No. of Recommendations: 20
what is more worrisome ?
A. he thinks $10k can buy a chevy
(i dont think even warren would drive a used chevy spark)
B. his huge investment in apple depends on a non-scientific anecdotal survey for its qualitative support?
Neither worries me.
A. He doesn't think $10k buys a Chevy, he just thinks people are so attached to their iPhones, they would turn down 10x the value of an iPhone if it meant never buying another one, but they would probably not turn down $10k if it just meant switching from Ford to Chevy. Neither the Android phone nor the Chevy car actually needs to cost $10k for that to be true.
And in fact, the scale issue makes the allegeance seem even stronger. If you compare the $10k incentive to the cost of the item, if you would turn down 10x the value of the iPhone, an equal degree of brand loyalty should mean you would turn down $500,000 to never buy another F-150 - imagine.
B. We don't know exactly what factors his huge investment depends on, although brand allegeance is probably one of them. And I don't think any survey was involved - it's just an illustration of the fanatical devotion of Apple customers to their brand. We don't know what other factors he has also considered, but they likely include the low price:earnings ratio (at the time of purchase), the solid debt-free financials, the longevity of their brand's strength, the board's cash return policies, his confidence in the board, their conservative investments in R&D (cf Facebook and Google), the recurring nature of the revenue stream, the pivotal role of a smartphone in people's lives (in addition to their brand preference), etc. etc.
dtb
