Apple Technology: Valuable Intellectual Property…or Fluff?
We seem to have offended the Apple (NYSE:AAPL) iPod and iPhone crowd with our disparaging remarks about the products yesterday. Only mild offence was intended, and it was directed more at the trend toward gadgetry, and not the people who use them. There are more ways to stay in touch these days with digital media. But people seem to be in touch more while saying a lot less.
One reader disagrees:
"The US technology companies will continue to do well in the long run.
"The sector will always face risks. Retail product shelf lives are short and sales sometimes fall below expectations.
"Profits from this form of intellectual property are as real as any other profits. They are anything but trivial, but they can come and go in an electronic flash."
Another puts it this way:
"The point is that Apple produces a lot of product that is non vital. The iPhone is a luxury phone. The iPod is not something you need either.
"Further, most people who use Macs do not use them for real work (software development, or even graphic arts). Yes, most graphic art work is now done on a PC. Most people get their job done on a PC.
"The point being that Apple is a fluff company that produces stuff that we really do not need, and they target trendy yuppies who think they are sophisticated. Further, most people do not use Apple products to create wealth.
"To be blunt, the fact that people look to Apple as some sort of symbol of the US economy really shows us in another dimension what a bunch of consumer whores Americans are.
"And of course, most people buying Apple product are doing so on credit.
"I would much rather own a railroad stock than Apple."
Dan Denning
The Daily Reckoning Australia
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About the Author
Dan Denning is the author of 2005's best-selling The Bull Hunter (John Wiley & Sons). Dan draws on his network of global contacts from his base in Melbourne. He’s the managing editor of resource newsletter Diggers and Drillers and the editor of The Daily Reckoning Australia.
Comment by Hans Blix on 25 October 2007:
i'm not an apple product owner or user, but to be fair on the issue of the mark-up on apple products, a recent issue of electronics new published the exact price of all the physical electronics that apple is paying for. it is about one third of the sell price of each gadget,example - an iPod with a sell price of $149 had $58 worth of electronics inside. the article notes that this cost does not include accessories, packaging or transport. i know that our products, made here in queensland, have a lot more mark-up than that, and we couldn't stay in business if they didn't.
Comment by Chuck on 26 October 2007:
"Yes, most graphic art work is now done on a PC."
I would like to see the data on that comment. From my experience (10 years in the graphics business) that is not true at all. Macs dominate the graphics and pre-press industries, as well as the art and design schools.
Comment by Michael Fischer on 26 October 2007:
Hmmm ... well to start with as someone who has owned apple stock for 6 years and realised a 2500 percent increase in value on the original purchase, while merely doubling my investment this year, I would rather have Apple Stock.
Currently Macintosh is only critical to people who value their time, need inexpensive access to the cutting edge of software development (mostly developed under Unix and sometimes under Linux), or have some esthetic sense. Windows is ideal for everyone else.