KEY POINTS:
Apple's shares have taken hits as markets tumble all over the place, led by the US. The basic tenet of hard times is that people stop buying stuff, or they look for cheaper stuff. Buying stuff is good, says President Bush - he's addressed slumps before by telling Americans to buy more stuff.
I don't think he has an economics degree.
Whatever your viewpoint, people are spending less because they have less disposable income. Or at least, they may still have the same disposable income but they're starting to think 'Yikes! I'd better keep that money in the bank and not buy that new FantasmaPlasma 3D Stereo Entertainment Centre with Treadmill Exerciser even though it's been a month since the last new car - But which bank is safe?'
So anyway, one result is that consumer product ordering drops. RBC Capital analyst Mike Abramsky has stated, in a note to investors, that consumers planning to buy a personal computer in the US over the next 90 days who intend to get a Mac rather than PC posted its biggest decline in the last two-and-a-half years from August to September. No word on how many who were thinking of getting PCs have dropped or not.
Apple's supposedly 'recession-proof' stock (AAPL) went down 16 per cent. Bigger computer entities have taken lesser hits, although this may be more of a reflection of Apple's rapid rise over the last 12 months than anything else. Hewlett-Packard, the world's biggest PC maker, fell just 1.9 per cent on the New York Stock Exchange and Dell fell 4.3 per cent on Nasdaq. The maker of the BlackBerry communications device, Research in Motion Ltd, had its shares fall 3.3 per cent on the Toronto Stock Exchange.
Since the bailout of the US economy was defeated by the US Senate, general economic effects will probably worsen, at least in the short term.
Including the decline over the last 24 hours, Apple stock has lost more than one third of its value over the past month. Apple's share price is the lowest it has been in over a year. So you might decide this is be a good time to buy, although some think Apple's share price has further to drop. An announcement in a week or two of new devices would be positive, unless they were ridiculously priced.
Apple, in its latest earnings call, has forecasted a need to cut margins.
9to5 Mac speculates that all this economic gloom may lead to some very low margin MacBooks, like some sort of Tablet things.
I'm not so sure - Apple normally avoids a presence in the highly competitive low-end market, with its low profit margins. I think the cash-rich company would prefer to keep its aspirational pricing position.
But that's not the main reason - to me, the main reason is the planning and design cycle. For Apple to be reacting to the economic downturn so fast to bring out low-end laptops in a couple of weeks seems unreasonable - unless Apple has been planning such devices for a long time, which is by no means clear.
There have been rumours of Apple tablets for years, with several prototypes haunting Cupertino labs.
But what is a Tablet? It's not something you put under your tongue. Nor is it something you carve commandments on. A Tablet PC is a computer shaped like a notebook except with the capability of its monitor being written on directly, for example with a stylus - ah, you can see why the speculation has arisen.
Apple's recent advances with touch-screen technology has certainly made an Apple Tablet more of an interesting possibility, although as anyone who has typed on an iPhone or iPod touch will know, it's really quite easy to get away with no keyboard and with pure finger control for many things. If the screen was much bigger, it would be easier still, although not very comfortable for writing that PHD on.
A Tablet is a fully functional personal computer, not a companion device (like a PDA). I just can't see a device with a huge (ie, notebook-sized) touch screen being cheap to manufacture.
- Mark Webster mac.nz
