KenC

Customer Survey Notes Microsoft's Brand Revival

You wrote, "The Windows brand revival story is a pretty clear one". Hmmm...for $300M you'd think they'd have gotten more bang for their buck.

Apple: Three Battles Won, Nicely Positioned for the Fourth

Let's look at FTEs from a year ago, and then extrapolate for the additional stores.

Here are the numbers:

March 2008 = ~12,000 FTEs

March 2009 = ~14,000 FTEs

Both figures were preceded by the word “approximately”, so they are clearly + or - 500 FTEs. Around 17% more FTEs this year than last, HOWEVER…, you have to factor in the number of stores open.

March 2008 = 205 stores

March 2009 = 251 stores

So, number of stores increased by 22%, and FTEs increased roughly 17%, but given the vagueness, the range would be from, 8% to 26%.

In other words, the increase is in the margin of error. Much ado about very little.

Clearly you did NOT read the filings you are citing, so everything you say afterward is SUSPECT. And, what are you going on about iPods in WalMart, that has been going on for a LONG time now. Jobs was there, when that decision was made.

No one likes one-sided stock hyping, but one-sided stock bashing with no basis in fact is worse.

How did you become a Top 3 Commenter? Did you game the system, because you are clearly out of your depth in commenting on Apple. Have you even read any of the filings that you are commenting on?

On Apr 24 03:53 AM Moon Kil Woong wrote:

> My take. According to filings Apple dropped its employees 10% from
> 15,600 to 14,000 and is currently under consolidation. It's margins
> rose due to cost cutting and a revenue mix shifting from hardware
> sales to software which means less market share gains.
>
> Looking at Apple to total PC shipments make more sense than comparing
> them with HP and Dell which they are loosing market share. This makes
> sense since Apple sells at a premium and we are in a recession.<br/>
>
> One can see positives as well as negatives in this filing. Cost cutting
> is not bad if management is honest about it. Expanding into China
> this year is a positive if Apple is honest about it combating expected
> domestic sales. Choosing not to get into Net books is fine if you
> think it undermines your value proposition with 13" Macbooks and
> iPhones around that price and functionality area. Dissing netbooks
> for no good reason isn't so intelligent. Apple should be happy it's
> computers sell for a premium and commit to those price points even
> if it looses market share. Jobs was always clear it was not his intention
> to try to become 20 or 30% of marketshare.
>
> The fact that Apple sells its iPods in Wal-Mart is unsettling for
> a few reasons 1) it doesn't fit their demographic niche, 2) it doesn't
> ring brand value, 3) it sounds like a good place to dump, and 4)
> shows Jobs is utterly absent in making corporate decisions there
> anymore.
>
> So yes, Apple had a nice quarter but it doesn't smell like victory
> to me.
>
> I don't own or short Apple. I'm a fan of their products but don't
> like one sided stock hyping.

Netbook Sales Cannibalizing PC Revenues

Netbooks are getting more expensive, while laptops are getting cheaper. Hasn't Katie noticed that netbooks are getting larger and larger? They're are encroaching on low-end laptops. Dell is about to release a 12" netbook. Heck, that's a laptop.

PC Sales Down, Netbooks Remain Firm

Another day, another bunch of gibberish from Paul Carton.

1) So, you survey 20,000 members, get only 3115 to respond. Of those, only 6% are thinking of buying a laptop. What's that amount? 187 respondents. Of those, 4% more are planning to buy a netbook than in January. How many is that? 7 people. Is that significant or is it just noise in the data?

What's the margin of error on your sample? In a random sample of 3000, it's about +/- 1.5%. So, your 6% buying a laptop could be as low as 4.5% or as high as 7.5%. Holy cow, since you are rounding to the nearest whole unit, that could mean your survey results are 6% +/- 1.5% or between 4 and 8%. In other words, the change in laptop buying intent could be nothing but noise in your sample.

2) Let's look at your netbook comments. So, of the 187 people who say they plan on buying a laptop, 18% or 33 people, plan on buying a netbook. Compared to last month, when only 14% or 26 people said so. That's a difference of only 7 people. Is that significant or is it noise? The sample size is ONLY 187 people!

3) The odd thing is that after writing about consumer pc spending, netbooks, Apple, HP, Dell, and customer satisfaction, you conclude with an out-of-the-blue question, "Even with the big hits Apple Mac Laptops have taken in our September and January surveys, why are they still managing to somehow muddle along in this incredibly tough spending environment?" Nowhere in the preceding, do you talk about these "big hits". Nowhere do you analyse these "big hits". Do we even know if these "big hits" are real? Maybe, they were imaginary, and that's why Apple seems to muddle along after taking such "big hits".

In both of those surveys of September and January, a 5% drop would represent roughly 9 people. Is this a large enough difference to be statistically meaningful or is it more noise? What explains the 4% jump in November's survey? Could it just be regression to the mean, and the fluctuations nothing more than noise from your large margin of error?

Paul, have you considered taking your survey to a statistician?

Apple vs. Dell: Capturing the Over 50 Crowd

Macbook Airs can be had for $999. Just check the Apple Certified Refurb Store. Get a 64GB SSD PATA drive for less than $130 at Geeks.com and you have an ultralight laptop that cost $3000 last year, for about $1150.

Look Who's Talking About Smart Phones

Sure, Dell has had their PDA, fail. They had their Ditty, fail. They can combine their PDA with their Ditty and put a phone on top. Lemme see, you think it's going to succeed? Have you even looked at what HP is doing? They just put their name on a HTC, kind of how they used to put their name on an iPod. They have almost no traction in smartphones, and you think Dell will?

Dell needs to stick with their knitting. They need to fix their core business before they go traipsing into new areas just because some consultants told them to do it.

Is the Notebook Market Slowing Down?

ThinkPanmure?!? They don't even cover Apple. At least, not officially, is this some guy's blog? The guy has NEVER been on an Apple conference call. And, he doesn't seem to even factor in iPhone's deferred revenues which should have normalized by 2009, in his 2009 eps numbers. What a joke.

Dell's Factory Sales: End of an Era

Actually, while the comments people have made are true, the biggest fact is that the market has changed. People have been transitioning from desktops to laptops for a while. While desktops could be bought sight unseen, as they are stuck under a desk, laptops must be seen and handled to make a sale. As long as desktops ruled, Dell was the king, as it could use its supply chain to make the cheapest desktop and get it to you the fastest. Now that laptops rule, Dell's approach isn't ideal. You need retail points of sale, and you need inventory. A fast supply chain isn't as critical when people are buying in-stock inventory. So, all those other missteps aside, the biggest factor in Dell's reason for selling its factories is that their market advantage has disappeared as laptops have taken over.

Seeing an End to the iPod's Hegemony

Interesting that you mention Chrome at the top. You do realize that Chrome is built upon WebKit and is now essentially part of the WebKit alliance? Who is part of the WebKit alliance, oh, Apple, Nokia, Adobe, and others. Who is NOT part of the WebKit alliance, oh, let's think, can you say Microsoft?

Your article would have been far more interesting if you had applied your thoughts to "Seeing an End to Internet Explorer's Hegemony".

I also wanted to point out some factual errors. You said, " And since the iTunes downloads were all encoded with Apple's DRM". Uhm, not "all" iTunes downloads are DRM encoded, just something like a little over a half, and that's only because some of the labels are trying to steer business to Amazon.

You say MS is "hammering the door" with the Zune. Everyone knows that that is laughable. Zune has 2% of the market at best. Dell is a failed player in the MP3 player market, and quoting Enderle only undermines your argument, since he has a conflict of interest, having consulted on the effort. And, Sandisk's wifi music player? You do realize that iPhones and iPod Touches can download over wifi from the iTunes Music Store, right, without going thru a computer.

The reason why MS and Dell are in the market isn't because they think they'll have an impact on iPods or iTunes, it's because they need a full media product offering. It's not just about music, but about all types of digital media, and giving up on music, will potentially cede the video download and video device market to Apple as well. That's the fear at MS and Dell. That's why they have to get into markets they don't look likely to win. They have to play in the last battleground, in order to have a chance to win in the next battleground.

And, thinking the subscription battle is where Apple will lose is just silly. Apple can turn on subscriptions in a New York minute. There's NO meaningful barrier to entry. Besides, there's more out there than just Pandora that already work on my iPhone. There's AOL Radio, where you can choose from hundreds of radio stations. There's rumors that Sirius is coming to the iPhone. There's a FREE app from SimplifyMedia which allows me to serve my whole music library from my home PC to my iPhone wherever I am. I don't even need my music on my iPhone any more. I can just stream it. Do you think Zune or Sandisk have those capabilities in their devices? The other players in the market are just getting further and further behind, because Apple has already created a large enough ecosystem that all the innovation is being driven for iPods and iPhones. The other players are too small to attract any development. Sure I know, it's much like Apple Computers were just 10 years ago, but it took extraordinary talent to take Apple from where it was 10 years ago to where it is today. It will take another extraordinary talent for it to happen again. So far, you haven't identified anyone or any company or any idea that would be that talent.

Dell: Market Pessimism Presents Buy Opportunity

Yes, shipments were up, but isn't that primarily due to the initial stocking of retail inventory? I'd be a little careful and see if this is real growth, or just temporary growth due to the rollout of the retail initiative.

Waiting for Dell's iPod Moment

<<As for shares of Microsoft languishing between $20 and $30 for years, they did until achieving a decisive breakout above $30 in October. I know because The Kelly Letter owns shares and we were waiting for Vista earnings, Xbox successes, and online inroads to finally pay off in Redmond, and they have. I expect that continue>>

I think basing your premise on the assumption that MS has made a real "decisive breakout" is the weakest part of your argument. Vista and Xbox earnings need to show they are sustainable. And, Google is just eating their breakfast, lunch and dinner in online advertising search.