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Monday, May 4, 2009

Steve Jobs preparing a new big thing

Well SJ is having something on his mind as the news does clearly confirm after he made this IPOD bestseller and the IPHONE knockout he definitely aims to penetrate the smart phone and laptop market much deeper but soon Amazon will have an Kindle competition of some kind and the console builders SONY, NINTENDO besides arch rival Microsoft more trouble in their own fields of gaming as well. He has to compete with a new global boom for Netbooks which graped quite some market share in a new niche and SJ has to offer some lower priced Apple experience.

- Apple lands Xbox boss
- Apple to introduce more affordable Macs, sources say
- Apple reportedly adding more graphics chip experts to team

Would you pay $849 for a new MacBook?

height="291">A report last week that Apple (AAPL) is preparing to slash prices on its entry level MacBook and iMac models has triggered a flurry of speculation about what the new price points might be.

According to AppleInsider’s Kasper Jade, Apple sees the cuts — which could come in the next month or two — as an “interim solution” to the growing popularity of netbooks, those sub-compact laptops that Steve Jobs once dismissed as “a piece of junk” but which are flying off the shelves at $299 to $349 apiece.

For example Acer, whose Aspire One netbooks are Amazon’s bestsellers, saw its U.S. market share grow 49.4% (to 13.6%) in the first quarter of 2009, according to Gartner Research, even as Apple’s share shrank to 7.4%, down 1% year to year. Mac sales actually fell last quarter for the first time in nearly six years.

How low will Apple go to turn that around? Jade’s reporting — based on unnamed sources “familiar with the matter” — is fuzzy on that point, but in the comment stream he makes it clear that he’s talking about price reductions in the range of $100 to $150.

Applying these cuts to the current entry-level machines, we get:

  • White 13-inch MacBook: $849 - $899, reduced from $999
  • 20-inch 2.66 GHz aluminum iMac: $969 - $1,019, reduced from $1,119

With gross margins last quarter of 36.4% — up from 34.7% in Q1 — Apple can certainly afford to sacrifice some profit to grow share. As AppleInsider points out, Apple last month started selling 2GHz iMacs to the education market for $899.

I am sure more people would love to buy Apple if they were cheaper and quality has its price but he also runs steep margins and could go for market share especially with the fracking bad Vista experience most users have before Microsoft comes with the successor.

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