Sunday, March 26, 2006

Why are there so many REBATES!

People hate rebates and there are two big reasons they exist. The first is kind of obvious. Seduce customers with a low "after rebate price" and hope they never send in the rebate slip or mess up the form somehow (some companies even lie and say you need to send the form again, which is impossible without the original receipt). But that's only the obvious reason rebates continue to be a retail plague. The other reason is even more disingenuous.
Accounting and looking good to the stock analysts. That's a big factor. You would think that a rebate is a wash. You get higher sales, but you have to subtract the cost of the rebate refunds. True, but not true. For many companies, rebates do not decrease what they report as their total sales. Instead they call rebates a marketing expense. That way, they can show a nice big sales number even if they're losing money! To the naive analyst (or cynical stock promoting analyst), the sales number will appear bigger. Naturally a company might have some large marketing expense when they're showing such growth!
The falacy is that they analyst (or public) might assume those sales are sustainable, when, in fact, they've been bought, dollar for dollar, with rebates.
Al Capone wondered why there are so many criminals when there are so many perfectly good ways to steal legally.

Wednesday, March 08, 2006

The Apple Road to World Domination

On my own website, I've been seeing a steady rise in Mac users from about 7-8% last year to 11-12% recently.
Those are home users, but still, very impressive numbers. People who can afford a Mac who don't need to sync with work PCs will want to buy a Mac (if they care and know anything).
If I didn't need to run Quickbooks and work with the office PCs all the time, I'd have a Mac.
(Qbooks on the Mac isn't as good)
If Apple wants to own the world, it has two big issues in front of it:
1: Getting a foot hold in the TV/stereo/entertainment room
2: Phones
Phones are a huge issue for Apple, and if you ask me, there's a 100% chance of an iPod phone soon.
The problem is, everyone has a phone and phones can easily do what an iPod does. Eventually people will not want to carry and pay for two devices. Motorola or somebody will eventually make a good phone/music player and Apple knows it.
The other issue is the entertainment room. As long as Microsoft or Sony (with the Playstation 3) has a shot at getting a foothold there and owning it, there is another place where people may buy their music and videos. You will be able to do that through XBoxes & Playstations. Sony & Microsoft will improve their music stores.
Once they manage to have a viable online store, they will be able to sell more competitive iPod like devices (including phones). Apple will lose the iTunes lock and the iPod dominance. People will use whatever device plays their music. If that's Windows media format (unplayable on iPods), then they will buy Microsoft compatible players.
It's up to Apple. So far the ROKR phone and the Mac Mini have been weak in these two markets. Apple will have to do better. Soon.