Like every morning when I first wake up I go sit at my computer and go through my RSS feeds. I guess this is the equivalent to those who run outside and grab their paper to have with their coffee. Although I am such a junkie I can’t wait for my coffee to finish brewing (or sometimes even brew it at all). I stumbled across an interesting article about Acer buying up Gateway for an insanely cheap price and it continued to talk about market share versus profit and how to really tell if a company is doing well. And if you know me, then you of coursed guessed already that this does have to do with Apple as well. Anywho, here’s a snippet and a link:
Surprise, surprise: It’s Apple that’s winning the ‘PC Wars’ after all
“Well… another one of those once-indomitable foes has bitten the dust. Gateway has been sold to Acer for a paltry $710 million (that’s how low Gateway had sunk; that price was actually seen as a huge premium by shareholders, who raised the stock 50% today. Apple, by the way, has a market cap of $115 billion). Despite throwing every strategy he could think of to fix Gateway’s problems–including selling the company to eMachines–PC industry pioneer Ted Waitt couldn’t figure out the conundrum of selling a highly-complex product that carries the margins of a banana,” Peter Burrows blogs for BusinessWeek.
“To me, it’s a powerful reminder of the wisdom of Jobs’ approach to business–which values profits over growth, and which values market share mostly as a trailing indicator of success rather than a primary peg of a strategy,” Burrows writes. “Gateway is far from the only proof point that Jobs was right. Back in the day, Apple’s main tormentors also included IBM, Dell, Packard-Bell, HP and Compaq. Now look. IBM is out of the business. Dell is struggling mightily. Gateway announced, in conjunction with the Acer deal, that it would buy Packard-Bell. Compaq was bought by HP…”"
Burrows writes, “While it’s hard to argue with Apple’s success, that old obsession with market share dies hard. While Lenovo clearly has the most to lose from Acer’s move, many articles mentioned that the Gateway acquisition would vault Acer well ahead of Apple, as well. Who knows, maybe that contributed to the 2.25% drop in Apple shares [yesterday]. If so, it’s a buying opportunity.”
If you get a chance read through the full article and check out the comments on MacDailyNews. They are entertaining.
