Originally Posted by Marvin
It's only logical to draw comparisons between what people are buying in huge numbers and what Apple sell. It's got nothing to do with Apple owing anything, it's a comment on what would benefit them based on what is benefitting their competitors.
It is initially logical but what I said was that that comparison is based on false assumptions. That Apple is happy with Acer/Dell margins or can magically create better ones without some clear differentiation. I'm not saying they can't create a mold-breaking low-end product but I don't think it will be a $199-399 netbook.
It's not as clean cut as that, Porsche use engines from VW and their purchase was of majority controlling shareholdings. I get your point that being a seller of premium products isn't necessarily a bad thing if you make a lot of profit but the computer industry is significantly different from the car industry despite the continual use of these analogies.
It pretty much is clean cut. Porsche and VW have had very close relations for years but in recent history only have one shared product (Cayenne/Toureg - where most of the engines are not shared). The point was that the smaller premium player can achieve the financial dominance to buy a controlling stake in the the vastly larger, less profitable company.
BTW - cars and computers, while clearly not identical share quite a few features that make comparisons meaningful. Mostly built from commodity parts, OEM vs. aftermarket, all manufacturers products run on the common infrastructure (fuels/roads, AC/LANs/Net), strong market segmentation (geo/demo/econ), capital purchases (often on credit), upgrade cycles/feature bumps, 2-5yr purchase cycles, etc. Not perfect but better than any industry most people have any knowledge of.
There will come a day in the not too distant future when we have a computer that can virtualize the Mac OS transparently and the machine will be so small as to be irrelevant to the aesthetics of the machine. This won't happen with a porsche. Apple need to seriously start thinking about volume and keeping their eco-system alive.
It is all a matter of when that future will occur. I agree in theory but this future has been imagined since JSB in Xerox PARC and it is taking a long time to turn up. In the meantime Apple has been moving along nicely in unit growth/share and at margins that keep it strongly viable and able to invest the R&D in such an uber device. Do you think Dell can afford to develop anything breakthrough right now?
How much do we know exactly about what Apple's margins are? If Apple made a smaller machine than a Macbook with lower spec parts then they may make lower dollar amount revenue per model but the target audience grows significantly. Apple certainly won't compete price for price with current netbook manufacturers but they can do a lot better than the prices they have on their current lineup.
Make a cheaper plastic laptop if you want but just don't race to the bottom with the others. What are the purchasing criteria for a netbook? Small, CHEAP. Apple's would probably be $499-599 at least and is unlikely to offer anything new in that form factor. The question is, will those buyers pay the Apple premium which at those price points becomes a large proportion of the total price. And before you opine - you have no idea. We only know what we or our buddies might do. You don't think Apple has researched the hell out of these market demographics? If netbook buyers won't pay (and I surmise they won't), then you are back to either a gamechanging device (tablet?) or a marginally cheaper plastic MacBook.
We know Apple's gross and net margins overall and they are stellar for the industry, even if we don't definitively know a MacBook from a MacPro. The iSupply teardowns also give us some big clues for the commodity guts (if not the fancy shells). I don't think that the market is particularly elastic until you compete on price with the bottom feeders which Apple should not do. If you shave $200-300 off the current plastic MacBook, you can't get that all from the components without making it a netbook which then makes it very expensive by comparison. Shaving off $100 won't expand the market much (but might stimulate earlier purchases as the thrifty consumer doesn't have to save up that marginal $100).
The prices in this thread are far from cheap when you compare them with the rest of the industry and most are what Apple used to sell their machines at. The main point is that Apple's prices have gone up so that entry points for each model of machine are unreasonable.
I can't recall when Apple's only tower had a £1900 entry point. On the last model, it was about 25% less than that.
I agree - UK prices seem out of whack but my point was that making a "premium" xMac is likely to cannibalize existing profitable sales and will still not attract the thrifty/BYO/geek buyers in numbers to offset it. Just my opinion but no-one else knows any better either.