It must be hard for Apple (AAPL) to be dragged off the top of the hill. It has been there so long. Steve Jobs has been hailed as the best CEO in America. Apple has long been considered one of the champions of US inventiveness and marketing prowess.
Much of that has changed in the last few days. Goldman Sachs wrote that Apple will be a victim of the recession.
Apple has sold nearly 200 million iPods in just over five years. That can’t continue.
Now the Mac has hit the skids. According to The Wall Street Journal, "Sales of Macs in U.S. stores last month declined 1% from a year ago, while industry-wide PC sales rose 2%, according to research firm NPD Group." Many analysts covering Apple thought that Mac sales might slow, but it had not occurred to anyone that they could "go negative."
Apple has become the victim of its own success and its own arrogance. Most iMac desktop models start at $1,199. MacBooks start at $1,299. Dell (DELL) is selling desktop models for under $500 and laptops for under $480. Apple’s response to that is that these PCs are not a Mac. They don’t have the same functions. They don’t look as good. They are not as cool. They don’t have the superior Mac OS.
The counter to the Apple argument about buying a Mac is that during a recession when people feel poor, they will often buy the least expensive product as long as it works reasonably well. That would hold true of most PCs from major manufacturers. Holiday buyers are defaulting to what they can afford.
The simple truth is that Apple has priced itself out of the market. It will have to cut prices if it wants to get Mac sales to grow.
Douglas A. McIntyre
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