In early 2008, Apple, Inc. (ticker: aapl), announced record Q1 2008 results. At the time shares were trading around the $200 mark. Shortly thereafter the stock plummeted about 50% on speculation that consumer spending was rapidly contracting and that given the “premium” pricing of Apple products that the company might see a downturn in sales. I guess analysts, speculation, and their ability to assume must be appreciated by many, and I am in fact one of those folks. After all, because of their speculation, we all got the chance to buy some stock in one of the most profitable companies in the world at about a 50% discount.

So, last week Apple, Inc. announced Q2 2008 results and again beat “The Street” and set a new record for Q2 results. Of course Apple stock has climbed its way back up in price to around $163 per share prior to yesterdays results disclosure. This leaves open the question of why people are in fact buying more Apple products than ever before, in spite of the speculation and assumptions that the analysts make. The answer is likely very complex but I’m going to offer my opinion about why this is the case.

Its never been easier to “test drive” an Apple product. With Apple’s growing retail presence their visibility has grown significantly and many folks have developed great curiosity about what exactly the Apple Store is all about. If you’ve never visited an Apple Retail store you should do so. Its not about computer shopping, its about experiencing Apple. But in my opinion, this in and of itself is only a supporting factor in the real reason consumer continue to buy Apple products.

I would say that the biggest reason that people are willing to pay a “premium” for Apple products is that once they experience the Apple Store, spend time checking out a Mac, iPod, or iPhone, they realize that the products are not priced at a “premium” at all, but in fact are probably being sold for far less than they could be. I know that there is at least one person who doesn’t believe what I am saying here so I would like to issue you a challenge. Launch your favorite web browser, open 3 new tabs, and navigate to the Apple Store online, the Dell Store online, and the HP Store online in each tab respectively. Choose a standard/stock iMac, MacBook, or MacBook Pro from the Apple Store online and then spec out a Dell and an HP so that it will come out of the box equipped and able to accomplish the same things that the Mac can accomplish right out of the box. Some things to remember when you do this:

1. Match hardware specs as close as possible, ie, Processor speed, RAM, Hard Drive size, display size, integrated camera for video chatting, etc.

2. Don’t forget to include the professional version of the Windows OS either XP or Vista, that is if you can make a determination about which of the 4 or 5 Vista professional versions is comparable. Feel free to err on the side of lower price if you really want to try and beat the price of the Mac.

When you have navigated through the 40 or so pages on which you configure the Dell and HP machines take a look their cost compared to the Mac. You’ll likely see that the Dell and HP machines end up costing more than the Mac. Aside from that, consider the TCO, or total cost of ownership from one simple perspective and that is expected length of service. I don’t know about you, but my experience has been that with Windows PC’s I’m lucky to get 2 to 3 years service. With my Macs, well, lets put it this way, my oldest machine is now a 9 year old PowerPC G4 and I’m running the most recent version of Tiger OS X 10.4.11. The only reason I haven’t upgraded that machine to Leopard is because I utilize it to support my clients that are still running Tiger. Anyone out there running Vista or even XP Professional on a 9 year old Windows box? I suppose its possible, but certainly not probable, and certainly not at all with Vista.

The bottom line is this, Apple products are not priced at a “premium”, they are priced based on the value that they bring to the end user. Consumers are far more educated these days and they understand that just because one product costs half what another costs does not mean its the best option. Couple that with the ability to actually interact with and experience the product before you buy and there you go my friends, the only question from most consumers is, “so I can leave with my new Mac today?”.