Yup, you nailed it. For the vast majority of the population even 5GHz USB is plenty.
Moving the kind of data streams that require the bandwidth of Thunderbolt is primarily the province of those who CREATE content. By the time said content is ready for consumption by a consumer it's no longer so bandwidth bandwidth-intensive so TB is overkill.
USB 10 MB doesn't do bi-directional nor does it do display port to drive high end monitors. TB is more for higher end applications.
Go read the differences between USB 3.1 and TB and then TB2.
You can't daisy chain several devices, one being a monitor and then have things happening in both directions. Sorry, but TB is FAR superior.
Thunderbolt combines PCI Express and Display port, USB 3.1 doesn't do that. So Mac users can buy an external PCI card chassis and plug it into a MacBook, iMac, and MacPro or Mac mini, along with RAID drives, monitors, etc. Thunderbolt and TB 2 is WAY more sophisticated than USB 3.1.
Actually, the history with Windows shows that this can become an extremely difficult barrier to overcome. People get locked into a platform. Android tablets have a chance because there are a lot of Android phone users who already have entry to the platform. They may own an iOS tablet, but a good Android tablet in the future is possible. Apple has a long, profitable future ahead of them. Microsoft has the big problem. Hardly any market share in phones, and a debacle in tablets.
I'm not sure what part of Windows history you might be thinking of. Fact is the enterprise market locked into DOS long before Windows was stolen from Apple, and the reason wasn't Microsoft, it was IBM who hired Gates et al to write DOS for their line of computers at the time. Enterprise's respect for IBM was so high at the time, it was an automatic decision. Previous to IBM in the market, Apple had dominance, but it was a small market at the time.
This time around, it is a bit different. Apple has dominance in the enterprise, school and government markets, and has become the de facto standard in those markets. Apple also has a very strong position in the consumer market where it competes with a huge number of Android based manufacturers, led by Samsung.
Microsoft, relying on the power of the Windows platform was stunned by how little power the Windows platform gave them in the consumer and non-consumer markets. It made little difference if it was backward compatible to older versions of Windows, or that there was any desire for an OS that looked like Windows (Windows RT).
Back in the day, the argument that the Mac was a better computer failed to translate into sales, because the ecosystem of DOS/Windows trumped hardware claims. That single thing is still at work today. Hardware specs are secondary to a good ecosystem. Apple's ecosystem includes a single trusted source for music, entertainment, and apps - with a half-billion of customer accounts, In addition it includes the iCloud, higher security devices, local stores for service and help, the highest-rated customer service, a loyal following of customers, and enough money in the bank that they can continue to push the envelope far into the future.
Quote:
Originally Posted by drblank
I'm sure Apple pays more for components than Samsung in the BOM listed since Apple buys them from Samsung and Samsung mfg them for cheaper than what they sell them to Apple for. Plus the Apple aluminum case isn't cheap to fabricate.
Actually the Samsung component division sells to the Sansung phone division, so the phone division likely pays close to what Apple pays. So the profits you see for Samsung phones and tablets is only for that division. The component division reports it's own profits. Apple's aluminum cases are more expensive to produce, however they give the Apple's products incredible rigidity and a longer effective life and higher resale value. When you incorporate those factors into a cost-of-ownership you find the iPhone has a much lower cost to the user than the initial price might indicate.
For 20 years people shipped PCs with razor thin margins and almost no one made money except for Dell/HP/IBM selling into the enterprise market. You can keep pushing the narrative that profit == success, but eventually computing platforms get commoditized. There used to be a number of successful, vertically integrated Unix vendors, in fact, more vertically integrated than Apple, because they actually made their own CPUs, motherboards, storage, everything. They all got crushed by "unprofitable" Linux.
Microeconomics 101, the long run in a competitive market is for prices to trend towards marginal cost. The writing is on the wall and Wall Street knows it. It's absurd the way people cheerlead overpaying super-high margins to Apple, who then doesn't even reinvest the profits back into innovation, but is sitting on the cash, distributing it to investors, or buying back stock. This might sound great for investors, but it doesn't sound good for consumers.
Is this really what you want, to pay a 39% margin? Do you want into a car dealership and negotiate with the sales agent to pay MSRP or above?
Competition is supposed to drive down prices, if you're deliberating cheering for one company to win everything and set monopoly prices, you're a moron.
If the PC market was any indication, what competition did was to drive down prices at the expense of innovation. Prior to the macbook air, laptops actually grew bulkier and heavier as manufacturers kept cramming in more and more specs, without bothering to invest in miniaturisation, or considering if such a move was really in the user's best interests or not. Or they would try to confuse consumers by bundling lopsided specs, such as boasting about having 8gb ram, while stinging on the graphics card (because nobody really knows how powerful they are by looking at those arcane model numbers anyways).
Tablets were all the same (essentially the tablet form factor running windows), and they equally sucked to use. Nobody bothered to redesign the OS, nor could they afford to anyways, because profits were already so slim, there was practically nothing left to invest in R&D. In short, everyone was just pushing out the same, old and tired designs, regardless of whether they worked or not.
So yes, to your question, so long as Apple continues to make excellent products that look great and work great, I am willing to continue buying them, even at 39% margin. It's not so much a matter of how much they are earning, but whether I feel I am getting value for my money. To this date, I feel that it is still the case.
The thing that comes to mind occasionally is that replacing computers with iPads is essentially dumbing down the next generation.
Without a real computer available, kids will just be learning how to become consumers without a platform to learn how to code on. The current crop of young app developers didn't develop their skills on a tablet, their parents and teachers encouraged them on a regular computer.
It is like, why teach children how to prepare a healthy meal at home when it is so convenient to just drive through the fast food chain restaurant?
When I was a kid I used to wire components together and make electronic things. I sure wasn't like my friends who could play a record or a radio, I could make such things. A lot of good that did me in the long haul because technology moved on from analog to digital to computers on a chip. The same with languages. All those early computer nerds that learned fortran, pascal, basic, et al...
So, I don't place that much store in needing a "real computer" to learn how to code for the mass of people. That has become a dead end, like fixing coo-coo clocks.
My iPad is a tool just like my MBP. I use which ever tool I need at the moment to make money and entertain me as I need. My iPhone makes me a ton of money and I don't even care what's inside. A "real computer" either locks me to a location or slows me down when I travel. Give me mobility and my own brain and I'm out meeting people and doing commerce instead of whiling my life away in my parent's basement with a "real computer."
*YOU* know that, and *I* know that, but most people don't know and don't CARE. Facebook, email, a way to get the pictures out of the camera... that's all they do with their computer. And let's be honest, they don't NEED a "high-end" machine to do that.
Apple is doing its best to get those people into iPads instead of cheap computers, but it'll probably take a half-generation or so for the new paradigm to sink in.
A half-generation is equal to 10 years... and that's about how long it is taking. The iPad and the iPhone are everywhere. Apple has moved us well into the future.
However, there will always be a market for cheep crap swinging from a pegboard hook in Dollar General.
When I was a kid I used to wire components together and make electronic things. I sure wasn't like my friends who could play a record or a radio, I could make such things. A lot of good that did me in the long haul because technology moved on from analog to digital to computers on a chip. The same with languages. All those early computer nerds that learned fortran, pascal, basic, et al...
So, I don't place that much store in needing a "real computer" to learn how to code for the mass of people. That has become a dead end, like fixing coo-coo clocks.
My iPad is a tool just like my MBP. I use which ever tool I need at the moment to make money and entertain me as I need. My iPhone makes me a ton of money and I don't even care what's inside. A "real computer" either locks me to a location or slows me down when I travel. Give me mobility and my own brain and I'm out meeting people and doing commerce instead of whiling my life away in my parent's basement with a "real computer."
Dear Sir:
Normally I do not disagree with your posts however on this topic I feel that you are a bit shortsighted. You clearly confirm that you have a MBP which is what I have as well. The basement dweller comment is unnecessary as the truly gifted young programmers of today began their studies at an early age. Typically they are not college dropouts living in a basement.
The thing that comes to mind occasionally is that replacing computers with iPads is essentially dumbing down the next generation.
Without a real computer available, kids will just be learning how to become consumers without a platform to learn how to code on. The current crop of young app developers didn't develop their skills on a tablet, their parents and teachers encouraged them on a regular computer.
It is like, why teach children how to prepare a healthy meal at home when it is so convenient to just drive through the fast food chain restaurant?
Not everyone wants to be a geek. There are other interests in the world.
USB 10 MB doesn't do bi-directional nor does it do display port to drive high end monitors. TB is more for higher end applications.
Go read the differences between USB 3.1 and TB and then TB2.
You can't daisy chain several devices, one being a monitor and then have things happening in both directions. Sorry, but TB is FAR superior.
Thunderbolt combines PCI Express and Display port, USB 3.1 doesn't do that. So Mac users can buy an external PCI card chassis and plug it into a MacBook, iMac, and MacPro or Mac mini, along with RAID drives, monitors, etc. Thunderbolt and TB 2 is WAY more sophisticated than USB 3.1.
Yeah yeah yeah, bigger badder bolder better, but so what?
No one is disputing Thunderbolt's superiority, we're saying it's irrelevant. Try to come up with examples of how any of what you describe matters to a typical computer user. Geeks like us do stuff that will take advantage of what Thunderbolt offers, but typical consumers don't.
When's the last time your neighbor installed a card in a computer? Consumers don't play Multichannel 96KHz/24bit audio files, they play 256Kb AAC or mp3 files. They don't exchange 30-bit layered HDR TIFF files, they send JPGs. And they don't shoot and edit 4:2:2 XDCAM video, they use H.264. They don't do anything that requires Thunderbolt. USB3 is more than enough, and it's both more common and less expensive.
Actually the Samsung component division sells to the Sansung phone division, so the phone division likely pays close to what Apple pays. So the profits you see for Samsung phones and tablets is only for that division. The component division reports it's own profits. Apple's aluminum cases are more expensive to produce, however they give the Apple's products incredible rigidity and a longer effective life and higher resale value. When you incorporate those factors into a cost-of-ownership you find the iPhone has a much lower cost to the user than the initial price might indicate.
Yeah right. I'm sure Samsung semi will give Samsung mobile the best price and delivery since it's the same company. Come on, don't be that naive. Don't you think it's strange that Samsung is one of the first to release a new product before others? It gives them a little more time to get new buyers.
MOst people don't even know what the term cost of ownership is. You're average consumer is, well, stupid. I run into so many clueless people that don't know jack about what they are using.
I asked a bunch of people that I kind of know what version OS they were running. ALL of the Android users I asked didn't know. One of them is hardcore Android user and I mean this guy has that glazed look kind of hard core like he just joined some religious cult. I mean HARD CORE and he told me he has the most recent version. yeah, the most recent version released on his phone, but he was at 4.1.x not 4.2.2. This was a few weeks ago. His response? "I guess I'll have to get a new phone". He just bought his last year.
All of the Android users I asked, except one, didn't know what the term NFC was, didn't know if they had it in their smartphone and didn't know what it's used for. That's how clueless the average consumer is. one bought one because of the screen size and NOTHING else. One bought it because it was on sale for $99 down from $150, oh, and it looked like an iPhone 4S.
These are people that are college level kids and they are your average 20+ kid. Go figure. TCO? If I asked them what TCO meant, their brain would probably melt and ooze out of their ears.
A lot of these kids just want to worry about their Facebook account and who's on it and be able to Twitter Justin BIeber. That's what a lot of them care about. I walked into one restaurant that I frequent and it was funny because one of servers tracked me down and started going into a "I hate Android" rant and they didn't know i use an IPhone. I mean this gal was PISSED. She pulled out her Android phone told me how many times she had to replace it because it burned up, it crashes, battery drains, gets crappy cell reception, yada yada and she tells me that she prefers the smaller screen of the iPhone 4S (this was right before the iPhone 5 came out or right around the same time). I'm she was PISSED. She was ready to throw the thing against the wall pissed. I stood there for literally 5 minutes listening to this person's rant. I was cracking up because she knew all of the problems and didn't hesitate ranting about it. I should have video taped it and put it on YouTube. It was funny.
Profits (margins) are the engines of innovation, or can be. In MSes case, their margins on Office has not resulted in innovation. In Apple's case, it certainly has. Whether it does so in the future is another matter.
Not everyone wants to be a geek. There are other interests in the world.
Not everyone wants to become a nuclear physicist however we all depend on them. Why take away the gateway from potential young super stars in computer programming?
We need to preserve the traditional computer just like we need to preserve the environment. Other interests are nice too but the scientific educational system in the US is under attack by popular culture. I believe one needs to be increasingly concerned about the poor academic achievements of today's youth in the US. Full computers are essential to this effort as computer science is the most important discipline for the future of mankind.
Other interests are nice too but the scientific educational system in the US is under attack by popular culture.
Not just scientific education. INTELLIGENCE is uncool.
Correct grammar and spelling have been replaced with an indignant "You knew (sic) what I meant!" If that were true it wouldn't matter, but often the lack of language skills obscures and confuses the message.
Kids need a solid foundation in math, science, language, music, art, sports and a craft or two (welding, carpentry, whatever). How many kids get all of those anymore? By the time they reach puberty we have them pegged for matriculation (whatever THAT means) or a trade, and if the latter we start ignoring the intangible facets of personal development.
Have you compared the AIOs? Aside from not having the Haswell chips yet, they offer the best 27 inch available and it's priced very close to the high end Dell. When you make comparisons, Apple should be compared to the higher end model PCs, not the consumer grade products most commonly sold to the public. WHY? Because Apple gives you things the other cheap PC mfg don't give you. Apple won't make cheaper products that yield no profits. They kind of want to stay in business. HP, Dell, Lenovo all make so little profits I'm surprised their doors are still open. Even HP would like to find a sucker to buy their PC division, but they can't find anyone interested. Pretty sad isn't it?
Dell just went private because they don't want to get bought out and since their financials suck, they are taking the company private. If they can't get their act together, they may find themselves closing the doors if they can't find a buyer down the road.
Yeah, a lot of people are price conscious, but they don't have wide spread Thunderbolt adoption in the PC world, this is something Apple has been doing and it's the future of I/O. You have to look really carefully for a PC to have a Thunderbolt port and the devices on the market are more for OS X users and not as much for PC users. Apple just wants their eco system to work well together and to continually improve their products. They have flaw like any other company, but I don't want to worry if the company is going to be out of business. Apple already had that scare, but they don't have to worry about that anymore. They are financially secure for pretty much the next 100 years. Apple can't help if it they make a product line people want to buy and they manage the company so they can make decent profits.
Don't forget cost of windoeed upgrades vs Osx. And cost of pages/numbers vs office. Etc
You do not seem to know much about Economics, micro or macro.
Companies that trend towards cost sales tend not to survive. Hence the current status of the entire PC industry.
This then leaves the Consumer in the crapper with companies they bought cheap products from no longer there to service/replace/repair/support. So how is this of benefit to the Consumer again?
For everything to move along at a steady pace the product has to be reasonable in cost for the bulk of Consumers and have a healthy margin for the Manufacturer to continue to grow and develop new or existing product lines.
What we have is no longer Consumerism, but Consumption-ism instead. "Just buy a new thingy if yours can't be serviced anymore, or the company is no longer around."
Companies should never be allowed to sell existing products below costs. This is exactly what Amazon is doing and kills competition. It is exactly what others do and destroy small businesses and entire segments. Is is it good for the Consumer? Sometimes, but in the long run it is in fact not healthy for anyone.
As for your weak arguments, lets dissect a couple....
Quote:
It's absurd the way people cheerlead overpaying super-high margins to Apple, who then doesn't even reinvest the profits back into innovation....
Are you an employee in Apple's R&D department and have something to share with us? What kind of ridiculous statement is this? It is step one showing everything out of your mouth being viewed as useless. Prove that Apple is not innovating. People like you and Wall Street pundits seem to have drastically different views of what that word means. It is after all a subjective term. What I think is innovative you do not, so that makes you right? I think not. Basing an argument off of purely subjective descriptions is crappy at its best.
Quote:
Is this really what you want, to pay a 39% margin? Do you want into a car dealership and negotiate with the sales agent to pay MSRP or above?
Rubbish. Pure rubbish. Yes, if I choose to pay a 39% premium that is what the essence of a free economy is. If my product is too far out of sorts then no one will buy it and I will go bankrupt. That is how Economics works. Your car analogy is hogwash as in in fact does happen now. I can buy a low percentage profit car like a Ford Focus or I can buy a Mercedes or Porche or Ferrari. You think their margins are the same? Are their prices at MSRP? Wait...they want to offer you addons and incentives that in the end are far above the original MSRP, so in fact the essence of car sales is to push the Consumer into paying above original costs. BAM - 2nd argument thrashed.
Let's do one more for fun, because after that everything you say is mostly drivel.
Quote:
Competition is supposed to drive down prices, if you're deliberating cheering for one company to win everything and set monopoly prices, you're a moron
Since when and what Economics professor taught you that? This is from Wikipedia to possibly help your narrow mind better grasp the concept.
"Merriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms".[4] It was described by Adam Smith in The Wealth of Nations (1776) and later economists as allocating productive resources to their most highly-valued uses.[5] and encouraging efficiency.
Later microeconomic theory distinguished between perfect competition and imperfect competition, concluding that no system of resource allocation is more efficient than perfect competition. Competition, according to the theory, causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. The greater selection typically causes lower prices for the products, compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly).
However, competition may also lead to wasted (duplicated) effort and toincreased costs (and prices) in some circumstances."
Note the bold and underlined parts... You will notice that it clearly states the goal is to give greater selection and better products. Though this CAN have a result in lower prices it is not the primary goal. It is also dependent on the presence of monopolies or oligopolies (or lack thereof).
To better put this in small terms you might understand - gas prices. Why in any given city or region are the prices so fixed? Why is every shop posting the exact same identical price at any given time? Is the goal under your definition not supposed to have pushed prices down and down and down to costs by now? There is surely enough competition out there in terms of a variety of companies and suppliers. What is their profit margin percentage? No one seems to know for sure but Exxon seems to be around 9% when the industry sits at 6%. Exxon is gouging us because they are above the average and should be pushing the cost down under your spirit of "competition". Shame on them for making more that the rest of the industry. Gougers.
Don't forget cost of windoeed upgrades vs Osx. And cost of pages/numbers vs office. Etc
I bought my 27 inch iMac and got it just before Christmas, some one I know bought that new Dell 27inch AIO that's priced very similarly to the iMac and he got his a couple of months ago and only after a few weeks he had to send it back to Dell to get fixed. Oops. Mine works like a champ. The difference in price for similar configurations was minimal only he only had the 32G Hybrid drive and I got the 1TB Fusion drive. I think mine with AppleCare and tax was like $100 more or something very minor in price. He's already sent his back to get fixed and he's been without his computer for about 2 weeks now. Ooops.
Any company that's stupid enough to sell a product called PADFONE or FONEPAD is a company to stay from.... They can't make up their mind. That introduction to the PADPHONE was comical. It was so cheesy... It's a pad, it's a phone. PADFONE!!! Totally ridiculous. They made about 6% net profit. Probably because of the PADFONE!!!
This is hilarious.
The padfone actually struck me as a pretty innovative product. The only downside is that the phone has a rather short battery life, as you are expected to continuously recharge it from the tablet component.
Not everyone wants to become a nuclear physicist however we all depend on them. Why take away the gateway from potential young super stars in computer programming?
We need to preserve the traditional computer just like we need to preserve the environment. Other interests are nice too but the scientific educational system in the US is under attack by popular culture. I believe one needs to be increasingly concerned about the poor academic achievements of today's youth in the US. Full computers are essential to this effort as computer science is the most important discipline for the future of mankind.
The people want to be computer programmers will take it upon themselves to learn.
And I disagree with your second point. You state that academic standards are dropping, and your solution is to combat that with technology that is more difficult and confusing to use? If pupils are going to be using ICT to learn more about math or english, does it make sense that the interface ought to be as simplified as possible, so they spend less time trying to figure out and troubleshoot the interface, and more time actually learning? Remember that the computers are there for them to learn 21st century skills, and not computer skills specifically.
Whether computer science is as important as you are making it out to be is another debatable issue. Suffice to say that not everyone become a computer scientist, nor does training to become one necessarily make you any smarter or better in your chosen field subsequently.
Repeat to yourself: Revenue solves all problems. If you've got revenue, even if you've got low margins, you have a business. Amazon knows this very well. Amazon fixes prices and capex in order to set profit as close to zero as possible. However, they can turn a profit at any moment if they wanted.
Apple really had no excuses for high margins for "innovation". They have $100+billion in the bank. They could lose $5 billion a year and still run for 20 years. This reminds me of the way Oil Company tax breaks are defended "They need these tax breaks for R&D and exploration!" Really? Exxon needs subsidies in order to influence them to look for more oil? Give me a break.
You are vastly oversimplifying things. Revenue alone does not solve problems. If your expenses exceed revenue, you're not going to be in business very long. If you have low margins, that's not a good thing either because not only are you less capable of weathering a revenue decline but also, you have less money to reinvest in the business.
As for Amazon, have you asked yourself why Amazon would choose to earn as little profit as possible? And turning a profit isn't a magic wand. When you set the prices low, it's hard to raise prices in the future.
The people want to be computer programmers will take it upon themselves to learn.
Kids do not take it upon themselves for any decisions until they are around 16 years of age and that is about 10 years too late to be a computer prodigy.
Comments
Quote:
Originally Posted by v5v
Yup, you nailed it. For the vast majority of the population even 5GHz USB is plenty.
Moving the kind of data streams that require the bandwidth of Thunderbolt is primarily the province of those who CREATE content. By the time said content is ready for consumption by a consumer it's no longer so bandwidth bandwidth-intensive so TB is overkill.
USB 10 MB doesn't do bi-directional nor does it do display port to drive high end monitors. TB is more for higher end applications.
Go read the differences between USB 3.1 and TB and then TB2.
You can't daisy chain several devices, one being a monitor and then have things happening in both directions. Sorry, but TB is FAR superior.
Thunderbolt combines PCI Express and Display port, USB 3.1 doesn't do that. So Mac users can buy an external PCI card chassis and plug it into a MacBook, iMac, and MacPro or Mac mini, along with RAID drives, monitors, etc. Thunderbolt and TB 2 is WAY more sophisticated than USB 3.1.
Quote:
Originally Posted by Tim Richardson
Actually, the history with Windows shows that this can become an extremely difficult barrier to overcome. People get locked into a platform. Android tablets have a chance because there are a lot of Android phone users who already have entry to the platform. They may own an iOS tablet, but a good Android tablet in the future is possible. Apple has a long, profitable future ahead of them. Microsoft has the big problem. Hardly any market share in phones, and a debacle in tablets.
I'm not sure what part of Windows history you might be thinking of. Fact is the enterprise market locked into DOS long before Windows was stolen from Apple, and the reason wasn't Microsoft, it was IBM who hired Gates et al to write DOS for their line of computers at the time. Enterprise's respect for IBM was so high at the time, it was an automatic decision. Previous to IBM in the market, Apple had dominance, but it was a small market at the time.
This time around, it is a bit different. Apple has dominance in the enterprise, school and government markets, and has become the de facto standard in those markets. Apple also has a very strong position in the consumer market where it competes with a huge number of Android based manufacturers, led by Samsung.
Microsoft, relying on the power of the Windows platform was stunned by how little power the Windows platform gave them in the consumer and non-consumer markets. It made little difference if it was backward compatible to older versions of Windows, or that there was any desire for an OS that looked like Windows (Windows RT).
Back in the day, the argument that the Mac was a better computer failed to translate into sales, because the ecosystem of DOS/Windows trumped hardware claims. That single thing is still at work today. Hardware specs are secondary to a good ecosystem. Apple's ecosystem includes a single trusted source for music, entertainment, and apps - with a half-billion of customer accounts, In addition it includes the iCloud, higher security devices, local stores for service and help, the highest-rated customer service, a loyal following of customers, and enough money in the bank that they can continue to push the envelope far into the future.
Quote:
Originally Posted by drblank
I'm sure Apple pays more for components than Samsung in the BOM listed since Apple buys them from Samsung and Samsung mfg them for cheaper than what they sell them to Apple for. Plus the Apple aluminum case isn't cheap to fabricate.
Actually the Samsung component division sells to the Sansung phone division, so the phone division likely pays close to what Apple pays. So the profits you see for Samsung phones and tablets is only for that division. The component division reports it's own profits. Apple's aluminum cases are more expensive to produce, however they give the Apple's products incredible rigidity and a longer effective life and higher resale value. When you incorporate those factors into a cost-of-ownership you find the iPhone has a much lower cost to the user than the initial price might indicate.
Quote:
Originally Posted by rjc999
For 20 years people shipped PCs with razor thin margins and almost no one made money except for Dell/HP/IBM selling into the enterprise market. You can keep pushing the narrative that profit == success, but eventually computing platforms get commoditized. There used to be a number of successful, vertically integrated Unix vendors, in fact, more vertically integrated than Apple, because they actually made their own CPUs, motherboards, storage, everything. They all got crushed by "unprofitable" Linux.
Microeconomics 101, the long run in a competitive market is for prices to trend towards marginal cost. The writing is on the wall and Wall Street knows it. It's absurd the way people cheerlead overpaying super-high margins to Apple, who then doesn't even reinvest the profits back into innovation, but is sitting on the cash, distributing it to investors, or buying back stock. This might sound great for investors, but it doesn't sound good for consumers.
Is this really what you want, to pay a 39% margin? Do you want into a car dealership and negotiate with the sales agent to pay MSRP or above?
Competition is supposed to drive down prices, if you're deliberating cheering for one company to win everything and set monopoly prices, you're a moron.
If the PC market was any indication, what competition did was to drive down prices at the expense of innovation. Prior to the macbook air, laptops actually grew bulkier and heavier as manufacturers kept cramming in more and more specs, without bothering to invest in miniaturisation, or considering if such a move was really in the user's best interests or not. Or they would try to confuse consumers by bundling lopsided specs, such as boasting about having 8gb ram, while stinging on the graphics card (because nobody really knows how powerful they are by looking at those arcane model numbers anyways).
Tablets were all the same (essentially the tablet form factor running windows), and they equally sucked to use. Nobody bothered to redesign the OS, nor could they afford to anyways, because profits were already so slim, there was practically nothing left to invest in R&D. In short, everyone was just pushing out the same, old and tired designs, regardless of whether they worked or not.
So yes, to your question, so long as Apple continues to make excellent products that look great and work great, I am willing to continue buying them, even at 39% margin. It's not so much a matter of how much they are earning, but whether I feel I am getting value for my money. To this date, I feel that it is still the case.
Quote:
Originally Posted by mstone
The thing that comes to mind occasionally is that replacing computers with iPads is essentially dumbing down the next generation.
Without a real computer available, kids will just be learning how to become consumers without a platform to learn how to code on. The current crop of young app developers didn't develop their skills on a tablet, their parents and teachers encouraged them on a regular computer.
It is like, why teach children how to prepare a healthy meal at home when it is so convenient to just drive through the fast food chain restaurant?
When I was a kid I used to wire components together and make electronic things. I sure wasn't like my friends who could play a record or a radio, I could make such things. A lot of good that did me in the long haul because technology moved on from analog to digital to computers on a chip. The same with languages. All those early computer nerds that learned fortran, pascal, basic, et al...
So, I don't place that much store in needing a "real computer" to learn how to code for the mass of people. That has become a dead end, like fixing coo-coo clocks.
My iPad is a tool just like my MBP. I use which ever tool I need at the moment to make money and entertain me as I need. My iPhone makes me a ton of money and I don't even care what's inside. A "real computer" either locks me to a location or slows me down when I travel. Give me mobility and my own brain and I'm out meeting people and doing commerce instead of whiling my life away in my parent's basement with a "real computer."
Quote:
Originally Posted by v5v
*YOU* know that, and *I* know that, but most people don't know and don't CARE. Facebook, email, a way to get the pictures out of the camera... that's all they do with their computer. And let's be honest, they don't NEED a "high-end" machine to do that.
Apple is doing its best to get those people into iPads instead of cheap computers, but it'll probably take a half-generation or so for the new paradigm to sink in.
A half-generation is equal to 10 years... and that's about how long it is taking. The iPad and the iPhone are everywhere. Apple has moved us well into the future.
However, there will always be a market for cheep crap swinging from a pegboard hook in Dollar General.
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Originally Posted by Macky the Macky
When I was a kid I used to wire components together and make electronic things. I sure wasn't like my friends who could play a record or a radio, I could make such things. A lot of good that did me in the long haul because technology moved on from analog to digital to computers on a chip. The same with languages. All those early computer nerds that learned fortran, pascal, basic, et al...
So, I don't place that much store in needing a "real computer" to learn how to code for the mass of people. That has become a dead end, like fixing coo-coo clocks.
My iPad is a tool just like my MBP. I use which ever tool I need at the moment to make money and entertain me as I need. My iPhone makes me a ton of money and I don't even care what's inside. A "real computer" either locks me to a location or slows me down when I travel. Give me mobility and my own brain and I'm out meeting people and doing commerce instead of whiling my life away in my parent's basement with a "real computer."
Dear Sir:
Normally I do not disagree with your posts however on this topic I feel that you are a bit shortsighted. You clearly confirm that you have a MBP which is what I have as well. The basement dweller comment is unnecessary as the truly gifted young programmers of today began their studies at an early age. Typically they are not college dropouts living in a basement.
Not everyone wants to be a geek. There are other interests in the world.
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Originally Posted by drblank
USB 10 MB doesn't do bi-directional nor does it do display port to drive high end monitors. TB is more for higher end applications.
Go read the differences between USB 3.1 and TB and then TB2.
You can't daisy chain several devices, one being a monitor and then have things happening in both directions. Sorry, but TB is FAR superior.
Thunderbolt combines PCI Express and Display port, USB 3.1 doesn't do that. So Mac users can buy an external PCI card chassis and plug it into a MacBook, iMac, and MacPro or Mac mini, along with RAID drives, monitors, etc. Thunderbolt and TB 2 is WAY more sophisticated than USB 3.1.
Yeah yeah yeah, bigger badder bolder better, but so what?
No one is disputing Thunderbolt's superiority, we're saying it's irrelevant. Try to come up with examples of how any of what you describe matters to a typical computer user. Geeks like us do stuff that will take advantage of what Thunderbolt offers, but typical consumers don't.
When's the last time your neighbor installed a card in a computer? Consumers don't play Multichannel 96KHz/24bit audio files, they play 256Kb AAC or mp3 files. They don't exchange 30-bit layered HDR TIFF files, they send JPGs. And they don't shoot and edit 4:2:2 XDCAM video, they use H.264. They don't do anything that requires Thunderbolt. USB3 is more than enough, and it's both more common and less expensive.
Actually the Samsung component division sells to the Sansung phone division, so the phone division likely pays close to what Apple pays. So the profits you see for Samsung phones and tablets is only for that division. The component division reports it's own profits. Apple's aluminum cases are more expensive to produce, however they give the Apple's products incredible rigidity and a longer effective life and higher resale value. When you incorporate those factors into a cost-of-ownership you find the iPhone has a much lower cost to the user than the initial price might indicate.
Yeah right. I'm sure Samsung semi will give Samsung mobile the best price and delivery since it's the same company. Come on, don't be that naive. Don't you think it's strange that Samsung is one of the first to release a new product before others? It gives them a little more time to get new buyers.
MOst people don't even know what the term cost of ownership is. You're average consumer is, well, stupid. I run into so many clueless people that don't know jack about what they are using.
I asked a bunch of people that I kind of know what version OS they were running. ALL of the Android users I asked didn't know. One of them is hardcore Android user and I mean this guy has that glazed look kind of hard core like he just joined some religious cult. I mean HARD CORE and he told me he has the most recent version. yeah, the most recent version released on his phone, but he was at 4.1.x not 4.2.2. This was a few weeks ago. His response? "I guess I'll have to get a new phone". He just bought his last year.
All of the Android users I asked, except one, didn't know what the term NFC was, didn't know if they had it in their smartphone and didn't know what it's used for. That's how clueless the average consumer is. one bought one because of the screen size and NOTHING else. One bought it because it was on sale for $99 down from $150, oh, and it looked like an iPhone 4S.
These are people that are college level kids and they are your average 20+ kid. Go figure. TCO? If I asked them what TCO meant, their brain would probably melt and ooze out of their ears.
A lot of these kids just want to worry about their Facebook account and who's on it and be able to Twitter Justin BIeber. That's what a lot of them care about. I walked into one restaurant that I frequent and it was funny because one of servers tracked me down and started going into a "I hate Android" rant and they didn't know i use an IPhone. I mean this gal was PISSED. She pulled out her Android phone told me how many times she had to replace it because it burned up, it crashes, battery drains, gets crappy cell reception, yada yada and she tells me that she prefers the smaller screen of the iPhone 4S (this was right before the iPhone 5 came out or right around the same time). I'm she was PISSED. She was ready to throw the thing against the wall pissed. I stood there for literally 5 minutes listening to this person's rant. I was cracking up because she knew all of the problems and didn't hesitate ranting about it. I should have video taped it and put it on YouTube. It was funny.
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Originally Posted by snova
Not everyone wants to be a geek. There are other interests in the world.
Not everyone wants to become a nuclear physicist however we all depend on them. Why take away the gateway from potential young super stars in computer programming?
We need to preserve the traditional computer just like we need to preserve the environment. Other interests are nice too but the scientific educational system in the US is under attack by popular culture. I believe one needs to be increasingly concerned about the poor academic achievements of today's youth in the US. Full computers are essential to this effort as computer science is the most important discipline for the future of mankind.
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Originally Posted by mstone
Other interests are nice too but the scientific educational system in the US is under attack by popular culture.
Not just scientific education. INTELLIGENCE is uncool.
Correct grammar and spelling have been replaced with an indignant "You knew (sic) what I meant!" If that were true it wouldn't matter, but often the lack of language skills obscures and confuses the message.
Kids need a solid foundation in math, science, language, music, art, sports and a craft or two (welding, carpentry, whatever). How many kids get all of those anymore? By the time they reach puberty we have them pegged for matriculation (whatever THAT means) or a trade, and if the latter we start ignoring the intangible facets of personal development.
Don't forget cost of windoeed upgrades vs Osx. And cost of pages/numbers vs office. Etc
You do not seem to know much about Economics, micro or macro.
Companies that trend towards cost sales tend not to survive. Hence the current status of the entire PC industry.
This then leaves the Consumer in the crapper with companies they bought cheap products from no longer there to service/replace/repair/support. So how is this of benefit to the Consumer again?
For everything to move along at a steady pace the product has to be reasonable in cost for the bulk of Consumers and have a healthy margin for the Manufacturer to continue to grow and develop new or existing product lines.
What we have is no longer Consumerism, but Consumption-ism instead. "Just buy a new thingy if yours can't be serviced anymore, or the company is no longer around."
Companies should never be allowed to sell existing products below costs. This is exactly what Amazon is doing and kills competition. It is exactly what others do and destroy small businesses and entire segments. Is is it good for the Consumer? Sometimes, but in the long run it is in fact not healthy for anyone.
As for your weak arguments, lets dissect a couple....
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It's absurd the way people cheerlead overpaying super-high margins to Apple, who then doesn't even reinvest the profits back into innovation....
Are you an employee in Apple's R&D department and have something to share with us? What kind of ridiculous statement is this? It is step one showing everything out of your mouth being viewed as useless. Prove that Apple is not innovating. People like you and Wall Street pundits seem to have drastically different views of what that word means. It is after all a subjective term. What I think is innovative you do not, so that makes you right? I think not. Basing an argument off of purely subjective descriptions is crappy at its best.
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Is this really what you want, to pay a 39% margin? Do you want into a car dealership and negotiate with the sales agent to pay MSRP or above?
Rubbish. Pure rubbish. Yes, if I choose to pay a 39% premium that is what the essence of a free economy is. If my product is too far out of sorts then no one will buy it and I will go bankrupt. That is how Economics works. Your car analogy is hogwash as in in fact does happen now. I can buy a low percentage profit car like a Ford Focus or I can buy a Mercedes or Porche or Ferrari. You think their margins are the same? Are their prices at MSRP? Wait...they want to offer you addons and incentives that in the end are far above the original MSRP, so in fact the essence of car sales is to push the Consumer into paying above original costs. BAM - 2nd argument thrashed.
Let's do one more for fun, because after that everything you say is mostly drivel.
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Competition is supposed to drive down prices, if you're deliberating cheering for one company to win everything and set monopoly prices, you're a moron
Since when and what Economics professor taught you that? This is from Wikipedia to possibly help your narrow mind better grasp the concept.
"Merriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms".[4] It was described by Adam Smith in The Wealth of Nations (1776) and later economists as allocating productive resources to their most highly-valued uses.[5] and encouraging efficiency.
Later microeconomic theory distinguished between perfect competition and imperfect competition, concluding that no system of resource allocation is more efficient than perfect competition. Competition, according to the theory, causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. The greater selection typically causes lower prices for the products, compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly).
However, competition may also lead to wasted (duplicated) effort and to increased costs (and prices) in some circumstances."
Note the bold and underlined parts... You will notice that it clearly states the goal is to give greater selection and better products. Though this CAN have a result in lower prices it is not the primary goal. It is also dependent on the presence of monopolies or oligopolies (or lack thereof).
To better put this in small terms you might understand - gas prices. Why in any given city or region are the prices so fixed? Why is every shop posting the exact same identical price at any given time? Is the goal under your definition not supposed to have pushed prices down and down and down to costs by now? There is surely enough competition out there in terms of a variety of companies and suppliers. What is their profit margin percentage? No one seems to know for sure but Exxon seems to be around 9% when the industry sits at 6%. Exxon is gouging us because they are above the average and should be pushing the cost down under your spirit of "competition". Shame on them for making more that the rest of the industry. Gougers.
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Originally Posted by CustomTB
Don't forget cost of windoeed upgrades vs Osx. And cost of pages/numbers vs office. Etc
I bought my 27 inch iMac and got it just before Christmas, some one I know bought that new Dell 27inch AIO that's priced very similarly to the iMac and he got his a couple of months ago and only after a few weeks he had to send it back to Dell to get fixed. Oops. Mine works like a champ. The difference in price for similar configurations was minimal only he only had the 32G Hybrid drive and I got the 1TB Fusion drive. I think mine with AppleCare and tax was like $100 more or something very minor in price. He's already sent his back to get fixed and he's been without his computer for about 2 weeks now. Ooops.
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Originally Posted by drblank
Any company that's stupid enough to sell a product called PADFONE or FONEPAD is a company to stay from.... They can't make up their mind. That introduction to the PADPHONE was comical. It was so cheesy... It's a pad, it's a phone. PADFONE!!! Totally ridiculous. They made about 6% net profit. Probably because of the PADFONE!!!
This is hilarious.
The padfone actually struck me as a pretty innovative product. The only downside is that the phone has a rather short battery life, as you are expected to continuously recharge it from the tablet component.
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Originally Posted by mstone
Not everyone wants to become a nuclear physicist however we all depend on them. Why take away the gateway from potential young super stars in computer programming?
We need to preserve the traditional computer just like we need to preserve the environment. Other interests are nice too but the scientific educational system in the US is under attack by popular culture. I believe one needs to be increasingly concerned about the poor academic achievements of today's youth in the US. Full computers are essential to this effort as computer science is the most important discipline for the future of mankind.
The people want to be computer programmers will take it upon themselves to learn.
And I disagree with your second point. You state that academic standards are dropping, and your solution is to combat that with technology that is more difficult and confusing to use? If pupils are going to be using ICT to learn more about math or english, does it make sense that the interface ought to be as simplified as possible, so they spend less time trying to figure out and troubleshoot the interface, and more time actually learning? Remember that the computers are there for them to learn 21st century skills, and not computer skills specifically.
Whether computer science is as important as you are making it out to be is another debatable issue. Suffice to say that not everyone become a computer scientist, nor does training to become one necessarily make you any smarter or better in your chosen field subsequently.
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Originally Posted by rjc999
Repeat to yourself: Revenue solves all problems. If you've got revenue, even if you've got low margins, you have a business. Amazon knows this very well. Amazon fixes prices and capex in order to set profit as close to zero as possible. However, they can turn a profit at any moment if they wanted.
Apple really had no excuses for high margins for "innovation". They have $100+billion in the bank. They could lose $5 billion a year and still run for 20 years. This reminds me of the way Oil Company tax breaks are defended "They need these tax breaks for R&D and exploration!" Really? Exxon needs subsidies in order to influence them to look for more oil? Give me a break.
You are vastly oversimplifying things. Revenue alone does not solve problems. If your expenses exceed revenue, you're not going to be in business very long. If you have low margins, that's not a good thing either because not only are you less capable of weathering a revenue decline but also, you have less money to reinvest in the business.
As for Amazon, have you asked yourself why Amazon would choose to earn as little profit as possible? And turning a profit isn't a magic wand. When you set the prices low, it's hard to raise prices in the future.
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Originally Posted by abazigal
The people want to be computer programmers will take it upon themselves to learn.
Kids do not take it upon themselves for any decisions until they are around 16 years of age and that is about 10 years too late to be a computer prodigy.