[opendtv] Re: High Tech marketing lessons
- From: "Ralph P. Manfredo" <rmanfredo@xxxxxxxx>
- To: <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 13 Jan 2005 12:47:28 -0800
As someone from Silicon Valley and who saw a demo of the first Apple
prototype given by Jobs and Wozniak at the Home Brew Computer Club in
1977-1978 time frame, what the article fails to do is give the credit to the
marketing genius of Steve Jobs. Had Apple not enticed Jobs to come back to
Apple, I believe Apple would be in either Bankruptcy or non-existent. Steve
Jobs is a Genius in scoping the market needs and desires and filling that
need.
Ralph P. Manfredo
President & CEO
rmanfredo@xxxxxxxx
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-----Original Message-----
From: opendtv-bounce@xxxxxxxxxxxxx [mailto:opendtv-bounce@xxxxxxxxxxxxx] On
Behalf Of Craig Birkmaier
Sent: Thursday, January 13, 2005 5:51 AM
To: OpenDTV Mail List
Subject: [opendtv] High Tech marketing lessons
Sorry to keep beating this drum, but there is something going on here
that should serve as a lesson for anyone trying to market high tech
products...like HDTV for example.
The Tuesday following Christmas we loaded the family into the Ghetto
Cruiser and drove to Orlando to have an upgrade installed in the new
iBook we bought my daughter for Christmas. I got the "reconditioned"
G4 iBook for $699 from Apple - it came with only a CD-ROM drive. So
we added a state-or-the art 8X Pioneer drive that records DVD-R and
DVD-RW (Apple's Superdrive does not support DVD-RW). After finding
the iBook under the tree, my daughter decided to accessorize it and
bought an iPod Mini the Monday following Christmas.
We had to leave the iBook at an authorized Apple service center for a
few hours, so we went to the Mall of the Millenia to shop and have
lunch. This is one of those new upscale malls filled with top of the
line stores and restaurants - they even have valet parking.
Eventually we wound up in the Apple store - a scaled down version
compared to the larger store they built in a similar upscale mall in
Tampa. The store was literally swarming with people; the checkout
line snaked around the back of the store.
You might say that the atmosphere was electric.
The following day, my friend Dan stopped at the same Apple store,
after picking up two iBooks, that he had upgraded with the new
Pioneer drives. He reported the same mob scene and buzz.
Looks like that buzz is now hitting the "street," as Apple announced
their first quarter results for fiscal year 2005. It is worth the
time to pull out a few notable stats from the story that follows:
This was the single biggest quarter for total revenues in Apple's history.
Apple profits quadrupled for this quarter versus Q104.
Apple shipped more than a million Macintosh computers in the quarter,
a 26 percent increase over last year. iMac sales nearly tripled.
Apple's chain of retail stores had revenue of $561 million in the
quarter, an average of $5.9 million a store. That compares with $4
million a store in the year-earlier period.
Apple's share price has increased more than 200% since this time last
year. In after hours trading the stock was up about $7 on heavy
volume.
Is there ANY other large high tech company that can report results
that come anywhere close to matching this performance?
Is there any other high tech company capable of matching this
performance in 2005?
Apple is re-defining home entertainment computing while the rest of
the PC industry seeks to embrace and extend a platform that attracts
BUZZards.
Regards
Craig
Apple's Profit Quadruples, Thanks to IPod
By LAURIE FLYNN
Published: January 13, 2005
Apple Computer said yesterday that profit in its first quarter more
than quadrupled - the biggest increase ever - on strong holiday sales
of its iPod music player.
The results came a day after the company embarked on a strategy to
capitalize on the success of the iPod by selling a line of low-cost
computers.
Apple, based in Cupertino, Calif., reported net profit of $295
million, or 70 cents a share, for the quarter, which ended Dec. 25.
That compares with $63 million, or 17 cents, for the quarter a year
earlier. The results beat the consensus forecast of analysts, which
was 49 cents a share.
"We're pretty thrilled," said Steven P. Jobs, Apple's chief
executive, in an interview yesterday. "This was Apple's biggest
revenue increase in its history," along with the record rise in
profit.
Mr. Jobs attributed the strong results to rising sales of personal
computers and iPods, and said about 40 percent of the quarter's sales
came from music-related products.
Revenue for the quarter was $3.49 billion, up 74 percent from $2
billion a year earlier. Analysts had forecast revenue of about $3.18
billion. The company also projected that revenue for the current
quarter would be $2.9 billion, and estimated that earnings per share
would be 40 cents, also surpassing analysts' expectations.
Shares of Apple rose 90 cents yesterday, to close at $65.46. Shares
continued to rise in after-hours trading, gaining as much as $7.22.
The company shipped more than a million Macintosh computers in the
quarter, a 26 percent increase over last year. Of those, the greatest
demand was for the iMac, with its sales nearly tripling.
"This is the first proof positive that the halo effect is real,"
said Gene Munster, an analyst at Piper Jaffray, referring to the
notion that customers interested in buying an iPod sometimes buy a
Macintosh as well.
The iMac is Apple's best-selling personal computer, with an average
price of $1,400.
But the iPod remained the big story, with Apple selling 4.6 million
of them in the quarter, five times the number sold in the period a
year earlier. That brought the total number of iPods sold in three
years to about 10 million.
Apple's iTunes music store made a small profit during the quarter
and has sold 230 million songs to date, Apple's chief financial
officer, Peter Oppenheimer, said.
Gross margin for the quarter, a crucial indicator of profitability,
was 28.5 percent, up from 26.7 percent in the quarter a year earlier.
At the annual Macworld conference in San Francisco on Tuesday, Apple
introduced new versions of its Macintosh that are aimed at consumers
who have traditionally opted for lower-priced Windows systems.
The Mac Mini - a stripped-down Macintosh that is priced as low as
$499 without a keyboard, monitor or mouse - is the least-expensive
computer that Apple has ever shipped and is competitively priced with
machines sold by Dell Computer and other low-cost manufacturers.
"The Mac Mini is a game changer for Apple," Mr. Munster said.
"They're standing in front of the best opportunity yet for Apple to
gain market share."
The new Apple strategy moves the company deeply into the consumer
electronics market and positions the new Macintosh as an
entertainment and communication device. It also promises to intensify
Apple's fight with Microsoft in a computer market that is dominated
by machines using Windows software.
The strategy is in part propelled by Apple's success with the iPod,
which has pulled Apple into the mass market.
Now, with a low-priced computer, Apple hopes to persuade more users
to switch to the Macintosh from PC's operating on Microsoft Windows,
and in turn raise its share of the overall market from its current 3
percent.
"The one question left is just what the switch rate will be," said
Charles R. Wolf, an analyst at Needham & Company, which raised its
rating on Apple from hold to buy. "Apple has set the table to grow
their market share, finally."
Apple is also hoping to capture an even greater share of the market
for portable music players, with the introduction of the iPod
Shuffle, a device based on flash memory. It is priced at $99, which
is $150 less than the current iPod Mini.
In the last year, the company has faced new competition from Sony
and other companies, whose flash-based products are priced below the
least expensive iPod.
On Tuesday, Mr. Jobs said that while Apple has 65 percent of the
market for hard-drive portable music players, it has only a third of
the total market for both hard-drive and flash-memory-based units.
The holiday season also led to a surge in traffic to Apple's retail
stores. "The very positive news during the quarter has been the Apple
stores," Mr. Wolf said. "Apple has become its own channel."
Apple's chain of retail stores had revenue of $561 million in the
quarter, an average of $5.9 million a store. That compares with $4
million a store in the year-earlier period.
"Opening the Apple stores has been a phenomenal success," Mr. Wolf said.
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