A Look at the Apple Sales Spin Merchants
April 15th, 2009All right, depending on whom you believe, Apple’s sales were down last quarter. Or maybe they were flat, or perhaps there was a minor uptick, particularly in recent weeks.
Obviously, Microsoft would rather have you believe that PC sales are on the upswing again and Apple’s days in the sun have come to an end. It’s time to get the world back onto the Windows train and consign those would-be upstarts to the dustbins of history.
Yes, it does appear true that U.S. retail sales of Macs weren’t so terrific in January and February, according to surveys conducted by the respectable NPD Group. Knowing some of the people there, I’ll grant that they are serious and dedicated to providing accurate information.
However, those numbers do not reflect the entire story. They do not, for example, include online sales, where Apple does stellar business courtesy of its own site, nor third-party Web-based resellers. Overseas sales are also excluded, and that’s where Apple has been doing quite well in recent years.
Consider that iPod sales for the last quarter of 2008 were slightly depressed in the U.S., but higher in other countries. All told, there was a slight increase.
More to the point, consider that Apple released updates to the Mac desktop lineup in early March, which, for the most part, were ready for immediate delivery. Unconfirmed reports had it that Apple actually had to increase its production runs because of high demand, and it’s certainly possible that declining sales earlier this year were, in part, the result of people holding off their purchases in anticipation of new models.
I am not, however, dismissing the economic situation, of course.
Now Wall Street, in a surprising turnaround, seems bullish on Apple these days. Estimates of the company’s stock price are rising, as are estimates of the quarterly financial results that will be disclosed next week.
Until then, my friends, we won’t really know just how well Apple did, or whether they failed to perform to expectations. Certainly nobody within the company is talking, and outside analysts can all be regarded with a grain of salt. That’s particularly true of the hacks who are desperately trying to put positive spins on Microsoft’s performance, and if they continue to report relatively flat sales, what will they say then?
Before I continue, let me tell you that I do not intend to provide any estimates of Apple’s sales for the last quarter or for this month. Frankly, I have no inside information to present and, while I hope they were flat or on the increase, I can certainly understand how the economy may cause lots of people to give personal computer purchases a far lower priority on their shopping lists.
But consider what’s really happening.
Microsoft’s new ad campaign, demonstrating that if you want to buy crap, you can get plenty of it with a Windows PC, is getting a fair amount of attention. The same holds true for that controversial survey from alleged analyst Roger Kay, who tried desperately to make it seem that it’s an awful lot cheaper to buy and operate a Windows PC when compared to a Mac.
These two attempts to turn negatives into positives simply don’t ring true in any respect. But I won’t repeat my objections. You’ve read about them in past columns, and a number of other tech writers have provided extensive looks into the situation and reached the same conclusions I did.
Certainly it’s true that Apple will do what it can to set a positive ring to its press releases. Sure there are occasional efforts at exaggeration. That’s just good marketing. But Microsoft has gone way beyond that, by actually engaging in blatantly false or misleading advertising and releasing erroneous studies to buttress its fading Windows franchise. In other words, they’re lying, no ifs, ands or buts.
Considering Microsoft’s past history, it’s also possible that they are helping to feed some of the negative stories about poor Mac sales. Maybe not blatantly, but behind the scenes, by providing off-the-record briefings, story suggestions and, just perhaps, by sending Windows fanboys (or girls) free PC note-books equipped with a recent Windows 7 beta to play with. That surely would generate a sufficient amount of positive spin to work against Apple.
Of course, one particular online columnist is suggesting the reverse, that the recent news about Steve Jobs running Apple from his living room sofa while on the mend from his illness was done simply to reassure Wall Street and doesn’t actually reflect the real situation.
Then again, that columnist has no way to know one way or the other, and there is no evidence whatever that the stories about the health of Steve Jobs, originated by the Wall Street Journal, are false. But when Microsoft sets its spin-meisters loose, facts are seldom allowed to get in the way.
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The problem with the analyst is that they like to lump the sale of computers in a single bag of high end systems and low margin models represented by the netbooks. Apple model is represented only by high end systems and so even if their sale is somewhat impacted by the slow economy, it will not take as large a hit as the rest of the PC competitors whose product lines are cannibalized by the mix of low end models. As an investor of AAPL I feel very comfortable about the stance that Apple has taken in its refusal to put out less than compelling low end cheap computers. This company will emerge from the economic slowdown in a much stronger shape than its competitors and will go on leading the pace of innovation where it counts.
The best educated guess is that Apple’s market share at around 10%. Why is Microsoft going after Apple for this small slice of the “PC” pie? I remembered CEO Steve Jobs saying that Apple would be happy to be able to double its market share. It was around 5% at the time.
As they say in the stock markets, the “trend is your friend.” Apple has done remarkably well to amass a cash-on-hand size that would be so envious by other companies. Mr. Jobs and his team have shown the world what they have accomplished in the last 10 years.
I await for Apple’s quarterly announcements on April 22nd. Hopefully, the impact of a down economy has not negatively affected their sales and profit too much.
Maybe because Microsoft knows once you go Mac, you don’t go back. They may see a threat of long term market share loss triggered by consumer adoption of Mac. The other issue is that the Get a Mac add campaign has gotten under their skin. That campaign uses humor to make the the point that Windows/Vista is a piece of junk. The undeserved aura of technological competence is very very important to Microsoft.
Apple’s profit margin remains intact. Weird that MS has turned their FUD campaign up a notch. Did they notice the trend towards all things Apple?