Price of corn dogs going up? Blame Steve Jobs
Don't be surprised if you walk into the corner minimart one day soon and find that the corn dogs cost $1.50, instead of 99 cents. This will have nothing to do with spiraling health-care costs, fuel prices or the federal debt. Blame Steve Jobs instead.
Seattle Times staff columnist
Don't be surprised if you walk into the corner minimart one day soon and find that the corn dogs cost $1.50, instead of 99 cents.
This will have nothing to do with spiraling health-care costs, fuel prices or the federal debt.
Blame Steve Jobs instead.
The jaw-dropping profit he reported last week — Apple netted $2.4 billion per month last quarter as iPad sales soared 183 percent — has to come from somewhere.
Microsoft used to get grief for funneling all the profits of the computer industry to Redmond. Maybe that will happen again if Windows 8 and Nokia Windows phones soar. But now the vortex is in Cupertino, Calif.
Like millions of affluent people around the world, the minimart owner will buy an iPad this year. She'll justify the purchase because it seems like a business tool, like her smartphone and PC.
When she gushes about the amazing new gadget, the store's cashier will persuade her to buy another iPad for the business. The cashier will argue that productivity will improve because there are great apps for tracking inventory and the device will increase foot traffic by helping the store become more engaged with social media.
The store has spotty Wi-Fi and the owner is too busy to mess with the wireless setup, so she'll buy iPads with 3G cellular service, which start at $629 and have $15 to $25 per month data plans.
About the time the cashier begins sending tweets about two-for-$2 corn-dog specials, Apple will introduce an "S" model of the iPad that will be even more fantastic. The owner will buy one of those and give her husband the first one.
The cashier will be bugging her for a raise, prompted by Netflix raising the price of the service he uses to get DVDs at home and streaming video on the iPad at work.
Nielsen research has found people use their PCs more, rather than less, after buying an iPad. At the same time, small and large businesses around the world are upgrading their PCs, despite Apple's tablet gains.
This upgrade cycle was confirmed in last week's earnings reports by Intel and Microsoft and recent reports from the firms that track global PC sales.
It's no wonder businesses are buying more PCs. Microsoft is phasing out support for the Windows XP machines they nursed through the uncertain years of Windows Vista and until Windows 7 proved itself.
Besides, it takes forever to load iTunes and sync an iPad on a creaky old XP machine.
When the owner of the minimart gets her new PC, she'll discover that the manufacturer of her printer declined to produce a Windows 7 driver for that model, forcing her to buy a new printer.
The minimart will end up paying $2,000 to Apple, $900 a year to AT&T, $500 to Dell, $100 to Microsoft and $100 to the printer company.
With higher prices of corn, pork and cooking oil, the owner's profit on a corn dog is down to about 35 cents. So the store will have to sell an extra 10,285 corn dogs to cover her new gadgets over the next year, or 28 more every day.
Meanwhile. the increased production of printers will enable the manager of an electronics factory in China to buy an iPad. Then his sales manager will ask for one to increase productivity and social engagement.
The factory's finance and operations managers will be envious and worry they look out of touch if they don't bring iPads to company meetings, so more will be ordered from Apple.
Last quarter, Apple sales in China grew sixfold and international sales accounted for 62 percent of its overall sales.
Fortunately, the new gadgets really will increase productivity and social engagement.
Instead of going down to the corner store, these people will have lunch at their desks and use their iPads to send tweets griping about the ridiculous price of corn dogs lately.
Brier Dudley's column appears Mondays. Reach him at 206-515-5687 or email@example.com.
About Brier Dudley
Brier Dudley offers a critical look at technology and business issues affecting the Northwest.
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