Originally Posted by Mr. H
I'm not one to get mad easily, but would you please stop with the car analogies? They do not work because there is no OS/platform equivalent and market share for auto manufacturers doesn't matter.
So tell me if car analogies make you SOOOO irate why didn't you lash out at a_greer's ford ranger/semi/F-150 analogy? You even stated that you agreed with the analogy.
Bit of a double standard temper tantrum there don't you think?
In any case, market share does matter to auto manufacturers that deal with volume. The US big 3 wouldn't be in such bad shape (or simply owned by someone else) if they still commanded the same marketshare that they did before because they make money on volume. Niche/upper end auto makers like Porsche don't care as much about market share as long as some minimum volume is maintained.
So no. If those that argue the other side wishes to bring up car analogies first I guess you'll just have to grit your teeth or advert your eyes when I respond in kind.
Now, if you really think my costings are unrealistic, the onus is on you to indicate where you think I've gone wrong. To just say "uh, Apple can't do it for that price, because other people can do a similar thing but with higher specs for $100 less, so you must be wrong" is not a very good argument (and actually, Dell don't have a proper equivalent to this proposed tower. the XPSs are a lot more because they come standard with much higher specifications, or didn't you notice?).
Yep, I question your costings because they seem very aggressive in comparison to the market. The Gateway E6610D SB is pretty close. 1GB vs 512MB RAM. X1300 vs X1600. Comes with a free 19" LCD that they say is worth $225. Total is $1349.
Gateways gross margins are what? 5.5% in Q2 06 ranging up to 10% Q2 05. The numbers we use here are all averages since we don't know the numbers for each model but I'm going to hazard Gateway is more agressive than Apple on pricing.
Since you're pulling your numbers out of your rear I'd say the onus is on you to show that a $999 conroe box does indeed have 28% margins when other, more agressive, companies can't seem to hit that mark and super agressive whitebox makers with low overheads can barely beat it by $100.
Secondly you seem absolutely dead-set that the only thing that this machine would do is cannibalise sales of other Mac models. What possible justification do you have to come to that conclusion when it is so obvious that the bulk of the computer desktop market is towers costing under $2000? You really think Apple is competing well here? The numbers are all against you.
If you wish to destroy one segment of the Apple line up (the AIOs) then I'd say that your gains in switchers must offset the losses from cannibalization which should be pretty steep IF we accept YOUR assumptions that AIOs are poor values and not desireable by the majority of computer users (ie mini-towers are better for the majority of users).
It is up to you to show that you can offset the loss in revenue and show greater overall profits by capturing more marketshare after writing off the engineering costs for developing the AIO's that will likely start selling in the range the cube did since, as you argue, the bulk of the market desires towers and computers less than $2000 (and in fact less than $1000).
See your assertions cut both ways.
You can also show that the loss in volume in purchases of notebook parts used in the iMacs don't hurt the laptop and Mac mini margins for bonus points.
As far as the "numbers being against" me...shall we compare the margins and profitability of Gateway and Dell to Apple again? I say that Apple is doing quite well in its overall strategy...and that INCLUDES the desktop segment. You want to change course...I'd say the "onus" is all on you.
You also want to show that Apple can gain significant share in 2006 in comparison with early 90's when arguably MacOS held a greater advantage over Windows 3.0 than OSX has over XP. Especially given that Apple's worst times were when they pushed the lower cost Performas to the forefront to gain marketshare.