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July 2, 2006

money

Secrets? At Apple? Nahhhh…

Posted Jul. 2, ’06, 8:08 AM PT by Dan Moren
Category | Money

Apple's Got a SecretThere was a piece in yesterday’s New York Times called “Apple’s Got a Secret” about Apple’s tight-lipped nature. Specifically, the company refuses to divulge how much money they make per iPod; i.e., how much it costs them to build one, versus how much the consumer pays. Analyst Robert Renck goes so far as issuing a “sell” recommendation on the company’s stock, due to its “penchant for secrecy.” Wall Street Journal writer Herb Greenberg agrees with the secrecy assessment, arguing that the way Apple breaks down its financials (geographically as opposed to by product line) “isn’t necessarily relevant to the Apple of today.”

While I’m sure we’d all love to pore over the details of Apple’s financial statements, who does this primarily hurt? Well, for one, the analysts themselves. It’s certainly a lot easier to make judgments on whether or not a stock is worth buying when you have intimate knowledge of a company’s financial situation, and Apple is no exception. But does it directly influence consumers? Would knowing the price for an iPod affect how much we’re willing to pay for it? Consumer electronics—unlike, say, cars—are not usually a negotiable product. Now, certainly I’d love to see Apple’s quarterly results broken down more thoroughly; if nothing else, it would give me more to write about, but at the same time, if they want to keep their mouth shut about money, I don’t have a problem with that. Secrecy about other aspects of their business—quality assurance, for example—well, that’s more of a problem for me.


4 Comments

Chris O'Rourke said:

I agree with the analysts. Apple's secretive nature is bad for business.
I purchased my first powerbook last fall as well as a 4th gen ipod. Both were purchased shortly before major upgrades to the line (2 weeks before the enhanced isight'ed powerbooks and 3 weeks before the ipod video). In both instances I was unable to exchange my purchases for the higher feature list items.
In the case of my powerbook I actually paid $500 more for features that were made standard with the new version.
I can understand not wanting to lose sales by not releasing information too early about forthcoming upgrades but Apple goes too far in making everything a big surprise.
I saved for 2 years to afford my powerbook and to have it cost me more for less features due to Apple secretiveness makes me greatly uninterested in buying another Mac again. As it is I can get OSX running on my pc's with zero issue now. Apple direly needs to stop with the "one more thing" fanboy stroking and move to a more open forecasted business model.

July 2, 2006 10:11 AM
Lokkison said:

Chris,
At the time that you bought it, you were obviously happy to pay that price for that specific product. If I buy some butter for $2.40 and then three weeks later find the butter for $2.10, I'm not going to run and cry about it.
Same thing applies to Real Estate, a house for $400,000 being valued at only $360,000 a month later after purchase.
It happens.

July 3, 2006 12:11 AM
Chris O'Rourke said:

While I agree with that logic partially it does frustrate a bit that that is the price paid for wanting an Apple product. While the ipod occurance isn't that big of a deal the powerbook purchase costing me $500 more for less product does.
Using your example it's more like I bought a stick of butter for 2.40 and then 3 weeks later it's 2.10 and also contains curative properties to stop cancer.
Yeah it's a bit extreme of a n example but at the end of the day it's still a tad bit strange that Apple doesn't follow the 30 day return/exchange policy of most every other company as well as expects consumers to just deal with "one more thing". If I was jobs and didn't have to pay for the product I'd totally be behind the oooh fanboy surprise, right now though I think it hurts the company more especially from a business standpoint of making businesses wary of switching to mac.

July 3, 2006 12:29 PM
Greg said:

Leave it to the New York Times to scream about businesses and governments keeping secrets...

July 3, 2006 1:39 PM

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