Hayweed

Does Apple Need an Enterprise Strategy After All?

IT departments don't want Apple since that would reduce the need for IT people. Budget cuts by management will solve that barrier.

As for Apple, people (analysts) are convinced that Apple sales will slow dramatically but this is bunk. Apple is a high end retailer that sells to the top 20% of consumers not the bottom 80% think Chevrolet and Asus/Gateway/ and Dell's consumer PCs. Management is in the 20% and what they use at home will begin to make it into work. What executive wants the hassle of virus scans and the crap that happens to PCs.

Apple owns the over $1,000 computer space. Dell gets twice the revenues of Apple and only half the profit. Apple could cut prices and try to compete on price. Is Porsche going to drop the price of the 911 to compete with Chevrolet. Doubt it. The upper end consumer while not immune to recession, may decrease spending but they will spend money on perceived value. Where is the value add on a dell pc at Walmart.

A $150 - $230 ipod is not that big of a luxury. That is like filling up your suv 2 or 3 times. In recessions people cut back but would you buy your kid some off brand mp3 player like the Zune which they would throw away or would you buy the leader.

The iphone at $199 is a steal compared to most of the junk phones for sale.

As for Rimm, they can't seem to get any of their new phones launched in the USA, their biggest market. The fact that they have told everyone that new products are coming (something apple hardly ever does) has caused most Blackberry consumers and business users to hold up on a new phone. Who wants to buy last year's model a week before the new phone comes out. Since the Bold seems delayed indefinitely, this is allowing more AT&T (largest seller of Blackberries) customers to give up on Rimm and switch to the iPhone.

Rimm's Bold is 3G. The new pearl is 2.5G. Why? The Storm is EVDO on Verizon. Too many different phones, too many different radios, too many different operating systems. Rimm seems to be making new phones into new platforms. Apple has one phone with one operating system that is a smaller version of OS X. No one not even MSFT has figured out how to put the computer OS on a phone except Apple.

All the new touchscreens, the Gphone, Nokia, the Instict, the Dare, Touch and even the not yet available storm, are all being compared to the iphone and all have not measured up. Just driving more and more people to look at the iphone at the apple store and now Best Buy, which results in more computers and more ipods.

I have a white imac in my conference room at work and almost every client under the age of 50 has asked me about the computer or the brand new imacs that my assistants have. They all ask how I like them and that they are thinking about switching. That never happened a year ago. People never paid attention to the fact that we used Apple computers.

The point is that the drop in Apple is due to fear not operating perfomance. Also remember that Apple accounts for phones by taking 1/8 of the price per quarter. This quarter will show 6 million old iphones at $400 a pop which is 6 million * $50 = $300 million. Add in 6 million new phones at $25 (1/2 of $200) and you get another $150 million. That $450 million also goes into next quarter even if they never sell another phone.

Apple will sell $1.2 billion in phones this quarter and only put $150 million towards revenues and earnings. That is why apple is a steal below $100.