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Why iPod Can't Save Apple
MadMirko writes "MacNN quotes an article from Money Magazine titled Why iPod can't save Apple, which says 'the buzz on the digital music player and "swank" storefronts are masking an ebbing bottom line, noting reduced CPU sales (resulting a shrinking marketshare), decreased profits (in part due to the lower-margin iPod and little-to-no profit at the iTunes Music Store), failure of the iPod to drive CPU sales, failure of the retail stores to increase marketshare, hidden retail store costs, no operational income, and little value in the stock.'"
How many tech companies (which were media darlings) imploded during the Dot-Bomb? Apple wasn't among them and they've been "Dying Since 1976". Hell, even one of the latest tech poster-children ( Segway) is sucking rocks. Apple has a core (no pun intended) market and a loyal customer base.
These analysts have an intangible they can't convert to numbers on the spreadsheet: customer loyalty. No user I've ever met has the same passion for Dell, Compaq or Microsoft.
disclaimer: I'm an Apple fanboy; bought a ][+ in 1981 (which still works!) and a variety of Macs along the way.
Trolling is a art,
Man...they need a shirt of that at ThinkGeek!
I love that!!!
Interesting because others have estimated that the iPod will add another 15 cents a share to Apple's earning this year which rises to 25 cents a share by 2006.
This is only focusing on the iPod and ignoring all other products in Apple's inventory announced and unannounced which are having large influences in their respective markets.
Visit Jonesblog and say hello.
"Out of the hundreds of people who were waiting outside Apple's SoHo store in the cold to buy an iPod, I could find only one whose positive experience with the music player led him to buy an Apple computer."
This is a strange statement. If the hundreds of people were waiting to buy an iPod, how would they have already had the iPod experience that would push them to purchase an Apple computer? Chicken before the egg here? As with most of the 'Apple is dying' articles we've seen over the last 15 years, this one mixes numbers without context and some strange subjective observations.
Oh yeah, BSD is dying too. And Bluetooth... =)
"My mother never saw the irony in calling me a son-of-a-bitch." - Jack Nicholson
Apple has one of the strongest brands in the world. They have fiercely loyal customers (no, I'm not one of them). They have a reasonable licensing policy for their OS (try and get a family multi-computer discount for XP Home Edition, ha ha). Anything they make with an "i" in the name gets snapped up by said loyal customers. If obscure Taiwanese component manufacturers with virtually no brand image can make money, Apple should be coining it in. Jobs just needs another big idea like the iMac and the iPod and everyone will forget about Apple's demise for a few years.
When I am king, you will be first against the wall.
Let's see, there's all Apple's IP, QuickTime technologies in MPEG4, a ton of software (OSX, Logic, Final Cut, Shake, i-Software) a fantastic industrial design department, manufacturing facilities, tight ties to Pixar (one of the most successful movie studios) a mature and integrated hardware/software design team, a chain of retail stores (successful or not, it's capital investment) and, currently, the most popular online music store (though not making profit, it's bringing in eyeballs) as well as the brand name Apple, probably as well known as Microsoft.
I'd say there's quite a bit of value in APPL.
My Other Computer Is A Data General Nova III.
Apple is posting profits => Apple doesn't need to be saved.
Market share does matter only if you're from Redmond and/or your plotting to rule the world, "normal" corporation are just after money, and money is just what Apple is making.
Yeah - i think this is much ado about nothing. I wouldn't write Apple off at the moment. Using stats w/ declining computer sales is a little suspect. Couldn't we say the same about Dell, HP/Compaq, Gateway, and IBM? The iPod, if nothing else is advertisement for Apple Technology. The G5 running Panther OS seems like a very strong combination of hardware/software. And i might wager than PC owning consumers buying iPods just might consider a Mac the next time around the block.
I wonder if the iPod could actually save Apple. It's not that I think Apple needs saving, but more so, question whether or not a $300 mp3 player could revitalize a company. Did Sony need saving when they released their Walkman? Did Nintendo need the Gameboy the rescue them form extinction? Nope. These companies used these products to become even more powerful than they already were.
Cheers,
Ian
All you have done is denied the premise of The I Shing's statement; you have in no way refuted it. Semantic arguments are just plain silly...
When someone refers to the immediacy of something by saying "Apple is about to die," they are OBVIOUSLY referring to a commonly accepted understanding of the relative immediacy of the impending collapse. To compare this to the collapse of England or the Sun going nova is just avoiding logical discussion of the topic altogether.
Disagree. Apple is to computers what Cadillac is to cars.
I want to see an economically-founded argument that targeting the premium segment of a market is a Bad Thing.
Had I cash aplenty, I'd be all about one o' them sexy G4 monstuhs with a flat screen the size of a sheet of plywood.
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
"Apple has a core (no pun intended) market and a loyal customer base."
Well, yes and no.
There are a lot of longtime Apple customers, but as much as we nix people like OSX for its BSD base, OSX alientated a LOT of longtime Mac users that wanted nothing to do with Unix or command lines. A prime complaint was that the Mac interface was changed too radically, and that it looks nothing like the beloved old 9X-and-lower line. I've also heard some of these people complain that OSX is too slow, especially on G3 hardware. Personally, I know more Linux people that love OSX than longtime Mac people that love it.
And now Apple has a quandry. Rather than trying for mass-market appeal but making prices competitive with PC products, Apple has tried to maintain the "join-our-exclusive-club" approach, which requires a premium in price for customers. Yes, I know you guys are going "but Macs are so much better, and you get what you pay for, and Macs are a bargain even at these prices". Well, Joe Schmo customer doesn't agree. He's out at BestBuy or CompUSA looking for a new computer, and all he sees is that Macs 1- cost a lot more, and 2- can't run the games and software that PCs can. Plus, if Joe Schmo's expierience is anything like mine, when he tries out these newer Macs at the store, he's not going to be real impressed with the quality and feel of the Apple hardware (sorry, I think the keyboards and mice have a cheap feel to them now. They generally seem more shoddy than past Macs to me). He's going to be saying "So why should I pay 900 bucks for an Emac that's slow (with it's stock 128 or 256 mb of ram) when I can get this HP for 600, or this Emachines for 400?".
Apple has to decide if it's going to stay the exclusive-club route, or try to get more converts. If they do the latter, they're going to have to price Macs more competitivly. The club route doesn't seem to be working as well. Those old Mac fans I know? Some of them are trying their best to extend the life of their beloved old Macs through upgrades, and they're using 9X for as long as they can get away with it. So Apple either has to get them back, or hope that lots more Linux users convert.
And for Segway sucking, well come on, did anyone REALLY think people were going to adopt them en-mass? The Segway was always a niche market at best.
Life is hard, and the world is cruel
The question that market analysts don't seem to be asking is what segments of the market is Apple growing in?
I've seen Apple making headways into the SysAdmin space. Not as servers (though XRaid perhaps will) but as personal workstations. Just this week two die hard Sun and VMS people have decided that their next workstations should be Macs. Replacing Sun Stations.
*This* is the important bit that is getting glossed over. Apple is making inroads with the Technoarti in companies. UNIX Sysadmins at the top of the totem pole have been crying for a UNIX laptop for years and now Apple is giving it to them. One Java developer recently quoted in JDJ remarked: "I use a Mac, it's like Linux with class and QA." (or something close to)
Macs are quickly becoming the status symbols of the technical shamans in the backroom. It's not hard to imagine that from there the jump to the CIO and the board room is not far off.
This is what looking at gross marketshare misses. Apple is front-loading the desire for Macs in IT. If they can couple it at the right time (once they've penetrated into the SysAdmin/CIO segment) with inexpensive corporate-type desktops... the world could change quickly.
If Apple can appeal on the resilience to worms/viruses and bring TCO value to corporations the future is bright.
What if it is just turtles all the way down?
From where I sit... in a predominantly Windows technology firm, we have people either switching their work computers or their home computers to Macs running OS X. I know a LOT of people in other places that are buying Mac laptops with OS X.
I'm sorry, but overall marketshare is not a death knell. Just because so many large manufacturing plants, call centers, and places like that have cheap Wintel doesn't mean Apple is dying. Look around... I bet most of you know people who are switching to a Mac. I don't know ANYONE that has done the opposite since OS X came out.
"Politicians find new names for institutions which under old names have become odious to the people."
Loosing market share and shrinking margins is usually a pretty sure sign a company is in decline.
Losing market share is actually not a pretty sure sign a company is in decline. Market share is only a ratio of the number of your products sold to the total products sold in a market. You can sell 10 widgets one year and 100 the next and still lose market share if UltraCompuMegaCorp's widget sales go from 20 to 2000 in the same amount of time.
Whether a company makes a profit, however, is a pretty good indicator, and it's something Apple has been able to do for the last several years. I'll believe Apple is dying when I see a big "going out of business sale" graphic on apple.com.
Obvious exits are NORTH, SOUTH, and DENNIS.
I've often marvelled at statements like that. And let me preface this by declaring that I own a powerbook - but I have *never* met a PC zealot. PC users rarely care that muchabout the branding of their box. Most PC users care about the games on their box, or the GHz it has compared to the PC down the block. But mostly, they don't care about apple. It's always the "little guy" who has the chip on his shoulder, who is always making comparisons to the "big guy" (at least in terms of marketshare here).
These discussions aren't so much PC zealots vs. Mac zealots - it's usually mac zealots vs. the PC users who push their (our?) buttons for fun.
Yet at the same time, Google has reported an increase in the percentage of Mac users using Google.
That would make sense, since the default web browser on MacOSX puts a Google-specific search textfield on every window.
"First you gotta do the truffle shuffle."
If I buy a Porsche, I'm not going to whine that the addons cost more than they do for a Taurus.
Don't blame me; I'm never given mod points.
Every time another virus runs amok, she adds another Mac person..
Without meaning to sound patronising, perhaps she should do some work to secure the windows boxes instead of letting viruses "run amok". I work in a 100% Microsoft shop (well, ok, we have Solaris boxes, IBM mainframes and a few linux machines dotted around) and in all the years I've been here we haven't been hit by one single virus. Our network is plenty secure, thanks, and while I'd rather we didn't use so many Microsoft products, viruses/worms come last on the list of my reasons to change.
Frankly I'm getting sick and tired of paper MCSEs who know about as much about properly securing a network as I know about how financial markets work.
Rant over. :) That wasn't particularly directed at your wife - your story was merely the catalyst.
- "Even when you factor in Apple's $13 a share in cash and almost no debt, the company's stock, at a recent $23, trades at 20 times estimated 2004 earnings. Dell's shares, on the other hand, go for 26 times projected 2004 earnings -- but its business is three times as profitable as Apple's."
First they state that the shares are $13 per, then comment thta when it was $23 shares it was trading at a high P/E ratio, as though it's bad, but then shows how Dell has a higher ratio. And to boot, he compares earning on a fiscal year that's not even closed yet. And on top of it, Dell isn't debt free. In fact, FEW companies are debt free, but apple is. that alone makes it a great stock buy.- "Tom Santos, one of the plaintiffs, estimates that Apple's stores would have lost as much as $80 million in 2003 had they been paying the same prices for inventory as the resellers paid."
Ok sir, tell you what, we'll have Apple charge you HIGHER prices so you don't have to complain about not going out of business.- "And Apple's earnings would have been worse had it not been for $4.8 billion the company has in cash and short-term securities. In fact, the cash hoard made more money last year than Apple's operations -- which lost $1 million while the computer maker booked a $69 million gain on interest income."
Which is far more than any Microsoft division made last year, excluding Office and Operating Systems.- "Out of the hundreds of people who were waiting outside Apple's SoHo store in the cold to buy an iPod, I could find only one whose positive experience with the music player led him to buy an Apple computer."
Ok, so they polled people for their experiences of devices they haven't bought yet. That's a great poll. I'd like to see a poll of people who bought Sony CD or MP3 players, to ask them if it made them buy a Sony Vaio. Or if HP's new iPod clone will make them buy an HP. That's a bogus comparison.- "While Apple's sales of $6.2 billion last fiscal year were nearly unchanged from 1999, profits plummeted 90 percent to $69 million, from $601 million four years ago...Jobs' mass-appeal strategy has crimped the company's historically high profit margins. Apple's net profit margin is just 1 percent. That's down from 10 percent four years ago."
The margins for PC makers has been razor thin for years, it just finally caught up with Apple. I got out of selling boxes years ago due to shrinking margins. The fact that you can get multi-GHz PCs for $500 while a 1Ghz apple is more than grand doesn't help either. So let's not blame Jobs for the shrinking margins, let's blame market factors. As for shrinking profits, that's due to hardware that's overpriced.Ok, let's not compare this last year's performance to the year before, or any other year Jobs wa there, let's comapre it to before he arrived. Well, fine then, let's compare the other years since 1996 when Steve managed to maneuver Apple into selling far more PCs than in 1996. Let's compare how this year's sales are disappointing to last year's, to be fair. And let's factor in the lack of new product development in that part of the company's line up. They've been focusing on the consumer device market, like with the iPod mini (a smash seller). Gateway has been pushing plasma TVs and digital cameras FAR harder than PCs. Companies can only do so much at a time. Even Microsoft, arguably the world's biggest software company, can only manage an OS upgrade every 3-4 years now, and their project dates always slip every further.
I'm not Apple fanboy. I can't stand the Mac OS UI, I don't like the hand holding, I don't like the over priced hardware, I don't like the platform lock in, etc. But, let's at LEAST be fair about an examination of the company.
jX [ Make everything as simple as possible, but no simpler. - Einstein ]
You're also getting _propriatary_ hardware
Excluding the motherboard (and even this is debateable. Go try and get a programming manual for your VIA chip), what exactly is proprietary about the Mac that isn't about your Athlon 64? I look inside mine and see a standard AGP video card, PCI SCSI adapter, IDE hard drive and DVD drive, everyday ordinary USB ports, standard audio jacks, regular ordinary ethernet, the same memory that PCs use... I look up on my shelf and I see programming manuals for all the parts inside the machine I care about. The instruction sets of the processors are different, but everything else isn't any less standard than your machine.
Someday you'll grow up, get a job, and have way less free time to "get your hands" dirty. Your time budget will shrink and your financial budget will grow. Then perhaps you'll appreciate that you can spend a few hundred extra dollars to get a machine like a mac.
The main reason Apple is constantly reported as "dying" is that same reason that so many of us are captivated by the company:
We have no idea what they're up to.
An ordinary tech company, as soon as something goes wrong, they start firing people and puffing out their chest about strategic alliances and new products that might come out some day, maybe.
Apple, on the other hand, doesn't tell us what they're up to until they're pretty much done with it. And then when they tell us, they do so in a way that impresses the shit out of us. We don't see the broken-ass beta version for six months before the final...we only see the final (which may have some bugs, or issues, but is definitely usable). Their R&D department is one of the most locked down in any industry. They don't issue press releases or hints the second they come up with an idea. Instead, they embark on internal analysis and testing.
The economic pundits of the world look at Apple and see their tight lipped R&D as "no ideas on the horizon." Which is ludicrous. Do these people think that iTMS, the iPod, the G4, OSX, just materialized out of thin air at MacWorld? Every time somebody's predicted Apple's imminant failure "unless they do something," they did something. Anybody who still makes predictions on a company that's proven so versatile and resourceful is a goddamn moron. Apple's successes were not ACCIDENTS.
Hey freaks: now you're ju
Yet again, only on Slashdot can:
...equate to "nothing can save Apple because Apple is dying." :) As far as I can tell, Apple is doing everything right. Is it possible Apple might see some sort of revival in the time up to Longhorn? Think of how many people would buy Apples if they were lowered even just as much as $200-300...
- Apple putting out a mind-blowing GUI on top of a UNIX-like system (Slashdotters claim not to like it yet rip-off the Aqua theme endlessly for KDE)
- Apple having massive sales of iPod/iPod Minis
- Apple vanquishing all debt
- Apple executive announcing plan to increase billions of dollars for company
- Apple innovating with Expose, OpenGL rendering backend for 2D GUI, Apple actually INCREASING performance with each OS X update
The one thing that always amazes me, is that no matter how bad the news, in fact the worse the better, any article on slashdot about some Apple misfortune or bug or new product regularly gets at least twice, if not three times, the number of posts compared to the usual average of around 200 to 350 posts.
That say to me that, even though there is a fair amount of trolling, that there is an enormous amount of interest in the company and its products. And given that the pro Apple comments are usually modded up, I suspect that:
a). There is a large portion of slashdot readers who use a Mac and OSX.
b). That interest translates into the real world in buying terms, and
c). That even the MS fanboys and die hard "it's too expensive" or "port it to x86" morons would use a Mac and OSX if they could.
In summary, I think Apple is doing so well with the G5, Powerbooks, OSX and the iPod that they are THE act to follow in the IT world.