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For six years, the Internet Nexus served as my technology blog, but I've since started blogging at the SuperSite Blog instead. If you're looking for the blog, please head there. --Paul

Tuesday, May 03, 2005

It's No Party

Forbes:

Apple Computer may have let its Tiger loose from its cage, but its stock price certainly isn't roaring.

Despite much ballyhoo in the media, and a Friday night retail party launching the latest version of the Mac operating system software, Apple's stock price trickled up to close only 37 cents higher on Monday, or about 1% ... [on] the day it started shipping the iPod shuffle... Apple's share price jumped $1.47, or about 4%.

In its March quarter, Apple's combined sales of laptops and desktops showed a 43% increase in unit shipments. But in real numbers that translates to a year-over-year increase of only 321,000 units.

Analyst Rob Enderle, head of California-based The Enderle Group, says the so-called "halo effect" around the iPod is really just a myth.

I'm not ready to say that the iPod can't or won't increase Mac sales, if just temporarily. But I will say this: Contrary to literally years of suggestions that that is exactly what's been happening, Mac sales have only jumped up once significantly, and that was because of the Mac mini, not the iPod. Is there an iPod "halo effect"? There is absolutely no evidence of that. None. Will Enderle (and myself) get roasted for stating a fact? Sure.

"From what I'm seeing, the iPod simply drives people into the stores, and the foot traffic helps move product," Enderle says. "The iPod benefits the entire Apple product line, but Apple could have done the same thing by having Paris Hilton, or some other celebrity, visit the Apple stores."

Another apparent myth is the notion that Apple--despite the protestations of its devoted user base--can reignite the old market-share battle it waged and lost with Microsoft. Of the 178 million PCs sold last year, according to market research firm IDC, some 3.2 million, or less than 2%, were made by Apple.

Apple relies on its users to upgrade their computers regularly. If each of those computers sold last year were upgraded to Tiger, it would represent a $412 million revenue opportunity, which increases to $800 million when you include the 2.9 million Apple computers sold in 2003.

And the debate rages. Apple fans will argue that market share doesn't matter, but will paradoxically trumpet any increases as proof that the market share numbers are on the way up. As long as Apple is making money, all is well. And the iPod can do a lot to erase the general malaise that is gripping the Mac market. But ultimately, Tiger, like the Mac mini, will simply give Apple a temporary boost. Then it's on to The Next Big Thing (tm). That's how Apple operates, folks. Don't shoot the messenger for stating the obvious.

[ Posted at 10:01 AM | Permalink ]