You are just being Mr. Meanie again of course, but what I meant was ...
- Apple makes a good 30-40% average margin on it's products
- Most other computer manufacturers deal with 10-15%
Therefore at any time, anytime they feel like it, they *can* swallow half of the margin on almost any product they like and still be very competitive. They could also afford to lower their overall margins across the board lowering all prices by 5-10% and still make tons and tons of money. I have never maintained that their current strategy is unreasonable in any way, in fact it's a very smart thing that they do with their margins. I'm just saying that anytime they want to they could easily produce a product that is much cheaper than their current pricing and yet still makes them more money than the competition.
They wouldn't make *quite* as much money, but then they are basically swimming in money at the moment anyway.
You of course interpreted my remarks as something else entirely.
No, I interpreted your remarks as exactly what you said. You said:
"Apple will have failed yet again to make an affordable product for the masses"
What does that have to do with Apple's margins? As I pointed out, Apple's iDevices have been selling like crazy and are leading the market. Clearly, they are affordable products for the masses.
Your attempts to pretend you said something entirely different are pretty sad.
Sorry but I don't see this device being plastic, because I don't see it being marketed to just kids. What's the last Apple product that was plastic? 3GS? Clearly that wasn't what Apple really wanted to do as iPhone 4 was glass and iPhone 5 is aluminum. A plastic body with 1024x768 resolution and A5 processor would be an embarrassment to announce IMO.
A £329 is possible, but is it necessary? Apple will only lose profit out of necessity; will Apple sell tons more at £299 rather than £349? No. But it may have to compromise on quality. $299 or under attempts to compete with Ama/Goog, and probably at 8GB with them. That's not where Apple wants to go, nor needs to. They also need to keep prices roughly in line with their other products or risk devaluing them. Current 16GB 7-inchers are ~$350:
Your cost comparisons are incorrect. In USD, the wi-fi only, 16GB versions are between $200 - $300 (typically). The $350 7" tablets that you seem to be pricing are usually the 4G versions.
But, I'll concede a bit...maybe $329-$349 would be a better price range for iPad Mini. My point is that $399 is too high (as a starting price point for a 7.85" Apple iPad Mini).
i disagree using the Cook Credo: Apple will not allow a pricing umbrella in the product line. Crap not withstanding, if Apple builds an 8" device, it will be at the price point of the current market 7" devices. Apple stated up front that 7" was a crappy user experience for the iPad (size battery life, UI). The market is speaking that the form factor is indeed interesting to apple, and they want to continue to have a 'gateway drug' device into the iOS ecosystem. this has to be a great interface. My guess it will be similar to current iPad or the current iPhone, not plastic, again, to differentiate the iPad brand.
I see a ~$50 price premium ($249) over the current competition, but not $100. At this level, $100 is significant.
This should be a 'Zune' killer play. make it impossible for others to make a Board of Directors approvable profit in the 4.1"-7.5" space. Apple will be happy with 'cheap' competitors, but not one that can has a 'quality' of the iPad at a price 25% less than the iPad.
I'm not trying to be picky, but I'm not sure I understand your post... so let me address each of your points:
1. "if Apple builds an 8" device, it will be at the price point of the current market 7" devices.":
What?! If the current 7" devices are between $200-$300, I say it's ridiculous for Apple to produce/sell one at those low prices.
2. "My guess it will be similar to current iPad...":
You just totally confused me. In #1 above, seems like you predict a very low price point, but you also predict it will be at the high level of quality as the existing iPad?! So you're saying that Apple should produce a 7.85" iPad Mini with the same great quality, but at an absrurdly low price point? I don't think so.
3. "This should be a 'Zune' killer play":
I don't even know what you meant by this. But assuming that you mean that the iPad Mini should be at a price point that is too low for others to go...to that, I disagree...in addition, it's not really relevant for the iPad. You see, for the iPod, there was nowhere else to go with it and Apple knew that iPods relevant to its company value was small and getting smaller. The iPad, on the other hand, is a more substantial profit driver and is growing. So while I agree that all companies would love to kill all competition, I don't think that it makes business sense (at this current point in time) to increase market share at the (dramatic) expense of profits. Maybe in 3 years, the iPad Mini may have to be offered at some ultra low price point.
4. "Apple will be happy with 'cheap' competitors, but not one that can has a 'quality' of the iPad at a price 25% less than the iPad.":
I hate to tell you this, but no company on the face of this earth will be able to product an appliance with the SAME quality as the iPad & offer at 25% less cost. If they do, I'll buy 100 of them. :-)
Sorry but I don't see this device being plastic, because I don't see it being marketed to just kids. What's the last Apple product that was plastic? 3GS?
Sorry but I don't see this device being plastic, because I don't see it being marketed to just kids. What's the last Apple product that was plastic? 3GS? Clearly that wasn't what Apple really wanted to do as iPhone 4 was glass and iPhone 5 is aluminum. A plastic body with 1024x768 resolution and A5 processor would be an embarrassment to announce IMO.
Listen, I'm certainly not saying it must be plastic. And I'm not trying to sound like a know-it-all. I'm just adding another very likely perspective that I think would be good for consumers as well as AAPL stock.
From what I understand, plastic is cheaper to produce/make and it's lighter for the user. Most consumers in this space want a lighter and a cheaper alternative. It's a win-win situation. The iPad Mini market is made up mostly 3 types: 1. cheap skates; 2. those that want ANOTHER Apple device (since they already own an iPod/iPhone and a Laptop) and; 3. those that want a smaller computing device (from an iPad and a laptop...people like inspectors, travelers, or little people).
It's only the minority that want a 7.85", super high quality device, IMO. I don't want Apple to launch a product that just appeals to the vocal droid geek, apple geek, ebook connoisseur, or some other vocal minority. I apologize in advance for saying that and pissing off some of you, really I do, but it has to be said.
A 1024x768 A5 7.85" device is not an embarrassment if the 7.85" device just friggin' works and is affordable! Looking back at the iPhone 3GS, I don't recall anyone (at that time) hating the phone because the plastic made it any less functional. If the mini device is of decent enough quality materials, seamlessly integrates hardware and software, and uses iOS...it'll be awesome.
Listen, I'm certainly not saying it must be plastic. And I'm not trying to sound like a know-it-all. I'm just adding another very likely perspective that I think would be good for consumers as well as AAPL stock.
From what I understand, plastic is cheaper to produce/make and it's lighter for the user. Most consumers in this space want a lighter and a cheaper alternative. It's a win-win situation. The iPad Mini market is made up mostly 3 types: 1. cheap skates; 2. those that want ANOTHER Apple device (since they already own an iPod/iPhone and a Laptop) and; 3. those that want a smaller computing device (from an iPad and a laptop...people like inspectors, travelers, or little people).
It's only the minority that want a 7.85", super high quality device, IMO. I don't want Apple to launch a product that just appeals to the vocal droid geek, apple geek, ebook connoisseur, or some other vocal minority. I apologize in advance for saying that and pissing off some of you, really I do, but it has to be said.
A 1024x768 A5 7.85" device is not an embarrassment if the 7.85" device just friggin' works and is affordable! Looking back at the iPhone 3GS, I don't recall anyone (at that time) hating the phone because the plastic made it any less functional. If the mini device is of decent enough quality materials, seamlessly integrates hardware and software, and uses iOS...it'll be awesome.
When Apple starts doing things that are "decent enough" it's time to worry. Jony Ive has often said if they can't make something better they won't do it. I'm sorry but a smaller plastic iPad with iPad 2-like specs is not making something better. To me that comes across as a complete compromise based on price. And assuming people will buy it just because its Apple.
Honestly I don't expect Apple to compete with the $199 tablets in terms of price. They don't need to play in a race to the bottom. Make a more premium device with superior build quality/materials, display, etc. Provide a reason to be able to sell it for $50 more.
Your cost comparisons are incorrect. In USD, the wi-fi only, 16GB versions are between $200 - $300 (typically). The $350 7" tablets that you seem to be pricing are usually the 4G versions.
But, I'll concede a bit...maybe $329-$349 would be a better price range for iPad Mini. My point is that $399 is too high (as a starting price point for a 7.85" Apple iPad Mini).
Problem is all the 16GB 7-inchers from HTC, Samsung, Dell, RIM etc. introduced in the last year or so have all plummeted in price - but pretty much all were introduced at around $349 - ie. this is the level at which they would be making a profit. They haven't. So comparing a probably leading Apple device to these failures at sale prices is kinda absurd. As is comparing them to Amazon/Google, who, we know, make zero profit on theirs. My figures may be out of date, but that's largely due to a huge amount sitting on retailer's shelves, not a difference in what they would sell them for, if they could. Apple can.
I do have trouble with translating USD though tbf, being a Brit. Prices are different in weird ways over this side of the Atlantic.
When Apple starts doing things that are "decent enough" it's time to worry. Jony Ive has often said if they can't make something better they won't do it. I'm sorry but a smaller plastic iPad with iPad 2-like specs is not making something better. To me that comes across as a complete compromise based on price. And assuming people will buy it just because its Apple.
Honestly I don't expect Apple to compete with the $199 tablets in terms of price. They don't need to play in a race to the bottom. Make a more premium device with superior build quality/materials, display, etc. Provide a reason to be able to sell it for $50 more.
I share your concern about "decent enough". I just think that the advantages outweigh the disadvantages. We'll see tomorrow if there's an announcement.
I agree that Apple should not compete with the $199 tablets. I'm thinking more like $299-$329. I just don't know if they can build one at that price with all high quality materials.
Comments
No, I interpreted your remarks as exactly what you said. You said:
"Apple will have failed yet again to make an affordable product for the masses"
What does that have to do with Apple's margins? As I pointed out, Apple's iDevices have been selling like crazy and are leading the market. Clearly, they are affordable products for the masses.
Your attempts to pretend you said something entirely different are pretty sad.
Quote:
Originally Posted by TimmyDax
A £329 is possible, but is it necessary? Apple will only lose profit out of necessity; will Apple sell tons more at £299 rather than £349? No. But it may have to compromise on quality. $299 or under attempts to compete with Ama/Goog, and probably at 8GB with them. That's not where Apple wants to go, nor needs to. They also need to keep prices roughly in line with their other products or risk devaluing them. Current 16GB 7-inchers are ~$350:
http://tablets.venturebeat.com/saved_search/7-Inch-Android-Tablets
Your cost comparisons are incorrect. In USD, the wi-fi only, 16GB versions are between $200 - $300 (typically). The $350 7" tablets that you seem to be pricing are usually the 4G versions.
But, I'll concede a bit...maybe $329-$349 would be a better price range for iPad Mini. My point is that $399 is too high (as a starting price point for a 7.85" Apple iPad Mini).
Quote:
Originally Posted by TheOtherGeoff
i disagree using the Cook Credo: Apple will not allow a pricing umbrella in the product line. Crap not withstanding, if Apple builds an 8" device, it will be at the price point of the current market 7" devices. Apple stated up front that 7" was a crappy user experience for the iPad (size battery life, UI). The market is speaking that the form factor is indeed interesting to apple, and they want to continue to have a 'gateway drug' device into the iOS ecosystem. this has to be a great interface. My guess it will be similar to current iPad or the current iPhone, not plastic, again, to differentiate the iPad brand.
I see a ~$50 price premium ($249) over the current competition, but not $100. At this level, $100 is significant.
This should be a 'Zune' killer play. make it impossible for others to make a Board of Directors approvable profit in the 4.1"-7.5" space. Apple will be happy with 'cheap' competitors, but not one that can has a 'quality' of the iPad at a price 25% less than the iPad.
I'm not trying to be picky, but I'm not sure I understand your post... so let me address each of your points:
1. "if Apple builds an 8" device, it will be at the price point of the current market 7" devices.":
What?! If the current 7" devices are between $200-$300, I say it's ridiculous for Apple to produce/sell one at those low prices.
2. "My guess it will be similar to current iPad...":
You just totally confused me. In #1 above, seems like you predict a very low price point, but you also predict it will be at the high level of quality as the existing iPad?! So you're saying that Apple should produce a 7.85" iPad Mini with the same great quality, but at an absrurdly low price point? I don't think so.
3. "This should be a 'Zune' killer play":
I don't even know what you meant by this. But assuming that you mean that the iPad Mini should be at a price point that is too low for others to go...to that, I disagree...in addition, it's not really relevant for the iPad. You see, for the iPod, there was nowhere else to go with it and Apple knew that iPods relevant to its company value was small and getting smaller. The iPad, on the other hand, is a more substantial profit driver and is growing. So while I agree that all companies would love to kill all competition, I don't think that it makes business sense (at this current point in time) to increase market share at the (dramatic) expense of profits. Maybe in 3 years, the iPad Mini may have to be offered at some ultra low price point.
4. "Apple will be happy with 'cheap' competitors, but not one that can has a 'quality' of the iPad at a price 25% less than the iPad.":
I hate to tell you this, but no company on the face of this earth will be able to product an appliance with the SAME quality as the iPad & offer at 25% less cost. If they do, I'll buy 100 of them. :-)
Originally Posted by Rogifan
Sorry but I don't see this device being plastic, because I don't see it being marketed to just kids. What's the last Apple product that was plastic? 3GS?
The new AirPort Express.
Quote:
Originally Posted by Rogifan
Sorry but I don't see this device being plastic, because I don't see it being marketed to just kids. What's the last Apple product that was plastic? 3GS? Clearly that wasn't what Apple really wanted to do as iPhone 4 was glass and iPhone 5 is aluminum. A plastic body with 1024x768 resolution and A5 processor would be an embarrassment to announce IMO.
Listen, I'm certainly not saying it must be plastic. And I'm not trying to sound like a know-it-all. I'm just adding another very likely perspective that I think would be good for consumers as well as AAPL stock.
From what I understand, plastic is cheaper to produce/make and it's lighter for the user. Most consumers in this space want a lighter and a cheaper alternative. It's a win-win situation. The iPad Mini market is made up mostly 3 types: 1. cheap skates; 2. those that want ANOTHER Apple device (since they already own an iPod/iPhone and a Laptop) and; 3. those that want a smaller computing device (from an iPad and a laptop...people like inspectors, travelers, or little people).
It's only the minority that want a 7.85", super high quality device, IMO. I don't want Apple to launch a product that just appeals to the vocal droid geek, apple geek, ebook connoisseur, or some other vocal minority. I apologize in advance for saying that and pissing off some of you, really I do, but it has to be said.
A 1024x768 A5 7.85" device is not an embarrassment if the 7.85" device just friggin' works and is affordable! Looking back at the iPhone 3GS, I don't recall anyone (at that time) hating the phone because the plastic made it any less functional. If the mini device is of decent enough quality materials, seamlessly integrates hardware and software, and uses iOS...it'll be awesome.
When Apple starts doing things that are "decent enough" it's time to worry. Jony Ive has often said if they can't make something better they won't do it. I'm sorry but a smaller plastic iPad with iPad 2-like specs is not making something better. To me that comes across as a complete compromise based on price. And assuming people will buy it just because its Apple.
Honestly I don't expect Apple to compete with the $199 tablets in terms of price. They don't need to play in a race to the bottom. Make a more premium device with superior build quality/materials, display, etc. Provide a reason to be able to sell it for $50 more.
Problem is all the 16GB 7-inchers from HTC, Samsung, Dell, RIM etc. introduced in the last year or so have all plummeted in price - but pretty much all were introduced at around $349 - ie. this is the level at which they would be making a profit. They haven't. So comparing a probably leading Apple device to these failures at sale prices is kinda absurd. As is comparing them to Amazon/Google, who, we know, make zero profit on theirs. My figures may be out of date, but that's largely due to a huge amount sitting on retailer's shelves, not a difference in what they would sell them for, if they could. Apple can.
I do have trouble with translating USD though tbf, being a Brit. Prices are different in weird ways over this side of the Atlantic.
Quote:
Originally Posted by Rogifan
When Apple starts doing things that are "decent enough" it's time to worry. Jony Ive has often said if they can't make something better they won't do it. I'm sorry but a smaller plastic iPad with iPad 2-like specs is not making something better. To me that comes across as a complete compromise based on price. And assuming people will buy it just because its Apple.
Honestly I don't expect Apple to compete with the $199 tablets in terms of price. They don't need to play in a race to the bottom. Make a more premium device with superior build quality/materials, display, etc. Provide a reason to be able to sell it for $50 more.
I share your concern about "decent enough". I just think that the advantages outweigh the disadvantages. We'll see tomorrow if there's an announcement.
I agree that Apple should not compete with the $199 tablets. I'm thinking more like $299-$329. I just don't know if they can build one at that price with all high quality materials.
Originally Posted by Kenmar
So if Ipad Mini prices @ 349.00, would we be better off going with Nexus 7 for grandkids?
No.