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NPD analyst: Apple buyers are buying mostly on brand name

"Is this true? How is it possible? NPD vice president of industry analysis Stephen Baker says it’s simple: “The average price of a non-netbook Windows PC is under $600. It’s hard to see what functionality you could add to a Windows notebook to make it worth $1,200 to $1,500 to someone.”

So what is Apple giving people for an extra thousand or two thousand dollars? “Apple is giving them Apple,” Baker said. “They’re the only ones willing to sell computers at that price level. They’re like Mercedes that way. In tech, we tend to think performance is most important, but most people want functionality. Yet there are lots of people who want to say, ‘I want to be cool and drive around in a fancy car.’ An Apple computer makes you cool, it makes other people jealous.”

In other words, you're getting nothing much more than brand kudos for spending the extra $1000 on an Apple laptop.

(Please note before commenting: I don't actually agree with this. But I think it's worth reminding people that "Apple has 91% of the $1000+ market" has a negative spin, as well as a positive one.)

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Comments (4)

Jul 27, 2009
jgpmolloy said...
"So what is Apple giving people for an extra thousand or two thousand dollars? “Apple is giving them Apple,”"

Which is great if you ignore ALL the advantages of going Apple. ie this is what the person who owns the Monopoly would say. That is ignore the actual differentiation and plead "nothing to see here".

I wish I were cool - there are many reasons for going Mac and, really, cool is NOT on my list.

Not sure what is actually going on here but it really looks like someone at NPD was being paid to utilize all the current anti-Mac buzz words from Redmond. In two paras he managed to use:

Paying for the name. Check.
Apple taxt. (Implied) Check.
Apple is just selling cool. Check.

Also am a little confused by. “They’re the only ones willing to sell computers at that price level." As I am sure the guys doing the top level machines at Dell and Sony would be a little upset that they appear to be being ignored.

Jul 27, 2009
Ian Betteridge said...
Exactly. I think what I'm getting at by posting this is that everyone - but *everyone* - has been going "ZOMFG MAC MARKET SHARE = 91%!!!!1!" without actually looking at the report, which is basically bunk.

What matters, as I think you've often said, is the profits - and that's a combination of margins and unit sales, not market share. The only time that market share matters is if your share is so low that people stop developing for your platform, and the sheer numbers of computers sold overall is now so high that even a 1-2% share would create a viable eco-system for third parties.

Back in the 1990's, when computer sales overall were lower, there was actually a real prospect of that happening. Nowadays, Apple's share would have to fall so low it was basically a rounding error - and even then, Apple's got the protective fall-back of owning key applications itself.

Jul 27, 2009
ordinal said...
I am not sure that it is really negative spin of the 91% (which is irrelevant stuff I agree), more the usual negatives being spun to apply _to_ it. Every time anything comes up about Apple products, there is usually a counter report by some "analyst" that manages to work in something about Apple customers just paying for the name. Apart from Apple releasing an unbranded $200 netbook I don't think anything would change that.

There must be some market for these analysts, interviews with tech publications don't pay the Blackberry bill. I am not sure quite what it is though.

Jul 27, 2009
juancarlos_h said...
Well... Apple doesn't only sell a name. It sells top of the line computers. Computers from Dell and VAIO and TOSHIBA and HP which meet the same standards are at the same price or over it. This article is bogus.

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