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Apple's Goals

post #1 of 9
Thread Starter 
Anyone frequenting these boards has been bound to express frustation at Apple in some way. I believe the reason is that Apple simply doesn't think the way we do.

IMO, some of the most posted complaints about Apple are processor speed and price. To many of us, the fact that Apple has allowed itself to market machines with a 1GHZ+ deficit that cost $3,500 without a monitor is ABSURD. The fact that the iPod costs $399 is ridiculous. The portables are more competitive, but the desktops and accesories are not based in reality.

All these things make you and I go "Apple, what the F**k are you doing???.....You have the highest profit margin in the industry and a shrinking market share...DUH!!!!" We think the solution is to lower prices in order the gain that market share back.....BUT:

I am starting to think that Apple really doesn't care that much about market share. They have millions of customers that are paying a premium for the products. Granted, they realize that they need to make some overtures such as the retail stores to maintain and slightly increase their share of the market. But, I think Apple realizes that they are making money even in a poor economy. I think they are actually foresaking market share in order to maintain ludicrous porfits. And, when the economy turns around, they know that they wil be raking in $200-300 million a quarter again.

This obviously will not lead to large expansion of their market share. But I think they may be saying "Who the hell wants that?" By maintaining a customer base they already have (one which I believe is less influenced by the economy than the Saturday morning soccer mom's buying Dells) they ensure profitability. They won't go in the toilet when the economy has its next downturn. And, they have the cash and talent to survive comfortably in the niche market. They have a powerful brand name and may indeed be becoming a yuppie luxury brand.

I do think that Apple could start chipping away at market share by lowering prices, increasing advertising and dealing with the MHZ gap more aggressively. But, I don't think that a huge market share is their goal. They may just want to maintain the millions of fanatics that they already have (in addition to the ed market and the pro market) These are people like you and I that are saying things like "maybe I'll drive 130 miles to the nearest Apple store for a day trip" or "when the G5 comes out I'm going to get it and nice big thousand dollar LCD screen because that WILL ROCK!"

You get the point. What do you guys think?
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post #2 of 9
I share most of your analysis on Apple's business strategy. Of course they will say "5 down, 95 to go" because they are expected to say something like that to please financial analysts and casual shareholders. And it's generally clever - it shows comittment. Shareholders in the know and upper management at Apple understand that Apple will never reach more than, say, 10 per cent PC market share. And that's an absolut maximum. Premium brands rarely have larger market share than that.

Personally, I have no problem what so ever with the small market share, as long as I don't miss out on stuff that I desperately need or want. So far, that's not the case.
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post #3 of 9
[quote]They have a powerful brand name and may indeed be becoming a yuppie luxury brand. <hr></blockquote>

Bingo.

And, if that wasn't the case, I would be seriously considering buying another Mac in the next year or so.
post #4 of 9
"They have a powerful brand name and may indeed be becoming a yuppie luxury brand."

Yep, I must fit that market...unemployed, no car, no girlfriend...but a brand new iMac that I'll be paying off for the next two years....(working on that girlfriend thing.... )

If I was a quantum physicist...sure I'd slobber for more speed but I'm not. If I was a basement dwelling, nose picking gamer/troll I'd put my own machine together and praise Windows XP to the gods.

But I'm not, I'm a former loser and now I am a Mac user...a damn proud one at that.
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post #5 of 9
I don't agree with that analysis.

First of all, yes, shareholders like to hear "5 down, 95 to go." However, they really like to hear 30% profit margins and ready access to $4bn cash. The latter, especially, means that they can ride out mistakes, miscalculations and tough times, and shareholders like that.

There was - and there is - no quick fix for the MHz gap. The 7450 was the first attempt to close the gap. More are on the way. But processor design takes time. I don't think anyone expected the 7400 to run into a wall the way it did. Apple has had to work with what was available to them.

The retail initiative makes a lot more sense for increasing market share than merely lowering prices. Everyone claims ease of use. Everyone claims to be the ultimate platform for photos, movies, etc. Pictures of Apple machines do not do them justice, either in terms of thoughtful, practical touches or in terms of aesthetics. Marketing alone is helpless here. People need to see Macs, to see them in action, to use them, to see what the advantages are. On a more primal level, people like to see and touch what they're going to buy. I'm not expecting a huge spike in Apple's market share from the stores, especially not now, but in this market even an uptick would be good news.

As for cutting prices, the cost of the entry-level TiBook just dropped $400. Not bad. The desktops - and especially the iMac - are lagging in price/performance, but the solution there is to boost performance, not cut the price. The more expensive iMacs have always been the best sellers. There seems to be a sweet spot pricewise at about $1300 (the price of the original iMac, not coincidentally) and Apple is wise to design their machines to meet it.
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post #6 of 9
I concur. But what Apple needs to do is to expand its brand to yuppie business owners. We have a UNIX core now, we should be utilising it with an Enterprise push.

Hardcore servers, terminals, business workstations. The Cube had great potential, but it needed to be under $1000 for the biz workstation, and under $500 for a terminal (OS X Netboot).

Even if it meant making a spinoff brand, the Apple name would be behind that.

Apple also needs to focus on developing the digital hub strategy. I did a presentation in a class, "Science of Design", and all these people had their mouths open when I was telling them all the capabilites of the digital hub. The digital camera hook up, the DVD burning, iMovie, iTunes, Disc Burner, iPod. They LOVED it, and I had several people asking me how much it would cost to get a Mac afterwards. Apple needs to keep that momentum and deliver on its promises by keeping up with consumer technology via software applications and appliances, or even rebranded appliances.
David Egger
Co-Founder MacMonkey.com
First Year Student DePauw University
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David Egger
Co-Founder MacMonkey.com
First Year Student DePauw University
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post #7 of 9
[quote]Originally posted by macmonkey:
<strong>
Hardcore servers, terminals, business workstations. The Cube had great potential, but it needed to be under $1000 for the biz workstation, and under $500 for a terminal (OS X Netboot).
.</strong><hr></blockquote>

Hardcore like Sun or IBM?? I don't think sooo. Apple has always been a desktop and multimedia platform. You will never see an IT department buying Macs for server applications. Apple should market the fact that Macs are Kewl machines to own.
post #8 of 9
Then use a spinoff brand name. The Enterprise market is a major cash cow. If the G5 is as big as it sounds, 64 way G5 servers running an ultra tight version of OS X would kick some serious ass.

IT Departments don't buy Apple stuff, because they don't offer serious networking stuff. You get little to no choice on an Apple server, and they're not that powerful. Also, they don't offer rackmount stuff, that's a big key. Saying that it will fail because IT departments don't buy Macs for servers now is like saying that Ford makes crappy computers. They don't offer that product--so no real bearing can be given.
David Egger
Co-Founder MacMonkey.com
First Year Student DePauw University
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David Egger
Co-Founder MacMonkey.com
First Year Student DePauw University
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post #9 of 9
[quote] Saying that it will fail because IT departments don't buy Macs for servers now is like saying that Ford makes crappy computers. They don't offer that product--so no real bearing can be given.<hr></blockquote>

Look at the Apple Store page, just below "Acessories" and to the left of "Select Software".
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