Apple holds price - but they're still sellin'

Seemingly challenging all reason, Apple's 'expensive' machines continue to sell while cheaper PCs suffer. Even though Windows PCs are increasingly sold at discount. In fact, TBR analyst Ezra Gottheil documents an overall 13 per cent drop in average selling price of PCs in the US. Despite that, TBR registers an 18 per cent decline in PC revenues in the fourth quarter of calendar 2008. People are still buying computers, but not in the same numbers and the vendors aren't making as much money from them.

Except Apple, which has been holding its prices. Apple's average selling price has somehow held as the company resists price drops, says Fortune.

Apple's unit sales actually rose in the same quarter, although at a rate of growth of 9 per cent year-to-year.

I mean, in this day and age, that rate sounds pretty good - it's just that last year, Apple recorded 44 per cent growth in that same quarter. But yes, that was a good year for most PC companies, not just Apple, and the last-quarter figure also shows Apple is not immune to more cautious tech spending.

Partly as a result of holding to pricing and partly from growth, Apple's cash reserves have grown at an annual rate of 50 per cent year-to-year for the past two years. Apple had 'just' US$12 billion in the bank two years ago. Now it has US$28 billion. That's quite a treasure chest considering what's going on in the world. Which gives it the muscle to innovate.

PC shipments are still getting doom and gloom forecasts. Shipments will fall 11.9 per cent in 2009, reckons research firm Gartner, as the tech sales in overseas 'emerging markets' begin to contract for the first time.

So why do Apple's machines still sell, if they're (as they always have been) decried as overpriced?

Because they don't just look great - Apple oversees the design of all the hardware (no matter who makes the hardware) and software to fulfil its computing aims. Apple has repeatedly shrugged off the advice heaped upon it by the industry, analysts, and the general public to make cheaper machines and even license Mac OS to run on grab-bag PCs.

Therefore users have experiences like this: "At work I am forever having programs crash, Windows s***ting itself, rebooting several times a day. All this offsets the fast render times and drives me crazy when I've got a tight deadline. We also have a full-time IT team that keeps these computers running as they should. At home on the iMac I never run in to any of these problems using exactly the same software."

Or how about: "Last week, I upgraded my leased Toshiba laptop to a 13-inch MacBook. And coming from a PC background, I have found the transition interesting but not that different ... Can't say I'm a Mac fan yet but I am very impressed with the aesthetics, reliability, quality and ease of use. So far, the MacBook seems to do everything my PC did, but better."

Or: "10 years PC fanboy. Recently bought a MacBook. Within days all my PC stuff was on Trade Me. Absolutely not going back to PC. OSX is beautiful, the quality of the hardware is stunning. 100 per cent worth the price difference and besides when you upgrade you will get your money back, have you seen how much secondhand Macs go for? The value added in OSX is amazing, it's all right there, no need to download all this other rubbish third-party software, no driver issues, just pure computing pleasure. If you really miss Windows (you won't) you can install it on your Mac. Amazing."

It's really hard to put a monetary value on stories like this (all culled from comments on the last two Mac Planet blogs). But it seems that Apple has worked out the formula, and it's sticking to its (gold inlaid) guns. People may be looking for value, but value comes in two forms - cheapest possible, or best perceived value for your dollar. Michael Gartenberg, VP of Strategy and Analysis at Interpret, LLC, told Ars Technica "For folks who are looking for the full PC experience, the no compromise device, Apple continues to do really well and grow in share."

Despite all this, rumours that Apple may release a netbook just won't go away. It's hard to ignore the phenomenon and Apple must be watching avidly - netbooks already account for 30 per cent of European consumer laptop sales.

But Apple is, as usual, innovating to its own schedule with its own ideas - this has worked pretty well for the company in the last decade, as it did when the Mac was first launched in 1984, with both regimens being directly attributable to Steve Jobs being at the helm.

Gartenberg thinks all Apple has to do is keep up its momentum and stay away from creating "me too" products. You know - like all those 'new' smart phones aping the iPhone, and companies scrambling to put up 'app stores'.

So far, rumours of an Apple netbook have been more hope than reason. But the stories are still percolating.

So here's my prediction - if Apple does release a netbook this year, it will be more expensive than most others, do what most others do, but it will also have be more powerful, and/or more usable and debut some unprecedented features.

If an Apple netbook isn't a game-changer, it's a bad idea.

But if Apple can get the Mac OS onto an iPod touch, what can it do with a bigger device?

- Mark Webster mac.nz