Originally Posted by Dazaran
So you're saying Apple should also get rid of the Mac Mini, 17 and 20 inch iMacs and the Macbooks? Since these are all low end products...
No, their low end entry is above the $500 cutline that analysts usually use for the budget/entry line. Prices for PCs there start a little above $250.
$999 for the cheapest iMac is certainly not low end. Neither is the MacBook.
I think you wanted to say "Apple is a STYLISH brand and should provide stylish products..blah blah blah."
Nope. I said what I meant. The low end Apple products are priced where everyone else's upper mid-range typically sits except for the Mini.
What you seem to have missed is that stylish is entirely possible with a mini-tower.
There are some towers that aren't too bad. Certainly the Mac Pro is stylish in the industrial sense. The Cube is stylish but really...it's an 8" cube. So a simple and elegant slim-tower design can be done. A squat mini-tower less so proportionally.
As to the rest of your 'points'. You have no numbers to back up your assertion that using more expensive laptop parts in desktops actually saves Apple money by lowering their costs on their laptops. For all we know Apple could be getting higher margins on their desktops without increasing the cost per system on their laptops.
If we take Intel at their word that no one gets special discounting and all discounting is based soley on volume then we can guess that 1.5M parts generates more discounts than 1M parts. We do know they are buying more Meroms than they would otherwise be with a Conroe desktop lineup. Likewise the Mobile 945GM Express parts being used in the iMacs.
Same for memory.
Absolute numbers would be difficult to come by but I don't think there should be much disagreement with the general idea. Here is a general link that indicates that Intel has stopped special pricing and gone to just volume discounts (there are plenty more from the same time period):
It appears to indicate that their key challenger, Dell, will not be getting special volume discounts from Intel.
Many believe cut-throat pricing advertised by Dell and other direct marketers were supplemented by large volume discounts those companies were negotiating with Intel. They are hoping that changes will eliminate some of the pricing advantage those companies were enjoying.
"I think this will be positive for the channel," said one system builder. "It looks like everyone will be treated equally."
Several system builders said they had little insight into the kind of volume negotiations that go on between Intel and its top-tier partners.
But one system builder believed those deals are negotiated on a contract basis and that some top-tier buyers were purchasing more CPUs than they could sell to get a better discount and then dumping the surplus on the grey market.
"Say they are negotiating for a-half million processors for US$50 each, they will say, 'what if we take one million,' even though they know up front they won't use those chips," he said.
Apple's current strategy plays well into the known Intel pricing policy. Especially since Apple isn't using Intel's marketing dollars.
From the article Apple may still be getting a sweet-heart "meet-comp" deal but if so its also more palatable for Intel's other customers if they are within a certain product segment. An all Merom/Woodcrest deal annoys Dell/HP/Gateway less than a sweetheart deal that includes Conroes where their bread and butter machines live.
Additionally since they're already supporting low end products and their buyers they're obviously making enough off low end products to justify low end products.
Except their "low end" products aren't low end. Their bread and butter machines (the iMac) range from $999 to $1994. Somewhere I read (and linked in this thread) Apple's average unit price was $1400 or so. That's bleeding amazing for the current computer market and being the 4th ranked US seller.
Again you don't have numbers to back up just how much if any increase in sales would be needed to break even let alone to justify using dramaticly.
It's on page 20...just kidding, I have no clue what page it's on but it is on a page in this thread. The short form is that even if you maintain margins making 28% on a $399 Mac Tower ($111.72) for every $1499 iMac 20" ($419.72)...which appears most popular on Amazon...you have to sell about four times as many of the cheap towers to make the same revenue.
Then you have to support 4 customers instead of one.
Vary the tower price around the $399-$1299 price points to get the breakeven points but the common prices are $499, $799 and $999 in the previous discussions. Add projected monitor sales as desired.
Apple must have done this math and with better metrics than you and I would have access to. They know their monitor sell rate in comparison to industry so they can compute their monitor conversion rates. They also have historical data from the 90s when they sold headless Performas...and I think (but not sure) with their ADB connectors.
Now with DVI...
Yet the point isn't that they'd have to sell as many monitors as towers, it's that when they did they'd increase margins over and above an iMac.
Depends on the price points. Sure, if they price as the latest Snoopy proposal (a tad under current iMac pricing) then yes, they make more profit. The downside is that their lines are more comparable to Dell/HP/Gateway offerings (Tower vs Tower instead of Tower vs AIO) AND the comparisons would suck.
Would the iMac become obsolete with a tower, unlikely it's obvious there's enough people who prefer that form factor to keep making them.
Eh...maybe but the proponents for the Tower say that's the dominant form for computers and AIOs are niche and replete with drawbacks. I agree with that statement with the caveat that AIOs are more stylish (which I think they don't disagree) and harder to compare directly with towers which hides the Apple margins in the mid range market (which they may or may not agree) and allows them to beat Dell on prices in the workstation market.
The problem you have with the Dimension and the iMac are that people are NOT seeing one as an AIO and one as a tower plus monitor. They're seeing both as a computer for x price and x + $200-$400 price. They already see Apple as being more expensive and buy either because of style or operating system. Therefore a stylish desktop/mid-tower/whatever would have the same effect with one major difference. It would sell to people who will not or cannot buy an AIO.
Show me a stylish tower with more sex appeal than the iMacs and I might be inclined to agree. Of course that's a subjective assessment but while the AIO form factor doesn't completely negate the price disadvantage I'm going to assert that it helps. Its obvious that the iMac costs more and performs less but its also obvious that the form factor is distinctly different. Same for the mini.
That mitigates the price difference and reinforces that Apple, as a brand, is distinctive and elite. Therefore worth the $$$. Style over substance.
Folks that cannot buy an AIO, laptop or Mac Pro are under served but its not a demographic that Apple seems to care about AND given their current performance it hasn't hurt them all that much. As a smaller company that competes against the entire Windows world they have to choose their battles and thus far, IMHO, they have choosen very well and haven't competed against Dell/HP/etc's strengths but in areas where Apple can dominate.