Apple, Inc. and the pursuit of affordable luxury electronics

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  • Reply 101 of 270

    There was an idiot in the other thread who was going on about 'why should consumers be loyal to brands?'

     

    I hope he had the sense to read this blog. He might actually learn something.

  • Reply 102 of 270
    dysamoriadysamoria Posts: 3,430member
    Great article Daniel.

    I have been on this tired old planet for a good number of years and well remember the advent of the Japanese industrial revolution after the second world war. That has forever imprinted n my mind that the word "cheap" does not, in fact, mean that it is merely less expensive (for the same quality product), but more in terms of the pejorative adjective meaning crappy quality and poorly made.

    I cringe every time someone says "Can't I get this cheaper?" When I hear that I think of the early Japanese transistor radios that would last about two weeks and would fall apart if you squeezed them slightly too hard.

    As far as the ANALysts are concerned, well just consider where they are making the noises from.

    The Japanese industrial culture was focused on "serve the man rapidly with plentiful items" before the USA fiddled with rebuilding them after WWII. The USA changed their culture to "serve the man with singular quality". They kept that ideal for a great long time. Far beyond the time the USA abandoned it and turned to mass cheap crap and built-in obsolescence. The cheap crap didn't come from Japan. The good stuff did. Haven't you seen Back to the Future?

    Doc Brown of 1955: Marty, I figured out why this thing isn't working. This component was made in Japan!

    Marty (from 1985): Doc, all the good stuff comes from Japan.

    Most of the USA's electronics industry moved outside the USA to reduce labor expense. The cheap crap comes from several places, but it's caused by American industry requests for cheap labor, and corporate pursuit of higher profit (by reducing investment), not by Japan being incapable of producing quality goods. The USA abandoned quality for corporate profit via cheap builds, and repeat sales via planned obsolescence. That's where quality went. Don't blame Japan.

    If American business wasn't so obsessed with cheapness, China wouldn't have as much a market to dump cheap crap goods at. And no, consumers didn't choose this. That's another myth of the so-called free market. The search for increased profit is what made the markets present cheap junk and push it as less expensive and "more economical" for consumers. After a while, no one makes quality goods any more because, the businesses who might have, can't compete in a market if their expenses are higher than the junk makers... without higher prices to consumers.

    I learned this ages ago and that's why I try to buy better product. But I'm one person fighting the trend of cheap crap, and people love to characterize quality goods as luxury items to mock those who buy them, and to make themselves feel better for not having prioritized their expenses to purchase them. There's a lot of stuff many people spend money on that I don't. Beer, cigarettes, drugs, sports, car stereos (and car pimping), cable tv, brand clothing/shoes, magazines, etc. Prioritize what income you have and choose better product.
  • Reply 103 of 270
    paul94544paul94544 Posts: 1,027member

    the reason why geeks hate Apple is really quite simple" Apple made computers easy to use. There was and still is an unwritten rule that you MUST NOT MAKE A COMPUTER DEVICE EASY TO USE. The whole MS/INTEL mindset is based on this assumption , the more complicated and buggy and useless the better-  that way you can make billions of $ on upgrades/refreshes etc etc ad infinitum . Apple has bucked this trend and they are HATED for it. The tech industry MUST have all its lackies attacking Apple because their jobs depend on maintaining this lie. It will never end. The biggest lie of all is that Apple is more expensive , it isn't total cost of ownership is less for Apple products - this is the truth the tech indistry really wants to keep from us 

  • Reply 104 of 270
    solipsismxsolipsismx Posts: 19,566member
    paul94544 wrote: »
    the reason why geeks hate Apple is really quite simple" Apple made computers easy to use. There was and still is an unwritten rule that you MUST NOT MAKE A COMPUTER DEVICE EASY TO USE. The whole MS/INTEL mindset is based on this assumption , the more complicated and buggy and useless the better-  that way you can make billions of $ on upgrades/refreshes etc etc ad infinitum . Apple has bucked this trend and they are HATED for it. The tech industry MUST have all its lackies attacking Apple because their jobs depend on maintaining this lie. It will never end. The biggest lie of all is that Apple is more expensive , it isn't total cost of ownership is less for Apple products - this is the truth the tech indistry really wants to keep from us 


    [VIDEO]
  • Reply 105 of 270
    radarthekatradarthekat Posts: 3,842moderator
    dysamoria wrote: »
    The Japanese industrial culture was focused on "serve the man rapidly with plentiful items" before the USA fiddled with rebuilding them after WWII. The USA changed their culture to "serve the man with singular quality". They kept that ideal for a great long time. Far beyond the time the USA abandoned it and turned to mass cheap crap and built-in obsolescence. The cheap crap didn't come from Japan. The good stuff did. Haven't you seen Back to the Future?

    Doc Brown of 1955: Marty, I figured out why this thing isn't working. This component was made in Japan!

    Marty (from 1985): Doc, all the good stuff comes from Japan.

    Most of the USA's electronics industry moved outside the USA to reduce labor expense. The cheap crap comes from several places, but it's caused by American industry requests for cheap labor, and corporate pursuit of higher profit (by reducing investment), not by Japan being incapable of producing quality goods. The USA abandoned quality for corporate profit via cheap builds, and repeat sales via planned obsolescence. That's where quality went. Don't blame Japan.

    If American business wasn't so obsessed with cheapness, China wouldn't have as much a market to dump cheap crap goods at. And no, consumers didn't choose this. That's another myth of the so-called free market. The search for increased profit is what made the markets present cheap junk and push it as less expensive and "more economical" for consumers. After a while, no one makes quality goods any more because, the businesses who might have, can't compete in a market if their expenses are higher than the junk makers... without higher prices to consumers.

    I learned this ages ago and that's why I try to buy better product. But I'm one person fighting the trend of cheap crap, and people love to characterize quality goods as luxury items to mock those who buy them, and to make themselves feel better for not having prioritized their expenses to purchase them. There's a lot of stuff many people spend money on that I don't. Beer, cigarettes, drugs, sports, car stereos (and car pimping), cable tv, brand clothing/shoes, magazines, etc. Prioritize what income you have and choose better product.

    Spot on. For further reading, Google W. Edwards Deming or begin here: http://www.qfdi.org/newsletters/deming_in_japan.html
  • Reply 106 of 270
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by asdasd View Post



    When people talk about creating their own PCs I talk about making my own fridge. It's cheaper you know.

    Funny, but many computer enthusiasts enjoy building computers. I've never met a fridge building enthusiast.  I have built many Linux servers, and you do save money as well as getting exactly what you want. Most of the ones I build cost north of $3K but would cost nearly triple that if purchased from HP and even then you have to wait a few weeks and the thing is packed with proprietary components which I don't like.  Linux servers are commodity items which I feel I can build as well or better than ones that I can just buy. Mac Pro is a completely different situation especially the new one. No one can duplicate that, especially since it runs OS X which is only compatible with Mac hardware.  Hackintoshes are generally thought to be unstable and unsuitable in a professional environment. I can build bulletproof Linux servers though.

  • Reply 107 of 270
    jhwicejhwice Posts: 2member
    Excellent editorial, outstanding insight.
  • Reply 108 of 270
    solipsismxsolipsismx Posts: 19,566member
    mstone wrote: »
    Funny, but many computer enthusiasts enjoy building computers. I've never met a fridge building enthusiast.  I have built many Linux servers, and you do save money as well as getting exactly what you want. Most of the ones I build cost north of $3K but would cost nearly triple that if purchased from HP and even then you have to wait a few weeks and the thing is packed with proprietary components which I don't like.  Linux servers are commodity items which I feel I can build as well or better than ones that I can just buy. Mac Pro is a completely different situation especially the new one. No one can duplicate that, especially since it runs OS X which is only compatible with Mac hardware.  Hackintoshes are generally thought to be unstable and unsuitable in a professional environment. I can build bulletproof Linux servers though.

    1) Sure, but you're not talking about a general purpose computer which is what [@]asdasd[/@] seems to be referring to when asshats say "Oh, I build my own computers." These guys aren't likely building notebooks which are the primary machines sold to customers.

    2a) I've built some very tough Hackintoshs but at the same time I'd never consider one for server use. For that I would go with *nix or Windows, depending on the usage need.

    2b) Right now I do have OS X Server running on one machine used for Time Machine backups and for my LAN's iTunes server off an 8TiB (4x4TiB) RAID 10 setup. Since it's the original flatscreen iMac with USB 1.0 I am using FW400 for connectivity to the RAID. It's running either Leopard or SL as the highest OS possible. It's wired to the router so 100MB/s is the fastest option. It's definitely slow if you try to use it directly but for what it's for it works out well. Still, I am planning on upgrading to 2012 or newer Mac mini once they are updated again. The reason is I wouldn't mind adding more features and getting better speed from the Apple TV and other Macs from accessing iTunes. 2012 or newer is to get USB 3.0 for my RAID.
  • Reply 109 of 270
    asdasdasdasd Posts: 5,686member
    I was joking about the fridge building but I do ask this.

    How much can you resell for? The real cost of ownership of anything is it's maintaince costs and the cost of depreciation. The latter is important if you can't sell.
  • Reply 110 of 270
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by asdasd View Post



    I was joking about the fridge building but I do ask this.



    How much can you resell for? The real cost of ownership of anything is it's maintaince costs and the cost of depreciation. The latter is important if you can't sell.

    They run 24/7 for about 5+ years and then certified recycled. They are completely depreciated from an accounting perspective and the company policy is that they must be destroyed. Never had one fail yet. They are mostly running LAMP configurations but I do build Windows Server boxes as well. In fact that is what I'm working on right now.

  • Reply 111 of 270
    solipsismxsolipsismx Posts: 19,566member
    mstone wrote: »
    They run 24/7 for about 5+ years and then certified recycled. They are completely depreciated from an accounting perspective and the company policy is that they must be destroyed. Never had one fail yet. They are mostly running LAMP configurations but I do build Windows Server boxes as well. In fact that is what I'm working on right now.

    Ignoring that these aren't consumer machine you're building which makes them a nonstarter for any reasonable comparison, how much time are you spending on research, building, setup, and maintenance? Now factor in the average Mac user's average hourly wage and then figure out how much time it would take them to do the same as you (since you clearly do this often) and you might find even when dealing a server the time simply don't work out for the average consumer in terms of cost savings, let alone the strew and annoyance of all it in the first place.
  • Reply 112 of 270
    mstonemstone Posts: 11,510member
    Quote:

    Originally Posted by SolipsismX View Post

     
    8GB (4x4GB) RAID 10 setup. 


    Wow! Is that a RAID made from USB memory sticks? ;-)

  • Reply 113 of 270

    I know, right? I want him to marry me. I just love his articles ! (plus he IS a hottie)

  • Reply 114 of 270
    gpo344gpo344 Posts: 4member
    Great article. Yet the stock price has been languishing in the low 500's. Why is it that Carl Icahn, Bill Miller, and many other people feel it is a "no brainer", but the stock can't move. With all the cash, they could buy themselves back in a few years, but the stock is so out of favor. Now we have to worry about earnings, and guidance for the June quarter.
    Daniel, can you comment about the stock price?
  • Reply 115 of 270
    I said his before, many times, and gotta say it again: I love your articles, Mr. Dilger.

    Marry me? Hehe

    Keep it up. You are simply the best tech writer I ever read (I read a lot - all the major tech news sites, including Gawker - you beat Mr. Jesus Diaz http://www.mediabistro.com/Jesus-Diaz-profile.html , another of my fav. writers).

    We love you.
  • Reply 116 of 270
    mstonemstone Posts: 11,510member
    Quote:

    Originally Posted by SolipsismX View Post

     
    Ignoring that these aren't consumer machine you're building which makes them a nonstarter for any reasonable comparison, how much time are you spending on research, building, setup, and maintenance? Now factor in the average Mac user's average hourly wage and then figure out how much time it would take them to do the same as you (since you clearly do this often) and you might find even when dealing a server the time simply don't work out for the average consumer in terms of cost savings, let alone the strew and annoyance of all it in the first place.


    Well referring back to the original poster who wrote that he could build a Linux server which would be faster and cost less than a Mac Pro, I don't think the conversation was ever about consumer machines. I certainly wouldn't consider the Mac Pro a consumer machine. In regards to the maintenance of the server boxes I build, it is almost zero in terms of HW, normal amount of SW maintenance but no different than any other platform. It literally takes me less than 2 hours to build and install Linux, but sometimes it takes days to get Windows and MSSQL + Management Suite installed and configured.

  • Reply 117 of 270
    plovellplovell Posts: 824member
    I continue to be puzzled by the lackluster sales of the Mac Mini. I have one with Fusion drive and it's great (bumping up memory also helps). It's nice with the two 23" Apple displays too - plenty of screen space.
  • Reply 118 of 270
    solipsismxsolipsismx Posts: 19,566member
    plovell wrote: »
    I continue to be puzzled by the lackluster sales of the Mac Mini. I have one with Fusion drive and it's great (bumping up memory also helps). It's nice with the two 23" Apple displays too - plenty of screen space.

    My guess is it comes down to the type of consumer that would by a desktop Mac likely wants something all inclusive (iMac) or super powerful (Mac Pro).
  • Reply 119 of 270
    dasanman69dasanman69 Posts: 13,002member
    There was an idiot in the other thread who was going on about 'why should consumers be loyal to brands?'

    I hope he had the sense to read this blog. He might actually learn something.

    Very few brands are loyal to customers, so why should they receive loyalty in return?
  • Reply 120 of 270
    drblankdrblank Posts: 3,385member

    Here's what I think DED missed on discussing.

     

    How long is it going to take until Apple completes the transition to 64 bit for their entire product line of iDevices?  At the end of next year, all of Apple's iDevices should be 64 Bit and then it will take about 2-3 additional years for the install base to adopt it where 90%+ has a 64 Bit iDevice and no 32 Bit iDevices in use.   Then the Developers don't have to worry about developing for both 32 Bit and 64 BIt.

     

    Android?  Hahaha.  They haven't even put out their first 64 Bit device yet as they have to wait until Google releases it, and THEN the Android mfg can start releasing product, but since companies like Samsung keep older devices on the price list long after they can run the latest OS, it will probably take them at least 7 to 10 years for 90%+ of the Android install base has 64 Bit devices.  

     

    My contention is that since the larger screen (rumors) iPhones should be released this year, they'll take over a large portion of the large screen smartphone market and then the Android community will predominately made up of cheaper, older 32 Bit phones that pretty much don't make any profit or lose money.  Not good for Samsung, HTC, or any other major Android phone maker.

     

    I don't know how much longer Microsoft can keep their Nokia phones on the market since they don't sell.  Same applies to the Surface RT product since it's not selling either.



    Now, I know that Microsoft has about 90% of the desktop and laptop market in terms of install base, but Apple is selling more and more laptops (compared to Windows laptops) and it might take a few years, but if they continue to pump out great laptops, it could be possible that that 90% market share Microsoft has in the desktop/laptop market will dwindle down to maybe around 75 to 80% within a couple of years.  I think that the iDevices (iPhones and iPads) is Apple's way of getting more laptop and desktop users as they get used to Apple's way of providing a quality product/tech support.

     

    What Apple doesn't go after is the entry level product categories since those simply don't make any profit and are more profit draining, so it's best to just simply avoid that market. Apple would destroy their margins if they went after that low end market and Apple just isn't interested in that, and both Jobs and Cook have mentioned that several times before.  I don't know why these analysts have such bad memory recall.  i think some of these analysts THINK that market share is more important than profitable business.



    What's keeping Apple from doing better numbers is two fold.  Larger screen models and having more production output. If they start pumping out 4 inch, 5 inch and 5.5 inch and can meet the demand of these three without having to wait longer than a couple of days, they could probably reach 300 to 400 Million devices sold in a year.  Right now, I think Apple is at 500,000 iPhones mfg per day, they need to essentially double the output, which means more assembly buildings have to be built, more people have to be hired and that goes for the mfg of the components (everything that goes on the inside).

     

    Moving the MacPro to the USA hopefully helped free up some assembly lines in China to be used for other products and if they do the same thing with the other desktops (iMac, MacMini) later this year, then that will free up assembly space in China to build more iDevices, which obviously need more production space.  At least, this is just my observation based on what i know.

     

    In order for Apple to capture more desktop sales, they might want to come out with a headless unit that's spec'd and priced in between the MacMini and the MacPro.  I don't think having the iMac as the only mid-range product is the right move.  I think they still need a headless model with similar internal specs, but without a monitor.

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