Pre: iPhone Killer for a Day?
Early reviews for the Palm Pre have been relatively positive -- in fact, some have said the Pre trumps the iPhone in some regards. How long those advantages last will become clearer once Apple reveals its plans for the next iPhone, which could happen as soon as next week. Pre or no Pre, though, Apple retail seems to be really reeling in the money, especially in its flagship glass cube store in New York.
Speculation surrounding the next-generation iPhone has been simmering all week, and with Apple's Worldwide Developers Conference (WWDC) set to hit next week, it just might boil over.
Lots of bloggers have been rounding up the rumors, like a 3.2 megapixel camera or even video conferencing.
However, it's not an all-iPhone world, after all. Overall, Apple appears to be raking in -- and spending -- plenty of cash. The company's flagship store in New York might be taking in as much as US$440 million per year, and Apple plans to build a data center in North Carolina.
Pre? What Pre?
Even as tech gadget guru Walt Mossberg, on his All Things Digital site as well as in The Wall Street Journal, reviewed the upcoming Palm Pre smartphone -- which he liked very much -- he couldn't get through the review without talking about the 600-lb. gorilla that is the Apple iPhone.
"Apple already has announced it's adding MMS (multimedia messaging service), universal search, and copy and paste. And, although Apple hasn't announced any new hardware features, I expect to see an iPhone with up to 32 gigabytes of memory, video recording, a higher-resolution camera, a compass, and greater operating speed. Plus, there are persistent rumors that Apple will announce at least one iPhone at a drastically lower price than (US)$199," he wrote.
Interest in the Pre seems genuinely pretty high, despite the odds that relatively few iPhone owners would ever consider a switch. Still, some seem to be ready for a Pre.
"... can't wait for this new phone. had an iphone and HATED the lack of a 'real' keyboard. lost the phone (was thrilled, used my upgrade to get a blackberry curve. nice phone, but lots of purse dialing going on since i am too lazy to take in and out of case or lock keyboard. the pre sounds perfect for this admittedly lazy, non techy, non video watching, texting, emailing, yakking mom. can't wait!!!!!" commented Marnie Rapaport on the All Things Digital review.
An interesting note brought up by Mossberg, one that's been more ignored than explored: The next-generation iPhone will most certainly sport more storage capacity, but what about its internal processor? Will it be faster? "Greater operating speed" are the words he uses ... might that refer to software improvements or new guts?
Apple has tended to avoid the discussion of the iPhone's processors ... and come to think about it, so have most other smartphone makers. However, when it comes laptops and desktops, it's pretty hard to buy one without knowing exactly what's inside -- the processor type, its clock speed, and graphics processor, too. Sure, some low-end boxes are pretty vague on the matter, but high-end smartphones aren't exactly cheap. What gives?
"The smartphone industry is very competitive, and they don't often want to compare one phone directly against another," Chris Hazelton, research director of Mobile and Wireless for The 451 Group, told MacNewsWorld. The PC market, on the other hand, has features that are familiar to customers and are very commoditized, he said. Smartphone manufacturers don't want to turn their products into commodities that sell based on the perception of a faster processor.
Plus, Hazelton explained, the main channel partners for smartphones are the service carriers like AT&T, Sprint, T-Mobile and Verizon. "They want to avoid having the device be the point of comparison -- they want their services to be the point of comparison," he said.
Besides, he noted, "the processor doesn't necessarily mean a faster experience on the phone -- often it comes down the OS and the browser and general network connectivity. ... You might have a fast processor, but your data connection can be a major stumbling block."
Location, Location, Location
In an article covering the retail action on Fifth Avenue in New York City, a New York Post story revealed an interesting tidbit picked up by bloggers: A prospectus shown to possible buyers last year reportedly indicated that the flagship Apple Store under the famous glass cube was doing "an incredible $440 million a year" in retails sales.
Is that a lot? Yeah, that's a lot. In fact, the Apple store might be "the single most lucrative store in all of New York," Cult of Mac blogger Pete Mortensen noted.
On the AppleInsider.com post on the subject, the first commenter, sflocal, pretty much nailed it: "Ay Carumba!"
Doing the math, macFanDave puts it all in perspective by adding, "One store is moving more than a million bucks a day?!?!?! ($1.2 million per day to be a bit more precise.) A thousand Macs per day? Mix minis, White MacBooks with the more expensive offerings and that's pretty close. 6,000 iPhones 3G? A day? That is just a staggering amount of product being moved. Either that is very impressive or someone has made a math error."
Of course, if the door never locks, it might be possible.
"That's one of the WE NEVER CLOSE open 24 hours a day models. Was in there to get my broken IN EAR HEADPHONES replaced and it was jammin at midnight just like it was noon on a weekend," added Multimedia.
Still, $440 million is a lot of coin. Makes you wonder if it's possible. It also makes you wonder just how important are the Apple retail stores to the company's overall success these days, anyway?
"I have been bullish on the Apple stores since the very first one, and I remain so. They are absolutely the best vehicle for Apple to deliver on its brand promise in its best possible light," Stephen Baker, vice president of Industry Analysis for the The NPD Group, told MacNewsWorld.
"Without the stores, Apple's position today would be incalculably less, and they would not be the cultural icon they are today. Great product is only as good as the atmosphere it is sold in, and that is the secret sauce in Apple's success," he added.
So, could that single store in New York really be doing $440 million a year?
"That would be a touch under $9 million per week, which is absolutely doable. That is a huge amount of volume in one store -- as a contrast, a great, busy wholesale club like Costco is probably doing $200 million in its best store, and they sell food," he explained.
"Apple has been said to have the highest sales-per-square-foot rates in all of retailing, and certainly that kind of number would validate that," he added.
North Carolina, Here We Come
After weeks of speculation and some heated debate in the North Carolina legislature, Apple got the state to pass a law offering up a tidy tax credit worth $46 million to the company. In return, the company said it will build a new server farm in the state. The server farm will employee about 50 full-time workers, according to Cnet.com's One More Thing blog. Plus, as part of the deal, the average wage of those employees has to remain higher than the wage standard in the county in which it's located.
Blogger comments are all over the map on this issue -- some are upset over "corporate welfare"; others are defending the arrangement for creating new jobs for areas in need of them. Commenter gikeda brought up an interesting idea:
"This just doesn't sound like a good deal for North Carolina. Yes, there will be construction jobs, but those are temporary. Yes, there will be an exponential effect from this investment; however, that materializes through additional business for restaurants, hair dressers and dry cleaners. They should only count the jobs that are directly created from the server farm which is 300. If they split the $45 million between the 300 workers, that is $150,000. If they gave $150,000 to 300 random people in North Carolina, that would have had a larger effect than this Apple deal," gikeda noted.
Of course, the facility will bring in new annual revenues to the state, so that idea isn't entirely flawless -- but who wouldn't want to be one of the 300?
Still, "Server farms also tend to expand over time. Not to mention, the more tech jobs and tech companies NC brings to it's state, the more people will think of NC as a tech savvy state," added ikramerica.
Back to that tax break -- aren't tax breaks for big corporate projects standard operating procedure these days?
"I don't know of any corporation that would go into any major building project without looking for or asking for some kind of a tax break. It's such a common way for businesses and communities to interact," Charles King, principal analyst for Pund-IT, told MacNewsWorld.
"Usually it's justified by the new jobs the project brings into the community," he added, noting that most companies investigate half a dozen different sites, looking at building codes and limitations. In the end, of course, many of the decisions come down to money -- and "the sweetest deal," he said.
Sweetest or not, Apple will be running some servers out of North Carolina. What they'll be doing with them is anyone's guess.
"What in the world does Apple have up its sleeve. A major push online? Are they going to buy Yahoo! or AOL and build a web services environment? Maybe they are going to really buy twitter and start tweeting video and music? Seriously that's pretty big news," jlopezcnet noted.