It's just true. They don't have enterprise to fund their R&D, software and platform. So where does the money come from? Hardware. Once you add it all up, they come out to be more expensive. And selling at a loss is a very stupid idea. Maybe near cost, but they can't afford the safety net that their $4 billion gives them either. One bad event and they're toast in that scenario. I'd rather have measly marketshare and survive than increase market share and die.
Apple spends less on R&D than Dell does, and even then increased sales resulting from lower prices would make up for any hypothetical decrease in revenue
<strong>Apple spends less on R&D than Dell does, and even then increased sales resulting from lower prices would make up for any hypothetical decrease in revenue</strong><hr></blockquote>
That's not a terribly useful comparison.
Last year, Dell's R&D budget was $452 million on net sales of $31,168 million. That's about 1.5%.
Apple's R&D budget was $430 million on net sales of $5,363 million. That's about 8%.
As BuonRotto points out, that comparatively huge amount has to come from hardware sales. Apple doesn't have those enormous equipment/software/support/service contract deals that provide so much of Dell's income.
Last year, Dell's R&D budget was $452 million on net sales of $31,168 million. That's about 1.5%.
Apple's R&D budget was $430 million on net sales of $5,363 million. That's about 8%.
</strong><hr></blockquote>
I wonder whether these figures reflect the attitudes of the companies towards the current 'recession'. I believe Steve Jobs said Apple intended to innovate itself out of the current slow down, which I guess requires an increase in the R&D budget. I don't think we've seen the fruits of this yet.
Last year, Dell's R&D budget was $452 million on net sales of $31,168 million. That's about 1.5%.
Apple's R&D budget was $430 million on net sales of $5,363 million. That's about 8%.
As BuonRotto points out, that comparatively huge amount has to come from hardware sales. Apple doesn't have those enormous equipment/software/support/service contract deals that provide so much of Dell's income.</strong><hr></blockquote>
Good point, Belle. However, I would again point out that by lowering their margins somewhat, they could increase their marketshare. An increase in marketshare will mean an increase in revenue, which will mean a lower overall percentage of their net will go into R&D. Note, I'm not saying that the actual amount spent on R&D need decrease. As I stated earlier in this thread, I can think of 2 recent sales that Apple lost simply because of prohibitive cost. These are the losses that concern me; loss of potential marketshare. Understand as well, when someone decides to buy a Mac over a WinTel box, doors open elsewhere. Friends and relatives ask 'Why did you buy a Mac?". It's a cascade effect. The reverse is also true - "Why didn't you buy a Mac?".
<strong>As BuonRotto points out, that comparatively huge amount has to come from hardware sales. Apple doesn't have those enormous equipment/software/support/service contract deals that provide so much of Dell's income.
</strong>
<hr></blockquote>
Whose fault is that?
If edu and corporate could even aford to look at macs, then Apple would have those revenue streams too. We could go round and round forever on this point.
In the end, whoever's at fault, Apple is where it is. I can agree with you about their predicament.
But there is a limit. Dell spent more money, while the percentage matters as a fraction of per-unit costs (that need to be recovered) what are we really talking about in terms of per-unit sales?
Apple sells about 3.5-5 million macs a year, give or take. We're looking at a hundred dollars per machine. Dell sells what? 3X, 4X as many machines? So maybe Dell has only to recover about $20-30 per machine. There you have it, and you can re-adjust the numbers as I just (grossly) ball-parked it. But that's maybe $70 difference between what Dell and Apple need to recover on each machine to get back their "research and development costs". Even at a cool C-note difference, it is certainly possible for Apple to keep it's machines within $200 of competing wintel product. That is, if you're using research and development costs as your excuse for higher prices. So, in all fairness we can spot Apple $100-200 per machine for all the "Mac"ness we love, but not much more than that (as even this margin includes a decent premium.) In the end, that's exactly what most of the "whiners" have been saying. We'll gladly pay 100-200 more than comparable wintel (about 20%-5% from low end to high end) evena bit more thn that as a percentage, but when you get up over 30-50% and higher for equivalent machines...
Well, Apple's current market-share reflects consumer/pro/institutional reactions to that pricing policy.
Remember also that what Dell spent on research and development does not yield a finished machine, Dell does not own an OS and needs to further add the cost of M$ licenses, so their expenditure per machine rises yet again and this percieved difference shrinks a little bit more.
If edu and corporate could even aford to look at macs, then Apple would have those revenue streams too. We could go round and round forever on this point.
In the end, whoever's at fault, Apple is where it is. I can agree with you about their predicament.</strong><hr></blockquote>
This is the problem, I guess. Immediate "solutions" for increasing sales would perhaps have made sense some years ago, but Apple's now in a hole that isn't going to be easy to climb out of. Excuse the preposition.
I'd argue that dropping hardware prices by even 10 or 20% now would have very little effect in increasing machine sales, and would therefore decrease revenue.
It's much too late. Corporations (and many educational establishments) have too much time and money invested in other solutions. Consumers, despite what the Switch campaign may suggest, are for the most part completely indifferent to the "advantages" of Apple computing.
And I assume that Apple has done its research, and realized the same thing, otherwise it wouldn't have taken this whole "digital hub" idea as a means of attracting new customers.
I'd like to see Apple's business plan. If only I could be a fly on the wall.
I wonder when the Switch campaign, and the enormous investment in OS X are supposed to kick in and increase sales?
HERE IS WHY YOU SHOULD NOT BE SICK OF PRICE WHINING! YOU BUY TECHNOLOGY FOR WHAT IT CAN DO MORE YOU!
APPLE IS NOT THE BETTER TECHNOLOGY - PEOPLE ARE NOT "PAYING FOR MORE" FOR SOMETHING BETTER...
If I buy a Mercedes or Ford I don't whine about the price of the former because it does MORE for me. It is able to out do the Ford in almost every aspect.
In the case of Apple all it offers is DESIGN! Not specs like the Mercedes. Which leads me to my next point and parallel regarding the cars.
IF Mercedes took a Ford Taurus and put the molding of a Mercedes on it and then resold it for the equivalent of the real car would you buy it? HELL NO! Hence, YOU SHOULD WHINE ABOUT UNFAIR PRICING!
And I have to get THIS off my chest because as was said...
[quote] If economics operated this way, I'd own a glass plasma TV and a garage full of Porsches.<hr></blockquote>
No you wouldn't. It would not be fair to offer superior technology at the same price as trash, hence you pay for the quality/size of a plasma tv and the speed and craftsmanship of a porche.
I will not pay a thousand dollars extra because Apple was able to craft a computer that would fit in a dome without a fan.
Comments
amazing how greedy the execs were on the price
margins.....
apple will survive one way or another but
what will really kill them is if they bleed
engineers...loose your best talent & you are kaput.
interestingly i bought my ti800 from macwarehouse.com because....i walk into the sandeigo apple store & the nitwit there is really
nasty & condenscending
"um well its a mac u know"
"its not cheap blah blah"
er dude i just walked in to see what it was like
& with that attitude u just lost a 3000$ sale...
think im kidding ? ..goto the store & see what i mean (i dearly hope this was an isolated incident)
contrast this with frys where the hardware is mixed with pc stuff so you can go & look & play around...
umm with attitude how are they gonna attract more
r&d people.
i nearly gave up if it wasnt for the sales guy from macwarehouse who really tried hard for the sale & im quite please with the powerbook.
so theres my other gripe apart from price...
treating customers (potential or otherwise) nicely.
<strong>Apple spends less on R&D than Dell does, and even then increased sales resulting from lower prices would make up for any hypothetical decrease in revenue</strong><hr></blockquote>
That's not a terribly useful comparison.
Last year, Dell's R&D budget was $452 million on net sales of $31,168 million. That's about 1.5%.
Apple's R&D budget was $430 million on net sales of $5,363 million. That's about 8%.
As BuonRotto points out, that comparatively huge amount has to come from hardware sales. Apple doesn't have those enormous equipment/software/support/service contract deals that provide so much of Dell's income.
<strong>
Last year, Dell's R&D budget was $452 million on net sales of $31,168 million. That's about 1.5%.
Apple's R&D budget was $430 million on net sales of $5,363 million. That's about 8%.
</strong><hr></blockquote>
I wonder whether these figures reflect the attitudes of the companies towards the current 'recession'. I believe Steve Jobs said Apple intended to innovate itself out of the current slow down, which I guess requires an increase in the R&D budget. I don't think we've seen the fruits of this yet.
<strong>
That's not a terribly useful comparison.
Last year, Dell's R&D budget was $452 million on net sales of $31,168 million. That's about 1.5%.
Apple's R&D budget was $430 million on net sales of $5,363 million. That's about 8%.
As BuonRotto points out, that comparatively huge amount has to come from hardware sales. Apple doesn't have those enormous equipment/software/support/service contract deals that provide so much of Dell's income.</strong><hr></blockquote>
Good point, Belle. However, I would again point out that by lowering their margins somewhat, they could increase their marketshare. An increase in marketshare will mean an increase in revenue, which will mean a lower overall percentage of their net will go into R&D. Note, I'm not saying that the actual amount spent on R&D need decrease. As I stated earlier in this thread, I can think of 2 recent sales that Apple lost simply because of prohibitive cost. These are the losses that concern me; loss of potential marketshare. Understand as well, when someone decides to buy a Mac over a WinTel box, doors open elsewhere. Friends and relatives ask 'Why did you buy a Mac?". It's a cascade effect. The reverse is also true - "Why didn't you buy a Mac?".
(tig)
<strong>As BuonRotto points out, that comparatively huge amount has to come from hardware sales. Apple doesn't have those enormous equipment/software/support/service contract deals that provide so much of Dell's income.
</strong>
<hr></blockquote>
Whose fault is that?
If edu and corporate could even aford to look at macs, then Apple would have those revenue streams too. We could go round and round forever on this point.
In the end, whoever's at fault, Apple is where it is. I can agree with you about their predicament.
But there is a limit. Dell spent more money, while the percentage matters as a fraction of per-unit costs (that need to be recovered) what are we really talking about in terms of per-unit sales?
Apple sells about 3.5-5 million macs a year, give or take. We're looking at a hundred dollars per machine. Dell sells what? 3X, 4X as many machines? So maybe Dell has only to recover about $20-30 per machine. There you have it, and you can re-adjust the numbers as I just (grossly) ball-parked it. But that's maybe $70 difference between what Dell and Apple need to recover on each machine to get back their "research and development costs". Even at a cool C-note difference, it is certainly possible for Apple to keep it's machines within $200 of competing wintel product. That is, if you're using research and development costs as your excuse for higher prices. So, in all fairness we can spot Apple $100-200 per machine for all the "Mac"ness we love, but not much more than that (as even this margin includes a decent premium.) In the end, that's exactly what most of the "whiners" have been saying. We'll gladly pay 100-200 more than comparable wintel (about 20%-5% from low end to high end) evena bit more thn that as a percentage, but when you get up over 30-50% and higher for equivalent machines...
Well, Apple's current market-share reflects consumer/pro/institutional reactions to that pricing policy.
Remember also that what Dell spent on research and development does not yield a finished machine, Dell does not own an OS and needs to further add the cost of M$ licenses, so their expenditure per machine rises yet again and this percieved difference shrinks a little bit more.
[ 10-27-2002: Message edited by: Matsu ]</p>
take ti 1gb for say $2700 to $3000 & thats
a good price....
the current price of 3799$ is nothing short of
rape if you pardon the expression...
on the tower side prices would seem better if
they tossed in a monitor or the low end 15" lcd
the top end is ridiculously priced at $5000
i mean comeon its not a sun workstation..its a
home pc..and then they expect a person to buy
a monitor /lcd on top of that...
$200 or so markup seems reasonable when compared
to intel/amds
so yes the "whiners" pc or otherwise will support
apple....upto a cetain point..hey they have families too.
heck i'd buy another ti powerbook if the price
was saner (otherwise i risk spouse damage
<strong>Whose fault is that?
If edu and corporate could even aford to look at macs, then Apple would have those revenue streams too. We could go round and round forever on this point.
In the end, whoever's at fault, Apple is where it is. I can agree with you about their predicament.</strong><hr></blockquote>
This is the problem, I guess. Immediate "solutions" for increasing sales would perhaps have made sense some years ago, but Apple's now in a hole that isn't going to be easy to climb out of. Excuse the preposition.
I'd argue that dropping hardware prices by even 10 or 20% now would have very little effect in increasing machine sales, and would therefore decrease revenue.
It's much too late. Corporations (and many educational establishments) have too much time and money invested in other solutions. Consumers, despite what the Switch campaign may suggest, are for the most part completely indifferent to the "advantages" of Apple computing.
And I assume that Apple has done its research, and realized the same thing, otherwise it wouldn't have taken this whole "digital hub" idea as a means of attracting new customers.
I'd like to see Apple's business plan. If only I could be a fly on the wall.
I wonder when the Switch campaign, and the enormous investment in OS X are supposed to kick in and increase sales?
<strong>
It's much too late.
.
.
.
I wonder when the Switch campaign, and the enormous investment in OS X are supposed to kick in and increase sales?</strong><hr></blockquote>
When the "competitive" hardware arrives. So I would argue it's still too early for those to kick in..
mika.
<strong>I'd like to see Apple's business plan. If only I could be a fly on the wall.
Apple doesn't have a business plan, just Steves delusions
"I have an idea, you know iTools?, well lets change it's name, start charing $99 a year and make a big annoucement at Macworld!"
[ 10-27-2002: Message edited by: Stagflation Steve ]</p>
APPLE IS NOT THE BETTER TECHNOLOGY - PEOPLE ARE NOT "PAYING FOR MORE" FOR SOMETHING BETTER...
If I buy a Mercedes or Ford I don't whine about the price of the former because it does MORE for me. It is able to out do the Ford in almost every aspect.
In the case of Apple all it offers is DESIGN! Not specs like the Mercedes. Which leads me to my next point and parallel regarding the cars.
IF Mercedes took a Ford Taurus and put the molding of a Mercedes on it and then resold it for the equivalent of the real car would you buy it? HELL NO! Hence, YOU SHOULD WHINE ABOUT UNFAIR PRICING!
And I have to get THIS off my chest because as was said...
[quote] If economics operated this way, I'd own a glass plasma TV and a garage full of Porsches.<hr></blockquote>
No you wouldn't. It would not be fair to offer superior technology at the same price as trash, hence you pay for the quality/size of a plasma tv and the speed and craftsmanship of a porche.
I will not pay a thousand dollars extra because Apple was able to craft a computer that would fit in a dome without a fan.
[ 10-27-2002: Message edited by: Shanksta ]</p>
(the little voice inside you says, "give in, give in...")
[ 10-27-2002: Message edited by: BuonRotto ]</p>
<strong>I think it's hilarious that people like Shanksta work themselves up so much about subjects like this.
hehehe... dont take my caps as yells i just wanted to emphasize certain points
Pray that:
1) Prices come down
2) performance go up
3) design gets even better
4) Market share gets better
5) my mac doesn't crash any more