Apple’s future: the next generation

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    Posted: 06 November 2011 03:06 PM

    When I bought my first Mac nearly three decades ago, the cost of the computer, software and printer totaled more than a thousand dollars over a PC running MS-DOS. Consider adjustments for inflation and you’re talking about a big chunk of change. That difference was roughly the cost of 2/3rds of my annual university tuition.

    The generation entering college today have grown up with Apple products that cost more than competing products, but at no where near the kinds of price premiums I had to pay. In many cases (iPod shuffle, MB Air, iPad, subsidized iPhone, etc.), there is virtually no premium at all.

    Apple now offers premium products at price parity. Few analysts understand the significance of this fact.

    Tomorrows Consumers Are Apple’s Ace
    (sub-heading in an article about analysts and pundits getting things wrong)

    While I have laid out for you my argument for why Apple’s already in good shape, we really haven’t seen anything yet. Evidence of this comes from a recent study by Harris Interactive. The firm polled young consumers aged eight to 24. They found that Apple had strong brand equity in this key group—in fact, it is the top brand in computers, phones and tablets among those 13 to 24…

    The fact that Apple is curating such loyalty across the board among the youngest of consumers is very significant. These kids are growing up Apple, and when they get to the age where they’re making purchasing decisions independently the company will benefit. This is something Apple has never enjoyed during its three decades of existence.

    Why is this? Today’s older tech generation comes from a time where Apple computers sat aside of PCs with a sixfold premium… Contrast that to today’s generation: They know Macs as the premium brand in computers, but without much of the so-called “Apple Tax”...

    This consumer group is huge, too. “Generation Y” (born 1977-2000) eclipses the size of the “Baby Boomers”. By 2017, it will exceed the elder group’s buying power, according to marketing researcher Kit Yarrow, PhD and retail expert Jane O’Donnell, authors of Gen BuY…

    ...the argument can be made that Apple’s best days are ahead of it, and the stars are aligning to keep the Cupertino company relevant for the years—if not decades—to come.

    http://betanews.com/2011/11/05/forget-analysts-and-pundits-apples-best-days-are-ahead/

         
  • Posted: 07 November 2011 07:25 AM #1

    True.  When I was in college 15 years ago I never considered a Mac.  They were too expensive and hard to upgrade.  Now no one can come out with a comparable product to e iPad or MacBook air that competes on price.  This is true with the iPhone also but that is mainly due to the huge subsidies

         
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    Posted: 07 November 2011 12:23 PM #2

    A family that has been 95 % Windows for 15 years is going to be 50/50 Apple by the end of the year.  Why ?  The parents will buy their high school son a MacBook.  They use an iPad at work and bring it home too.  The Windows PC’s they have are legacy at best.  I will inform them of the glories of Crossover for Mac and Parallels.

         
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    Posted: 07 November 2011 12:42 PM #3

    I am not so sure we have reached price parity on computers.

    You can still get a decent laptop at Best Buy for $400.

    The fact that ATT sells out on the free 3GS and was doing quite well with when it was $99, shows how price sensitive consumers are.

    Despite the price advantage US car manufactures have they still can’t beat the Honda and Toyota folks.

    The difference I think is not so much price but ability to do similar things and move across platforms.

    I still think Apple needs to get into Enterprise market in order to see 30% or higher market share.

    That will happen as long as the iPad remains king and protects its 70% market share.  But I would give it another 10 years.

    Those young kids will get Macs for homes when they become adults, but their gov or private sector job who uses 90% Windows machines will still rule the day.

         
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    Posted: 07 November 2011 01:20 PM #4

    omacvi - 07 November 2011 04:42 PM

    I am not so sure we have reached price parity on computers. You can still get a decent laptop at Best Buy for $400.

    I agree. I was pointing out that many (not all) of Apple’s products are now at price parity, or close enough for most people. That is a major departure from the historic norm for Apple.

    Drew Bear - 06 November 2011 07:06 PM

    In many cases (iPod shuffle, MB Air, iPad, subsidized iPhone, etc.), there is virtually no premium at all…Apple now offers premium products at price parity.

    omacvi - 07 November 2011 04:42 PM

    I still think Apple needs to get into Enterprise market in order to see 30% or higher market share.

    That will happen as long as the iPad remains king and protects its 70% market share.  But I would give it another 10 years.

    I don’t think Apple needs to focus on Enterprise market share. They already hold 90% share of the over-$1,000 PC market and should simply hold on to that; perhaps extend it to the $800+ level. But there’s no reason for them to fight for the low margin end of the market.

    Those young kids will get Macs for homes when they become adults, but their gov or private sector job who uses 90% Windows machines will still rule the day.

    Yes, they will “rule” by sheer numbers, but not by influence. Windows computers will be used for the grunt work, but Macs will be used by many executives, managers & supervisors. But don’t be surprised if we start to see iPads encroach on that 90% of computing machines.

    The broader point is that this new generation of employees will have some familiarity with Apple devices. The “retraining” barrier is now much lower.

         
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    Posted: 07 November 2011 02:37 PM #5

    omacvi - 07 November 2011 04:42 PM

    I still think Apple needs to get into Enterprise market in order to see 30% or higher market share.

    Apple didn’t like the enterprise market because of its hippie leader.  With Tim Cook, time is ripe to move into the enterprise market with more earnest.  Having said that, Apple needs to work harder to bring the cost of iMac.


    DrewBear,

    I think Apple is not putting much effort in enterprise market because of SJ’s focus.


    In responding to you guys, going forward, what should be the right form factors in an enterprise?

    All-in-one: 45% 
    MBA: 10%
    iPad: 45%

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    Posted: 07 November 2011 02:56 PM #6

    AndrewLing - 07 November 2011 11:25 AM

    True.  When I was in college 15 years ago I never considered a Mac.

    In the early days, most users are hackers or casual hackers.  So Steve Wozniak was right and SJ is wrong.  If Apple has focussed on improving Apple II, make many tradeoffs and court game players, IBM PC would not be around.  Fast forward today, there are few hackers (mostly high end game players), most of us just want to do our work, a no slots all-in-one Mac is better.  My thinking is:

    For serious work:  iMac, MB, MBP, MBA
    For game playing: Wintel PC
    For consuming media mainly: iPad, iPod
    For consuming “free” may be even illegal stuffs:  Wintel PC

    Is it worth the effort or more importantly is it consistent with Apple mission to target game players and “free” stuffs consumers?

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    Stay Hungry. Stay Foolish.  - Steve Jobs

         
  • Posted: 07 November 2011 05:46 PM #7

    SJ once said: Ford don’t make special cars for enterprise customers; why should Apple make special computers? The implication being that if enterprise needs something that Apple’s product doesn’t offer, there’s something wrong with the product or the way Enterprise wants to use it. He was looking far ahead.

    Since then Apple has made huge progress toward fitting in with enterprise: SMB, Outlook integration; dropping reliance on Appletalk protocols; import and export MS Office documents, etc. At the same time, the majority of corporate operational software is now web enabled, requiring no client install, and Internet Explorer has become much better standardised. Apple products are ready to fit into the corporate environment.

    Nevertheless, the case for moving from PC to Mac has not been compelling for the Enterprise. Outposts of legacy software have a habit of hanging around for decades. But iPhone and iPad do things for enterprise that they can’t do another way. So IOS, not Mac is the route into the Enterprise.

         
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    Posted: 07 November 2011 06:01 PM #8

    sleepygeek - 07 November 2011 09:46 PM

    So IOS, not Mac is the route into the Enterprise.

    Do you call a Mac running iOS, a Mac or an iOS device?  Are you envisaging that the only form factors used in enterprise would be handhelds and palmhelds grin?  They don’t need desktops and laptops?  Based on my working experience, my thought is:

    AIO desktop = 45%
    Laptop = 10%
    Palmheld = 45%
    Handheld = 100% in addition to above.

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    Stay Hungry. Stay Foolish.  - Steve Jobs

         
  • Posted: 08 November 2011 12:32 AM #9

    The lack of perceved price parity is due to the lack of selection.  Personally I just ordered a 17” gaming laptop from dell with a nice video card for 750.  Apple doesn’t have anything comparable which is both a good and bad thing.  For example my last dell laptop literally snapped at the hinges from just opening it as has the display cable hanging by a thread.  I literally would receive a small electronic shock if I rub the sides of the case.  Apple doesn’t make anything this cheap or crappy.  Also I was unable to configure my dell with a ssd drive.  They probably reserve the option for their high end modes only.

    If you want something comparable to a MacBook air you can’t get it for cheaper from anyone else.  They simply don’t have the machining tools to make the cases in volume.

         
  • Posted: 08 November 2011 01:29 AM #10

    Apple didn’t go after the enterprise for many SOLID business reasons.

    First, the enterprise had an incredible gatekeeper in MSFT certified IT personnel.  They knew nothing of Macintosh, and didn’t want a foreign platform on their network.  Advice to upper management was for the IT person’s benefit, not the enterprise.

    Second, enterprise likes secondary sources for equipment.  You still can’t get that with Macs, but the support costs of Mac is such, that the enterprise is starting to make exceptions to this requirement.

    The enterprise wants a road map, which is why MSFT is always out there talking about the future.  Apple delivers the future (and willing to cast aside the past), without talking about it, but this is unsettling to the enterprise.

    Lastly, the enterprise has enormous investments in proprietary softwares that won’t run on Macs.  Think of this as MSFT’s walled garden.  It’s also MSFT’s achilles heel, as it requires extraordinary software backwards compatibility.  That’s why it took so long for MSFT to remove DOS from Windows.

    Fortunately, enterprise management are people (aka consumers) with families that make decisions without benefit of a MSFT trained/dependent IT person.  Apple products were/have been introduced into management’s homes where they saw the benefits of OSX and Apple hardware.

    Apple is targeting the enterprise, its just not obvious because they’re coming in the back door.

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    Posted: 08 November 2011 04:35 AM #11

    AndrewLing - 08 November 2011 04:32 AM

    The lack of perceved price parity is due to the lack of selection.

    Thinking aloud:  From the book “Steve Jobs” I noted that Steve Jobs love many (more than three) choices but Apple don’t offer much (less than three, sometimes one) choices.  Ironic.

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    Stay Hungry. Stay Foolish.  - Steve Jobs