Alex Salkever takes a critical look at Apple’s business opportunities in a new special report on BusinessWeek Online . While Apple gets credit for its successes, some analysts wonder what the company’s future prospects are — a phenomenon Salkever calls a “tug of war between positive and negative momentum.”
Despite Apple’s ability to move 100,000 copies of Mac OS X 10.2 this past weekend, Salkever noted that some retailers had to offer discounts and rebates to draw customers to get the software, perhaps nervous about criticism from some users that Jaguar is priced too high for its value.
Likewise, early strong sales of the flat panel iMac have weakened. Salkever noted, however, that Apple’s falloff in PC sales is consistent with the market as a whole, and PC manufacturers in general have had an abysmal year. Apple has seen success with its iPod, however, and more recently has also seen strong sales of the 17-inch iMac.
Apple’s retail stores also draws criticism, but it’s all in how you look at the figures. While a Merrill Lynch analyst complains about how the retail effort is increasing Apple’s fixed-cost base and called it “a big mistake,” Salkever said that Apple stores are “beating the pants” off of Gateway Country stores for foot traffic and are managing a 0.9 percent conversion rate, about half of what one analyst believes Apple needs to score a 50 percent increase in its current marketshare.
Tepid corporate reception to OS X, limited growth in the home broadband market and Quark Inc.’s lack of a Mac OS X-native version of QuarkXpress are all cited as additional factors limiting Apple’s prospects. Apple’s decline is schools seems to have leveled off, if IDC’s numbers are to believed (a recent report by QED said that Apple’s numbers are still slipping, however). The eMac and Jaguar’s improved Windows networking support are both counted as favorable factors for Apple’ continued use in schools.
Negative factors aside, Salkever called Apple “the BMW of computer companies,” and said that Apple continues to “hold its own” in a market that has been increasingly dominated by Dell, which increased its marketshare by 5 points last year. This “reflects positive momentum,” he said.
“And so, despite all his accomplishments of the past several years, Jobs still finds himself trying to win over those who doubt that Apple can ever be more than a niche player,” said Salkever.