2.) JustInTime Inventory. Dell holds almost no inventory and can change configs in a matter of days. </strong><hr></blockquote>
That is nonsense. I had the luck of ordering a computer from Dell right as they were switching a product line. 3 and a half weeks later the computer went to the building phase and 4 weeks later they updated their website for the new line. It takes them time to switch out lines just like everybody else.
If Apple is hesitant to sell low-priced, reduced-feature towers because they don't want to be associated with the low-quality, Wal-Mart type of image, they could easily start up a new company that specializes in such things: A new independent company which will license the MAC OS yet bring back lots of the profit back to the parent company (Apple).
Toyota created Lexus when it entered a market which is not associated with Toyota's traditional image. Chevrolet created GEO when it decided to sell imported cars, since it didn't want the Chevy brand tarnished with "cheap imports".
But I believe that Apple has already considered this and decided that the market for Macs are not big enough for 2 companies. Even if they sell distinct products, one company will cannibalize the other company too much and they will fail to coexist.
I agree with most of what you wrote jccbin, but Apple's reported numbers don't mesh with this part:
[quote]Originally posted by jccbin:
The margin of which you speak is PROFIT margin. Apple is earning 24-27% profit per quarter - AFTER paying all the expenses you note. Yes their costs are high, but they still mark everything up 25% or more.
One of the greatest examples of a company producing its own knock-offs was OXO who produced "cheap knock-offs" of their 'Good Grips' for various stores to sell exclusively, so that other companies would not produce kitchen tools with similar grips. It worked very well for them, but for Apple, it would not likely work. If you are well known, you may be exposed or otherwise tarnished by the second brand if you can not pull it off well. The second brand would either cannibalize sales or go "bankrupt," either of which would be bad as investments. It is far too risky, and as there are currently no other computer companies doing similar things, (except kind of HP/Compaq which uses different brands for different levels, but is foundering) Apple should grow in less devious ways.
Sorry, too long. <img src="graemlins/hmmm.gif" border="0" alt="[Hmmm]" />
. . . for Apple, it would not likely work. If you are well known, you may be exposed or otherwise tarnished by the second brand if you can not pull it off well. The second brand would either cannibalize sales or go "bankrupt," either of which would be bad as investments. . .
</strong><hr></blockquote>
Well, companies frequently make different brands of a product to serve different markets. Someone started to use the term knock-offs, and I'm sorry I ever repeated it. I believe it gives a whole different meaning to what really is a common marketing strategy. Apple in fact did make a Performa at one time, to differentiate it from other Macs. I doubt Apple would use that same brand name again, however.
I believe your response is a good one, if your knock-off means a cheap, shoddy computer. (By the way, I found that interesting about the Good Grips.) If Apple did produce a different brand of computer for low end markets, I doubt very much it would be anything that would tarnish Apple's reputation. I believe it would instead redefine what a really low priced computer can be, and if targeted well, it should not cannibalize sales of other Mac. Yes, it will impact them some, but I believe Apple does realize this danger, and would make design trade-offs to minimize it.
Added by Edit:
Lucy, you should post more than once a year, and it was not too long. Just right.
Well, companies frequently make different brands of a product to serve different markets. Someone started to use the term knock-offs, and I'm sorry I ever repeated it. </strong><hr></blockquote>
One very clear cut example is Proctor & Gamble and the entire detergent aisle of the store. Some chains carry only certain lines, but P&G must make 14 different 'Brand names' of laundry detergent. None of them are 'knock-offs', they all have their own advertising budget etc.
For this to work, though, the actual product needs to be _cheap_ to differentiate. For laundry detergent it can all be made in the same vat (and even at the same time!) with additives thrown in on a schedule. (Lemon-fresh, no-bubbles, extra bubbles, good-to-colors etc.) The product is still 98% identical
Apple was on this 'product differentiation' path in the Dark Ages of 1997ish. As soon as you start differentiating computers you start ending up with changes in the motherboard chipset - and the overall inefficiency goes up. Unless you have something that works off of a standard that third parties are designing towards... like RapidIO and HT. Both seem to make eminent sense if the price is low enough to use everywhere.
But we aren't there yet.
The niche that seems to clamor most loudly for a machine specific to that niche is the gamers. The return of the pizza-box computer would fit that pretty well: ONE slot, AGP or PCI convertible with a little bridge card, no built-in graphics, one CPU. Something like that.
Well, companies frequently make different brands of a product to serve different markets. Someone started to use the term knock-offs, and I'm sorry I ever repeated it. I believe it gives a whole different meaning to what really is a common marketing strategy. Apple in fact did make a Performa at one time, to differentiate it from other Macs. I doubt Apple would use that same brand name again, however.
I believe your response is a good one, if your knock-off means a cheap, shoddy computer. (By the way, I found that interesting about the Good Grips.) If Apple did produce a different brand of computer for low end markets, I doubt very much it would be anything that would tarnish Apple's reputation. I believe it would instead redefine what a really low priced computer can be, and if targeted well, it should not cannibalize sales of other Mac. Yes, it will impact them some, but I believe Apple does realize this danger, and would make design trade-offs to minimize it.
Added by Edit:
Lucy, you should post more than once a year, and it was not too long. Just right.
For Apple, the "Claris" brand would have been ideal. Although it was originally the semi-independent software arm, they could have used it to come out with a line of "Claris" brand computers. They would run the Mac OS, but would not be called "Macintosh", and be based on a completely different design ethos - an in-house clone, essentially. This would allow Apple to maintain the "prestige" of the PowerMac line, while the Claris brand could focus on, say, cheap gaming rigs or something. Unfortunately, Claris is dead, but I'm sure Apple could either resurrect it or find a substitute. The "Claris" computers might cannibalize some iMac or Powermac sales, but since all the money goes into the same pot, so what? I think this would be great for Apple.
The niche that seems to clamor most loudly for a machine specific to that niche is the gamers. The return of the pizza-box computer would fit that pretty well: ONE slot, AGP or PCI convertible with a little bridge card, no built-in graphics, one CPU. Something like that.
I?ll have one of those. Hold the anchovies. Ahh, but you have already..
Regarding a low cost Mac without a monitor, it would be attractive to business. It would compete better than an eMac, since most businesses already have perfectly good monitors, and bigger businesses have hundreds, even thousands, of them. So, no matter how you get there, a separate brand or just a lower cost Mac, this computer has potentially large markets beyond the low end consumer market.
Possible Points you are making: (please choose the one that applies so I can read your posts accordingly)
1) I want Apple to be more successful as a company so they should do whatever that takes to stay in business in the future.
2) I want a cheap tower because my poor ass cannot afford the current ones.
3) I just like to bitch and moan about future Apple hardware even though I have not bought a new Mac since 1989.
4) Market Share would help me either make fun of my PC buddies, or convince more people to buy Macs.
5) I am just a whiner and no Mac no matter how amazing or how cheap would make me happy.
Seriously, I do not want Apple to make a cheap computer. I enjoy feeling superior to PC users and you all should too. I may be an elitist but I don't want the type of people who buy PCs at Wal Mart using macs, we are better than them and it should stay that way.
The only point above that I agree with is that Apple must do what it takes to be profitable and stay in business, just so we can keep getting cool Macs. Why would any of you want to lose the superior feeling you get when some one says they have a 1000 compaq or a POS dell using XP home edition. We are Mac users, we are better than them, I refuse to be down there with them, and I refuse to shop with them at Wal Mart.
. . . Seriously, I do not want Apple to make a cheap computer. I enjoy feeling superior to PC users and you all should too. I may be an elitist but I don't want the type of people who buy PCs at Wal Mart using macs, we are better than them and it should stay that way.
The only point above that I agree with is that Apple must do what it takes to be profitable and stay in business, just so we can keep getting cool Macs. . .
</strong><hr></blockquote>
I believe most of us want Apple to be profitable and stay in business. To do this, Apple can not aim primarily at elitist markets. Market share must grow to keep the Mac a very viable platform for applications developers. ( I guess there could be an elitist PC maker on the Windows side, since there are enough other companies to cover the other markets and keep the developers happy. There just doesn't happen to be such a PC maker.) To grow total market share, Apple must meet the needs of more computer buyers, not just elite buyers.
The business market is important and a very low cost Mac, without monitor, would help Apple do better in that market. It would also help Apple get back some of the lost education market. Schools that bought all Windows PCs already have enough monitors. When they wish to upgrade computers, an eMac can not compete against a Windows PC without monitor. There are lots of uses for a low cost Mac.
In retrospect, suggesting Apple sell at discount houses is likely not a good idea. However, if Apple made a low-cost, no-monitor Mac for business and education, it would sell into the home market too. A low price does not mean it has to be shoddy. It may be limited in some ways to keep cost down. For those who need more than those limits, there is the eMac, iMac and the PowerMacs. With the business, educational and home markets to buy it, I don't believe this Mac would be a flop.
Most of us here know that Macs are better...something that not every American knows. Apple has to deal with that too. So even if Apple did make a cheaper model, they would still have a world of PC's to compete against which unfortunately still have a higher position in most of the market's mind. So if they did invest in developing a lower-end Mac, how much would it really help the company? How would they push it into the market? If it's a sub-$1K machine, it'll probably lack power, so why would an established PC user want to change platforms to begin with, I know why, but they don't and that's the essence of the problem. Also, remember the Mhz myth...
Apple should drop original iMac because it's getting too old. Graphics card is only ATI RAGE 128 Ultra 16MB and only CD-ROM drive.
Too many iMac models. They should drop CD-RW model and SuperDrive model. Combo and 17" are enough for customers, because Apple has also eMac product line, which sometimes are better and cheaper.
I think that Apple should drop 14" iBook model, because it's getting to be too expensive, if you compare price/processor power. Apple should also compress price and replace CD-ROM and add CD-RW.
PowerBook product line is ok and so is PowerMac.
So my product line would be:
- eMac Combo
- eMac SuperDrive
- iMac Combo
- iMac 17" SuperDrive
- iBook 12"-13" CD-RW
- iBook 12"-13" Combo
- PowerBook 2 models
- PowerMac 3 models
Only problem in my productline is that it doesn't contain any really cheap model.
Heck, I wish Apple would make a VCR or a DVD player or a TV remote control or a stereo receiver. ANY of these devices could benefit from Apple's knack for combining hardware, software, form and function into a usable device.
[ 10-18-2002: Message edited by: Chris Cuilla ]</strong><hr></blockquote>
Go <a href="http://www.bang-olufsen.com/"; target="_blank">Bang & Olufsen</a>. After all, as a mac user, you should be used to paying a lot of money for electronics ;-)
<strong>Seriously, I do not want Apple to make a cheap computer. I enjoy feeling superior to PC users and you all should too. I may be an elitist but I don't want the type of people who buy PCs at Wal Mart using macs, we are better than them and it should stay that way.</strong><hr></blockquote>
Equating "cheap" (i.e. inexpensive) with low quality isn't always accurate. Especially when many PC models provide superior components at lower cost points. Although it's true that some "cheap" PC's are also of low quality, that's not always true. Except for the chipset doesn't Apple rely on third parties for the components in their systems? How many of those third parties also sell to PC makers?
Paying more for something doesn't automatically make it a better product, and it doesn't make you a better person either.
1) I want Apple to be more successful as a company so they should do whatever that takes to stay in business in the future.
[/QB]<hr></blockquote>
With the Caveat "_I_ think they should do xyz"...
Currently a PC buyer has a long list of semi-valid reasons to buy a PC over a Mac. I disagree with some, vehemently disagree with others... and can see their points on others.
What people keep dreaming is that Apple could built a computer that not only has the ease of use in software, the ease of use in hardware, but also competes directly on price with parts slapped together from Computer Shopper and simultaneously competes in performance. It is NOT going to happen.
The one thing the 970 _might_ do if it lives up to (or exceeds) the performance we expect is actually end up with a computer where we can say 'In general I think the Mac is faster' (with a straight face). Personally, I run custom science/engineering software -> I want a Quad CPU machine, and I want to be able to say "My computer can kick the holy living snot out of yours." I'm not sure there's enough of a market for that _for_Apple_.
But in that market, Intel is charging a _LOT_ for CPUs, there's plenty of space for someone (IBM + Apple say) to stake out a nice sturdy claim.
A five fold increase in SpecFP _plus_ the Altivec optimizations... I'll be pretty happy regardless.
good post, nevyn... 'you pay for what you get'. At least for a couple of months... I'm still waiting for a nice surprise. I just feel like we'll all be dazzled by new year... you'll see...
Comments
<strong>
2.) JustInTime Inventory. Dell holds almost no inventory and can change configs in a matter of days. </strong><hr></blockquote>
That is nonsense. I had the luck of ordering a computer from Dell right as they were switching a product line. 3 and a half weeks later the computer went to the building phase and 4 weeks later they updated their website for the new line. It takes them time to switch out lines just like everybody else.
[ 10-20-2002: Message edited by: Telomar ]</p>
Toyota created Lexus when it entered a market which is not associated with Toyota's traditional image. Chevrolet created GEO when it decided to sell imported cars, since it didn't want the Chevy brand tarnished with "cheap imports".
But I believe that Apple has already considered this and decided that the market for Macs are not big enough for 2 companies. Even if they sell distinct products, one company will cannibalize the other company too much and they will fail to coexist.
Just my opinion.
[quote]Originally posted by jccbin:
The margin of which you speak is PROFIT margin. Apple is earning 24-27% profit per quarter - AFTER paying all the expenses you note. Yes their costs are high, but they still mark everything up 25% or more.
<hr></blockquote>
From <a href="http://www.apple.com/pr:"; target="_blank">www.apple.com/pr:</a>
Revenues for the quarter were 1.44 billion.
"Profit" for the quarter was actually a loss of 45 million.
"Profit ignoring one time charges" was 7 million.
Gross margin was 26.4%
Analysis:
Assume for a second that _all_ expenses are accounted for in the 'gross margin' of 26.4%
Revenue / (1 + gross margin) = Cost of providing goods
1.44 billion / 1.264 = 1.14 billion
Revenue - Cost of providing goods = net profit
1.44 billion - 1.14 billion = 300 million.
300 million >> 7 million >> -45million.
-> the gross margin number that is continuously touted does not cover all expenses (like R&D) but the costs of parts and assembly.
I think shareholders would all be giggling in the streets if Apple managed a 27% profit for the quarter
Sorry, too long. <img src="graemlins/hmmm.gif" border="0" alt="[Hmmm]" />
<strong>
. . . for Apple, it would not likely work. If you are well known, you may be exposed or otherwise tarnished by the second brand if you can not pull it off well. The second brand would either cannibalize sales or go "bankrupt," either of which would be bad as investments. . .
</strong><hr></blockquote>
Well, companies frequently make different brands of a product to serve different markets. Someone started to use the term knock-offs, and I'm sorry I ever repeated it. I believe it gives a whole different meaning to what really is a common marketing strategy. Apple in fact did make a Performa at one time, to differentiate it from other Macs. I doubt Apple would use that same brand name again, however.
I believe your response is a good one, if your knock-off means a cheap, shoddy computer. (By the way, I found that interesting about the Good Grips.) If Apple did produce a different brand of computer for low end markets, I doubt very much it would be anything that would tarnish Apple's reputation. I believe it would instead redefine what a really low priced computer can be, and if targeted well, it should not cannibalize sales of other Mac. Yes, it will impact them some, but I believe Apple does realize this danger, and would make design trade-offs to minimize it.
Added by Edit:
Lucy, you should post more than once a year, and it was not too long. Just right.
[ 10-21-2002: Message edited by: snoopy ]</p>
<strong>
Well, companies frequently make different brands of a product to serve different markets. Someone started to use the term knock-offs, and I'm sorry I ever repeated it. </strong><hr></blockquote>
One very clear cut example is Proctor & Gamble and the entire detergent aisle of the store. Some chains carry only certain lines, but P&G must make 14 different 'Brand names' of laundry detergent. None of them are 'knock-offs', they all have their own advertising budget etc.
For this to work, though, the actual product needs to be _cheap_ to differentiate. For laundry detergent it can all be made in the same vat (and even at the same time!) with additives thrown in on a schedule. (Lemon-fresh, no-bubbles, extra bubbles, good-to-colors etc.) The product is still 98% identical
Apple was on this 'product differentiation' path in the Dark Ages of 1997ish. As soon as you start differentiating computers you start ending up with changes in the motherboard chipset - and the overall inefficiency goes up. Unless you have something that works off of a standard that third parties are designing towards... like RapidIO and HT. Both seem to make eminent sense if the price is low enough to use everywhere.
But we aren't there yet.
The niche that seems to clamor most loudly for a machine specific to that niche is the gamers. The return of the pizza-box computer would fit that pretty well: ONE slot, AGP or PCI convertible with a little bridge card, no built-in graphics, one CPU. Something like that.
<strong>
Well, companies frequently make different brands of a product to serve different markets. Someone started to use the term knock-offs, and I'm sorry I ever repeated it. I believe it gives a whole different meaning to what really is a common marketing strategy. Apple in fact did make a Performa at one time, to differentiate it from other Macs. I doubt Apple would use that same brand name again, however.
I believe your response is a good one, if your knock-off means a cheap, shoddy computer. (By the way, I found that interesting about the Good Grips.) If Apple did produce a different brand of computer for low end markets, I doubt very much it would be anything that would tarnish Apple's reputation. I believe it would instead redefine what a really low priced computer can be, and if targeted well, it should not cannibalize sales of other Mac. Yes, it will impact them some, but I believe Apple does realize this danger, and would make design trade-offs to minimize it.
Added by Edit:
Lucy, you should post more than once a year, and it was not too long. Just right.
[ 10-21-2002: Message edited by: snoopy ]</strong><hr></blockquote>
For Apple, the "Claris" brand would have been ideal. Although it was originally the semi-independent software arm, they could have used it to come out with a line of "Claris" brand computers. They would run the Mac OS, but would not be called "Macintosh", and be based on a completely different design ethos - an in-house clone, essentially. This would allow Apple to maintain the "prestige" of the PowerMac line, while the Claris brand could focus on, say, cheap gaming rigs or something. Unfortunately, Claris is dead, but I'm sure Apple could either resurrect it or find a substitute. The "Claris" computers might cannibalize some iMac or Powermac sales, but since all the money goes into the same pot, so what? I think this would be great for Apple.
I?ll have one of those. Hold the anchovies. Ahh, but you have already..
mika.
[ 10-21-2002: Message edited by: PC^KILLA ]</p>
Possible Points you are making: (please choose the one that applies so I can read your posts accordingly)
1) I want Apple to be more successful as a company so they should do whatever that takes to stay in business in the future.
2) I want a cheap tower because my poor ass cannot afford the current ones.
3) I just like to bitch and moan about future Apple hardware even though I have not bought a new Mac since 1989.
4) Market Share would help me either make fun of my PC buddies, or convince more people to buy Macs.
5) I am just a whiner and no Mac no matter how amazing or how cheap would make me happy.
Seriously, I do not want Apple to make a cheap computer. I enjoy feeling superior to PC users and you all should too. I may be an elitist but I don't want the type of people who buy PCs at Wal Mart using macs, we are better than them and it should stay that way.
The only point above that I agree with is that Apple must do what it takes to be profitable and stay in business, just so we can keep getting cool Macs. Why would any of you want to lose the superior feeling you get when some one says they have a 1000 compaq or a POS dell using XP home edition. We are Mac users, we are better than them, I refuse to be down there with them, and I refuse to shop with them at Wal Mart.
[ 10-21-2002: Message edited by: FlashGordon ]</p>
<strong>
. . . Seriously, I do not want Apple to make a cheap computer. I enjoy feeling superior to PC users and you all should too. I may be an elitist but I don't want the type of people who buy PCs at Wal Mart using macs, we are better than them and it should stay that way.
The only point above that I agree with is that Apple must do what it takes to be profitable and stay in business, just so we can keep getting cool Macs. . .
</strong><hr></blockquote>
I believe most of us want Apple to be profitable and stay in business. To do this, Apple can not aim primarily at elitist markets. Market share must grow to keep the Mac a very viable platform for applications developers. ( I guess there could be an elitist PC maker on the Windows side, since there are enough other companies to cover the other markets and keep the developers happy. There just doesn't happen to be such a PC maker.) To grow total market share, Apple must meet the needs of more computer buyers, not just elite buyers.
The business market is important and a very low cost Mac, without monitor, would help Apple do better in that market. It would also help Apple get back some of the lost education market. Schools that bought all Windows PCs already have enough monitors. When they wish to upgrade computers, an eMac can not compete against a Windows PC without monitor. There are lots of uses for a low cost Mac.
In retrospect, suggesting Apple sell at discount houses is likely not a good idea. However, if Apple made a low-cost, no-monitor Mac for business and education, it would sell into the home market too. A low price does not mean it has to be shoddy. It may be limited in some ways to keep cost down. For those who need more than those limits, there is the eMac, iMac and the PowerMacs. With the business, educational and home markets to buy it, I don't believe this Mac would be a flop.
---------------------------------------------------------------------------
"Logic can take you from A to B. Imagination can take you anywhere"
-Albert Einstein
Apple should drop original iMac because it's getting too old. Graphics card is only ATI RAGE 128 Ultra 16MB and only CD-ROM drive.
Too many iMac models. They should drop CD-RW model and SuperDrive model. Combo and 17" are enough for customers, because Apple has also eMac product line, which sometimes are better and cheaper.
I think that Apple should drop 14" iBook model, because it's getting to be too expensive, if you compare price/processor power. Apple should also compress price and replace CD-ROM and add CD-RW.
PowerBook product line is ok and so is PowerMac.
So my product line would be:
- eMac Combo
- eMac SuperDrive
- iMac Combo
- iMac 17" SuperDrive
- iBook 12"-13" CD-RW
- iBook 12"-13" Combo
- PowerBook 2 models
- PowerMac 3 models
Only problem in my productline is that it doesn't contain any really cheap model.
<strong>
Heck, I wish Apple would make a VCR or a DVD player or a TV remote control or a stereo receiver. ANY of these devices could benefit from Apple's knack for combining hardware, software, form and function into a usable device.
[ 10-18-2002: Message edited by: Chris Cuilla ]</strong><hr></blockquote>
Go <a href="http://www.bang-olufsen.com/"; target="_blank">Bang & Olufsen</a>. After all, as a mac user, you should be used to paying a lot of money for electronics ;-)
I wouldn't give up my B&O AV gear for anything...
<strong>Seriously, I do not want Apple to make a cheap computer. I enjoy feeling superior to PC users and you all should too. I may be an elitist but I don't want the type of people who buy PCs at Wal Mart using macs, we are better than them and it should stay that way.</strong><hr></blockquote>
Equating "cheap" (i.e. inexpensive) with low quality isn't always accurate. Especially when many PC models provide superior components at lower cost points. Although it's true that some "cheap" PC's are also of low quality, that's not always true. Except for the chipset doesn't Apple rely on third parties for the components in their systems? How many of those third parties also sell to PC makers?
Paying more for something doesn't automatically make it a better product, and it doesn't make you a better person either.
1) I want Apple to be more successful as a company so they should do whatever that takes to stay in business in the future.
[/QB]<hr></blockquote>
With the Caveat "_I_ think they should do xyz"...
Currently a PC buyer has a long list of semi-valid reasons to buy a PC over a Mac. I disagree with some, vehemently disagree with others... and can see their points on others.
What people keep dreaming is that Apple could built a computer that not only has the ease of use in software, the ease of use in hardware, but also competes directly on price with parts slapped together from Computer Shopper and simultaneously competes in performance. It is NOT going to happen.
The one thing the 970 _might_ do if it lives up to (or exceeds) the performance we expect is actually end up with a computer where we can say 'In general I think the Mac is faster' (with a straight face). Personally, I run custom science/engineering software -> I want a Quad CPU machine, and I want to be able to say "My computer can kick the holy living snot out of yours." I'm not sure there's enough of a market for that _for_Apple_.
But in that market, Intel is charging a _LOT_ for CPUs, there's plenty of space for someone (IBM + Apple say) to stake out a nice sturdy claim.
A five fold increase in SpecFP _plus_ the Altivec optimizations... I'll be pretty happy regardless.