Not sure I understand your differentiation between low prices versus below their intended profit margin....seems to be pretty much the same in the eyes of the consumer in most cases.
I agree with everything you said except for 2 things in regards to "average profit margin":
1. Neither you nor me know what that number is.
2. That number (as defined by the Corporation) is a planned margin, but is not known until consumers "vote" with their wallet (i.e. buy the low end or the high end).
My point of contention is that it is quite possible that by reducing cost of the high end, more consumers will buy the high end, thereby actually increasing the average profit margin. It may not be viable for the Mac, but maybe more of a viable theory for flash storage (iPhones/iPads).
But hey, I'm not trying to quibble. I think that some here made some good points that Apple feels that its low end is good for the masses and that maybe it's the high end that really isn't really necessary or popular, so why reduce that price? In the end, Apple is almost always smarter than me. Almost always. :-)
1) It's not the same. Apple wants to make a certain profit and the customer wants to get a certain value out of a product. The value for the customer varies because most Mac buyers don't see the value in the iMac over other Macs, and why most PC sales are not Macs.
2) We do know what the number is because Apple states it during their earnings. You have to do math to figure out their expectations for the quarter, their revenue and net profit, but the values are all there.
3) Of course reducing the cost of the high end will cause more people to buy it. This is what we've been discussing. This is what fast food companies do by selling you a very expensive soda at the low end and then charging you a little more for a much larger container; a container that has as nominal cost increase, as well as for ice and for the carbonated soda and syrup. They point is to maximize the upsell as much as possible.
PCs don't work that way because no vendor can have enough product to make all their machines the same at the high end. it's not just more syrup and water, it's very different components altogether. Again, you're coming at this as if Apple's low end is some ideal price point and then upgrades are somehow raping you. That's the wrong to way to look at any product.
4) Try this scenario: Take the most expensive iMac you can price. Now add $1000 to the price for the hell of it. Now start taking away each upgrade but instead of reducing the price start adding that to the base price. Now do it reverse. Would that make sense for Apple to do so? Would that make you a happy customer simply because they reduced the price as you added components even though the end result would be $1000 more than the top of the line is now? Of course not! All you're doing is complaining that Apple charges you for upgrades. If you don't see a value in those upgrades then don't get them. If you see no value in an AIIO then don't buy one. That is how the free market works. This really couldn't be any simpler.
5) Here's another scenario: Let's say Apple can get ahold 10 million 16GB NAND chips, 10 million 32GB NAND chip, and 10 million 64GB NAND chips for a quarter that will go into their Pads (limiting to iPad even though they go in many devices) Now lets say that Apple does what you want them to do and reduces the upgrade price on those devices. Lets say they drop 75% to be just the cost. So you have the iPad at $500, $525 and $550.
So now more people want the 64GB because it's only $50 more. Now they are making less money than before. A drop in real revenue by $150 but you think they will make more because they can sell more. But can they? They only have 10 million... which they sell out of at the $700 price point. So where is the extra profit coming from? What about people that will wait for the 64GB to come back in stock because they don't want 16 or 32GB because paying $25 to $50 more is worth waiting? Now they not only make less money but sell less items. How could that possibly make sense to you?
The only way that works in maintaining their profit margins is to push up the lower end to force the high-end purchase (like with soft drinks). That means the 16GB iPad is now $650 instead of $500 and the 32GB iPad is now $675 instead of $600, but again you have the same issue with supply and demand from using components that are not simply an accumulation of more of the same thing, unlike with syrup and carbonated water. So now you have Apple losing a lot of business to the lower end and still only having people want the 64GB iPad even though it's likely overkill simply because the value for the additional capacity seems better. I think you'd be a fool to think that a $5 large soda at the movie theater is a bargain because you're compared it to the medium at $4.75.
Would you really want Apple to charge hundreds of dollars more per base Mac just so that the upgrade pricing looks like it's saving you money? No matter what Apple will still make the same profit on the decked out Mac as they would before.
I understand your position and it's a valid argument. In retail electronics you shave the bone on TV pricing but making it up on cables. That's not the case with Apple though.
Critics have broken down the cost of Apple devices and demonstrated that Apple already makes really healthy margins on even their base configurations. The prices they charge for upgrades are not compensatory, they're gouging, period.
I do NOT expect upgrades at cost. I expect them at the same kind of margins they make on everything else. ESPECIALLY now that Jony is making it impossible for us to do these things ourselves.
I understand your position and it's a valid argument. In retail electronics you shave the bone on TV pricing but making it up on cables. That's not the case with Apple though.
Critics have broken down the cost of Apple devices and demonstrated that Apple already makes really healthy margins on even their base configurations. The prices they charge for upgrades are not compensatory, they're gouging, period.
1) Again, you people aren't seeing the forest for the trees. it's not your company. You can't say "well I think you're making a good enough profit with the base model so gimme the upgrades at the price I want to pay." That's fucking ridiculous. There profit margins are what they are. They calculate that along what they have sold in the past for various upgrade steps within a product category along with how many units they can sell and then price it accordingly to maximize the number of units they think they can sell at a certain price to maximize their return. The math is complex but you guys should at least be able to understand the concept.
2) If you think Apple is breaking the law with their "price gouging" then report them.
I do NOT expect upgrades at cost. I expect them at the same kind of margins they make on everything else. ESPECIALLY now that Jony is making it impossible for us to do these things ourselves.
2So you want upgrades that the profit margins they make for the product category as a whole? Do you know what that is? Lets say their profit margin on an upgrade is double what it is for the base model, do you really want them raise the price of the base model so you can have this foolishly level price to satisfy so ignorance about economics and/or some OCD issue? What does it matter if the base model is $1799 and the one you want is $3000 when no matter how the numbers fall Apple will still charge you $3000 for the model you want, if not more money because the system you want to set up will cause an ever greater crunch on the high end components while reducing sales or the lower end? All you're really saying is that you want to be an elitist.. but don't want to pay for being one. That's sad, ironic and hypocritical.
[...] All you're really saying is that you want to be an elitist.. but don't want to pay for being one. That's sad, ironic and hypocritical.
No, I understand the point, and I'm not a fucking idiot. I understand the weighting you're describing. First, I'm saying it's bullshit because we KNOW how much margin there is in a base model machine, and it's already VERY healthy. Second, I'm saying it's irrelevant because OVERALL Apple's margins are too high. I think Apple is now greedy to the point where it's becoming vulgar. As evidence I present their enormous cash reserve and executive compensation packages that are beyond the realm of what 99% of the population can even IMAGINE. More than a lottery jackpot per person per year.
I think it's wrong for all of us to pay so much more for Apple than we would for *equivalent* competing products. I'm okay with paying more for quality, but not so MUCH more for insane profits.
And I do have a choice. I haven't purchased a new MacBook Pro since 2009. I'd *like* to, but I refuse to reward what I consider to be egregious treatment of customers. I realize legions of people do still line up to get boned in the ass, making it hard to argue with Apple's actions. I guess I just naively expect Apple to be a "better" corporate citizen. They issue shareholder dividends, why not a BUYER dividend in the form of somewhat more competitive prices?
You may see the issue differently and I respect that. It's not fair to call me an idiot just because we don't agree.
No, I understand the point, and I'm not a fucking idiot. I understand the weighting you're describing. First, I'm saying it's bullshit because we KNOW how much margin there is in a base model machine, and it's already VERY healthy. Second, I'm saying it's irrelevant because OVERALL Apple's margins are too high. I think Apple is now greedy to the point where it's becoming vulgar. As evidence I present their enormous cash reserve and executive compensation packages that are beyond the realm of what 99% of the population can even IMAGINE. More than a lottery jackpot per person per year.
I think it's wrong for all of us to pay so much more for Apple than we would for *equivalent* competing products. I'm okay with paying more for quality, but not so MUCH more for insane profits.
And I do have a choice. I haven't purchased a new MacBook Pro since 2009. I'd *like* to, but I refuse to reward what I consider to be egregious treatment of customers. I realize legions of people do still line up to get boned in the ass, making it hard to argue with Apple's actions. I guess I just naively expect Apple to be a "better" corporate citizen. They issue shareholder dividends, why not a BUYER dividend in the form of somewhat more competitive prices?
You may see the issue differently and I respect that. It's not fair to call me an idiot just because we don't agree.
You say you're not an idiot and you understand everything I've stated and you still show you don't understand how the free market works. You say that people who buy Apple's products are getting "boned in the ass" and want a "buyer dividend." You really need to let go of this elitist and entitlement you've created for yourself. You're just a consumer. Either buy a product from a vendor or not. If no vendor offers what you want and you think there is a gap in the market then create your product to fill that gap. That's how the free market functions.
I wish they made the iMac $7999 so we could skim out the current customer base.
Excuse me? Why even make that comment? Feel free to clarify.
Because so many people think Apple should lower their prices 'because they have enough money already'. If they'd price their products higher they could have less customers and still make the same profit. After reading post #104 I think that's a good thing.
You say you're not an idiot and you understand everything I've stated and you still show you don't understand how the free market works.
I'm gonna take one more shot at being civi because I think you're worth it.
I don't think "because we can" is a good enough standard in 21st century western culture. That does NOT mean I don't understand how it works. I get it. What the market will bear, buy or not, yada yada yada. As long as we're throwing around business model conventional wisdom, there's also "Just because we CAN doesn't mean we SHOULD." Apple CAN choose to "settle" for "only" around 33-35% gross margin (which is still around triple what HP and Dell manage), sell even MORE product AND make buyers feel warm and fuzzy instead of resentful.
Remember what started this thread? A slip in customer satisfaction. Reducing that age-old so-called "Apple Tax" could go a long way towards building lasting relationships with consumers. Buyers are more savvy that they were even just ten years ago, and they consider corporate culture in their big ticket item decision making.
You think it's okay for them to charge as much as they possibly can until enough buyers bail to cause a hit. I think it's better to make the pricing more competitive and win many more converts. If you think that makes me an idiot, I guess I overestimated your willingness to accept alternative viewpoints.
Quote:
Originally Posted by SolipsismX
You're just a consumer. Either buy a product from a vendor or not.
Yeah, I get that. I SAID so. Remember? I said that I haven't bought a MacBook Pro even though... oh never mind.
I'm gonna take one more shot at being civi because I think you're worth it.
I don't think "because we can" is a good enough standard in 21st century western culture. That does NOT mean I don't understand how it works. I get it. What the market will bear, buy or not, yada yada yada. As long as we're throwing around business model conventional wisdom, there's also "Just because we CAN doesn't mean we SHOULD." Apple CAN choose to "settle" for "only" around 33-35% gross margin (which is still around triple what HP and Dell manage), sell even MORE product AND make buyers feel warm and fuzzy instead of resentful.
Remember what started this thread? A slip in customer satisfaction. Reducing that age-old so-called "Apple Tax" could go a long way towards building lasting relationships with consumers. Buyers are more savvy that they were even just ten years ago, and they consider corporate culture in their big ticket item decision making.
You think it's okay for them to charge as much as they possibly can until enough buyers bail to cause a hit. I think it's better to make the pricing more competitive and win many more converts. If you think that makes me an idiot, I guess I overestimated your willingness to accept alternative viewpoints.
"Just because we CAN doesn't mean we SHOULD." is not a valid rebuttal because it's what I've being all along. The free market works because if enough people choose no to buy a product because the price is too high then the company will suffer. Remember how Apple lowered the price of the original iPhone after initial demand subsided too much for their liking? That's the free market working... and it's beautiful.
Your comparisons to Dell and HP are irrelevant. They have different models. HP, Dell, et al. are competing for different segments of the market. HP and Dell's high end PCs have routinely been higher priced than a comparable Mac. Note, that is not to say that HP and Dell were profiting more because profit isn't you taking a price and subtracting the cheapest components you find on Newegg. Companies that produce a physical product that are successful are typically very efficiently run. Apple has shown they have a great supply chain and manufacturing process, often investing billions years in advance for a calculated long term goal. You are suggesting they reduce their profits from this simply because their competitors are so poor at competing and because you want a "buyer's dividend." You are implying that Apple, and only Apple, should not be a free company in a free market but a socialist company. That's crazy talk!
Yeah, I get that. I SAID so. Remember? I said that I haven't bought a MacBook Pro even though... oh never mind.
But you're still whining about it and implying a notion of socialist rule where the consumers get Apple's profits return to them for being loyal consumers.
PS: I know you're saying to yourself that you didn't say that or think that — and I believe you honestly didn't — but that is exactly what you are implying by trying to rip Apple from the free market simply because they are more successful at designing, building, selling, and servicing their products then you want them to be.
Bloated product lines, advertised products that take forever to show up with mass confusion, like iPad mini LTE, iMac 21", iMac 27", iPod touch... *sigh*.
No, I understand the point, and I'm not a fucking idiot. I understand the weighting you're describing. First, I'm saying it's bullshit because we KNOW how much margin there is in a base model machine, and it's already VERY healthy. Second, I'm saying it's irrelevant because OVERALL Apple's margins are too high. I think Apple is now greedy to the point where it's becoming vulgar. As evidence I present their enormous cash reserve and executive compensation packages that are beyond the realm of what 99% of the population can even IMAGINE. More than a lottery jackpot per person per year.
I think it's wrong for all of us to pay so much more for Apple than we would for *equivalent* competing products. I'm okay with paying more for quality, but not so MUCH more for insane profits.
And I do have a choice. I haven't purchased a new MacBook Pro since 2009. I'd *like* to, but I refuse to reward what I consider to be egregious treatment of customers. I realize legions of people do still line up to get boned in the ass, making it hard to argue with Apple's actions. I guess I just naively expect Apple to be a "better" corporate citizen. They issue shareholder dividends, why not a BUYER dividend in the form of somewhat more competitive prices?
You may see the issue differently and I respect that. It's not fair to call me an idiot just because we don't agree.
Dude, don't let the shortsightedness of a few upset you. "None are so blind..."
I'm gonna take one more shot at being civi because I think you're worth it.
I don't think "because we can" is a good enough standard in 21st century western culture. That does NOT mean I don't understand how it works. I get it. What the market will bear, buy or not, yada yada yada. As long as we're throwing around business model conventional wisdom, there's also "Just because we CAN doesn't mean we SHOULD." Apple CAN choose to "settle" for "only" around 33-35% gross margin (which is still around triple what HP and Dell manage), sell even MORE product AND make buyers feel warm and fuzzy instead of resentful.
Set aside your tirade for a second and consider two facts:
1. There is no such thing as "too high a price". Manufacturer sets a price and the consumer either pays it or they don't. If the consumer pays it, then that's the 'correct' price for that consumer. Similarly, if the vendor would rather pass up added sales rather than lower the price, that's their right. YOU (or other consumers) don't get to dictate a price to the supplier except by not buying. If enough people refuse to buy, then the supplier lowers the price, accepts the lower revenue, or goes out of business. That's how the market works. If you don't like the price, don't buy - and spend your money on the alternative.
2. You're crazy if you think that Dell and HP charge 1/3 of what Apple does. For example, I went to HP.com and clicked on 'laptops'. I selected the first laptop on the page and upgraded from 8 GB to 16 GB. Price was $200. Dell charges $175 for their laptops and $150 for desktops (but that's 4x4 GB rather than 2x8GB as Apple does). Apple's $200 is not far out of line with market price.
[...] You're crazy if you think that Dell and HP charge 1/3 of what Apple does.
That's not what I said. I said they make 1/3 the MARGIN Apple does. If you're gonna be insulting, at least know what you're responding to so you don't look like an idiot.
And you guys can quit with the Economics For Dummies lessons. I fucking GET it. My fucking DOG gets it! You guys sure have an awfully high opinion of your own economics expertise.
Apple can do whatever the **** they want. You and Solip can do whatever the **** you want. I give up. I think there's another, possibly better, way to do business, but you guys are too deeply entrenched in "get all you can while you can" to even discuss it so consider me done.
That's not what I said. I said they make 1/3 the MARGIN Apple does. If you're gonna be insulting, at least know what you're responding to so you don't look like an idiot.
And you guys can quit with the Economics For Dummies lessons. I fucking GET it. My fucking DOG gets it! You guys sure have an awfully high opinion of your own economics expertise.
Apple can do whatever the **** they want. You and Solip can do whatever the **** you want. I give up. I think there's another, possibly better, way to do business, but you guys are too deeply entrenched in "get all you can while you can" to even discuss it so consider me done.
You say you get but everything you've stated to support your position seems to say the opposite.
If you think there is a better way then why not show that? BTW, a better way is a detailed method as to how Apple can lower prices and still make more profit. Nothing else matters! There is no altruism from Dell and HP for their inability to command a higher profit margin.
I'll use my own desires as an example: If Apple only charged me no more than $450 for the 32GB upgrade instead of $600 and it was CAS 9 I'd be happy to buy from Apple. As it stands I'll pay $300 from Newegg.
In that example Apple is losing profit on the RAM. Probably a solid $150 after everything has been calculated. Since I don't think RAM is in short supply I think this would be a real reason to lower RAM prices. But they aren't so I'll find my own solution.
Edit: This example is still what the market will bear, but from my singular PoV which may not be held by enough people to make it a viable option for Apple. Based on their current prices and what other OEMs charge it's clear they don't currently think it's in their favor overall.
Second, I'm saying it's irrelevant because OVERALL Apple's margins are too high.
This is subjective.
As evidence I present their enormous cash reserve and executive compensation packages that are beyond the realm of what 99% of the population can even IMAGINE.
This is not for you to decide. You have zero say in this beyond your choice of purchasing a product. That's how a free market economy works.
I think it's wrong for all of us to pay so much more for Apple than we would for *equivalent* competing products. I'm okay with paying more for quality, but not so MUCH more for insane profits.
Then stop buying Apple products. If you are correct, their prices will go down. If you are not, nothing will happen.
I'd *like* to, but I refuse to reward what I consider to be egregious treatment of customers.
There you go! Exactly! But arguing about it here does nothing additional to aid your cause. You have already stated all Apple cares to hear.
Please also note that your last purchase was during an even (subjectively) "worse" time in Apple's history when they charged far more for upgrades than they do now.
I guess I just naively expect Apple to be a "better" corporate citizen.
Ah, but when you speak of this, all that matters is their duty to the owners and employees of the company. To that end, they are performing marvelously.
They issue shareholder dividends, why not a BUYER dividend in the form of somewhat more competitive prices?
They don't need to and are physically unable to. The latter is covered by the fact that customers stock them out at the CURRENT prices. The former is covered by the principles of the free market.
Originally Posted by v5v
I think there's another, possibly better, way to do business…
And you may deign to hold that opinion, just note that you have zero internal insight into what they're actually doing.
My iPhone, iPad mini's for the kids and our new iMac came quickly. The 27" iMac came weeks earlier than the Dec. 26th they had said I would have it buy. I'm very happy, as always, never had a problem with Apple online store or in person.
That's not what I said. I said they make 1/3 the MARGIN Apple does. If you're gonna be insulting, at least know what you're responding to so you don't look like an idiot.
And you guys can quit with the Economics For Dummies lessons. I fucking GET it. My fucking DOG gets it! You guys sure have an awfully high opinion of your own economics expertise.
Apple can do whatever the **** they want. You and Solip can do whatever the **** you want. I give up. I think there's another, possibly better, way to do business, but you guys are too deeply entrenched in "get all you can while you can" to even discuss it so consider me done.
I don't think you fully understand Apple is a premium brand.
Much the same with other types of designer brands, the cost is much greater than BoM
You think Mercedes charges near cost price for a different paint job? They need to paint the body a colour anyway, why can't I have lime green?¡
1. Don't treat one poster like they're the only ones with the problem. v5v is not the only one with the sentiment that some Apple products are priced too high. I'm not the only one either. So stop your condescending/personal attacks (esp. you, Solipism). Many of us pose questions/issues in order to present a point that is general sentiment, not necessarily a point that we personally 100% believe in. You can call us stupid an/or an idiot, and you can tell us "just don't buy it"...but I prefer that you address the important points, not dismiss us.
2. In regards to "high price", TS said it himself (in response to v5v), that "high" profit margins is subjective. So there you are...and I agree...it's subjective as far as the consumer's perspective. I appreciate examples and explanation, but to just make one argument and then think everyone else is stupid for not "getting it" is just pure arrogance.
3. While I don't like feeding the trolls, I also am not afraid or upset by them. Many of us are Apple lovers but are not Apple purists or Apple cultists. We engage here at this site to get to the truth and to gain balanced information. Stop treating posters like they're either Apple purists or Apple haters. Some are happily in between.
May your 2013 be one of good health and happiness.
Do I get that Apple is more of a premium brand?...yes. But to make the analogy of Mercedes and paint jobs?...that's not brilliant, it's highly inaccurate.
In many cases, Apple offers similar products at VERY similar price points to the main stream. Apple absolutely knows that they cannot be both "the Mercedes" brand AND a successful computer company at the same time...and that's why things have changed over the last 7 years. I would say that 90% of new Mercedes car owners are wealthy (I just made up that 90% btw). And Mercedes does just fine with that strategy. But I don't that will work in today's computer industry/environment.
Stop thinking that Apple is like Mercedes. It's not.
And I won't even address the color paint job...unless you can explain why that analogy even makes sense. Don't mean to be rude, I just don't get your analogy.
Comments
1) It's not the same. Apple wants to make a certain profit and the customer wants to get a certain value out of a product. The value for the customer varies because most Mac buyers don't see the value in the iMac over other Macs, and why most PC sales are not Macs.
2) We do know what the number is because Apple states it during their earnings. You have to do math to figure out their expectations for the quarter, their revenue and net profit, but the values are all there.
3) Of course reducing the cost of the high end will cause more people to buy it. This is what we've been discussing. This is what fast food companies do by selling you a very expensive soda at the low end and then charging you a little more for a much larger container; a container that has as nominal cost increase, as well as for ice and for the carbonated soda and syrup. They point is to maximize the upsell as much as possible.
PCs don't work that way because no vendor can have enough product to make all their machines the same at the high end. it's not just more syrup and water, it's very different components altogether. Again, you're coming at this as if Apple's low end is some ideal price point and then upgrades are somehow raping you. That's the wrong to way to look at any product.
4) Try this scenario: Take the most expensive iMac you can price. Now add $1000 to the price for the hell of it. Now start taking away each upgrade but instead of reducing the price start adding that to the base price. Now do it reverse. Would that make sense for Apple to do so? Would that make you a happy customer simply because they reduced the price as you added components even though the end result would be $1000 more than the top of the line is now? Of course not! All you're doing is complaining that Apple charges you for upgrades. If you don't see a value in those upgrades then don't get them. If you see no value in an AIIO then don't buy one. That is how the free market works. This really couldn't be any simpler.
5) Here's another scenario: Let's say Apple can get ahold 10 million 16GB NAND chips, 10 million 32GB NAND chip, and 10 million 64GB NAND chips for a quarter that will go into their Pads (limiting to iPad even though they go in many devices) Now lets say that Apple does what you want them to do and reduces the upgrade price on those devices. Lets say they drop 75% to be just the cost. So you have the iPad at $500, $525 and $550.
So now more people want the 64GB because it's only $50 more. Now they are making less money than before. A drop in real revenue by $150 but you think they will make more because they can sell more. But can they? They only have 10 million... which they sell out of at the $700 price point. So where is the extra profit coming from? What about people that will wait for the 64GB to come back in stock because they don't want 16 or 32GB because paying $25 to $50 more is worth waiting? Now they not only make less money but sell less items. How could that possibly make sense to you?
The only way that works in maintaining their profit margins is to push up the lower end to force the high-end purchase (like with soft drinks). That means the 16GB iPad is now $650 instead of $500 and the 32GB iPad is now $675 instead of $600, but again you have the same issue with supply and demand from using components that are not simply an accumulation of more of the same thing, unlike with syrup and carbonated water. So now you have Apple losing a lot of business to the lower end and still only having people want the 64GB iPad even though it's likely overkill simply because the value for the additional capacity seems better. I think you'd be a fool to think that a $5 large soda at the movie theater is a bargain because you're compared it to the medium at $4.75.
Quote:
Originally Posted by SolipsismX
Would you really want Apple to charge hundreds of dollars more per base Mac just so that the upgrade pricing looks like it's saving you money? No matter what Apple will still make the same profit on the decked out Mac as they would before.
I understand your position and it's a valid argument. In retail electronics you shave the bone on TV pricing but making it up on cables. That's not the case with Apple though.
Critics have broken down the cost of Apple devices and demonstrated that Apple already makes really healthy margins on even their base configurations. The prices they charge for upgrades are not compensatory, they're gouging, period.
I do NOT expect upgrades at cost. I expect them at the same kind of margins they make on everything else. ESPECIALLY now that Jony is making it impossible for us to do these things ourselves.
1) Again, you people aren't seeing the forest for the trees. it's not your company. You can't say "well I think you're making a good enough profit with the base model so gimme the upgrades at the price I want to pay." That's fucking ridiculous. There profit margins are what they are. They calculate that along what they have sold in the past for various upgrade steps within a product category along with how many units they can sell and then price it accordingly to maximize the number of units they think they can sell at a certain price to maximize their return. The math is complex but you guys should at least be able to understand the concept.
2) If you think Apple is breaking the law with their "price gouging" then report them.
2So you want upgrades that the profit margins they make for the product category as a whole? Do you know what that is? Lets say their profit margin on an upgrade is double what it is for the base model, do you really want them raise the price of the base model so you can have this foolishly level price to satisfy so ignorance about economics and/or some OCD issue? What does it matter if the base model is $1799 and the one you want is $3000 when no matter how the numbers fall Apple will still charge you $3000 for the model you want, if not more money because the system you want to set up will cause an ever greater crunch on the high end components while reducing sales or the lower end? All you're really saying is that you want to be an elitist.. but don't want to pay for being one. That's sad, ironic and hypocritical.
Quote:
Originally Posted by SolipsismX
[...] All you're really saying is that you want to be an elitist.. but don't want to pay for being one. That's sad, ironic and hypocritical.
No, I understand the point, and I'm not a fucking idiot. I understand the weighting you're describing. First, I'm saying it's bullshit because we KNOW how much margin there is in a base model machine, and it's already VERY healthy. Second, I'm saying it's irrelevant because OVERALL Apple's margins are too high. I think Apple is now greedy to the point where it's becoming vulgar. As evidence I present their enormous cash reserve and executive compensation packages that are beyond the realm of what 99% of the population can even IMAGINE. More than a lottery jackpot per person per year.
I think it's wrong for all of us to pay so much more for Apple than we would for *equivalent* competing products. I'm okay with paying more for quality, but not so MUCH more for insane profits.
And I do have a choice. I haven't purchased a new MacBook Pro since 2009. I'd *like* to, but I refuse to reward what I consider to be egregious treatment of customers. I realize legions of people do still line up to get boned in the ass, making it hard to argue with Apple's actions. I guess I just naively expect Apple to be a "better" corporate citizen. They issue shareholder dividends, why not a BUYER dividend in the form of somewhat more competitive prices?
You may see the issue differently and I respect that. It's not fair to call me an idiot just because we don't agree.
You say you're not an idiot and you understand everything I've stated and you still show you don't understand how the free market works. You say that people who buy Apple's products are getting "boned in the ass" and want a "buyer dividend." You really need to let go of this elitist and entitlement you've created for yourself. You're just a consumer. Either buy a product from a vendor or not. If no vendor offers what you want and you think there is a gap in the market then create your product to fill that gap. That's how the free market functions.
Because so many people think Apple should lower their prices 'because they have enough money already'. If they'd price their products higher they could have less customers and still make the same profit. After reading post #104 I think that's a good thing.
Quote:
Originally Posted by SolipsismX
You say you're not an idiot and you understand everything I've stated and you still show you don't understand how the free market works.
I'm gonna take one more shot at being civi because I think you're worth it.
I don't think "because we can" is a good enough standard in 21st century western culture. That does NOT mean I don't understand how it works. I get it. What the market will bear, buy or not, yada yada yada. As long as we're throwing around business model conventional wisdom, there's also "Just because we CAN doesn't mean we SHOULD." Apple CAN choose to "settle" for "only" around 33-35% gross margin (which is still around triple what HP and Dell manage), sell even MORE product AND make buyers feel warm and fuzzy instead of resentful.
Remember what started this thread? A slip in customer satisfaction. Reducing that age-old so-called "Apple Tax" could go a long way towards building lasting relationships with consumers. Buyers are more savvy that they were even just ten years ago, and they consider corporate culture in their big ticket item decision making.
You think it's okay for them to charge as much as they possibly can until enough buyers bail to cause a hit. I think it's better to make the pricing more competitive and win many more converts. If you think that makes me an idiot, I guess I overestimated your willingness to accept alternative viewpoints.
Quote:
Originally Posted by SolipsismX
You're just a consumer. Either buy a product from a vendor or not.
Yeah, I get that. I SAID so. Remember? I said that I haven't bought a MacBook Pro even though... oh never mind.
"Just because we CAN doesn't mean we SHOULD." is not a valid rebuttal because it's what I've being all along. The free market works because if enough people choose no to buy a product because the price is too high then the company will suffer. Remember how Apple lowered the price of the original iPhone after initial demand subsided too much for their liking? That's the free market working... and it's beautiful.
Your comparisons to Dell and HP are irrelevant. They have different models. HP, Dell, et al. are competing for different segments of the market. HP and Dell's high end PCs have routinely been higher priced than a comparable Mac. Note, that is not to say that HP and Dell were profiting more because profit isn't you taking a price and subtracting the cheapest components you find on Newegg. Companies that produce a physical product that are successful are typically very efficiently run. Apple has shown they have a great supply chain and manufacturing process, often investing billions years in advance for a calculated long term goal. You are suggesting they reduce their profits from this simply because their competitors are so poor at competing and because you want a "buyer's dividend." You are implying that Apple, and only Apple, should not be a free company in a free market but a socialist company. That's crazy talk!
But you're still whining about it and implying a notion of socialist rule where the consumers get Apple's profits return to them for being loyal consumers.
PS: I know you're saying to yourself that you didn't say that or think that — and I believe you honestly didn't — but that is exactly what you are implying by trying to rip Apple from the free market simply because they are more successful at designing, building, selling, and servicing their products then you want them to be.
Dude, don't let the shortsightedness of a few upset you. "None are so blind..."
Set aside your tirade for a second and consider two facts:
1. There is no such thing as "too high a price". Manufacturer sets a price and the consumer either pays it or they don't. If the consumer pays it, then that's the 'correct' price for that consumer. Similarly, if the vendor would rather pass up added sales rather than lower the price, that's their right. YOU (or other consumers) don't get to dictate a price to the supplier except by not buying. If enough people refuse to buy, then the supplier lowers the price, accepts the lower revenue, or goes out of business. That's how the market works. If you don't like the price, don't buy - and spend your money on the alternative.
2. You're crazy if you think that Dell and HP charge 1/3 of what Apple does. For example, I went to HP.com and clicked on 'laptops'. I selected the first laptop on the page and upgraded from 8 GB to 16 GB. Price was $200. Dell charges $175 for their laptops and $150 for desktops (but that's 4x4 GB rather than 2x8GB as Apple does). Apple's $200 is not far out of line with market price.
Quote:
Originally Posted by jragosta
[...] You're crazy if you think that Dell and HP charge 1/3 of what Apple does.
That's not what I said. I said they make 1/3 the MARGIN Apple does. If you're gonna be insulting, at least know what you're responding to so you don't look like an idiot.
And you guys can quit with the Economics For Dummies lessons. I fucking GET it. My fucking DOG gets it! You guys sure have an awfully high opinion of your own economics expertise.
Apple can do whatever the **** they want. You and Solip can do whatever the **** you want. I give up. I think there's another, possibly better, way to do business, but you guys are too deeply entrenched in "get all you can while you can" to even discuss it so consider me done.
You say you get but everything you've stated to support your position seems to say the opposite.
If you think there is a better way then why not show that? BTW, a better way is a detailed method as to how Apple can lower prices and still make more profit. Nothing else matters! There is no altruism from Dell and HP for their inability to command a higher profit margin.
I'll use my own desires as an example: If Apple only charged me no more than $450 for the 32GB upgrade instead of $600 and it was CAS 9 I'd be happy to buy from Apple. As it stands I'll pay $300 from Newegg.
In that example Apple is losing profit on the RAM. Probably a solid $150 after everything has been calculated. Since I don't think RAM is in short supply I think this would be a real reason to lower RAM prices. But they aren't so I'll find my own solution.
Edit: This example is still what the market will bear, but from my singular PoV which may not be held by enough people to make it a viable option for Apple. Based on their current prices and what other OEMs charge it's clear they don't currently think it's in their favor overall.
Originally Posted by v5v
Second, I'm saying it's irrelevant because OVERALL Apple's margins are too high.
This is subjective.
As evidence I present their enormous cash reserve and executive compensation packages that are beyond the realm of what 99% of the population can even IMAGINE.
This is not for you to decide. You have zero say in this beyond your choice of purchasing a product. That's how a free market economy works.
I think it's wrong for all of us to pay so much more for Apple than we would for *equivalent* competing products. I'm okay with paying more for quality, but not so MUCH more for insane profits.
Then stop buying Apple products. If you are correct, their prices will go down. If you are not, nothing will happen.
I'd *like* to, but I refuse to reward what I consider to be egregious treatment of customers.
There you go! Exactly! But arguing about it here does nothing additional to aid your cause. You have already stated all Apple cares to hear.
Please also note that your last purchase was during an even (subjectively) "worse" time in Apple's history when they charged far more for upgrades than they do now.
I guess I just naively expect Apple to be a "better" corporate citizen.
Ah, but when you speak of this, all that matters is their duty to the owners and employees of the company. To that end, they are performing marvelously.
They issue shareholder dividends, why not a BUYER dividend in the form of somewhat more competitive prices?
They don't need to and are physically unable to. The latter is covered by the fact that customers stock them out at the CURRENT prices. The former is covered by the principles of the free market.
Originally Posted by v5v
I think there's another, possibly better, way to do business…
And you may deign to hold that opinion, just note that you have zero internal insight into what they're actually doing.
Quote:
Originally Posted by dwilly
Just hire the person from Amazon
I agree, Amazon Rocks
I don't think you fully understand Apple is a premium brand.
Much the same with other types of designer brands, the cost is much greater than BoM
You think Mercedes charges near cost price for a different paint job? They need to paint the body a colour anyway, why can't I have lime green?¡
Brilliant!
It's just Samsung customers that can't figure it out
Happy New Year, folks!
3 things here:
1. Don't treat one poster like they're the only ones with the problem. v5v is not the only one with the sentiment that some Apple products are priced too high. I'm not the only one either. So stop your condescending/personal attacks (esp. you, Solipism). Many of us pose questions/issues in order to present a point that is general sentiment, not necessarily a point that we personally 100% believe in. You can call us stupid an/or an idiot, and you can tell us "just don't buy it"...but I prefer that you address the important points, not dismiss us.
2. In regards to "high price", TS said it himself (in response to v5v), that "high" profit margins is subjective. So there you are...and I agree...it's subjective as far as the consumer's perspective. I appreciate examples and explanation, but to just make one argument and then think everyone else is stupid for not "getting it" is just pure arrogance.
3. While I don't like feeding the trolls, I also am not afraid or upset by them. Many of us are Apple lovers but are not Apple purists or Apple cultists. We engage here at this site to get to the truth and to gain balanced information. Stop treating posters like they're either Apple purists or Apple haters. Some are happily in between.
May your 2013 be one of good health and happiness.
Quote:
Originally Posted by Fillie
I don't think you fully understand Apple is a premium brand.
Much the same with other types of designer brands, the cost is much greater than BoM
You think Mercedes charges near cost price for a different paint job? They need to paint the body a colour anyway, why can't I have lime green?¡
Quote:
Originally Posted by PhilBoogie
@justmeblue: you should've used 0,0,255
Brilliant!
Do I get that Apple is more of a premium brand?...yes. But to make the analogy of Mercedes and paint jobs?...that's not brilliant, it's highly inaccurate.
In many cases, Apple offers similar products at VERY similar price points to the main stream. Apple absolutely knows that they cannot be both "the Mercedes" brand AND a successful computer company at the same time...and that's why things have changed over the last 7 years. I would say that 90% of new Mercedes car owners are wealthy (I just made up that 90% btw). And Mercedes does just fine with that strategy. But I don't that will work in today's computer industry/environment.
Stop thinking that Apple is like Mercedes. It's not.
And I won't even address the color paint job...unless you can explain why that analogy even makes sense. Don't mean to be rude, I just don't get your analogy.