TV-PGAugust 17, 2005: A rowdy bunch of Virginians goes all Lord of the Flies when the supply of used $50 Henrico Country iBooks utterly fails to satisfy demand. Meanwhile, Gateway follows in Dell's footsteps and announces disappointing quarterly results, and Apple is number one in customer satisfaction, while Dell slips further down the pole...
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Shocked, Shocked We Are (8/17/05)
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We hate to say "we told you so," but... oh, wait, no-- we hate to say "here's that money we owe you." We love to say "we told you so"! So, yeah, we told you so. Or rather, we almost told you so. There's no question that we were critical of Henrico County's Certifiably Stoopid™ plan to ditch its tens of thousands of Apple iBooks and replace them with Dells in the name of "cost savings," but now that we look, we see that we weren't exactly explicit about the hole in its rationale for the switch.

To wit: never mind that switching to Wintel laptops is bound to increase tech support costs and downtime due to viruses and worms (like the one currently smacking around Windows 2000 systems all over the globe), but if cost is such an issue, why, exactly, was the county planning to sell off its excess iBooks at a price of just $50 each? Seems to us that if money were really the overriding factor, as opposed to the knee-jerk (and we do mean jerk) anti-Mac bigotry of the clueless honchos holding the big rubber stamp, surely they'd be trying to recoup some capital by selling said iBooks at closer to their actual value. After all, the AirPort card in each unit alone fetches more than fifty clams on eBay.

Also, while we were pretty clear about thinking the switch and consequent iBook fire sale were unquestionably bad ideas, our analysis conspicuously lacked any prediction of the obvious results of offering a limited number of laptop computers to the public for roughly one-tenth of their street price-- e.g. riots, mayhem, public urination, motor vehicles plowing through crowds of people, baby carriages and mothers of young children trampled underfoot, and worst of all, mass backsies. Faithful viewer Royce was the first of dozens to point out the utter chaos that erupted due to Henrico's ill-advised plan to sell easily-eBayable and -hockable electronic gear at rock-bottom prices on a first-come, first-served basis. CNN has more details on mankind at its nadir, while the Richmond Times-Dispatch has photos of the insanity and NBC12 has-- you know you want it-- video!

Much as we'd like to think that the citizenry of Henrico County regressed to violence and poor personal hygiene because of their deep-rooted love of Apple's products (i.e. "Those four-year-old iBooks are so fly, I'm willing to publicly wet myself and then swing a folding chair at a grandmother of five just for the privilege of buying one"), the truth of the matter is that most of the frenzied customers were probably just looking for a quick way to turn $50 into $300 or more without having to spend all that time tediously scratching the silver stuff off of instant lottery tickets. Still, it's free publicity for Apple, and while we feel really sorry for the seventeen people who were injured and that one lady who lost a flip-flop, we're going to try to look at the bright side. Given Henrico County's defection to Dells and Cobb County canceling its iBook program amid claims of deception and back-room shenanigans, we figure we're entitled.

Not that it's all bad news on the Apple-in-education front; Macworld UK reports that, in the UK, at least, Apple's share in schools is experiencing "major growth" and now represents 11 percent of the market. And in a few years' time, when some UK school district unloads a slew of used iBooks for £30 apiece, you can bet that the Brits will be far more polite while stomping each other and soiling themselves for cheap laptoppage.

 
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A Sick Cow Getting Sicker (8/17/05)
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Meanwhile, evidently it's still a lousy time to be any computer manufacturer whose name doesn't rhyme with "Snapple™." Okay, sure, Hewlett-Packard just posted better-than-expected results (and who are we to complain, since Apple's stock got a nice little boost from that bit of news?), but we'll call that the exception that proves the rule. After all, remember when Dell announced disappointing quarterly earnings last week, prompting an amusing little stock price plunge? Well, next in line to sashay down the Catwalk of Shame is Gateway, which did, in fact, post a profit-- its first in over three solid years, incidentally-- but painted a dire portrait of future earnings and consequently saw its stock plummet by 78 cents. That may not sound like much, but GTW was already so firmly in the toilet that a loss of 78 cents per share represents a whopping 20 percent drop. Oooooh, hurty.

Not that the news was all bad from Cow Country; according to the Wall Street Journal, Gateway actually reported "booming sales of personal computers." Unfortunately, the company also reported a terrifying increase in inventory levels, massive share dilution, and skyrocketing accounts receivable-- and indicated far less rosiness moving forward due to those pesky "pricing and component-cost pressures" that are the personal bugbears of all computer manufacturers whose strategy hinges largely on buying the cheapest parts available, bolting them together, and selling them with razor-thin margins in hopes of beating competitors on price and making up the difference in volume. Add in the fact that most of Gateway's $17 million quarterly profit came in the form of a $15 million settlement from Microsoft (most of which it can only spend on marketing, apparently), and Gateway's long-awaited return to profitability seems like little more than a freak accident of circumstance. And Wall Street knows it.

If you're somehow surprised by this turn of events, you clearly haven't been paying much attention to Gateway in recent years. Then again, who has? This is a company that did so poorly, it was forced to amputate all foreign offices, had to shut down its entire chain of retail stores, tried to keep afloat by selling cheap TV sets, thought it would be good for its image and brand to launch an extensive marketing campaign dedicated to informing the buying public that it was a company run by a talking cow, and finally only survived by more or less getting bought out by, of all entities, eMachines. You know you're in trouble when your savior is a company made famous by shipping crappy little sub-$400 Wintels slapped together from potato scrapings and peat moss. Indeed, forget the days of yore when only Apple was fit to wear the "beleaguered" mantle; if anything these days, Gateway is the Uberbeleaguered.

Do we seem a little too happy about all that? Guilty as charged. Honestly, we don't actually have anything personal against Gateway itself, but we can't help rejoicing in its misery. See, back in the late '90s, there was a sad little man who, despite being a rabid Wintel fan, actually read AtAT on a regular basis. Why? Apparently just so he could send us hate mail practically every single day, gloating over every misstep Apple made (real or imagined) and insisting over and over again that Apple would soon go out of business and Gateway would rule the roost. So are we pleased that Apple is currently worth over 32 times Gateway's market cap?

Yes. Yes we are. Ahhhh, it's good to be petty...

 
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I Can't Get No (Da-na-naa) (8/17/05)
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Speaking of Dell's recent fall from grace (well, okay, it was more of a dainty stumble), wouldja believe that there almost seems to be some sort of actual correlation between a computer company's customer satisfaction levels and the performance of its stock? We know, it's weird-- it's almost like Wall Street is doing something logical for once. When the possibility occurred to us, we admit we had to lie down for a while until the feelings of dizziness passed. Then we ate an entire one-pound bag of Twizzlers and everything was okay again.

But leaving aside the miraculous restorative powers of a simple strawberry-flavored twisty confection, check this out: Bloomberg reports that the University of Michigan's American Customer Satisfaction Index ranks Dell a 74, which represents a 6.3 percent drop from its year-ago score of 79, and the lowest score Dell's received since 1998. Claes Fornell, head of the National Quality Research Center which assembles the index based on a poll of 80,000 consumers, describes Dell's decline as "dramatic" and blames "call center problems, including long wait times and difficulty with consumers getting their questions answered." (It was probably also a bad move on Dell's part to replace all of its call center staff with talkative parrots and small children wielding See 'n' Say Farmer Says toys, but did they listen when we warned them? Nnnnoooooo...) Claes also notes that "consumers are also questioning the reliability of their PCs." Whuh-oh, sounds like trouble in paradise; when his customers start focusing on reliability, it's time for Mike Dell to flee for the hills.

Apple, meanwhile, continues to top the charts with its score of 81-- the highest score in the index, unchanged from last year, and still Apple's best result in the index's 11-year history. This comes as no particular surprise to us, seeing as our own latest experience with Apple's customer service is progressing smoothly; the Genius-on-duty at the Apple Store Northshore Monday night believed us when we told him that our iPod's hold switch was flaky, even though we couldn't demonstrate it in front of him. He put us down for a free warranty replacement with zero hassle. Unfortunately, due to a recent run on replacement iPods, we have to wait until next week to make the swap, but since our iPod is merely sick and not actually dead, that barely inconveniences us at all. We couldn't ask for much more. Well, maybe a cocktail. And a pony. But all in all, we were pretty satisfied with what we got.

Now, here's the freaky part: Apple, whose customer satisfaction score tops the industry, has seen its stock price balloon 48 percent this year already. Dell, meanwhile, whose score dropped significantly since last year, also happens to be down 13 percent in the stock market in 2005. It all actually makes sense. Spooky, isn't it? Alert the media!

 
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