BW: Students Will Save Apple’s Fourth Quarter

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A prominent economist wrote that Apple is about to finally take a hit from the slowing economy. However, thatis not going to happen this quarter thanks to back to school purchases, according to BusinessWeekis Arik Hesseldahl on Thursday. A remarkable number of college students are planning to buy Apple notebooks.

Mr. Hesseldahl is so certain that Apple will meet its consensus numbers that he has a $50 bet with Paul Kedrosky, a senior fellow at the Kauffman Foundation, who argued that because Apple products are "aspirational," Apple would feel the pinch as students cut corners with their computer purchases.

However, the BW author who follows Apple has pointed to remarkable data. "A recent survey by Student Monitor, a New Jersey outfit that tracks the buying habits of college students, found that 13% of all undergrads expect to buy a new notebook this fall," Mr. Hesseldahl noted. "Of those, 43% say they plan to get a MacBook or MacBook Pro, nearly double those who said they expected to get a Dell notebook, and seven times as many as those who plan to buy from HP, says Eric Weil, the firmis managing partner. While students prefer Dell for desktop computers, thatis small consolation: Students favor notebooks over desktops by a factor of nearly 5 to 1."

Those are staggering numbers, and even Microsoft has done their part to make it happen. The perception with college students is that Vista is a buggy mess and not cool. Microsoft plans to fight back with an expensive ad campaign in September, but it remains to be seen if it can slow down Appleis drive towards 10 percent market share in the U.S.

Mr. Kedrosky also thinks that an Apple announcement, even if in early September, is too late to be a factor in back-to-school purchases. Mr. Hesseldahl disagreed there as well.

"While many schools will start on Sept. 2, classes at lots of state schools donit get under way until late September," Mr. Hesseldahl explained. "I think there will be plenty of freshmen armed with financial aid and scholarship checks headed to the bookstore to order a new notebook during the final three weeks of the month."

However, that assumes that the eagerly awaited new Apple notebooks are available right after theyire announced, rumored to be September 9th. Mr. Hesseldahl remained confident that Mr. Kedrosky will be writing that check to charity come Octoberis earnings report from Apple.

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