TheONbutton Durham Computer Services

Remote IT Support and Computer & Technology Help in Durham, Chapel Hill and Raleigh NC

iMac Sales Plunge, Apple Slashes Refurb Macbook Air to $1,149

It’s been a week that Apple fans will want to forget.  NPD reported that Apple sales for November were flat year on year whilst Windows PCs gained 7%, iMac sales collapsed by 38% whilst Windows desktops fell only 15% and Apple announced that the company will stop attending Macworld after the 2009 show.  Apple laptop sales rose 22% compared to 15% for Windows laptops.

mb-air

What does this mean for Apple?  Most likely something needs to be done…and pretty fast.  Apple has responded by slashing prices of its refurbished models, a move likely aimed at removing the carrying costs of old inventory.  Macbook Airs are available for $1,149 on Apple’s US website at the time of writing.  Deep reductions are offered across other lines as well and online stores are offering serious discounts on new models.  After a while this discounting could erode the premium perception of the brand and hurt Apple retail store sales, which are typically made at full price.

Netbooks captured the the public's imagination in 2008

Netbooks captured the the public's imagination in 2008

This may be a short term band-aid to improve working capital, but Apple needs to look deeper at its product line and offer models at prices which relate to the current economy.  The company has been too late in coming to the Netbook market, which exploded with colossal growth this year following the arrival of the Asus EEE in late 2007.  Apple needs a Netbook quickly, and it will need to compete with the quality of the MSI Wind, Acer Aspire One and Asus EEE range, which all sell for around $300-400.

Steve Jobs said that “We don’t know how to build a sub-$500 computer that is not a piece of junk.”  Well Apple might have to learn how.  Five hundred dollars is now premium Netbook territory as prices have been falling throughout 2008.

I expect that if Apple enters the market they would choose the $600-800 range with a couple of configurations.  They need this because Macbooks are no longer the coolest laptops to pull out of your bag…Netbooks are.  A glance at the Amazon bestseller list shows Netbooks occupying slots which Macbooks used to live in. 

The MSI Wind Netbook was one of the most hotly anticipated products of 2008. Can Apple introduce its own competitor to stop the rising Windows sales?

The MSI Wind Netbook was one of the most hotly anticipated products of 2008. Can Apple introduce its own competitor to stop the rising Windows sales?

Whilst Macbooks used to be the laptop of choice for Manhattan coffee shop outings, Netbooks now get the curious admiring looks.  In an America looking to downsize cars, energy usage and spending, Netbooks are the Prius of today’s laptop showroom.

Clearly the slowdown in the economy has affected Apple as a seller of premium products.  It also seems that Apple’s negative advertising campaign throughout 2008 against PCs may have not had the positive sales effect Apple was hoping for.  In fact the plunging iMac sales figures indicate that Apple might have done better through a positive campaign promoting the benefits of the iMac compared to Windows desktops.  It may be that consumers simply were unable to identify a positive value of spending the extra bucks on an iMac, which is a classic outcome of a negative advertising campaign, unless the competing product is seen as truly worthless.  Clearly not the case in this instance as iMac sales plunged 23% more than Windows desktop sales.

Whilst I think Apple will pull through, it needs to revitalize its line-up to be attractive in today’s economy.  And hopefully that revitalization effort will give us reasons to buy Macs, instead of reasons not to buy PCs.  I want to want Macs for good reasons, not because I’m told the competition is bad.

Neil Berman

www.theonbutton.com

Advertisements

Dec 18, 2008 - Posted by | Apple, Hardware, Microsoft, News | , , , , , , , , , , ,

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: