How Apple turned the fountain of youth into a fountain of cash (Digital Trends)

College students have never been more popular than today. No, not in terms of Facebook friends, although that’s likely true, too. Rather, it’s because of their role in the consumer electronics market. Every major CE manufacturer is targeting their demographic. David Roman, the new CMO at Lenovo, admitted recently that “the only way to build a consumer brand is to be relevant to the youth market,” however, the youth market tends to be elusive to everyone but Apple.

Older generations, either because they want to be hip or because they don’t understand fast-changing technologies, are looking to 18- to 24-year-olds for direction. Apple is right there, attracting a wide spectrum of consumers. The company’s products “just work,” which appeals to the non tech-savvy crowd, but their offerings also have sleek designs, which appeals to the most tech-savvy of users. In a February survey, comScore found that nearly half of U.S iPad users make more than $100,000 per year. I don’t know too many college students making that kind of money. Although Apple markets the iPad to younger generations and employs young staff members at its retail branches, the truth is that most Apple customers are closer to 40 than 20. More than 50 percent of iPad users in the U.S. are over 35-years-old, while 27 percent are 25-34, and just 15.2 percent are 18 to 24.

Who is the iPad User?

Lesson for manufacturers: Target 18 to 24-year-olds and their parents will follow.

The best thing for MacBook sales has been the success of Apple’s entry-level iDevices; the iPod, iPhone, and iPad, which serve as a way to introduce mainstream PC users to the Apple brand and iOS platform, boosting upstream sales. In its fiscal Q2, Apple posted $24.67 billion in revenue (up 83 percent) and sold 2.75 million MacBooks (up 53 percent, year on year), 4.69 million iPads, and 18.65 million iPhones (up 113 percent year on year). So it’s no surprise that every consumer electronics manufacturer in the world is having meetings trying to figure out how to be more like Apple. If they’re not, they should be! Did I mention $24.67 billion in quarterly sales?!

People forget that the MacBook Air did not sell well until Apple reduced the price and offered an 11-inch option for less than $1,000. Apple has since had success with its MacBook Air line, and shortly after, a flood of copycats arrived, driving down the average price of 11-inch notebooks. After all, if Apple is selling that size, that must be what consumers want, right?

Average notebook price by display size

Apple sales are spurred by the success of the company’s retail stores and competitors have taken notice. Microsoft hired George Blankenship, former Apple real estate chief, to launch its retail outlets. In April, Sony began revamping its Sony Style stores with a new format complete with white display platforms and increased customer interaction, closely mirroring Apple’s format. And JC Penney shares rose over 17 percent in one day, in conjunction with the recent news that Ron Johnson, former Apple Senior VP of retail, would be taking over as CEO. Even shareholders believe that copying Apple can pay dividends (pun intended).

Competitors’ products have begun to resemble Apple’s products. Intel recently announced its “ultrabook” concept, which the company expects to make up 40 percent of the notebook market by 2012. Ultrabooks are being marketed as thin, portable, long battery life, quick startup time… sound familiar? They’re not ultra-small or ultra-cheap, but they’re ultra-similar to Apple’s MacBook Air and just about all tablets. Intel currently has an 80 percent share of the notebook market, so it has the leverage to tell manufacturers what to do. That said, the company’s 40 percent goal for ultrabooks is ambitious (read: a dream) so why not bet on Apple?

Apple’s competitors are beginning to adopt the company’s strategies:

Lenovo’s global rebranding effort is focused on showing what its products can do, rather than just its specifications and what it looks like.Samsung has been searching for a popular and user-friendly operating system, partnering with Google and fully embracing both Android and Chrome.Sony, in addition to improving its retail stores, continues to focus on stylish designs and using its other entertainment products including TVs, Blu-ray players, cameras, camcorders, and even its Playstation consoles, to create a seamless entertainment experience.Intel is bringing user experience to the component level with its ultrabook chips, which will allow a wide range of manufacturers to take advantage of the technology.HP is creating an ecosystem around webOS, allowing multiple devices and form factors to access and sync content.Henry Ford, who made the automobile popular in the early 1900?s admitted, “If I had asked the public what they wanted, they would have said a faster horse.” In the same way that Ford disrupted the burgeoning horse industry, Apple continues to disrupt markets (smartphone, gaming, music, PC), while creating new ones all together (tablet). In 1998, Steve Jobs said, “It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.” He says innovation is about “the people you have, how you’re led and how much you get it.”

Apple gets it. In fact, Apple designers get the youth market so well that they’re able to tell them what they want before they know they want it. And that would be really annoying if sales didn’t prove them right each quarter.

About the author: Deron Kershaw is a market analyst for Gap Intelligence, a San Diego-based independent technology research firm with emphasis in helping product manufacturers and retailers understand current retail market trends in order to respond to customer demands as they occur. He can be reached at dkershaw@gapintelligence.com.

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Italy promotes vocational education to match youth with jobs (Reuters)

ROME (Reuters) – Recruiters at Italian defense and aerospace firm Finmeccanica have jobs to offer but can't find the right people, despite high youth unemployment in the euro zone's third-largest economy.

Jobs come up in Italy in production, logistics, aircraft fitting and maintenance, but personnel manager Francesco Mantovani says the education system often fails to supply enough competent candidates.

"It's difficult to find the technicians we need," he said. "It's above all an issue of quality."

A new system of university-level technical training is due to be launched this year to help bridge the gap that threatens Italy's productivity and competitiveness, and to try and overcome a cultural bias against vocational education.

A mismatch between education choices and the skills Italian businesses need has led employers' groups to complain they lack 110,000 qualified technicians every year, while more than a quarter of young people are out of work.

He said that they have fewer problems in other countries where they operate such as Britain and France.

But convincing young people of the appeal and prospects of a technical education may be a long struggle due to the prestige attached to intellectual work and common views that humanities courses are broader, easier and more interesting.

"I prefer a more general education, technical courses are too specialized," said Jacopo Cenciotti, a 25-year old student of communication. "I like talking to people whereas I think technical jobs are more individual manual work."

CULTURAL PROBLEM

To try and help more people gain needed skills, 58 higher education institutes plan to start offering two-year technical courses this year leading to a diploma. They are modeled on Germany's Fachhochschulen and France's Instituts Universitaires de Technologie (IUTs).

More than 30 percent of Italian graduates between 25-34 years old are unemployed, but poor prospects are not enough to put students off their favorite subjects, and many avoid technical courses because they think they are too difficult.

"I can't get to grips with technical stuff, it's useless trying," said 21-year-old Fabio Colace.

Even people who are more inclined to manual work at a young age are often persuaded into the more traditional route of high school and then university, as opposed to technical training leading straight to a job, due to academic prestige.

"It's a cultural problem, a widely diffused view that technical education is lower in the hierarchy of studies," said Alberto Barcella, who deals with school and education issues for Italian business group Confindustria.

More than half of Italian graduates are in the humanities and social sciences field, a higher rate than in most of its Western European peers, according to the European Union statistics agency Eurostat.

Italy has a rich tradition of skilled trades of all kinds and a host of highly regarded engineering firms but business leaders fear not enough skilled labor is being replaced by younger generations.

With one of the world's lowest birthrates and an aging population, Italy's standing as the second manufacturing producer in Europe after Germany is at stake, said Barcella.

He said recruitment from abroad was limited because Italy's mostly small and medium sized companies lack the experience and know-how for hiring foreign labor.

Eurostat figures show the number of tertiary-level graduates in science and technology per 1000 inhabitants in their 20s is about 11 in Italy, compared to 18 in Britain, 20 in France and an EU average of 14.

Only two thirds of Italian graduates under 35 are working, compared to nearly 90 percent in Britain, Germany and France, according to figures from research institute Censis.

HUMAN CAPITAL

About 22 percent of Italian graduates studied science and engineering, Eurostat figures show, slightly below rates in France and Germany. But Italy also lags in the development of technical training as an alternative route to university.

Mantovani said about half of managers surveyed within the Finmeccanica group were not fully satisfied with people selected for technical roles due to lacking skills, and they had to invest a lot in extra training for employees.

"A better solution would be to carry out this training before they join the firm," he said.

That is the aim of the new technical courses.

Until now, advanced technical education in Italy has been limited to shorter, temporary courses launched by local authorities and lacking appeal and prestige for students, organizers of the new scheme said.

About 14 percent of all Italians hold a tertiary degree, half the average of developed countries in general. The technical diplomas should increase the number of people finishing higher education.

Students will learn skills for sectors such as sustainable transport, energy efficiency or export products. A third of the course will be spent working within a company such as Finmeccanica, which is cooperating with several courses.

The Organization for Economic Cooperation and Development says the plan could help boost productivity in one of the euro zone's most sluggish economies.

"This kind of institution should help develop the kind of human capital needed," said OECD economist Paul O'Brien.

Student unions have welcomed the new links with business but say education needs to maintain a degree of autonomy and that the curriculum of technical schools should be broadened to keep young people's options open.

"Education is not just a direct channel to the world of work, it is also about knowledge and knowledge is not only linked to work," said Mariano Di Palma from the Students' Union.

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