“Computer makers are scrambling to adjust to rapidly deteriorating demand for personal computers, cutting prices as they brace for what is quickly shaping up to be a cheerless holiday season,” Justin Scheck and Yukari Iwatani Kane report for The Wall Street Journal.
“Dell Inc. and some retailers are even offering discounts of 20% to 30% on new notebook computers, chipping away at profits in a segment that has enjoyed healthy demand,” Scheck and Kane report. “Until now, the $263 billion PC sector had shown resilience amid a slowing economy: World-wide PC shipments rose at least 12% in each of the first three quarters of the year. But PC sales have stalled in recent weeks as consumer spending has plunged.”
“Research firm IDC is preparing revised numbers that it could release as soon as Friday that project a 1% drop in U.S. PC shipments for the fourth quarter compared with a year earlier,” Scheck and Kane report. “The deteriorating PC climate portends poorly for Hewlett-Packard Co., the market leader with 19% global share in PC shipments, and Dell, which has roughly 15% share, according to IDC.”
“One exception to the trend may be Apple Inc. The Cupertino, Calif., company chose to pack more features into new aluminum MacBooks it unveiled last month, rather than drastically cut prices. The new aluminum MacBooks start at $1,299 and range upwards of $2,000,” Scheck and Kane report.
“The strategy allows Apple to maintain its brand’s premium reputation while protecting its industry-high profit margins, which are close to 20%. In its last reported quarter, the company reported double-digit growth in unit and revenue shipments for its Macintosh computers,” Scheck and Kane report. “Though analysts say Apple will likely be affected by the economy, they say the company will still see a solid holiday season as consumers snap up the new notebooks.”
More in the full article here.
[Thanks to MacDailyNews Reader “Citymark” for the heads up.]
MacDailyNews Take: Think Different:
@Connor MacBook:
I clearly remember Steve saying exactly that but I’ve NEVER been able to find that quote, not on Youtube or anything!
He was talking about the tech bubble at the beginning of the decade that brought everybody back down to earth, put Apple on a level playing field with them, and eliminated the charlatans.
Hook me up with a link to that quote if you have it, either in print or on video. Thanks!
Peace.
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Olmecmystic
“This is the story of the three little pigs. Dell built their house of straw, and HP built their house of wood. Then the Big Bad Recession came and blew their houses down. But Apple built their house of bricks and weathered the storm.”
The Three little pigs had three stores. During the depression the Dell pig sold bread, the HP pig sold bread and the Apple pig sold fancy loaves of luxury bread which were no more nutritious than Dell bread but sure looked nicer. Some people even claimed they tasted better too, but that might have just been the fact that they paid so much money for the bread that they needed to think that.
As the recession stuck, the people had less money but were still hungry. They stopped buying the pretty Apple bread they loved so much and ate Dell and HP bread for the next few years, looking forward to the day they would be able to afford to buy Apple bread again.
There’s a reason why Wal-Mart is the one retailer that’s doing well right now, and it shouldn’t be a surprise that in recessions the expensively priced goods are the first thing to get cut by people, not the last. This is especially true when an equally effective budget priced alternative exists.