Why Apple's Mac ASPs Are Likely To Climb - At Lenovo's And Dell's Expense

Why was I not surprised to see this comment from Apple's quarterly earnings conference call yesterday?:

Demand for our Mac Books and Mac Book Pros continued to be very strong. Sales of Mac Notebooks grew 79% year over year during the quarter and accounted for 59% of total Macs sold. We began and ended the quarter with between three and four weeks of Mac channel inventory.

I have consistently moaned about my Lenovo X60S since I received it 9 months ago. Well, after a few more crashes, an ever looser WiFi toggle switch and a few other issues, I finally made the move. 3 weeks ago I ordered a MacBook Pro. Today I received it from IT after I went through a tutorial yesterday.

It is very slick and fast. But here is the most interesting part that also relates to yesterday's earnings call: Since I moved over from Windows and basically live in a Windows IT environment, we loaded Parallels and Windows onto the Mac. Because of that, we turbo charged it with extra memory at, of course, additional cost. So as more users like me move from our ThinkPads to Macs but can't fully cut the Windows umbilical cord yet, this drives the ASP (average sales price) of the MacBook up. It obviously helps Mac sales growth numbers, but does not necessarily impact Microsoft (MSFT) as much as it impacts PC notebook makers like Lenovo and Dell.

It also helps prove an adage that I once heard in the name of Scott Cook, founder of Intuit. Cook is reported to have said "great brands are earned and not made." Apple has certainly earned its brand by making great products. But the reverse seems to be true as well: "Great brands can be ruined by poor products." So goodbye Lenovo, this is the last post I will type on your keyboard with my beloved red trackpoint -- and hello slick Mac.

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Disclosure: Benchmark is an investor in Seeking Alpha

Comments

[Tommo_UK]

You'll also find Mac ASPs rising because with the launch of Adobe CS3, hundreds of thousands of extra Mac Pros are going to be sold in Q3 and Q4. These sell at between $2000-6000 ech depending on the configuration, so Mac ASPs - averaging around $1500 now - are going to rocket upwards.

[Dan Poarch]

Enjoy your Mac. It's the new Darkside. ; )

[Malkiel]

It's a shame, isn't it, that most of the punishment for Microsoft's hubris in launching an unready Vista will be borne by hardware makers who are holding up their part of the industry. Every maker of every component and every maker of finished computers will lose sales this year. Before we say the manufacturers had nobody but themselves to blame it should be considered whether they really had any choice in the marketplace but to offer Windows. What was the alternative? Enterprise Linux never had a chance in a licensing environment built around a player like Microsoft with deep pockets.

[Mup]

Some of the hardware manufacturers ought to think about dumping Microsoft and imitating the Apple business model. What I mean is that some of the hardware manufacturers and the Linux distros could pair off. Each can target a different market segment and customize the user interface to fit. We could have a dozen or so Apples, all competing with integrated solutions, all profitable, and all compatible with each other because they use standard protocols and they run the same applications with the same file formats.

Apple's business model is a winner. Why not imitate it? Right now the Linux distros need some work before they can be used by people who don't speak Perl as their native language, but paired with a hardware manufacturer, it shouldn't be too hard to work that out.

[wildfire_94107]

You had to take a tutorial to use your new Mac?