[quote]And another thing. Apple's software and hardware divisions should be profitable on their own. One should not subsidise the other.<hr></blockquote>
Do you really want to pay $500 for an OS upgrade? I don't.
<strong>Another thing to keep in mind is that Apple is CONSTANTLY compared to the ENTIRE Windows-based x86 market. That's extremely misleading</strong><hr></blockquote>
Dude, Apple is a platform; it's called "Macintosh". That's the road Jobs decided Apple was to take. It's got its advantages--the usual "we're the only ones in control of both, software and hardware" blurb--as its disadvantages.
That's how things are, love it or hate it. I personally hate it--I fondly remember the clone era--but there's no use denying it.
Actually, SJ did the same mistake TWICE: at first while he was at Apple, and then while running NeXT--can you imagine licensing NeXTSTEP to IBM??? Oh-so-horrible!</sarcasm>. He specifically wanted Apple to be a platform, the be-all and end-all of a certain sector of the industry. He did NOT want to share the merits with anybody, and he can't stand to see somebody else doing better things than himself (think PowerComputing in late '97).
So, got complaints about this? Call Steve and try to convince him that he should split Apple into two different companies, a SW and a HW division.
<strong>If Apple can sell Os X for less than M$ does...a bigger competitor than Dell...then they should compete harder on harderware as well...they may not match Dell's prices equally. But I think they should get closer on specs and price.</strong><hr></blockquote>
Apple is closer than most people here think. It's just that people compare their professional offerings to el cheapo towers like the Dell Dimension series and then wonder why Apple's so overpriced.
To win the spec-sheet game, you have to be willing to push out crappy engineering and indulge in wildly misleading marketing tactics. I don't think it's necessary for Apple to stoop that low. The tack they've taken with the Switch adds is canny: It ignores specs in favor of tapping into the deep well of discontent among everyday Windows users, and it draws attention to Apple's strengths.
The situation with the towers has nothing to do with the education market, so that's not relevant. The eMac is quite literally custom designed for education customers.
The same things that are keeping a lot of (2D) graphics pros from OS X are also keeping them from Windows, only more so (you think losing Jon's Commands is bad? How about losing AppleScript!). Maybe, eventually, PCs will make some inroads there. But the level of frustration associated with them is still too high, and fast processors just mean that they're frustrating at a much higher speed.
IT departments have generally been kept at bay because of Mac advantages besides speed. It's true that they'll find any excuse to go all Windows that they can, but that's always been true. Macs now have a great many advantages from an IT standpoint that they didn't have, so the lack of speed is not necessarily a deal breaker.
I'm not predicting G5s at MWSF; I think 1.5-1.6GHz G4s are a possible offering, based on a die shrink to .13. I hope RapidIO appears on the G4, so that MaxBus is no longer an issue and Apple can roll out a next-gen motherboard, but I'm not holding my breath.
<strong>In the world of cars, neither Ford, GM, Toyota etc own the roads, so it doesn't matter if you buy an A to B car, like a Ford or even a Yugo (if you can find one), or a BMW or even a Rolls Royce ... because no matter what car you choose to purchase, all the same roads are open to you.</strong><hr></blockquote>
I think this is the best analogy I've seen so far. It's a pity though that many won't understand it, and many more will refuse to do so...
<strong>Ed M. You can say all day that selling more units per market share decline is a good thing but in reality it isn't.</strong><hr></blockquote>
I totally agree, isn't this one of the fundamental principles of capitalism?
Let's say AI Inc. sells 1000 computers. We have our IPO, and the following year we sell 5000. Our stock skyrockets (like the 1999 net economy bubble). One year later recession hits, and the whole industry starts selling fewer and fewer computers. But AI's are so great that people keep buying them. But guess what, we only manage to increase our sales from 5000 to 5500: our stock collapse.
Capitalism, unfortunately, is based on growth. There is just one option: if you don't grow, you sink...
Well if the rumor of Motorola stopping G5 developement are true, then we won't see 1.4-1.6GHz PowerMacs at MWSF.
I'm betting we'll be stuck at 1.25GHz for 12-18 months until the Power5 arrives, so be prepared for 1GHz and 1.25GHz Quad machines in January. <img src="graemlins/lol.gif" border="0" alt="[Laughing]" />
I totally agree, isn't this one of the fundamental principles of capitalism?
Let's say AI Inc. sells 1000 computers. We have our IPO, and the following year we sell 5000. Our stock skyrockets (like the 1999 net economy bubble). One year later recession hits, and the whole industry starts selling fewer and fewer computers. But AI's are so great that people keep buying them. But guess what, we only manage to increase our sales from 5000 to 5500: our stock collapse.
Capitalism, unfortunately, is based on growth. There is just one option: if you don't grow, you sink...
Sheesh...
ZoSo</strong><hr></blockquote>
Gee, I thought good business practice was to sell more equipment to increase cash flow and increase profits. As long as you sell more machines and make more profits the market share doesn't really enter into it. Market share = megahertz myth faster don't mean better. If you sell 10,000 more machines (at reduced prices) and make less overall profit, then you aren't getting anywhere. Profit and cash flow count.
<strong>I thought good business practice was to sell more equipment to increase cash flow and increase profits. As long as you sell more machines and make more profits the market share doesn't really enter into it. Market share = megahertz myth faster don't mean better. If you sell 10,000 more machines (at reduced prices) and make less overall profit, then you aren't getting anywhere. Profit and cash flow count.</strong><hr></blockquote>
You're right--I made the wrong example. I was actually thinking about profits, but I based my example solely on units sold... My bad...
Anyway, as is being discussed in other threads here in FH, it looks like Apple isn't exactly trying its best to address our need for a low margin-fast selling unit.
Headless eMac? Barebones PowerMac? I'm convinced Apple could sell those like hotcakes (I'd buy a couple, that's for sure )--but then, who knows...
[[[Apple needs marketshare to keep developers on board. Im sorry, but you can tell me car analogies all day long, and its still not a perfect matching analogy. In the long run, selling 170K PowerMac units/Q is going to hurt Apple.]]]
Yep. That's so short term and now all the developers have going for them is relying on upgrades, milking people with nothing really new. More on that later...
[[[In the world of cars, neither Ford, GM, Toyota etc own the roads, so it doesn't matter if you buy an A to B car, like a Ford or even a Yugo (if you can find one), or a BMW or even a Rolls Royce ... because no matter what car you choose to purchase, all the same roads are open to you. ]]]
The roads.... I believe that the "roads" in this particular case is the *data*. As of now, most of the data that is exchanged between systems (and platforms) is transparent in that it can be taken from platform to platform\t
\t
[[[You want to get to New York from Boston, the only difference the car makes is the comfort of the ride.\t]]]
EXACTLY! And some people care about HOW you get there rather than just getting there. And you are ignoring a lot of other variables. You distill it down too much. What about efficiency, gas mileage, maintenance etc.? shouldn't these also be considered before choosing the appropriate car for the trip.? Similarly, what about the payload and or passenger compliment. A Vett can get from New York to Boston just fine, but what if you needed to take 5 people? So, I don't buy into your interpretation, there are too many other considerations that you conveniently left out. There are other areas that would affect he choice, that's why there is a host of different vehicles offered to suit the many different needs. If it were as simple as traveling from point A to point B then maybe the argument would have *some* merit. BTW, have you noticed that there are TONS of different toothpaste and toothbrushes on the market? Why is that?
[[[it becomes a turf war of compatability and standards,]]]
At this point, Micro$oft is being less open to standards and locking people into proprietary solutions. Still, today's DATA is transportable. That said, the TOOLS become the important factor.
[[[halfway thru the trip, the customer can't just switch systems/tracks, because that means a very costly unload from one incompatible system, to another ... ]]]
You know... I always chuckle when I hear this... It's funny because companies essentially have "made a deal with the devil" in that Micro$oft has them locked in because of all the interdependencies. They are getting cooked slowly and likely spending more over time supporting a platform that has them locked in. And that's just for apps and hardware (x86 machines). These companies still have support costs, update costs, maintenance costs, costs do to lost productivity and down time, patch testing... And that's not even taking into consideration the upgrades from one version of Windows to the next.
[[[it's just too expensive. So you stay with whatever system sets the standard in whatever field you're in, because long term, it's still cheaper than switching. ]]]
What of the long term costs over a given period of time and taking into consideration all the hardware and software and OS updates that were required within the same platform?\t
\t
[[[it's cost and hassle factor - Micro$soft knows this ]]]
I'm sure they do.. once the contract is signed, they have you locked. And if it really is cost and hassle, what's more costly to support than Windows and what's more of a hassle than Windows?\t
\t
[[[B - become so incomparibly cheaper and better than the competition, that it's worth the hassle of unloading.\t]]]
This is probably a myth since the cost of switching would really be an insignificant cost given the cost of support, upgrades, maintenance et. al that M$ has you locked into. The frog-in-the-pot-of-water analogy comes to mind.. And I believe Gartner did a study on just this very point. their suggestion was to ditch M$ and IIS and migrate to LINUX on Apache. (I forget the details), but the point was that it was a BETTER solution and it was cheaper, even over time. but the safe confines that M$ supplies... ooooooo.
[[[Option C was Microsoft's ace in the hole, it's now been degraded to about a one eyed jack, now that most people who are going to buy a computer, have bought one and are familiar with using one. ]]]
Yet, those Windows PCs aren't exactly selling as well as people thought. And since the only differentiating factor among PC brands is PRICE, there is no brand loyalty. Someone who buys a Gateway today will probably buy something else next time if it's cheaper.. That's if Gateway is still around. In that case they might buy a Compaq... Oh wait a minute, thet're gone already (almost).
[[[... if you no longer become the standard way people choose to get from A to B, the competing system will take over, and you'll never get back in.\t]]]
Wrong. This argument only holds if the you presume the DATA moving between platforms is proprietary and not transportable. It is.
[[[Thus, Apple can only win by laying new track to new destinations (which they are trying to do with video and audio stuff, while holding onto the routes the currently own, and getting to people for whom the cost of unloading from one system to another is cheapest ... read: home users. ]]]
I'll agree with the home user example, but really, the same can be applied to corporate. LINUX is already doing it. OS X is a UNIX OS. It's the #1 UNIX OS in terms of installed base and shipping volume, it has the best UI tools and already has mainstream apps. It's much further along than LINUX. I believe it's only a matter of time before OS X starts to erode M$'s dominance in corporate arenas.
[[[The problem? If you've got slow chips, the competition can claim that they're the fastest and cheapest way to get to the new places you're trying to set the standards on ]]]\t
Being faster doesn't translate into being more productive. There are other considerations that you chose to leave out. I'm not going to go into them because they've been done to death already. In short, it's uneducated perception.
[[[Ed M. You can say all day that selling more units per market share decline is a good thing but in reality it isn't. Typically sounds like someone making the numbers add up to the way they like it. ]]]
That's why people like to use market share -- because it only shows part of the real picture...
\t
[[[Marketshare is the only way to compare yourself to your competitors. ]]]
Well, Apple *is* the 4th largest computer manufacturer in the world. (shipping volume)
Market share rankings of some familiar PC companies:
Dell: 14.1
Compaq: 11.1 (going to be 0% soon)
HP 7.1
Gateway: 6
[[[3% of 170k is only 5100 units I believe.. and only .09 percent of all apple sales are switcher sales.\t]]]
Last I read, Apple shipped 808,000 Macintosh units this past quarter.
That's 3.2 million systems a year and that means that 1 Mac is sold every 9.75 seconds.
[[[while pc users upgrade as often as twice a year, and have more than one computer on average.\t]]]
That isn't true at all, since the slump in PC sales is proof of that. Even if it were true, what does that get those people in terms of return on investment?
[[[Ed M. I feel your marketshare arguments are misplaced as far as Apple are concerned.\t]]]
You would... On that same note, what do you suppose the other PC OEMs should do to grow their market?
\t
[[[How about PCs are cheaper, easy to upgrade and offer more bang for buck.) then Apple won't be able to compete on price. They offer less ram and inferior graphic cards at the same price point. ]]]
And after the Y2K purchases they aren't selling very well. There was a point where companies were giving them away for free. \t
[[[Computers seem to be coming down in price all the time...but Apple seems to think they can tread water with nine month update cycles. ]]]
Oh c'mon... people aren't upgrading as fast as they used to. That's why there is a slump. People are finding that their current machines, Macs, OR PCs are more than enough to suit their needs.\t
\t
[[[Not so. If they've got 95% of the market to aim at and Dell are selling to an even more saturated market than Apple is...\t]]]
Apple is somewhat insulated from those price wars. Gateway is taking a hammering though.
[[[Specs and price are the bottom line. ]]]
Is that the way it is? We should all be eating McDonnald's food.\t
\t
[[[I find it interesting that you suppose PCs don't differentiate product lines. That's not what I see in a PC World or Micro Mart magazines.]]]
What do you see that differentiates PC brands other than price? What will a Dell PC running Windows get me that a Gateway won't?\tWhat difference will an HP running Windows make? Don't you see, these companies are "Windows repackagers" Similar to Vanilla ice cream.
\t
[[[If economies of scale don't matter then how come M$ and their PC partners hosed Apple?]]]
What are you babbling? Hey, how's Compaq doing? PackardBell?
[[[Apple were merely one. M$ and cronies many.Apple had their chance. They chose not to.\t]]]
huh?
[[[Thats why they are fighting to stay relevant. ]]]
Ya know... PC companies have come after Apple and many have died already. People have been using this argument for almost 30 years now. Maybe in another 30 Apple will finally go belly up and everyone who was predicting their demise will finally be able to say "I told you so" LOL talk about *old*
[[[And another thing. Apple's software and hardware divisions should be profitable on their own. One should not subsidise the other.]]]
Says who? Why cannibalize your own company?\t
\t
[[[Don't be too surprised if Apple offers more software products soon...and charges for them also. ]]]
Oh, I won't be...\t
\t
[[[So, got complaints about this? Call Steve and try to convince him that he should split Apple into two different companies, a SW and a HW division.Or you might want to think before typing. ]]]
You should be working for HP...
[[[I totally agree, isn't this one of the fundamental principles of capitalism?Let's say AI Inc. sells 1000 computers. We have our IPO, and the following year we sell 5000. Our stock skyrockets (like the 1999 net economy bubble). One year later recession hits, and the whole industry starts selling fewer and fewer computers. But AI's are so great that people keep buying them. But guess what, we only manage to increase our sales from 5000 to 5500: our stock collapse.Capitalism, unfortunately, is based on growth. There is just one option: if you don't grow, you sink...Sheesh...ZoSo ]]]
First of all, Apple is one of two PC OEMs actually turning a profit. And for the record, Apple IS growing... As long as they're selling units, user-base is growing. There's plenty of Macs out there, but shouldn't they have died like 20 years ago? Why not apply your logic to the other OEMs? Why single out Apple? Are they going to go under anytime soon do you think? Are they performing poorly? How do they rank in the Fortune 500? I bet they rank in the top 150. How is their stock performing compared to others? Yeah, they're floundering all right... Give me a break...
Bigc has it right...
[[[You're right--I made the wrong example. I was actually thinking about profits, but I based my example solely on units sold... My bad...\t]]]
That's great.. all is forgiven. Now, Apple is *still* moving plenty of units...
[[[Headless eMac? Barebones PowerMac? I'm convinced Apple could sell those like hotcakes ]]]
Ah! I like this idea.... Apple should be able to cut costs AND be able to move more units. Like a nice inexpensive cube. Nice.\t
Still, Apple has some advantages..
Think of all the potential UNIX apps that can make a vertical transition to OSX. Again, OS X is the largest UNIX and having your wares on that UNIX seems to be a good idea. Furthermore, companies already running UNIX would probably be attracted to the features of OS X given it's superior UI as compared to other UNIX variants. Again, applications developers have an opportunity (just like Alias|Wavefront) to grow *their* market share and *their* exposure. The Windows market is all but saturated and most developers now rely on upgrades instead of new full-sales. There are clearly opportunities to be had. And remember, it's up to the *developers* to offer the solutions and spark demand in *their* product. They can do that with OS X and both sides can be profitable, so the outlook for Apple looks pretty good even if they are having a bit of difficulty ramping the MHz. of their systems... I wonder why auto manufacturers don't follow the lead of Intel and advertise their car offerings showing an engine's RPM limit instead of torque, MPG and horsepower? ;-) Anyway... OS X is *key* for Apple.
To quote my friend Dave K. Every...
"Show me the customers that demanded a spreadsheet before Bricklin created Visicalc? Show me the customers that demanded a GUI before Apple delivered the MacOS? It doesn't work that way. And if you found both people asking for it, it would NEVER justify the expense. But when you offered the solution, you find that there are 1,000 that want it, and you just didn't know about it. And that the software created opportunities and brought you into new markets, etc.... But if you never take the risks, then you will never see the rewards. That's the job of software companies; create solutions to gain new markets. If you stop innovating, then you are stagnant and just waiting to be obviated by someone with more a clue (more vision) than you have.
Every company that is not paranoid about their markets, and thus stops trying to innovate (which Apple is)and penetrate *new* markets in order to maximize profits of the now, sells their future for the present. This short-term quarterly report thinking is what has allowed not only companies but whole industries to be eaten alive.
Some of these companies do survive. They go into innovation through acquisition mode; and can sometimes acquire fast enough to tread water or break even. (Or at least slow the inevitable descent into oblivion). Most go under, or become pathetic shadows of they once were, and shameful embarrassments compared to their potential.
If new platforms are coming up (OS X) and are ignored, by them (but not their competition) they are missing out on many opportunities that their competition isn't.
Let's not learn the lessons of Novell, Lotus, DEC, Wang, DataGeneral, Packard Bell, and so on. Let's mimic them, because many of them were profitable, in the short term, right before they focused on the *now* for too long and let the competition pass them by, and they disappeared.
I tend to think that if developers ignore the #2 OS, and the #1 UNIX OS (which also happens to be the fastest growing OS) then they are not exactly being wise or planning for their future profits and longevity." - DKE
And that's one way that developers in the PC sector can become profitable again. (read: Autodesk etc.) So, that's a plus... Of course Apple will benefit because now the platform will offer additional solutions where none(or very few) exist presently (CAD). And there will be more developers and the market share will grow. At least that's how it *should* work. lol In All, I think Apple will be fine. Let's not forget about that IBM CPU that's coming.. I've been posting *that* speculation on the forums at AI. There are a lot of clues that seem to add up... We'll know more in Otc.
Why, Macworld New York 2003 is JUST AROUND THE CORNER!!!
And you know what that means! 3GHz G5s, G4+ ultra-widescreen iBooks, OS XII, Newton II, iPhone, iWalk, 100GB iPods, QuickTime 9, iMovie 5, iTunes 6, iCal 1.5 (ha!), Plutonium PowerBooks, the return of colored iMacs, 22" widescreen Special Edition eMacs and a 6-button retina-controlled Pro Mouse II (in graphite, strawberry and Blue Dalmation, no less!).
Why, Macworld New York 2003 is JUST AROUND THE CORNER!!!
And you know what that means! 3GHz G5s, G4+ ultra-widescreen iBooks, OS XII, Newton II, iPhone, iWalk, 100GB iPods, QuickTime 9, iMovie 5, iTunes 6, iCal 1.5 (ha!), Plutonium PowerBooks, the return of colored iMacs, 22" widescreen Special Edition eMacs and a 6-button retina-controlled Pro Mouse II (in graphite, strawberry and Blue Dalmation, no less!).
Last time I checked (@barefeats) the dual GHz SDR was actually faster--but I'll concede, in most tests they were really head to head--than the new DDR model.</strong><hr></blockquote>
One thing to keep in mind here -- although DDR stands for "dual data rate", it is a little bit misleading. You do not suddenly get double the performance over SDRAM; indeed, for any read request under 64 bits (the overwhelming majority), you see little to no improvement at all.
All things being equal, you'll generally see at most a 10% performance gain from DDR vs. SDRAM in the same system, all other things being equal (and even then, only in applications that stream data in chunks larger than 64 bits at a time).
The piece of the car analogy that has always historically made it completely invalid is the one people have pointed out: MS effectively dictates the type of gas we use, and the roads we run on. That is, Apple's biggest potential problems are lack of tools or the defection of developers.
But - _NEXT_ had developers. Waht was _their_ marketshare? Let's think worst case: If Apple never sold another Mac, how long would it take before the compiler wasn't developed? Well, it's GCC, and they're just now phasing out some architectures from 1990ish.... This just highlights one of the advantages of the OS switch - Apple may not dictate the type of fuel used - but they are virtually guaranteed to always be able to use _something_ that's readily available.
The other part is sheer ease-of-use of Cocoa. There's three-man shops selling competent commercial software now. Typically these are the people steeped in Cocoa from the original NeXt days. If you actually talk to these folk, it's clear that there's a core of developers more committed to Cocoa than the 'Mac zealots' have ever been about Apple. Something about 'My work is actually _fun_.'
<strong>it would be nice if there was a cocoa for windows runtime . then those three man shops could earn a very nice living.
</strong><hr></blockquote>
There used to be. IIRC something called OpenSTEP. I remember seeing it in one of the first Rhapsody Developer CD sets, Yellow Box for Windows.
Then SJ decided it was not meant to be... <img src="graemlins/oyvey.gif" border="0" alt="[No]" />
Anyway, I s'pose that M$ could have blocked it in some way if it ever became too successful, so maybe we lost something that would have had a short life anyway... Too bad... <img src="graemlins/oyvey.gif" border="0" alt="[No]" />
The roads are data, the petrol is applications and the motor is the system. In this case I see the Mac as the car with a diesel engine:
It can run on the same roads as the other cars (use the same data), but needs a different petrol (applications). The diesel engine has lower revolutions than the petrol engine (clock-speed), but higher torque (more work done on lower revs - shorter pipeline). It costs more to buy, but lasts longer and uses less fuel (energy), making it more cost-effective in the long run.
In Europe at least the diesel cars are taking marketshare from the cars with petrol engines...
Dude, Apple is a platform; it's called "Macintosh". That's the road Jobs decided Apple was to take. It's got its advantages--the usual "we're the only ones in control of both, software and hardware" blurb--as its disadvantages.</strong><hr></blockquote>
No, Apple didn't choose to go up against the entire gamut of Windows vendors. In fact, when Apple introduced the Macintosh, there was no commercial product from Microsoft named "Windows."
....
[quote]Originally posted by ZoSo:<strong>
Actually, SJ did the same mistake TWICE: at first while he was at Apple, and then while running NeXT--can you imagine licensing NeXTSTEP to IBM??? Oh-so-horrible!</sarcasm>. He specifically wanted Apple to be a platform, the be-all and end-all of a certain sector of the industry. He did NOT want to share the merits with anybody, and he can't stand to see somebody else doing better things than himself (think PowerComputing in late '97).</strong><hr></blockquote>
How did Jobs want Apple to be a platform when he was CEO of NeXT? At any rate, it would seem that the point is moot, because both NeXT and PowerComputing both are now parts of Apple.
[quote]Originally posted by ZoSo:<strong>
So, got complaints about this? Call Steve and try to convince him that he should split Apple into two different companies, a SW and a HW division.</strong><hr></blockquote>
It seems that you are the one who is complaining. Have you made that call yet?
One thing to keep in mind here -- although DDR stands for "dual data rate", it is a little bit misleading. You do not suddenly get double the performance over SDRAM; indeed, for any read request under 64 bits (the overwhelming majority), you see little to no improvement at all.
All things being equal, you'll generally see at most a 10% performance gain from DDR vs. SDRAM in the same system, all other things being equal (and even then, only in applications that stream data in chunks larger than 64 bits at a time).</strong><hr></blockquote>
I hate to disagree with you moki, but whilst the programme will request memory in small chunks most of the time, the processor will always request a cache line, or 32 Bytes at a time. The main reason why most programmes, which don't stream memory in large blocks, don't see much gain from DDR is that there is almost no change in the latency. (Okay, it amounts to the same thing in the end anyway, but I don't like to see people discussing just bandwidth as if it were everything, and ignoring latency. Just look at RDRAM)
DDR is great for streaming data, and of little benefit for almost everything else.
This is in response to Apple needing to keep both the software and hardware divisions profitable.
Normally I would agree, but since Apple is trying to grow market share they need leverage. They are wisely using their software division for some of that leverage.
If Apple can get a super-critical growth in market share, then they maybe can think about making some money in their software division.
--------------
Side note: If you split the software and hardware divisions and told them to maximize profits independantly of each other. The software division would kill the hardware division because they would wisely release MacOSX for the PC market (increasing their marketshare/profits considerably). I'm afraid that would kill Apple's hardware division, and the final product on the PC would not be as good. I don't think this would be good for present Apple customers.
Apple's hardware alone can't compete with PCs (economy of scale).
Apple's software alone can't compete with PCs
(well, they could compete, it would just rip the company apart and they would initially shrink to 1/50 the size)
<strong>This is in response to Apple needing to keep both the software and hardware divisions profitable.
Normally I would agree, but since Apple is trying to grow market share they need leverage. They are wisely using their software division for some of that leverage.
</strong><hr></blockquote>
I agree. Consider OS X. To be really profitable Apple would have to charge a lot more than $129. The price is kept down for good marketing reasons.
For comparison, consider that Microsoft sells way over ten times as many copies of their OS. Since the cost of a little plastic CD is very low, most of the revenue is to cover the fixed cost of engineering the OS, plus profit.
Comments
Do you really want to pay $500 for an OS upgrade? I don't.
<strong>Another thing to keep in mind is that Apple is CONSTANTLY compared to the ENTIRE Windows-based x86 market. That's extremely misleading</strong><hr></blockquote>
Dude, Apple is a platform; it's called "Macintosh". That's the road Jobs decided Apple was to take. It's got its advantages--the usual "we're the only ones in control of both, software and hardware" blurb--as its disadvantages.
That's how things are, love it or hate it. I personally hate it--I fondly remember the clone era--but there's no use denying it.
Actually, SJ did the same mistake TWICE: at first while he was at Apple, and then while running NeXT--can you imagine licensing NeXTSTEP to IBM??? Oh-so-horrible!</sarcasm>. He specifically wanted Apple to be a platform, the be-all and end-all of a certain sector of the industry. He did NOT want to share the merits with anybody, and he can't stand to see somebody else doing better things than himself (think PowerComputing in late '97).
So, got complaints about this? Call Steve and try to convince him that he should split Apple into two different companies, a SW and a HW division.
Or you might want to think before typing.
ZoSo
<strong>If Apple can sell Os X for less than M$ does...a bigger competitor than Dell...then they should compete harder on harderware as well...they may not match Dell's prices equally. But I think they should get closer on specs and price.</strong><hr></blockquote>
Apple is closer than most people here think. It's just that people compare their professional offerings to el cheapo towers like the Dell Dimension series and then wonder why Apple's so overpriced.
To win the spec-sheet game, you have to be willing to push out crappy engineering and indulge in wildly misleading marketing tactics. I don't think it's necessary for Apple to stoop that low. The tack they've taken with the Switch adds is canny: It ignores specs in favor of tapping into the deep well of discontent among everyday Windows users, and it draws attention to Apple's strengths.
The situation with the towers has nothing to do with the education market, so that's not relevant. The eMac is quite literally custom designed for education customers.
The same things that are keeping a lot of (2D) graphics pros from OS X are also keeping them from Windows, only more so (you think losing Jon's Commands is bad? How about losing AppleScript!). Maybe, eventually, PCs will make some inroads there. But the level of frustration associated with them is still too high, and fast processors just mean that they're frustrating at a much higher speed.
IT departments have generally been kept at bay because of Mac advantages besides speed. It's true that they'll find any excuse to go all Windows that they can, but that's always been true. Macs now have a great many advantages from an IT standpoint that they didn't have, so the lack of speed is not necessarily a deal breaker.
I'm not predicting G5s at MWSF; I think 1.5-1.6GHz G4s are a possible offering, based on a die shrink to .13. I hope RapidIO appears on the G4, so that MaxBus is no longer an issue and Apple can roll out a next-gen motherboard, but I'm not holding my breath.
I certainly hope MWSF is interesting.
<strong>In the world of cars, neither Ford, GM, Toyota etc own the roads, so it doesn't matter if you buy an A to B car, like a Ford or even a Yugo (if you can find one), or a BMW or even a Rolls Royce ... because no matter what car you choose to purchase, all the same roads are open to you.</strong><hr></blockquote>
I think this is the best analogy I've seen so far. It's a pity though that many won't understand it, and many more will refuse to do so...
Again, great post...
ZoSo
<strong>Ed M. You can say all day that selling more units per market share decline is a good thing but in reality it isn't.</strong><hr></blockquote>
I totally agree, isn't this one of the fundamental principles of capitalism?
Let's say AI Inc. sells 1000 computers. We have our IPO, and the following year we sell 5000. Our stock skyrockets (like the 1999 net economy bubble). One year later recession hits, and the whole industry starts selling fewer and fewer computers. But AI's are so great that people keep buying them. But guess what, we only manage to increase our sales from 5000 to 5500: our stock collapse.
Capitalism, unfortunately, is based on growth. There is just one option: if you don't grow, you sink...
Sheesh...
ZoSo
I'm betting we'll be stuck at 1.25GHz for 12-18 months until the Power5 arrives, so be prepared for 1GHz and 1.25GHz Quad machines in January. <img src="graemlins/lol.gif" border="0" alt="[Laughing]" />
<strong>
I totally agree, isn't this one of the fundamental principles of capitalism?
Let's say AI Inc. sells 1000 computers. We have our IPO, and the following year we sell 5000. Our stock skyrockets (like the 1999 net economy bubble). One year later recession hits, and the whole industry starts selling fewer and fewer computers. But AI's are so great that people keep buying them. But guess what, we only manage to increase our sales from 5000 to 5500: our stock collapse.
Capitalism, unfortunately, is based on growth. There is just one option: if you don't grow, you sink...
Sheesh...
ZoSo</strong><hr></blockquote>
Gee, I thought good business practice was to sell more equipment to increase cash flow and increase profits. As long as you sell more machines and make more profits the market share doesn't really enter into it. Market share = megahertz myth faster don't mean better. If you sell 10,000 more machines (at reduced prices) and make less overall profit, then you aren't getting anywhere. Profit and cash flow count.
<strong>I thought good business practice was to sell more equipment to increase cash flow and increase profits. As long as you sell more machines and make more profits the market share doesn't really enter into it. Market share = megahertz myth faster don't mean better. If you sell 10,000 more machines (at reduced prices) and make less overall profit, then you aren't getting anywhere. Profit and cash flow count.</strong><hr></blockquote>
You're right--I made the wrong example. I was actually thinking about profits, but I based my example solely on units sold... My bad...
Anyway, as is being discussed in other threads here in FH, it looks like Apple isn't exactly trying its best to address our need for a low margin-fast selling unit.
Headless eMac? Barebones PowerMac? I'm convinced Apple could sell those like hotcakes (I'd buy a couple, that's for sure
ZoSo
Yep. That's so short term and now all the developers have going for them is relying on upgrades, milking people with nothing really new. More on that later...
[[[In the world of cars, neither Ford, GM, Toyota etc own the roads, so it doesn't matter if you buy an A to B car, like a Ford or even a Yugo (if you can find one), or a BMW or even a Rolls Royce ... because no matter what car you choose to purchase, all the same roads are open to you. ]]]
The roads.... I believe that the "roads" in this particular case is the *data*. As of now, most of the data that is exchanged between systems (and platforms) is transparent in that it can be taken from platform to platform\t
\t
[[[You want to get to New York from Boston, the only difference the car makes is the comfort of the ride.\t]]]
EXACTLY! And some people care about HOW you get there rather than just getting there. And you are ignoring a lot of other variables. You distill it down too much. What about efficiency, gas mileage, maintenance etc.? shouldn't these also be considered before choosing the appropriate car for the trip.? Similarly, what about the payload and or passenger compliment. A Vett can get from New York to Boston just fine, but what if you needed to take 5 people? So, I don't buy into your interpretation, there are too many other considerations that you conveniently left out. There are other areas that would affect he choice, that's why there is a host of different vehicles offered to suit the many different needs. If it were as simple as traveling from point A to point B then maybe the argument would have *some* merit. BTW, have you noticed that there are TONS of different toothpaste and toothbrushes on the market? Why is that?
[[[it becomes a turf war of compatability and standards,]]]
At this point, Micro$oft is being less open to standards and locking people into proprietary solutions. Still, today's DATA is transportable. That said, the TOOLS become the important factor.
[[[halfway thru the trip, the customer can't just switch systems/tracks, because that means a very costly unload from one incompatible system, to another ... ]]]
You know... I always chuckle when I hear this... It's funny because companies essentially have "made a deal with the devil" in that Micro$oft has them locked in because of all the interdependencies. They are getting cooked slowly and likely spending more over time supporting a platform that has them locked in. And that's just for apps and hardware (x86 machines). These companies still have support costs, update costs, maintenance costs, costs do to lost productivity and down time, patch testing... And that's not even taking into consideration the upgrades from one version of Windows to the next.
[[[it's just too expensive. So you stay with whatever system sets the standard in whatever field you're in, because long term, it's still cheaper than switching. ]]]
What of the long term costs over a given period of time and taking into consideration all the hardware and software and OS updates that were required within the same platform?\t
\t
[[[it's cost and hassle factor - Micro$soft knows this ]]]
I'm sure they do.. once the contract is signed, they have you locked. And if it really is cost and hassle, what's more costly to support than Windows and what's more of a hassle than Windows?\t
\t
[[[B - become so incomparibly cheaper and better than the competition, that it's worth the hassle of unloading.\t]]]
This is probably a myth since the cost of switching would really be an insignificant cost given the cost of support, upgrades, maintenance et. al that M$ has you locked into. The frog-in-the-pot-of-water analogy comes to mind.. And I believe Gartner did a study on just this very point. their suggestion was to ditch M$ and IIS and migrate to LINUX on Apache. (I forget the details), but the point was that it was a BETTER solution and it was cheaper, even over time. but the safe confines that M$ supplies... ooooooo.
[[[Option C was Microsoft's ace in the hole, it's now been degraded to about a one eyed jack, now that most people who are going to buy a computer, have bought one and are familiar with using one. ]]]
Yet, those Windows PCs aren't exactly selling as well as people thought. And since the only differentiating factor among PC brands is PRICE, there is no brand loyalty. Someone who buys a Gateway today will probably buy something else next time if it's cheaper.. That's if Gateway is still around. In that case they might buy a Compaq... Oh wait a minute, thet're gone already (almost).
[[[... if you no longer become the standard way people choose to get from A to B, the competing system will take over, and you'll never get back in.\t]]]
Wrong. This argument only holds if the you presume the DATA moving between platforms is proprietary and not transportable. It is.
[[[Thus, Apple can only win by laying new track to new destinations (which they are trying to do with video and audio stuff, while holding onto the routes the currently own, and getting to people for whom the cost of unloading from one system to another is cheapest ... read: home users. ]]]
I'll agree with the home user example, but really, the same can be applied to corporate. LINUX is already doing it. OS X is a UNIX OS. It's the #1 UNIX OS in terms of installed base and shipping volume, it has the best UI tools and already has mainstream apps. It's much further along than LINUX. I believe it's only a matter of time before OS X starts to erode M$'s dominance in corporate arenas.
[[[The problem? If you've got slow chips, the competition can claim that they're the fastest and cheapest way to get to the new places you're trying to set the standards on ]]]\t
Being faster doesn't translate into being more productive. There are other considerations that you chose to leave out. I'm not going to go into them because they've been done to death already. In short, it's uneducated perception.
[[[Ed M. You can say all day that selling more units per market share decline is a good thing but in reality it isn't. Typically sounds like someone making the numbers add up to the way they like it. ]]]
That's why people like to use market share -- because it only shows part of the real picture...
\t
[[[Marketshare is the only way to compare yourself to your competitors. ]]]
Well, Apple *is* the 4th largest computer manufacturer in the world. (shipping volume)
Market share rankings of some familiar PC companies:
Dell: 14.1
Compaq: 11.1 (going to be 0% soon)
HP 7.1
Gateway: 6
[[[3% of 170k is only 5100 units I believe.. and only .09 percent of all apple sales are switcher sales.\t]]]
Last I read, Apple shipped 808,000 Macintosh units this past quarter.
That's 3.2 million systems a year and that means that 1 Mac is sold every 9.75 seconds.
[[[while pc users upgrade as often as twice a year, and have more than one computer on average.\t]]]
That isn't true at all, since the slump in PC sales is proof of that. Even if it were true, what does that get those people in terms of return on investment?
[[[Ed M. I feel your marketshare arguments are misplaced as far as Apple are concerned.\t]]]
You would... On that same note, what do you suppose the other PC OEMs should do to grow their market?
\t
[[[How about PCs are cheaper, easy to upgrade and offer more bang for buck.) then Apple won't be able to compete on price. They offer less ram and inferior graphic cards at the same price point. ]]]
And after the Y2K purchases they aren't selling very well. There was a point where companies were giving them away for free. \t
[[[Computers seem to be coming down in price all the time...but Apple seems to think they can tread water with nine month update cycles. ]]]
Oh c'mon... people aren't upgrading as fast as they used to. That's why there is a slump. People are finding that their current machines, Macs, OR PCs are more than enough to suit their needs.\t
\t
[[[Not so. If they've got 95% of the market to aim at and Dell are selling to an even more saturated market than Apple is...\t]]]
Apple is somewhat insulated from those price wars. Gateway is taking a hammering though.
[[[Specs and price are the bottom line. ]]]
Is that the way it is? We should all be eating McDonnald's food.\t
\t
[[[I find it interesting that you suppose PCs don't differentiate product lines. That's not what I see in a PC World or Micro Mart magazines.]]]
What do you see that differentiates PC brands other than price? What will a Dell PC running Windows get me that a Gateway won't?\tWhat difference will an HP running Windows make? Don't you see, these companies are "Windows repackagers" Similar to Vanilla ice cream.
\t
[[[If economies of scale don't matter then how come M$ and their PC partners hosed Apple?]]]
What are you babbling? Hey, how's Compaq doing? PackardBell?
[[[Apple were merely one. M$ and cronies many.Apple had their chance. They chose not to.\t]]]
huh?
[[[Thats why they are fighting to stay relevant. ]]]
Ya know... PC companies have come after Apple and many have died already. People have been using this argument for almost 30 years now. Maybe in another 30 Apple will finally go belly up and everyone who was predicting their demise will finally be able to say "I told you so" LOL talk about *old*
[[[And another thing. Apple's software and hardware divisions should be profitable on their own. One should not subsidise the other.]]]
Says who? Why cannibalize your own company?\t
\t
[[[Don't be too surprised if Apple offers more software products soon...and charges for them also. ]]]
Oh, I won't be...\t
\t
[[[So, got complaints about this? Call Steve and try to convince him that he should split Apple into two different companies, a SW and a HW division.Or you might want to think before typing. ]]]
You should be working for HP...
[[[I totally agree, isn't this one of the fundamental principles of capitalism?Let's say AI Inc. sells 1000 computers. We have our IPO, and the following year we sell 5000. Our stock skyrockets (like the 1999 net economy bubble). One year later recession hits, and the whole industry starts selling fewer and fewer computers. But AI's are so great that people keep buying them. But guess what, we only manage to increase our sales from 5000 to 5500: our stock collapse.Capitalism, unfortunately, is based on growth. There is just one option: if you don't grow, you sink...Sheesh...ZoSo ]]]
First of all, Apple is one of two PC OEMs actually turning a profit. And for the record, Apple IS growing... As long as they're selling units, user-base is growing. There's plenty of Macs out there, but shouldn't they have died like 20 years ago? Why not apply your logic to the other OEMs? Why single out Apple? Are they going to go under anytime soon do you think? Are they performing poorly? How do they rank in the Fortune 500? I bet they rank in the top 150. How is their stock performing compared to others? Yeah, they're floundering all right... Give me a break...
Bigc has it right...
[[[You're right--I made the wrong example. I was actually thinking about profits, but I based my example solely on units sold... My bad...\t]]]
That's great.. all is forgiven. Now, Apple is *still* moving plenty of units...
[[[Headless eMac? Barebones PowerMac? I'm convinced Apple could sell those like hotcakes ]]]
Ah! I like this idea.... Apple should be able to cut costs AND be able to move more units. Like a nice inexpensive cube. Nice.\t
Still, Apple has some advantages..
Think of all the potential UNIX apps that can make a vertical transition to OSX. Again, OS X is the largest UNIX and having your wares on that UNIX seems to be a good idea. Furthermore, companies already running UNIX would probably be attracted to the features of OS X given it's superior UI as compared to other UNIX variants. Again, applications developers have an opportunity (just like Alias|Wavefront) to grow *their* market share and *their* exposure. The Windows market is all but saturated and most developers now rely on upgrades instead of new full-sales. There are clearly opportunities to be had. And remember, it's up to the *developers* to offer the solutions and spark demand in *their* product. They can do that with OS X and both sides can be profitable, so the outlook for Apple looks pretty good even if they are having a bit of difficulty ramping the MHz. of their systems... I wonder why auto manufacturers don't follow the lead of Intel and advertise their car offerings showing an engine's RPM limit instead of torque, MPG and horsepower? ;-) Anyway... OS X is *key* for Apple.
To quote my friend Dave K. Every...
"Show me the customers that demanded a spreadsheet before Bricklin created Visicalc? Show me the customers that demanded a GUI before Apple delivered the MacOS? It doesn't work that way. And if you found both people asking for it, it would NEVER justify the expense. But when you offered the solution, you find that there are 1,000 that want it, and you just didn't know about it. And that the software created opportunities and brought you into new markets, etc.... But if you never take the risks, then you will never see the rewards. That's the job of software companies; create solutions to gain new markets. If you stop innovating, then you are stagnant and just waiting to be obviated by someone with more a clue (more vision) than you have.
Every company that is not paranoid about their markets, and thus stops trying to innovate (which Apple is)and penetrate *new* markets in order to maximize profits of the now, sells their future for the present. This short-term quarterly report thinking is what has allowed not only companies but whole industries to be eaten alive.
Some of these companies do survive. They go into innovation through acquisition mode; and can sometimes acquire fast enough to tread water or break even. (Or at least slow the inevitable descent into oblivion). Most go under, or become pathetic shadows of they once were, and shameful embarrassments compared to their potential.
If new platforms are coming up (OS X) and are ignored, by them (but not their competition) they are missing out on many opportunities that their competition isn't.
Let's not learn the lessons of Novell, Lotus, DEC, Wang, DataGeneral, Packard Bell, and so on. Let's mimic them, because many of them were profitable, in the short term, right before they focused on the *now* for too long and let the competition pass them by, and they disappeared.
I tend to think that if developers ignore the #2 OS, and the #1 UNIX OS (which also happens to be the fastest growing OS) then they are not exactly being wise or planning for their future profits and longevity." - DKE
And that's one way that developers in the PC sector can become profitable again. (read: Autodesk etc.) So, that's a plus... Of course Apple will benefit because now the platform will offer additional solutions where none(or very few) exist presently (CAD). And there will be more developers and the market share will grow. At least that's how it *should* work. lol In All, I think Apple will be fine. Let's not forget about that IBM CPU that's coming.. I've been posting *that* speculation on the forums at AI. There are a lot of clues that seem to add up... We'll know more in Otc.
--
Ed M.
Why, Macworld New York 2003 is JUST AROUND THE CORNER!!!
And you know what that means! 3GHz G5s, G4+ ultra-widescreen iBooks, OS XII, Newton II, iPhone, iWalk, 100GB iPods, QuickTime 9, iMovie 5, iTunes 6, iCal 1.5 (ha!), Plutonium PowerBooks, the return of colored iMacs, 22" widescreen Special Edition eMacs and a 6-button retina-controlled Pro Mouse II (in graphite, strawberry and Blue Dalmation, no less!).
It'll be a GLORIOUS summer!
[ 08-18-2002: Message edited by: Orthodoc ]</p>
Why, Macworld New York 2003 is JUST AROUND THE CORNER!!!
And you know what that means! 3GHz G5s, G4+ ultra-widescreen iBooks, OS XII, Newton II, iPhone, iWalk, 100GB iPods, QuickTime 9, iMovie 5, iTunes 6, iCal 1.5 (ha!), Plutonium PowerBooks, the return of colored iMacs, 22" widescreen Special Edition eMacs and a 6-button retina-controlled Pro Mouse II (in graphite, strawberry and Blue Dalmation, no less!).
It'll be a GLORIOUS summer!
<strong>
Care to cite your sources?
Last time I checked (@barefeats) the dual GHz SDR was actually faster--but I'll concede, in most tests they were really head to head--than the new DDR model.</strong><hr></blockquote>
One thing to keep in mind here -- although DDR stands for "dual data rate", it is a little bit misleading. You do not suddenly get double the performance over SDRAM; indeed, for any read request under 64 bits (the overwhelming majority), you see little to no improvement at all.
All things being equal, you'll generally see at most a 10% performance gain from DDR vs. SDRAM in the same system, all other things being equal (and even then, only in applications that stream data in chunks larger than 64 bits at a time).
The piece of the car analogy that has always historically made it completely invalid is the one people have pointed out: MS effectively dictates the type of gas we use, and the roads we run on. That is, Apple's biggest potential problems are lack of tools or the defection of developers.
But - _NEXT_ had developers. Waht was _their_ marketshare? Let's think worst case: If Apple never sold another Mac, how long would it take before the compiler wasn't developed? Well, it's GCC, and they're just now phasing out some architectures from 1990ish.... This just highlights one of the advantages of the OS switch - Apple may not dictate the type of fuel used - but they are virtually guaranteed to always be able to use _something_ that's readily available.
The other part is sheer ease-of-use of Cocoa. There's three-man shops selling competent commercial software now. Typically these are the people steeped in Cocoa from the original NeXt days. If you actually talk to these folk, it's clear that there's a core of developers more committed to Cocoa than the 'Mac zealots' have ever been about Apple. Something about 'My work is actually _fun_.'
selling only to OSX users.
it would be nice if there was a cocoa for windows runtime . then those three man shops could earn a very nice living.
[ 08-19-2002: Message edited by: keyboardf12 ]</p>
<strong>it would be nice if there was a cocoa for windows runtime . then those three man shops could earn a very nice living.
</strong><hr></blockquote>
There used to be. IIRC something called OpenSTEP. I remember seeing it in one of the first Rhapsody Developer CD sets, Yellow Box for Windows.
Then SJ decided it was not meant to be... <img src="graemlins/oyvey.gif" border="0" alt="[No]" />
Anyway, I s'pose that M$ could have blocked it in some way if it ever became too successful, so maybe we lost something that would have had a short life anyway... Too bad... <img src="graemlins/oyvey.gif" border="0" alt="[No]" />
ZoSo
[QB]The car analogy.
<hr></blockquote>
Another take on the car-analogy:
The roads are data, the petrol is applications and the motor is the system. In this case I see the Mac as the car with a diesel engine:
It can run on the same roads as the other cars (use the same data), but needs a different petrol (applications). The diesel engine has lower revolutions than the petrol engine (clock-speed), but higher torque (more work done on lower revs - shorter pipeline). It costs more to buy, but lasts longer and uses less fuel (energy), making it more cost-effective in the long run.
In Europe at least the diesel cars are taking marketshare from the cars with petrol engines...
Terje
Dude, Apple is a platform; it's called "Macintosh". That's the road Jobs decided Apple was to take. It's got its advantages--the usual "we're the only ones in control of both, software and hardware" blurb--as its disadvantages.</strong><hr></blockquote>
No, Apple didn't choose to go up against the entire gamut of Windows vendors. In fact, when Apple introduced the Macintosh, there was no commercial product from Microsoft named "Windows."
....
[quote]Originally posted by ZoSo:<strong>
Actually, SJ did the same mistake TWICE: at first while he was at Apple, and then while running NeXT--can you imagine licensing NeXTSTEP to IBM??? Oh-so-horrible!</sarcasm>. He specifically wanted Apple to be a platform, the be-all and end-all of a certain sector of the industry. He did NOT want to share the merits with anybody, and he can't stand to see somebody else doing better things than himself (think PowerComputing in late '97).</strong><hr></blockquote>
How did Jobs want Apple to be a platform when he was CEO of NeXT? At any rate, it would seem that the point is moot, because both NeXT and PowerComputing both are now parts of Apple.
[quote]Originally posted by ZoSo:<strong>
So, got complaints about this? Call Steve and try to convince him that he should split Apple into two different companies, a SW and a HW division.</strong><hr></blockquote>
It seems that you are the one who is complaining. Have you made that call yet?
[quote]Originally posted by ZoSo:<strong>
Or you might want to think before typing.
ZoSo</strong><hr></blockquote>
Physician, heal thyself.
[ 08-19-2002: Message edited by: Mr. Me ]</p>
<strong>
One thing to keep in mind here -- although DDR stands for "dual data rate", it is a little bit misleading. You do not suddenly get double the performance over SDRAM; indeed, for any read request under 64 bits (the overwhelming majority), you see little to no improvement at all.
All things being equal, you'll generally see at most a 10% performance gain from DDR vs. SDRAM in the same system, all other things being equal (and even then, only in applications that stream data in chunks larger than 64 bits at a time).</strong><hr></blockquote>
I hate to disagree with you moki, but whilst the programme will request memory in small chunks most of the time, the processor will always request a cache line, or 32 Bytes at a time. The main reason why most programmes, which don't stream memory in large blocks, don't see much gain from DDR is that there is almost no change in the latency. (Okay, it amounts to the same thing in the end anyway, but I don't like to see people discussing just bandwidth as if it were everything, and ignoring latency. Just look at RDRAM)
DDR is great for streaming data, and of little benefit for almost everything else.
michael
Normally I would agree, but since Apple is trying to grow market share they need leverage. They are wisely using their software division for some of that leverage.
If Apple can get a super-critical growth in market share, then they maybe can think about making some money in their software division.
--------------
Side note: If you split the software and hardware divisions and told them to maximize profits independantly of each other. The software division would kill the hardware division because they would wisely release MacOSX for the PC market (increasing their marketshare/profits considerably). I'm afraid that would kill Apple's hardware division, and the final product on the PC would not be as good. I don't think this would be good for present Apple customers.
Apple's hardware alone can't compete with PCs (economy of scale).
Apple's software alone can't compete with PCs
(well, they could compete, it would just rip the company apart and they would initially shrink to 1/50 the size)
<strong>This is in response to Apple needing to keep both the software and hardware divisions profitable.
Normally I would agree, but since Apple is trying to grow market share they need leverage. They are wisely using their software division for some of that leverage.
</strong><hr></blockquote>
I agree. Consider OS X. To be really profitable Apple would have to charge a lot more than $129. The price is kept down for good marketing reasons.
For comparison, consider that Microsoft sells way over ten times as many copies of their OS. Since the cost of a little plastic CD is very low, most of the revenue is to cover the fixed cost of engineering the OS, plus profit.