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Apple Prepares For the Coming iPod Slump
Hugh Pickens writes "Companies like AOL have stagnated along with the products that made them successful as a mature market and downward pressure on prices led to a nasty death spiral, but Saul Hansell writes in the NY Times that Apple has used its amazing six-year run with the iPod to nurture other business lines. Even though the number of iPods sold this quarter grew only 1 percent from the same quarter a year ago, Apple should be able to sustain itself with three business lines that will help it withstand a collapse in the MP3-player market: a continuing revenue stream from the iPods that have already been sold because of the iTunes Store, product upgrades to the iPhone and iPod Touch that are so different that they may well appeal to a significant number of iPod users, and perhaps most significantly, sales of the Macintosh which showed an increase of 51 percent by units and 54 percent by dollars."
Battery replacement to existing units is a great new line of revenue for any customers who aren't willing to just replace the original when it stops holding a charge.
All Apple has to do is to look at Dell. Dell made gads of money and had huge growth by selling PCs. The PC itself wasn't new, but it was being bought by more and more demographics. That, however, only lasts so long. To keep up with the same growth, Dell would have to sell more computers in a year than there are people on this planet. So they have to sell people a second computer if people aren't ready to replace their existing computer or computers to businesses. But their entire business still revolves only around computers and every thing is just an accessory. They tried getting into other lines like media players, printers, etc with varying degrees of success.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Eventually the market would saturate and I am sure Apple economists must have known it. I don't think they are really surprised at the slump.
Nothing to see here..... move along.
If the number of Mac units sold is accurate, then Vista is absolutely killing HP and Dell unit sales.
That would suggest that Dell and HP's consumer PC business will show unit and dollar sales declines.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
I think the big flaw in your numbers is business users. The vast majority of them are not going to pay the premium for Apple hardware, and I don't see Apple selling budget boxes or licensing their OS anytime soon.
If you take businesses out of the count and look at a consumer level, then your numbers seems more feasible to me. You just have to walk into a college lecture hall and count the Apple logos to see the inroads that they're making.
One time I threw a brick at a duck.
While I don't own a Mac Book Pro, and I haven't looked at its specs
when I first saw those commercials, I immediately though Wow!!! I remember ads for laptops and luggables in the late 80's/early 90's -- they didn't fit in no inter-office envelope.
I know someone a few years ago who bought himself an Apple laptop, because he was frustrated with his Windows laptop work provided. He seemed to think it was well worth the money, as it just worked.
I honestly can't say if it's a lot of hype and hot air or not
I guess it's all a matter of what you want and need.
Cheers
Lost at C:>. Found at C.
Apple could likely make just as much money with a slower rate of new products coming out. However, that would make it far easier for competitors to catch up.
Microsoft's second generation Zune, had it arrived a year earlier, would have been competitive hardware wise with the then current iPods. As it was, Apple's rapid upgrading left it looking like nothing special.
The old Apple of the late 80s basically stopped the frantic pace of upgrades, and that's exactly what allowed Microsoft to catch up over a ten year period from 1985-1995. The bumper sticker that said "Windows 95 = Mac 89" was funny, but the sad part was that Mac 89 wasn't so far behind Mac 95.
Now the tables are turned, and Microsoft is the one coasting along on past performance, allowing Apple to catch up and surpass it.
Windows Vista, 7, and Singularity: The New Copland, Gershwin, Taligent
>I'm not even confined to one vendor for application and use.
Spoken as the non-iPod owner you are. Buy music from Amazon and put it in the iPod? How about free podcasts? Audible.com? Transcode your own movies? Download mp4s from bittorrent and play them in your Touch/iPod video? Free apps for jailbroken iPhones/iTouches? All of the above work for me, zero worries. Notice how I can fill my iPod to the brim without even mentioning the iTunes store?
And then, I still that option if I want to exercise it to get commercial music, latest movies an option that you certainly don't have. It might be "absurdly high" for you, it's absurdly convenient for me.
If Apple's success is so heavily dependent on a single product I think they've got more important things to worry about.
Honestly, I think this is a problem with American companies and media. All they seem to care about is that one hit. They're desperate to come up with the one product that will ensure success, at least temporarily. Because then all too often they seem content to rest on their laurels or worse go to extreme lengths to prevent competition.
So what do we constantly hear from the media, nonsense about this-killer and that-killer, how a particular product is going to change everything and there apparently is little patience for methodical, evolving improvements.
The iPod didn't just fall out of Apple's collective ass. It really was the embodiment of Apple's design philosophy and corporate vision. It also helped that Apple actually had the resources to design the device, develop the software and actually have a direct hand in it's manufacture.
Contrast that with other companies who claim they want to develop something to compete with the iPod. In many cases, like Microsoft, they take an existing product, a Toshiba MP3 player, and customize it for their use. For that reason alone it will never be as well integrated as the iPod.
In many other cases companies will take existing products, particularly Chinese-made products, rebrand them, maybe modify the external design slightly, and resell them here. So the American consumer gets stuck with a subpar product. In the short-term the company earns some easy money but in the long-term they've hurt their brand.
There are many other issues here, but this is one of the bigger problems I see afflicting American companies. Many American companies don't actually make anything anymore. They've effectively dumping the engineering and manufacturing core of the business and have focused almost completely on marketing. Innovation seems to only exist within marketing departments. They're constantly hunting for new advertising gimmick to sucker people into buying more of the same.
Instead of taking the approach of focusing on quality at a premium they're still trying to compete on price. Then they wonder why they lose to the, usually foreign, competition. And when things go south they always blame everyone and everything but their own decision-making. Granted, I'm over-simplifying a bit, but I do think it's a big problem nonetheless.