Upmarket Apple DesignerWare
Sunday, January 15th, 2006According to a news item in the Financial Times, upmarket retailers here in the U.K. outperformed others in the industry during the Christmas period.
In “So Long Apple Nay Sayers”, Om Malik highlights the difference in performance between Apple and Dell, where Apple plays the role of the upmarket retailer.
Apple invests large sums in product design and with creative talents such as Jonathan Ive on board, its products seem more like designer wear than hardware. Business Week dissected the Apple Nano recently and estimated that before marketing and distribution costs, the profit margin on the Nano is around 50%.
So which business model is more volatile: Apple with its high end designer-ware or Dell with four times more sales of affordable but slightly dull products?
Instinctively one might say that Apple is more volatile since its revenues are subject to fashion trends, which can be fickle. But both are subject to general economic trends and in the U.K., where the economy is slowing down, it seems that Dell-like business models suffer while the Apple-like upmarket ones continue to prosper.

