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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.'"
Yes, yes, yes, Apple's about to bite to dust, we've been hearing that for years.
Check out the Apple Death Knell Counter for links to many, many other articles, dating back to 1995, all of which have experts predicting that Apple is about to go bust.
You are in error. No-one is screaming. Thank you for your cooperation.
I still think OS X is going to save Apple. It may be a slower propegation than this narrow analysis on the iPod and iTunes, but from what I have seen it has been creating more and more demand for Apple products.
Just locally, I have been spreading a "Mac Fever" to many of my collegues. A friend of mine turned me Mac this past summer after leaving an iMac with Panther on it up in our office all summer. He was working out of town for several weeks, and I used it regularily. I would have never wanted a Mac running OS 9, but now that I've used Panther...
After he got back I had to return to my Winblowz box (as I cannot use StuidoMX or Photoshop on Linux =[ ). After that I was fevering for a Mac hardcore. I finally was able to pick up a new G5 around Christmas time.
Ever since, I have been estatic about its performance, beauty, and stability. This has lead to antoher PowerMAC for the office, and two iBooks between my friend and I. The other people we work with are seeing how well our Macs help us get our work done, and are now looking to buy Macs of their own.
At other places I have worked I see the same thing happening. Someone gets a Mac, and six months later four or five other people have gotten not just one, but usually two, for office and home.
Of course, a computer is more expensive than an iPod, so this growth will be slower, but I see it occuring in force all around me.
I give it about 2 years before MSFT buys apple. It will be a good move since they'll be able to kill OS X.
The thought that Apple was counting on a music playback device to become a powerhouse is a joke. They are a computer firm, this is one revenue stream not the salvation of the firm. It is more likely that they want people to see how easy it is to use an iPod and then purchase a Mac for integration.
If they were counting on the iPod as their saviour, then they were doomed from the onset of the project.
CPU sales: the G5 may be popular, that is popular for a high end machine, but the more affordable machines, the iMac and the eMac, are in need of a serious upgrade (why not a G5) to make them attractive again - these machines don't sell that well anymore (I don't have inside information, but this could be learned from various reports).
Tom, happy owner of a 2x1Ghz PowerMac
...No user I've ever met has the same passion for Dell, Compaq, or Microsoft..
You've clearly not been out much.. zealots come in all forms don't think Apple to have them all.
As a user of iTunes (mainly because I drink way too much soda during the day, and redeem free songs from Pepsi on iTunes) I have grown to really like their service. If it continues to grow (by adding on to their somewhat meager existing library) they will definitely have a new source of income online selling music. From me, anyhow.
And I may just have to go buy an iPod now to hook up to my iTunes service.
Kudos, Apple... you have got a hard-core Mac hater to use your products. I would call that an amazing success.
Check out the best P2P sharing website: MEDIACHEST.COM
Some of these authors need to get with the times. Just because it was trendy to talk about the "beleaguered company" back in the 90s doesn't mean all those arguements still hold water.
iPod won't save Apple? Controlling most of the mp3 player market isn't good? And this helping iTunes Music Service start up...the FIRST one that all the major labels thought was worth trying and has 50 million downloads? I'd say the iPod did a good job (especially with it's high profit margin).
Oh yeah...I guess the deal with HP doesn't amount to anything either. I'm sure all the top brass at HP was thinking "hm...how can we get more money? Hey, let's go with a product that nobody knows and that won't bring in any money...not for the company that invented it and certainly not for us".
C'mon people...get with the times. The iPod is just one thing. And a damn good thing. It's bringing a lot of money and recognition to Apple. Now add a supercomputer built from G5s at VA Tech, major enterprise software apps being ported over to Mac...um...hello...
"He uses statistics as a drunken man uses lampposts...for support rather than illumination." - Andrew Lang
It seems to me that the entire PC game market is slowing down. The most popular games now are of the MMO class, most likely due to their addictive nature. With the way console gaming is increasing, I think not pursueing a game market may actually have been a good idea. The thing that hurts apple the most, in my opinion, is the fact that they cannot call their Processor 4 GHZ. The target market is consumers who desire ease of use, but this same market likes big numbers. Apple's big numbers come with an even bigger price tag, which makes it difficult when Dell can offer a 3 GHZ machine for 700 dollars.
...Apple is nothing without the iPod, and the cash iPod sales bring in.
To which I say, where's the companion article about Microsoft's dire financial situation? I mean, if they didn't have Windows and Office income subsidizing all their money-losing products (which is almost everything else they make), they'd be hemmorhaging money in a way that would shame the Pentagon.
By the way, Apple's computer sales are down because the models are stale and a refresh is due (or overdue, in the case of the G5). I've got several thousand dollars sitting in the bank, just waiting for the new G5s to be announced, and I am far from alone. And the iMac and eMac lines were very recently EOL'd and should get updated soon as well.
~Philly
I go to a major university and have always had the habit of seeing what types of laptops people use as I walk around. In the last 6 months I've noticed a huge increase in the number of Mac users. Yesterday while walking to class, I saw that about 2/3 of the students had Macs. When I started at the university three years ago I really don't remember seeing anyone who had a Mac. From my personal experience, Macs seem to be increasing in popularity.
I just can't afford a real one. I was raised on them, up until G3s, at which point we stopped buying from Apple, and I started molesting my poor 9600 with third party upgrade cards. Unfortunately, you can only push old hardware so far before it's overwhelming oldness clamps down on any boosts you might be striving for. It's going to be a long, long time before I can afford a new Apple computer, so here I am with a 2.4 Ghz PC I got for 300, playing the living hell out of games that aren't available for the Mac, Photoshopping, Dreamweaving, etc... My poor FrankenMac is living with my mom now, until she can afford a bargain PC of her own to run her home business on. It's too weak/old to run X properly, so she's using 9.1. It's a sad thing to be a huge fan, but be outside their intended user base because I don't have 3,000 to blow on something decent. Reminds me of a G5 parody site: Ask yourself, "Is my money good enough for this computer?"
Apple may be dying but I know a large number of people that have recently bought new macs and I've been sending people off to buy macs because I do not answer window questions anymore. At the after meeting Pizza at the local lunix users group last month there were 10 people that had mac laptops out of the 30 or so people.
Of course I'm holding out on buying a new one till they come an Apple [tm] 3 button mouse.
Any more than Pepsi is going to go bust.
No matter what you're talking about, unless it's a government service, there's *always* a long-term underdog. Or so has been my experience.
Heinz? Hunts.
Frito-Lay? Humpty Dumpty.
Philishave? Remington.
etc, etc.
That all being said, the Apple platform, as currently sold and marketed, simply can't get a large marketshare. Their target audience (People with enough money that "good enough" isn't, and the monied disenfranchised) simply isn't big enough to get them out of the spot they're in.
If you could be told what you can see or read, then it follows that you could be told what to say or think - BoC
What are you talking about?
Just this last november I was looking at getting a new laptop to replace the Toshiba I had bought 18 months previously which had suffered battery failure (replaced it) and then backlight failure (killed it as a laptop so I turned it into a server, hey, might as well use the new battery for something and a server with built in UPS is worth something to me).
That Toshiba spec'ed in with a 1Ghz PIII, 256MB RAM, 14" LCD, 20GB drive and Nvidia Gforce 2Go graphics, was pretty sweet at the time. Trouble was, it was very poorly built. The nice silver paint they put on the palm rest rubbed off in weeks leaving two nasty looking palm prints, and the case chipped and cracked like mad because it was made from very brittle plastic.
OK, so when looking at replacing the machine I decided I would go with one of the new G4 iBooks as it had a better spec than the old laptop and is definitely made from better materials. Oh, and unlike the previous laptop I wasn't going to pay an extra 100 or so to MS for an OS I wasn't going to use. This Mac is the first machine I have bought in 20 years that kept the originally installed OS. Best of all the Mac ocst 1000, thats a cool 500 less than the Toshiba. Yes, I could have got some cut down POS Intel laptop for similar money but they are simply not built as well as this iBook.
I think it is fair to say that anyone claiming that Apple gear is more expensive than Intel based stuff is talking out of the wrong orifice!
Best of all, once I got the iBook I just had to buy an iPod, then I got an Airport card, next I am going to dump the POS Windows XP box I have and replace it with a Mac, possibly a nice iMac or I might splash out on a G5 as they are very good value for money.
There is nothing not to like about Apple kit, it is really nicely put together, the OS is simply a joy to use for this long time UNIX bod, even if the stuff was more expensive it would be worth it, and in fact it isn't more expensive. These machines are to die for, and yes, I have lots of friends who are picking up Macs too. Oh, and I am a scientist and a Mac is the best of all worlds, it is a powerful UNIX box and yet has the one blasted thing that people just assume we all have, MS Office. Office X on the Mac is better than any version on the PC. I would prefer to use OpenOffice and one day I will, NeoOffice shows the potential and doesn't need X11 by the way.
All in all, I can't see why everyone doesn't use Macs now, I am currently on a crusade to get all my friends to use them and frankly, it isn't that hard a sell!
"I have the attention span of a strobe lit goldfish, please get to the point quickly!"
Mac is still very popular, and very much used in audio and video. I'm a new comer into the audio engineering world and I've never not used a mac outside of my own studio. Windows just isn't stable enough for me to deal with it. Can you imagine recording a 24 track pro tools session and all of a sudden the machine stops responding?
No thank you, I don't want my client, who could have tracked three songs in a day, eating up that many channels realize "hey, I just wasted a ton of money on studio time, and now we're going to have to do it again?"
Thanks, but no thanks. I'll take a more stable mac, with better software and support, than that any day.
Call me crazy, but it's just how I am.
<happiness>beer</happiness>
I second that observation - I'm one of the only physicists on my experiment who doesn't use a Mac laptop! OS X has a lot of appeal in many parts of the science community - it allows a user the ability to transparently use a lot of unix/linux functionality (ssh, xwindows, etc) to deal with workstations and data servers and yet gives you a fun, slick user interface when you want it. Not to mention that Mac laptops, while somewhat delicate, are very nice.
I'm writing this from a Mac myself, but the information you posted is wrong. If you look at the Google reports for Feb 2004, the Mac users are 4%. Now look at report for June 2001. The amount reported for Mac users....... 4%
You are right! My Mac is 4-1/2 years old and I'm still playing Quake on it and even though I _want_ a dual G5 ... can't justify the cost. Why? Everything just keeps working with OS X and ... with _our_ upgrades and patches tend to work tighter and FASTER.
Then you have Windows. Enjoy! (sucker)
I remember the 0.97-pre-1 days quite well when Linux stunk on ice, boys and girls. I've use Linux and UN*X for quite some time, helped write training manuals during the dot-bomb days and have enjoyed the Linux and UN*X communities thoroughly.
This year when it was time to upgrade to another computer, did I get a bitchin' dual processor rig with gobs of ram, all bone crushing speed and input jacks galore?
No. I got a (nice, used) Quicksilver 867 with a Superdrive and an iBook to take with me on vacation. I can develop software, scripts and all sorts of goodies in the shell or just jump and start up a nice game of Q3A, or UT2004, or whatever. These pieces of hardware to the job that couldn't be done by others for ideological, historical, or monetary reasons and I'm glad that someone put unix on the desktop in a fashion that is easy to use and has plenty of future still in it.
Unix has made it to the desktop, ladies and gentlemen. Thanks for an excellent job, Apple.
I'll be back to buy more sooner than later.
I attend both astronomy and computing conferences regularly. In the last year or two (since Mac OS X and the new line of PowerBooks really started catching on) I have seen a dramatic change in the laptops being used at these conferences. A couple years ago, there would have been a handful of Dells, a few IBMs, some Sonys, and maybe, just maybe, an Apple or two out of fifty laptops. This has changed to point where 30%-40% of all laptops I see at these conferences are now Apple PowerBooks or iBooks running OS X.
I've never been a huge fan of Apple, but have always grudgingly admitted that their OS has always been better designed from a useability point-of-view than Windows (and, sadly, Linux desktops), and that their aesthetics in hardware and software design are way better than any other company's. And, despite what a few earlier commentors have posted, Apple's hardware is usually quite good (with the exception -- up until the introduction of the G5 -- of their processors which have largely sucked. Thanks Motorola!).
I'm a Linux user at work and at home and will likely be replacing my home computer sometime soon. I had been thinking that I would just build a PC (Windows free) and install linux, and helping my wife and son with the transition. I now think that my next computer will be a Mac. I still don't consider myself a huge Apple fan, but what they offer is way better designed than anything else out there at this time.
I really think that Apple has driven the thin edge of the wedge between some traditionally non-Apple users and the usual Windoze OS/hardware that they would normally buy. Apple has re-invented itself in the past and, I think, innovated way more than many other companies. I think that they just might succeed in driving that wedge in further.
#include "cunning_plan.h"
This being the case, Apple is either really dying and has just been narrowly escaping death for almost 30 years, or the "Apple is dying" article is just something the tech reporters polish off every once in a while when its a slow news day and they want to stir up some interest. Think about it, if there's nothing big and / or interesting to write about this week, why not publish the "Apple is Dying" report again to stir up the Mac fans. It definitly gets the attention of some folks while not having to produce any real news. It's a cash-cow article.
Paul Lenhart writes words!
Nobody ever seems to put this together but everytime Apple makes a threat to port their OS to x86 hardware, Microsoft makes some sort of "investment" and they quietly drop the plan. Microsoft is actually Apple's savior and will be as long as x86 is there for the taking.
Remember Yellow Box? Remember the Microsoft investment?
Apple on Intel would have several hundred of my dollars, if they'd ever release it.
Life is the leading cause of death in America.
About the time Apple needs to launch the PB G5, there will be a lot of competition in the 64 bit market. OK, Apple will probably survive, but the important market share in high end laptops may be severely threatened.
And yes, I know the AMD64 is a kludge (it's like a Tomcat with a piston prop on the front), but it's a hellishly compatible kludge. I like elegant processor architectures, but this one works and works well.
Panurge has posted for the last time. Thanks for the positive moderations.
When I go to high-end tech conferences (TED, PC Forum, Pop! Tech, etc., the kind company CTO's go to) all I see are PowerBooks. Heck, and PC Forum the lone Vaio user taped an Apple logo to the lid of his computer in order to "fit in." So Apple clearly completely owns the "leading edge" tech user market, which is a good indicator of where the general market is heading. That is, if the people that build Yahoo, eBay, etc., all use Mac's, then (1) the things they build work on Mac's, and (2) they influence everyone around them to consider Mac's.
And on a more mundane level, Apple is also more profitable than almost any other personal computer company (most are losing money, Apple is profitable). Apple has figured out how to make a retail store chain work (unlike Gateway). Apple has the best brand in the computer business, the best customer loyalty, and highest customer satisfaction. Apple completely dominates the new, rapidly growing digital music sales market. And their platform is the basis for the best price/performance supercomputer on the planet. That's all got to be worth something!
Enable 3D printed prosthetics!
Big money scientists running with government grants didn't do too much with Windows anyway. The scientists switching to OSX aren't hurting Microsoft -- they are hammering one more nail into Sun's coffin.
Conformity is the jailer of freedom and enemy of growth. -JFK
Not to rain on your parade, but with one sig.fig. data, they could increase their marketshare by over 25% (3.51% to 4.49%) and you wouldn't be able to tell.
Not to rain your parade, they could have decreased their marketshare by 25% from 4.49% to 3.51% and you wouldn't be able to tell.
According to Zeitgeist Apple's marketshare swings between 3 and 4 in recent times and that increases the probability that it is somewhere in the 3.5% region
Frankly, Nintendo probably would have disappeared a few years ago without the GameBoy. And there's no doubt that Nintendo is only a fraction as powerful as it was when the GameBoy was released - back then, the NES was the top selling games system in the world.
To get back on-topic, I hope Apple isn't betting the company on the iPod, because I don't see a long-term future in standalone music players. I'm in the market for a new cellphone and find that even on the cheapest contract deals I can get a free phone with a built-in MP3/AAC player. Some even include video players. OK so most have limited flash memory for now, but it can't be long until they start integrating gigabyte drives. I'd also be willing to bet that phone companies will soon create music stores that will allow people to download tracks to their phone direct without having to go through a PC. When that happens, then unless Apple has an iPhone up its sleeve and a deal extend iTunes to become a mobile service, it can kiss its music business byebyes.
The author of this post asserts his moral rights.
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.
So what are they going to do? Ship windows on the machine? Even if they cut prices to be "competitive" Joe Customer is still going opt for the PC because he can run his games and software on it. So in your senario Joe Customer would still buy the PC because it still has an advantage over his Mac unless the Mac was priced much lower than the PC to make up for its "crippled" status. Or maybe there's other reasons why folks buy Macs other than price and software availability.
See everyone's a freakin' expert on this, you don't think that Apple has a strategic financial think tank? You don't think that they're plotting the course best for them? Why is it that Apple critics think that becomming Dell is ONLY viable option for Apple?
I think Apple likes where they are. They're not the dominant strip n' ship shop, but they're cutting a profit and they're making innovative designs. Guess what? They're happy with that! Not every company needs to aspire to be Microsoft or Dell.
Apple needs to find a silver bullet to increase its CPU share, since there's clearly a relationship between hardware and software sales. But the company certainly isn't in trouble.
Apple is one of the world's strongest brands, and the company is awash in cash. The iPod represents Apple's first real experiment with brand extension. It worked -- there will be more to come.
If I were Steve Jobs, I'd find a way to sell cheap boxes loaded with OS X. They would essentially be OS delivery systems: a way to get more OS X in the field and make developers feel good about supporting the platform. These boxes would replace the iMac, but would be sold without monitors. Most consumers already have one, and a hundred bucks is worth shaving off the price point.
I'd sell the damn things at Wal-Mart, starting in markets without Apple Stores. The kind of folks who go to an Apple boutique aren't this product's target, anyway.
Nobody beats Apple on industrial design. I am confident the clever boys and girls in Cupertino can make an inexpensive box that will look unlike anything on the retail shelf. Apple needs to leverage its coolness.
And if they really want to be slick, a new low-end box should contain a built-in docking cradle for an iPod. maybe the whole project gets positioned as a media center that doubles as a PC.
This is my post. There are many others like it. If you don't like what you read here, go try one of the others.
Any idiot can tell you the stock price will come down a bit since the p/E is not supported by the present facts known. On the other hand if ipod sales continue to boom and people start flipping their old mac for new G5s (by the way the imac g4 inventory is being cleared out for the introduction of some yet to be announce product). Then their earnings will go up and the stock price should rise. This is why analysts are rating apple and hold and not a sell. the price is high and will fluctuate down but may zoom up on the next earning statement.
I think this author,probably in the pay of microsoft, is planting a story anticipating the near term price fall of apple stock to make himeslef look good and maybe stimie apples encroachment on windowns in the enterprise world.
Some drink at the fountain of knowledge. Others just gargle.
Now add to this sales of unbundled software like iLife that can run on Mac OS X Intel.
This is Apple's wildcard.
Yes, Apple is a hradware company, but they are software too, and could change models.
"I don't think it's selfish, to eat defenseless shellfish." -NOFX
An anecdote, but a good one. My friend is a graphics designer, has been using Macs forever. I was a windows guy who got a powerbook. He didn't like or understand OS X. He worked well in 9 and that was enough. But 9 users live in a connected world. My friend sees my machine with expose, idvd, photoshop, keynote, etc, and decides to install OS X to dual boot his machine. The verdict? He spends his time entirely in OS X except for photoshop, which he runs in classic mode.
Long time Apple users suffered through a lot of FUD about OS X, but the numbers are changing.
As for OS X not running fast on an older G3 - How fast do you think Windows XP or Fedora runs on a pentium 2? Because Apple users are used to the fact that their hardware is worth good cash years after their purchase, they seem to feel entitled to the latest and greatest on their 5 year old hardware. Apple won't bother apeasing them - the money is in the G5 baby.
..it depends on whether or not the iPod/iTunes for Windows was in part done to give people a "taster" of Mac quality and ease-of-use. If Apple was planning to drive Mac sales that way, it's valid to discuss if it was successful or not.
That doesn't mean Apple should have made it Mac only, it simply means that sometimes the market does what marketing thinks it will. That is, if Apple was thinking that way in the first place, I haven't seen any official info to indicate that.
Kjella
Live today, because you never know what tomorrow brings
Apple has decided that the 'exclusive club' route, as you call it, is best for them. As another poster noted, even if they DO lower their prices (and profit margins), people will still see "Windows has games, I'll take the Dell." Apple can't beat Windows at its game, which seems to be "ship a barely passable OS at a minimum price". Apple's game is "ship a sweet OS and raise the prices to make up for the R&D." (and then some)
I saw this quote a while ago: "I don't think BMW is complaining about their 2% marketshare. Neither is Apple."
I've got more mod points and GMail invi
and little value in the stock.
Independent of whether Apple continues to operate as a company, keep in mind that from investment point of view, Apple hasn't been all that great a thing. Even when taking a long-term view (like this, comparing AAPL with dow jones since Apple's listing) main reason to own Apple shares would be to show your loyalty to company, not to make money. On medium term; over past 10 years, investing in Apple would have been even worse, and had brought you only 50% growth (and dividends are almost neglibly small). That's much lower than what is traditionally expected (somewhere slightly above 10% annual ROI).
So what does this matter? Just that from investment POV (it was written by Money mag) Apple has been a dog, and they are trying to explain why they think it remains such, even though it has good brand, got the spotlight, positive "mindshare". You may disagree, but that's their background.
I like paying taxes. With them I buy civilization -- Oliver Wendell Holmes
Then you are going to be waiting a long time. MacOS, and Mac applications are designed not to need more than the single button. I bought a three button mouse for my PowerBook, and the only time I ever use that is when I'm running X11 applications. Nothing native needs it (which is not to say they don't support it. They do.)
I am TheRaven on Soylent News
the financial press says Apple is dying, sell thier stock, BUT ... SCO stock should reach $45.00 per share.
Givin the facts, what's wrong with this picture?
* Carthago Delenda Est *
This isn't news anymore...
... that Wall Street and the financial barons deem Apple to be a bad stock investment phases me not. I think they can exist as a niche computing hardware supplier and etch out enough profit to stay in business. At least until the next round of monopolistic Microsoft collusion control with hardware manufacturers and media conglomerates that incorporate "trusted" DRM computing that locks out non Windows computer users...
I think it's interesting though how Apple is now straddling a tightrope - I see posts scattered here about how tech savvy users have flocked to OS X and even I, in my traveling service partner gig, have sold some folks on OS X after they see me work with my powerbook (whether it be plugged into a projector and teaching classes or just using it for contract *nix work and having folks see what a joy it is compared to Windows boxes...). However, I think Apple has lost some of the old OS 9 customer base that were not so enamored with OS X. Sad, because those folks will now venture back into a world teeming with viruses, worms, spam and clunkier multimedia software.
But I think the increased usage by so referred to technorati has future blessings for Mac users or non Windows users in general. More developers flocking to the platform, even if for curiosity sakes, means more software for Mac users or more cross platform offings.
Again, the best of both worlds - a state of the art desktop GUI (yes, it has some warts still) coupled with all the *nix tools. I used to run Linux on my home desktop - it worked fine for a lot of stuff but I had difficulties with USB devices hooking in, wireless setup and tasks like CD burning - not that these were because of Linux, but still these issues had to be dealt with. OS X just works yet I get the added bonus of superior display aesthetics (and for someone like me with poor eyesight is essential) and all the *nix goodies.
* Comes with all the development tools and IDE to do Cocoa programming or cross platform Java, perl or python.
* Apache server plus PHP built in and easy to add whatever server platform add-on.
* Pretty colors and easy on the eyes fonts for all those ssh sessions needed for work and for home server handling.
* X11 and ability to run the Gimp and the whole gauntlent of free software.
When it's time for a new desktop, I'm going to get another Mac and replace the AMD box that currently sits there...
AZspot
For the record I hate most Apple Fans, the same way I hate Linux Fans, and WIndows Fans there usually onesided and think their favorite app is god's gift to the world.
/. article in the past talking about X amount of music downloaded in the first day or something, and from what I remember it was a fairly large number. The thing is this is a new service, and if it has lost money, well it's only been out for a year and most business as a rule of thumb don't see a profit for 3 years, it takes 1 the first year to work on doing whatever it takes to get the name out, the second year your more known and the name really starts to be branded at that point, then the third year is when you actually have enough of a customer base that you start breaking even and/or seeing a profit.
However, this is a pretty lame ass article. I don't like the iPods (for various reasons) but they ARE a great little machine and very popular. Looking around the office I see 4 people atm who have one on there desk, I know 3 freinds that own one, and at school I see them all over the place. So even if Apple lost some money on these in the first year or two they now have there name ALL OVER THE PLACE. This is basically Marketing 101, you get your name out there at any cost, eventually it comes back to you, this is why companies will spend $1+ on superbowl commercials. It's also why in San Jose if you buy any new 04 VW you get an iPod for free.
Now iTunes. I don't know anyone who uses this, as most still use Kazaa for any thing they want. However if I recall correctly there was a
Anyway, all in all, Apple over the last 4 years has really gotten their name out, and made a huge difference. I think their really starting to gain a larger market share because of these endeavors, and in the next year or two I expect to see them raking in a lot of money.
Ave Molech Setting
Apple's stated goal is to use the iPod/iTunes combination to introduce PC users to the OSX interface, and the Macintosh philosophy in general. Once they are familiarized they will hopefully purchase a Mac and fully enter the Apple lifestyle. If Windows users just purchase an iPod, Apple's profits will be negligible. There would not be 'red ink flowing like blood,' but there would not be any revenue growth, either.
Check the web, the words practically fell from Steve Job's mouth.
===---===
Together, we will drive the rats from the tundra.
Bloomberg reports: Apple Computer's sales of its iPod were up 140% in the fourth quarter of 2003, giving it a 50% share of the digital music player market. How did the company do it? With a typical Apple design that couples cool style with high technology, and with terrific marketing, featuring an ad campaign that Marian Salzman of ad agency Euro RSCG said "is about an Apple state of mind." Read the rest of the article here
In addition, a quick check of the stock analysis shows a generous 1-Year Return of 71.706%.
I don't know about you, but I would say they are doing just fine.
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Market share of what? All computers sold in a year? Follow that logic, if M$ has a slight decline in server market share that would mean they are dead! Don't get me wrong, market share is important, but not as important as making $$$$$. Also, Apple has a very strong and cool brand that many companies would kill for. It is way cooler to have an Apple product than a M$ product. Apple has a much better design ethic and produce much better products. M$ may be able to crank out technically workable gear but they got no sizzle, no funk...and therefore they suck.
As far as the ipod being a failure...what crack smoking fool thought that one up! It is the hottest player out there. It may well be true that the margins are not the same as other players, but being the best rarely means you crank out cheap crap you sell for a high price, it usually means you have the best goods.
This sounds like M$ FUD to me. They are all freaked out because Mac is taking over the music business, giving them an edge in the home user market. That threatens the M$ music and video technology. This all makes M$ look like a loser and nobody likes a loser. Apple makes M$ look bad.
Dr Osheroff, the Stanford Nobel Prizewinning Physicist (who served admirably like a Richard Feynman clone according to Adm. Gehman on the NASA Columbia Accident Investigation Board) gave several lectures I attended at our local university. I was not surprised to see he used a Mac and was a keen and competent Mac lover. I wonder what percentage of Nobel Prize winners use Macs in their everyday research. I'd guess a much larger proportion than most might expect.
We REPLACE PCs every 4 years or less on average. When we buy new PCs we are usually surplussing the old hardware. When we buy Macs we are generally ADDING TO our inventory.
So if you just look at our "market share" it would appear that PCs have 2-3 times the market share. In reality, they only have a small fraction.
My PC using friends are constantly upgrading/replacing their PCs (which they can, because the hardware is cheap and ubiquitous). To the bean-counting dweebs, each new purchase counts as "new market share" when in reality, they don't have ANOTHER PC they've replaced their original one.
I'm not saying that there aren't many more PC's in use than Macs, what I am saying is that Macs tend to be used for far longer (than I think they should be) so the stats appear skewed. One of my personal clients is still using an LCIII for cryin' out loud! Last week we actually had a color-classic in for repair. I wonder how many 286's are still in daily use today?
Remember, there are lies, damn lies, and then statistics!
"terrorism" and "pedophilia" are the root passwords to the Constitution
Being debt free is not a good thing. How long till people understand this? Large companies are not run like your household. Too much debt is a sign your company maybe over extending itself. Too little debt means you are not using your available cash reserves properly.
Individuals and organizations don't want their multimillion dollar investments sitting around in a savings account. Debt is a direct indication of your investors confidence in your companies ablity to make them money.
All companines have cash reserves. Very, very few companies are debt free. There is a reason for that and it isn't that is Apple is such a great company.
Well, since you're quoting IBM -- this company was at the brink of death in the early nineties. IBM was a giant but blown-up, strong but immobile elephant. Company procedures and employee attitudes where about to kill it. I can recommend Lou Gerstner's book Who Says Elephants Can't Dance?... Gerstner took over as CEO back then and is responsible for IBM's successful turnaround. But that doesn't mean its success will last forever...
I went looking at iPods online today and I noticed that their price point for accessories and addons actually drives their price point on the iPod itself. For instance, I started with the intention of buying a 15 gig iPod for approx. $300, but then as I moved through the online store, I got to a point where they offer accessories. It got me thinking about what came with the 15 versus the 20 gig iPod and there are at least 2 of the 3 additions on the 20 gig iPod package that I would have bought that weren't included in the 15g package. The additions, plus tax, to my total price now put me in a position to buy the 20g iPod package for the same price (essentially). So now I'm looking at a larger capacity iPod with more accessories, for the same price as the lower capacity iPod and less accessories. And it gets worse because now going from the 20g pod package, and adding another 2 accessories with tax, now puts you in position to buy the 40g iPod package...
They obviously planned this carefully, because I think if you are looking at iPods in the first place, then the money isn't enough of a substantial issue for a move from $300 to $500. So at very little cost and effort from Apple, they've essentially priced their products in such a way that if you're really looking to buy one, you're going to go for the gold, and shell out the additional $$$.
Is Apple dying? Quite possible, but from all indications, not anytime soon.
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-David.
If only the author of the article had gotten of a with of this neat little iPod + File Sharing idea.
Of course, a portable mp3 player alone can not save a computer company. They need to continue improving notebooks, get IBM to release CPUs with monsterous performance, make music store profitable (I am buying $40 audiobooks - should be some way there), add really impressive features to the OS...
But above all, they need to continue making new gadgets. iPod is sweet, now I want an HD-based camcoder/QT player that fits comfortably in my pocket and syncs with my DVD collection. How about an elegant stereo/video/game player box in my living room that talks to a Mac through an AirPort extreme station? How about a PDA with really fantastic voice/handwritting recognition?
"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." Oh. My. God. If you try to compare ANY computer manufacturer's profits four years ago to their profits now, they WILL look bad. Why? Because the tech boom was in full swing four years ago! The tech market is recovering from the burst bubble, but it's nowhere NEAR what it was then! Whoever wrote this drivel needs to pull his head out of his ass. Seriously. That quote is sheer ignorance and utter idiocy.
reduced CPU sales (resulting a shrinking marketshare)
I've got two Al PowerBooks and two iMacs, all purchased within the last 12 months, that tell a different story. I've made the switch to the Apple platform for my desktop machines, and two of my friends have both declared that their next computer will definitely be a Mac. People at my office are now looking at Apple in a different light, because they see Apple hardware being delivered to my desk. They are interested, curious. Switching is contagious.
I was at the Apple Store opening at Southpark Mall in Charlotte, NC. The line was so long you couldn't even get in the door. The next day, people were milling around out front at 9:00am (the store opens at 10:00am), and within 15 minutes after the store opened, it was full of people trying out Apple stuff - and making purchases.
From out here in the field, it doesn't look like Apple marketshare is falling.
Even if they do go under (which I sincerely hope they don't) they've been around for close to 30 years. How many other companies can say the same, especially those that started in a garage (yes, I know about HP etc.). Look at all the other early microcomputer players that are no longer around - Atari, Commodore, leading Edge, Kaypro, Osborne, DEC, etc. - the list goes on. Its very, very difficult, especially in the technology biz, to have such longevity.
1) OS9 won't run on G5s
60% of mac users haven't moved to OSX. There is a LOT of resistance there, the people who bought a mac because it was simple to use REALLY don't want to learn a whole new OS, repurchase all their software and lose all the apps that haven't been ported.
2) Still stuck at 2Ghz.
I'm an Apple fanboy so I don't mind, but why has the PC contingent stopped being on Apple's case about being slow?
btw, I'd love to have read the article, but "The page you've requested is only available to current money magazine subscribers." and "Offer available to U.S./Canadian subscribers only." they won't even sell me the damn article because I'm British.
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