Imagine sitting on your own private jet – you’re high up in the clear sky, no clouds, things are clam and you’ve been given a flute of champagne to sip on. Then you look out the window, towards the land – and you see flames. Other planes burning up and some colliding in to each other. The land filled with chaos and you can only imagine people screaming their heads off.
But you don’t care – you’re mile above that problem and enjoying life.
The the above scenario is where Apple is at given the current worldwide economic crisis
You see, despite the thinking of cheap US$800 laptops that companies like DELL, Toshiba, Acer, Asus and others are churning out – that’s just not Apple’s style.
Sure we would all love cheap laptops, but we would look just like anyone else. Apple have a premium brand, with premium products and therefore premium prices to match. During their recent launch of new laptops, Apple announced prices from US$999 up to US$2499. So the question is – if you like a good premium product – would you pay an extra $199? (Agree that some specs may differ)
People are willing to pay extra for that premium feel and ‘oh-so-awesome-one-click-mouse’. No doubt Apple has grown tremendously and maintained that reputation over the past few years – and Steve Jobs has done a hell of a job to keep his plane cruising at that altitude.
So why isn’t Apple down with the mess that the others guys are in?
You have companies below competing, trying to save costs, laying off staff, whipping sales people to make more cash and that just isn’t how Apple sees it. Yes, no doubt Apple’s margins will be a little lower and growth won’t be as before – but Apple’s sells to a market that is not a price-sensitive one and will not compromise on premium quality goods. Hence Apple doesn’t bring its price down nor sacrifices it’s brand.
You take the same case for car manufacturers – just because the current crisis affects people’s spending, we don’t see BMW or Mercedes bring down their sedan prices to match Toyota’s Camry?
It’s an economic dip that will affect BMW’s margins, but that’s reality. Like every other car manufacturer, they will take a hit. But when we all do recover from the economic issues, BMW will still maintain it’s reputation for a company producing quality cars.
Here is a quick Apple health check – the company has $20 billion in cash, no debts and the highest margin and growth rate it in the industry. If you see Apple’s stock price going down, it’s not because the company is in trouble – it’s because everyone else in the same industry will dip, and Apple economically follows suit.
Sources:
http://www.alleyinsider.com/2008/10/apple-won-t-get-crushed-by-the-recession
http://www.nytimes.com/2008/10/19/business/19digi.html
As predicted, new iPod have hit the virtual online shelf at the Apple store.
These include new ranges on the Shuffle, Nano, Classic and Touch series.
The Shuffle starts from AU$65 with 1GB and AU$89 for 2GB.
The Nano, which now comes with a much bigger screen (2 inches) to support better video viewing, starts from AU$199 for 8GB and AU$279 for 16GB.
However the 16GB has a 7-10 day delivery period within Australia while the other will ship withing 24 hours.
The Classic – which only has one model storing 120GB sells for AU$339
Finally the iPod Touch, starts at AU$329 for 8GB, AU$419 for 16GB and AU$549 for 32GB. It has the biggest screen of all at 3.5 inches supporting Multi Touch and is WiFi capable.
I haven’t had a hands on feel on any of these models – but I’m sure the Apple Store on George St, Sydney as well as other Apple Stores in Myer and David Jones would stock them too.
Despite the new releases of the iPod range – Apple’s stock have dropped $6.24 (-3.95%) closing on Tuesday 9th (American time). I will be reviewing this tomorrow to see the results of stock close on 10th Sept (American time).
In a week from now we may potentially see a new line of iPods from Apple.
It has been confirmed that Apple will have a press conference scheduled on the 9th Sept 08 to unveil “unspecified new products”.
The event has been themed “Let’s rock” and some believe that Apple will launch a new generation of iPods and possibly a price cut to be more competitive in today’s market.
Last month, Digg cofounder Kevin Rose predicted that the following could be some of Apple’s announcement:
- Revamp of the entire iPod Line
- Cosmetic changes to Touch but Nano will have a significant change (the above picture is taken from his blog)
- Price drops to separate the iPod from the iPhone
- new iTunes (version 8.0)
What is unclear is whether Apple will release any updates to their MacBook line.