quote:

By
JOHN
C. DVORAK
BERKELEY (MarketWatch) -- The hype over the unreleased iPhone has actually increased over the past month despite the fact that nobody has seen or used the device. This, if nothing else, proves the power of branding and especially the power of brand loyalty.

It's the loyalists who keep promoting this device as if it is going to be anything other than another phone in a crowded market. And it's exactly the crowded-market aspect of this that analysts seem to be ignoring.

Apple Inc.'s AAPL, +0.31% past successes have been in markets that were emerging or moribund. Its biggest hit has been the iPod. But let's examine what happened here.

First the MP3 player business was segmented and unfocused with numerous players making a lot of cheap junk and not doing much to market any of it.

Apple does what? Advertise. Gosh, what a concept.

Then there was the online music distribution business, again unfocused and out-of-control with little marketing and a lot of incompatible technologies. So Apple comes in with a reasonable solution, links it to the heavily promoted iPod and bingo. A winner.

It advertises on TV, on billboards and on the Internet. Within no time the company takes over the business that would probably still be languishing without Apple.

Thus Apple does what it does best. It produces a jazzy product and promotes it like any good business should do. And in the process manages to get a high margin.

This is nothing more than the fundamentals.

Now compare that effort and overlay the mobile handset business. This is not an emerging business. In fact it's gone so far that it's in the process of consolidation with probably two players dominating everything, Nokia Corp. NOK, +0.39% and Motorola Inc. MSI, +0.20%

During this phase of a market margins are incredibly thin so that the small fry cannot compete without losing a lot of money.

As for advertising and expensive marketing this is nothing like Apple has ever stepped into. It's a buzz saw waiting to chop up newbies

The problem here is that while Apple can play the fashion game as well as any company, there is no evidence that it can play it fast enough. These phones go in and out of style so fast that unless Apple has half a dozen variants in the pipeline, its phone, even if immediately successful, will be passé within 3 months.

There is no likelihood that Apple can be successful in a business this competitive. Even in the business where it is a clear pioneer, the personal computer, it had to compete with Microsoft and can only sustain a 5% market share.

And its survival in the computer business relies on good margins. Those margins cannot exist in the mobile handset business for more than 15 minutes.

And note that the Microsoft Corp. MSFT, +0.05% versus Apple battles are laughable compared to the frenzied marketing mania in the handset business. Even Microsoft itself has troubles with its attempts to get into a small sub segment of the handset business with its operating system.

What Apple risks here is its reputation as a hot company that can do no wrong. If it's smart it will call the iPhone a "reference design" and pass it to some suckers to build with someone else's marketing budget. Then it can wash its hands of any marketplace failures.

It should do that immediately before it's too late. Samsung Electronics Ltd. SSNGY, +0.00% might be a candidate. Otherwise I'd advise you to cover your eyes. You're not going to like what you'll see.

quote:

Commentary: Sorry, Steve: Here's Why Apple Stores Won't Work
May 20, 2001

By Cliff Edwards

For years, Apple Computer (AAPL) CEO Steven P. Jobs has tried working with retailers to make shopping for Apple's stylish products as appealing as using them--everything from setting up kiosks to special sections adorned with Apple's Think Different posters. Still, the computer maker's share has fallen, and Jobs figures he knows why. "Buying a car is no longer the worst purchasing experience. Buying a computer is now No. 1," he griped at the MacWorld trade show in January.

Now, he's taking matters into his own hands. On May 19, Apple will open a swanky new retail store--the first of as many 110 nationwide--at Tyson's Corner Galleria mall outside Washington. While Apple execs won't comment on their plans, the idea seems clear: Well-trained Apple salespeople in posh Apple stores can convince would-be buyers of the Mac's unique advantages, including its well-regarded iMovie software for making home videos and its iTunes program for burning custom CDs.

"CAVIAR." With its top-notch brand and proven marketing panache, Apple should have a shot at improving on the Gateway Country Store model. And it will give Apple fresh outlets to sell its own products such as the titanium PowerBook and other companies' consumer gadgets such as Handspring Inc.'s Visor handheld line. The company would gain new revenue as a reseller of other electronic goodies and have more control over marketing and servicing of its products. What's more, Apple could boost margins by cutting out middlemen and wooing buyers to higher-priced models.

The way Jobs sees it, the stores look to be a sure thing. But even if they attain a measure of success, few outsiders think new stores, no matter how well-conceived, will get Apple back on the hot-growth path. Jobs's focus on selling just a few consumer Macs has helped boost profits, but it is keeping Apple from exploring potential new markets. And his perfectionist attention to aesthetics has resulted in beautiful but pricey products with limited appeal outside the faithful: Apple's market share is a measly 2.8%. "Apple's problem is it still believes the way to grow is serving caviar in a world that seems pretty content with cheese and crackers," gripes former Chief Financial Officer Joseph Graziano.

Rather than unveil a Velveeta Mac, Jobs thinks he can do a better job than experienced retailers at moving the beluga. Problem is, the numbers don't add up. Given the decision to set up shop in high-rent districts in Manhattan, Boston, Chicago, and Jobs's hometown of Palo Alto, Calif., the leases for Apple's stores could cost $1.2 million a year each, says David A. Goldstein, president of researcher Channel Marketing Corp. Since PC retailing gross margins are normally 10% or less, Apple would have to sell $12 million a year per store to pay for the space. Gateway does about $8 million annually at each of its Country Stores. Then there's the cost of construction, hiring experienced staff. "I give them two years before they're turning out the lights on a very painful and expensive mistake," says Goldstein.

Harsh words. Still, Job's instinct that Apple has to take some dramatic steps is on target. In recent years, Apple has succeeded mainly by getting its 25 million-strong customer base to upgrade to pricier machines with higher margins. But only 12 million of them are due for upgrades in the next couple of years, analysts estimate. Meantime, Dell Computer Corp. and Compaq Computer Corp. have been stealing share from Apple in the key education market.

What's more, Apple's retail thrust could be one step forward, two steps back in terms of getting Macs in front of customers. Since most Mac fans already know where to buy, much of the sales from Apple's stores could come out of the hides of existing Mac dealers. That would bring its already damaged relations with partners to new lows. In early 1999, Best Buy Co. (BBY) dropped the iMac line after refusing a Jobs edict that it stock all eight colors. Sears, Roebuck & Co. (S) late last year dumped Apple, sources say, after concluding that sales were too hit or miss. And in recent weeks, Mac-only chains such as The Computer Store and ComputerWare have closed down, citing weak margins. Now, faced with competition from Apple, others may cut back. "When you choose to compete with your retailers, clearly that's not a comfortable situation," says CompUSA Chief Operating Officer Lawrence N. Mondry.

Indeed, rather than taking on the retailers who ought to be its partners, Apple would do better improving how it works with them. A good step would be to end the "think secret" approach that shrouds every new-product announcement. Covert operations worked beautifully when Jobs first arrived on the scene; his charismatic stage presence and Apple's eye-popping designs created priceless buzz. Now, retailers complain that the secrecy prevents them from doing advance advertising to hype sales and clear out inventory. "They are the most secretive company I've ever done business with," says one top retailer. "They should let the news leak out, to convince the world how exciting their stuff is. That's how everyone else does it." Maybe it's time Steve Jobs stopped thinking quite so differently.

Corrections and Clarifications

"Sorry, Steve: Here's why it won't work," (News, Analysis & Commentary, May 21) reported that several Mac-only chains, including The Computer Store, have closed down, citing weak margins. While a single store by that name in Wichita Falls, Tex., did cease retail operations in August, 2000, it is not affiliated with Computer Stores Northwest, Inc., which operates a chain of six stores also called The Computer Store in the Pacific Northwest. Computer Stores Northwest says it has no plans to close any of these stores. BusinessWeek regrets the error.

Edwards covers Apple from San Mateo, Calif.

KOTEX GOD OF BLOOD posted:

gr8 start here boys

Citizen Tayne posted:

OP is a stupid piece of poo poo, please ban him.

Maximum Leader posted:

arm loving MacBook coming soon guys. you are useless shithead if u think it won't

KOTEX GOD OF BLOOD posted:

By
JOHN
C. DVORAK

Maximum Leader posted:

arm loving MacBook coming soon guys. you are useless shithead if u think it won't

Smythe posted:

a) post a animted gif of a classic YOSPOS meme but in another dimension where Apple was never revived and something is different, not sure.

KOTEX GOD OF BLOOD posted:

classic yospos meme, like, from before or after it became as bad as post-2008 lf

Smythe posted:

im gla your choosing the comedy option. its really easy to make pretty convincing fake cum tho. and fun

quote:

EXCLUSIVE-Apple Watch not on shopping list for 69 pct of Americans -Reuters poll
13-Mar-2015 15:48

SAN FRANCISCO, March 13 (Reuters) - Apple Inc's AAPL.O new smartwatch may be a tough sell, with 69 percent of Americans indicating they are not interested in buying the gadget, according to a Reuters/Ipsos poll.
However, the survey also showed limited awareness of the watch. The poll was taken after Apple Chief Executive Tim Cook rolled out the product on Monday, and only about half of respondents said they had heard news of the timepiece in the last few days.

MrMoo posted:

New York fashionistas bash apple watch because they didn't get free lines of cocaine to snort and sycophantic parties to embellish.

KOTEX GOD OF BLOOD posted:

A Pinball Wizard posted:

5

KOTEX GOD OF BLOOD posted:

KOTEX GOD OF BLOOD posted: