Apparently, branding still works

Mac volume was up 17% last quarter, while other PCs were up around 2%.  Total Apple profits up 47%.

There you go about Apple again, Craig.  Acer is also up strongly.

imageimage

Acer did take over the #2 worldwide unit share position, at 14%.   But Acer’s average selling price is low, and  prices are falling — laptop prices down 20% across the industry – so Acer’s margins are tight at 2%.  Volume gains are driving marked profit growth (percent increase in net income), but the law of small numbers applies.

C’mon, it’s bad all over, so of course margins are low;  Acer’s share capture puts them in the driver’s seat when things get better.

Acer’s 2% net income yields about 6% share of industry profit.  By my calculations, the average Acer PC generates $10 in net income, while Macs deliver around $120.  So Apple’s paltry 3.8% unit share captures 20%+ share of personal computer profits (iTunes, iPhone, etc. excluded).  Their shareholders like riding that bus.

Well, those same drooling sycophants Apple has tapped for decades must be propping them up.

Last quarter saw the highest number of Mac sales ever, with about half to new customers.  Mac average prices are UP (2-3X the average for a Windows PC), so they aren’t buying new Macophiles with low low price or free printers.

All this during the Great Recession.

They are only a player in the US…they control the OS…if not for iPod…

It is about the brand.

Much has been written on how this is done.  I can offer no new insight;  I’ll simply point out that branding is showing its worth under pressure.  While others cut, go low, and promote deals to survive the downturn, Apple widens the gap from competition with brand touchpoints —  beautifully simple design, cool but approachable personality, great buying and ownership experience.

image

I spoke to a solar entrepreneur this week about the commoditization of that industry.  He said “I want my company to be the Apple of solar.”  Good idea.

* Data quoted or extrapolated from public IDC and NPD sources.  I suggest calculating for yourself if you intend to rely on the figures.

Advertisements

0 Responses to “Apparently, branding still works”



  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s





%d bloggers like this: