Reaction is still coming in from analysts on Apple’s decision to drop the price of its plastic entry-level MacBook. While ThinkPanure and others believe the sub-$1,000 notebook isn’t enough to attract worried consumers, some onlookers told Cult of Mac the move was a good beginning.
“They’ve never done cheap well – but the $999 MacBook is a good start,” Piper Jaffray analyst Andrew Murphy e-mailed Wednesday.
Murphy said Apple is positioning Mac sales for a long economic slowdown. Wednesday, JPMorgan said Apple had “meaningful buffers” that could allow the company to ride out any initial impact. Analyst Mark Moskowitz pointed to the value of Cupertino’s brand and iPhone revenue expected later in 2009.
Although the price cut affects a legacy plastic MacBook, more than half of the consumers considering the $999 plastic MacBook will opt for the newly-unveiled $1,299 aluminum unibody design, Murphy wrote.
The upshot of Tuesday’s new products: a slight or no impact on Apple margins. The company is expected to announce third quarter numbers later this month.
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
2 responses to “Piper Jaffray: Apple Has ‘Never Done Cheap Well’”
Apple has a big advantage in recessions: Value. Little Timmy is not going to find a mountain of oresents under the tree this Christmas. So Mom and Dad will buy none or two big gifts, and a few more cheap items to fill out the stocking.
Buying a new PS2 (3? X11?) isn’t a good value. It’ll be obsolete in another 18 months. A $600 Dell isn’t a great value, it actually costs $800 when you add in all the security software and support you need. Buying Timmy (or Tammy) the white MacBook is a great value, for just the Wow! factor alone. Add the usability and TCO and it’s a winner. The same criteria apply to iPods and iPhones. They cost more, but you get a lot more, especially buyer satisfaction.
Apple does so well because they understand one bit of business jargon better than everyone else: Satisfice. Basically, it means getting what you need; maybe not everything you want, but at least everything you know is necessary. You need technology that does a job, does it well, and does it reliably. Buyers believe Apple delivers that.
Instead of a new wardrobe (jeans, undecipherable tee shirts which are likely more profane than you’d ever guess, and shoes designed by a professional bowler), a new game system with 11 new games, mobile phone bling, and snowboard with matching gear (last year’s is so lame), Ti/ammy gets a $900 MacBook (education price), which will last until they go off to college. And then gets passed down to the next kid.