11/17/2005, 3:05pm, EST
Thursday, November 17th
Study questions 'iPod halo effect'
"No Sherman's march to the sea here," said Kay. "The argument against the halo effect says that while Apple's shipments have been up for the past four quarters, it is because they are coming off historic lows. And we are now in an upgrade cycle in which the Apple faithful buy new systems."
"Apple's share has risen from 1.8 percent in 3Q04 pretty steadily, albeit in baby steps, up to a high of 2.5 percent in 2Q05. It is not easy to determine whether this rise is due to a halo effect or just represents the normal cyclical of Apple users upgrading, which they do every few years," Kay said.
Apple's position remains below where it was from 1997 through the middle of 2002, and Kay said that it is in this "unenviable" position due to the fact that "its products have become increasingly less competitively priced and have lost their advantage over PCs in features and functions."
While Apple's rise in the market is real, the report says that the halo effect is illusionary at best. It also said that Apple's future is more clouded that many think, especially after the recent rejection of Mac OS X as the primary operating system for MIT's $100 laptop project.
"From the overall market's point of view, [the halo argument is] a tempest in a teapot," said Mr. Kay. "I believe the company continues to make suboptimal strategic decisions, even as its marketing and short-term tactical execution are astounding. What will trip it up again are the standards and pricing issues." [updated]
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Until that question is asked and accurate date is collected, everyone is just blowing smoke and creating something out of nothing. Again, who cares.
The MIT's $100 laptop was just hint to everybody that osX is going to be licensed to non Apple hardware, not a real proposition. Apple can always freely distribute the osX for MIT on sponsored disks or something if they really want this market. They better make a version for the Sony to, that would rase there marketshare.
Another guy at work just bought an iMac and yet another is planning to buy one during tax time. There are people in my company (strictly Windows based) who I would never had thought they would be interested in Apple products, yet they are buying them.
This Roger Kay guy deep down knows the iPod is having an effect on ALL Apple products. He's just after his own agenda. Apple, I believe, has planned things REALLY well with the timing of products and is taking advantage of the iPod craze while it lasts. The awareness of Apple as a great solution for computers is rising quickly. Word of mouth advertising for Macs is rising exponentially and things are really going to change in 2006.
2006 is going to be a HUGE year for Apple.
BTW, there's plenty of truth to his argument as well. People hold onto their macs longer then PC folks (need to, they cost a lot more then those PCs), and are more cyclical in upgrade cycles. I finally bought a G5 tower in April, mainly because I couldn't wait any longer for apple to finally upgrade the little buggers. And let's not forget there may be a buying push now to get your PPC macs before they go intel (one of the other reasons I bought mine, wanted to make sure I kept my precious classic compatibility, and I plan on getting an iMac for my mother sooner then later for the same reason).
Oh, and no one mentions a point in the blurb above, that states apple is still behind where they were just three years ago. Or that pricing is going to be a big sticking point (loved Smurfman's comment about co-worker who was going to buy a Mac, but is saving his money to get one - you need to, considering the cost of all but the most low-end models).
And Mac users don't hold onto their Macs longer because Macs cost more, but because they don't become unuseable in only a few years like Wintel PCs do. Afterall, the average income of Mac users are higher than PC users. So they can afford to upgrade their Macs anytime they want and they keep their Macs longer because they choose to. And they choose to because Macs just work and they work for a long time. Anyone who uses both Macs & Wintel PCs know that.