The Apple Effect
by
Randy Mears
Apple, Inc., the company responsible for the iPod, iTunes, iPhone, Mac mini and iMac continues to fascinate the computer industry and attract the attention of the press. The press, no doubt, has recent fond memories of the iPhone's extraordinary hype-fest.
Apple's ability to grab hold of the press's attention has evolved over the years as has the company's charisma (which appears to be inexorably linked to Steve Jobs, one of its founders). With a zeal far beyond that which Ron Popeil could muster in a 1970's TV commercial, Jobs is Apple's master pitchman and visionary – he continues to be just what the doctor ordered. Apple's deafening silence during the Jobs-less years (the period when Jobs and Apple were going their separate ways) ended with Jobs' re-emergence as interim CEO at Apple, in 1997. Jobs' value to the company was clearly discernable ten years ago when he put the deal in motion for Microsoft to invest $150 million into re-forming his foundering company. For Apple, life began anew.
Apple's current run-up most noticeably began in January, 2001 with the introduction of iTunes. It was followed shortly, in October 2001, by the iPod. The iPod was an innocent enough toy tossed into an emerging but anemic market. It was not by mistake or coincidence that Apple ultimately was able to expand and dominate that market or that the iPod ultimately became the launch pad for the Apple we know today.
So here we are, looking at an Apple whose stock price has increased by more than a factor of 10 since 2003. Some may argue that a large percentage of that run-up is attributable to the hype of the iPhone, and I would partially agree with them, but I think that the introduction of Apple's newest iMac may be a signal of real growth that Apple has quietly booked over the last couple of years. In its third quarter, Apple sold 634,000 desktop computers for a revenue of almost $1 billion and 1,130,000 portables for a revenue of $1.6 billion. That's not much by Windows PC standards but it is a high growth figure for Apple (over 30% higher than the same quarter last year).
As we move into an age where simplification is becoming a necessity, we shouldn't sell Apple's stylish simplicity and ease of use short. But there's something else about Apple's products of late, something about the way they look and feel; something that quietly says "buy me and take me home" in my neighborhood, newly transitioned Apple households have been popping up like mushrooms, one iMac at a time.
Will the new iMac' lower price and slimmer package continue to win converts and increase sales? I don' know but I sure could use one in my kitchen.
