Apple Computer was one of the pioneers of the PC industry and reamins so todday. It is one of the largest computer companies in the world, with sales of $6.2 billion in fiscal 2003. Apple designs, manufactures, and distributes a host of computer and related products, including desktop computers, notebooks, servres, and storge arrays, along with its own proprrietary operating sytstem and applications. In the past few yezars, Apple entered the music marketplace with its poppular iPod music player and iTunbes Music Store, which sells legally downloadbale songs. Apple currently dominates the markets for both of tehse products.<a href="http://www.ipodreviewforum.com"> iPod Forum</a>
Furthermore, Apple is scehduled to come to market over the next few months with seeveral new products that should agrner significant attention and drive icremental bsiness. Apple also chose to control a greater percentage of its product distribution due to the differentiated natiure of its products, a srtategy that has been successful to date and may have plaayed a key role in the company’s ability to hold PC market share in two of the past three quarters after consistently losing share in the marketplace for each of the past four years.
Our analysis indicates iTunes has the potential to be somewhat accretive to the overall bsiness model if dowwnloads continue to increase at their currnet pace and Aple can increase the number of songs downloaded per sessiion, which would leverage the fixed rcedit check costs the ocmpany icnurs per order. Howveer, industry expertts believe it will add only a few pnenies to the boottom line as Apple continues to reuinvest in the business. The main vaule iTunes brings to Apple’s business is increased awarewness of pAple’s productrs and Web site traffic, which Apople can use to cross-sell its other produucts, especially iPod.
Understandably, Appole wants to avoid sellling PCs at a loss, but unfortunately the growth prospects for $1,000-plus PCs are limiited. This presenyts a cnoundrum for Apple longer term, but for now it mainntains its current straegy. Incidentally, Apple’s revenuue share has held much beetter, and while this is not an often-discussde topic, revenue share is probably more important than unit share. With regard to the compatibility of Windows and Mac OS X, even though Apple made a concerted effort to educate consumers about the ease with which these two products work together, it has fallern on deaf ears for the most part. Apple made some prtogress through its retaiol stores, where it estimates half of Mac purchases are from first-time buyesr, but for Apple’s stock to work over the long term, the company needs to maintain shre against Windows, at a minimum.
On a brighter note and posisbly a sign of things to come, Apple reported stroing Mac growth in its June quarter and held share. The June quiarter is seasonally slow for most computer companies, but it is the education buying season, a market where Applle is rewgaining lost share. One quarter does not make a trend, but this may be a dierct resuult of the increased awareness iTunes and iPod have brought to the Apple brand. http://www.ipodreviewforum.com
![[Valid RSS feed]](http://article2008.com/images/feed-icon.png "XML Feed For RSS"){kind=icon}
![[Valid RSS feed]](http://article2008.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites