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The Back Page - Apple Death Knell #44: Philips Electronics Buys Apple in 2005

by - December 29th, 2004

Writing for TheStreet.com and MSN Money, John D. Markman has put together his annual predictions column for the upcoming year. In "12 Big Surprises for 2005," Mr. Markman makes a number of political and economic predictions, as well as some very specific predictions about what individual companies will do. One of those companies, Apple Computer, will find iPods stacking up on store shelves in 2005 and have to sell itself to Philips Electronics, making Mr. Markman's column Apple Death Knell #44 in the Apple Death Knell Counter.

In his column, Mr. Markman wrote: "Apple Computer releases two new handheld devices in an attempt to follow up its iPod mega-hit, but they fail to gain traction. iPods begin stacking up at electronics stores when it is discovered that, after a Christmas buying frenzy, there are now 2.7 iPods for every American over the age of 6. Apple turns to Philips Electronics for a bailout and is sold to the Netherlands-based consumer electronics giant for $80 a share."

Mr. Markman's imagery of "2.7 iPods for every American over the age of 6" may be hyperbole, as that would mean that Apple would have sold some 675 million iPods for a whopping US$201.8 billion, give or take a few billion. Obviously a company grossing more than the GNP of several developing nations combined wouldn't need a bailout, so that must be an attempt at a joke.

I am left assuming he means that the 8 million or so iPods that Apple will have actually sold by the end of 2004 has already saturated the market, but it's just a weird way of trying to make his point. It's also interesting that he thinks Apple's follow up products will be a failure when the company has so far executed amazingly well every step of the way.

Be that as it may, Mr. Markman's other comments are clear: He expects Apple to need a bailout in 2005, despite the company's massive cash stockpile, growing Mac sales, growing iPod sales, and growing iTunes Music Store sales. That's definitely a bold prediction, and one that certainly makes Mr. Markman fitting company for the likes of Paul "Reality Check" Thurrott, Andrew Neff, Rob Enderle, and the other notables that are enshrined, for posterity's sake, in the Apple Death Knell Counter.

For a while, there, I was worried that I was going to have to start digging through more archives to find all those unsung Death Knells from years gone by in order to keep the ADKC growing. It seems, however, that there are still a few people who can see doom and gloom in Apple's future.

Note that Mr. Markman's comments about Apple come on page 2 of his column, and thanks to those Observers who wrote in about the piece.


began using Apple computers in 1983 in a high school BASIC programming class. He started using Macs in 1990 when the Kinko's guy taught him how to use Aldus PageMaker, finally buying a Power Computing Power 100 in 1995. Today, Bryan is the Editor of The Mac Observer, and has contributed to the print versions of MacAddict and MacFormat (UK).

You can send your comments directly to him, or you can also post your comments below.

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