February 23rd, 2009

Do you really think Apple's going to take business advice from a bunch of cheapskates?

Posted by Adrian Kingsley-Hughes @ 10:44 am

Categories: Apple

Tags: Apple Inc., Netbooks, Nettops & MIDs, Desktops, Apple Mac OS, Hardware, Operating Systems, Software, Adrian Kingsley-Hughes

I can’t be the only one who’s tired of reading the opinions of cheapskates who feel that Apple, for some bizarre and unexplicable reason, owes them a low-cost Mac OS powered computer. Read my lips: It’s not gonna happen!

See, there are two lines of thinking. In the real world we have Apple, a multi-billion dollar company that’s carved out for itself a niche as a luxury technology company. Through selling a select few products at a relatively high price point (higher than other OEMs could pull off) the company pulls in billions of dollars a year with worldwide sales. You’re also dealing with a company that has around $25 billion (yes, billion!) in the bank, and zero debt. By any metric, Apple is doing very, very well.

But then in bizzaro-world, we have folks who seem utterly desperate for Apple to venture into mass-market areas such as budget PCs and netbooks, market segments that are notorious for having razor-thin profit margins and which are fought over by more than a dozen big-name OEMs. Boil down these bizzaro-world arguments and you really come down to one conclusion - Apple should make a cheap PC to satisfy the needs of the cheapskate buyer. Pop quiz - do you make billios of dollars from a cheapskate customer base? Hmmmm … maybe, but it’s a huge gamble.

Now, regular readers will know that I’m no Apple fanboy (in fact, I really can’t muster up the enthusiasm to be a fanboy for any company nowadays - there are products and services that I like and continue to buy, and there are those that I don’t …) and that the total extent of my Apple purchases over the years comes down to a few iPods and a Mac mini. I build my own PC systems so buying Apple doesn’t really factor in with me most of the time, but even when I’m in the market for a notebook, I’m too much of a cheapskate myself to spend money on an Apple-branded system. Sure, if I could pick up a brand new Mac Pro for say $500, I’d snap up one (probably several), but I’m not going to start fabricating a weak argument that Apple should be selling cheap systems just because of that. IIf I was going to go down that line I’d also want a cheap yacht, a cheap Rolex and a cheap Ferrari. The truth is that Apple shouldn’t start associating with cheap systems, not at least while the current business model is bringing in the cash by the truckload. Sure, there’s a downturn in spending, and there’s also no doubt that netbooks are hot, but you’d need to sell a lot of netbooks to bring in the same profit as one MacBook Pro or iPhone.

Now, we all know that the economy is shaky, and I’m pretty certain that over the next year or so Apple is going to experience a few hits, but I don’t even see that as being a valid reason for the company to throw out a business model that’s worked for years. It doesn’t have to change. Why? Just look at the company’s cash reserves - that’s give you nearly $25 billion reasons why it doesn’t need to change. Apple has the cash it needs to weather the current financial storm without having to make any changes to its sales model. 

Bottom line - Apple doesn’t need to make any rash business changes right now. It definitely doesn’t need to take business advice from a bunch of people looking for a cheap Mac. If Apple starts down that road of cutting prices, it’ll end up being another Dell or HP.

The way I see it is if you want an Apple computer and can buy one, buy one. If you can’t afford one, look at the plenty of excellent systems that are powered by Windows or Linux. If you really mush have a Mac OS system, then hit spend some quality time with your favorite search engine and learn how to put together a hackintosh system … anything, as long as your quit it with the whining!