Jeff Ray: New iPad Illustrates Shift In Middle Class Jobs
DALLAS (CBSDFW.COM) – Before we even talk about the new iPad, let’s look at the list of the highest-valued companies in America: Apple, Inc. is No. 1.
On Thursday, their stock briefly hit $600 a share, analysts think it could go as high as $700. If you know about P/E ratio, then consider that Apple has a lower P/E than IBM or Google. The Cupertino, Calif. company remains the world’s most valuable company, with a market capitalization of $540.7 billion.
And it actually MAKES very little; it designs, markets and sells products and writes software. Apple has about 47,000 employees in America. Apple contracts out its production, meaning it doesn’t invest in factories but has other companies make their products. The company responsible for the iPad (and iPhone) is a Chinese company called FoxConn. Industry analysts estimate about 700,000 people make Apple products, they are just not Apple employees or work in Apple factories. Nor do they work in America.
So the biggest company (by value) in America doesn’t manufacture in America. If this isn’t a snap shot of where the middle class in America is heading (toward sales, service,design and into the arms of an iPad) I don’t what is. Its the middle class (largely) buying the iPad and the future that represents (more business applications using the iPad platform) is what is driving the stock price of Apple, Inc.
The 3rd generation iPad came out Friday. Don’t look here for a review (here is a great one by Walter Mossberg of the Wall Street Journal.) I will tell you that the display on the new iPad (just called iPad, no “3” or “S”) is absolutely stunning and the best in the marketplace right now. It also is the first 4G product by Apple, so if you get the more expensive version you’ll enjoy download speeds that likely surpass your Internet at home. Safe to say the upgrades are enough for people to stand in line.
Apple released the new iPad in nine countries Friday, there is an industry insider forecast of 2.5 million units sold in the three days period ending Sunday night. That’s about 1.2 BILLION dollars in sales (about what Wal-Mart does per day through 8,500 stores).
They have already sold 55 million iPads (in only two years) and have between 60 to 70 percent of the tablet market. It is predicted that they’ll sell 65 million this year alone. You know you are doing something right if people will stand in line to spend $500 for something that you sell.
This is more than just a gadget. One of the reasons Wall Street is so bullish on the iPad is because of business applications.
In the line today we talked to a real estate agent whose company wrote an iPad app that produces closing contracts. We talked to a medical sales rep who is going to stop carrying around eight catalogs of product-line and put everything in her new (and first) iPad. So instead of walking around with half-a-dozen phone books in paper weight she’ll walk around with one iPad. If the client is interested in something she’ll send them a link or a screen shot.
Next week I’m doing a story on a construction company that no longer prints out the blueprints. Yes, they are using iPads on construction sites to take the “print” out of “blueprint”. The applications for tablets are almost endless and the technology (and therefore capacity) is expanding. The expansion is the application of a new technology in a thousand different ways. Most of those who utilize an iPad in the business place are white-collar information and technology workers. The market is demanding efficiency and the iPad is finding a way to get it.
In many ways, the iPad growth and bright future is pointing at the direction the work force in America is heading. The technology is rapidly being absorbed in the white collar world. Meanwhile, there is hardly a blue collar American job making the technology.
We also talked to a business owner who, like Apple, runs his production in China. He bought two iPads, one for him and one for one of his employees in China. In fact, his co-worker watched via Facetime (on his iPhone 4s) the entire transaction. He’ll get his iPad next week when his American boss travels there. When the iPad went on sale on Friday it was available in nine different countries. Twenty-five more countries will be added starting next Friday. China is not on the list. Yes the iPad is made in China but you can’t buy one there, not yet at least. Where the world is mostly white collar there are iPads. Where they are made there are few.
No wonder people stand in line for one. Who would have thought that the newest iPad would be cheaper than the latest stock share? And that Apple stock price? The next big “tech event” is this October or November when Apple rolls out its iPhone 5 on the 4G network. They’ll sell a million of them. Probably on the first day.