Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Don Green who wrote (49968)	1/9/2006 8:31:29 PM
From: NAG1	Respond to of 213177

Is this part correct? <<We have a case about this at Harvard [Business School], about when John Sculley was the CEO of Apple in the early 1990s. He actually had remarkably clear vision about where the industry was heading. He had three priorities. First, he felt the company needed to get its price down to $1,000, from $3,000 or $4,000 at the time. The second thing was to open up the architecture, by selling the OS. And the third was that handheld devices were going to be big. He was right on all three, but the culture of Apple was just so strong that Sculley just couldn't change the direction of the ship. >> Wasn't it Jobs who wanted to get the price down, got into a fight with Sculley over this very issue and got tossed over it? Maybe I am remembering it wrong. Neal

To: Don Green who wrote (49968)	1/9/2006 10:40:45 PM
From: Cogito	Read Replies (3) \| Respond to of 213177

Don - Re: "How Apple Could Mess Up, Again" Or not. Christensen makes some interesting points. However, I think that there's a very big difference between holding on to a proprietary model in computers and doing so with an mp3/video player. In my opinion his argument that Apple can't continue to grow their market share because "a good Dell PC can be had for $500, and it has performance that's well beyond what most of us need", is just wrong. It's demonstrably wrong, because that Dell has been available all along, yet Apple is regaining market share. Saying that most people are satisfied with their PCs ignores the growing numbers of people who are absolutely not satisfied, because they can't deal with the viruses, spyware, and attendant software nightmares. I have a web design client who spent the entire weekend trying to reanimate his Toshiba laptop, and eventually having to wipe his disk clean and start over again. There's a fun process, when you're dealing with Windows. All he did was to try to install an upgrade to Norton Antivirus. The system crashed when it rebooted itself, and then would not boot, despite the best efforts of Microsoft and Symantec tech support. The good news is that at my urging, he had bought a WD external hard drive, and had backed up the computer only last month. The bad news is that even with a backup, Windows takes forever to reinstall, and all applications have to be reloaded, too. (FYI, doing a full restore on a Mac takes a LOT less time, since applications, drivers, and preferences can be restored along with data. Now there's a dime's worth of difference for you.) Knowing I'm a Mac guy, he called me up today to ask about how difficult it would be to switch. His chief concern was whether all his Microsoft Office documents would be accessible on a Mac. When I assured him that they could, he decided his next computer will come from Apple. - Allen

To: Don Green who wrote (49968)	1/10/2006 3:06:39 AM
From: JP Sullivan	Read Replies (1) \| Respond to of 213177

IMHO, Christensen has omitted a very important ingredient in his assessment of the iPod: Desirability. He has compared the iPod to boring items such as medical equipment, aircraft and software, which are non-personal and typically used in public, industrial or work-related settings (same goes for PCs). Apart from the fact that they all tend to be more expensive than the typical iPod--which btw, the AAPL and SJ of old would have priced much higher--these are items that people tend to not want in their personal space and would not form any kind of emotional attachment to them. Nearly every woman I've spoken to desires a $1000 (and upwards) LV handbag. Those who are on a tighter budget would go for Coach; and those who can really splurge would go for Dior and Chanel. Of course, those who have a Rolls or three in the garage are likely to be toting a $15,000 Hermes. Now, why anyone in their right mind would pay that kind of money for a bloody handbag is beyond me. But there it is. Objectively speaking, isn't a handbag a fungible commodity? (Just like an MP3 player, right?) After all, it's just a portable container and you can get a decent, albeit generic, one made in China for $20 or so. So why are people willing to pay such enormous sums of money for such a common item? Desirability. The fashion world is all too aware of it. And so it AAPL. That would account for SJ's insistence on aesthetics and detail and his obsession with secrecy and suspense. Fortunately, the other MP3 makers haven't caught on. That's because they're staffed with your typical cut-and-dried, function-over-form industrial designers. And their bosses are just as insipid. This isn't a screwdriver we're talking about here. This is a product that accompanies us on holidays and moments of leisure, and yes, some of us take it to bed too. My view is that once the price is right, desirability will take over and influence the consumer's choice. People forget that the iPod was not the first MP3 player on the scene. In fact it arrived about 18 months after the first player showed up using MSFT's platform (I'm sure you'll correct me if I'm mistaken). So, out of nowhere AAPL captures the MP3 market. I don't think it's a fluke that this happened. For some reason SJ knows the heart of the consumer (must be from all that time he spent in those ashrams in India during his Hare Krishna days), and as long as he keeps his finger on the pulse, AAPL will continue to lead in this area, proprietary or not. I wonder if Christensen has considered why, despite the big lead that some MP3 makers have had over AAPL, and why, despite using MSFT's super-duper media platform, these makers remain bit players in the market. To reiterate my point: this is NOT a PC we're talking about. MSFT is dominant in the PC world today because it was able to penetrate corporate America (thanks in large measure to IBM). And yes, the PC was a lot cheaper than the Macs of the 80s. But the iPod is a product that people purchase for personal reasons and mostly for themselves. If corporate America were suddenly to decide which MP3 players their worker bees must buy, I'd be very worried. Thankfully, that is not the case. It will be interesting to see how AAPL can compete for the living room, which I believe is where the action is going to be. To add to my point that the competition's products lack allure and desirability for the average consumer, consider how MSFT's media PC platform is doing. It's been out about three years now and how many media PCs have been sold? What, 3 million last year? And analysts are raving about 6.5 million this year? How successful is that for a mass consumer product? Maybe it's a good number considering the price, I don't know. To me, it seems pretty lame. Anyone who's seen a butt-ugly media PC can understand the paltry numbers. Who the heck wants such a monstrosity in their living room? I suspect the majority of buyers are teenage males holed up in their bedrooms, who don't much care what anything looks like as long as it's got the right amount of horsepower. -we-