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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.


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


Dec 18, 2008 Posted by | Apple, Hardware, Microsoft, News | , , , , , , , , , , , | Leave a comment

Inside The New Apple Store

This is the new Manhattan Apple Store, tucked away in an unassuming Meatpacking District warehouse. In fact the only identifier to the building is a huge roof billboard, which sits uncomfortably amongst the cool frontages of the surrounding designer stores and bars.

Apple has chosen an interesting location for its new Manhattan store. Whilst 14th Street traditionally conjures up visions of Union Square’s hustle and bustle with its Circuit City, Virgin Megastore and summer festivals, Apple has chosen the more exclusive end of the street. It feels like this entrenches an image of designer media brand rather than aiming at the the mass market.

Walking into the store, the staircase is a stunning centerpiece amongst now familiarly identikit furnishings shared with other Apple stores.

Perhaps in an attempt to capture some of Acer’s stratospheric laptop sales volumes, Apple has placed the computers on the ground floor which reminds you to look at them before heading up to the iPod and iPhone floor. With the iMac having to start again earlier this year it will be interesting to see if the MacBook range can capture some of the PC market share which the Intel move was meant to facilitate. Certainly MacBooks are the primary focus downstairs.

Moving up a floor and it’s all iPod, iPhone and Bose, the now familiar Apple music partnership. Everything is well layed out, if now a little passé, with plenty of staff on hand to assist. On the top floor is the Genius Bar.

Coming back down the staircase is definitely one of the fun experiences in this store. Another is imagining how cool this place would be as loft apartments or a club…and that stimulates the key question for me: What is this store doing here?

For the Saturday afternoon before Christmas, it feels empty because the shopping action is elsewhere. For tourists, there’s the 5th Ave store. For local residents and small businesses there are little independent stores in Chelsea and the Village to help them out with any worms in their Apples. Perhaps this is the target market?

As I leave someone is handing out flyers to his local independent Apple store…I hope he gets along with his new neighbor.

Neil Berman

More from the staircase…

Dec 25, 2007 Posted by | Apple, Audio | | Leave a comment


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