How can Apple survive a Depression?

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Hawaii Cruiser's picture
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How can Apple survive a Depression?

I use the D word, and not hesitantly, but I know many still hold to a "Prolonged Recession," and if that's your opinion, then consider the question a hypothetical. What will/would Apple have to do to survive a fairly long economic Depression? Will enough people still cough up the extra bucks for a Mac over a PC? Will the Apple handhelds maintain themselves as a status symbol but substantially lose market share? Will OS development slow down to a crawl or accelerate to draw attention? The colder winds of change are upon us.

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Seeing as Apple has $25 billi

Seeing as Apple has $25 billion or so in cash on hand (http://finance.yahoo.com/q/ks?s=Aapl, look at the "balance sheet" section), and its stock has been pretty stable (http://finance.yahoo.com/q/bc?s=AAPL) compared to the rest of the market, it's obvious that they will survive the next year. Yes, Mac sales were down in February, but that's because a lot of people held off on their purchases because it was fairly obvious Apple would refresh the product line in early March (which they did). Between people switching to OS X because they're fed up with (or don't want to deal with) Vista, and iPhone purchases, they're good at least in the short term. I'd be surprised if the markets don't pick up again by the end of the year, but in any case, as long as Apple keeps innovating and doesn't simply react to what the markets want (like so many other PC makers do), it'll be fine.

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Remember that Apple isn't hav

Remember that Apple isn't having to compete in the same way that, say, Dell and HP are competing with each other. With Apple having their own unique product line I'm sure it will be less likely that current Mac users will move away but instead save their upgrades for later. And the iPod shows no sign of going out of fashion soon either with a massive amount of iPod touches sold over the holiday season and interest in the iPhone is picking up fast.

Apple might also be doing the right thing with Snow Leopard. They're not going to introduce new whizz-bang features but make a great OS even better and more stable - just what we need to keep our heads down during the recession.

I think they'll be fine for a good bit longer.

Jon
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Even in tough times, I'd prob

Even in tough times, I'd probably buy an Apple machine. This last go around though, they didn't offer a machine of the type I was in the market for, so they didn't really lose a sale, they just missed a sales opportunity.I wonder how many people are like me and want a netbook, and aren't particularly thrilled that all we have to choose from are either bargain basement machines ($299-500) or should have bought a full sized premium ($500-1000+) and can only pick from the regular makers. Thing is, netbooks are a cut throat market, and Apple doesn't really do those kind of markets. If they do a netbook, and do it "right" they'll gain my next purchase when I am in need, even if it is in hard times. Smile

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Apple will weather it just fi

Apple will weather it just fine. Here's why - they have a loyal and dedicated following and they focus on products with higher margins than other companies. Like BMW and Mercedes - there is a certain brand cachet that people will pay extra for no matter what. Quality, well thought out design, etc. - those qualities will ensure corporate survival, provided no poor business decisions (think Performa's mid 90's) occur.

There are things that people will find money for no matter how scarce money is - comfort food (pizza, chinese, etc. - delivery guys get mad business when the economy is bad), cigarettes, alcohol, religion, and gambling/lottery. Many of us would consider the Mac to be something of a religion (not in the spiritual sense, but the fact that we are discussing this proves my point) - so I think that we'll find the money to get apple gear as things get bad.

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My Two Cents...

I think that Apple as a whole will do just fine.
Even with tough times I squirrel away a few bucks to get spare parts and software for my Mac's and Apple II's, and here lately I've been toying with the idea of completely switching over to a Mac. Even though they may cost a bit more, they are well worth the cost in reliability, stability, and ease of use.

If the cold winds of change are upon us...then it's time to get a Parka. Smile

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