The bad news from Apple's quarterly results(247wallst.com)
247wallst.com
The bad news from Apple's quarterly results
http://www.247wallst.com/2008/04/the-mac-apples.html
6 comments
It's not well written, but there is a kernel of truth in there: Apple has not even scratched the surface of the corporate computing world.
I once met with someone in charge of big chunks of IT for VW who was quite the Mac fan, but had an interesting perspective on why they couldn't even really consider them:
Apple has positioned itself as a luxury item (and much of their strategy depends on that image) and as such can't play in the commodity market. They create artificial scarcity. They have real production limits. They don't have the support infrastructure to deal with large corporate customers.
His line was, "What if I call them up tomorrow and order 10k machines? There's no way they can fill it in a timely manner, much less support us after the purchase."
Interesting, certainly.
I once met with someone in charge of big chunks of IT for VW who was quite the Mac fan, but had an interesting perspective on why they couldn't even really consider them:
Apple has positioned itself as a luxury item (and much of their strategy depends on that image) and as such can't play in the commodity market. They create artificial scarcity. They have real production limits. They don't have the support infrastructure to deal with large corporate customers.
His line was, "What if I call them up tomorrow and order 10k machines? There's no way they can fill it in a timely manner, much less support us after the purchase."
Interesting, certainly.
"Apple has not even scratched the surface of the corporate computing world"
Apple actively subverts any desire the corporate world may have to switch. Unreliable supply chains, a lack of scheduling, unpredictable design decisions, &c. I know their sales people feel the frustration that their corporate clients feel: they -want- to be able to sell 10 million in product annually to a single client. But, for instance, this last year their educational deployment was MONTHS delayed because of the new iMac.
I wish this were the exception: it's the rule. And that's great if you're selling 'cool', it's not great if you're selling 'reliable'.
Apple actively subverts any desire the corporate world may have to switch. Unreliable supply chains, a lack of scheduling, unpredictable design decisions, &c. I know their sales people feel the frustration that their corporate clients feel: they -want- to be able to sell 10 million in product annually to a single client. But, for instance, this last year their educational deployment was MONTHS delayed because of the new iMac.
I wish this were the exception: it's the rule. And that's great if you're selling 'cool', it's not great if you're selling 'reliable'.
"iPod sales sales have slowed considerably. They were up only 8% in the quarter. to 10,644,000. With almost 150 million sold since the product was introduced, it is surprising that the music player has held up that well. The product saved the company from obscurity but its best days are over."
Interesting statement, and a noticable lack of facts to support that statement. With 150 million iPods sold, there are about 6 billion people on this planet that don't have one. If Apple managed to sell 10 million iPods last quarter, why would it not do the same this quarter?
Interesting statement, and a noticable lack of facts to support that statement. With 150 million iPods sold, there are about 6 billion people on this planet that don't have one. If Apple managed to sell 10 million iPods last quarter, why would it not do the same this quarter?
This also seems relevant to the discussion of the relative strengths of the Mac and PC markets right now:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aQ7_...
vs. Apple's Best. Quarter. Ever.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aQ7_...
vs. Apple's Best. Quarter. Ever.
Gruber posted an apt response to this on Daring Fireball, I thought.
http://daringfireball.net/linked/2008/april#thu-24-mcintyre
What a terribly-written post.
I agree. The wording is fine, but it's pure speculation and FUD. There is absolutely no indication of any research done, data collected, or sources cited.
The writing is a little off compared to his usual stuff, but it still raises a valid point: Apple can only grow so big if they can't get companies/schools to start buying Macs.
Personally, I think it'll be a while before this happens, if it happens at all. Too many of the people who control what computers those companies buy don't see Macs as 'real' computers.
Personally, I think it'll be a while before this happens, if it happens at all. Too many of the people who control what computers those companies buy don't see Macs as 'real' computers.
"The writing is a little off compared to his usual stuff, but it still raises a valid point: Apple can only grow so big if they can't get companies/schools to start buying Macs."
It's worthless because he gives no facts or useful figures to support his hypothesis.
1. Schools ARE buying Macs. Pretty sure they displaced Dell to become number 1 in that market again (or was that just laptops?).
2. How big is big, exactly? How much of the consumer market can they realistically get? Once upper level managers decide they need the cachet of a Mac laptop precisely because of its must have status as a consumer item, how are the IT guys going to tell them they won't support it and keep their jobs? There's some evidence this is happening with iPhone already.
"Too many of the people who control what computers those companies buy don't see Macs as 'real' computers."
Those are probably people who are very cognizant of the stock market, and judge the appeal of potential suppliers at least in part by what the vendor's stock price is doing. In the media, "Vista is a failure" and "Apple is the hottest company in tech" are strong memes right now. I guarantee you that the "decision makers" are very aware of them.
Also, the unstated idea that Apple needs to overtake Dell and/or HP for its stock to continue to grow is badly mistaken. When you have 3.5% world wide share, a single percentage point of increased market share is a huge increase in revenue and profit. Add to that the fact that Apple's share of the market is mostly among the most profitable customer segments. Much of Dell and HP sales are for product lines with razor thin margins. So, no, it is not necessary for Apple to rival the dominant players in corporate sales to continue to grow.
UPDATE: I totally left off the fact that Apple is really the most successful 21st century consumer electronics manufacturer, and are almost certain to introduce entirely new product categories. They won't all succeed, but given Apple's track record it would be foolish to bet that none of them will.
It's worthless because he gives no facts or useful figures to support his hypothesis.
1. Schools ARE buying Macs. Pretty sure they displaced Dell to become number 1 in that market again (or was that just laptops?).
2. How big is big, exactly? How much of the consumer market can they realistically get? Once upper level managers decide they need the cachet of a Mac laptop precisely because of its must have status as a consumer item, how are the IT guys going to tell them they won't support it and keep their jobs? There's some evidence this is happening with iPhone already.
"Too many of the people who control what computers those companies buy don't see Macs as 'real' computers."
Those are probably people who are very cognizant of the stock market, and judge the appeal of potential suppliers at least in part by what the vendor's stock price is doing. In the media, "Vista is a failure" and "Apple is the hottest company in tech" are strong memes right now. I guarantee you that the "decision makers" are very aware of them.
Also, the unstated idea that Apple needs to overtake Dell and/or HP for its stock to continue to grow is badly mistaken. When you have 3.5% world wide share, a single percentage point of increased market share is a huge increase in revenue and profit. Add to that the fact that Apple's share of the market is mostly among the most profitable customer segments. Much of Dell and HP sales are for product lines with razor thin margins. So, no, it is not necessary for Apple to rival the dominant players in corporate sales to continue to grow.
UPDATE: I totally left off the fact that Apple is really the most successful 21st century consumer electronics manufacturer, and are almost certain to introduce entirely new product categories. They won't all succeed, but given Apple's track record it would be foolish to bet that none of them will.
Best line from this: "The PC and Windows had done too good a job." Yes, that's exactly why Apple saw 51% growth in Mac sales - because Windows has just been doing too damn good a job. Just to push his ignorance to the forefront, also tries to directly compare 2008 Apple with 1980's Apple and 1998 Apple.
Granted 1998 may have been an important year in Apples history but they never experienced volume and popularity like they have in 2005-Present. Apple is the biggest brand in tech right now. Trying to compare that with where they were in an infant PC market in the 1980's or when they were trying to resurrect themselves in the mid-late '90's is simply idiotic. He also fails to understand the impact that the young generation of computer users will have in the long-term. How many 20-something college students or IT-types are there that are pretty Apple-savvy. A lot. There is little doubt that this will seriously impact the work computing environment on some level. If any company in this discussion has hit a glass ceiling, it's clearly Microsoft.