The Mac Observer

Skip navigational links

You're viewing an article in TMO's historic archive vault. Here, we've preserved the comments and how the site looked along with the article. Use this link to view the article on our current site:
BusinessWeek: Apple In Best Shape In Nearly A Decade

BusinessWeek: Apple In Best Shape In Nearly A Decade

by , 1:00 PM EDT, August 3rd, 2004

The announcement this weekend from Apple CEO Steve Jobs that he had underwent cancer surgery has touched off a small round of State of the Apple pieces from the mainstream press. In addition to yesterday's CNN article questioning what would happen to Apple if Mr. Jobs left, BusinessWeek has published a piece by Alex Salkever that offers an overview of the many things Apple is doing right. Mr. Salkever's opinion is that Apple is "in its best shape in nearly a decade."

Mr. Salkever cites Apple's cash reserves of some US$4.6 billion, Apple's success in higher education, government, and portable sales to K-12 education, and of course the company's hit iPod. Mr. Salkever also discusses the idea of whether a halo effect from the iPod could still be in the offing From BusinessWeek:

True, the "halo" effect that many analysts have predicted the iPod would create has remained elusive. Even Apple has no real evidence of consumers switching en masse from PC to Macs because of the iPod's popularity. But there's evidence that the iPod, plus Apple's growing retail presence, is putting the Mac bug in the brain of a far broader demographic of potential customers -- including women, kids, and others who are not typical PC buyers. According to one study cited by Philip Schiller, Apple's senior vice-president of worldwide product marketing, the second-most-requested Christmas gift last year was an iPod, lagging only behind sneakers.

CROSS-PLATFORM APPEAL.  Schiller and other Apple executives say the halo effect might well take longer than the two years that iPods have been available for Windows machines. That could be key because the cross-platform iPod, more than anything else, has attracted non-Mac users to Apple stores, says Schiller. Needham & Co. analyst Charles Wolf says at least one-third and possibly two-thirds of the people buying iPods are PC users.

You can find the full article at BusinessWeek, and we recommend it as an interesting read.

BusinessWeek has also published three related articles today. "Apple's Back-to-School Blast" is another article from Mr. Salkever that discusses Apple's renewed market share growth in education; "No 'Halo' Effect? Look Again" is a more detailed look at the above-mentioned halo effect by Peter Burrows, computer editor for BusinessWeek; and "Will Uncle Sam Like the Taste of Apple?" is an in-depth look at Apple's growing sales to government.. All three articles are interesting reads.

Spin: It's interesting to contrast this very positive outlook on Apple with yesterday's mostly negative piece from CNN. While this could be a case of tomahto/tomayto, we think Mr. Salkever's overview of Apple is the far more accurate one. Not everything is perfect in Cupertino, but Apple definitely is in the best shape it has been in at least a decade, probably closer to 15 years.

The Mac Observer Spin:

It's interesting to contrast this very positive outlook on Apple with yesterday's mostly negative piece from CNN. While this could be a case of tomahto/tomayto, we think Mr. Salkever's overview of Apple is the far more accurate one. Not everything is perfect in Cupertino, but Apple definitely is in the best shape it has been in at least a decade, probably closer to 15 years.

Observer Comments

Show: Subjects Only | Full Comments
Close Name:pyxl8 Posts: 171 Joined: 24 Dec 2003
Subject: Companion pieces at Business Week

The articles are, for the most part, refreshingly positive, and good news of recent upticks in Apple's market share in categories like education and government should confuse the naysayers.

Not sensational or full o' fud either...amazing... YAY!
(Let us cherish these rare journalistic gifts....)

-Ken P



Last edited by pyxl8 on Tue Aug 03, 2004 5:29 pm; edited 1 time in total
Reply | Quote
Close Name:John F. Braun -   TMO Staff Posts: 233 Joined: 11 Jun 2001
Subject: Negative Articles Are More Fun

Wow, a mainstream business publication actually saying nice things about Apple? Someone should have a talk with them. I bet they'd get 10 times the number of hits and magazine sales if they predicted the eventual demise of Apple, as so many have done in the past.

Seriously, now that the effects of the past bozo CEOs have been more or less negated, it looks like Apple is definitely on the path to continued success.

View Name:RealityCheck -   Troll Posts: 392 Joined: 06 May 2004
Subject: Wait A Minute - Mac Market In Abysmal Shape
Close Name:Dean Lewis Posts: 162 Joined: 29 Sep 2001
Subject: Troll food

Let's check the real facts:

"- Mac market share at all time low"
- somebody hasn't read the articles touting the larger mindshare Apple has gotten of late. Recent news in mainstream press shows that Apple is second only to Dell in brand recognition and type of computer consumers will purchase. Sales are back on an increase and this trend will reverse. Besides the fact that market share doesn't seem to affect the impact Apple has on the PC world. Your statement is sort and pithy but doesn't account for the subtleties involved with Mac market share -- so it's a b.s. arguement.

"- Consumer line: Apple has suspended iMac production"
- Production will begin again this fall when the G5 chip is ramped up in production, which is IBM's fault and not Apple's. Because Apple are waiting for the G5 chips, we know the next iMac/consumer model will have G5 processors, even, which is a step up from the current consumer line. In the meantime, there are plenty of systems in the pipeline for sale. Stating only half of the truth in order to suggest production has ended completely is b.s.

"- Pro line: Apple can't get G5 chips to meet promised ship dates"
- Again, IBM's fault; not Apple's. Of course, the interesting thing here is that means demand is far outstripping supply, which means either IBM severely underestimated or sales have been extremely robust. Either way, sales are good, and your take is b.s.

"- Mac prices at all time high"
- the eMac is $799; $999 with a superdrive. This is the lowest price ever for a Mac capable of making full use of the iLife packages it has installed for free, incuding making movies and burning DVDs and making use of the critically-acclaimed GarageBand. If you know how and where to shop, you can get great bargains on refurbs, open-box and others, too. I know people who spend more on their PC gaming rig than I'd ever spend for any Mac. Your argument is outdated, not inline with today's prices, and pure b.s.

Hey, did I mention you're completely full of b.s.?

Close Name:Guest
Subject:

To the post above:

1. You're thing about market share is on. Additionally, PCs score big when bought in huge freaking loads by massive corporations. And again, a small market share doesn't mean Apple is crapping out, that's not their plan or area. Dell is on the other end of the spectrum from leading edge, but sells lots of computers. Apple chooses not to follow this path.

2. I disagree with your logic on blaming everything on IBM. True it's IBM's fault that G5s are slow to come out, but you still have to blame Apple for this. Why? Well, after all, they are a business and have to be carefull and do research on business partners and suppliers and all that jazz. So to put it all on IBM is misleading because Apple teamed up with them, subjecting their customers to possible limiting production constraints of computers, namely IBM's ability to make G5 chips.

Close Name:Dean Lewis Posts: 162 Joined: 29 Sep 2001
Subject:

"I disagree with your logic on blaming everything on IBM. True it's IBM's fault that G5s are slow to come out, but you still have to blame Apple for this."

I don't agree because IBM promised Apple they'd be able to keep up the supply. They aren't living up to their part of the bargain, and that is not Apple's fault. What IS Apple's fault is whether Apple is doing anything to fix the problem, which may be impossible due to the fact Motorola is done with producing these types of processors now. And, even if so, we don't know at this moment what Apple is doing behind the scenes to remedy the situation. This is the first production snafu with the G5s, so it isn't exactly right to leap to the conclusion Apple is doing nothing righ tnow. Should another iteration of G5 systems come and go like this, then Apple can take on some blame.

My take is since they've already essentially promised G5 iMacs in the fall during their recent earnings conference, then Apple knows something we don't about how IBM is going to remedy this situation. Otherwise, there is no way in hell they'd have enough G5 processors for both the Pro and Consumer lines. If Apple can't deliver even G5 Powermacs come fall, then best to get those letters off to Apple to pull their heads out. Until then, it's IBM's fault.

Close Name:pyxl8 Posts: 171 Joined: 24 Dec 2003
Subject: Don't feed the trolls!

You made valid points, Dean, but trolls won't eat facts, so don't waste time trying to feed any to them. They only survive through attention, and at TMO we learned that it's better to starve them out by ignoring them!

-Ken P

Close Name:kenaustus Posts: 602 Joined: 27 Jun 2003
Subject: It's not just IBM

Intel is having major problems in producing their high end chips, probably worse than IBM. At least IBM is delivering G5 chips for the PowerMac and XServe. Would have been nice if the iMac could have been introduced in June, but I'm VERY happy to wait for a G5 iMac - far better than a Dull that will crap all over me in 2 years, like the 2 year old office Dull has done.

Also interesting to note that MS has pushed back their new 64 bit Windows OS until next year, leaving Apple with the OS that accommodates 64 bit chips as well as 32 bit chips. That's not even counting Longhorn that is somewhere in Never Never Land.

Apple is the only computer company out there that is sitting on a new product (G5 iMac) that could have a waiting list within a month or so of introduction AND another hot product (iPod mini) that has had a waiting list since it was introduced. Actually, a French site has also listed the Airport Express as having a 2 - 4 week waiting list as well.

Christmas shopping advise or Mac lovers: order the iPod or iPod mini now if you want it for Christmas - there is going to be chaos this season. ORder the iMac the first few days after it's release if you don't want to wait a while on the backorder list. Apple is going to be the hot company this Christmas.

Close Name:DawnTreader -   TMO Staff Posts: 15039 Joined: 04 Jan 2002
Subject: Re: Wait A Minute - Mac Market In Abysmal Shape

Quote
RealityCheck wrote:
Wake up, you're under the influence of the RDF. Let's check the facts:
- Mac market share at all time low
- Consumer line: Apple has suspended iMac production
- Pro line: Apple can't get G5 chips to meet promised ship dates
- Mac prices at all time high

Everything is pointing to a real Mac sales fiasco this quarter. You heard it here first.


Actually, no.

Cash is at an all-time high.
Debt is at an all-time low.
Apple's share in its primary market is at a multi-year high.
Apple's share of the no-margin, sub $700 market is at a low.
Apple has suspended manufacturing of G4 iMacs
Apple is transistioning manufacturing for the G5 iMac.
Apple can't get enough G5 chips to meet demand.
Mac prices are not at an all-time high. As a matter of fact the eMac is at a price point well below the cost of a Mac 10 years ago.

Close Name:John F. Braun -   TMO Staff Posts: 233 Joined: 11 Jun 2001
Subject: Real Men Hide Behind a Pseudonym

Quote
RealityCheck wrote:
<snip>

Everything is pointing to a real Mac sales fiasco this quarter. You heard it here first.


Everybody knows that you can only get quality Mac market analysis from someone who hides behind a pseudonym.

Close Name:Bryan -   TMO Staff Posts: 7340 Joined: 11 Jun 2001
Subject:

I'll feed the troll on this one point: Apple's laptop prices are at an all-time low, as is Apple's consumer desktop pricing. Apple's pro line is priced the same as it has been for years, which is cheaper than it a few years before that.

You are a loser, RC, a very sad and pathetic loser.

View Name:RealityCheck -   Troll Posts: 392 Joined: 06 May 2004
Subject: DawnTreader - Price Check
Close Name:DawnTreader -   TMO Staff Posts: 15039 Joined: 04 Jan 2002
Subject: Re: DawnTreader - Price Check

Quote
RealityCheck wrote:
The G5 costs more than the G4 or G3 in years past. While PC prices have been falling, MAC prices have been rising.

The starting price for a G5 is $1999 and that's with inadequate 256MB RAM and a lame 64MB graphics card. Put in only 1G RAM, decent 256MB graphics, and AppleCare, the price zooms to a ridiculous $2823 before tax. Over $2800 for only a 1.8GHz G5 is outrageous. Conclusion if you want a decent headless Mac you're going to come up with almost $3000, a new Mac record.


Actually, the G3 iMac debuted at $1,299.00.

The G4 iMac debuted at a similar price.

A G4 eMac can be found on the Apple site for $799.00.

I remember paying over $2,500 for a Mac Plus. Actually, well over $3,000.00 for a MacPlus and dot matrix printer plus tax in 1987. AppleCare wasn't available at that time.

The original Mac debuted in 1984 at about $2,500.00.

According to Dan Knight's system profiles on lowendmac.com, the headless the Macintosh IIci debuted in late 1989 at $6,600.00 or $8,700.00 for a IIci with 40 megbyte hard drive.

The first headless Mac, the Mac II, debuted in 1987 at $3,900.00 or $5,500.00 with a 40 megabyte hard drive.

The first G3 tower (266 MHz) debuted at $2,999.00 in 1997, in desktop form the first G3 (233 MHz) debuted at $1,999.00.

The list goes on and on. The G5 is certainly not the most expensive Mac ever or on record.

Close Name:John F. Braun -   TMO Staff Posts: 233 Joined: 11 Jun 2001
Subject: Magic $3K Price Point

Funny thing is that every desktop Apple or Apple compatible product that I've owned, from an Apple //e to a Mac ][ci to a Power 100 to a PowerCenter Pro 210 to a G4 to my current baby, a dual 2 GHz G5, have always run me about $3K. My strategy, except for the G5, would be to get a machine near, but not at, the top of the line, and to NOT get enhancements like RAM and HD from Apple.

The nice thing is that each subsequent machine had more features than the last. So if anything, the bang per buck has increased as time moves on.

On the PC side, all I can say is that my work PC, a Dell Precision M60 with enough juice to do development work, would have gone for $5K without our corporate discount. With the discount, it was about $3600.

Close Name:AFCdtLoeb Posts: 2533 Joined: 20 Jul 2004
Subject:

Apple makes the iPod. The iPod is about to do something that only happens about once a decade. It is beginning to blur the line between product and clutural icon. I'd say Apple is doing just fine.

View Name:RealityCheck -   Troll Posts: 392 Joined: 06 May 2004
Subject: Correction - Even More Overpriced Earlier Macs
Close Name:John F. Braun -   TMO Staff Posts: 233 Joined: 11 Jun 2001
Subject: RC Didn't Take His Ritalin Again

You should take the time to read the referenced Business Week articles. Apple's market share in key verticals has increased as of late.

And that $499 machine? Get back to us when you have to replace it in 3 years, or when it breaks. Macs are proven to have a longer usable lifespan, and the highest quality in the industry. You get what you pay for.

Thanks for playing, though. Better luck next time.

Close Name:DawnTreader -   TMO Staff Posts: 15039 Joined: 04 Jan 2002
Subject: Re: Correction - Even More Overpriced Earlier Macs

Quote
RealityCheck wrote:


For consumers looking for an upgradeable headless Mac, prices now start at $1999 for a 1.8GHz G5 which is totally out of touch. PC prices start at $499 for a 2.8 GHz Pentium 4. By raising prices Apple ensures continued market share decline.


RC, the G5 minitower is not a consumer machine. I buy lots of PCs each year in a commercial environment. At $499, regardless of the processor, a buyer gets commodity components, second-rate board design and really poor performance.

Pricing out PCs for a commercial environment I'm finding starting prices at about $1,500.00 for anything adequate.

Even a 2.8 GHz Pentium box on any kind of Win 2K or XP network loses signifianct performance as the background operations chew up processor cycles and the network overhead eats away at operations. Component quality and durability is at least as important as the theoretical processor speed.

The eMac at $799.00 is Apple's entry level consumer computer and IMHO holds its own on features, price and performance versus the competition.

Putting a $499.00 desktop in a commercial environment is foolish. It will cause not only a reduction of productivity as the user's work is slowed to a crawl, it will mosty likely need to be replaced within 15 months if it doesn't fail within that period due to component issues.

Employee time is worth far more than the cost of the PC they use. A business manager who buys $499.00 PCs for an office isn't thinking long-term and is wasting valuable employee time with low productivity equipment.

Close Name:Guest
Subject: Re: DawnTreader

"Debt is at an all-time low."

Not to nitpick, but I suppose debt-free would be an all-time low! : )

Comment on this Article


You cannot edit your comments.   You cannot delete your comments.

Comments are currently closed. Please email the author instead.


Recent Headlines - Updated November 22nd

Fri, 7:07 PM
Games - Soccer Sim Championship Manager 2010 Released for Mac
6:47 PM
Games - EA Publishes Original Monopoly for iPhone
6:15 PM
News - Original Apple I on Ebay for $50K, w/Letter from Steve Jobs
6:11 PM
Games - New iPhone Games: Secret of the Lost Cavern Ep 1, New DJ Nights, More
5:47 PM
Games - Star Trek D-A-C Game Headed to the Mac Next Month
4:57 PM
Product News - TidBITS Releases “Take Control of Syncing Data in Snow Leopard”
4:26 PM
John Martellaro's Blog - Particle Debris (week ending 11/20) Stationery Pads Go Poof
2:59 PM
Free on iTunes - Musée du Louvre, Art Lite, SketchBook Mobile X and More.
1:50 PM
Deal Brothers - Acer P215H bmid 21.5” Widescreen LCD Monitor:  $139.99
11:24 AM
TMO Appearances - Jeff Gamet Shares More Holiday Gift Ideas on MacJury
10:43 AM
Product News - Cocktail 4.5 for Leopard Adds QuickLook Cache Clearing
10:06 AM
News - Hack Enables Mac OS X 10.6.2 on Netbooks

The Mac Observer Reader Specials

  • __________
  • Buy Stuff, Support TMO!
  • Podcast: Mac Geek Gab
  • Podcast: Apple Weekly Report
  • TMO on Twitter!