Originally Posted by Res
Right now Apples low end computer is the $799 eMac, and it is pretty much a bad joke of a machine. It comes with 128 megs of RAM (that's the joke part), and 1 GHz G4 on a slow bus. Top it off with a slow video card, and what you get is kind of pathetic by todays standards. The current eMac is at the end of it's life cycle folks, we all know it, and it is really starting to show.
Shortly we will see the next version of the eMac/iMac line, and if Apple aggressively ups the specs, the market share will follow.
I used to think that the eMac was the loss leader for Apple. I suspected that Apples manufacturing process was not efficient enough to produce that particular machine at a more attractive price. But the more I got to thinking about it, I began to consider that my original hypothesis was incorrect.
As you mentioned, Res, the eMac is a mishmash of outdated and inefficient computer parts. The Ram is OLD 133MHz SDRAM. The video card is ONLY 32MB, and isnt actually produced anymore in that configuration (64MB is now the standard for the ATI 7500 retail). The CRT, while flat glass, is NOT a Trinitron, and therefore cannot cost more than any OTHER flat CRT, which currently retails at < $100. The G4 processor (entry-level) is only 800MHz. And while the case is custom-made for the eMac, Id find it difficult to believe that Apple HASNT recouped its costs for any custom molding after 2 years time.
So, Apples manufacturing process wouldve had to have been AWFULLY inefficient to make a 2-year-old computer with 3+ year-old parts cost MORE than a comparable PC with (often) BETTER hardware. Even more so, it wouldve been hard to believe that EVEN WITH a pitiful manufacturing process, Apple would have BARELY been making money off the machine. And then, it hit me.
What if the eMac was the PRIMARY source of profit in the Macintosh line? Yeah, it sounds ridiculous, but hear me out. The Apple financial results only state the percentage of machines sold, and the percentage profit margin on ALL SALES. It (to my knowledge) does NOT indicate how much profit margin Apple makes on EACH MACHINE. And thats where your other statement fits in:
Would any of us really be complaining about Apple's pricing if the $799 eMac came with a 2GHz G5 on a fast bus, and a Radeon 8600XT?
It occurred to me that Apple is REALLY giving good value on some of its PowerBooks and PowerMac towers: BIG processors; BIG graphics cards; BRAND NEW enclosures. Most likely, those are the computers that yield the LEAST profit (per machine) for Apple.
So, what if the eMac was INTENTIONALLY kept stagnant so that Apple could temper some of the profits lost to its cutting-edge machines? If thats true, it would seem to follow that a 'headless' Macintosh would present the same financial conundrum: Yes, we can make a profit off each machine, but not ENOUGH profit to offset the losses on other machines. Moreover, this philosophy would fit very well in line with Apples precedent of profit BEFORE market share.
All this, of course, is hypothetical. Ive no knowledge whatsoever of Apples profit margin breakdown on EACH computer sold.
Just a few random thoughts from an Apple stockholder whos currently using a Windows machine.