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  (Source: Reuters)

Apple's sales plunge: January '08 thru February '09
Apple is stuck in recession purgatory

It’s been a fast paced start to the year for Apple.  The electronics superpower has rolled out a new laptop, new desktops, and even a new iPod Shuffle -- priced for the recession at $79.  However, what would normally make for another record setting start of the year for Apple is fast turning south as fears of the recession has sent customers fleeing from Apple's pricey luxury lineup.

After seeing its sales growth surpassed by PCs for the first time in months in January, the latest figures show that February was far worse for Apple.  The NPD Group has released its sales figures for the month and they are worse than even Piper Jaffray’s Gene Munster's pessimistic forecast.

Both iPod and Mac sales were down 16 percent year-to-year.  The worst predicted by analysts was around a 4 percent drop.  Analysts were somewhat predicting the drop as last February was a particularly good month for Apple, and Apple only released its new desktops and iPod in March.

Munster's new predictions place total iPod sales for the quarter ending in March at around 9 to 10 million units.  He predicts that 2 to 2.2 million Mac computers will ship in the same period.  The Street is predicting 9.5 million iPods.  These figures are not significantly worse than last year, and represent analyst optimism that Apple's new products will lead to a strong March.

Thus, the real test for Apple will be how its sales have fared at the end of March.  While January was a letdown and February was undeniably downward trending for Apple, a strong March could salvage an otherwise rocky quarter.

One potential ace in Apple's sleeve is the announcement of the iPhone OS version 3.0 later today.  No one knows quite when Apple will release the new OS, but many are speculating wildly, including guessing at new hardware (every past x.0 release has been accompanied by new hardware).  Big news could stave off the Wall Street wolves for a little while, even if Apple's sales disappoint.

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RE: So what?
By michael2k on 3/17/2009 12:42:19 PM , Rating: -1
So many assumptions:

1) Why is Apple's historical pricing relevant now? Now they are not overpriced, just premium priced: Compare to similar high end Dell, HP, and even Lenovo offerings. Apple just doesn't make a budget system.
2) People aren't more careful with their cash, they just happen to have less cash. People buy just as stupidly now as before, they just buy less.
3) If there was a non-Apple product that was equivlent or superior to the Apple offering for less, then it would have taken off before the recession too. Except for the majority of people, there aren't equivalents, merely cheaper offerings or more expensive offerings.

#3 is most contentious so let me clarify.

The iPod was superior for most of it's lifetime until the Zune and iPod touch came out; the Zune matched the iPod (6 years late) and the iPod touch eclipsed it. That iPod sales are falling is indicative of multiple effects: Multiple competitors finally catching up, market saturation, and superior products such as the iPhone and iPod touch relegating the iPod to "classic" status.

RE: So what?
By omnicronx on 3/17/2009 1:34:06 PM , Rating: 2
1) Except this is not true, they are more expensive with comparable products than all of these companies.

2) This is a ridiculous statement, buying less implies they are being more careful with their cash. Unless of course everyone lost their jobs, but this is obviously not the case for the vast majority as unemployment has gone up less than 3%.

3) Agree with you here, Apple still has no real competition in the mp3 player market, although iTunes plays a huge role in this.

RE: So what?
By michael2k on 3/17/2009 7:38:27 PM , Rating: 2
So a 20" Dell XPS One vs an 20" iMac, where you get better video, storage, and CPU speed, $799+software vs $1,199.
But24" Dell XPS One is the same price as a 24" iMac, where you get 4 cores at 2.33GHz vs 2 cores at 2.66GHz, 640GB HDD on the iMac, you would need the equivalent software package ($99) on the Dell, and you still get better graphics on the Mac (9400M vs X4500HD

So that one data point disproves your assertion that (all) Macs are more expensive with comparable products than all these companies. Dell may have a cheaper entry level, but the "comparable" to a 24" iMac costs just as much.

2) It isn't, if you looked at it critically. People AREN'T smarter just because they have less money. They are still just as stupid as before, they just happen to buy cheaper things.

Does that make sense? Instead of buying $20 worth of steak, they buy $10 worth of steak, the difference in this case is that Apple doesn't provide a $10 steak, you either buy $20 or nothing.

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer

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