Tuesday, March 20, 2012

Apple Controls the Entire Life Cycle of the iPad?

OK, this is quick and easy to understand. Last Friday, Apple computer sold 3 million iPad3's, That's worth a lot of samoleans, like maybe $1.8 billion dollars... that's big bucks. They also last week announced they'll start buying back some of their stock, and begin to pay quarterly dividends to their stockholders, for the first time in the company's history. These actions will reassure some shareholders, that they're worth the investment. They own a hoard of cash approaching $90 billion stashed away here and there around the world. Their stock has grown more than five-fold since 2009.

But back to all of those iPads... There was a brief time just before the iPad3 hit last Friday, that refurbished units of the earlier model were on sale, for a mere $150 bucks (or less) off. Hmmm... I'd like one, but don't want to pay that much, how about a used one? Well, it turns out Apple is offering something like $260.00 as a trade in toward a new iPad3. Guess what that does? It sets the bottom price in the used market. Who would sell you their old iPad for $200 bucks when Apple will give them $260?

Imagine a company so rich they can control the used market for their "obsolete" products. This makes me uneasy.

1 comment:

  1. I don't know if you remember the time when Whitton got all excited about stocks and started investing via Sharebuilder (now ING). It allowed wee little folk like us to invest whatever amount of money we had and buy shares or portions of shares accordingly. I bought a handful of shares of Apple back then, in roughly '02. Imagine my surprise when I logged in ten years later and found that the shares had gone from the $60 I bought in for to something like $350. I invested on a whim and it's certainly had its rewards, but even I'm uncomfortable with the Machiavellian way the company's apparently run.