^^ Nah the motivation is clear; a way to upsell people to get them to spend $100 more (and hopefully once they're there they will never downgrade). That's obviously why Apple chose to make 64 the new 32 but leave 16 as is. Phil Schiller can say you get 4x the storage for only $100 more. Seeing the 16GB still hanging around tells me one thing, not enough people have moved into the middle tier yet. I'm sure Apple's thinking is once they do and they start filling up their phones they won't downgrade. Perhaps once the majority of install base is in the middle tier Apple will upgrade the entry level model.
but would you not agree if the 6s started at 32GB $650 they would sell more units overall?
I think Apple sacrificing some profit to get a bigger install base is worth it long term. They will still be making a nice profit selling the 32GB for $650. Problem is Wall Street won't allow Apple to do this. If Apple shows even 5% shrinking revenue the stock will get smashed. Its already smashed almost 20% from it peak in Jan/July. If Apple was private they could do this type of 1 step back 3 steps forward moves. Now every quarter needs to show growth or else the stock gets hammered.
I would agree in the sense that if the company produced a $300 iPhone for the emerging markets that also would increase unit sales, but that doesn't suggest it's the optimal strategy to pursue. I do think it's a matter of shaping the perception of the value-proposition user's get from all the new capabilities of the latest iPhones, and $100 for all those features presents them as a steal when compared to $100 for a storage bump. It's a brilliant tactic that keeps customers coming back for the newest models.
No way on earth does this acquisition happen if they were still a public company. The shareholders would make too much of a protest worrying about the next quarters numbers instead of the long-term vision.
....
How far did you have to reach up your rear to pull that one out? As others have said, this move indicates that Dell believe that the PC is dead. It is not dead in the sense that they will still be on the market, but the PC is most certainly dead in terms of a growth industry. Even in a stagnant market, Dell's relative place in it is in decline. Take a look at at where Dell stands now compared to where it stood before it went private.
Dell as a public company traded places with HP for the top spot on the list of Windows PC hardware OEMs. Today, it is No. 3. You may believe that a public Dell board of directors would have prevented Dell from diversifying its market offerings to remain viable. I do not believe that they were that stupid.
but would you not agree if the 6s started at 32GB $650 they would sell more units overall?
I think Apple sacrificing some profit to get a bigger install base is worth it long term. They will still be making a nice profit selling the 32GB for $650. Problem is Wall Street won't allow Apple to do this. If Apple shows even 5% shrinking revenue the stock will get smashed. Its already smashed almost 20% from it peak in Jan/July. If Apple was private they could do this type of 1 step back 3 steps forward moves. Now every quarter needs to show growth or else the stock gets hammered.
You're in it for the long term as am I. I would take a short term hit knowing it was the right thing to do long term. Good customer experience is more important than quarterly ASPs and margins. What's so perverse about this is its Wall Street that has been banging the drums for a cheap iPhone. It's Wall Street that seems in constant worry about iPhone sales and iPhone being disrupted by something good enough that's cheaper. Yet it's this same Wall Street that will absolutely hammer the stock if margins are 39.8% when analysts were expecting 40% or there was a decline in ASP.
Apple just needs to bite the bullet on this. There is a solid business rational for doing it that will pay off long term. That's how you sell it to Wall Street. They need to do the same thing with their cloud offering. Make it competitive with Microsoft and Google. Again this is all in service of superior customer experience, in service of getting people into your ecosystem and not giving them a good reason to leave it.
By why is Phil so motivated to get that upsell? Its because 90% of Phil's compensation is based on the stock price. Without that type of pressure to please Wall Street they could think more strategically and long term instead of worrying about making a quick buck.
Well upselling clearly isn't a new concept and Apple's not the only company to do it. I was going to suggest Schiller learned it in school but his degree was actually in biology so...
Anyway this is an area where I think Apple needs to start thinking differently. I think they've started to do that with the iPhone upgrade program though according to Tim Cook that came from Angela Ahrendts in retail, not Schiller's marketing org.
That is one thing about Cook I'm slightly disappointed with. He never explains his long term vision for the company. I wish he explained more clearly the theory of the Apple eco-system and why Apple should not be valued like a hardware company. I wish they also did more long-term projects that look for growth instead of just pure profit such as:
1. AppleMusic. Should be $5 to grow user base.
2. TV subs. Apple should accept low profits for this to grow user base.
3. Cloud. Offer more cloud for free. At least the size of the device.
Make the ecosystem more sticky than ever. Make it clear to Wall Street you are sacrificing some profit to grow the user base.
I agree with you on this. I've said before I would like to see Cook speak more to Apple's vision (and not just the 'only Apple can do hardware, software and services that he always says). Lately at Apple events we get very little from Cook. We don't even get a state of the business anymore. They just jump right into announcing products. And there we get the what, but no one to really tie it all together and give us the why. That's what we need from Cook.
Well then they should have released the ATV in the spring when the A9 would not be supply constraint.
4k is not mainstream but how much more would it cost for Apple to include it? $10? That's what I mean. Who cares about $10 if you can dominate the set top box platform. Hell Roku and Fire has 4k and ATV doesn't? I mean WTF.
i trust Apple's product and component teams to know what theyre doing -- far more than some anonymous guy on a website. the proof is in the pudding -- apple continues to destroy it.
again -- what *you* want (beefier processor game, etc) has no bearing on what is right for them to build and sell this today. personally, i sure as hell dont want to wait until spring or next fall until it has all the features some guy on the web thinks it needs.
your claim that this is proof that WS controls product design is bunk.
Who's going to buy this now that Microsoft has the Surface Book coming out? Microsoft fanboys surely will buy Surface Pro or Surface Book and everyone else will buy based on price. And based on the laptops I see in my office (Fortune 20 company) corporations aren't going to be snatching these up either. Who are these for?
Depends on the user's performance and hardware requirements.
The XPS 15 fully equipped is $1,699. That includes a 1080p display, an i7-6700HQ (4 cores 8 threads), 16 GB DDR4 2133 RAM, 512 GB PCIe SSD, Thunderbolt 3 (40 Gbps) and a nVidia GTX 960m with 2 GB GDDR5. For $2,149 it will also come with a 4K display.
If the tablet/pen features aren't a requirement, that has a lot more to offer than an entry Surface Book with dGPU for a similar price.
By why is Phil so motivated to get that upsell? Its because 90% of Phil's compensation is based on the stock price. Without that type of pressure to please Wall Street they could think more strategically and long term instead of worrying about making a quick buck.
if you honestly think phil, cook and the rest of the exec team is worried about making a quick buck, then you have no idea how apple operates.
I agree with this. Cloud storage should be at least the size of your device.
you dont need cloud storage equal to the size of your device, because things like the OS and your apps are already in the cloud, waiting to be restored to your hardware *instance*. you only need storage space for your unique data (documents, photos, etc).
but i love how youve twisted "the stock market is controlling Apple!" to mean they dont have whatever features you wish were the way you wished them.
Lately at Apple events we get very little from Cook. We don't even get a state of the business anymore. They just jump right into announcing products. And there we get the what, but no one to really tie it all together and give us the why. That's what we need from Cook.
omg...this Cook bashing is absurd. the reason he didnt speak about that stuff at the fall event is because IT WAS JAM PACKED of product. there was no time to re-tell the same old charts and "everything is going smashingly well" fluff for the umpteenth time.
you do realize youve had a steady narrative of why Cook sucks since he came to be CEO, right? first that he was just a "bean counter". then that he was too focused on civil rights. now, that he's not speaking enough at an already long event that had no time for anything but the hotly anticipated and demanded products...
so if it isn't about profits why does the AppleTV not have 4k or uncompressed audio?
everything in some sense is about profits. that isnt what i said. what i said, was your claim that "WS controls Apple and these non-features are proof!" is bunk.
features dont get added until the cost-benefit ratio makes sense for to be added. 4K doesnt meet that threshold yet. and uncompressed audio? puleez. im a hardcore tech nerd and apple guy, and i dont give two shits about uncompressed audio.
repeat after me: NFC, LTE...apple didnt incorporate those either, until it made sense to do so. they have far more data on their customers than you do. remind yourself that youre just a guy on a website w/o access to a LOT of data.
If you don't care about uncompressed audio you are not an audio nerd.
The uncompressed audio mixes blow away regular Dolby digital.
i dont recall ever stating i was an audio nerd.
but im assuming you fancy yourself some sort of audiophile. i will remind you -- whatever outlier use cases you think are of value probably dont matter to 99% of the population. youre like the self-declared pro consumers complaining that apple caters to consumers too much...almost as if theyre a consumer electronics company. oh yeah, they are..
2. Bringing out a half-ready Apple Watch. Because of Wall Street pressure Apple brought out the Watch way to early. The software was not ready for big time. The hardware is not fast enough and the services are not build out enough. If Apple was private they could have waiting till it was truly ready.
3. AppleTV. Should have had 4k and uncompressed audio. Should have hammered a TV package even if in the short-term they would make zero profit on it. Should have made a more gamer ready remote and Ax9 chip. Should have integrated Homekit. All these things would hurt short term profits but it would establish AppleTV as the standard in the all in one home box. If they did this they could easily sell 50-75 million AppleTV's with TV packages. AT that point Apple could negotiate with the content providers a better deal once they have a dominate position.
The $100 billion buyback was to appease Wall Street. How has Wall Street rewarded Apple? By making the stock worth LESS than when the buyback began. Fuc Wall Street.
I agree with the points but not the conclusion. Apple should release products that are ready for prime time to preserve its reputation as "best in class", not to placate Wall Street. I'm disappointed by the Apple Watch and TV because the Apple of old wouldn't release such mediocre products. Tim Cook is responsible for what Apple releases, not Wall Street.
I agree with the points but not the conclusion. Apple should release products that are ready for prime time to preserve its reputation as "best in class", not to placate Wall Street. I'm disappointed by the Apple Watch and TV because the Apple of old wouldn't release such mediocre products. Tim Cook is responsible for what Apple releases, not Wall Street.
You're whitewashing history if you think the Apple Watch and 4th gen Apple TV are somehow less complete than previous Apple product launches before Cook took over as CEO.
so if it isn't about profits why does the AppleTV not have 4k or uncompressed audio?
About the 4k thing. The new apple tv supports 4k with its hdmi 1.4 output at 30hz. We know for certain that the A8 is capable of 4k playback and it has been proven so on the iPhone 6. Do a search on the web for it. This A8 in the new apple tv is running at full power unlike the iPhone 6, so it will be more powerful right out of the box. (no concerns about power saving, it runs on wall current). The A8 also supports the HEVC (high efficiency video coding) H.265, which is already used on the iPhone 6 for FaceTime, this is the same standard which 4k video is compressed in. When and if the market for 4k matures enough to be worth it Apple will simply just make a software update and turn it on.
Currently I have a very fast connection to the internet that is 4k capable but I am hamstrung by my carriers 250 gig data cap. Until things like that change 4k for most If not 90% of U.S. users is a pipe dream. The data bandwidth needed is huge even compressed. Hell they haven't even got a blu ray disc standard hammered out yet for 4k. Its like the Blu ray HDDVD wars all over again.
so if it isn't about profits why does the AppleTV not have 4k or uncompressed audio?
Because 4K won't be here for several (at least a couple) years.
Uncompressed audio is of dubious appeal (and utility)
4K is pretty much here now if you think about all those nice pictures you took with your iPhone (or just about any other camera these days).
Airplay of photos to the TV via ATV is a convenient way to review or share pictures with friends and family in the living room. 1080p is fine on a 46" TV from the opposite side of the room, but you should check out your stills on a 4K screen (65" or larger from the same living room distance, or on a 4K desktop monitor--or a 5K iMac!). It's amazing how much added dimension some shots appear to have when your field of vision is filled with the higher resolution image. It would be nice to be able to Airplay photos to a 4K TV.
PS: 4K BluRay players should be available within a few months from now.
Comments
Nah the motivation is clear; a way to upsell people to get them to spend $100 more (and hopefully once they're there they will never downgrade). That's obviously why Apple chose to make 64 the new 32 but leave 16 as is. Phil Schiller can say you get 4x the storage for only $100 more. Seeing the 16GB still hanging around tells me one thing, not enough people have moved into the middle tier yet. I'm sure Apple's thinking is once they do and they start filling up their phones they won't downgrade. Perhaps once the majority of install base is in the middle tier Apple will upgrade the entry level model.
but would you not agree if the 6s started at 32GB $650 they would sell more units overall?
I think Apple sacrificing some profit to get a bigger install base is worth it long term. They will still be making a nice profit selling the 32GB for $650. Problem is Wall Street won't allow Apple to do this. If Apple shows even 5% shrinking revenue the stock will get smashed. Its already smashed almost 20% from it peak in Jan/July. If Apple was private they could do this type of 1 step back 3 steps forward moves. Now every quarter needs to show growth or else the stock gets hammered.
I would agree in the sense that if the company produced a $300 iPhone for the emerging markets that also would increase unit sales, but that doesn't suggest it's the optimal strategy to pursue. I do think it's a matter of shaping the perception of the value-proposition user's get from all the new capabilities of the latest iPhones, and $100 for all those features presents them as a steal when compared to $100 for a storage bump. It's a brilliant tactic that keeps customers coming back for the newest models.
How far did you have to reach up your rear to pull that one out? As others have said, this move indicates that Dell believe that the PC is dead. It is not dead in the sense that they will still be on the market, but the PC is most certainly dead in terms of a growth industry. Even in a stagnant market, Dell's relative place in it is in decline. Take a look at at where Dell stands now compared to where it stood before it went private.
Dell as a public company traded places with HP for the top spot on the list of Windows PC hardware OEMs. Today, it is No. 3. You may believe that a public Dell board of directors would have prevented Dell from diversifying its market offerings to remain viable. I do not believe that they were that stupid.
You're in it for the long term as am I. I would take a short term hit knowing it was the right thing to do long term. Good customer experience is more important than quarterly ASPs and margins. What's so perverse about this is its Wall Street that has been banging the drums for a cheap iPhone. It's Wall Street that seems in constant worry about iPhone sales and iPhone being disrupted by something good enough that's cheaper. Yet it's this same Wall Street that will absolutely hammer the stock if margins are 39.8% when analysts were expecting 40% or there was a decline in ASP.
Apple just needs to bite the bullet on this. There is a solid business rational for doing it that will pay off long term. That's how you sell it to Wall Street. They need to do the same thing with their cloud offering. Make it competitive with Microsoft and Google. Again this is all in service of superior customer experience, in service of getting people into your ecosystem and not giving them a good reason to leave it.
Well upselling clearly isn't a new concept and Apple's not the only company to do it. I was going to suggest Schiller learned it in school but his degree was actually in biology so...
Anyway this is an area where I think Apple needs to start thinking differently. I think they've started to do that with the iPhone upgrade program though according to Tim Cook that came from Angela Ahrendts in retail, not Schiller's marketing org.
I agree with you on this. I've said before I would like to see Cook speak more to Apple's vision (and not just the 'only Apple can do hardware, software and services that he always says). Lately at Apple events we get very little from Cook. We don't even get a state of the business anymore. They just jump right into announcing products. And there we get the what, but no one to really tie it all together and give us the why. That's what we need from Cook.
i trust Apple's product and component teams to know what theyre doing -- far more than some anonymous guy on a website. the proof is in the pudding -- apple continues to destroy it.
again -- what *you* want (beefier processor game, etc) has no bearing on what is right for them to build and sell this today. personally, i sure as hell dont want to wait until spring or next fall until it has all the features some guy on the web thinks it needs.
your claim that this is proof that WS controls product design is bunk.
so if it isn't about profits why does the AppleTV not have 4k or uncompressed audio?
Because 4K won't be here for several (at least a couple) years.
Uncompressed audio is of dubious appeal (and utility)
Who's going to buy this now that Microsoft has the Surface Book coming out? Microsoft fanboys surely will buy Surface Pro or Surface Book and everyone else will buy based on price. And based on the laptops I see in my office (Fortune 20 company) corporations aren't going to be snatching these up either. Who are these for?
Depends on the user's performance and hardware requirements.
The XPS 15 fully equipped is $1,699. That includes a 1080p display, an i7-6700HQ (4 cores 8 threads), 16 GB DDR4 2133 RAM, 512 GB PCIe SSD, Thunderbolt 3 (40 Gbps) and a nVidia GTX 960m with 2 GB GDDR5. For $2,149 it will also come with a 4K display.
If the tablet/pen features aren't a requirement, that has a lot more to offer than an entry Surface Book with dGPU for a similar price.
if you honestly think phil, cook and the rest of the exec team is worried about making a quick buck, then you have no idea how apple operates.
you dont need cloud storage equal to the size of your device, because things like the OS and your apps are already in the cloud, waiting to be restored to your hardware *instance*. you only need storage space for your unique data (documents, photos, etc).
but i love how youve twisted "the stock market is controlling Apple!" to mean they dont have whatever features you wish were the way you wished them.
omg...this Cook bashing is absurd. the reason he didnt speak about that stuff at the fall event is because IT WAS JAM PACKED of product. there was no time to re-tell the same old charts and "everything is going smashingly well" fluff for the umpteenth time.
you do realize youve had a steady narrative of why Cook sucks since he came to be CEO, right? first that he was just a "bean counter". then that he was too focused on civil rights. now, that he's not speaking enough at an already long event that had no time for anything but the hotly anticipated and demanded products...
some guys just cant win, can they?
everything in some sense is about profits. that isnt what i said. what i said, was your claim that "WS controls Apple and these non-features are proof!" is bunk.
features dont get added until the cost-benefit ratio makes sense for to be added. 4K doesnt meet that threshold yet. and uncompressed audio? puleez. im a hardcore tech nerd and apple guy, and i dont give two shits about uncompressed audio.
repeat after me: NFC, LTE...apple didnt incorporate those either, until it made sense to do so. they have far more data on their customers than you do. remind yourself that youre just a guy on a website w/o access to a LOT of data.
...Katy L. Huberty has maintained an Overweight rating...
Well that's not very nice. Her weight seems perfectly fine to me.
i dont recall ever stating i was an audio nerd.
but im assuming you fancy yourself some sort of audiophile. i will remind you -- whatever outlier use cases you think are of value probably dont matter to 99% of the population. youre like the self-declared pro consumers complaining that apple caters to consumers too much...almost as if theyre a consumer electronics company. oh yeah, they are..
2. Bringing out a half-ready Apple Watch. Because of Wall Street pressure Apple brought out the Watch way to early. The software was not ready for big time. The hardware is not fast enough and the services are not build out enough. If Apple was private they could have waiting till it was truly ready.
3. AppleTV. Should have had 4k and uncompressed audio. Should have hammered a TV package even if in the short-term they would make zero profit on it. Should have made a more gamer ready remote and Ax9 chip. Should have integrated Homekit. All these things would hurt short term profits but it would establish AppleTV as the standard in the all in one home box. If they did this they could easily sell 50-75 million AppleTV's with TV packages. AT that point Apple could negotiate with the content providers a better deal once they have a dominate position.
The $100 billion buyback was to appease Wall Street. How has Wall Street rewarded Apple? By making the stock worth LESS than when the buyback began. Fuc Wall Street.
I agree with the points but not the conclusion. Apple should release products that are ready for prime time to preserve its reputation as "best in class", not to placate Wall Street. I'm disappointed by the Apple Watch and TV because the Apple of old wouldn't release such mediocre products. Tim Cook is responsible for what Apple releases, not Wall Street.
You're whitewashing history if you think the Apple Watch and 4th gen Apple TV are somehow less complete than previous Apple product launches before Cook took over as CEO.
so if it isn't about profits why does the AppleTV not have 4k or uncompressed audio?
About the 4k thing. The new apple tv supports 4k with its hdmi 1.4 output at 30hz. We know for certain that the A8 is capable of 4k playback and it has been proven so on the iPhone 6. Do a search on the web for it. This A8 in the new apple tv is running at full power unlike the iPhone 6, so it will be more powerful right out of the box. (no concerns about power saving, it runs on wall current). The A8 also supports the HEVC (high efficiency video coding) H.265, which is already used on the iPhone 6 for FaceTime, this is the same standard which 4k video is compressed in. When and if the market for 4k matures enough to be worth it Apple will simply just make a software update and turn it on.
Currently I have a very fast connection to the internet that is 4k capable but I am hamstrung by my carriers 250 gig data cap. Until things like that change 4k for most If not 90% of U.S. users is a pipe dream. The data bandwidth needed is huge even compressed. Hell they haven't even got a blu ray disc standard hammered out yet for 4k. Its like the Blu ray HDDVD wars all over again.
so if it isn't about profits why does the AppleTV not have 4k or uncompressed audio?
Because 4K won't be here for several (at least a couple) years.
Uncompressed audio is of dubious appeal (and utility)
4K is pretty much here now if you think about all those nice pictures you took with your iPhone (or just about any other camera these days).
Airplay of photos to the TV via ATV is a convenient way to review or share pictures with friends and family in the living room. 1080p is fine on a 46" TV from the opposite side of the room, but you should check out your stills on a 4K screen (65" or larger from the same living room distance, or on a 4K desktop monitor--or a 5K iMac!). It's amazing how much added dimension some shots appear to have when your field of vision is filled with the higher resolution image. It would be nice to be able to Airplay photos to a 4K TV.
PS: 4K BluRay players should be available within a few months from now.