TV-PGSeptember 4, 2003: Fred Anderson's keynote could have used a few sparklers and monkeys wearing funny hats, but at least we got some good news about Apple's market share. Meanwhile, at some point over the summer Apple suddenly became "cool," and the market for used iTunes Music Store songs is red-hot...
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From the writer/creator of AtAT, a Pandemic Dad Joke taken WAYYYYYY too far

 
Reaching For The Stars (9/4/03)
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Well, the first Frednote in recent memory has come and gone, yet there's been precious little coverage of the performance of Apple's CFO. Oh, sure, The Mac Observer has detailed notes on all the juicy new info that Mr. Anderson spilled to his audience at the Smith Barney Citigroup 2003 Technology Conference, but there's no mention of whether or not he killed. Did Fred captivate the crowd with his flashing pearly whites and the world's first juggling routine to incorporate a riding lawnmower, three pineapples, and an armed thermonuclear device? Enquiring minds want to know!

Okay, well, since no one's talking about Fred's remarkable balancing skills on a flaming unicycle, we're going to have to assume that he kept things toned down for the decidedly Wall Street audience. (If Steve ever lets him keynote a Macworld Expo, though, get ready for some no-holds-barred razzle-dazzle, boy howdy.) That means for now that we'll have to go against everything we stand for and focus on content over delivery. It's a darn good thing that we have no real convictions, or we'd probably feel some sort of inner turmoil right now. Whew, dodged a bullet on that one.

Anyway, there's a ton of spiffy info from Fred's keynote at both The Mac Observer and Mac Rumors, so we won't waste your time yammering about all of it-- we'll just waste your time yammering about a few choice tidbits, specifically ones relating to market share. First, the unquestionably happy stuff: Apple's education market share ticked upward to a vaguely respectable 16% last quarter, up a full percentage point from 15% the quarter before, and if you just count portables, Apple's share climbed from 24% to a whopping 30%-- which even beats Dell's numbers for schoolbound laptops. On the consumer front, however, we have some good news and some bad news. The good news is that Apple has almost tripled its market share in the consumer market since two years ago. The bad news is that it "almost tripled" from a monumentally pathetic 1.2% slice of the pie to a merely woeful 3.5% one.

1.2%?! Let's think about that for a second; that means that of every 100 people out there buying a computer, only 1.2 of them were buying Macs-- and we all know how notoriously flaky those .2 people are when it comes to making the monthly payments. If you insist on thinking in terms of entire people, it means that out of every 500 mass-market computer buyers in early 2001, Apple only managed to corral six, which is, as we mentioned earlier, the very dictionary definition of "monumentally pathetic." We weren't aware it had gotten so bad. Thank goodness we're only hearing about this after the tripling, because if we'd heard about the 1.2% figure earlier, we might well still be struggling to emerge from the ensuing coma. (Say, is it too late to claim that's what caused our epic eleven-week hiatus? It is? Nurtz.)

That said, why dwell on the past? Fred reportedly sees a lot of growth potential in Apple moving forward, and not just in the consumer and education markets; the company is apparently targeting both small business and enterprise buyers, and the advent of a Mac OS X-native QuarkXPress and the new G5 is expected to throw creative pro sales back into high gear, too. The future is wide open, the road ahead is clear, and the sky's the limit. Why, with a lot of hard work and more than a little luck, by this time next year we bet Apple can push its overall market share to-- dare we say it?-- 4%. Dare to dream...

 
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"My Mom Says I'm Cool" (9/4/03)
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Meanwhile, how exactly is it that Apple's share of the U.S. consumer market only comes to 3.5% when Apple is apparently the epitome of cool? As faithful viewer mrmgraphics points out, WIRED reports that "youth marketing experts" such as Look-Look have determined that the country's young 'uns have crowned Apple "one of the coolest companies in America." Look-Look polled 20,000 net-savvy whelps aged 13 to 35 (35?! Hey, apparently we're still young! Who knew?), and a majority of them chose Apple as the "company they would most like to endorse" if they were famous-- over Coca-Cola, Levi's, and Nike. The iMac and iPod were also voted tops in the "extremely well-designed products" category.

And look-look here-here, the Lambesis Research Group's L Style Report concurs; Apple is a "core trendsetter brand" among 15- to 34-year-olds. Youth Intelligence agrees as well, stating that Apple has a "high profile among young people." None of this comes as all that much of a shock, we suppose; Jon Ive's designs drip so much cool you need to keep 'em on a coaster or risk ruining your carpet, although we'd always felt that the Mac's relative lack of game support lost it a ton of points with the whippersnapper crowd. So what's going on, here, and why is Apple still at 3.5% in the consumer market?

It turns out that there's a bunch of reasons, actually. The first is that Apple being "cool" with the nation's striplings apparently only just happened over the summer. The second is that the main reason why Apple has youth appeal is the iPod, not the Mac, and massive sales of iPods have zero direct effect on Apple's share of the personal computer market. The third is that even if the Mac is ultra-hip among the youngsters, the really young ones are presumably at the mercy of their parent's decidedly less-cool judgment when it's time to go buy the family computer; we're guessing there aren't too many 13-year-olds dropping a thou on an iBook down at the local Apple retail store.

The hope, though, is that this is the start of something big and that Apple can somehow escape the Warhol effect and stay cool with the youth crowd for longer than fifteen minutes. If it can, then revenue from the consumer sector ought to skyrocket in the coming quarters. Or maybe not; after all, market share and coolth are largely mutually exclusive. The majority is rarely cool; cool stands alone. Case in point: there was only one Fonz. Aaaaaay.

 
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The Free Market Is AWESOME (9/4/03)
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Woo-hoo, we'll never have money problems again! And better yet, we'll be able to undertake all sorts of projects we previously deemed well beyond our financial means; for example, following up on the Virginia Tech supercomputer news, faithful viewer bRaD Weston took a gander at the list of the world's top supercomputers, busted out his nifty sliderule, and determined that we could build the fastest massively parallel cluster on the planet by welding together a mere 4,455 dual 2.0 GHz Power Mac G5s. Yesterday we didn't have a clue where we'd have gotten the $15 million or so to buy the G5s and the gear to hook 'em all together, but now we've got a plan to raise the cash in just a couple of weeks. Soon we'll be well on our way to Ultimate Supercomputer Ownership! (Take that, Earth Simulator! Molest us not with this pocket calculator stuff!)

No, we didn't just discover Matthew Lesko and his government grant spiel; we've known about that creepy guy for years, but always steered clear knowing full well that it's only a matter of time before Batman swoops in to pummel him silly. Anyway, as it turns out, all the big money is in the secondhand iTunes Music Store song market. Faithful viewer Jakester notes that a single 99-cent song listed on eBay has currently amassed bids topping out at over $2,500-- and there's still over five days left before the auction ends. We're talking a return of at least 250,000% (well, minus listing fees, we suppose) in one week's time. Now that's the kind of investment strategy we like to see! Basically, if it wouldn't make Fred Flintstone's eyes turn into dollar signs with that chipper little "ping" of a cash register, we're not interested.

Yes, we're well aware that none of Fred's get-rich-quick schemes ever worked and he was eventually reduced to scraping out a meager living by hawking Fruity Pebbles before he finally died destitute and alone, but we maintain we're a whole lot smarter than poor ol' Fred. For one thing, we never got locked out of the house by our prehistoric cat. (Well, okay, once. Maybe twice. But certainly not every freakin' week. "WILLLLMAAAAAA!!!")

So apparently, all we need to do to finance our World's Fastest Supercomputer is buy about 6,000 songs at the iTMS, list 'em on eBay, and just wait for the cash to start rolling in. Not that we have $6000 handy, mind you, but we do have three bucks's worth of credit left on our Visa, so we figure we'll start with just three songs, and once those are sold we'll have more than enough moolah to buy the 6,000 songs necessary to fund our 9,000-processor G5 juggernaut. Easy peasy!

We are a little surprised, of course, that so many people are so willing to shell out over two grand for a song they won't even be able to play; as you're all well aware, iTMS songs are tagged with the purchaser's Apple ID when downloaded, and can only be played on up to three different "authorized" computers at once. So unless the seller is planning on giving up his password and allowing the winning bidder to use up one of those "authorized" slots, said winning bidder will be the lucky recipient of... a 3.2 MB file.

It is perhaps even stranger that said bidders don't just buy their own copies of the song at the iTMS, in which case 1) they'd only pay a dollar, and 2) they'd wind up with a song they could actually play. But "ours is not to reason why, ours is but to make a ton of cash by selling useless files to rich stupid people who could buy working copies of the songs for a buck apiece at the iTMS." (You know, that adage never actually made sense to us until now. Neat.)

Now, we're sure there are a few of you out there who are convinced that none of the bidders is serious and the apparent transfer limitation of iTMS music is the whole point of this auction in the first place-- that the seller isn't really expecting to unload his beloved copy of Devin Vasquez's cover of "Double Dutch Bus" from the soundtrack of a movie starring Dana Carvey as some sort of rampaging turtle-humanoid. (Indeed, who could bear to part with it?) He is simply, you contend, "making a statement" about how you don't "own" the iTMS songs you pay for the same way you own a CD you buy at the store, which is of course resellable at will.

"Making a statement"? Puh-leeze. As if anyone would subvert the sanctitude of eBay with a frivolous listing. You should be ashamed at your lack of faith in the inherent goodness of humanity. Supercomputer stardom, here we come!

Addendum: And thus dies the dream; the auction link now just says "Invalid Item." Sigh. Anyone got $15 million we can borrow?

 
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