Replies to post #1527 on Apple Inc (AAPL)

[roni]

Bill, about advertising the less expensive Macintoshes, you wrote:

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.

There is something in here that seems counter-intuitive to me.

Who has better odds of knowing what computers Apple is selling and how much they cost? Would it be existing Mac users or people who use a) another platform, or b) have no home computer?

It seems like the intuitive answer would be that existing Mac users are far more likely to have knowledge of Apple's current computer offerings. OTOH, it seems far less likely that non-Mac users would have the same level of knowledge.

Now, it could make sense to advertise to existing Mac users to reinforce their pre-exisiting knowledge, but it seems to make more sense (unless one is talking of advertising in the Mac print media) to design something that would really hit home on the low prices of the eMac and iBooks, something that would reach both audiences but would not be targetted at existing Mac users.

That makes more sense to me.

Ron

[langostino]

Palmer - approaches to buying

First, on iPods, I think the number of people who buy an iPod " to go with their existing Mac rather than put the money toward a new Mac?" is an extremely small percentage of people. I view that as a good thing not a bad thing. iPod sales, IMO, are almost entirely additive to CPU sales. There really isn't any cannibilization of dollars available. I believe that for two reasons -- because the dollars involved are so different, and because the iPod and a PC are such different items that getting an iPod doesn't really impact the need or desire to upgrade a PC.

Second, on switching, yes, there is definitely switching going on, and I have no reason to disbelieve Anderson's 50% figure. What you have to realize is that that figure has been pretty constant for the last 5 years. There has ALWAYS been switching going on. It didn't suddenly materialize after Apple launched the Switch advertising campaign. If you go back to CCs in 1998 and 1999 after the original iMac was launched, you'll see both in press releases and in the CCs, Apple was bragging about the percentage of iMac buyers that were switchers. All through the years that figure has been in the neighborhood of 40-45%. At one point back on RB I posted with links to the old press releases, etc. In the final analysis, there is probably more "true" switching going on now than three or four years ago because less of that figure comes from brand new computer users than it did then.

Third, while there are definitely some people who think of making a major appliance purchase as a "no research", off the cuff type purchase, and would go to a store to look at a brand of they saw advertised on t.v. without having a clue of whether it fell within their budget. In fact, there are plenty of people who don't have fixed budgets to begin with. But I suspect you're projecting a younger person's approach to being a consumer on this, which is certainly not the way an average consumer shops. Most consumers at least do a small amount of research before taking the time to drive to a store. At least enough to know whether the shiny new Powermac G5 is anywhere near their $1,000 budget (for those that have such a budget - which is the type which started roni's discussion). Frankly, this is where Apple gets killed for doing ZERO print advertising. The weekend newspapers in every major city are stuffed full of ads from the Circuit Cities of the world with tons of ads for PCs. In fact, Comp USA usually manages to squeeze in a few Macs. For the type customer for whom a PC purchase is a once every three or four years, $1,000 outlay, looking in the weekend paper before running out to a store is definitely going to happen in most cases.