True, but if you're able to put 2 and 2 together, you can learn a lot from upstream supply.
For example, I would assume that the motherboard for the next ivy Bridge MBA is somewhat different than the motherboard for the older MBA. So if you were the motherboard supplier and Apple ordered 2 M of the new motherboard for delivery over the next 12 months and 1 M of the old motherboard for delivery over the same time period, you could assume that they are planning to continue to offer the old one at the same time as the new one.
That wouldn't tell you anything about price - that might be a pure guess based on the level of discounts Apple usually offers on previous generation products. For example, the old iPad is 20% lower than the base new one - just like the 20% being projected here.
I'm not saying that it's true, but it is possible for an upstream supplier to have information that would allow one to make a reasonable prediction.
That would still imply that Apple has leaks in their supply chain management. It would not surprise me if many of these "leaks" are simply fabrications. As you mentioned, Digitimes isn't known for its accuracy. I guess it could make some sense if they wanted a cheaper 11", but this rumor is more likely driven by what could be rather than by evidence from the supply chain.
Quote:
Originally Posted by mstone
Many people fail to grasp the concept of "You get what you pay for". They don't understand that a $500 Dell is not a good deal. They will pay for vanity though, which is a significant factor in Apple's recent success as it is perceived as very trendy at the moment, to be a MacBook or iPhone owner.
I wouldn't call that an absolute in electronics. There are many people who are shocked when when their expensive laptop goes south or a drive fails. Now they can do some testing at the assembly phase for potentially defective parts, but beyond that, any machine can fail given the mass market nature of consumer electronics.
Quote:
Originally Posted by Tallest Skil
Why? Apple sells over 90% of all computers over $1,000.
Why wouldn't they want to sell 90% of all computers over $800?
Tim Cook wants Mac marketshare.
Have those numbers ever come from a reliable source? Many of these suggestions have been severely lacking in details. It's like they're just rumors thrown out without sources or estimated margin of error to prop up the stock price.
Have those numbers {i.e., that Apple sells 90% of computers over $1,000} ever come from a reliable source? Many of these suggestions have been severely lacking in details. It's like they're just rumors thrown out without sources or estimated margin of error to prop up the stock price.
I'm not familiar with the source. When I clicked on their reference links, none of them gave any reference to how the estimate was calculated. You really do respond quickly. I must keep a better eye on threads where i've responded.
Not at all.
When the current entry level MBA was introduced, the retail price was $1000. If we use Apple's average margin of around 40%, that means that the cost of sales were $600. In order to sell it at $800 with the same 40% margin, the cost would be $480. They would only need to take $120 (20%) off the manufacturing cost to leave the margin untouched.
In the past year, CPU prices have dropped significantly. In particular, when Ivy Bridge was released, the price for Sandy Bridge dropped. SSD prices have dropped significantly. And they've probably fully amortized the tooling and manufacturing lines. Heck, if they do nothing else but replace the i5 with an i3, that alone would save them $100 - or most of the money they need to save.
And that, of course, assumes that Apple will get the same margin. They might well accept a slightly lower margin to open up a higher volume educational channel for the MBA. It's really no different than the fact that they sell the iPad 2 for 20% less than the new iPad and 20% less than its introduction price of only a year ago.
Maybe, but I've seen no evidence that SFF CULV CPUs from Intel are being dropped by $120.
Maybe, but I've seen no evidence that SFF CULV CPUs from Intel are being dropped by $120.
I didn't say that they had.
The point is that if Apple can buy the components cheaper than at the MBA's most recent revision by $120, they could drop the price to $799 for the old model without harming their (percent) margins.
Even if the CPU hasn't dropped by $120, it's quite possible that the CPU, battery, RAM, SSD, and motherboard have together dropped by that amount. Keep in mind, too, that tooling costs (and design costs) are amortized over the expected life of a design. If they keep a design longer than anticipated, the design and tooling costs drop to zero (since they're already fully amortized). Adding all of those things together, it's entirely plausible that they could have costs that are $120 less than last year. Plus, there are some areas where they could cut corners a bit - maybe a slightly smaller battery, elimination of Thunderbolt, etc.
Digitimes has a perfect record - they've never been right on the rumors that SAR tracked. If they happen to be right on this one, it's pure luck.
Thanks for that link. I don't remember Digitimes ever being right, but I was wondering if anyone had ever tracked it. You're right, according to Stupid Apple Rumors at least, Digitimes is quite literally never right.
I do have to question SAR not showing their work though. They are clearly flat out lying when it comes to 9to5Mac (and they seem to have some weird feud going on), so it makes me question if they are just playing a "see, we can make stuff up too" game.
First, throwing DigiTimes out of the equation and just considering the notion, given the relative volume of the two machines your statement would make more sense the other way round. And in either case an $800 sale for Apple.
That said, $899 makes a more likely scenario than $799 - even if just for the education market - whether with lower end IB or current SB, both of which have been discussed here. And they're clearing out their refurbs of the $999 Air at $849 today.
Quote:
Originally Posted by aplnub
I think this sounds plausible. SSD prices fall so you leave small SSD in 11". Use current gen. processor after the new one comes out and up sale.
Kinda like how they do the "New iPad" and the "iPad2" at the same time.
Apple has shown a recent fondness for this tactic in two segments (iPhone and iPad) so a third use of it isn't out of the question.
Quote:
Originally Posted by herbapou
With the lower SSD prices and new intel CPU design for untrabook, Apple should be able to lower there prices on the Mac lines. Would be nice to see Apple gain some significant market share in the PC business. With the volume they sell, Apple could reduce the "Apple design tax" from 2 times the price of the same PC to 1.2 to 1.5x. They will never be able to sell at the same prices because of the superior design but getting close would help gain market shares.
I try to recommend Macs to people I know but they all end up buying Pc's for 1 reason: price.
One way or another you gets what you pays for.....
Quote:
Originally Posted by Carmissimo
A drop in SSD pricing would not likely translate into lower prices but rather more memory for the same price. The entry Air with 64GB of memory is crying out for a boost to 128GB.
The iPad is a fine choice for casual use at a lower price point so I think having the Air line start at 128GB would make a lot of sense.
I'm really hoping, since I'm in the market for a new notebook that 256GB is the new starting point for the pro line at current prices (and that there are still Pros!).
Quote:
Originally Posted by charlituna
Apple doesn't chase any market when it comes to what the other players are doing. This is something Digitimes just can't get in their heads.
I could see them perhaps keeping their current 11 inch model and due to the cost of parts going down cutting the price but that's the best they would do. They aren't about to tarnish their image by trying to make a cheap model to compete with folks that are actually trying to design to compete with them.
Quote:
Originally Posted by jragosta
I could picture them updating the MBA with more RAM, Ivy Bridge, etc and then leaving the current base model as a $799 model for cheapskates. They're already doing that with the iPad and the iPhone, so why not with the MBA? I believe they did it with the iMac at one time, as well as an educational model.
I could picture it being a great little computer for education, for example. Most school districts could easily get buy with a base model with Sandy Bridge and 64 GB (even perhaps 32). My daughter's school is using tablets that are a lot less capable than that.
Entirely different items. Apple indicated that the iPad had only marginal effect on MBA sales, so I don't expect that the opposite would be any less true.
Again, $899 seems to make more sense from Apple's POV, i.e., expanding the base, enticing/holding/expanding the ed market, not compromising the experience (even if the last gen experience), build quality, or MARGINS etc.
As your "entirely different item," something like over 25% of new iPad and new iPhone buyers are purchasing their first Apple device - creating the likelihood of increased rather than decreased Apple PC sales. Or if those folks are opting for iDevices INSTEAD of "trucks," still a net gain in Apple customers.
Quote:
Originally Posted by macarena
I really want Apple to employ a scorched earth strategy to increase market share. Do not leave any low lying fruit for the opposition. Insistence on 40% margins might not be the best strategy for Apple today. If they can sell twice the volume at half the margins, their overall profits would be the same - and it is not inconceivable that Apple can sell twice the volume at half the margins in some product segments - notably desktop and laptop computers. Anyway, today desktop and laptop computers are such a small percentage of Apple's business that lowering margins will not impact the company much.
Quote:
Originally Posted by I am a Zither Zather Zuzz
Apple makes a huge profit percentage, They could lower prices, increase volume, and make even higher net profits.
Besides your line of thinking, your posting name (talkin' to ZZZ) makes me always deprecate your posts before I even read them. The one thing Apple's never done with a strategic hardware product of their own at least, other than the now long gone back to school packages) is to pursue a "greater net profits/lower margins through volume discount pricing" strategy - and given their current (overwhelming) success, that is NOT going to change anytime soon, if ever.
For examples of how this hurts a prestige brand, see what happened to Sony, Panasonic and others which started to slap their logo on ever more downscale junk.
Some of Apple's software and cloud operation is a possible exception, e.g., take iTunes - I download tons of podcasts and very seldom buy anything there, and Apple notes their profitability is lower in the store. So the enticing "ecosystem" (now to include device-wide apps like Messages, Reminders, iTunes Match, etc.) and some of their apps (the aggressive pricing on iWork, e.g.) is not approached in exactly the same way.
Quote:
Originally Posted by Blastdoor
It makes a great deal of sense. Apple plays to win, and they aren't worried about competing with themselves. If they were, they wouldn't have introduced the iPad in the first place.
I agree that Apple would never sell at a price point that isn't profitable, nor would they sell at a price point that results in a low quality product. But if they can sell at a lower price while maintaining margins and quality, then they absolutely will.
Perhaps some observers do not appreciate how the economic realities have changes for Apple in the last 10 years. Ten years ago, Apple couldn't compete at lower price points with the Mac because Apple lacked the economies of scale to drive down costs. But now Apple is the biggest, baddest tech company in the world and can get prices on key components that also-rans like Dell and HP can only dream of.
HP is (again) the largest PC maker in the world, not Apple (tho' Apple's a larger COMPANY by market cap and other metrics), so I assume they have some small clout with suppliers. Apple's ability to use their cash mountain to pre-buy components, tho', likely gives them some of the advantage you're implying. Just wanted to clear that up.
Quote:
Originally Posted by macarena
The people who think that Apple will not do this, are forgetting that this is Tim Cook's Apple - not Steve Jobs' Apple. For a master at logistics, the best way to showcase his skills is to increase supply (and therefore marketshare), and lower prices, without impacting profit margins significantly.
Secondly, it is high time Apple made a serious attempt at marketshare. There is absolutely no point in having $100B in the bank, if Apple does not use that money to improve its market presence in areas where they can. For a large company, Apple's profit margins are approaching obscene levels. Even Apple lovers will soon start questioning the pricing strategies. Apple is better off sacrificing margins for market share today. In all likelihood, their overall profits would increase at lower margins, because of much higher sales.
The new iPad has seen humongous demand, but still Apple has managed to keep supply at reasonable levels. Wait periods are in days, and not weeks. And Apple did not increase pricing on the new iPad, despite significant improvements - and even expectations in the market that the new iPad would be priced at $579 or $599. I believe, these two facts signal a clear departure from past strategies.
I usually don't bother with posts that include whining "obscene profits" rhetoric lifted from the 99% non-thinking mentality (and I can at least guess whom you vote for). As long as it's not the result of an illegal or illegally pursued monopoly (the situation MS approached in the '90s), a company's margins are its own business. If they charge more than the (in this case "Apple lovers") market will bear, they will either suffer or adjust their profits and/or products.
But yet and still you make some interesting points. Just as making the world's best-selling single smart phone and tablet device benefits the whole Apple aura and promotes lock-in with their ecosystem, grabbing enough of the PC market to be at least the US market leader in a single notebook line (if they're not already) and increasing OS X's market share (without sacrificing overall margins and product quality) does seem as if it has more inherent appeal to Tim Cook (and Apple's Board) than it would have had to Steve. And greater sales would help amortize the development costs of what is apparently a move to annual upgrades of OS X.
So a move to an $899 entry level notebook - whether last year's un-stripped model or a new model with at least last year's performance - would be a step in that direction (again $799 would surprise me). The $1000 entry level price of a Mac with a screen is not carved in stone after all - and virtually all of the components in computers have decreased on a price/value scale.
Another variable no one's mentioned in the thread (that I noticed) is whether or not Apple plans to go the hi dpi/Retina display route with some or all of their upcoming models (assuming the screens are available at the right price and volume - and that most apps' elements wouldn't display at miniscule sizes without extensive re-coding. In that case a notebook with a "regular resolution" screen at a lower price would also make sense.
(Moving a three decades old platform to Retina poses more challenges both to Apple and ISV's than doing so with the new world of iDevices did - by a long shot. This lies outside of my expertise, but I assume a key question is how much of the transition can be handled at the OS level and how much has to be done by the ISV's. If I found I had to buy new versions of ALL my Mac programs to take advantage of the new screen tech, I'd have to think twice or thrice.)
Quote:
Originally Posted by tjwal
Apple is still a niche player in the laptop/desktop market. Offering an entry level Air at a lower price could attrack a large number of users who have been introduced to Apple through iPods, iPhones and iPads. This could substantially increase MacOS market share, so strategically it would be a good move.
Quote:
Originally Posted by Tallest Skil
Why? Apple sells over 90% of all computers over $1,000.
Why wouldn't they want to sell 90% of all computers over $800?
Tim Cook wants Mac marketshare.
As noted by other posters, 90%+ of the high-end market (and I think #3 in the US PC market) is a pretty nice niche. As for the veracity of the 90% stat, I've never seen it credibly challenged anywhere.
I think this is more likely than other posters. Two of the most expensive components in the MacBook air are the SSD and the CPU. We already know that Apple gets a better deal on flash memory than anyone else. If Apple were to include an AMD processor instead of an Intel processor then they might be able to hit this price point.
Hitting the $800 price point should be a no brainer for Apple. More importantly it is easy for them to maintain quality. Going the AMD route should give them an all around better performer in that price range.
Beyond the processor the collapse of the DRAM and flash markets should provide Apple additional leverage. People need to remember that this is only a $200 drop in price.
1. Increased market share. 2. Increased revenues. 3. Continue to be the benchmark for the category. 4. Continue to convert PC users to Macs. 5. If Apple doesnt do it somebody else will impacting Apple negatively.
Of the above #5 is critical. Just because a high quality competitor to the AIR has yet to happen doesn't mean that it won't happen. Apple has screwed themselves repeatedly in the past by over pricing hardware and loosing significant market share to good enough competitors.
they have the iPad for that price point.
you don't understand iPad, the people that buy iPad nor the people that buy laptops. This isn't even remotely the same market.
for now, leave AMD for others.
Why? Is your understanding of electronics that limited. Bluntly AMD has a extremely competitive mobile solution which is far better than some want to admit. Their line of Fusion processors is a very good choice for AIR like machines.
it makes 0 sense.
It is called expanding growth. It is also running with a successful theme.
Many people fail to grasp the concept of "You get what you pay for". They don't understand that a $500 Dell is not a good deal.
On the flip side people do understand value. The sad part about this discussion is that some don't think that Apple can hold up the quality in an $800 AIR. Frankly I see $800 as an easy target for Apple, with decent though not stellar margins. An $800 AIR has the potential of being as successful as the current models without resorting to crap hardware.
They will pay for vanity though, which is a significant factor in Apple's recent success as it is perceived as very trendy at the moment, to be a MacBook or iPhone owner.
This I disagree with very much. The Mac has proven itself to be a very capable machine, that does have real advantages over its PC counter parts.
This is total non sense, the inability to compete almost had Apple bankrupt.
Cost isn't everything, just use a PC or android to see that.
Apple stuff has soul and usability.
Cost never is everything, but excessive cost for what Apple offers up has impacted their performance as a company for years. The good thing now is that Apple moves enough volume that affording to cut pricing is very realistic. The fat margins of the past are not required to keep the company afloat.
Ports include: Gigabit Ethernet, USB 3.0 (2), USB 2.0 (1), HDMI, SD reader
Weight: starting at 4 pounds
Thickness: "as thin as 19.8 mm"
Battery life: up to nine hours
Beats Audio with dual speakers and a subwoofer
HP CoolSense technology
HP TrueVision HD Webcam
HP Protect Smart
HP ENVY Ultrabook (15.6-inch model)
Starts at $799.99; available on May 9
Operating system: Windows 7 Premium (64-bit)
Display: 15.6 inches (1366 x 768 resolution)
CPU: available with second- or third-generation Intel Core processors
Memory: 4GB 1600MHz DDR3
Storage: 32GB (cache) mSATA with 500GB HDD
Connectivity: 802.11a/g/n
Ports include: Gigabit Ethernet, USB 3.0 (2), USB 2.0 (1), HDMI, SD reader
Weight: starting at 4 pounds
Thickness: "as thin as 19.8 mm"
Battery life: up to nine hours
Beats Audio with dual speakers and a subwoofer
HP CoolSense technology
HP TrueVision HD Webcam
HP Protect Smart
Intel Technologies: Rapid Start, Identity Protection Technology, Smart Response and
Smart Connect Technologies
This will need a response from Apple at some point, especially since ULTRABOOK is an Intel classification and using almost the exact same chassis and components but an AMD solution allows them to knock $200 off the $799 we are discussing right now.
This will need a response from Apple at some point, especially since ULTRABOOK is an Intel classification and using almost the exact same chassis and components but an AMD solution allows them to knock $200 off the $799 we are discussing right now.
Sorry, but those HP models you cited are not competing with the MacBook Air. Both of them are 'starting at 4 pounds' and as thin as 19.8 mm. The MacBook Air starts at 2.4 pounds and is 18 mm thick at the thickest (as thin as 3 mm).
These are very different markets. The real competitors for the MacBook Air start around $800-900, although most of them have very significant limitations.
This will need a response from Apple at some point, especially since ULTRABOOK is an Intel classification and using almost the exact same chassis and components but an AMD solution allows them to knock $200 off the $799 we are discussing right now.
1. The "sleekbooks" are just "thin-and-lights" that don't meet Intel's minimums for "ultrabooks" (and deviate likely in other ways besides the AMD Inside) so dismissable as the kind of crap Apple will SHOULD never build.
2. On HP's site, the glass-clad 14" Envy (14T 3000 Spectre) is listed at $1399. Sandy Bridge, 4GB RAM, 128GB SSD, 1600x900 and "as thin as" not listed. 4.25#. (claimed "up to" 9.5 hours and two year warranty - interesting.) - I couldn't find the machines listed above OR in the Endgadget link on their site.
And compared to the "announced ware" in the list above, the 13" MB Air has 1440 by 900 (native) resolution + TB vs. their 1366 x 768 - a big chunk of price right there - before any 2012 Macbook updates (and the MBA is "as thin as" 17mm and less than 3# - tho' it is 13" and not directly comparable). The res of the next gen 15" Mac notebooks (Air and/or Pro) will almost certainly be 1600x900 or higher, even without a move to Retina.
So in the first place, let's compare when both the machines in the list and the link AND the new Apples are actually on sale before we evaluate any head-to-head.
This will need a response from Apple at some point, especially since ULTRABOOK is an Intel classification and using almost the exact same chassis and components but an AMD solution allows them to knock $200 off the $799 we are discussing right now.
Sorry, but those HP models you cited are not competing with the MacBook Air. Both of them are 'starting at 4 pounds' and as thin as 19.8 mm. The MacBook Air starts at 2.4 pounds and is 18 mm thick at the thickest (as thin as 3 mm).
These are very different markets. The real competitors for the MacBook Air start around $800-900, although most of them have very significant limitations.
They meet the Intel specification for the term which is just marketing anyway. They are competing with Apple. No one is this thread has declared that PC makers will make as good a product as Apple. The discussion is if the specs are competitive but the price is doubled, then will Apple have to hit $799 or can they ignore it and keep their pricing at $999. I do not believe Apple can hold their margins and ignore competitors like the ones I linked to above. I think plenty of people would see they are trading one whole pound for 4 inches of screen real estate at almost half the cost. These would not be underpowered, out of date, close out type laptops. The point is the usual arguments about how PC makers "cheap out" their solutions do not apply to these machines.
They meet the Intel specification for the term which is just marketing anyway. ...
You may dismiss the Intel specification as marketing, but the MacBook Air is real. You have been around here as very active poster for more than a decade. This means that you should be well aware of the recent lament from Intel and its OEMs that Apple's retail price for the MBA was about the same as the production costs of Intel-specification thin laptops. Intel and its OEMs appear now to have gotten these things to market with the tagline "Inspired by Intel." You can rest assured that the Wintel manufacturers had to make massive compromises to reach their current price point. Even at that, you can also rest assured that their margins are slim to non-existent.
They meet the Intel specification for the term which is just marketing anyway. ...
You may dismiss the Intel specification as marketing, but the MacBook Air is real. You have been around here as very active poster for more than a decade. This means that you should be well aware of the recent lament from Intel and its OEMs that Apple's retail price for the MBA was about the same as the production costs of Intel-specification thin laptops. Intel and its OEMs appear now to have gotten these things to market with the tagline "Inspired by Intel." You can rest assured that the Wintel manufacturers had to make massive compromises to reach their current price point. Even at that, you can also rest assured that their margins are slim to non-existent.
Of course the MacBook Air is real. No one ever claimed it wasn't real?!? These laptops are real as well. Ultrabook basically means netbooks type laptops that are not woefully underpowered Atom based abominations of plastic. Apple went with better processors and SSD's. They cut the cruft and had a real hit on their hands.
It isn't that PC makers couldn't make that same laptop. It is that their thinking just isn't the same. Their thinking would introduce the same old monstrosities with the marketing screaming "We've got an ethernet port bitches, you suck!"
Intel's money spent creating and pushing out the concept of ultrabooks is just an attempt to change the thinking of folks like Acer and HP. It isn't like Intel has gone in and created fabrication plants to help out partners or things like that. This is a spec and designs to help meet that spec. Those that do have been dubbed ultrabooks by Intel and can be marketed as such. HP mixed and matched a few other components and called the other products "sleekbooks" which is also just marketing.
Apple can compete on innovation or they can compete on price. There are a half dozen threads here asking about new products and the lack of them lately because we were promised 2012 would be a knock out year after 2011 seemed muted but of course we had Steve Jobs passing. 2011 had basically no Mac improvements beyond spec bumps (MacBook Air 11 being the exception.) iPods weren't even given a spec bump. iPhone had the 4s which while I thought it was a nice bump, it has clearly last a full year. I don't see much happening here and it is cause for concern. When the driving force for a company passes and afterwards the concern is that the company seems to lack drive and vision, calling people trolls or being dismissive doesn't solve the problem. Some of us were around when Apple was begging Microsoft to continue Office and the company was days away from being broken up and sold off. We don't want a repeat of that.
It isn't that PC makers couldn't make that same laptop. It is that their thinking just isn't the same. ...
Clearly, you have not been paying attention. It is obvious that Wintel OEMs do not think like Apple, but thinking differently is just the start of Apple's advantage. An essential element of Apple's advantage is its massive cash horde. It uses the money to build factories for its contractors that no combination of competitors can emulate. Apple cornered the market on the machine tools used to fabricate the aluminum bodies of its laptops. Everything goes under the microscope--from the raw aluminum for its laptop bodies to the last mile delivery to the customer. Part of this process is a complete study of every cost to produce everything. In that, Apple squeezes all identifiable costs to the bone.
You may fantasize about the ability of the Dells, the HPs, and the Lenovos to compete on production costs with Apple. In a drug-induced state, you may even fantasize about the white box OEMs competing with Apple. But in the real world, Apple has production advantages that are secure for the foreseeable future.
Comments
Quote:
Originally Posted by AdonisSMU
Dont' believe it. Apple is more likely to add more features to justify the $999 price point. They aren't going lower than that.
Why? Apple sells over 90% of all computers over $1,000.
Why wouldn't they want to sell 90% of all computers over $800?
Tim Cook wants Mac marketshare.
Quote:
Originally Posted by jragosta
True, but if you're able to put 2 and 2 together, you can learn a lot from upstream supply.
For example, I would assume that the motherboard for the next ivy Bridge MBA is somewhat different than the motherboard for the older MBA. So if you were the motherboard supplier and Apple ordered 2 M of the new motherboard for delivery over the next 12 months and 1 M of the old motherboard for delivery over the same time period, you could assume that they are planning to continue to offer the old one at the same time as the new one.
That wouldn't tell you anything about price - that might be a pure guess based on the level of discounts Apple usually offers on previous generation products. For example, the old iPad is 20% lower than the base new one - just like the 20% being projected here.
I'm not saying that it's true, but it is possible for an upstream supplier to have information that would allow one to make a reasonable prediction.
That would still imply that Apple has leaks in their supply chain management. It would not surprise me if many of these "leaks" are simply fabrications. As you mentioned, Digitimes isn't known for its accuracy. I guess it could make some sense if they wanted a cheaper 11", but this rumor is more likely driven by what could be rather than by evidence from the supply chain.
Quote:
Originally Posted by mstone
Many people fail to grasp the concept of "You get what you pay for". They don't understand that a $500 Dell is not a good deal. They will pay for vanity though, which is a significant factor in Apple's recent success as it is perceived as very trendy at the moment, to be a MacBook or iPhone owner.
I wouldn't call that an absolute in electronics. There are many people who are shocked when when their expensive laptop goes south or a drive fails. Now they can do some testing at the assembly phase for potentially defective parts, but beyond that, any machine can fail given the mass market nature of consumer electronics.
Quote:
Originally Posted by Tallest Skil
Why? Apple sells over 90% of all computers over $1,000.
Why wouldn't they want to sell 90% of all computers over $800?
Tim Cook wants Mac marketshare.
Have those numbers ever come from a reliable source? Many of these suggestions have been severely lacking in details. It's like they're just rumors thrown out without sources or estimated margin of error to prop up the stock price.
The figures came from NPD market research firm.
http://www.loopinsight.com/2010/02/01/nine-out-of-10-computers-sold-over-1000-are-macs/
I'll let you decide if they're a reliable source.
Quote:
Originally Posted by jragosta
The figures came from NPD market research firm.
http://www.loopinsight.com/2010/02/01/nine-out-of-10-computers-sold-over-1000-are-macs/
I'll let you decide if they're a reliable source.
I'm not familiar with the source. When I clicked on their reference links, none of them gave any reference to how the estimate was calculated. You really do respond quickly. I must keep a better eye on threads where i've responded.
Maybe, but I've seen no evidence that SFF CULV CPUs from Intel are being dropped by $120.
I didn't say that they had.
The point is that if Apple can buy the components cheaper than at the MBA's most recent revision by $120, they could drop the price to $799 for the old model without harming their (percent) margins.
Even if the CPU hasn't dropped by $120, it's quite possible that the CPU, battery, RAM, SSD, and motherboard have together dropped by that amount. Keep in mind, too, that tooling costs (and design costs) are amortized over the expected life of a design. If they keep a design longer than anticipated, the design and tooling costs drop to zero (since they're already fully amortized). Adding all of those things together, it's entirely plausible that they could have costs that are $120 less than last year. Plus, there are some areas where they could cut corners a bit - maybe a slightly smaller battery, elimination of Thunderbolt, etc.
Quote:
Originally Posted by jragosta
Funny, but the people who actually track such things disagree.
http://stupidapplerumors.com/news/2012/six-month-rumor-Report
Digitimes has a perfect record - they've never been right on the rumors that SAR tracked. If they happen to be right on this one, it's pure luck.
Thanks for that link. I don't remember Digitimes ever being right, but I was wondering if anyone had ever tracked it. You're right, according to Stupid Apple Rumors at least, Digitimes is quite literally never right.
I do have to question SAR not showing their work though. They are clearly flat out lying when it comes to 9to5Mac (and they seem to have some weird feud going on), so it makes me question if they are just playing a "see, we can make stuff up too" game.
Quote:
Originally Posted by s4mb4
no way. at $799 that would affect iPad sales....
First, throwing DigiTimes out of the equation and just considering the notion, given the relative volume of the two machines your statement would make more sense the other way round. And in either case an $800 sale for Apple.
That said, $899 makes a more likely scenario than $799 - even if just for the education market - whether with lower end IB or current SB, both of which have been discussed here. And they're clearing out their refurbs of the $999 Air at $849 today.
Quote:
Originally Posted by aplnub
I think this sounds plausible. SSD prices fall so you leave small SSD in 11". Use current gen. processor after the new one comes out and up sale.
Kinda like how they do the "New iPad" and the "iPad2" at the same time.
Apple has shown a recent fondness for this tactic in two segments (iPhone and iPad) so a third use of it isn't out of the question.
Quote:
Originally Posted by herbapou
With the lower SSD prices and new intel CPU design for untrabook, Apple should be able to lower there prices on the Mac lines. Would be nice to see Apple gain some significant market share in the PC business. With the volume they sell, Apple could reduce the "Apple design tax" from 2 times the price of the same PC to 1.2 to 1.5x. They will never be able to sell at the same prices because of the superior design but getting close would help gain market shares.
I try to recommend Macs to people I know but they all end up buying Pc's for 1 reason: price.
One way or another you gets what you pays for.....
Quote:
Originally Posted by Carmissimo
A drop in SSD pricing would not likely translate into lower prices but rather more memory for the same price. The entry Air with 64GB of memory is crying out for a boost to 128GB.
The iPad is a fine choice for casual use at a lower price point so I think having the Air line start at 128GB would make a lot of sense.
I'm really hoping, since I'm in the market for a new notebook that 256GB is the new starting point for the pro line at current prices (and that there are still Pros!).
Quote:
Originally Posted by charlituna
Apple doesn't chase any market when it comes to what the other players are doing. This is something Digitimes just can't get in their heads.
I could see them perhaps keeping their current 11 inch model and due to the cost of parts going down cutting the price but that's the best they would do. They aren't about to tarnish their image by trying to make a cheap model to compete with folks that are actually trying to design to compete with them.
Quote:
Originally Posted by jragosta
I could picture them updating the MBA with more RAM, Ivy Bridge, etc and then leaving the current base model as a $799 model for cheapskates. They're already doing that with the iPad and the iPhone, so why not with the MBA? I believe they did it with the iMac at one time, as well as an educational model.
I could picture it being a great little computer for education, for example. Most school districts could easily get buy with a base model with Sandy Bridge and 64 GB (even perhaps 32). My daughter's school is using tablets that are a lot less capable than that.
Entirely different items. Apple indicated that the iPad had only marginal effect on MBA sales, so I don't expect that the opposite would be any less true.
Again, $899 seems to make more sense from Apple's POV, i.e., expanding the base, enticing/holding/expanding the ed market, not compromising the experience (even if the last gen experience), build quality, or MARGINS etc.
As your "entirely different item," something like over 25% of new iPad and new iPhone buyers are purchasing their first Apple device - creating the likelihood of increased rather than decreased Apple PC sales. Or if those folks are opting for iDevices INSTEAD of "trucks," still a net gain in Apple customers.
Quote:
Originally Posted by macarena
I really want Apple to employ a scorched earth strategy to increase market share. Do not leave any low lying fruit for the opposition. Insistence on 40% margins might not be the best strategy for Apple today. If they can sell twice the volume at half the margins, their overall profits would be the same - and it is not inconceivable that Apple can sell twice the volume at half the margins in some product segments - notably desktop and laptop computers. Anyway, today desktop and laptop computers are such a small percentage of Apple's business that lowering margins will not impact the company much.
Quote:
Originally Posted by I am a Zither Zather Zuzz
Apple makes a huge profit percentage, They could lower prices, increase volume, and make even higher net profits.
Besides your line of thinking, your posting name (talkin' to ZZZ) makes me always deprecate your posts before I even read them. The one thing Apple's never done with a strategic hardware product of their own at least, other than the now long gone back to school packages) is to pursue a "greater net profits/lower margins through volume discount pricing" strategy - and given their current (overwhelming) success, that is NOT going to change anytime soon, if ever.
For examples of how this hurts a prestige brand, see what happened to Sony, Panasonic and others which started to slap their logo on ever more downscale junk.
Some of Apple's software and cloud operation is a possible exception, e.g., take iTunes - I download tons of podcasts and very seldom buy anything there, and Apple notes their profitability is lower in the store. So the enticing "ecosystem" (now to include device-wide apps like Messages, Reminders, iTunes Match, etc.) and some of their apps (the aggressive pricing on iWork, e.g.) is not approached in exactly the same way.
Quote:
Originally Posted by Blastdoor
It makes a great deal of sense. Apple plays to win, and they aren't worried about competing with themselves. If they were, they wouldn't have introduced the iPad in the first place.
I agree that Apple would never sell at a price point that isn't profitable, nor would they sell at a price point that results in a low quality product. But if they can sell at a lower price while maintaining margins and quality, then they absolutely will.
Perhaps some observers do not appreciate how the economic realities have changes for Apple in the last 10 years. Ten years ago, Apple couldn't compete at lower price points with the Mac because Apple lacked the economies of scale to drive down costs. But now Apple is the biggest, baddest tech company in the world and can get prices on key components that also-rans like Dell and HP can only dream of.
HP is (again) the largest PC maker in the world, not Apple (tho' Apple's a larger COMPANY by market cap and other metrics), so I assume they have some small clout with suppliers. Apple's ability to use their cash mountain to pre-buy components, tho', likely gives them some of the advantage you're implying. Just wanted to clear that up.
Quote:
Originally Posted by macarena
The people who think that Apple will not do this, are forgetting that this is Tim Cook's Apple - not Steve Jobs' Apple. For a master at logistics, the best way to showcase his skills is to increase supply (and therefore marketshare), and lower prices, without impacting profit margins significantly.
Secondly, it is high time Apple made a serious attempt at marketshare. There is absolutely no point in having $100B in the bank, if Apple does not use that money to improve its market presence in areas where they can. For a large company, Apple's profit margins are approaching obscene levels. Even Apple lovers will soon start questioning the pricing strategies. Apple is better off sacrificing margins for market share today. In all likelihood, their overall profits would increase at lower margins, because of much higher sales.
The new iPad has seen humongous demand, but still Apple has managed to keep supply at reasonable levels. Wait periods are in days, and not weeks. And Apple did not increase pricing on the new iPad, despite significant improvements - and even expectations in the market that the new iPad would be priced at $579 or $599. I believe, these two facts signal a clear departure from past strategies.
I usually don't bother with posts that include whining "obscene profits" rhetoric lifted from the 99% non-thinking mentality (and I can at least guess whom you vote for). As long as it's not the result of an illegal or illegally pursued monopoly (the situation MS approached in the '90s), a company's margins are its own business. If they charge more than the (in this case "Apple lovers") market will bear, they will either suffer or adjust their profits and/or products.
But yet and still you make some interesting points. Just as making the world's best-selling single smart phone and tablet device benefits the whole Apple aura and promotes lock-in with their ecosystem, grabbing enough of the PC market to be at least the US market leader in a single notebook line (if they're not already) and increasing OS X's market share (without sacrificing overall margins and product quality) does seem as if it has more inherent appeal to Tim Cook (and Apple's Board) than it would have had to Steve. And greater sales would help amortize the development costs of what is apparently a move to annual upgrades of OS X.
So a move to an $899 entry level notebook - whether last year's un-stripped model or a new model with at least last year's performance - would be a step in that direction (again $799 would surprise me). The $1000 entry level price of a Mac with a screen is not carved in stone after all - and virtually all of the components in computers have decreased on a price/value scale.
Another variable no one's mentioned in the thread (that I noticed) is whether or not Apple plans to go the hi dpi/Retina display route with some or all of their upcoming models (assuming the screens are available at the right price and volume - and that most apps' elements wouldn't display at miniscule sizes without extensive re-coding. In that case a notebook with a "regular resolution" screen at a lower price would also make sense.
(Moving a three decades old platform to Retina poses more challenges both to Apple and ISV's than doing so with the new world of iDevices did - by a long shot. This lies outside of my expertise, but I assume a key question is how much of the transition can be handled at the OS level and how much has to be done by the ISV's. If I found I had to buy new versions of ALL my Mac programs to take advantage of the new screen tech, I'd have to think twice or thrice.)
Quote:
Originally Posted by tjwal
Apple is still a niche player in the laptop/desktop market. Offering an entry level Air at a lower price could attrack a large number of users who have been introduced to Apple through iPods, iPhones and iPads. This could substantially increase MacOS market share, so strategically it would be a good move.
Quote:
Originally Posted by Tallest Skil
Why? Apple sells over 90% of all computers over $1,000.
Why wouldn't they want to sell 90% of all computers over $800?
Tim Cook wants Mac marketshare.
As noted by other posters, 90%+ of the high-end market (and I think #3 in the US PC market) is a pretty nice niche. As for the veracity of the 90% stat, I've never seen it credibly challenged anywhere.
Why do you believe this? The markets are dramatically different.
Hitting the $800 price point should be a no brainer for Apple. More importantly it is easy for them to maintain quality. Going the AMD route should give them an all around better performer in that price range.
Beyond the processor the collapse of the DRAM and flash markets should provide Apple additional leverage. People need to remember that this is only a $200 drop in price.
Of the above #5 is critical. Just because a high quality competitor to the AIR has yet to happen doesn't mean that it won't happen. Apple has screwed themselves repeatedly in the past by over pricing hardware and loosing significant market share to good enough competitors. you don't understand iPad, the people that buy iPad nor the people that buy laptops. This isn't even remotely the same market. Why? Is your understanding of electronics that limited. Bluntly AMD has a extremely competitive mobile solution which is far better than some want to admit. Their line of Fusion processors is a very good choice for AIR like machines. It is called expanding growth. It is also running with a successful theme.
This I disagree with very much. The Mac has proven itself to be a very capable machine, that does have real advantages over its PC counter parts.
Cost never is everything, but excessive cost for what Apple offers up has impacted their performance as a company for years. The good thing now is that Apple moves enough volume that affording to cut pricing is very realistic. The fat margins of the past are not required to keep the company afloat.
HP unveils ultra and sleekbooks
Quote:
HP ENVY Sleekbook (15.6-inch model)
Starts at $599.99; available on June 20
Operating system: Windows 7 Premium (64-bit)
Display: 15.6 inches (1366 x 768 resolution)
CPU: a second-generation AMD APU
Memory: 4GB 1600MHz DDR3
Storage: 320GB HDD
Connectivity: 802.11a/g/n
Ports include: Gigabit Ethernet, USB 3.0 (2), USB 2.0 (1), HDMI, SD reader
Weight: starting at 4 pounds
Thickness: "as thin as 19.8 mm"
Battery life: up to nine hours
Beats Audio with dual speakers and a subwoofer
HP CoolSense technology
HP TrueVision HD Webcam
HP Protect Smart
HP ENVY Ultrabook (15.6-inch model)
Starts at $799.99; available on May 9
Operating system: Windows 7 Premium (64-bit)
Display: 15.6 inches (1366 x 768 resolution)
CPU: available with second- or third-generation Intel Core processors
Memory: 4GB 1600MHz DDR3
Storage: 32GB (cache) mSATA with 500GB HDD
Connectivity: 802.11a/g/n
Ports include: Gigabit Ethernet, USB 3.0 (2), USB 2.0 (1), HDMI, SD reader
Weight: starting at 4 pounds
Thickness: "as thin as 19.8 mm"
Battery life: up to nine hours
Beats Audio with dual speakers and a subwoofer
HP CoolSense technology
HP TrueVision HD Webcam
HP Protect Smart
Intel Technologies: Rapid Start, Identity Protection Technology, Smart Response and
Smart Connect Technologies
This will need a response from Apple at some point, especially since ULTRABOOK is an Intel classification and using almost the exact same chassis and components but an AMD solution allows them to knock $200 off the $799 we are discussing right now.
Sorry, but those HP models you cited are not competing with the MacBook Air. Both of them are 'starting at 4 pounds' and as thin as 19.8 mm. The MacBook Air starts at 2.4 pounds and is 18 mm thick at the thickest (as thin as 3 mm).
These are very different markets. The real competitors for the MacBook Air start around $800-900, although most of them have very significant limitations.
Quote:
HP ENVY Sleekbook (15.6-inch model)
Starts at $599.99; available on June 20
Operating system: Windows 7 Premium (64-bit)
Display: 15.6 inches (1366 x 768 resolution)
CPU: a second-generation AMD APU
Memory: 4GB 1600MHz DDR3
Storage: 320GB HDD
Connectivity: 802.11a/g/n
Ports include: Gigabit Ethernet, USB 3.0 (2), USB 2.0 (1), HDMI, SD reader
Weight: starting at 4 pounds
Thickness: "as thin as 19.8 mm"
Battery life: up to nine hours
Beats Audio with dual speakers and a subwoofer
HP CoolSense technology
HP TrueVision HD Webcam
HP Protect Smart
HP ENVY Ultrabook (15.6-inch model)
Starts at $799.99; available on May 9
Operating system: Windows 7 Premium (64-bit)
Display: 15.6 inches (1366 x 768 resolution)
CPU: available with second- or third-generation Intel Core processors
Memory: 4GB 1600MHz DDR3
Storage: 32GB (cache) mSATA with 500GB HDD
Connectivity: 802.11a/g/n
Ports include: Gigabit Ethernet, USB 3.0 (2), USB 2.0 (1), HDMI, SD reader
Weight: starting at 4 pounds
Thickness: "as thin as 19.8 mm"
Battery life: up to nine hours
Beats Audio with dual speakers and a subwoofer
HP CoolSense technology
HP TrueVision HD Webcam
HP Protect Smart
Intel Technologies: Rapid Start, Identity Protection Technology, Smart Response and
Smart Connect Technologies
Quote:
Originally Posted by trumptman
HP unveils ultra and sleekbooks
This will need a response from Apple at some point, especially since ULTRABOOK is an Intel classification and using almost the exact same chassis and components but an AMD solution allows them to knock $200 off the $799 we are discussing right now.
1. The "sleekbooks" are just "thin-and-lights" that don't meet Intel's minimums for "ultrabooks" (and deviate likely in other ways besides the AMD Inside) so dismissable as the kind of crap Apple will SHOULD never build.
2. On HP's site, the glass-clad 14" Envy (14T 3000 Spectre) is listed at $1399. Sandy Bridge, 4GB RAM, 128GB SSD, 1600x900 and "as thin as" not listed. 4.25#. (claimed "up to" 9.5 hours and two year warranty - interesting.) - I couldn't find the machines listed above OR in the Endgadget link on their site.
And compared to the "announced ware" in the list above, the 13" MB Air has 1440 by 900 (native) resolution + TB vs. their 1366 x 768 - a big chunk of price right there - before any 2012 Macbook updates (and the MBA is "as thin as" 17mm and less than 3# - tho' it is 13" and not directly comparable). The res of the next gen 15" Mac notebooks (Air and/or Pro) will almost certainly be 1600x900 or higher, even without a move to Retina.
So in the first place, let's compare when both the machines in the list and the link AND the new Apples are actually on sale before we evaluate any head-to-head.
Quote:
Originally Posted by jragosta
Quote:
Originally Posted by trumptman
HP unveils ultra and sleekbooks
This will need a response from Apple at some point, especially since ULTRABOOK is an Intel classification and using almost the exact same chassis and components but an AMD solution allows them to knock $200 off the $799 we are discussing right now.
Sorry, but those HP models you cited are not competing with the MacBook Air. Both of them are 'starting at 4 pounds' and as thin as 19.8 mm. The MacBook Air starts at 2.4 pounds and is 18 mm thick at the thickest (as thin as 3 mm).
These are very different markets. The real competitors for the MacBook Air start around $800-900, although most of them have very significant limitations.
They meet the Intel specification for the term which is just marketing anyway. They are competing with Apple. No one is this thread has declared that PC makers will make as good a product as Apple. The discussion is if the specs are competitive but the price is doubled, then will Apple have to hit $799 or can they ignore it and keep their pricing at $999. I do not believe Apple can hold their margins and ignore competitors like the ones I linked to above. I think plenty of people would see they are trading one whole pound for 4 inches of screen real estate at almost half the cost. These would not be underpowered, out of date, close out type laptops. The point is the usual arguments about how PC makers "cheap out" their solutions do not apply to these machines.
Quote:
Originally Posted by trumptman
They meet the Intel specification for the term which is just marketing anyway. ...
You may dismiss the Intel specification as marketing, but the MacBook Air is real. You have been around here as very active poster for more than a decade. This means that you should be well aware of the recent lament from Intel and its OEMs that Apple's retail price for the MBA was about the same as the production costs of Intel-specification thin laptops. Intel and its OEMs appear now to have gotten these things to market with the tagline "Inspired by Intel." You can rest assured that the Wintel manufacturers had to make massive compromises to reach their current price point. Even at that, you can also rest assured that their margins are slim to non-existent.
Quote:
Originally Posted by Mr. Me
Quote:
Originally Posted by trumptman
They meet the Intel specification for the term which is just marketing anyway. ...
You may dismiss the Intel specification as marketing, but the MacBook Air is real. You have been around here as very active poster for more than a decade. This means that you should be well aware of the recent lament from Intel and its OEMs that Apple's retail price for the MBA was about the same as the production costs of Intel-specification thin laptops. Intel and its OEMs appear now to have gotten these things to market with the tagline "Inspired by Intel." You can rest assured that the Wintel manufacturers had to make massive compromises to reach their current price point. Even at that, you can also rest assured that their margins are slim to non-existent.
Of course the MacBook Air is real. No one ever claimed it wasn't real?!? These laptops are real as well. Ultrabook basically means netbooks type laptops that are not woefully underpowered Atom based abominations of plastic. Apple went with better processors and SSD's. They cut the cruft and had a real hit on their hands.
It isn't that PC makers couldn't make that same laptop. It is that their thinking just isn't the same. Their thinking would introduce the same old monstrosities with the marketing screaming "We've got an ethernet port bitches, you suck!"
Intel's money spent creating and pushing out the concept of ultrabooks is just an attempt to change the thinking of folks like Acer and HP. It isn't like Intel has gone in and created fabrication plants to help out partners or things like that. This is a spec and designs to help meet that spec. Those that do have been dubbed ultrabooks by Intel and can be marketed as such. HP mixed and matched a few other components and called the other products "sleekbooks" which is also just marketing.
Apple can compete on innovation or they can compete on price. There are a half dozen threads here asking about new products and the lack of them lately because we were promised 2012 would be a knock out year after 2011 seemed muted but of course we had Steve Jobs passing. 2011 had basically no Mac improvements beyond spec bumps (MacBook Air 11 being the exception.) iPods weren't even given a spec bump. iPhone had the 4s which while I thought it was a nice bump, it has clearly last a full year. I don't see much happening here and it is cause for concern. When the driving force for a company passes and afterwards the concern is that the company seems to lack drive and vision, calling people trolls or being dismissive doesn't solve the problem. Some of us were around when Apple was begging Microsoft to continue Office and the company was days away from being broken up and sold off. We don't want a repeat of that.
Quote:
Originally Posted by trumptman
...
It isn't that PC makers couldn't make that same laptop. It is that their thinking just isn't the same. ...
Clearly, you have not been paying attention. It is obvious that Wintel OEMs do not think like Apple, but thinking differently is just the start of Apple's advantage. An essential element of Apple's advantage is its massive cash horde. It uses the money to build factories for its contractors that no combination of competitors can emulate. Apple cornered the market on the machine tools used to fabricate the aluminum bodies of its laptops. Everything goes under the microscope--from the raw aluminum for its laptop bodies to the last mile delivery to the customer. Part of this process is a complete study of every cost to produce everything. In that, Apple squeezes all identifiable costs to the bone.
You may fantasize about the ability of the Dells, the HPs, and the Lenovos to compete on production costs with Apple. In a drug-induced state, you may even fantasize about the white box OEMs competing with Apple. But in the real world, Apple has production advantages that are secure for the foreseeable future.