A Monster Q4 for Apple?
Earlier this week, I dropped by the Apple store at the nearby mall. The place was packed with consumers checking out MacBooks, iMacs and iPods, while an army of super-friendly employees actually provided good customer service (a novelty within the Canadian retail scene).
There is no doubt Apple, which has $15-billion of cash on the books, continues to be red-hot. The only question is how hot is hot. If you measure hotness by what the analysts are saying, Apple is going to have a monster fourth-quarter. RBC analyst Mike Abramsky expects Mac shipments to soar 47% in Q4 from the same period last year. He credits the release of Leopard, sleeker iMacs, and the iPhone as huge drivers.
Meanwhile, Piper Jaffray had expected Apple to selling 3.7 million Touch units and 23 million iPods, although sources now suggest Apple is aggressively ramping up production. Meanwhile, Apple shares have jumped more than $30 in the past month to $189.95.
Truth be told, Apple is a juggernaut and there’s no indication the good times are going to end any time soon. Apple has been transformed from a player serving a niche, but loyal, market into a mainstream player. People who never considered buying a Mac a few years ago are enthusiastically jumping into the fray.
Apple’s got it so good that even a recession in the U.S. may not cut it off at the knees, while rivals such as Dell will probably be forced to slash prices to maintain sales.
It is pretty amazing to see how Apple has blossomed. Was it the iPod? Do consumers finally appreciate design? Or has the computer really become a mainstream tool, and Apple now finds itself at the right place at the right time.
What do you think? Are there any bumps in the road ahead for Apple? Or is it smooth sailing?
Update: The Apple Blog (my new, favorite Apple blog) has a good post on why Apple stores are resonating with consumers. Here’s a bit of his take:
Nothing beats word of mouth marketing, and by creating a completely open environment for customers to enter and be free to play, talk or hang out is a beautiful thing. It’s like the Starbucks of the IT industry. You compare the Apple store to the Dell stands you see in malls and you realize the immediate polarization in business models as well as brand. Apple fosters community-building relationships, not only between customers and machines, but between customers and other customers. Walking into an Apple store, I feel completely open to talk to the stranger standing next to me playing with the same device. After all, we tend to share one huge interest: our devotion for Apple.
December 7th, 2007 at 12:56 am
I don’t think that it will be all smooth sailing for Apple. They have already started to experience growing pains. The stability of Leopard pretty much sums up this whole issue. Long time fans are used to an OS that is rock solid and just works. This has now been sacrificed for a few bells a whistles. I think that Apple will have to get their act together before they start losing customers.
December 7th, 2007 at 12:15 pm
In Saint John, NB, my little city of 122,000 people, most of these people would have laughed at you not long ago if you told them you they were getting a Mac, but now they seem to be flying off of the shelves!
People can’t but help notice the elegant designs of the Mac and upon closer inspection they end up walking out with one. I have seen this time and time again.
I actually sold six systems at a local Futureshop even though I don’t work there!
Great post by the way.
December 7th, 2007 at 1:47 pm
RE:
By Adrian Corscadden on Dec 7, 2007 | Reply
I don’t think that it will be all smooth sailing for Apple. They have already started to experience growing pains. The stability of Leopard pretty much sums up this whole issue. Long time fans are used to an OS that is rock solid and just works. This has now been sacrificed for a few bells a whistles. I think that Apple will have to get their act together before they start losing customers.
Leopard is rock solid on my G5 dual 2GHz, ‘course I don’t have any system altering utilities messing it up.
December 7th, 2007 at 3:06 pm
“The stability of Leopard pretty much sums up this whole issue.”
Leopard is only just up to “10.5.1″ and many people seem to be having no trouble with it. And it’s not about “bells and whistles”; it’s about “64 bit”. Think “server sales”.
December 7th, 2007 at 8:09 pm
Jack:
That’s true, many people aren’t experiencing problems with Leopard. There are however, a significant amount of people who are.
Tom:
Sorry, my “bells and whistles” statement was a bit rash, and I do agree that the stuff under the hood is more important.
December 8th, 2007 at 3:46 am
“That’s true, many people aren’t experiencing problems with Leopard. There are however, a significant amount of people who are.”
I recall there was plenty of whing and complaining when 10.1 debuted. There was more when 10.2 came out. 10.3 was greeted by a chorus of “just more eye candy” and complaints about the declining stability of OS X. Tiger was considered the most minor of upgrades by quite a few people, after they complained about the awful crashes left and right.
The truth is, OS X has gotten much more stable, much more refined, and much more powerful with every major release. Yet with every release, we get more of the same old complaints - too much eye candy, not enough stability.
The fact that Apple is now selling as many Macs in a single quarter than they used to sell in an entire year means that even if fewer than half the people experience problems on a percent basis (i.e. OS X is twice as reliable), more than twice the number of people will experience problems than before, in terms of raw numbers.
For example, let’s say there are 1000 users and 10% of them experience serious problems. That’s 100 users whining and bitching on the forums.
After a few years, the product now has 10,000 users and only 2% experience serious problems. That’s 200 users screaming on the message boards.
Which software is more reliable? Would you go with Software version A or version B if you had a choice?
Just because many more people are experiencing issues doesn’t mean OS X has gotten worse if the Mac user base has grown much faster than reliability has improved, as the above example shows. The fact is, there are WAY more Mac users today than there were when Tiger made its debut.
December 8th, 2007 at 6:46 pm
Yeah, what Light said.
The percentage of Mac users with problems is shrinking, but the raw numbers are going up. Market share is increasing faster than stability.
…and 10.4.1 was definitely worse than 10.5.1.
December 8th, 2007 at 11:54 pm
…I concede defeat.
December 9th, 2007 at 12:55 am
Here’s my thoughts after trying to buy an mp3 player other than an ipod:
Link, post follows: http://techfold.com/2007/12/08/the-unbearable-pain-of-competing-with-apple-samsungs-sad-christmas-tale/
Yesterday, I tried to not buy an iPod.
Specifically, I tried to buy a Samsung “P2? - 4gb, touchscreen, bluetooth, video, music. I looks sweet, has a great UI, is tiny and slim, and hits an awesome price point at $149 - perfect for Christmas gift giving.
Sadly, Samsung is not Apple. Let us count the ways in which Samsung f–ked up and put an iPod in my wife’s stocking…
1. STOCK: Christmas is the make-or-break retail season for consumer electronics. Yesterday, I went to five retail stores: two Futureshops, one Best Buy, one London Drugs, and even Zellers. Each store (except Zellers, which apparently doesn’t carry MP3 players over $50) had a full array of iPods in their full spectrum of prices and capacities. They were flying off the shelves, and the staff kept on carrying out more from the back. Samsung? Not one. Anywhere. In the ENTIRE CITY. Someone at a Futureshop told me they were on backorder from the manufacturer. How do you let your retail distribution network run out of stock two weeks before Christmas??! Are you kidding? Nope. The Futureshop that told me about the backorder didn’t expect any until January.
2. PRICING: Every staff member at every store new the iPod product line inside and out, and new exactly how each was priced. Each store had identical pricing for each item - my expectations were consistently met. For the Samsung P2, I saw $149, $169, $179, and $219. That’s almost a 50% spread on price. Talk about sowing confusion and alienating customers…
3. POSITIONING: Obviously, every store had the iPod’s front and center. OK, makes sense. But the Samsung’s were’nt just out of the way - they were generally dirty, unplugged and battery drained, mislabelled, and generally dissheveled. Does Samsung not have a freaking Retail Merchandiser in Winnipeg? The city draws a shopping population of over 1,000,000 people, the majority of who probably get their consumer electronics from under 30 retail locations. Why doesn’t Samsung have someone out there doing the rounds every day to ensure product condition, correct information, pricing, etc.? I know PEPSI does it on a weekly basis, sending reps around to 7-11’s and other retail channels. Why can’t Samsung?
4. EDUCATION: That same merchandiser should be educating holiday staff at the retail outlets as to the product names and features. Most staff that I spoke too seemed surprised that the product existed, and when I pointed to the demo model reacted as if they’d never seen one before. Insanity.
The moral of the story? Apple has it together. Total value chain management. Prescient inventory loading of their retail partners. Flawless execution. Samsung doesn’t even appear to be making an effort. Is it any wonder Apple dominates?
December 9th, 2007 at 12:56 am
Here’s my thoughts after trying to buy an mp3 player other than an ipod:
Link: http://techfold.com/2007/12/08/the-unbearable-pain-of-competing-with-apple-samsungs-sad-christmas-tale/
Yesterday, I tried to not buy an iPod.
Specifically, I tried to buy a Samsung P2 - 4gb, touchscreen, bluetooth, video, music. I looks sweet, has a great UI, is tiny and slim, and hits an awesome price point at $149 - perfect for Christmas gift giving.
Sadly, Samsung is not Apple. Let us count the ways in which Samsung f–ked up and put an iPod in my wife’s stocking…
December 9th, 2007 at 2:48 pm
Leopard is rock-solid on my Intel iMac. Love Spaces and Time Machine. Wouldn’t dream of going back to Tiger.
December 13th, 2007 at 3:30 pm
Good post, I really enjoy your blog and I’m glad you enjoyed my post over at The Apple Blog.
@Adrian: Sorry everyone ganged up on you, I was just about to do the same. If anything, XP and Vista are taking the hurting. The market share for XP is still vastly larger than OS X. But you walk into any college class these days, and all you see are lit up Apple logos staring back at you. I’d be very interested to see 5-10 years time how the market shifts as students introduce Macs into the work force.
@Rod: iPods are like a gateway drug. Once you pick one up, you’ve already turned and pretty soon you’ll be lighting up a MacBook in no time. People just need a bit of convincing is all.