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Apple finally takes a big fall

Posted Dec 16 2008, 07:04 AM by Douglas McIntyre
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It must be hard for Apple 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 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

Top Stocks blogger Douglas A. McIntyre is an editor at 24/7 Wall St.

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Comments

 

I whole heartedly agree with the author, Doug, but even go one step further.  I don't believe it takes a recession to demonstrate Apple's less than optimal business plan. For many years now, Apple has had the superior OS, better performance, less viral exposure, etc.  Yet Apple's market share is what? 15-20%? (Someone please write me with the correct figure!)  So then with the best system out there, why dosen't Apple hold the lead in market share?  Oh yeah!!   'Cause they're knocking people over the head with their out of line pricing, thats why!!!

World economic crisis because the United States do? How are we going to deal with this?  Here will give you a lot of answers!!

http://www.money-business.cn

The disdain for Apple comes through in this article.   As a homeschooling mom, I can't begin to tell you my relief when my son bought me a Mini Mac.  After all the problems I had with other computers, this Apple has freed me up to spend time doing what I need to do.  Less stress, less headaches trying to update Microsoft Windows, figure out clitches of which there were many.  Microsoft knows how to trap consumers with their product.  It was a continual mess.  I, not a techie by any means, was able to make a beautiful website in under two hours.  All by myself with iWeb!!  So, you can say all you want about Apple, but hands down they have a better product.  Sorry.

The US is now entering a DEPRESSION. Yes I said DEPRESSION and not recession which the US has been there for over a year. The US is done as the leader of the free world as the world has now rejected the US and soon wioll reject the USD and plunge the US into a decade long DEPRESSION for it's crimes against humanity.

take it easy dan. Yes the US will go into a depression and it's only a matter of time. The world will reject the USD since it is worthless and the US will be financially punish thus the reason for a depression. This is what happens when you voe for Bush. Now you are all going to suffer.

wow some really dumb comments, no surprise from some really dumb US consumers.

Look in the mirror folks, you're the reason the economy sucks, not just because you voted for Bush.  As much as Bush may be a fool, he does not have the power alone to get the US into this mess.

You Bush bashers always make me smile. I guess if you need to blame someone or something he's a good a choice as anybody. IMHO the current state of our economy started with FDR. When the government decided to start the first welfare program (aka Social security) we started down the slippery slope we're on. It plodded along slowly until 1994 when Clinton authorized Freddie and Fannie to start making loans to people who werenot qualified in the name of social equality. Fast forard to 2008 and you have the federal reserve, the wall street robber barons aqnd congress to put on the final touches. Thank God I was futunate enough to work for a businessman who saw all this coming in 2004. When he talked I listened and I'm only minutely exposed to the current crisis because of him.

If you want to blame Bush for where we are, I don't care. I don't personally think he's done a very good job but that't not the point. Just do a little research and answer these 2 question. Where was the Dow in Jan. 2007 when the Democrats took over congress and where is it now? Where was the dow when Obama was elected and where is it now? Any corolation between the two? You have to answer that yourself.

Dan and Pete what does what you both wrote have to do with Apple's pricing issues? Dare I say NOTHING! Take your anti-everything diatribe to the appropriate discussion forum.

It's why Jobs has so much money...Mac and MacBook buyers (and I'm one) have none.

Macs are way over-priced, and I won't buy another til the price drops. I bought my MacBook out of frustration, and I still have mixed emotions about it.

Apple needs to adjust its pricing to reflect the fact that consumers are much more cost conscious now than they were a year ago.  No adjustments = no sales growth in the future.   There is a saturation point with all new, latest and greatest technologies and gadgets.  Apple has reached that point with its new products.  I expect the stock to drop from here significantly over the next year.  A good short selling candidate.  More info at www.WallStreetStocks.us

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