Ruslan Kogan isn’t about to stand up in front of a crowd of journalists and not say something controversial. In an appearance at the Kickstart IT media forum in Queensland this morning, Kogan’s founder and Gerry Harvey’s least favourite entrepeneur discussed the role Apple plays in propping up retailer profits, and whether or not Kogan will ever enter the Android tablet market.
Here’s Kogan on how Apple has become a major power in Australian retail stores:
You may not know it yet, but the biggest retailers in Australia are Apple’s bitch. In the last quarter, the sale of Apple products and Apple-related accessories made up over 30% of JB Hi-Fi’s sales. That’s pretty incredible. What does this mean? It means that Apple is an innovative company with a unique proiduct offering. It also means that the biggest bricks and mortar retailers are relying on the genius of Apple to stay alive. But what if Apple decided it could make more money through its own site and stores rather than using that third party network?
In Kogan’s view, it’s only a matter of time before that happens:
It might next year, it might be the year after. The time will come when Apple pulls out, and that may well be the end of bricks and mortar retail as we know it.
And here’s his take on why Kogan isn’t likely to have another crack at the Android market — once again, Apple is very much in the frame:
There’s certain products where I feel that the user experience that Apple has created is superior to what anyone else can make. That’s why we have not released an MP3 player. That’s why we are yet to release a tablet. We have played with hundreds of tablets and tried to improve the user interface and tried our absolute best and we can’t do better than Apple. In terms of that, they have made an awesome product.
When they make an awesome product, it’s an awesome product. The same with phones. We have looked at Android phones, but once again it’s at the point where if we launch an Android phone, it will be a budget model.
Daniel Long
Tuesday, March 1, 2011 at 11:14 AMBest headline of the day prize is awarded to you Angus.
scitt
Tuesday, March 1, 2011 at 11:22 AM30% of sales sounds impressive but profit margins on apple stuff is tiny for the retailer.
Steve
Tuesday, March 1, 2011 at 11:33 AMi would think the profit margins are small on that 30% but it would be the ‘getting people in the door’ factor that would hurt the retailers if apple ever decided to pull out.
Can’t see it happening though, part of Apple’s marketing has been to get their products out their to as many punters as possible… retailers are falling over themselves to stock apple products so Apple can keep the margins small and not affect their profits too much.
Michael
Tuesday, March 1, 2011 at 11:29 AMSo going by JB Hifi’s half year report to the end of 2010 where they made sales of $1.68b, that would suggest that 30% of that or $480,000,000 (approx. $240,000,000 assuming an even split for simplicity) was from Apple and Apple related sales. I find it a little far-fetched that this is true unless Kogan is saying it’s 30% of one portion of JB sales rather than overall, for example small electronics or computers.
Dave Goodfellow
Tuesday, March 1, 2011 at 11:48 AMEither way, that’s fricken HUGE! …you do have to wonder where he got that kind of breakdown from though
Damo
Tuesday, March 1, 2011 at 8:35 PMIntelligent comment. I would strongly question where Kogan gets his stats from.
Jason
Wednesday, December 14, 2011 at 6:41 PMHe pulled them out of his arse, like the rest of the shit that comes out of Kogan’s mouth.
He’s the biggest shit talker in the industry.
Tom Reynolds
Tuesday, March 1, 2011 at 1:04 PMCould that be referring to product numbers or $$$ value?
Tim
Tuesday, March 1, 2011 at 9:58 PM480M isn’t that much. only about $24 per person in Australia
matt
Tuesday, March 1, 2011 at 11:42 AMman, from that, it sounds that if anyone is Apple’s bitch… it’s Kogan!
I got a hold of an HTC android phone the other day… it shits all over the iphone with regards to interface!
and yeah, retailers make no money from selling Apple’s products…
Jono Ward
Tuesday, March 1, 2011 at 12:23 PMin that article, there was mention of an apple tablet and an apple mp3 player being superior to other products. never was there a mention in the article of the iphone being superior to android phones.
PhoneUser
Tuesday, March 1, 2011 at 2:58 PM“never was there a mention in the article of the iphone being superior to android phones.”
Maybe not specifically, but he clearly implied as much when he said…
“[...] if we launch an Android phone, it will be a budget model.”
Ev
Tuesday, March 1, 2011 at 12:53 PMI’m pretty sure he’s not Apple’s bitch, but he is in fact ‘Ev’s Bitch.’
Look at his t-shirt!
Simon
Tuesday, March 1, 2011 at 11:56 AMThe margins might be low on the Apple products, but it’s much higher for the non-Apple branded accessories. It’s the same with digital cameras, etc. The fat profits are on the accessories.
PG
Tuesday, March 1, 2011 at 12:40 PMthis guy is an apple fan boy in disguise .. and totally full of it!
Mike
Tuesday, March 1, 2011 at 4:51 PMWhat disguise?
Nads
Tuesday, March 1, 2011 at 1:01 PMI used to work for JB Hi-Fi, and I can tell you the retailers just as much profit margin as they do on Apple competitor products. Infact generally more because Apple doesn’t generally let them discount theie products.
Big ticket items like laptops, TV’s and iPads do not have a huge profit margin in them. The money is made on all the little extra’s you buy with it – Cables, adapters, media, docks etc.
Jeffery King
Tuesday, March 1, 2011 at 1:04 PMJust FYI, I think retailers make 7% on apples products at best. I bought a Macbook Pro for $2100 a few months ago, I bought it on interest Free GoMastercard deal they had going…..Gomastercard charge them 9% of the purchase price to give me that deal…..which meant they lost money on my sale, the sales guys told me, “we are told to push as many adds on we can to try and make some profit”
Tim Mead
Tuesday, March 1, 2011 at 3:11 PMHow much actual product development does Kogan do? From what I’ve seen, the majority of their product lines appear to be no-name Chinese/Korean/Taiwanese products rebadged and imported into Australia.
“We have played with hundreds of tablets and tried to improve the user interface and tried our absolute best and we can’t do better than Apple.” – So Kogan have full software and UX capabilities to try and do a better job than Google/HTC/Motorola etc.? Pull the other one.
Ross
Tuesday, March 1, 2011 at 3:34 PMif he’s talking revenue than it isnt that impressive, since (besides huge TVs) apple make the most expensive things in JB. but even then, this guys argument makes no sense and im kind of ashamed gizmodo would even take the bait in posting this article.
Tell
Tuesday, March 1, 2011 at 10:22 PMGizmodo loves kogan