Apple Cuts Production Orders of MacBooks, iPods, and iPhones
http://firefox.org/news/articles/1164/1/Apple-Cuts-Production-Orders-of-MacBooks-iPods-and-iPhones/Page1.html
L Mouse
By L Mouse
Published on 02/6/2008
Appleinsider is reporting that Apple is cutting production of iPods, iPhones, and (possibly) MacBooks ...
Economy or products to blame?
Appleinsider is reporting that Apple is cutting production of iPods, iPhones, and (possibly) MacBooks. This likely reflects lower than expected sales of the products during the fourth-quarter Holiday season and thus far this year. Multiple web sites have speculated that this may be due to the worsening global economic outlook.
However, my personal assessment on Apple is that all three products have issues integral to the products that are limiting sales, in addition to the part that a lousy economy is playing.
While the iPhone is a cool gadget, I'm not sure that the pretty appearance and the gee-wow-cool-it's-Apple factor are enough to fuel tremendous numbers of sales over an extended period. (Though, admittedly, it captured 28% of the market in Q4 2007 according to research by Canalys.) iPhone is much more expensive than many phones with integrated MP3 players, and -- despite the fact that there's no rebate or discount from the carrier -- purchasing it requires a two year contract with AT&T (in the US.) I've yet to hear a good reason why one should be required to sign a long-term contract for the privilege of using an iPhone, if one is also paying full price for it.
Additionally, by limiting the iPhone to one carrier, Apple is also limiting their domestic market. (Yes, phones can be unlocked, but I suspect that a very small number of buyers will be willing/able to do this in the US. Outside the US, that's another story.) If a buyer doesn't already have a plan with AT&T one would assume that they will wait until their contract with their current carrier's up, because who wants to pay for two phone plans? And then, when they are free to shop for a new cell phone company, they may find more bang for their buck with another brand of phone, particularly since the "latest and greatest" appeal of the iPhone will have worn off within a few months of the release date. The iPod looks cool but other phones do essentially the same things it does, and for less money.
As far as iPods go, I looked at iPod Touches recently and -- while they have some nice features, including WiFi and an integral web browser -- one significant drawback is the severe lack of storage space. Apple released a 32 GB model yesterday, February 5th, 2008, but prior to that they only came in 8 and 16 GB versions. The 8GB wouldn't even hold all my music -- it holds approximately 1750 songs, which is practically nothing -- and even the 32GB one wouldn't come close to accommodating all my video or digital photos. 8GB only holds ten hours of video.
To put this lack of space in perspective, my 40 GB "old" iPod is about 95% full. While I could certainly pick and chose what I wanted to put on a new iPod, it would be a nuisance. So, I'm holding off on purchasing a newer iPod until it's available with a much bigger drive.
If I'm going to pay money for a new one, I want it to be a significant upgrade over the old one -- and it's not, really, without sufficient space to store my stuff on it. The WiFi is attractive to me, but I'm not sure it's worth the cost of a new iPod with inadequate storage.
How many folks feel the same way? I suspect it's more than a few.
For iPod sales, I think Apple's ultimately battling two factors -- the poor economy (MP3 players are a luxury item, after all) and the fact that many users have iPods already and likely don't see a $300-400 Touch as much of an upgrade over the older models of iPods.
And then there's laptops. MacBooks, also rumored to be part of the production cut, are much more expensive than Windows and Linux based laptops. And yes, they're better -- in many lovely shiny ways -- but filet mignon is also better than hamburger. Macs are great, but they're the tenderloin of the computer world, and in a poor economy consumers are quite likely to go for the computing equivalent of perfectly adequate Linux or Windoze based ground sirloin.
I'm sure there's some Apple fans who will come to defend Apple's iPhones, iPods, and computers. However, I think that while it's convenient to blame the "bad economy" for lack of sales, Apple might also want to take a hard look at the products its selling to make sure that the features are worth the prices they're charging, and that their gadgets actually meet consumer needs.
However, my personal assessment on Apple is that all three products have issues integral to the products that are limiting sales, in addition to the part that a lousy economy is playing.
While the iPhone is a cool gadget, I'm not sure that the pretty appearance and the gee-wow-cool-it's-Apple factor are enough to fuel tremendous numbers of sales over an extended period. (Though, admittedly, it captured 28% of the market in Q4 2007 according to research by Canalys.) iPhone is much more expensive than many phones with integrated MP3 players, and -- despite the fact that there's no rebate or discount from the carrier -- purchasing it requires a two year contract with AT&T (in the US.) I've yet to hear a good reason why one should be required to sign a long-term contract for the privilege of using an iPhone, if one is also paying full price for it.
Additionally, by limiting the iPhone to one carrier, Apple is also limiting their domestic market. (Yes, phones can be unlocked, but I suspect that a very small number of buyers will be willing/able to do this in the US. Outside the US, that's another story.) If a buyer doesn't already have a plan with AT&T one would assume that they will wait until their contract with their current carrier's up, because who wants to pay for two phone plans? And then, when they are free to shop for a new cell phone company, they may find more bang for their buck with another brand of phone, particularly since the "latest and greatest" appeal of the iPhone will have worn off within a few months of the release date. The iPod looks cool but other phones do essentially the same things it does, and for less money.
As far as iPods go, I looked at iPod Touches recently and -- while they have some nice features, including WiFi and an integral web browser -- one significant drawback is the severe lack of storage space. Apple released a 32 GB model yesterday, February 5th, 2008, but prior to that they only came in 8 and 16 GB versions. The 8GB wouldn't even hold all my music -- it holds approximately 1750 songs, which is practically nothing -- and even the 32GB one wouldn't come close to accommodating all my video or digital photos. 8GB only holds ten hours of video.
To put this lack of space in perspective, my 40 GB "old" iPod is about 95% full. While I could certainly pick and chose what I wanted to put on a new iPod, it would be a nuisance. So, I'm holding off on purchasing a newer iPod until it's available with a much bigger drive.
If I'm going to pay money for a new one, I want it to be a significant upgrade over the old one -- and it's not, really, without sufficient space to store my stuff on it. The WiFi is attractive to me, but I'm not sure it's worth the cost of a new iPod with inadequate storage.
How many folks feel the same way? I suspect it's more than a few.
For iPod sales, I think Apple's ultimately battling two factors -- the poor economy (MP3 players are a luxury item, after all) and the fact that many users have iPods already and likely don't see a $300-400 Touch as much of an upgrade over the older models of iPods.
And then there's laptops. MacBooks, also rumored to be part of the production cut, are much more expensive than Windows and Linux based laptops. And yes, they're better -- in many lovely shiny ways -- but filet mignon is also better than hamburger. Macs are great, but they're the tenderloin of the computer world, and in a poor economy consumers are quite likely to go for the computing equivalent of perfectly adequate Linux or Windoze based ground sirloin.
I'm sure there's some Apple fans who will come to defend Apple's iPhones, iPods, and computers. However, I think that while it's convenient to blame the "bad economy" for lack of sales, Apple might also want to take a hard look at the products its selling to make sure that the features are worth the prices they're charging, and that their gadgets actually meet consumer needs.