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The Channel Wire
September 29, 2008
Given the unprecedented carnage that took place on Wall Street Monday, it's not surprising that Apple shares were hit hard, falling nearly 18 percent during regular trading.

But although some analysts believe that Mac desktop and notebook sales may be slowing, solution providers say the uniqueness of Apple products will help the company avoid a prolonged sales slump.

In a Monday blog post, Silicon Valley Insider noted that both RBC and Morgan Stanley downgraded Apple stock on demand concerns, with Morgan Stanley's Kathryn Huberty calling out Apple's lack of an offering in the sub-$1000 market segment as a potential area of weakness.

Apple, which is reportedly preparing to launch new laptops in two weeks, hasn't traditionally competed on price. But despite Macs' higher price tag, Apple reached 20 percent U.S. retail notebook market share -- and 35 percent dollar share -- in July and August, according to NPD.

Regardless of whether Apple cuts Mac prices, John Eaton, president of San Francisco-based solution provider Eaton & Associates, doesn't expect the financial crisis to dramatically affect the rate of Mac adoption.

"Consumers buy Macs for religious reasons already and I don't think that will change, although Apple could continue to gain market share by rolling out a high-value, sub-$1000 machine," Eaton said.

Apple doesn't offer cheap laptops and desktop systems, so a continued economic downturn will limit the number of consumers that are able to afford their systems, says Michael Oh, president of Boston-based Apple reseller Tech Superpowers.

However, Oh doubts that Apple will bring sub-$1000 notebooks to market anytime soon. "The primary reason they won't is because they've always protected their pricing, and have always done so by offering a very unique product," he said.

Added Oh: "People buying Macs don't have a choice -- either they pay the money to buy Apple or deal with an inferior experience. Until the Psystar-like clone makers make inroads into Apple's legal department (which they won't for years), I just see it as fewer [consumers] who can afford Macs."

Posted by Kevin McLaughlin at 7:20 PM
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