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Kool-Aid Guzzler wrote:

http://lowendmac.com/musings/09mm/art/m … s-0609.gif

You can see the impacts of the recession right there as the "V" in their sales graph.  They made a record profit that quarter of $1.6B, when they could have made a record profit of $2B+ without a recession. 

Meanwhile, Dell dropped 63% in profits nd 23% in revenue in their last quarterly statement.  This result seems totally backwards to what would have been expected in a recession.  It seems like the low-end, cheaper computer maker would see an increase in revenue and profits, and the high-end, expensive maker would see a drop.  I think this demonstrates how well Apple's strategy is working.

We are in a really strange place when we say that they didn't break the record enough so that means they are affected by the recession

If you look closer at the graph there is a dip every year at that point. It is called January-March is their slowest quarter every year. Therefore, you would have to see a drop each year take place at that point. The more their total sales increase the larger the drop will look on the graph.

You are partially right in the second half of your post. You state

This result seems totally backwards to what would have been expected in a recession.

Most people in these forums did predict exactly the opposite. Those of us that predicted what actually happened were roundly criticized as being Apple lovers or whatever else made them feel better. We started reporting quarter after quarter about Apple's successful sales and we were told that we weren't looking at one factor or another and that it was all downhill from there, blah blah blah. It got to the point where we got tired of the conversation and haven't really participated in a while because no matter how much evidence we posted to the contrary we were told again and again that the strategies that Apple had chosen were a mistake. In this economy they would be hammered because people will look to buy cheaper PCs, etc. Notice that as soon as I did post this message I was hit with

I was waiting to see how soon, and which of, the Dynamic Duo would post first, and how loudly crow. Took you two long enough.

My point then and my point now is that those people that aren't normally in the market for a Mac because of the cost are going to be even more frugal with their money in a recession. This means they are going to make their current PC last longer. Those that aren't as concerned about the cost probably still have money to spend on a computer. The fact is that once we were in an officially recognized recession the savings rate went from an 0% to just under 7% now. This is because those at the lower end of the income scale went from spending into the red to actually saving some money. There goes a lot of cheap PC sales, etc.

Kool-Aid Guzzler wrote:

Who's the other half of your dynamic duo?

The most recent V in the graph does indeed seem larger than past years - I actually hadn't even noticed the others until you pointed them out.  Interesting theory about the most recent one looking bigger because the sales are bigger.

I watched many of the odd predictions and reactions around here, and sat back quietly laughing to myself expecting that each quarterly report would show how great Apple's strategies are paying off.  Walk into any Apple store and you get a sense of the buzz surrounding this company.  Maybe they should change the name of this forum from "In Tech News" to "Apple Pessimists". 

Czachorski was the other half. And you are spot on about the name change

You're also right about the Apple stores. Every time I go in one there is a flurry of activity. Even if the rest of the mall isn't that busy the Apple store is always buzzing. And forget about when a new product is released. I bought my iPhone 3G last year in an Apple store on release day and the line was unbelievable. Unfortunately I don't live that close to an Apple store now (nearest one is about 3+ hours away) so when I upgraded to the 3GS this year I did it at my local AT&T. I had to wait a few days for it but I have to say that my local AT&T has some really great people working at it. It was the best experience I've ever had with a wireless company.

robco wrote:

I was surprised when we got our 3G Ses. We went Saturday after launch to a busy Apple Store with no reservation or pre-order. We waited about ten minutes and walked out about 30 minutes later (the sales rep was having issues with the handheld machine). It did take a while to activate, but mostly because they didn't tell us to reboot the phones - that worked. Most of the Apple Stores I've visited in the area usually have a decent crowd.

Were you surprised that it didn't take you that long? I'm sure it had a lot to do with Apple ramping up production adequately. Don't forget that they did sell over a million the weekend before when it was released. I think they are just more organized because they keep learning from each release.

Last edited by frankly (2009-07-29 11:21 pm)

Kool-Aid Guzzler wrote:

http://lowendmac.com/musings/09mm/art/m … s-0609.gif

You can see the impacts of the recession right there as the "V" in their sales graph.  They made a record profit that quarter of $1.6B, when they could have made a record profit of $2B+ without a recession. 

Meanwhile, Dell dropped 63% in profits nd 23% in revenue in their last quarterly statement.  This result seems totally backwards to what would have been expected in a recession.  It seems like the low-end, cheaper computer maker would see an increase in revenue and profits, and the high-end, expensive maker would see a drop.  I think this demonstrates how well Apple's strategy is working.

Dell has been having issues, restructuring, and whatnot.  However, the most successful computer companies (i.e. not Dell, and not Apple) on the planet have, in their arsenals, consumer towers and low-cost netbooks.

Acer grew 51% since last year in the US, and they make the cheapest computers that money can buy.
From IDC,

Acer continues to capitalize on its growing channel presence to ship Portables geared toward a wide range of cost-conscious consumers. The company maintained its lead in Mini Notebook PCs while its early entry into Atom-based Notebooks should also pay dividends later in the year. The company saw a significant gain in the U.S. market, likely benefiting from the troubles of Dell and Lenovo.

So yeah, Apple's strategy is working pretty well --in the US market.  It's hard to say whether a consumer tower or netbook offering would help them catch up to HP.  As for the global market, the boutique strategy just doesn't cut it.  HP shipped over 13 million machines for the year;  Toshiba was number 5 at 3.5 million.  Apple didn't make the list.

Acer's growth is primarily in netbooks, no?  When Apple rolls out another market game changer this fall, the netbook world will be turned on its head.

robco wrote:

I guess it depends on what you're going for. If it's volume, then Apple's business model hasn't ever really been about volume. If it's raking in cash, Apple does a pretty good job of it. Selling loss leaders can be a good marketing strategy, but not if they're the only thing you sell. Apple probably could boost their numbers with a consumer desktop and a more diverse portable lineup, but that doesn't appear to be a concern for them. Their margins are strong enough so they don't have to rely on huge sales figures to make a profit.

In the US, possibly.  Worldwide, there's no chance.  HP shipped 13 million machines.  We don't know how many machines Apple shipped but it has to be less than 3.5.  Let's say it's 3 million --No amount of price gouging could cover that large a volume gap.

robco wrote:

I didn't think they'd run out of phones, more that the wait would be much longer. To be honest, if I'd already had a 3G, I wouldn't have bothered to upgrade. Most of the features are available with the 3.0 update. We got the 3G S mostly for the added storage and well, may as well get the current model. I don't think I'll be in a hurry to upgrade before the contract expires. I'm hoping we'll see the iPhone on a competing carrier, but that's probably too much to hope for. AT&T - and GSM/HSPA tech in general - are the weakest part of the iPhone experience.

I didn't say anything about them running out. I asked if you were surprised there was no wait. My point was simply that when they sold over a million the previous weekend the initial demand was met and therefore there probably wouldn't be any waits going forward. Also, by most accounts I read the initial weekend wasn't even that bad because they had plenty of stock and allowed pre-orders this time, which sped up the lines.

I went from a 3G to a 3GS and I can tell you that the speed difference is noticeable and worth the upgrade. When you throw in the compass, voice control, Nike+, and better camera (with video) it was more than worth the upgrade for me. I didn't upgrade my wife's this time because she isn't as much of a power user as me but I will probably upgrade her the next time around.

You are right about AT&T being the weakest part of the iPhone experience.

They're probably ticked that the iPhone offers a better experience, can do more and the games cost less.

John Gruber of Daring Fireball weighs in on the issue at hand.


Frank

Last edited by frankly (2009-07-31 12:08 am)

ukimalefu wrote:

In other news, NINTENDO is saying that the iPhone competes with the DS. Apple is now an official player in hand held gaming devices. THE iPhone PRINTS MONEY TOO!

http://www.engadget.com/2009/07/30/nint … e-a-ds-ds/

A Telltale dev recently opined that the iPhone is more powerful than the Wii, and as I mentioned a few days ago, one credible rumor has the AppleTV becoming a welterweight game console. Ports shouldn't be difficult. I am a bit leery of other than official numbers of Macs shipped. Published numbers are healthying up as the economy starts to recover.

Mr. T wrote:

Kool-Aid Guzzler wrote:

Mr. T wrote:

Yeah, netbooks.  I don't know what kind of "netbook" Apple's working on, but it's likely going to be as "high-profile" as a netbook could be.  I don't think they'll take many sales away from Acer.  A netbook will still boost Apple, but it's not going to dominate the market, because that's not Apple's focus.

Phones weren't their focus prior to Jan of 2007.

Precisely my point.  The iPhone is a high-profile device designed to compete with similar high-profile devices.  They're doing okay in the smartphone market, but they have no hope (or intention) of competing with $10 throw-away TracPhones.  In the overall cell phone market, Apple is not really significant.

It's the same type of situation with netbooks.  Apple's version is going to be a little thinner, have a little better battery life, and cost double.  It's going to boost sales, for sure (because the market is heading towards netbooks), but the netbook market, as a whole, will be mostly unaffected.

Netbooks per se, no. Apple's strength, tho, has been in laptops for some time, and portables in the aggregate now total about 80% of the overall market; and it should help that Apple will have a product to fill that high-portability niche at a rather better price point than the MBA.

Apple does seem to be highly, perhaps overly concerned about iPhone profits, tho, in a different vein- but that seems like something for a separate thread.

Kool-Aid Guzzler wrote:

If you view their position strictly in terms of selling perhaps 1-2% of the cell phones made, then I am not surprised that you erroneously conclude that they are not significant.  If you look at them as a company that delivers high value to the customers, while turning a healthy profit, and using those funds and their design skills to re-invest and develop new innovations, then they could be looked at as a very significant player - perhaps THE most significant. If I were RIM, Samsung, Nokia, or other makers, that stark fact is what would have me quacking in my boots.

We both seem to have a different idea of the word "significant."  This is what I meant:

Everyone else in the industry accepts the fact that they can't sell a phone with a 3x profit margin in a large enough volume to make the kind of profit that Apple does.  Before Apple entered the market, such a high-margin phone didn't exist --since then, nobody has attempted to compete with Apple on those terms.  So as long as other phone makers aren't losing a lot of sales to Apple, they can keep on doing business just like they've always done --Apple isn't a threat.  In the special case of smart phone makers, Apple is taking sales from its competitors, so they obviously need to keep on their toes.

high value

Hmm... that sounds familiar.

while turning a healthy profit, and using those funds and their design skills to re-invest and develop new innovations, then they could be looked at as a very significant player - perhaps THE most significant.

There was an article a while back explaining that Apple's R&D costs are abnormally low.  (I think it was a thread on this forum).

Mr. T wrote:

Kool-Aid Guzzler wrote:

Mr. T wrote:

Yeah, netbooks.  I don't know what kind of "netbook" Apple's working on, but it's likely going to be as "high-profile" as a netbook could be.  I don't think they'll take many sales away from Acer.  A netbook will still boost Apple, but it's not going to dominate the market, because that's not Apple's focus.

Phones weren't their focus prior to Jan of 2007.

Precisely my point.  The iPhone is a high-profile device designed to compete with similar high-profile devices.  They're doing okay in the smartphone market, but they have no hope (or intention) of competing with $10 throw-away TracPhones.  In the overall cell phone market, Apple is not really significant.

My Net10 phone cost me $60, and only costs $15 a month.

At this point I could never justify jumping from $15 to a contract at $90 a month when I barely use it as it is. If it had internet, I'd use the hell out of it though. And I mean real internet, not "cell phone crappy browser that takes three minutes to load a small page and takes forever to navigate through via the direction keys all while charging me 10 cents for every minute of download time." But what can I complain for $60? I didn't buy it to use the internet. If I really want internet on the go, I'll get an iPod touch. Shame I'd only be able to use it in WiFi hotspots though.