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Discussion in 'MacBytes.com News Discussion' started by MacBytes, Jan 13, 2006.
Link: This Apple Is Too Shiny
Posted on MacBytes.com
Approved by Mudbug
They claim no operational advantages over Dell? Obviously they haven't compared a Dell and Mac. Tell that to my coworker who's machine randomly shuts off every two hours (yup, it's a Dell). Good grief.
Definition of disingenuous:
not candid or sincere, typically by pretending that one knows less about something than one really does.
Hmmm, more business with lower profit margins? That's never happened before! I'm shocked and amazed. That couldn't result in them making more money, could it? Let's see, is $1.8 billion more or less than $1.942 billion? That's a tough one, but maybe Mr. Ozanian can calculate it with the help of a good computer. Time to get rid of your PC, Oz.
Oh no, falling profit margins!
Really, is it so troublesome that the profit margins are declining minimally while the overal sales volume increases vastly? We are still looking at unit shipment growth (in the computer division) that is about 3X the average for the industry. And, profit margins for Apple's computer division are much larger than the industry average. Heck, total profits (not in percents) at Apple are higher than those at pretty much all other computer companies (excepting maybe Dell).
I'm not saying that the valuation of Apple stock might be a bit too much, but this is more a concern for short-term stockholders than for people concerned with the long-term performance of the company (and by long-term I mean greater than a 1- or 2-year time period--which might seem like eons in in the current stock market).
Heh...nice...I'm pretty sure that line is about *business* operational advantages. Meaning Dell's supply chain management. Not computer operational advantages. At least that's pretty strongly indicated by the context.
I've read in several business journals that Dell and Apple are at the top of operational efficiency in the computer industry. Most other companies lag behing these two by a long-shot. Apple has really improved their manufacturing and distribution over the last few years, and it is a testament to their business model that they can get similar efficiencies as Dell when they fill the majority of their orders (at least online) for individuals while Dell deals mostly with large (uniform) shipments to businesses.
This seems accurate to me also ... although when you look at things like Dell's flat panel business, well, I tend to wonder. I don't know what the margins are on those panels, but their prices are astounding in comparison to the competition...and suggest that they are getting excellent supplier deals. I think Dell's Supply Chain Management is still better at playing in the low margin / low cost market, but Apple's is as good or better when it comes out to high margin / large ticket items.... I don't think Apple would have its advantage if it tried to sell $400 systems including screens, like Dell does.
But God forbid. I'm just as happy that they don't. And also, if you buy into the argument here that increasing revenue and profit at the cost of margin erosion is a bad thing, then mmm... that's been *EXACTLY* the net result of Dell's long term supply chain activities.
Well... don't I feel stupid.
Heh, sorry. But your point was well taken too. God, I hate operating Dell computers!
mac buiness that grows *only* 28% year over year? is this guy freaking serious? does he know the industry average? its aboug 3% year over year growth for computer companies. apple is at 28% and this is listed as a negative? of course ipod growth will be more substantial, its a newer product. thats like saying next year that "fords new 2008 tarus grew 120932945230952% in its first year of sales, but the 2005 focus grew only 30%" of course the newer product is going to have a higher percentage increase in sales. its ridiculous how they love to bash apple, when the numbers are actually in their favor.
im amazed an "analyst" can say that 30% growth compared to 2=3% industry growth is a BAD thing....amazing
also, do people complain about wal mart having low profit margins? sell more, lower margins.....its basic economics
probaly just trying to drive down the share price because they know they missed the boat, and trying to get on for a bit cheaper
OMG and this is on Forbes.com?
What a lunatic! And this guy writes for Forbes.com? Looks like everyone's covered the unbelieveable comments already, but there are a few bits that makes even less sense to me.
Where he's talking about R&D, I can see what he's trying to say, but it's like comparing apple's to oranges. Surely if your profit doubles in a year (which i'm not sure about, but it would seem that extravegant!) these percentages he mentions mean nothing.
If in 2004 they made $100 million profit (lord knows what the number is!) and in 2005 their profits jumped to $300 million, that percentage could even mean they are still INCREASING R&D. From 8% to 4% he states. Taking these guessed profits into account would mean that their R&D INCREASED from $8 Million to $12 Million.
I wouldn't be surprised at Sony spending 7%, but just HOW MANY BLEEDIN PRODUCTS do they make??? Plus, Apple research in a different way. They make sure that there are only 1 or two different versions of everything on the market at one time in a controlled fashion. And then there's Sony who make about 100 different music players and the entire sales combined probably pales in comparison to the dominant iPod.
I can't even be arsed to read the second page.
i really want to email this guy....can anyone find his email address?
WTF. Okazian is a fool. Seriously, where is he getting his numbers?
He thinks that iPod sales will top 4 million units for last quarter. They were at 14 million.
4 million? Most estimates were for around 10-11 million. wtf.
Average selling price decreases from 418 to 188. But volume has gone up about 100 fold. wtf.
R&D has declined from 8% of sales to 4%. Compared to 2003. Well, the company has quadrupled revenue in that time period, so r&d has actually increased since 2003. wtf.
Overhead and selling costs can continue to decline, especially considering Intel and the iTunes store. iTunes has basically a fixed overhead. The more it is used, the lower the overhead is. Intel basically allows Apple to outsource a lot of motherboard design, something it had to for itself before. wtf.
A recent 2.5% marketshare in computers? When was that, 3 years ago? According to most experts it has already increased to over 4%. He should know this since if Apple computer sales are increasing at a faster rate than the PC market, that would mean that they are taking share. Guess he couldn't put that together though. wtf.
Dell does not hold any extreme competitive advantage when it comes to process. Apple actually has faster inventory turns than Dell. Creative hold a patent. So what. Apple doesn't owe them anything, and it has given Creative zero advantage.
Mr. Ozanian's ass must hurt from all the numbers he had to pull out of it to make this story up.
Forbes should be embarrassed to print this drivel. WTF.
this guy specializes in sport teams values....i guess thats kind of like computers??
i want his email so bad
PC growth for the industry (for the Asia Pacfic region at least) was around 15%
dell, hp, gateway.....about 3-4% year over year growth
The problem with Dell is that they are now known as commodity PC makers. They sell to businesses and to people who want something cheap. When Lenova starts going after businesses with the IBM name and can offer cheaper computers than Dell, suddenly they aren't looking so good. They'll go the way of HP, or even GateWay. Apple, on the other hand, has cool cornered. People will pay for a better OS and good looking products. If they can lower prices a bit, and improve support and reliability just a little more (not that they aren't already one of the best, but they can use a little improvement) they will... well, pretty much do what they're already doing. Increase marketshare and add a few more users to their already increasing base.
Not everyone will pay more for quality, but enough will to allow Apple to remain relevant.
there is a comment form which could be filled up. inform them that you want your comments to be published and hopely there would be a link, where we could read your comments. good luck.
For whatever reason it amused me greatly that each point you made ended in "wtf." Next time I rant I'm going to borrow your format.
A very good point that I think many people over look. By creating the hardware and the software in house Apple has a unique place in the computer world and doesn't need to follow similar business to Dell or HP (or MS). Apple doesn't have to try and "out Dell" Dell like other companies do because Apple offers a genuine alternative (not just something that's basically re-badged).
Very true - the other side of the coin, of course is, that because nobody else offers an alternative source, purchasing from Apple means vendor lock-in. Using PC technology, every 3, 5, whatever years companies can look for better service and product agreements, ensuring they always get the best deal.
Have I been hitting the Pipe, or did I just read that?
This guy is bitching about iTunes Music Store only making $0.04 a song when Jobs himself has said, on CNBC that iTMS isn't there to make money, only to drive iPod sales. I swear, if I ever see this hack in public I'll break his coccyx. This whole things smacks of Kantorian reporting. Sorry bastard was probably writing the article on a mac.
Then why is it that they never get a good deal? The total cost of ownership is always much higher for PCs. Training takes more time and costs more money. Upgrade paths are numerous, but never as smooth, so they end up costing more, especially when done by bloated, PC-loving IT departments, many of which can take weeks to solve the simplest of problems. Then there's the cost of the downtime when a virus/spyware/hacker strikes, not to mention the cost of defending against them or the cost of getting them out once they get in. Cheaper hardware often results in more breakdowns with more downtime quickly eliminating any cost savings, even when covered by warranty.
Erm, who says they don't get good deals? Microsoft can produce hundreds of studies to show you wrong about TCO. Hell, it's one of their main arguments against Linux migration! Unfortunately anecdotes and MacFUD doesn't sway large purchasers.
Either this guy is writing a very poorly-written satire, or he's mad because he didn't purchase Apple stock when it was at $16.
Whatever he says, it makes no difference. Financial analysts around the world are continuing to rate Apple as "outperform" and raise the target price.
Studies can easily be manipulated by those funding them. It's interesting to note that Intel once did a study of their own company's Mac vs PC maintenance and support costs, but that study was buried when they realized that the PC was costing them significantly more. Maybe we'll get to see future reports now that the switch has begun.