2003: When Business Picks Up Again
Reply 21 of 34
October 25, 2002 5:18PM
[quote]Originally posted by Big Mac:
<strong>Look, I appreciate the mature responses many of you provided, but your assertions are surely not realistic. If you wish to contend that you would be satisfied with purchasing today's woefully overpriced, underpowered Power Macs even though something much better is on the way; if you have no appreciation for the price to performance ratio, then happily purchase away. It would certainly help me as a stock holder! But all of the possible rationalizations brought up here aren't going to change the issues. You're free to disagree with me, of course, but I have confidence in my opinion.
[ 10-25-2002: Message edited by: Big Mac ]</strong><hr></blockquote>
I buy a car based on what fits my needs at the time I'm buying it. My current car is a Chrysler Sebring convertible. I really wanted a Miata or maybe an MR2, but I have two kids I have to haul around sometimes, so I had to compromise on something with at least 4 reasonable seats. I didn't go out and buy the fastest, biggest, most feature-laden model regardless of price. I don't know many people who do. I drive a car until it either falls apart or no longer meets my needs. I don't trade my cars in every year, or even every other year just because something better/faster/whatever is available. Actually, I typically drive a car for about 10 years before I get rid of it.
For the past 15 years, I've almost always wanted a new computer every year - even though I had to wait typically 3 or 4 years - because there was something I wanted to be able to do that i couldn't do with my current equipment. I have been genuinely surprised this past year that although I was looking longingly at the latest coolest gear, I honestly couldn't think of anything new that I really needed new gear for.
So it has nothing to do with price/performance or perceived value or anything else related to current hardware. I buy hardware to run software, not the other way around. I see no need to replace my current hardware for the foreseeable future because I see no new software technologies coming that would demand more than what I've got. It will eventually get worn out and unreliable, so I will think about getting something new when that time comes. Meanwhile, I've got a mortgage, and kids, and electric bills and other stuff that demand my money. Spending thousands of dollars on new computer hardware just to run URT 50 fps faster doesn't quite make my list of priorities.
[ 10-25-2002: Message edited by: TJM ]</p>
Reply 22 of 34
October 25, 2002 5:44PM
Another point that came to mind while I was thinking about car shopping: value is always in the mind of the purchaser. What's valuable to you is not necessarily valuable to me.
Last year, my wife wanted a new minivan. We shopped around and drove probably a dozen different models. A stop by the Honda dealer was a telling lesson in this. The Honda Odyssey had gotten rave reviews from lots of consumer magazines and was in great demand. Our local Honda dealer was out of 2001 models, but had 2 2000 models they would sell us. They each had about 20,000 miles on them, but were still asking $2500 over the sticker of a
2001 model. And they were asking it because obviously they could get it (from some people - not from us).
The point: for some people, it was important enough to have the Honda minivan that they were willing to pay way over the current sticker price for a year-old used model. To them, it was worth it. It wasn't to us, so we bought something else. The Mac OS is a huge selling point IMO, and I
be willing to pay more for an "underpowered" machine in order to get it. If there was something I liked better, or almost as well, at a lower price, I would buy that. Right now, I see no alternative anywhere near the value of the Mac. I would gladly pay a premium of at least $500 over equivalent PC hardware for the privelage of using it. Some may be willing to pay more, other less. I am satisfied that Apple is doing all they can to get the best hardware they can out the door at a price that let's them still make a profit. When I'm in the market for a new computer, I'll take a look at what's available and make a decision at that point as to what's the best use of my money. But it's my money to spend the way I think is important for me. I don't expect you to agree and I don't care if you do or not.
Reply 23 of 34
October 26, 2002 12:02AM
[quote]Originally posted by TJM:
Spending thousands of dollars on new computer hardware just to run URT 50 fps faster doesn't quite make my list of priorities.
[ 10-25-2002: Message edited by: TJM ]</strong><hr></blockquote>
and also getting a monitor that can refresh at the higher rate
Reply 24 of 34
October 26, 2002 2:59AM
[quote]Originally posted by stunned:
Face it, apple prices are too expensive. If the price cuts are eating too deep into Apple's margins, they better cut costs. If PC makers can achieve significantly lower costs, it only means they are more cost efficient and are sure to eat into Apple's sales
Its prices are too high and is not contibuting to their cause. their last quarter profits is testimonial to that. </strong><hr></blockquote>
The problem with this (every time it comes up) is that there are some clear truths that still lead to a bad policy decision. Cutting prices _of_course_ leads to more Mac sales. Duh. It is obvious... and thus it comes up incessantly. But in x86 land 'R&D' and 'OS support costs' are sliced to the bone.
Dell buys components for $500, sells box for $550.
Apple buys the exact same components, assume they could get them for $500 (which is false). What price would Apple have to sell that box for to make the same profit/box?
The only difference at that point would the OS. Mac OS development is distributed across 3.5 million CPUs/year. Doze development costs distributed across _30_ million CPU/year. Or is that per quarter.
Thus Apple's OS costs do (and will always) make their boxes more expensive _for_identical_parts. If you _have_ to be more expensive, you might as well do something that adds value/interest.
(Not a car analogy below, honest, it's about imports)
In Germany, not _all_ Mercedes are luxury models - but when you go to import them to the US, the added shipping/etc costs -> none of the cheapest models are worth bothering with. Does it reduce sales? Heck yes! Does it reduce _net profits_... NO.
The PC makers have been 'more cost efficient' ever since they standardized on pretty much the same MB bits. They will always eat into Apple's sales. With the exact same hardware efficiency as Dell, Apple would have to sell boxes at an effective loss to match them in price. And you can't sell at a loss and win when your enemies war chest is substantially larger.
Note also that Apple's losses last quarter weren't _operating_ losses. If they'd shaved $100 of the 734,000 Macs they sold, that would cost $73 million. Then they would have had operating losses (unless they could sell something like 3.5 million Macs in the quarter.)
Reply 25 of 34
October 26, 2002 6:51AM
[quote]Originally posted by Big Mac:
<strong>Look, I appreciate the mature responses many of you provided, but your assertions are surely not realistic. If you wish to contend that you would be satisfied with purchasing today's woefully overpriced, underpowered Power Macs even though something much better is on the way; if you have no appreciation for the price to performance ratio, then happily purchase away.[ 10-25-2002: Message edited by: Big Mac ]</strong><hr></blockquote>
Something better is ALLWAYS on the way! People purchase computers to do a given group os tasks. For 99% of the people out there a 17" iMac is completely adequate.
And, BTW, I did just purchase a new G4 for a new employee to do web design/programming. I purchased the current BOTTOM of the line G4 because it is more than enough of a machine!
Apple IS on the right track with their hardware. Are their prices higher than Wintel offerings...they sure are! However, OSX is worth the premium and Apple knows this.
What I am more concerned about is where will Apple be 12 months from now with their server hardware. This (better server hardware) is when business will beging to look at them even closer. In the past three months I have spent over $30,000 with Dell in new server hardware. I haven't even considered Apple's servers yet and some of those machines were for a new web cluster...
Reply 26 of 34
October 26, 2002 8:44AM
Blah, blah blah, blah blah... Apple can't, they're special, Jobs craps golden turds... Blah blah blah...
Large corporations can show as much profit or loss as they want to. In this regard Apple is as shameful as any other company in that earnings per share are ridiculously low (though better than many other companies, actually). Apple can make substantially cheaper products and still turn the same profits. They choose not to, but virtually all of the benefits of commodity parts apply to them (they use just about the same everything). And while they do develop and support an OS, they don't pay windows licensing fees. No one forced them to bundle expensive components together or be inflexible in their configurations, or ridiculous with their option prices.
Don't be so willing to excuse them, they're about 2 years behind the price curve, they DID NOT do their homework.
Reply 27 of 34
October 26, 2002 9:43AM
While I do agree with many posters here that Apple is behind the curve in tthe price/performance ratio of their current models, I find it interesting that many of the computer makers; such as Dell, Gateway and Sony, are directly or indirectly targeting Apple's 3-5% market share rather than batteling it out between themselves. The way I see it Apple is behind in performance at precisely the time to be behiind in that arena, when the hardware is as fast as is needed for most uses today. They are also ahead of the curve on inductrial design and ease of use with value added software. Apple is the only Hardware/Software company in the consumer market today that can achieve the integration that they offer. Sony comes close with the peripherials that they offer today, and likely will add in the comming months. Apple has already started to address this with the Ericson deal and the iPod (which from what I have seen is a huge success).
Apple's main problem today as I see it is that they are behind in the release of updated hardware for most of their products. They also need an update to the overall archetecture. This is hampered by Motorolla's lack of support for a faster FSB and DDR. Apple has come up with some interesting work-arounds for this, but they really need a new chip. With the option of MP systems, they could probably compete well with Dual 800-1ghz in the consumer market. The MP systems will speed up the responsevness of the OS and run multiple programs with a better "feel" than single processor systems, even if the software in question does not take advantage of MP's (and most people I know have at least 2 programs going at once when they have the computer on at home). But Apple needs FSB and memory that can feed the processors and as I understand they currently do not have this option in the G4 chip, and wont untill sometime in 2004.
The pro market is in one respect in worse condition, and in another in a much better position. The anouncement of the IBM chip shows us the war that Apple may be going, but unless false information is bieng given about the time-frame we have 8-12 months before this comes to market. Add to this the lack of options, and history of Motorolla's scaling of the G4, and I see a further erosion of Apples ability to market their hardware to Pro's just as their OS is really bringing non-traditional interest in their platform.
Apple does have the money to weather this out, and with the release of another Apple branded consumer device bringing more good press, when that comes out, and devices from periperial companies supporting Raundevue (SP) Apple is positioning themselves as a very strong "premium" consumer company, much like Sony. In the pro market they may get enough interest to get people looking at the OS and current hardware to support them untill they have a truely competative processor/motherboard to compete in these markets. That is coming with the current IBM chip, and since IBM will most likely sell their own computers with this chip there will be incentive to them to push the development further than Motorolla has been able to push the G4. <img src="graemlins/smokin.gif" border="0" alt="[Chilling]" />
Reply 28 of 34
lemon bon bon
October 26, 2002 10:53AM
"(Motorola doesn't even give its official G4 SPECmarks, since the performance of the chip is so abysmal.)"
S'funny, IBM don't mind posting theirs.
Amorph may be happy with Motorola's efforts.
He's right in his assertion that it's 'fast enough' for him and for what 'most' people do. That's why people aint buying x86's inspite of their 3 giggers and Apple's despite Ten, stunning design and a superb digital hub strategy (copied, note, by the Wintel cronies.)
I'm sure there are merits to the G4 design...or were
at the time... However, it's 'risc' advantage has simply been over taken by x86 companies who have painted themselves into a performance plateau as far as the general consumer is concerned.
However, just because the 'general' consumer, apparently, don't need that performance, doesn't let Moto' or Apple off the hook. The 'weak' enconomy thinly veils G4's 'lagging' performance and Apple's 'Wallmart' style 'two for one' workstation strat' highlights the G4's deficiencies for 'serious' work. Which, I thought, Macs were used for.
It'd be churlish to say that Apple's management haven't executed very well given all the variables. However, I'm not the only whiner to highlight the flowerpowerMac's weak bang for buck performance 'increments'.
I won't buy a tower because, in my opinion, they're out of date. Not good enough, not competitiven for the premium price.
I think, for me, the 970 will settle alot of my grievances, more with Motorola than with Apple.
It's at least given me an indication of where Apple maybe going in the next year. That's better than nothing.
Lemon Bon Bon
Reply 29 of 34
October 26, 2002 11:34AM
[quote]Originally posted by Lemon Bon Bon:
I think, for me, the 970 will settle alot of my grievances, more with Motorola than with Apple.
Lemon Bon Bon</strong><hr></blockquote>
At least you have finally put the blame where it should be.
Apple has obviously realized their problem for a couple of years and has been working dilligently to remedy the processor differential between Apple and x86.
You can't just pull a new technology, high speed-high bandwidth CPU out of a hat. If Apple gets this done by 2H of 2003 that will be quite an accomplishment (~2.5 years?) given the current and recent economic conditions.
Reply 30 of 34
October 26, 2002 12:28PM
[quote]Originally posted by Lemon Bon Bon:
<strong>"(Motorola doesn't even give its official G4 SPECmarks, since the performance of the chip is so abysmal.)"
S'funny, IBM don't mind posting theirs.
Amorph may be happy with Motorola's efforts.
And that's fair. In fact, I allowed for your situation in my original post, although I used
as an example instead of you: There are places where the PowerMacs
seriously underperforming. But they're exceptions: Approximately what percentage of the population does 3D work?
Counterexample: A sound engineer friend of mine is looking at PowerMacs, because the performance of the latest version of Cubase on a 1.6GHz Athlon running Windows 2K is actually
, in absolute terms, than the performance of the version he's currently running on a 700MHz Pentium III! And the roar of the Athlon box he was working on was not acceptable to him, either - not that the PIII is quiet, but he has limits.
[quote]<strong>He's right in his assertion that it's 'fast enough' for him and for what 'most' people do.</strong><hr></blockquote>
And that being the case, the small size and low heat dissipation are
, because they mean that Apple can offer far more svelte machines that are still plenty powerful.
Besides, on consumer-grade motherboards, the MHz Myth becomes even more of one because the software doesn't tax the CPU, and the motherboard starves the CPU. Cheap motherboards are cheap for a reason. The last review I read of a shootout between the iMac and the Gateway Profile, the iMac was behind in the reviewers performance benchmarks - by about 10%. Not anything in the same league as what the MHz difference (800MHz vs. over 2GHz) nor the difference in SPEC marks would imply.
[quote]<strong>I'm sure there are merits to the G4 design...or were
at the time... </strong><hr></blockquote>
There are. But engineering is about tradeoffs, and unfortunately performance in your application space is what got traded off in the design of the G4. You will probably appreciate the 970.
[quote]<strong>However, just because the 'general' consumer, apparently, don't need that performance, doesn't let Moto' or Apple off the hook. The 'weak' enconomy thinly veils G4's 'lagging' performance and Apple's 'Wallmart' style 'two for one' workstation strat' highlights the G4's deficiencies for 'serious' work. Which, I thought, Macs were used for.</strong><hr></blockquote>
Define "serious work." Apparently the entire team responsible for the development of <a href="
; target="_blank">Perl</a> - including Larry Wall - has switched to TiBooks running OS X. Gene sequencing and protein folding are both running spectacularly on the G4, and most scientists are happy with the current offerings, because AltiVec is pure gold to them and the G4's performance/watt ratio is very attractive for clustering. 2D graphics work is quite serious. For that matter, work by an acclaimed writer or social critic tapped out on an iBook is serious.
But all that aside, remember the original goal of the Macintosh: It's "the computer for the rest of us:" consumers and non-technical people. A tradeoff that favors the average Joe is a very Mac-like tradeoff to make. The original Macintosh barely had the horsepower to run its own GUI, but nevertheless it shipped with a GUI, because that's where the machine's real capacity for empowerment lay. Everything else is gravy.
Actually, I can't think of a time when Macs were ever used for 3D graphics rendering. It used to be that the 3D
was done on a Mac - slowly, but with access to other applications, and with a good interface - and then sent to an SGI Onyx or the like to do the grunt work. So as far as you're concerned the new towers are a change for the
- they actually
render scenes without falling over now, even if it takes them a while. But a 3D designer who did their design work on a PowerMac and leaned on an Athlon-powered Linux box (or cluster) for rendering would just be using Macs the way they've always been used in 3D.
The 970 will probably change that. It'll be interesting to watch.
[ 10-26-2002: Message edited by: Amorph ]</p>
Reply 31 of 34
October 26, 2002 1:24PM
It is easy to be critical of Apple's hardware prices when the cost of developing and maintaining an operating system are taken too lightly. One post mentioned that makers of Windows PCs must pay a license fee, implying that a similar dollar amount for Apple would be sufficient to cover OS X costs. Not so. The cost to Apple is much higher.
Microsoft's license fee is low because of sheer numbers of licenses. There are about 18 times as many PCs going out with Windows XP than Mac OS X. So, Microsoft can keep the license fee for many computers fairly low. Even though Microsoft has a larger OS development budget than Apple, it is not 18 times as much. If a cost analysis were to publish how much Apple must tack on to every Mac sold just to support all its OS activities, it would be well over 200 dollars. That is my guess.
Reply 32 of 34
October 26, 2002 2:04PM
NO it wouldn't. It wouldn't be radically different from M$'s fee per machine. If Apple claims otherwise, it's basically a standard corporate bullsiht line. How many people have been working on OSX? Add their salaries multiply by the number of years in development, that is it, period, end of story. No component costs, zero inventory and negligible shipping. Printed and packaged discs cost what? A dollar. M$ is rich for a reason.
OSX is not a (substantial) extra expense over and above what other box builders incur, no matter what Apple tells you. What it is, is an essential part of the development of their total package. Money spent on OSX is not seperate from their other business, to be added on at the end as an excuse for poor price performance, it runs in step with their hardware development and contributes to it. Builders of windows PC's have to do similar testing of windows packages with their PC's, they buy the OS, but they still have to spend money making sure it all works well together. Apple's costs may be a little higher and divided differently, but building a quality PC and licencing an OS for it is not so much cheaper than doing the equivalent within Apple, really, not so much so that PC's rountinely undercut equivalent Apple machines by 50% or more.
Apple has badly misjudged the direction of computer prices and they're scrambling to make any excuse they can. Personally, if the machines performed like the expensive machines that they are, while still on the wrong side of too high, many price complaints would disappear rather quickly. Eventually though, they'll have to come down in price to match the rest of the industry. No one is saying they have to build bargain basement, stripped down do-it-yourself hot-rods with big performance and few features. They can stay in the high-end with their consumer and pro machines, but the performance and the price has to be a little more realistic and a little more accessible.
Otherwise, the market-share talk is empty talk.
Reply 33 of 34
October 26, 2002 2:07PM
Time to play both sides of the fence
[quote]I won't buy a tower because, in my opinion, they're out of date. Not good enough, not competitiven for the premium price. <hr></blockquote>
Actually, the Dual 867's are a pretty good bargain. My plan was to wait until this time next year before buying a new machine, but I'm pretty tempted by them, especially with a Superdrive for $1899. I can hawk my QS733 to some schnook on eBay for $1000, which puts my out of pocket expenses at ~$900 for a machine which doubles the performance of my current machine.
I just did a little experiment at the Dell website. I chose a Dimension 8250 w/ P4 2.66GHz processor, and tried to get it to match the dual gig PowerMac as closely as possible (looking at benchmarks at <a href="
; target="_blank"> blanos.com </a>, I'm guessing those two machines are comparable, at least for my purposes). I came up with a cost of $2037. Since the Dell doesn't have an option for an ATI 9000 video card, I dropped the video on the PM to a GF4MX, which puts its cost at $2399. So the question is, is the experience of OSX worth $362, a %20 premium? Personally, I think it is.
[quote] Besides, on consumer-grade motherboards, the MHz Myth becomes even more of one because the software doesn't tax the CPU, <hr></blockquote>
Actually, that may be true for Windows and OS9, but it's not true for OSX. All of the extra baggage that comes with Quartz can bog down any CPU < 1 GHz G4 (I'm guessing, since there's no single proc GHz G4 on the market. IME, scrolling a long HTML page in Chimera, IE, or Mozilla can bring my QS733 to it's knees. On any one of the longer pages here at AI, the thumb will take upwards of a second to catch up with the mouse cursor if you quickly scroll the page from top to bottom. On the dual 867's and GHz PMs I've played with at the Biltmore Apple store, the thumb only lags for a split second-- not really noticable. I'm guessing that a single GHz G4 would be in the same ballpark.)
Unfortunately, this is probably one of the few tests that Joe Schmoe is going to perform when comparing machines. PCs-- no lag. Macs-- lag. Therefore, the PC is faster.
There are similar bottlenecks for iPhoto, iMovie, and even iTunes (I've got 3500 songs in iTunes, and the lag scrolling the list of songs in my library is long enough to be annoying). Unfortunately, Apple's consumer software is just a bit too far ahead of the hardware. If my guess about a single GHz G4 is right, though, I'd imagine the problems will disappear with the next update to the iMacs/eMacs, whenever that is (hopefully not too long from now-- the iMacs really haven't been updated proc.-wise in ten months. That's too long.)
Having said all that, if a non-poweruser were to ask me what kind of computer they should buy, I'd tell them to wait until the next rev of the iMacs, and buy a 17" model. I'd guess it won't be long, and it's certainly better than anything PCs have to offer.
Reply 34 of 34
October 26, 2002 4:12PM
[quote]Originally posted by snoopy:
<strong>One post mentioned that makers of Windows PCs must pay a license fee, implying that a similar dollar amount for Apple would be sufficient to cover OS X costs. Not so. The cost to Apple is much higher....
If a cost analysis were to publish how much Apple must tack on to every Mac sold just to support all its OS activities, it would be well over 200 dollars. That is my guess.</strong><hr></blockquote>
The amount it costs Apple probably can't be easily verified. But does anyone have any objective data on the average fee paid by PC builders for the MS OS license, MS software (i.e. Office, etc.), and additional software pre-installed on the average PC?