Not So Dismal

Making Economics a Little Easier to Understand

Posts Tagged ‘Inferior Good

Cheap Macs Aren’t the Point

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Here’s an excellent article from Daring Fireball’s John Gruber on why the “$800 Macbook”, a concept that began as literally one man’s rumor and grew into some sort of backwards conventional wisdom, was not announced at yesterday’s Apple event. One stat in particular that is so telling as to Apple’s philosophy toward their product line: the Mac had 18% of US marketshare, but 31% of revenue share for the industry. Where others are commodities, Macs are not. This makes Apple more protected in a period of economic uncertainty like the one we face today than, say, Dell because with the Mac, it never comes down to price. “PCs” are inferior goods (in the economic sense), but Apple’s most loyal customers are the ones that have nowhere else to turn. The creatives and professionals rely heavily on the type of tools that either only exist or exist in their best forms under OS X, an operating advantage that no other company can have.

[Disclaimer: I own AAPL shares.]

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Written by caseyayers

15 October, 2008 at 3:54 pm