Stopped Clock

There’s a streak of incredulity in the old inbox regarding this item wherein I agreed with Jim Cramer’s take on Apple, which (the incredulity) stems from the fact that Cramer can be a bit of a buffoon, and/or because as recently as 29 January he was recommending selling Apple, which was at the time selling for like $131 a share and which at this writing is at $169.

But, (a) that 29 January piece was about the tech sector as a whole, not Apple in particular, and most of the stocks Cramer warned about in that piece (e.g. Dell, Garmin, Google, Microsoft, Texas Instruments, and VMware) are in fact down or flat since then; and (b) even if Cramer is often or even usually wrong about Apple, it doesn’t mean he isn’t right this time.

I didn’t say “Jim Cramer is always right”, just that he’s exactly right on this one particular point: that young people — by which let’s say we mean college-aged and younger — are buying Apple products in both remarkable numbers and with remarkable devotion. Apple’s strength in this market is both wide and deep, and it includes both iPods and Macs. (I suspect students are a big reason why Apple’s laptop sales are growing so much faster than their desktop sales.¹) And, investor-strategy-wise, I also think Cramer’s right that this particular point (Apple’s popularity and iconic status in the youth market) is one that most Apple analysts are overlooking or underestimating.

It’s a potential gold mine. The younger one is, the more disproportionately one tends to care about what’s cool.² Apple’s kit is very cool, and their competitors’ kit ranges from “not cool” to “totally lame”. When you’re old and everyone around you is doing or buying something you don’t understand, you think they’re assholes; when you’re young, you do it/buy one, too. They don’t have preconceptions (or misconceptions) about Macs dating from the ’90s or ’80s because anything pre-iPod is prehistoric from their perspective.

1. For the just-released-yesterday Q2 2008, Apple’s Mac sales were up 51% over the same quarter a year ago. But desktops (iMacs, Mac Minis, and Mac Pros) were up “just” 37%, compared to 61% for laptops. (Source.) ↩

2. Or as the kids themselves are saying, “dyson”. ↩

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