“Intel Corp. the world’s largest chip maker, seems ready for an economic slowdown, with consumers gravitating toward cheaper goods. When reporting third-quarter earnings this week, Intel Chief Executive Paul Otellini told investors that he was seeing ‘signs of stress’ and market uncertainty as a result of the credit crisis. At the same time, Intel saw stronger sales of its Atom chip, designed for low-cost computers and devices,” Therese Poletti reports for MarketWatch.
“Apple Inc., however, is thinking quite differently. After a slew of rumors that Chief Executive Steve Jobs would unveil a laptop at a recession price of $800, investors were disappointed that the company’s sole entry into the sub-$1,000 notebook market consisted of trimming $100 from the price of its cheapest MacBook model,” Poletti reports.
MacDailyNews Take: “Slew of rumors?” No. One rumor, from a single source, and then a slew of articles covering that lone rumor. As usual. (See: $800 MacBook rumor knocks Apple stock for a loop – October 14, 2008)
Poletti continues, “Apple may be making a high-stakes gamble by not addressing the economy head-on with lower prices for its products — which, to be fair, were likely in the works long before the current financial crisis began… But amid theories that the United States is in its worst economic crisis since the Great Depression, Apple’s steadfast focus on highly stylized, more expensive products makes one wonder if executives have their heads in the sand, or if they know that their consumers are willing to break the bank to buy its gadgets.”
MacDailyNews Take: Five (5) of the top 10 “Bestselling Computers and PC Hardware” on Amazon this morning were Apple Macs ranging in price from $994-$1794. The $1794 MacBook Pro was the top-selling Mac of the five on the list at #2. Someone’s certainly got their head in the sand, but — hint, hint — they’re not an Apple executive.
Poletti continues, “Recent data from market researcher Gartner Inc. supports the view that lower-cost products are gaining in the marketplace… In an interesting shift, two companies that focus on netbooks — low-cost, scaled down notebook computers — saw robust growth. Taiwanese-based ASUS and Acer Inc. both saw growth accelerate. In the United States during the third quarter, Acer grew at a rate only second to Apple. Apple was still the fastest growing among the top U.S. PC vendors, with 29.4% unit growth, while Acer saw unit growth jump 11.2%., vs. the third quarter of 2007.”
MacDailyNews Take: Apple is #1 in growth with Mac products that are 2.5x-4x the cost of one of those Acer mini craptops. Therefore, Poletti’s contention that Apple should move to making low end shrunken junk is simply illogical. In the U.S., where everyone is supposedly lining up for free soup on street corners, Apple Mac units sales are growing at a rate 30 times that of PC market; so excuse our French as we call bullshit on Poletti’s fatally-flawed premise.
Poletti continues, “The Gartner data on the faster growth at Acer are compelling, because the trend toward purchasing lower-cost devices was evident even before the stock market meltdown this month. Analysts said it was still unclear if the strong sales among these cheaper netbooks were cannibalizing other PC sales, or if it represents a new growth segment.”
MacDailyNews Take: If you’re surprised that $399 mini craptops sell more units than $1999 MacBook Pros, then you either haven’t been to Wal-Mart lately or you shop there regularly. Apple Mac currently has 17.6% retail market share and 31.3% revenue share in the U.S.
Poletti continues, “It is worth noting that Apple buys its processors from Intel, and that it could develop a lower-cost netbook around the Atom chip should it choose to in the near future. When Jobs was asked about the growing netbook market on Tuesday, he said ‘we’ll see how it goes.’”
MacDailyNews Take: Apple won’t bother unless Applesque margins somehow magically appear.
Poletti continues, “The calendar fourth quarter, which is typically the busiest of the year for PC makers, is probably going to be full of disappointments this year, as more consumers sit on their wallets. So time will tell who is making the right bet here — Apple or Intel.”
MacDailyNews Take: Intel hasn’t stopped making high-end, high-priced processors, have they? More logic rudely deployed in the face of Poletti’s poppycock. Both Intel and Apple are right, Intel’s covering as many bases as it can and Apple’s catering to its discriminating user base who understand quality, elegance, total cost of ownership, and all of the other reasons why people buy Macs and will continue to do so regardless of clucking choruses of Chicken Littles.
Full illogical article here.
[Thanks to MacDailyNews Reader "Christopher J." for the heads up.]
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