Originally Posted by quinney
If you are saying that the appleTV is the handle and the content is the razor,
I hope Apple Inc finds a way to increase its margins on selling content. Right
now content sales is probably the lowest margin item in Apple's list. A
strategy that emphasized that, rather than higher margined hardware
sales, would be a departure from what they have done in the past.
If you are saying that a "halo effect" will eventually raise hardware sales,
then I think the handle and razor analogy is off.
I think that all involved will be making more profit on rentals. Apple will be renting hundreds of millions of movies over time. Perhaps hundreds of millions around the world each year, eventually. They also won't be losing money on the handle. They never do. They are not MS or Sony in that regard. They probably are accepting lower margins, but they will make a profit.
As for the halo effect, no, I wasn't thinking about that, but it will be there.
I read an article that said that 31% of Americans now own at least one Apple product. That's amazing! That number is up from the low 20's a year ago.
Every product that Apple sells can contribute to the halo effect. This is not some magical phenomenon, but simple reality. If one likes a product, one is more likely to buy another from the same company.
That's one reason some have used the term "Apple ecology". Or "iPod ecology".
Third parties will step up to make these products more interesting. Keyboards for the ATV. Extra HDD's, SDK usable controller software for the iTouch and iPhone, etc.
This ties it all together.
I have friends in the high end audio industry where I once was involved. Most of them have moved from just making one component in a system, to having "turnkey" systems because of customer demand. Apple is moving to that model as well.
I fully expect, as do some industry people, that Apple will have its own Tv's and other components at some point.
I very definitely see people wanting an Apple "turnkey system, and Apple is better situated to deliver it than anyone else, though others are trying.