Apple Is Becoming A Luxury Firm: Lundy

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

Oct. 23 (Bloomberg) -- Lawrence Lundy, Consultant at Frost & Sullivan, discusses the tablet wars and why Apple is forgoing the ‘junk’ market. He speaks on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

It comes to an apple product?

Wax the products themselves are a good iteration.

They will sell very well over the holiday.

Think about the premium and.

They're committed to high-end margins.

That is increasingly difficult in a maturing market.

Tablets are following the smartphone trend.

You have to get past thanksgiving.

You have to get past christmas.

Are these products enduring?

Wax they are until another product delivers better quality and battery life.

I think apple maintaining these high profit margins -- they are following a different trajectory.

They think they can maintain these margins.

The problem is, smartphones subsidize.

The price points are not so important.

Iphones aren't just as subsidize as other hand phones aren't they?

The market itself is a subsidized market.

Tablets are not.

If your pricing a product that $600, that is a big investment.

It ensures that they are not competing in a junk market.

You are already looking at an expensive product.

Is this your definition of luxury?

Is that what he was perpetuating.

That is the fine upon we have seen from these releases.

It suggests that they are not competing.

They don't see the competition.

They are saying, we are a luxury brand.

We price these accordingly.

As burberry isn't competing with h&m. they are not after the same consumers.

Apple is increasingly going to say, look, we are not competing in this market.

Here is a great design.

They're giving away software for free.

There is nothing in life for free.

How apple spends its money is an interesting case.

This is an absolutely smart move.

In regards to say, look, our software is free.

We can subsidize it with our hardware sales.

You can expect operating systems and software all for free.

Microsoft, roughly 90% of operating margins are through software.

If we think about licensing software, apple is giving it away for free.

Microsoft is under increasing pressure.

What is my proclivity to leave?

This is the future.

The ecosystem.

As we see more devices, proliferation, we see smart watches, wearables.

They are going to plug into this ecosystem.

You develop an ecosystem, you create a seamless platform, you have locked in customers.

We have 30 seconds.

Just briefly, a bit of a fanfare.

Microsoft had two services on the go.

The first one didn't do very well.

Why produce a second one?

They are building out the rest of the nokia portfolio.

They have got to commit to this ecosystem.

They need to build out an ecosystem.

That is the future of the smartphone and the tablet wars.

Lawrence lundy, we get 90% apple and 10% the microsoft.

Does that tell you something?

"the pulse" is coming up in 15 minutes.

Guy johnson is in charge today.

Two stories dominating the agenda.

The stress test and the apple story.

We will talk about the stress test.

This is a three pillar strategy

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change