The worst analysis ever

14 Comments

Analyst firm Gartner suggests Apple quit hardware business and sell software to its hardware competitors.

Gartner’s anaylst suggest as Apple adds volume, higher component costs will decrease their margins. Somehow they seem to suggest that Intel is doing business with Apple ‘just because’.

“Apple’s margins for its Mac business, currently around 40 percent, are only sustainable because component makers such as Intel choose to prop up the business.”

Is Gartner suggesting that the only reason Apple is able to sell computers is because Intel feels like it? Please, I would love to see the real justification for that theory. It’s simple business, Gartner. Apple makes whole computers, Intel makes parts of them. There is no other reason for them not to do business, even before the official transition announcement.

The ‘analysis’ continues…

“As a result of permanently changed market conditions, Intel has been forced to restructure and, in our opinion, cannot go on supporting Apple (or any other customer) indefinitely.”

First, Apple is only alive because of Intel. Then later on it’s because HP cried pricing unfairness, Intel can’t support any customer indefinitely. What type of business can survice that isn’t designed to produce for their clients?

It’s obvious there is something brewing with consumers, and when one company continues to post growth in a down market no one can argue that. It doesn’t take analysis to see that Microsoft’s Vista troubles have hurt PC manufacturers, and they are eager for an interim solution. Even if it is only for a few years until Vista SP2 RC1 Build 1996 Extreme Home Table PC Edition N fixes come.

14 Comments

albrecht schmitz

One point to take into consideration concerning the “special treatment” of Apple by Intel is not only the 5 percent marketshare.
In the high end chips suh as dual core Apple is by far the biggest customer since it lowest model is already equipped with it.
Furthermore, when Intel launched it first for Apple and the only for the pc-market, that was an intelligent sales decision. Which other manufacturer would have decided to change it’s entire product line to the new chips. Only Apple. Probably Intel would not have had enough production capacity in the beginning for Apple as well as for the others.
Conclusion : Apple has reasonably good prices for a high end product which leaves Intel a good profit together with an immediate mass production to start cutting production costs. In a traditional launch these chips would have been marketed in the pc-market in small quantities until a certain volume was achieved.
Conclusion : plain busines sense for both parties.

Brandon Eley

Of course Apple gets special treatment. Apple may not be big in market share for operating systems, but as a PC manufacturer they have a huge market share and are right up there with the big guys. HP, Dell, they all get price cuts and special treatment to some extent. Intel saw an opportunity to tap into 5 % of the hardware market it wasn’t currently getting a piece of. As Apple’s PC market share grows (and it’s growing) so does Intel’s.

I haven’t read this “analysis” but I don’t think Intel or Apple are going anywhere anytime soon. These kinds of analyses have been around since the ’90s. I can’t count the number of articles I’ve read that spelled doom for Apple. Apple’s still here, and sometimes I wonder what’s happened to those writers with such skill at fortunetelling.

Mantiz

I think what he meant with intel proping up Apple is that they did not just support apple like they would do with any pc manufacturer,
they brought the intel core duo for example, first to the mac and a couple of months later to the pc market.
And yes, apple is stll able to sell computers not because intel feels like it, but because of intel doing business with apple.

If at a point they were not be able to strike a good deal intel could bail, that would mean at the point where they are now, big problems for Apple.

Anonymous

I have had the “pleasure” of presenting to Gartner and many of their ilk while representing a major consumer electronics and software company or two. Whenever I read a report concerning a topic with which I am intimately familiar, I conclude that the writer is an imbecile, or at best, a lazy moron. I try to keep that in mind when reading analyst reports.

Leon

this is just another example of how erroneous Gartner’s research tends to be. I can’t believe that people continue to give their “insight” credence.

Robere

The basis of this analysis left me with whiplash … what, higher volume ‘increases’ your component costs?? Since when, per unit costs go way down with bigger orders …

This just seems like a dig.

Intel seems geniuinely excited to be working with Apple on new products which offer the promise of new untapped markets for those custom chips.

Has it been sugested that Apple gets fovarble pricing for the same chips compared to PC makers other than in this article?

matthew

Worst Apple analyst, yes, but a great publicist. He’s getting this article plastered everywhere today.

At any rate, there are a ton of reasons even the vaguely Apple-informed analyst would never propose such a pairing.

Not to mention the fact that these companies are reported to be on two ends of the reliability survey scale (Apple, 201; Dell, 4). Nice.

Frank

Contra Gartner, The whole point of going to Intel hardware was to neutralize the differential between Apple and Dell and HP. If Intel declares bankruptcy tomorrow, Apple, Dell, HP, and the others would all simply move to AMD, or whatever other chip company sprung up to serve this vast market.

I fail to see how Intel’s fortunes affect Apple any differently than the rest of the PC makers.

Concerned Reader

This is the worst analysis of an analysis that I’ve ever read. From that line, how did you come to the conclusion that the analyst was suggesting that Apple is able to sell computers because Intel feels like it? Read what he said again. Gartner said that the 40% margins on the computers are only sustainable because Intel doesn’t charge Apple as much as they could, and said absolutely nothing about Apple’s ability to actually sell computers without Intel.

Anyway, it doesn’t make a difference because there isn’t an analyst in the industry that actually knows what he or she is talking about. I work in the securities industry and have access to a lot of research on the track records of analysts. Turns out that the vast majority of their track records suck not just in performance but in facts. Analysts have very little (read: almost zero) knowledge of the inter-workings of the companies they’re analyzing. As a result, they pull stuff out of the air that seems reasonable and pass it off as an “analysis.” Truth is, all they do is make reasonable guesses. Very little analyzing actually goes on. There’s only one analyst that I can think of who’s track record has been consistently impressive — and they are that way because they take a quantitative approach to the companies they analyze (they have a formula they follow and the computer decides the stock’s rating) rather than what every other analyst does (which, as I mentioned before, is to take a guess).

JulesLt

On the same day that statistics show that Dell are losing market share to both Apple and HP too. To me that suggests that the growth in the bottom end of the market has flattened out – as with iPod sales it had to sometime.
The problem they have is that they have established a brand that is associated with being ‘cheap’ rather than ‘good value’. People often buy a cheap first car, but rarely buy the same model again, whereas they will stick with a better quality manufacturer.

Equally, Gartner seem to miss the point that Dell probably could not manufacture the Mac any cheaper than Apple could. There is nothing particularly magical about how Dell do what they do, and they could not do it and deliver something like the iMac.

Gartner seem to specialise in either stating the obvious or the ridiculous, rather than anything I’d actually call analysis.

Comments are closed.