Port De Soller Mallorca

Port De Soller Mallorca

Friday, 12 August 2011

Amid The Market Carnage, Apple's The New King -But is it digging its own grave?

Amid The Market Carnage, Apple's The New King - Yahoo! UK & Ireland Finance

As of last night, Apple was valued at a cool $337 billion, trumping the oil giant ExxonMobil at $331 billion. Other companies in the mega-cap list include:
Petrochina - $277 billion
Industrial (Mexico: ST2000.MX - news) and Commercial Bank of China - $226 billion
Nestle (BSE: NESTLE.BO - news- $217 billion
Microsoft - $203 billion
This story got me to thinking about video recorders, whhhaaaat? I here you say, in fact some of you reading this probably don't even know what a video recorder is, or care for that matter.
But for those of us who do, do you also recall that there were two systems, Betamax and VHS and of the fight for survival between the two.  Now if you look at the links for both you will see that Betamax comes out on top as the better system, technically, but clearly with drawbacks as described in the articles, and this is where VHS won the battle.  But the battle wasn't just one of technical superiority, as I recall. There was also a cost implication for most people.  As home video took of in the UK in the early 80's to buy a recorder of any description was one that had  to be looked at as a major luxury item.  I wasn't long out of the Army and I recall my first job was as a warranty administrator for a commercial garage and my take home wage was circa £75.00 after tax, etc., per week.  So just under £4k a year.  Video machines were on sale (and for rent) for anything from £300+ to £600+, so, as you can see, while desirable, one of these machines was way down the order in terms of things that we needed, but really wanted!
Interestingly while looking at this I found this blog that looks at all things 80's and there was also an article on videos recorders as well, here for your delectation is the link 1980s-coming-to-your-home-vcr
So, what is the link between Apple today and video recorders of the 1980's, well, maybe none, but it got my thinking going of again in a lateral direction, as I usually do with these things.  Today, as in the 1980's I am working and as in the 1980's I do not earn a big wage and while Ishbel and I have been left to fend for ourselves by our children, who have grown up and gone on to have families of their own with no consideration to looking after us any more (only kidding), we still don't have that much money to throw around.  Now being a bit of a technophobe, in that I like to own gadgets, but can't always afford them, I have and do, on a regular basis, pop in to the local Apple shop and drool over the sleek lines of the ipods and ipads, and macs, but I have never bought one.  My kids have, (hate them) but I haven't. Ishbel wanted one as she travels around on the train to visit the kids mid week when she isn't working, but ended up with Creative's Vision M  mp3 player .  Having listened both to the ipod and the vision M I believe that the latter is every bit as good as the former.  What drove me to that was nothing more than price, but since she got it about 4 years ago now, it has let us down only once.  It was popped into a box sent back to Ireland and a replacement was sent by return, and that has functioned without problem ever since.

So, quality, of product, quality of sound and size of memory cannot be faulted.  Compared to and iPod, well I can't really but I wouldn't change from Creative to Apple for those reasons mentioned and also for price.  Sure Creative have much more expensive products as well but they are well below the price of Apples stable of gadgets and this is where I think Apple may well be digging there own grave ahead of toppling in to it!

Apple are now the most valued company on the planet and they have achieved that by building and selling what is unquestionably quality merchandise.  But how can they justify the continued high prices that they continue to maintain, especially as, a) we have been told since Adam was a boy that the more of a product that is produced the lower the cost, doesn't seem to be the case with Apple though does it? And, b) we know that the vast majority of their products are built using what one would loosely term as 'cheap labour, in the far east and China,  Again then the question has to be asked how they can continue to justify the continued high prices?

But the final spadeful of dirt being dug out of that hole that they may well get buried in surely has to be the Android operating system. As well as the report that Apple is now the most profitable company on the planet we learn that Smart phones and other gadgets containing the Android OS are outselling Apple by two to 1 across the world.  As I said I do not have an iPhone and nor does Ishbel.  I have an HTC and Ishbel has a Samsung Galaxy S.  We both 'love' these phones, although I am a late entrant to the smart phone market, I wouldn't want to do without it now. On the other hand for our daughter's, Marie, who swears by her iPhone and Jennifer is counting down the 'sleeps' until she gets her new iPhone, but Brian, our son, who according to Ishbel, 'gets more like his dad' everyday to the riposte, 'Oh shut up, mum!' also swears by his HTC.

The point of all this is of course, that Apple, like windows before them have a virtual monopoly on their OS system and will not share.  They continue to charge premium prices in every country they operate in and while we all might aspire to own an Apple gadget, it is always going to be out of the reach of many more than it sells to.  On the other hand Android is in everything else from the cheap and gaudy to the, 'as expensive as an Apple' and can much better supply more economical gadgets to the masses around the globe.  Surely this has to be a warning to Apple to change their strategy and make their product less elitist! 

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