Cool Tech Reviews

Market research company NPD released some of their statistics on PC sales at US brick and mortar stores that are causing a flurry:

You need look no further than numbers released today by NPD to understand Apple’s strategy. Its revenue share of the “premium” price market — that is, computers over $1,000 — is a staggering 91%. This means that 9 out of every 10 retail dollars that is spent on PCs in that price range, goes to Apple, as Betanews’ Joe Wilcox points out. That, for lack of a better word, is insane.

Analysts and journalists are often quick to point out Apple’s relatively low overall market share (less than 10%). But that completely misses the point of Apple’s Mac business. If Apple wanted to make a range of low-end computers, it absolutely could. And such machines would sell like crazy, boosting Apple’s market share. But there would have to be some trade-off in quality, and perhaps more importantly to Apple, to its high margins. And as it has proven time and time again, it has no desire to give up either.

I have no desire to own an Apple PC since I have too many applications and tools that require Windows, but I have always regarded them as the "high priced spread" or the "Mercedes" brand and respect them for it. The systems, peripherals, and software work nicely together without the "fit and finish" problems that plague Windows PCs because Apple tightly controls the ecosystem.

And that’s why Microsoft’s recent Laptop Hunter commercials really never made a lot of sense. Sure, from a marketing perspective, I understand the idea: It’s a down economy, lets play up the fact that our computers are cheaper. But in many of the spots, the shopper’s stated desired computer was simply not something that Apple even made. In the famous first commercial, Lauren wants a laptop with a 17-inch screen for under $1,000. Okay, Apple doesn’t make that product. So of course she’s not going to buy a Mac.

I was similarly puzzled - if you want a bargain PC, Microsoft is the only real choice so the ads were merely stating the obvious. If you want to go first class and unlike me have no need to run Windows applications, then head on over to the Apple Store and indulge yourself. If you are on a budget and want value, head on over to Amazon or TigerDirect or NewEgg or a hundred other places and do some serious shopping for a Windows PC.

The long and rancorous negotiations between Apple and the major music labels are apparently over and Apple’s iTunes will be able to offer their music DRM-free, but it came at the expense of Apple’s long standing "one price for all" policy:

Apple has cut deals that will finally enable iTunes to offer songs free of copy protection software from the three largest music labels, according to two sources close to the negotiations. In exchange, Apple has agreed to become more flexible on pricing, the sources said.

The three largest labels are Warner Music, Sony BMG and Universal Music Group.

Under the terms of the deal, song prices will be broken down into three categories–older songs from the catalog, midline songs (newer songs that aren’t big hits), and current hits–said one of the sources. Apple has offered songs free of digital rights management protections from EMI for more than a year. But EMI accounts for less than 10 percent of music sold in the U.S.

Apple and the music labels have also apparently come to terms on over-the-air downloads, according to a source. That would allow iPhone owners to download songs to their mobile devices via cell networks and without the aid of Wi-Fi. Apple, which closed the deals last week, could announce the agreements as early as Tuesday at the Macworld Conference and Expo in San Francisco.

There is some questioning of whether the availability of DRM-free music makes any difference to consumers. While I agree that the average consumer probably doesn’t pay attention to DRM in the normal course of events, they get really cranky when for whatever reason their subscription lapses and all their tunes are unplayable.

From the same source, the rumored pricing for the tiers is $0.79, $0.99 and $1.29 per track. Yes, it would have better if they had gone lower at the low end.

Update: Apple did announce it at MacWorld and the prices are: $0.69, $0.99 and $1.29 per track.

Eric Bangeman at Ars Technica:

Over the past few years, we have watched Apple climb the music sales chart courtesy of the iTunes. Last month we learned that Apple passed Best Buy to become the number two retailer in the the US in December. Now, Apple has ascended to the top of the charts, surpassing Wal-Mart for the first time ever, according to an NPD MusicWatch Survey for the month January contained in an internal Apple e-mail which was leaked to Ars Technica but has not been officially published.

Yet another industry where the Internet is putting traditional means of distribution in the shade. The CD music business isn’t over yet, but the handwriting is on the wall. Also of interest in the NPD numbers - Amazon’s music sales seem to be struggling despite their brand new (and highly touted) online MP3 store.