Apple’s shares have dropped 5% and were halted during trading hours at $514 and the after-hours price is down another 10.21% $461. Although Apple is still making a lot of money, the growth indicators have alarmed investors who were betting on “growth”. Just one year ago, analysts were predicting a share price of $1000 and just five months ago, AAPL was worth $700. Apple shipped shipped the expected number of iPhone units (for moderate analysts), but the Macs numbers tanked by 21% year over year… this is bad.The first idea is too look at the obvious: the iPad is eating away sales of the Macs. I think that this is partially true, but iPad alone does not explain this – not even close. A friend of mine pointed out that this drop seemed even worse than 2001 year, a year that wasn’t great for Apple.
Others may point at the Mac price point, which they say is too high in these times of economic difficulties, especially in Europe, where things are fairly bad and are not really getting better. Apple does price its products fairly high over there, given that they cost 30% higher than in the USA if you convert the price back from Euros to dollars. Add to that the average income may not always be higher in the Eurozone and you have a potential explanation.
Finally, you may also want to look at the overall value-proposition of the Mac. This is something that Apple supporters don’t like to question, but for example, Apple laptops used to provide more “bang for the buck”: a few years ago, I find it difficult to configure a laptop PC that could significantly beat a Macbook for the same features and comparable build quality. Today, I can find many PCs that would give it a run for its money. Apple’s computers have been getting more expensive (in relative and absolute terms), and the added-value they bring is less obvious than it used to be. That’s my perception as a Mac user anyway.
Finally, Apple has blamed some of the problems to come from the fact that they had difficulties building enough new “thin” Mac computers and that old Mac were phased out, while new Macs where not ready to ship in the required volume. This may be true, but it remains to be seen how much that particular problem contributed to the overall slow-down -21%- seems too big to be explained by a shortage issue.
Couldn’t it simply be that the Mac is losing its cool and its value as Apple bets the farm on the iOS devices? What do you think?
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