Will the economy hurt Apple?
Many industry wags, including Microsoft’s Steve Ballmer, are wondering aloud whether the horrible economy will result in revenue problems for Apple Computer.
There is a lot of talk on the street and in the board room, apparently, about how well Apple will do in poor economic times like these. Microsoft EO Steve Ballmer has been quoted, in a CNET article, as saying, “Apple gained about one point, but now I think the tide has really turned back the other direction. The economy is helpful. Paying an extra $500 for a computer in this environment – same piece of hardware – paying $500 more to get a logo on it? I think that’s a more challenging proposition for the average person than it used to be.”
Other pundits have also been heard to wonder if Apple will be hard hit in the marketplace because of their higher prices during a time when money is tight. There is some evidence for this point, such as Apple’s 6 percent lower sales month in January 2009 when compared to January 2008. Of course, it should be noted that many other companies, such as Dell and HP, had a much worse January than Apple, both in terms of sales and stock share prices.
It may well be that the entire argument against Apple in the area of price is absurd. It is true that Apple computers cost more than some PCs. It is also true that Audis cost more than some other automobiles. Any statement like that, without comparing equals, is ridiculous on it’s face. It is very true that you can purchase, say, a PC laptop for less money than a MacBook.
However, that PC will have neither the quality not the performance specs of of the MacBook. The fact of the matter is that Apple simply does not manufacture systems at the bottom end of the line. If you go to the Dell Web site and price a system with the same specs as the MacBook Pro, you will come up with a price very close to, and sometimes higher than, the Apple product.
Yes, Apple is going to see reduced sales during the course of this economic downturn. But so is everybody else in the business. Users that need quality and pay attention to prices for equal merchandise would do as well to buy a Mac as to buy a PC. If you want cheap, you can certainly buy a cheap computer. If you want a cheap car, you don’t want an Audi. But if you need performance and quality, you may well find that a Mac or an Audi is a bargain.
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March 30th, 2009
I share your opinion, very good post.
March 30th, 2009
Right you are. Afterall, the average person spend more time on a computer than driving a car, therefore the level of satisfaction and productivity you derive from your computer mean a lot, unless you are a Steve Balmer and you just do not pay attention to these fundamental facts.
March 30th, 2009
Part of the argument–especially in the PC world–is that you can find a machine to fit the specs you want, rather than the specs that Apple believes you want.
“Lauren” is a great example. She wants a computer with a big screen but doesn’t really care about speed or weight all that much. Think “Transportable Desktop Replacement.”
Now the 17″ MacBook Pro is a wonder. Large high-definition screen, fast CPU, lots of memory, fast graphics, thin, and light. But it’s also $2700. Worth the money? Sure! But it’s also a lot more than I need–except for the screen which is perfect. And, of course, with Apple’s limited product matrix, there’s no way you can get, say, a 17″ MacBook Pro with a 2GHz Core 2 Duo instead of the 2.6GHz or 2GB instead of 4GB of memory.
Part of the issue is that Apple cannot (or will not) be all things to all people. To go with your car analogy, if I can’t afford the performance and reliability of an Audi, I may go with a Honda. Sure it won’t have the performance of the Audi, but it will have the same reliability of the Audi and cost me less money, which I can use for such things as food, clothing, and health-care.
March 31st, 2009
I’m not getting how you can possibly say that any comparable laptop that costs less is inferior.
Lenovo, for one makes a pretty nice 17″ slim laptop you can spec either over or under the Macbook Pro price.
If you want an actual comparison that makes sense take the Macbook with a cheap plastic case that had LCD issues and a craptastic case with well documented discoloration and cracking issues. It was far from an “Audi” but cost a lot more than other similar hardware.
That isn’t saying that you can’t buy a Mac that isn’t an excellent and well engineered wonder and worth the extra cash, but you can also way overpay because you have to get a feature which is important to you like say firewire or a large bright display that only comes with a premium model.
If you get into a discussion about relative values of price and features on desktops with iMacs you get all kinds of “rules” to be “fair” like it must be another all-in-one despite the fact that no one shops like that.
Apple could very well pop out an excellent $900 model to fit in between the Mini and the iMac and compete in that extremely popular sector. I would guess most of the Hackintoshes are in a that class. You aren’t seeing one and it has nothing to do with Jobs contention of “We can’t make a computer at that price that isn’t crap” It’s because it would lower margins.
It’s a tribute to Jobs skills that instead of thinking the product is overpriced, people are convinced lower cost=inferior product.