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Apple needs G5 says CEO of Europe's Largest Mac dealer - Page 2

post #41 of 156
[quote]Originally posted by KidRed:
<strong>...like Bose and Bang Wolfsen.</strong><hr></blockquote>

You meant, <a href="http://www.bang-olufsen.com/" target="_blank">Bang & Olufsen</a>, right? I agree.
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post #42 of 156
R&D as a percentage of sales is how you measure it.

No...it isn't. Think, if Apple suddenly started selling 10x as many machines, would their R&D have to increase at all? No.

So saying that Apple can't lower prices because of high R&D costs is BS. Its a completely circular argument. The *reason* for the R&D costs that you call "high" is that Apple sells very few machines.

Dell is able to amortize their cost over many more machines, because they sell high-quality, fast systems with great support and at fair and at times more than fair prices.

Dell is growing, Apple is shrinking. That is a fact. If you still want to say Apple has the better business model, go ahead.
post #43 of 156
[quote]Originally posted by crayz:
<strong>No...it isn't. Think, if Apple suddenly started selling 10x as many machines, would their R&D have to increase at all? No.</strong><hr></blockquote>

Agreed...good point.

[quote]<strong>Dell is growing, Apple is shrinking. That is a fact. If you still want to say Apple has the better business model, go ahead.</strong><hr></blockquote>

I agree with your above point, but not necessarily this one. Dell and Apple are in similar markets, but with dissimilar customers. While Dell's business model works for their environment, Apple need not take up that business model and falter the way Gateway, for example, is.

They need to stay in their market, target their customer base, and gain as many switchers as they can. I think they are doing just fine. With a PPC970 move, I think they will be doing much better.
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post #44 of 156
[quote]Originally posted by crayz:
<strong>R&D as a percentage of sales is how you measure it.

No...it isn't. Think, if Apple suddenly started selling 10x as many machines, would their R&D have to increase at all? No.

So saying that Apple can't lower prices because of high R&D costs is BS. Its a completely circular argument. The *reason* for the R&D costs that you call "high" is that Apple sells very few machines.

Dell is able to amortize their cost over many more machines, because they sell high-quality, fast systems with great support and at fair and at times more than fair prices.

Dell is growing, Apple is shrinking. That is a fact. If you still want to say Apple has the better business model, go ahead.</strong><hr></blockquote>

Circular arguments are great, aren't they. If Apple was selling 10 times more machines would their prices be lower?
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I heard that geeks are a dime a dozen, I just want to find out who's been passin' out the dimes
----- Fred Blassie 1964
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post #45 of 156
[quote]Originally posted by crayz:
<strong>No...it isn't. Think, if Apple suddenly started selling 10x as many machines, would their R&D have to increase at all? No.</strong><hr></blockquote>

If Apple sold 10x as many machines their R&D cost would be very reasonable, if they could keep it the same.

You have to look at how much a company earns by investing a certain amount in R&D, and it seems that Apple needs to spend a lot on R&D to even make a decent income.

Could Apple lower their R&D? Yes.

Could Apple lower their prices because of that? Yes.

Would they earn more money? Probably not.

Dell can spend $1 on developing something and sell it for $75 - Apple can't.

Measured in dollars, Dell spend about the same as Apple, but on how many different models?

All else being equal: Apple spend much more on developing every model they sell.


[quote]Originally posted by crayz:
<strong>So saying that Apple can't lower prices because of high R&D costs is BS.</strong><hr></blockquote>

No it's not. Lower prices does not automatically mean more sales to cover (among other things) R&D.

You have to find the sweet spot where you earn the most - not sell the most.


[quote]Originally posted by crayz:
<strong>Dell is able to amortize their cost over many more machines, because they sell high-quality, fast systems with great support and at fair and at times more than fair prices.</strong><hr></blockquote>

The fun thing is that they are having a hard time earning money.

If Dell hadn't changed the way they do their quarterly reports last quarter, it would have shown a negative result of $1.6 billion.

[ 12-30-2002: Message edited by: JLL ]</p>
JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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post #46 of 156
[quote]Originally posted by JLL:
<strong>No it's not. Lower prices does not automatically mean more sales to cover (among other things) R&D.</strong><hr></blockquote>

I know we have been over this I don't know how many times, but the message clearly isn't penetrating your RDF so I will try again,

8 out of 10 serious customers who are interested in buying Macs leave empty handed from my store, we are the only store in the region and we sell at the MSRP.

8 out of 8 who don't buy a mac say price was the reason they didn't do so. As one woman said before Christmas "I don't hate Windows that much...."

I have not heard a person raise a compatability issue as their reason for not buying a mac in two years.

Price is the only real issue I hear raised by those who didn't buy a Mac,

Customers don't even seem all that worried about the lower levels of performance until they see the price.

I run just one store, in one medium sized city, but mac dealers I know across the country and around the world raise the same issue over and over again.

I am very confidant that those 8/10 who don't buy a mac because they can't justify the expense would have otherwise.

Am I to believe sales to those 80% who walk away because of price wouldn't offset decreased margins,

before you continue to vent your splean and quote tired old Apple apologist lines, why don't you have a little talk with your local apple dealer and ask them what might improve sales.
Stagflation
stag·fla·tion
Sluggish performance growth coupled with a high or rising prices
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Stagflation
stag·fla·tion
Sluggish performance growth coupled with a high or rising prices
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post #47 of 156
[quote]Originally posted by Stagflation Steve:
<strong>

I know we have been over this I don't know how many times, but the message clearly isn't penetrating your RDF so I will try again,

8 out of 10 serious customers who are interested in buying Macs leave empty handed from my store, we are the only store in the region and we sell at the MSRP.

8 out of 8 who don't buy a mac say price was the reason they didn't do so. As one woman said before Christmas "I don't hate Windows that much...."

I have not heard a person raise a compatability issue as their reason for not buying a mac in two years.

Price is the only real issue I hear raised by those who didn't buy a Mac,

Customers don't even seem all that worried about the lower levels of performance until they see the price.

I run just one store, in one medium sized city, but mac dealers I know across the country and around the world raise the same issue over and over again.

I am very confidant that those 8/10 who don't buy a mac because they can't justify the expense would have otherwise.

Am I to believe sales to those 80% who walk away because of price wouldn't offset decreased margins,

before you continue to vent your splean and quote tired old Apple apologist lines, why don't you have a little talk with your local apple dealer and ask them what might improve sales.</strong><hr></blockquote>

And the people at Apple responsible for pricing, finances and so on are doing nothing but running around with their hands to their ears

You can bet your ass that Apple are doing research on how many machines they can sell at a given price point and how much they will earn at that price point - it's basic economics.

But of course, the many 'couch economists' here are much wiser - I guess that you could get a football team into the Superbowl too.
JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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post #48 of 156
OK, let's say that Apple would sell 80% more machines by lowering their prices $300 on average:

Last quarter Apple sold 734,000 Macs and that comprised $1.094 billion of its $1.443 billion in revenue.

That's an average price of $1,490.46, and the gross margin was $393.48 per machine earning Apple $288,814,300 in gross income.

Apple posted a net loss of $45 million.

New prices and 80% more machines:

1,321,200 x $1,190.46 = $1,572,836,000 in revenue

1,321,200 x $93.48 = $123,505,800 in gross income

New net loss: $210 million.

See my point?

Edit: Regarding component prices, Dell sold 3,523,000 PCs in the US alone last quarter, and you think that Apple pays the same as Dell when they buy components?

[ 12-30-2002: Message edited by: JLL ]</p>
JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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post #49 of 156
It's hard to believe there is so much confusion over R&D and product development costs. R&D by the way also includes early stage engineering, maybe just proving a concept for a product. Much of that never sees the light of day, but it is necessary in a creative company. Product development cost is engineering and other expenses to develop a new, salable product, and accounting keeps track of it by project. So in the end, management knows the development cost for each product. A portion of a product's gross profit is considered payback for its development. When a product pays back all its development cost, it is sometimes called a cash cow.

No one outside the company gets involved with the nitty gritty of absolute costs for R&D. The meaningful figure to use for overall analysis of a company is R&D as a percentage of sales. Dell may spend more dollars for R&D, but they likely have more product types and they certainly sell more. I would also suspect that much of their R&D is spent trying to squeeze every last penny out of the manufacturing cost of their products. Market share and low manufacturing cost is why Dell is now difficult to compete with. The only way Apple can compete is to play a little different game, one that Dell is not interested in or cannot play.

I do not mean Apple is faultless. I just believe that some here are over simplifying the problem that Apple faces, and what the solution is. Apple may be in a holding pattern for a good reason. We have no way to know. Lots of good ideas also need good timing to work best.
post #50 of 156
[quote]Originally posted by JLL:
<strong>And the people at Apple responsible for pricing, finances and so on are doing nothing but running around with their hands to their ears

You can bet your ass that Apple are doing research on how many machines they can sell at a given price point and how much they will earn at that price point - it's basic economics.

But of course, the many 'couch economists' here are much wiser - I guess that you could get a football team into the Superbowl too.
</strong><hr></blockquote>

I know alot of people at Apple who are just as frustrated as I am, pricing is set by Steve Jobs and his inner circle personally, and as they demonstrate over and over again, they are further removed from reality than most highly medicated mental patients are.

Lets not forget that these are the same people who projected Apple could sell 600,000 G4 Cubes a quarter.
Stagflation
stag·fla·tion
Sluggish performance growth coupled with a high or rising prices
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Stagflation
stag·fla·tion
Sluggish performance growth coupled with a high or rising prices
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post #51 of 156
[quote]Originally posted by JLL:
<strong>OK, let's say that Apple would sell 80% more machines by lowering their prices $300 on average:

Last quarter Apple sold 734,000 Macs and that comprised $1.094 billion of its $1.443 billion in revenue.

That's an average price of $1,490.46, and the gross margin was $393.48 per machine earning Apple $288,814,300 in gross income.

Apple posted a net loss of $45 million.

New prices and 80% more machines:

1,321,200 x $1,190.46 = $1,572,836,000 in revenue

1,321,200 x $93.48 = $123,505,800 in gross income

New net loss: $210 million.

See my point?

Edit: Regarding component prices, Dell sold 3,523,000 PCs in the US alone last quarter, and you think that Apple pays the same as Dell when they buy components?
</strong><hr></blockquote>

Read a Microeconomics textbook at come back when you know what you are talking about, you are calculating a locked in expense ratio, expenses don't rise in lock step with growth.
Stagflation
stag·fla·tion
Sluggish performance growth coupled with a high or rising prices
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Stagflation
stag·fla·tion
Sluggish performance growth coupled with a high or rising prices
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post #52 of 156
[quote]Originally posted by Stagflation Steve:
<strong>

Read a Microeconomics textbook at come back when you know what you are talking about, you are calculating a locked in expense ratio, expenses don't rise in lock step with growth.</strong><hr></blockquote>

No, but 600,000 more Macs produced won't cut the costs that much (12.5% just to break even with the result of last quarter), plus most of you are asking for much more than $300 price cut.

You're talking about Apple almost doubling their market share because of price alone - get back to where you say you come from.
JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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post #53 of 156
[quote]Originally posted by JLL:
<strong>I guess that you could get a football team into the Superbowl too.</strong><hr></blockquote>

Ouch, around here, that's sore topic this morning...
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post #54 of 156
[quote]Originally posted by Rhumgod:
<strong>

Ouch, around here, that's sore topic this morning...</strong><hr></blockquote>

Sorry
JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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post #55 of 156
The problem with your calculations is that the margins are averaged, Apples margins appear artificially low because they can't sell their high end extreme high margin systems at the moment because no one wants them.

You couldn't apply your caluclations to any company that sells more than one product, and even then they are worthless because they don't account for the economics of scale.
Stagflation
stag·fla·tion
Sluggish performance growth coupled with a high or rising prices
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Stagflation
stag·fla·tion
Sluggish performance growth coupled with a high or rising prices
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post #56 of 156
[quote]Originally posted by Stagflation Steve:
<strong>

Read a Microeconomics textbook at come back when you know what you are talking about, you are calculating a locked in expense ratio, expenses don't rise in lock step with growth.</strong><hr></blockquote>

Now we're talking about something I know something about!

Stag and JLL, you both have great points. Without a doubt, lowering the price of a Mac will sell more Mac's. Without a doubt, some expenses are more fixed than others, so raising units sold will not raise those (fixed) expenses. Without a doubt, every business prices their products to maximize current and future profits.

Two points I would raise are elasticity and costs -
1) Elasticity of price
Lowering a Mac price will sell more units, but how many? Stag - how much lower would the price have to go to sell more Mac's such that the total gross margin will be greater than the current total gross margin? I would expect that the more Mac's sold will drive down some component costs, but let's not grossly over-estimate this.

CTG = (C#MacSold * Price) - (C#MacSold * cost)
NTG = (N#MacSold * LowerPrice) - (N#MacSold * (cost - smallSavings)

CTG - Current Total Gross
NTG - New Total Gross
Total Gross - (price - component costs) * units sold

Stag - what would be your educated guess at solving the NTG equation? Is there a solution where NTG &gt; CTG? According to JLL's attempt previously, there is no solution for NTG &gt; CTG.

2) Production costs.
Don't forget that Production costs can actually rise as more units are produced. This can happen when having to use less efficient manufacturers to produce needed components. For instance, more iMacs may require another source for flat panels, which might require new development engineering costs.


Let me add a couple of things -
1) Apple's costs are high due to various reasons. I'm sure some of the costs could be lowered through smart management. For instance, sell all Silicon Valley capital assets and move to Austin! But I'm also sure that Apple as a premium product producer has higher - justifiably so - costs than Dell and Gateway. So the debate would be about where is the fluff? Matsu - As the commercial goes, I bought Apple - about a 100 shares, so I'm with you about increasing profits and cutting costs. Hopefully, performance will be addressed sooner than later (PPC 970 - Please come SOON!!!)
2) Stag - I am really interested in your thoughts on price versus units sold. Also - what premium would people pay for a Mac such that sales would double/triple?

[ 12-30-2002: Message edited by: jwdawso ]</p>
-JD
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post #57 of 156
It doesn't take an MBA to know that macs are well overpriced. Business skills are still irrelevant. When I say percentage doesn't matter, I should say it doesn't matter to me as a buyer, I see the price and relative merits of the system in question, I don't care how much you spent per machine to get it that way.

You have to spend that money anyway, if you sell more, a priveledge of your own success is that you can distribute that cost over a greater number of sales. Dell does pay for Windows because they add it to my bill and I wiegh that when I look at the final price. If there's any trick, like not including shipping in the advertised price (another Dell ploy to keep the advertised price as low as possible) it doesn't last long in my eyes. I go by the check-out price, on the few cases where I've taken to quoting Dell prices I always make sure to include both the cost of shipping and of software licenses. However, I don't see where Dell ships machines without an OS, they have to pay for that license in the cost of the machine. Sure, it's passed on to us, but it impacts their ability to lower MSRP, just like R&D expenditures do. They pay for it, then you pay for it.

Is only Apple to be excused for their expenses?

And all those big geniuses at Apple are still rapidly losing market-share in education, slowly bleeding worldwide marketshare, and increasingly falling behind in price performance, despite recent attempts to get cheaper models on the market. No one is invested in Matsu.Inc, but people are invested in APPL, I should think it more important to question their business acumen rather than mine. Think about it, despite an extremely loyal fan base and outrageous prices, and a very healthy bank balance, earnings per share are miniscule and the stock price is not quite in the shitter, but waiting outside the stall -- really backed only by their cash reserves. No confidence there. This is not a company that's doing everything right, as some here would like to pretend, rather it faces significant problems.

You know that Apple gets very good component prices on everything except cases. We know that they often use lower spec (and cheaper) parts. We know that they milk their integrated Mobo's for many generations of PC hardware, and almost surely pay less in the long run for the life of the iMac's Mobo than a box builder assembling parts of newer vintage. Look at the costs. Apple does NOT have higher costs except where they stubbornly choose to -- 1) the debut of custom integrated mobos (all models except PM which neccessitate longer periods between updates in order to reduce overall cost and 2) custom enclosure which also tend to limit the updateability of consumer machines.

Some of you would like to blame industry forces for Apple prices, but that is unfair to everyone else doing an honest business in the industry. Costs affect everyone. Apple is not a little fish and they are in a better position to gt good prices than most companies out there. Their high prices are their own fault, not mine.

Some of you ought to learn to read before you question my business sense. I'm not the one doing my best to destroy what should be a tech winner, to basically fail in spite of myself.
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post #58 of 156
[quote]Originally posted by Matsu:
<strong>It doesn't take an MBA to know that macs are well overpriced. Business skills are still irrelevant. When I say percentage doesn't matter, I should say it doesn't matter to me as a buyer, I see the price and relative merits of the system in question, I don't care how much you spent per machine to get it that way. </strong><hr></blockquote>

No, it doesn't matter to you, but I don't think that Apple can sell a machine to you at the price you want and still earn money.

The amount of Macs that Apple should sell if they lower the price to a level of your desire is unrealistic.


[quote]Originally posted by Matsu:
<strong> However, I don't see where Dell ships machines without an OS, they have to pay for that license in the cost of the machine.</strong><hr></blockquote>

You can buy a Dell with the choice of Windows, Red Hat or no OS.


[quote]Originally posted by Matsu:
<strong>Think about it, despite an extremely loyal fan base and outrageous prices, and a very healthy bank balance, earnings per share are miniscule and the stock price is not quite in the shitter, but waiting outside the stall -- really backed only by their cash reserves.</strong><hr></blockquote>

Exactly, but lowering the price won't help.

Apple is in a position where they can't get processors that can compete with 'the other side', and they can lower the price that much if they still want to earn money.

The price isn't the problem - the performance is.

I'm waiting for Apple to be able to make high performing Macs at a proper price, not lowering the prices on the lower performing Macs they make today, since it IMHO isn't possible for Apple to sell that much more of the current Macs that it can cover the cost of producing them.


[quote]Originally posted by Matsu:
<strong>You know that Apple gets very good component prices on everything except cases.</strong><hr></blockquote>

But it's nowhere near the prices Dell pay - they buy six times as much.

[ 12-30-2002: Message edited by: JLL ]</p>
JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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post #59 of 156
Also you must remember that apple gives a lot away with a new Mac. You get iPhoto, iMovie, iDVD, iCal, and iTunes, plus the OS and all the other applications that are included with it. These things don't fall of trees. Then you have to remember that apple designs all their computers to look unique. They must pay for custom boxes; which include expensive plastics and medals. Like the Stainless steal the iMacs arm is made of etc. Come on guys you all know that we get more when we buy an apple. Apple doesn't need to lower prices they need to up performance. They need the 970.
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post #60 of 156
"and as they demonstrate over and over again, they are further removed from reality than most highly medicated mental patients are."



"Lets not forget that these are the same people who projected Apple could sell 600,000 G4 Cubes a quarter."

Ouch.

They need the 970 AND to reduce prices. Maybe NOT to Dell levels, but Jeez, a tower for £1,000-1,000 inc VAt (no monitor remember!) wouldn't go amiss!

Yeesh. It wasn't that long ago Apple had towers in the UK for £1,100 ish...before that audacious price hike.

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post #61 of 156
[quote]Originally posted by Lemon Bon Bon:
<strong>Yeesh. It wasn't that long ago Apple had towers in the UK for £1,100 ish...before that audacious price hike.</strong><hr></blockquote>

Given the price reductions on the other models, I don't think that a £200 price reduction on the next Power Macs are impossible - the current exchange raise will give you a £100 price reduction alone even if the price stays the same in the US.
JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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JLL

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post #62 of 156
Oh, iDunno that Apple can't lower prices and still remain profitable. There's an 899 edu iBook floating around, and that's a helluva decent deal for a well made notebook. You can't tell me that, even with a G4, a 15" LCD iMac couldn't sport the same entry level (sans the expensive battery, 2.5" HDD and laptop drive).

The eMac is really 2 years too late. What's the point now? To frustrate switchers back into the PC camp with half baked analogue boards? Take one LCD iMac, 40GB Hdd, a read only optical (DVD) and 15" TFT, put a thicker "glass" cover on the screen and perhaps lock the arm to prevent kiddies from destroying it. Instant 899 LCD machine. Good for edu (arm optionally locked) or the switcher (arm fully articulating).

And you have to think how much cheaper it would be to build a small single processor tower using AGP and PCI slots and standard drive enclosures sans monitor. 899-1299 budget tower. Better profit margins than any AIO too. You don't pay for an expensive custom case, you don't pay an LCD and the mechanicals to hold it. Just a straightforward small cube/tower with basic expansion (1 AGP, 1 PCI, 1 CPU daughtercard and accessible drive bays)

There's a lot Apple could do to reach more customers with intelligently specified configurations at more acceptable prices.
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post #63 of 156
What the **** are you smoking Matsu?

More combo-drive eMacs are sold than any other model bar the 17" iMac.

Also, the price of the iMac LCD isn't in the industrial design, but the display itself! Turning the iMac back into a "bubble boy" computer isn't going to magically drop the price to $899!!!

Schools don't want read-only drives. They want the students to be able to take home data. I know Matsu, let's use a floppy drive instead to keep the price down! That's what I would call a technological jump!

Barto

[ 12-30-2002: Message edited by: Barto ]</p>
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post #64 of 156
Or how about the really old drives with the actual floppy discs! Yea Thats it. The First floppy drive to actually be floppy...in 15 years.

...Or they could just update the current hardware and lower prices some. I mean come on its been almost a year.

knock knock!

Oh yes..Who is IT!

Oh its just your customers.

Who?

You know the guys who buy your computers...

oh... Why are you bothering me? GO away.

...
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post #65 of 156
[quote]Originally posted by Barto:
<strong>More combo-drive eMacs are sold than any other model bar the 17" iMac.

Also, the price of the iMac LCD isn't in the industrial design, but the display itself! Turning the iMac back into a "bubble boy" computer isn't going to magically drop the price to $899!!!
</strong><hr></blockquote>

1. Sales of the eMac have crashed over the last month as dealers refuse to sell them (or scare the hell out of potential customers) because of quality control issues.

2. The LCD iMac uses the least expensive 15" LCD made, the LCD used in the iBook is more expensive than the LCD used in the 15" LCD iMac by almost double

The iBook uses a very high quality high density 12" LCD display, the iMac uses a bargin basement 15" low density LCD display that is rarely seen outside extreme low end LCD displays and 'laptops' like the ECS Desknotes
Stagflation
stag·fla·tion
Sluggish performance growth coupled with a high or rising prices
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Stagflation
stag·fla·tion
Sluggish performance growth coupled with a high or rising prices
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post #66 of 156
[quote]Originally posted by Matsu:
<strong>And you have to think how much cheaper it would be to build a small single processor tower using AGP and PCI slots and standard drive enclosures sans monitor. 899-1299 budget tower. Better profit margins than any AIO too. You don't pay for an expensive custom case, you don't pay an LCD and the mechanicals to hold it. Just a straightforward small cube/tower with basic expansion (1 AGP, 1 PCI, 1 CPU daughtercard and accessible drive bays)</strong><hr></blockquote>

Now you're talking about new models - not lowering price on existing models.

I do agree that Apple need to make a couple more models, and I would personally love to see the Cube reintroduced as a business computer with a G3, low end GPU and small hard drive.
JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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post #67 of 156
"...with a G3..."

Arghh!!! One step forward, a half marathon back. Ah well.
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post #68 of 156
[quote]Originally posted by Matsu:
<strong>"...with a G3..."

Arghh!!! One step forward, a half marathon back. Ah well.</strong><hr></blockquote>

You don't need a G4 in a business environment.
JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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post #69 of 156
Oh go scroll a document!

Who says such a machine should be opnly for business, what about consumner and edu? A G3, get serious, the point of technology is to move forward not backwards. G4's don't cost any more than G3's and heat is not an issue in a desktop machine. NOw a G3 with altivec and a big FSB (Gobi?) that would be OK (essentially a G4). Lets not have any more BS about what we need, we need power, cheap power!!!
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post #70 of 156
A G3 with a mid-range graphics chipset or a G4 with a low-end graphics chipset would be required for Mac OS X to run acceptably
Stagflation
stag·fla·tion
Sluggish performance growth coupled with a high or rising prices
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Stagflation
stag·fla·tion
Sluggish performance growth coupled with a high or rising prices
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post #71 of 156
The G3 has to go. To blab about the the usefullness of the velocity engine in the G4 since 1999 and still sell G3 in 2003 do look like Apple does not belive their own preachings <img src="graemlins/oyvey.gif" border="0" alt="[No]" />

It really does not matter that VE is not used in many apps and that the G3 is a viable CPU it simply looks bad <img src="confused.gif" border="0">
post #72 of 156
"and I would personally love to see the Cube reintroduced as a business computer with a G3, low end GPU and small hard drive."

I'd love a Cube. A 1 gig, Gobi edu/Dell busting Cube, £499 inc Vat. Mx2 chipset. 256 megs of ram. Reasonable hard drive. Slot load from front!

I'd tear Apple's arm off. The cube was a show-stopper. Price it to shift and it would have.

Enamel white. No skirt. No grill on top. Ports out back. Slightly bigger. For standard graphics cards/components? Having said that. Look how small Nintendo made the 'Gamecube'...

To me, the Cube...anyday over the eMac. Edu' customers would be able to keep their monitors.

Ah...the Cube...

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We do it because Steve Jobs is the supreme defender of the Macintosh faith, someone who led Apple back from the brink of extinction just four years ago. And we do it because his annual keynote is...
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We do it because Steve Jobs is the supreme defender of the Macintosh faith, someone who led Apple back from the brink of extinction just four years ago. And we do it because his annual keynote is...
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post #73 of 156
[quote]Originally posted by Matsu:
<strong>Oh go scroll a document!</strong><hr></blockquote>

No trouble doing it on my iBook.

[quote]Originally posted by Matsu:
<strong>Who says such a machine should be opnly for business, what about consumner and edu?</strong><hr></blockquote>

Why can't Apple make a model suited for business work? I'm not saying that they shouldn't make a cheap consumer model - read my post again.

The optimal would be if Apple enabled Quartz to run like X Window servers and client - that way I would love to have thin Mac clients and some Xserves in out server room serving the clients.


[quote]Originally posted by Matsu:
<strong>A G3, get serious, the point of technology is to move forward not backwards. G4's don't cost any more than G3's and heat is not an issue in a desktop machine. NOw a G3 with altivec and a big FSB (Gobi?) that would be OK (essentially a G4). Lets not have any more BS about what we need, we need power, cheap power!!!</strong><hr></blockquote>

A G3 with AltiVec would still be cheaper and use less power than a G4.

But this argument is getting a bit OT. The point of my post was that Apple should make a Mac suited for business and other environments where homedirs are on servers and where you don't need to run the latest game or render 3D.
JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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JLL

95% percent of the boat is owned by Microsoft, but the 5% Apple controls happens to be the rudder!
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post #74 of 156
The G3 is perilously close to being eclipsed by PDA architectures, I wouldn't call it viable for a company with the stated intention of attracting switchers.

"Look honey, this here PDA runs almost as fast as that iBook, 600Mhz vs 800"

Doesn't matter if it's true or not.
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post #75 of 156
[quote]Originally posted by JLL:
<strong>You don't need a G4 in a business environment.</strong><hr></blockquote>

Especially when Apple is about to flip Moto the bird. But they better have something as good, or much better in the wings...
...we have assumed control
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post #76 of 156
[quote]Originally posted by JLL:
<strong>A G3 with AltiVec would still be cheaper and use less power than a G4.
</strong><hr></blockquote>

This is only true if Moto doesn't ship a 0.13 micron G4. There isn't anything magical about the G3, aside from IBM having better fabs. IBM could probably take Moto's 7457 and produce it as effectively as they produce their G3s (and it would be a superior chip).


On the subject of Apple's pricing / market share / etc:

Lowering prices will undoubtedly increase Mac sales, I don't think anyone would argue that. There is no sudden "magic" threshold, however, so each dollar you shave off the product will get you some number of extra customers and this is very likely a non-linear function (i.e. if you shave off two dollars you don't get exactly twice as many buyers, you either get more or less). Nobody knows what this function looks like, and it changes moment to moment as the economy shifts, the world situation becomes more or less stable, etc. The only data point that is available on this function is what sales were yesterday at yesterday's price point. This prediction stuff is hard, and when the guys at Apple have to order components then need to anticipate numbers of units and every extra unit purchased cuts into the bottom line. This is particularly painful for things like low-end processors where if you don't sell it now you'll probably never be able to sell it for anything close to cost. As a result, companies often stick to what they know and price points they have experience with. Its easy for us to sit here and talk about how Apple should drop its prices by half so that sales will skyrocket, but our ass isn't on the line when the sales don't triple and Apple posts a huge loss as a result.

The PC market has pushed prices as low as they will go (and even lower in some cases), and they are hurting for it. The margins aren't there, nobody is making money, and machines are no longer selling like they used to. Apple surely uses this data in evaluating their price point, and for quite a while now it says "don't go here!"

The guy at the Apple store says that 8 out of 8 people who didn't buy a Mac decided not to because of price. How many would have bought if the price was 10% lower? 20%? 80%? As several people above said, the customer doesn't really care about Apple's profit/loss situation but Apple doesn't have that luxury. And how many people did buy a Mac at the current price point? Apple's prices are sitting somewhere on an unknown continuum, and shifting it up or down will change both the price and the number of sales. Apple juggles this against their supply of parts, their assembly & distribution capacity, their "shelf space", and their production costs. Its extremely complicated and a lot of people don't seem to get that.

Apple probably has their existing designs pretty close to their sweet spots -- i.e. for a given machine decreasing the margin wouldn't increase sales enough to compensate, and increasing margin would harm sales excessively. We're all also aware of the perceived and real performance issues in the current Mac lineup, but until a new processor is available Apple can't do anything about that (and they probably can't cut costs much either with 2 processors in each PowerMac). Apple's current lineup is pretty well established in terms of desktop/portable & consumer/pro, so until real changes are possible (i.e. new processors available) its probably not worth the cost of trying to make small changes. The margins are only ~20%, so cutting it to 10% halves your profits but only lowers your price by 10% which isn't going to double the number of customers.

To increase sales new designs will have to be either more compelling or lower cost. More compelling is Apple's usual approach because lower cost makes them more generic and less differentiated. The eMac (quality issues aside) is a good example of this -- the costs are lower but it isn't so unique & distinctive. These products have their place, and education is clearly one of them. Price conscious consumers is another one. The eMac's price is inflated by the nature of the enclosure & display, however, so a headless variation (cube or pizza box) might have a market waiting for it. There may also be a place (education, geeks, utility machines) for a low cost mini-tower in a plain brown wrapper -- especially when the 970 arrives and they can put the current motherboard into a low-end tower without fear of it heavily cannibalizing PowerMac sales. These lower margin machines are risky, however, because the margin is so small compared to the cost of building them. It doesn't take many lost sales to be losing money.
Providing grist for the rumour mill since 2001.
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post #77 of 156
[quote]Originally posted by Ed M.:
<strong>PC OEMs don't do the R&D... Remember, Apple does the OS, the hardware, the design of all the cases and mobos, the chip sets, the packaging, the marketing....etc. etc.... They literally *touch* everything, including the power supplies. The list goes on.
</strong><hr></blockquote>

So what? As long as the final price of a product is too high for sustaining a healthy market share, it doesnt matter who is making what part of the product. Apple is still not making memory-chip,LCDs, harddrives..

And while Dell dont do much R&D ( well.. actually they do), Intel is still putting a lot of R&D effort in their chip design. And Microsoft is putting a lot of R&D into Windows OS. In the end, a PC got this R&D baked into the price.
post #78 of 156
[quote]Originally posted by JLL:
<strong>

Now you're talking about new models - not lowering price on existing models.

I do agree that Apple need to make a couple more models, and I would personally love to see the Cube reintroduced as a business computer with a G3, low end GPU and small hard drive.</strong><hr></blockquote>

The G3 is like 5 1/2 years old. Time to throw it away from new computers. Wasnt it competing against P-MMX and P-Pro when the first G3 products appeared?

Time to move on!
post #79 of 156
[quote]Originally posted by Stagflation Steve:
<strong>8 out of 10 serious customers who are interested in buying Macs leave empty handed from my store, we are the only store in the region and we sell at the MSRP.</strong><hr></blockquote>

If that is representative of the overall market, and if the other two "serious customers" are leaving your store with Macs, then Apple's market share is set to quintuple. I'm sure Apple would be delighted to hear that they had a 20% share.

Not that I think that's the case. I'm just pointing out that, in Apple's current circumstances, 2 out of 10 would-be purchasers is a much better share than they currently have. So without further information, it could even be good news.

[quote]<strong>8 out of 8 who don't buy a mac say price was the reason they didn't do so. As one woman said before Christmas "I don't hate Windows that much...."

I have not heard a person raise a compatability issue as their reason for not buying a mac in two years.</strong><hr></blockquote>

I've heard it every time I've suggested a Mac. I doubt the people who are afraid of incompatibility even look at one. None of the people I talked to did, apart from glancing at their pages on the Apple web site. Those that went with the safe option ordered Dells, too, so they won't appear on retail radar.

As far as lowering prices, Steve himself has gone on record saying that he'd sell iMacs for $199 if he could. If you can figure out a way for Apple to sell cheaper Macs that a) are still Macs (not machines that are so cheaply packaged and feature-crippled that they're distinguishable from low-end PCs only by their incompatibility), and b) will not cause Apple to lose their shirts, I'm sure they'd love to hear it.

[ 12-31-2002: Message edited by: Amorph ]

[ 12-31-2002: Message edited by: Amorph ]</p>
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post #80 of 156
Excellent analysis of the situation Programmer, especially pointing out the difficulty of finding the right price for most profit. Considering the poor performing processors Apple must use now, reducing price is not likely to help sales enough. I could see a price drop when the 970 appears, and makes a much more appealing PowerMac. At that time, a little price cut may indeed generate still more sales resulting in a high profit and a healthy boost in market share. Personally, I think this would be the way to go. An alternative strategy is to "skim the cream" for a while with a new, better product. I hope Apple does not do that, unless there is an initial supply problem with 970 processors. In that case, "skimming the cream" is the best strategy. It gets the most profit when there is limited supply, and it's better than having frustrated buyers who are upset because Apple cannot deliver.
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