“SG Cowen analyst Richard Chu said Tuesday that a survey of 1,400 U.S. consumers has caused him to become more positive about Apple Computer’s shares. In a research note, Chu said there is ‘evidence of a significant halo effect’ and strong market share for the iPod that is helping boost sales of Apple’s Macintosh computers,” Rex Crum reports for MarketWatch.
Chu estimates Apple will earn 31 cents a share on $3.33 billion in revenue when it reports third-quarter results tomorrow.
Full article here.
MacDailyNews Take: We await comment from Rob “iPod Halo Effect is just a myth” Enderle and Roger “I see no evidence of iPod Halo Effect” Kay with bated breath.
Related MacDailyNews articles:
Analysts expect Apple to post $3.33 billion in revenue for Q3-2005 on July 13 – July 07, 2005
Merrill Lynch: Mac sales ‘appear robust,’ expects futher evidence of ‘iPod Halo Effect’ – July 07, 2005
BofA raises Apple earnings estimates, forecasts 5.4 million iPods, 28-percent Mac growth for quarter – July 07, 2005
TheStreet.com dubiously concludes that iPod demand has slowed, could impact Apple earnings – July 06, 2005
J.P. Morgan raises Apple estimates based on ‘more optimistic’ Mac shipments – July 05, 2005
First Albany raises Apple earnings, sales, iPod forecasts, cuts Mac mini forecast – July 05, 2005
Apple to webcast third quarter 2005 financial results conference call on July 13 – July 05, 2005
RealMoney: Apple’s iPod Halo Effect ‘quite profound,’ Macs taking good market share from Wintel – June 27, 2005
Enderle: ‘iPod Halo Effect is just a myth, same thing as having Paris Hilton visit Apple stores’ – May 02, 2005
Morgan Stanley: Apple’s ‘iPod Halo Effect’ is ‘roughly double what the market expects’ – March 18, 2005
IDC VP Roger Kay sees no evidence of Apple ‘iPod Halo Effect’ based on ‘Apple’s desktop share’ – January 10, 2005
We’ll all see when the numbers are released tomorrow. If Mac sales are indeed up 25% or more year over year, then there is no way that Enderle or anyone else can deny the iPod halo effect any longer…
…and if they aren´t the mac fanboys will make all the excuses we need!
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I’ve said it before, and I will say it again:
The halo effect was created with the intention of becoming a self fullfulling prophecy. It is a marketing tool. It was created to have an ice-breaker in any conversation about switching from windows to mac.
Without talking about the ‘halo effect’ there would have been no measurable ‘halo effect’ –
And, it has worked…
The first rule of the “halo effect” is that mac users do not talk about the “halo effect”.
I see first hand evidence of this all the time. I don’t need no stinkin report to tell me this.
Here’s my prediction for tomorrow’s Q3 report…
Macs sold: 1.1 million (best quarter in 4+ years)
iPods sold: 5.4 million (best quarter ever)
Sorry, folks. It is easy to deny, because there is no way to draw a cause and effect relationship between iPods and Mac sales. There are too many confounding variables.
For example, don’t you think that those niggling little security problems which affect one of the other popular operating systems might just have some little influence on sales? It would be at least as reasonable to talk about the Winn Schwartau Effect.
Personally, I would need to see some pretty compelling evidence that the mind of “Joe Sixpack” connects iPod>Apple>Apple Computer>Macintosh.
And don’t get me started on “Brands”. Brands are for cattle.
While the Halo effect will produce some converts, I think its still going to be the Mac faithful who are going to produce more converts. I’ve got at least 6-7 friends who having brought an iPod and are still undecided as to what their next computer purchase will be.
I have spent many an hour with each showing off what my Powerbook and Tiger is capable of.
While the introduction of Intel to Apple platform is swaying some the time scale or this introduction seems to prohibitive to them.
So in other words they are deciding to wait until Macs start shipping with Intel inside to make an ultimate decision.
Simple…. the halo effect works by exposing more people to the Apple user experience and getting them into an Apple store for a hands on experience.
The iPod and iTunes have enabled Apple to promote the Mac in ways that were impossible before.
With increasing numbers of Windows users enjoying their iTunes/iPod – it’s only natural that they’d be more likely to consider (and buy) a Mac. Why isn’t this obvious to everyone?
I just wanted to say that I have nothing to add.
Oops — I’m sorry. That should’ve read: I have nothing ORIGINAL to add.
At this juncture.
The way I see it, the Halo effect is where potential customers get to experience Apple products for the first time. Many of these customers may have little or no experience with Macs or the Mac OS. Having a good experience with the iPod may therefore induce them to look into the Mac platform for the following reasons:
1. Virus / Security issues on Wintel
2. Ease of use
3. Software such as iLife etc.
The point is that the iPod has spread the name of Apple to people who typically have never bought or considered one of their products before. Other factors such as the above will obviously be important in presuading customers to buy a Mac for the first time.
Therefore saying that the Halo effect doesn’t exist is not correct. It is one means that are encouraging people to look into buying a Mac instead of a PC.
But just you wait until tomorrow, you pusillanimous Mac zealots!
‘At’s right! Uh-huh.
I’m gonna be ALL OVER that quarterly report, Homes!
You KNOW it!!!
Peace out.
(Except to Mac users.)
Enderle: I am seeing more Paris Hilton effect instead, Paris Rocks!!!! My Underle Group consists of me, myself, I and my wank. My wank has the highest IQ among us and it is the driving force of our think-tank: the Underle Group in the Bay Area.
I have tried to convert a friend recently who likes the i-Pods and who is a realtor but apparently the IT guy of his real state firm tells him that FMLS and Top Producers web apps only work with MS Internet Explorer for Windows and don’t work well in Virtual PC. Does anyone know if this is true or if there are alternative services that he can use. Any realtors out there?
I know 4 ipod owners that have pcs. None has ever considered switching to a Mac. there is no halo effect – this is a myth started by the Steve the Great.
Most macs being bought today are by those mac owners upgrading. PC owners buy macs for the virus reasons, not the ipod reasons. Very, very few PC owners are buying macs. The cost difference is huge and growing.
Please don´t waste all our time by flaming with the osx is better diatribe. few care, except osx owners.
It would be easy to test the Realtor web apps with your own mac.
The IT guy probably just says that because he doesn’t want to support 2 platforms.
10.4.2 is up!
The Halo I want is Halo 2 for Mac. I guess I’ll just have to play through again on Legendary.
Tony… I also know several PC/iPod owners and only one is ‘considering’ switching to (or adding) a mac. But even if only 5% (and the figure often quoted is 10%) do switch that is a huge HUGE boost to the mac user base. 35 million iPods by years end!
Maybe the simple fact that Apple as a company is financially sound (thanks to the iPod) is as important as the ‘user experience’ of the iPod.
I think, for whatever reason, the halo effect is real.
MW truth – ain’t it so, ain’t it so!
I’ve been a Mac convert since May of 2004 and do you know what sent me running to my beloved PowerMac G5 dual 1.8? It was Final Cut Pro!! I did a little research and found out that anybody worth their salt when it came to video editing used Apple products. The fact that they were virus proof was only icing on the top!
A basic principle of advertising is that increased exposure and mind share usually equates to increased sales. Add to that the fact that most people love their iPods and have had really great experiences with them and a lot of them end up going into Apple Stores crammed with other cool Apple products to buy their iPods and accessories and there really is no debate. Of course the halo effect is real. The only question that remains is one of degree.
Thanks Neil
I tested the FMLS web site and yes it has problems with Safari. Some functionality links don’t show up which make the site unusable. This is the number 1 real state listings site in Atlanta. Shame. It may work under Virtual PC but this site gets heavy heavy use for a realtor. If you spend 90% of your time on it then my friend may as well get a Windows PC.
The fact remains that in marketing you must create awareness as well as a call to action (i.e. purchase).
The iPod has certainly increased awareness of Apple, and I believe increased Apple sales to people that previously would not have considered Apple products.
Including myself, I know 6 people that have purchased (or will be soon purchasing) an Apple OS X laptop and/or desktop product AFTER purchasing the iPod as their first Apple product (EVER)!
I know for sure that four of us NEVER even considered Apple as a Personal Computing choice prior to our experience with iPod (i.e. we now discuss how we have “seen the light” as a result of “discovering” Apple)
After getting our iPods we started looking into Apple related websites (as well Apple’s own) for info about our iPods, and of course discovered all the information about OS X, and the Apple Mac hardware.
Yes viruses and malware etc were factors in our decisions to purchase Apple, but without the iPod, we would have just been coughing up for another 1 year subscription to our Firewall, Adware and Virus protection software, totally unaware of the existance of a real, and even better option.
I am not going to suggest that our experience is typical of ALL iPod owners, however I also think that statements such as “I know ‘x’ number of iPod owners that aren’t going to buy a Mac” are flawed in conclduing that the iPod halo effect does not exist.
The fact remains, the iPod halo effect is only described as the INTRODUCTION of Apple and it’s hardware/software to people previously unaware of it, through their experience with the iPod. The premise being that SOME of these people, now that they are aware of Apple, will consider, and better still even purchase Apple products.
For at least 4 people I know, and I’d be willing to bet the other 2 people can be counted in as well, our “Apple hardware purchases are the result of our experiences with the iPod” – I believe that the “shorthand” for that is the “iPod halo effect”?
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I offer this as SOME evidence that as a result of a connection with an iPod, there was a connection made to Apple, and then onto their hardware/software.
And in this case, one, ten or even 1000 negatives do NOT disprove the existence of the iPod halo effect, however only a few positives DO prove that it DOES exist, as it shows that as a result of the iPod, SOME consumers have been exposed to and then chosen to purchase Apple products when they previously wouldn’t have, which is the ENTIRE concept behind the iPod halo effect.
my 2 cents
Luke
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JEG, did you test the site under Internet Explorer or Firefox on the Mac? A lot of times if I run across a site that Safari has trouble with I will fire up one of those and it works fine.