Apple Inc (AAPL)

[Bill Palmer]

lango

Of all the PC users out there, the group that Apple currently has the best chance of converting are those who are intrigued by the idea that they might actually be able to get a lot more out of a computer than they're getting out of their PC, after all. Most people don't decide that they want to Switch to the Mac based on price. They decide because they finally "get it" about the Mac, and then find out that there's a solid Mac within their price range after all.

Most of the people to which you're referring have no idea that the whiz-bang G5 or mini-me PowerBook are out of their price range. They see the ads, and it gets them into the Apple Stores. When they find out that the one they saw on TV is the high-end model that they don't really need, and that they can get most of the goods for a mere $800-$1000, then they bite. Switching is, in fact, a lifestyle change, whether anyone wants to admit it or now, and the decision to do so is dictated by the feeling of the need for a change. It's like quitting smoking, changing careers, or going from stick-shift to automatic.

Unless you believe that Anderson is flat-out lying when he says that approximately half of Macs sold in Apple Stores are to people who did not already own a Mac, then you would have to agree that the strategy is working in that regard. People ARE switching, no matter what any naysayers might wish to think. The fact that so many third-party Mac resellers have proclaimed that they can't get anyone to switch while Apple Stores are doing it so comparatively easily, well that just demonstrates the need for more and more Apple Stores.

The only area in which Apple would do well to advertise based on price would be to existing Mac users -- those who are sitting on a three-year-old iMac because they have no idea that they can get an eMac, which beats the crap out of what that they've got now, for a significantly lower price than they paid for their older iMac. The reluctance of these people to upgrade (based largely on the fact that the older iMacs are so capable of running most of the newer Mac stuff adquately, if not ideally), is what keeps overall sales from exploding.

And another thing -- how many of those 300,000 iPod sales this quarter were to Mac users who bought an iPod to go with their existing Mac rather than put the money toward a new Mac? I'd bet a LOT.