Wall Street Journal: Even Apple (AAPL) is Not Immune
By:
TraderMark Thursday, February 19, 2009 12:30 PM
First, let me say I'm a big Apple (AAPL) fan from the perspective of their long term prospects. But this infatuation with all things technology by market bulls is silly - aside from large cash hordes there is nothing to see here in my opinion other than "thesis trading". Hewlett Packard (HPQ) was not impressive, Cisco (CSCO) was not impressive, Dell (DELL) looks dead - etc.
The
Wall Street Journal reports that even Apple (AAPL) is getting hit by this consumer, with January sales down 6% year over year. Apple relies on the old (current?) Nike (NKE) model - sell similar stuff to competitors but with style, cache and the like; for a premium. Not sure as this economy worsens if that is going to hold up. The market share loss is especially sharp!
p.s. I am simplifying when I say "similar stuff" - of course there is differentiation of product to a degree but a computer is a computer at its basis, a phone is a phone (even if Apple does them better). If I can't afford it, it doesn't matter how much cooler I think an iPhone is versus a Nokia (NOK) model.
- Apple Inc.'s unit sales of computers through U.S. retail channels fell 6% in January from the same month in 2008, the first monthly decline in three years, according to market-research firm NPD Group.
- In dollar terms, market research firm NPD Group estimates the value of Apple sales through US retail channels dropped 11%, and that the company's market share declined 16.4% -- to 13.7% -- from a year ago.
- The data suggest that Apple's premium pricing, which helped boost revenue when demand was strong, may be hurting the company now that consumers are being more careful about their spending amid the recession.
- Demand for Apple's laptop computers, in particular, had remained relatively solid for months despite the economic downturn as consumers were willing to pay higher prices for a sleek design and unique operating system. But NPD analyst Stephen Baker said consumers are becoming more price-sensitive as the economic climate continues to worsen. "Casual buyers or people who are trying to make a choice are trading down," Mr. Baker said.
- Mr. Baker said he believes that consumers interested in low- to mid-range portables have been gravitating toward Apple's $999 laptop, the company's least-expensive model.
The above story is the opinion of the author only and it does not reflect
iStockAnalyst opinion. Further, the author is not personally advising you
regarding the suitability of the story for your investment needs. In no event
iStockAnalyst will be liable for any loss or damage including without
limitation, indirect or consequential loss or damage, or any loss or damage
whatsoever arising from or arising out of, or in connection with the use of this
information. Please consult your investment advisor before making any investment
decision.
