Gordon Gecko is alive and well. I hope their numbers continue to falter so they are forced to listen. History has shown it is only factors such as these Apple hears.
Lower price doesn't necessarily mean lower margins! Is it impossible to make an offering at a price the rest of us mortals can bite without compromising on the margins & experience? I guess the geniuses at Apple know better. But the above acknowledgement bodes well for it.
If Apple hardware are not competitive anymore, don’t sell them. Instead, sell macOS and iOS as Services installable to other hardware and compete with Microsoft Windows and Android. If iCloud is not competitive, obviously, put iCloud into DropBox. We shall pay less, Appke can keep cost down.
Lower price doesn't necessarily mean lower margins! Is it impossible to make an offering at a price the rest of us mortals can bite without compromising on the margins & experience? I guess the geniuses at Apple know better. But the above acknowledgement bodes well for it.
Reminds me of that Steve Jobs interview where he said Apple's mistake in the late 80s was targetting margins instead of market share. Not sure he lived up to his owns words there.
If Apple hardware are not competitive anymore, don’t sell them. Instead, sell macOS and iOS as Services installable to other hardware and compete with Microsoft Windows and Android. If iCloud is not competitive, obviously, put iCloud into DropBox. We shall pay less, Appke can keep cost down.
Yes and then let every brand kill the experience with their own skins and wait ‘eons’ for updates. No thank you. That’s why Google saw the light and produced their own hardware. Yes in a perfect world we would all get what we want. My 2012 iMac is due for an upgrade. I can’t afford it and I refuse to finance it. So I suck it in until when I can. We all want to eat our high end cake and have it too.
Of course Apple is keeping an eye on price. That it charges only single digit multiples of ssds in retail boxes is a clear demonstration of its generosity.
After reading through this thread I found that there is quite a vocal opinion about Apple’s price tag being too high. Apart from simply voting with your wallet (and possibly being angry that the costs are perceived personally as “unaffordable”, “not worth it”, “greedy”) maybe one aspect is the device perceived category. What I mean is this: in the past, Apple made very very expensive computers. I remember how I longed for my first Mac, which at the original price was far out of reach (> 10k more than 30 years ago for a Mac 512ke including a line printer and a few other things) which eventually went over the table for half price. That was however, a game changing device at the time. And for me: I never regretted the hefty price tag for owning one of those marvels. However, what came after, in terms of the DTP hype was really out of reach for me. Yet: there were many faithful customers for those expensive products: because it was a productivity tool and in this capacity worth its price. So maybe, by contrast, the iPhone is “simply” a gimmick. Nothing where it’s design/usability provides such a strong USP that it would justify the price. All perceived, of course. And in that capacity, I understand why some potential customers opt out. I did myself as well, and am curious which iPhone generation will make me pull the trigger again.
If Apple hardware are not competitive anymore, don’t sell them. Instead, sell macOS and iOS as Services installable to other hardware and compete with Microsoft Windows and Android. If iCloud is not competitive, obviously, put iCloud into DropBox. We shall pay less, Appke can keep cost down.
Yes and then let every brand kill the experience with their own skins and wait ‘eons’ for updates. No thank you. That’s why Google saw the light and produced their own hardware. Yes in a perfect world we would all get what we want. My 2012 iMac is due for an upgrade. I can’t afford it and I refuse to finance it. So I suck it in until when I can. We all want to eat our high end cake and have it too.
I also have a 2012 iMac that I would like to update, but have been holding off on because of other financial priorities. On the other hand, my 2012 iMac still runs the latest versions of all the software that I use just fine. This includes Photoshop, Bridge, InDesign, Lightroom, MS Office, etc. I also find that my computing habits are changing. At work I use my 5K iMac for most of my work, but most of my personal work and increasingly more of my professional work has switched to my 2018 iPad Pro. I suspect when Photoshop for iPad ships later this year this curve will accelerate.
I also find that Apple has spoiled me with it’s thin, light product line. I can’t stand carrying my 15” 2015 MacBook Pro around anymore since I am so used to my iPad Pro. I suspect my next personal computer upgrade will happen when Apple ships a 13” MacBook with 32GB of RAM. That with an external Pro monitor and eGPU should be perfect for my use cases.
Anyone who is familiar with what computer tech prices were like relative to inflation back in the '80s and '90s knows that this is a golden age for inexpensive computer tech...even for Apple.
The problem with his response comes from being so far removed from the average consumer which Apple originally reached to appeal to in order to get to the place they are today.
As others have commented, research and development is always going to be a factor for any company and it is incorporated as such in their balance sheets and amortized over a number of years to reach maximum benefit.
There is nothing wrong with Apple creating a premium line either.
Apple needs to make two lines - one that is affordable for average consumers and the other for professionals.
I could see a line of non pro Apple products that should range from $500 to $1000 for computers/laptops and $400 to $800 for mobile phones, tablets, and wearables.
You need to reread what he said: R&D is only one, single factor. There are many, many other factors that impact the cost beyond mere hardware components. Two of those that no other manufacturer has are: Operating System and Ecosystem.
People keep thinking Apple is a hardware company. For them, hardware just a vehicle used to serve up their software and ecosystem services which do the real work and also cost money to develop and maintain. Big money.
Unless you can develop and manufacturer all components for your product, it's hard to keep price down. OLED display from Samsung is an example.
Actually it's quite the opposite: The Chinese & Asian manufacturers do a better, cheaper job than is available anywhere else.
But, even if what you said was true, if you actually read what he said, he points out that hardware costs are only one of the costs that go into the iPhone. Yeh, everybody focuses on the hardware -- but its the software and ecosystem that set both the iPhone and the Mac apart from the competition. And that software and ecosystem don't come free. But neither are they included in the so called "cost" analysts talk about.
Not buying Apple's argument. When the cost of a Mac mini goes up 60%, Apple Pencil 30%, Apple TV 50% or so, something else is wrong. It's not inflation, it's greed. Imagine the cost of your Toyota Camry up 30% the next year for an all-new design and more HP. It's the same thing and now imagine that if the spare tire was extra. ... Apple is insanely greedy these days.
Does Apple not report on their gross "margins" each quarter? Have you analyzed those margins and concluded that they are unrealistically inflated?
If you look closely, you'll see that Apple has been _spending_ far more on research and development. Those costs needs to be covered. I am confident their margins have not increased anywhere near the levels that you claim in your comment.
They do report such margins and they are generally going up. That is, however, not my point. The point is that Apple products are overpriced, some much more so than the competition, and that overprice-ness is increasing. That is my point -- the increasing disparity in price which no other competitor does, and this is what the COO acknowledges above and has to address.
Apple's margins have been flat to slightly down over the past 10 years. Moreover, those reported margins are for the business as a whole, where currently services are a bigger part and carry margins almost double that of hardware. The hardware margins are therefore far lower than they've been historically.
The problem with his response comes from being so far removed from the average consumer which Apple originally reached to appeal to in order to get to the place they are today.
As others have commented, research and development is always going to be a factor for any company and it is incorporated as such in their balance sheets and amortized over a number of years to reach maximum benefit.
There is nothing wrong with Apple creating a premium line either.
Apple needs to make two lines - one that is affordable for average consumers and the other for professionals.
I could see a line of non pro Apple products that should range from $500 to $1000 for computers/laptops and $400 to $800 for mobile phones, tablets, and wearables.
Interesting take given that people have been complaining about Apple's prices for over 30 years.
Apple already makes both affordable (iPhone 8, Mac Mini, MacBook) and premium lines (iPhone XS, MacBook Pro).
LOL, is he really!!! This is coming from an ex apple customer and a Steve Jobs fan. You people have a choice and you could get a phone or computer that will do anything that apple promises to do and much more for literally one tenth the price. They even have the worst customer service, I sent my old imac to be fixed at their stores and due to several wrong diagnosis so they can start charge me to replace the most expensive part without actually listening to me or acknowledging the real problem, they ended up stealing it because I was late a week for picking it up and told me they threw it in the trash to be recycled and I lost $2500 and a life time of memories and hard work.
Let us know where we can pick up an equivalent to an iPhone XS for 1/10th the price, which would be around $100.
Well, I am no longer buying point ans shot camera since I bought iPhone 5S and MP3 player since iPhone 3GS.
What else.. Oh.. Palm pilot has been replaced with iPhone. etc...
The people who complain about iPhone price, do you want to go back to dumb phone? You still can. Nokia still make it.
You want all the feature and top of tech currently available then you have to pay for it.
All company priced in for all their spending. Include free coffee, place to work, toilet paper, etc.. Not just advertising & R&D cost.
Do you think these executive people work for peanut?
There is lots of other phones and cheaper than iPhone. Choice is yours. No one ask or you must buy iPhone.
You don't have to buy iPhone Xs or Xs Max, you can buy 7 or 8.
Still same phone less performance cpu and camera. Still produce great selfie.
Even car these days are expensive.. Compare 5 years ago toyota camry and 2019 version. Every 3 years lease price goes up as well or same money less feature. Like I leased RAV4 2016 EX and it has motorized hatch back and gps. 2018 RAV4 EX model that my sister leased does not and no gps.. Lease price is same.
Well just maybe if all those stupid American Troll companies.. and all those stupid American Class Actions suits over trivial crap.. Apple could put some of those Billions back into affordability.. They need that extra profit because some moron and his mates aren’t happy with the precise count of pixels, or Apples website is not designed specifically for the vision impaired, or there 4 year old iPhone isn’t as fast as it was when new.. so suck it up princesses .. There’s plenty of cheap phones out there.. so go buy one !!
Apple hasn't spent billions in patent litigation, and even if it had that would be equivalent to a few months of R&D expenditures or a few fractions of a percentage point in the price of the average iPhone.
I do not buy Jeff Williams downright pathetic excuse.
Take the mac mini as a classic example. After 4 years of do nothing, zilch (actually they raised the prices), they came with a mac mini with the exact same case, they did the min upgrade of internals with a crap internal GPU and sold it for significantly more. Over the course 4 years the R&D expenditure on product was small.
As for cost, they have culled products, reduced the size of the macOS team, contracting out to other countries more. Jeff is full of it.
I don't see where Jeff Williams claimed a large R&D investment in the Mac Mini, and it appears he was speaking about Apple's products in general, not the one specific product you decided to focus on to try to undermine his statements (a product that makes up less than 1% of Apple's sales).
Also, just as FYI the Mac Mini in 2006 sold for exactly the same price as it does today, $799. Except today that $799 is actually $1,000.
Not buying Apple's argument. When the cost of a Mac mini goes up 60%, Apple Pencil 30%, Apple TV 50% or so, something else is wrong. It's not inflation, it's greed. Imagine the cost of your Toyota Camry up 30% the next year for an all-new design and more HP. It's the same thing and now imagine that if the spare tire was extra. ... Apple is insanely greedy these days.
Does Apple not report on their gross "margins" each quarter? Have you analyzed those margins and concluded that they are unrealistically inflated?
If you look closely, you'll see that Apple has been _spending_ far more on research and development. Those costs needs to be covered. I am confident their margins have not increased anywhere near the levels that you claim in your comment.
They do report such margins and they are generally going up. That is, however, not my point. The point is that Apple products are overpriced, some much more so than the competition, and that overprice-ness is increasing. That is my point -- the increasing disparity in price which no other competitor does, and this is what the COO acknowledges above and has to address.
Sounds like you're basing this on your gut and instincts rather than facts and data.
LOL, is he really!!! This is coming from an ex apple customer and a Steve Jobs fan. You people have a choice and you could get a phone or computer that will do anything that apple promises to do and much more for literally one tenth the price. They even have the worst customer service, I sent my old imac to be fixed at their stores and due to several wrong diagnosis so they can start charge me to replace the most expensive part without actually listening to me or acknowledging the real problem, they ended up stealing it because I was late a week for picking it up and told me they threw it in the trash to be recycled and I lost $2500 and a life time of memories and hard work.
Nice one. You got the Steve Jobs reference in the first full paragraph. So many trolls neglect the fundamentals nowadays. Also weird that one would not back up their computer before taking it in for repairs. I did shed a tear at the part about them throwing your computer away because you were a week late picking it up. That would be very sad, if remotely credible.
I make a lot more money now than what I did a few years ago, but cannot stomach seeing a $129 wireless keyboard when I can buy the same thing for $40 at some other place.
I was really excited that Apple FINALLY offered a full-size wireless keyboard (i.e. with number pad), but like you, did a double-take when I saw the price. Still, that wasn't the part that led me to accuse Apple of a foul. It was Apple charging an extra 20% -- on top of the already very high price -- to get it in Space Grey. That gives the appearance of opportunistic gouging.
Comments
If iCloud is not competitive, obviously, put iCloud into DropBox. We shall pay less, Appke can keep cost down.
Apart from simply voting with your wallet (and possibly being angry that the costs are perceived personally as “unaffordable”, “not worth it”, “greedy”) maybe one aspect is the device perceived category. What I mean is this: in the past, Apple made very very expensive computers. I remember how I longed for my first Mac, which at the original price was far out of reach (> 10k more than 30 years ago for a Mac 512ke including a line printer and a few other things) which eventually went over the table for half price. That was however, a game changing device at the time. And for me: I never regretted the hefty price tag for owning one of those marvels.
However, what came after, in terms of the DTP hype was really out of reach for me. Yet: there were many faithful customers for those expensive products: because it was a productivity tool and in this capacity worth its price. So maybe, by contrast, the iPhone is “simply” a gimmick. Nothing where it’s design/usability provides such a strong USP that it would justify the price. All perceived, of course. And in that capacity, I understand why some potential customers opt out. I did myself as well, and am curious which iPhone generation will make me pull the trigger again.
I also find that Apple has spoiled me with it’s thin, light product line. I can’t stand carrying my 15” 2015 MacBook Pro around anymore since I am so used to my iPad Pro. I suspect my next personal computer upgrade will happen when Apple ships a 13” MacBook with 32GB of RAM. That with an external Pro monitor and eGPU should be perfect for my use cases.
People keep thinking Apple is a hardware company. For them, hardware just a vehicle used to serve up their software and ecosystem services which do the real work and also cost money to develop and maintain. Big money.
But, even if what you said was true, if you actually read what he said, he points out that hardware costs are only one of the costs that go into the iPhone. Yeh, everybody focuses on the hardware -- but its the software and ecosystem that set both the iPhone and the Mac apart from the competition. And that software and ecosystem don't come free. But neither are they included in the so called "cost" analysts talk about.
Apple already makes both affordable (iPhone 8, Mac Mini, MacBook) and premium lines (iPhone XS, MacBook Pro).
Apple hasn't spent billions in patent litigation, and even if it had that would be equivalent to a few months of R&D expenditures or a few fractions of a percentage point in the price of the average iPhone.
I don't see where Jeff Williams claimed a large R&D investment in the Mac Mini, and it appears he was speaking about Apple's products in general, not the one specific product you decided to focus on to try to undermine his statements (a product that makes up less than 1% of Apple's sales).