<strong>All you cheap computer market share people have to remember some things. Apple (I believe) is not only looking to gain market share, but get a certain kind of Switcher. Apple consumers are smarter, better educated, and more wealthy. Selling an olf iMac to grandma for little to know profit, means she does not have a lot of money and will probably die before she would need to upgrade. What is the point.</strong><hr></blockquote>
Cute. But its not abot lowering your prices. Its about introducing a product to fit a new market.
Apple is completely having the wrong product (eMac) at the wrong price. If this is Apple introduction machine, then they are, oh about $500 off.
They can easily introduce a product at $500 that is headless and not very much upgradable. Not cheap, but they need to address the market because the market is changing on them. Like now.
I've been saying it for a while now - 10-15% price cut across the board. Lower margins, gain market/mind share. This is what Apple needs to do.
Personally, I'd buy a G3 iMac if the price were right. Ditto with the eMac or iMac FP. Actually, come January, we're going to be in the market for a new Mac. Looking at the 17" iMac FP. However, first place we'll look is used/refurbished market. Why? Price vs. performance. While we ain't about to go WinTel (got a Win98 PC already; if we need another I'll build another.), the sad fact is that the current crop of Macs is woefully underpowered or over-priced, depending on how one looks at it.
Considering the target market, Apple still adds value here.</strong><hr></blockquote>
Just what do you think is inside the eMacs and iMacs? Apple is still using ridiculously out-dated video cards, ponderously-slow 5400RPM hard disks, and a 100MHz External Bus (the standard from 1999). If you think Apple honestly stands for quality components, then there's something wrong with you.
[[[So Gateway can produce a machine for under $300 and make a profit? hmmm.]]]
You can bet that they're NOT making a profit. Some cordless phones can cost that much lol. Gateway is about done anyway.
--
Ed M.
[[[Gee, duh...I wonder if that's why their marketshare eroded from the teens to 3%...]]]
Customer base is expanding, not shrinking.
[[[They can easily introduce a product at $500 that is headless and not very much upgradable. Not cheap, but they need to address the market because the market is changing on them. Like now. ]]]
You people really kill me. You should all read the paper, listen to the news and do your research. Don't you see?? NONE of the cheepee -PEE-Sees are selling. The only PC manufacturer turning a profit is Dull and that's questionable because at the lass minute they decided to alter the way they report earnings otherwise they would have reported a nice hefty loss of over billion dollars. So, tell me, these cheap PC's are the answer?? they've been sub 500 bucks for quite a while and they still aren't flying off the shelves... Sheesh!\t
[[[I've been saying it for a while now - 10-15% price cut across the board. Lower margins, gain market/mind share. This is what Apple needs to do. ]]]
It *might* work for [Apple], but it certainly isn't working for the other OEM's other than Dull.\t
\t
BTW, MacConnection has some pretty decent prices on G3 iMacs
Just what do you think is inside the eMacs and iMacs? Apple is still using ridiculously out-dated video cards, ponderously-slow 5400RPM hard disks, and a 100MHz External Bus (the standard from 1999). If you think Apple honestly stands for quality components, then there's something wrong with you.</strong><hr></blockquote>
You are equating performance with reliability. I am not.
[[[I've been saying it for a while now - 10-15% price cut across the board. Lower margins, gain market/mind share. This is what Apple needs to do. ]]]
It *might* work for [Apple], but it certainly isn't working for the other OEM's other than Dull.\t
\t
BTW, MacConnection has some pretty decent prices on G3 iMacs
--
Ed<hr></blockquote>
Apples margins are currently 27-30%. Do you really think that they can expect to make 27 to 30 cents off of every dollar in todays economy? Really, drop the price of the G3 iMac in particular. I guarantee that the R&D costs have long since been made up. Push altivec optimizations to maximize the G4s potential, and to truly distinguish it from the G3.
But hey, what do I know? I'm just a consumer in the market for a 'new' Mac...
[quote]You are equating performance with reliability. I am not.<hr></blockquote>
Ah, well the quality isn't fantastic either. Both Macs and PCs are slammed together in Chinese factories, with most of the same components. Some junk PC manufacturers might cut even more corners, but my grey box PC has been more reliable than my family's past three Macs (excluding Windows 98 problems).
You know, your comment made me think about this. Gateway is selling their machine for $399, I wonder how much of that goes to MS. $100? So Gateway can produce a machine for under $300 and make a profit? hmmm.
I think OSX is awesome too, but how do I convince a Windows User its better to check email and surf the net for an extra $700?</strong><hr></blockquote>
In retailing, this is known as a "loss leader" - a product that you deliberately sell at a loss in order to get attention and traffic. Once in the store, people either a) realize the cheapo is junk and instead buy something more expensive that makes a profit for the store, or b) buy enough stuff with the cheapo to make the store an overall profit anyway.
My suspicion is that Gateway hopes they sell exactly zero of these. They're an advertising gimmick to get suckers in the door.
Actually, they produce more hatchbacks and minivans at a VERY cheap price in the European markets compared to the US. For the US market the charge a very nice premium. Wanna now how much a new Mercedes minivan cost in Spain? Guess?
Actually, they produce more hatchbacks and minivans at a VERY cheap price in the European markets compared to the US. For the US market the charge a very nice premium. Wanna now how much a new Mercedes minivan cost in Spain? Guess?
I couldn't find a price at that link, but besides, it's apples and oranges anyway. I'm talking about brand identity. To North American buyers, a $10,000 Mercedes dilutes the brand. So would a $400 Mac.
<strong>I've been saying it for a while now - 10-15% price cut across the board. Lower margins, gain market/mind share. This is what Apple needs to do.
Just my opinion, and subject to criticism.
(tig)</strong><hr></blockquote>
Okay.
The problem with this is that last month Apple made no money. It clearly can't afford this. (4 billion bucks is nothing. They could spend it in a week if they wanted to). They obviously need to lower prices but they can't do that because they spend too much money innovating. They have no other choice because we all saw what happened when Apple stopped innovating and tried to compete on price a few years back. You are really kidding yourself if you think Apple can compete with PC makers AND keep producing really cool operating systems, software, and technology. One of the best decisions Apple has done is to kill free iTools. The more Apple can do to cut costs, the cheaper Macs will be for us all.
Apples margins are currently 27-30%. Do you really think that they can expect to make 27 to 30 cents off of every dollar in todays economy? Really, drop the price of the G3 iMac in particular. I guarantee that the R&D costs have long since been made up.</strong><hr></blockquote>
That's not the point.
Apple can't raise and lower prices - the market will freak out. If Apple plans to have higher-end components in the iMac/iBook in 6-12 months, they need to find a way to hold their prices and add value to the systems (witness all of the bundling options now.)
If you look at other manufacturers, products only last a few months. Then they get tossed and replaced. Remember the 17 gazillion Performa models? Everybody hated that.
Now, we've got a handful of models at more-or-less set price points that upgraded periodically to improve their value. Now, a case might be made that the G3 classic CRT iMac should be that item, but I think the eMac is pretty close to that now - complete system.
Personally, I'd like to see the eMac down to $899 as a standard price point, and the iMacs drop $100 and put in 17" LCD across the board.
First, I suspect that Apple sells the snow iMac very cheap in bulk deals to schools and institutions. They keep the list price up and specs down to avoid competition with the LCD iMac.
Second, it is not known to us how much elasticity there is in the Macintosh market. Presumably, Apple knows this. In other words, if Apple dropped the price of the eMac to $500 would they really sell a whole lot more Macs all together? Instead they might sell more emacs but mostly at the expense of sales of LCD iMacs. We don't have the data.
Having said all that, it would be interesting if Apple could sell an eMac for about $600. They could include a stripped down version of the OS to avoid losing sales of professional systems. In other words, drop the server aspects of the OS, maybe drop some things needed by FCP, Quark, In Design, etc. They could include AppleWorks, Mail and a free browser so that the mythical average user could get their basic needs met out of the box. iTunes, iCal and iMovie would ice the cake.
The main reason we don't see this, of course, is because Apple doesn't license its OS. If they licensed the OS then some company would take a shot at survival by filling this niche.
"You people really kill me. You should all read the paper, listen to the news and do your research. Don't you see?? NONE of the cheepee -PEE-Sees are selling."
Perhaps THEY aren't. But Apple's 'desirable' desktops aren't either. 'power'Mac sales clobbered. iMac flat panel sales are flat. eMac and iMac original sales disguising poor sales there. Apple's cheapo Mac aint cheapo enough or well specced enough. And their desktops aren't cheap enough.
This 'stagnation' isn't quite due to the economy. A couple of years ago Apple suffered similar sales malaise from overpricing the Cube. This 'premium' approach is only acceptable to the point that 'switchers' and Mac wannabe upgraders say, 'No. Too much. Too little. Wallet. In pocket.' I'm not saying Apple products shouldn't carry a premium...but where are the premium specs to go with? Define the 'point'.
Dell or Gateway do a £399? Apple could do a £499. Do they? Apple's cheapest Tower? Don't look. So people wait until a decent cpu comes along to justify the price.
And laptops? iBook...selling okay. Price reasonable. But not aggressive. Powerbook, massively overpriced for a mid-range laptop and selling poorly.
"The only PC manufacturer turning a profit is Dull and that's questionable because at the lass minute they decided to alter the way they report earnings otherwise they would have reported a nice hefty loss of over billion dollars. So, tell me, these cheap PC's are the answer??"
Underspecced and overpriced. They've got the advantage that they're selling out of date cpu, memory, motherboards and graphic card specs. They've got hefty premiums for their stunning plastic and 'X'. If they can't make a profit on that...then they're really in trouble.
They also have the advantage of storming out the gates with great designs but they fail to get aggressive with spec updates or price reductions quick enough. One a year isn't good enough.
"...they've been sub 500 bucks for quite a while and they still aren't flying off the shelves... Sheesh!"
Well. Like you say. The PC market is flooded. But Apple have 95% of the market to aim at. Dell haven't got that advantage and still make a 'profit'.
The flat panel iMac sums up everything that's wrong with Apple. They still don't get it. Apple execs still think the economy (or Quark) is the reason 'power'Macs are selling poorly?
Not on anything cheaper than the midrange PowerMac. The iMac's margins started out below 10%, and they're probably still well below 20%.
[quote]<strong>Do you really think that they can expect to make 27 to 30 cents off of every dollar in todays economy?</strong><hr></blockquote>
Revenue becomes less important during hard economic times?!
Look at their SEC filings. They've been just about breaking even operationally (i.e., product sales vs. the expenses of running the company). Most of their profits have been due to returns on their carefully managed investments. Work out the percentage of gross profits vs. operating expenses - is it anywhere near 27%? Given that, what makes you think they can suddenly slash their prices? They'd go directly into the red, and if the price cut eliminated any profit margin on the iBook and iMac they wouldn't come out.
The sales on their more profitable lines are soft, so they are depending on the more slender revenue from the consumer lines. They could lower prices on the higher end lines to stimulate sales, but they have much less room to move on the low end. Nevertheless, as Fred Anderson indicated at the beginning of this year, they're moving as much as they can at the low end, and taking the hit to their average margins to do so.
[quote]<strong>Really, drop the price of the G3 iMac in particular. I guarantee that the R&D costs have long since been made up. Push altivec optimizations to maximize the G4s potential, and to truly distinguish it from the G3.</strong><hr></blockquote>
I'd rather they brought the eMac down near the iMac's range and retired the G3 iMac. I don't see $399 PCs - after a $100 rebate, which is offered because the overwhelming majority of people never mail them in, and without a monitor - really lighting up the market. Consumers can smell desperation. Some people might snatch this up, but I doubt it will do anything for Gateway.
Besides, by the time you've bought the Gateway and a monitor and forgotten to mail in the rebate, how much have you saved over an iMac? People have accepted a $100 differential in this thread, and the iMac isn't that far from there.
Well how do these newly announced price drops on the iBook fit into this? The iBook is arguably Apples most price competitive product, and they just cut off $200 from all the models plus a modest speed bump. Are they gonna start doing this to all their product lines?
<strong>You people really kill me. You should all read the paper, listen to the news and do your research. Don't you see?? NONE of the cheepee -PEE-Sees are selling. The only PC manufacturer turning a profit is Dull </strong><hr></blockquote>
Would you mind notifying my customers of that?
The cheap PC's are flying off the shelves, I just sold 40 of these to a customer that was up to this point all Mac,
I am selling these as fast as they are arriving, and it beats the shit out of the iMac and eMac, and of about 70 sold, only two have been defective and one of those was damaged by UPS.
Also nice, is that system has a higher retailer margin than the iMac, eMac or iBook and is only a few bucks less than the margin on the low end "Concord" G4.
You also mention that Dell is the only profitable PC maker at the moment, what does Dell sell?
Cheap PC's,
If Dell is profitable that strongly suggests people are buying cheap PC's,
I am really glad that cheap high quality PC's are avaiable, it lets me hold onto my Macintosh customers when they switch to Windows.
Comments
<strong>All you cheap computer market share people have to remember some things. Apple (I believe) is not only looking to gain market share, but get a certain kind of Switcher. Apple consumers are smarter, better educated, and more wealthy. Selling an olf iMac to grandma for little to know profit, means she does not have a lot of money and will probably die before she would need to upgrade. What is the point.</strong><hr></blockquote>
Cute. But its not abot lowering your prices. Its about introducing a product to fit a new market.
Apple is completely having the wrong product (eMac) at the wrong price. If this is Apple introduction machine, then they are, oh about $500 off.
They can easily introduce a product at $500 that is headless and not very much upgradable. Not cheap, but they need to address the market because the market is changing on them. Like now.
Personally, I'd buy a G3 iMac if the price were right. Ditto with the eMac or iMac FP. Actually, come January, we're going to be in the market for a new Mac. Looking at the 17" iMac FP. However, first place we'll look is used/refurbished market. Why? Price vs. performance. While we ain't about to go WinTel (got a Win98 PC already; if we need another I'll build another.), the sad fact is that the current crop of Macs is woefully underpowered or over-priced, depending on how one looks at it.
Just my opinion, and subject to criticism.
(tig)
I think if Apple were to revise their lineup like this:
iMac $799 -> $599 or $649
eMac $1099 -> $999
The'd be competitive. Especially when you consider the following:
Gateway:
1. Runs Windows (yuck)
2. Probably made of cheap junk components.
3. Not "all-in-one"
Considering the target market, Apple still adds value here.
<strong>
No. They should stick with the 799/1099/1199 iMac Classic/eMac/iMac lineup. Their OS is worth 399 alone.</strong><hr></blockquote>
nah. OS X is only worth $129.
Prices should fall by about 10% to at least compete with the rest of the computer makers for the X'mas period.
Let's see what Apple got up its sleeve on Nov 6. I am really very excited.
<strong>
Gateway:
1. Runs Windows (yuck)
2. Probably made of cheap junk components.
3. Not "all-in-one"
Considering the target market, Apple still adds value here.</strong><hr></blockquote>
Just what do you think is inside the eMacs and iMacs? Apple is still using ridiculously out-dated video cards, ponderously-slow 5400RPM hard disks, and a 100MHz External Bus (the standard from 1999). If you think Apple honestly stands for quality components, then there's something wrong with you.
You can bet that they're NOT making a profit. Some cordless phones can cost that much lol. Gateway is about done anyway.
--
Ed M.
[[[Gee, duh...I wonder if that's why their marketshare eroded from the teens to 3%...]]]
Customer base is expanding, not shrinking.
[[[They can easily introduce a product at $500 that is headless and not very much upgradable. Not cheap, but they need to address the market because the market is changing on them. Like now. ]]]
You people really kill me. You should all read the paper, listen to the news and do your research. Don't you see?? NONE of the cheepee -PEE-Sees are selling. The only PC manufacturer turning a profit is Dull and that's questionable because at the lass minute they decided to alter the way they report earnings otherwise they would have reported a nice hefty loss of over billion dollars. So, tell me, these cheap PC's are the answer?? they've been sub 500 bucks for quite a while and they still aren't flying off the shelves... Sheesh!\t
[[[I've been saying it for a while now - 10-15% price cut across the board. Lower margins, gain market/mind share. This is what Apple needs to do. ]]]
It *might* work for [Apple], but it certainly isn't working for the other OEM's other than Dull.\t
\t
BTW, MacConnection has some pretty decent prices on G3 iMacs
--
Ed
<strong>
Just what do you think is inside the eMacs and iMacs? Apple is still using ridiculously out-dated video cards, ponderously-slow 5400RPM hard disks, and a 100MHz External Bus (the standard from 1999). If you think Apple honestly stands for quality components, then there's something wrong with you.</strong><hr></blockquote>
You are equating performance with reliability. I am not.
[[[I've been saying it for a while now - 10-15% price cut across the board. Lower margins, gain market/mind share. This is what Apple needs to do. ]]]
It *might* work for [Apple], but it certainly isn't working for the other OEM's other than Dull.\t
\t
BTW, MacConnection has some pretty decent prices on G3 iMacs
--
Ed<hr></blockquote>
Apples margins are currently 27-30%. Do you really think that they can expect to make 27 to 30 cents off of every dollar in todays economy? Really, drop the price of the G3 iMac in particular. I guarantee that the R&D costs have long since been made up. Push altivec optimizations to maximize the G4s potential, and to truly distinguish it from the G3.
But hey, what do I know? I'm just a consumer in the market for a 'new' Mac...
(tig)
Ah, well the quality isn't fantastic either. Both Macs and PCs are slammed together in Chinese factories, with most of the same components. Some junk PC manufacturers might cut even more corners, but my grey box PC has been more reliable than my family's past three Macs (excluding Windows 98 problems).
<strong>
You know, your comment made me think about this. Gateway is selling their machine for $399, I wonder how much of that goes to MS. $100? So Gateway can produce a machine for under $300 and make a profit? hmmm.
I think OSX is awesome too, but how do I convince a Windows User its better to check email and surf the net for an extra $700?</strong><hr></blockquote>
In retailing, this is known as a "loss leader" - a product that you deliberately sell at a loss in order to get attention and traffic. Once in the store, people either a) realize the cheapo is junk and instead buy something more expensive that makes a profit for the store, or b) buy enough stuff with the cheapo to make the store an overall profit anyway.
My suspicion is that Gateway hopes they sell exactly zero of these. They're an advertising gimmick to get suckers in the door.
[ 11-01-2002: Message edited by: TJM ]</p>
Should Apple introduce a new Mac system for $399? <hr></blockquote>
Should Mercedes introduce a new car for $9,990?
(Whoo-hoo! 50 posts, I'm a member!)
[ 11-01-2002: Message edited by: Ensign Pulver ]</p>
<strong>
Should Mercedes introduce a new car for $9,990?
(Whoo-hoo! 50 posts, I'm a member!)
[ 11-01-2002: Message edited by: Ensign Pulver ]</strong><hr></blockquote>
Actually, they produce more hatchbacks and minivans at a VERY cheap price in the European markets compared to the US. For the US market the charge a very nice premium. Wanna now how much a new Mercedes minivan cost in Spain? Guess?
<a href="http://www.mercedes-benz.es/index.asp?menu=2235"; target="_blank">http://www.mercedes-benz.es/index.asp?menu=2235</a>;
<strong>
Actually, they produce more hatchbacks and minivans at a VERY cheap price in the European markets compared to the US. For the US market the charge a very nice premium. Wanna now how much a new Mercedes minivan cost in Spain? Guess?
<a href="http://www.mercedes-benz.es/index.asp?menu=2235"; target="_blank">http://www.mercedes-benz.es/index.asp?menu=2235</a></strong><hr></blockquote>;
I couldn't find a price at that link, but besides, it's apples and oranges anyway. I'm talking about brand identity. To North American buyers, a $10,000 Mercedes dilutes the brand. So would a $400 Mac.
<strong>I've been saying it for a while now - 10-15% price cut across the board. Lower margins, gain market/mind share. This is what Apple needs to do.
Just my opinion, and subject to criticism.
(tig)</strong><hr></blockquote>
Okay.
The problem with this is that last month Apple made no money. It clearly can't afford this. (4 billion bucks is nothing. They could spend it in a week if they wanted to). They obviously need to lower prices but they can't do that because they spend too much money innovating. They have no other choice because we all saw what happened when Apple stopped innovating and tried to compete on price a few years back. You are really kidding yourself if you think Apple can compete with PC makers AND keep producing really cool operating systems, software, and technology. One of the best decisions Apple has done is to kill free iTools. The more Apple can do to cut costs, the cheaper Macs will be for us all.
<strong>
Apples margins are currently 27-30%. Do you really think that they can expect to make 27 to 30 cents off of every dollar in todays economy? Really, drop the price of the G3 iMac in particular. I guarantee that the R&D costs have long since been made up.</strong><hr></blockquote>
That's not the point.
Apple can't raise and lower prices - the market will freak out. If Apple plans to have higher-end components in the iMac/iBook in 6-12 months, they need to find a way to hold their prices and add value to the systems (witness all of the bundling options now.)
If you look at other manufacturers, products only last a few months. Then they get tossed and replaced. Remember the 17 gazillion Performa models? Everybody hated that.
Now, we've got a handful of models at more-or-less set price points that upgraded periodically to improve their value. Now, a case might be made that the G3 classic CRT iMac should be that item, but I think the eMac is pretty close to that now - complete system.
Personally, I'd like to see the eMac down to $899 as a standard price point, and the iMacs drop $100 and put in 17" LCD across the board.
First, I suspect that Apple sells the snow iMac very cheap in bulk deals to schools and institutions. They keep the list price up and specs down to avoid competition with the LCD iMac.
Second, it is not known to us how much elasticity there is in the Macintosh market. Presumably, Apple knows this. In other words, if Apple dropped the price of the eMac to $500 would they really sell a whole lot more Macs all together? Instead they might sell more emacs but mostly at the expense of sales of LCD iMacs. We don't have the data.
Having said all that, it would be interesting if Apple could sell an eMac for about $600. They could include a stripped down version of the OS to avoid losing sales of professional systems. In other words, drop the server aspects of the OS, maybe drop some things needed by FCP, Quark, In Design, etc. They could include AppleWorks, Mail and a free browser so that the mythical average user could get their basic needs met out of the box. iTunes, iCal and iMovie would ice the cake.
The main reason we don't see this, of course, is because Apple doesn't license its OS. If they licensed the OS then some company would take a shot at survival by filling this niche.
Perhaps THEY aren't. But Apple's 'desirable' desktops aren't either. 'power'Mac sales clobbered. iMac flat panel sales are flat. eMac and iMac original sales disguising poor sales there. Apple's cheapo Mac aint cheapo enough or well specced enough. And their desktops aren't cheap enough.
This 'stagnation' isn't quite due to the economy. A couple of years ago Apple suffered similar sales malaise from overpricing the Cube. This 'premium' approach is only acceptable to the point that 'switchers' and Mac wannabe upgraders say, 'No. Too much. Too little. Wallet. In pocket.' I'm not saying Apple products shouldn't carry a premium...but where are the premium specs to go with? Define the 'point'.
Dell or Gateway do a £399? Apple could do a £499. Do they? Apple's cheapest Tower? Don't look. So people wait until a decent cpu comes along to justify the price.
And laptops? iBook...selling okay. Price reasonable. But not aggressive. Powerbook, massively overpriced for a mid-range laptop and selling poorly.
"The only PC manufacturer turning a profit is Dull and that's questionable because at the lass minute they decided to alter the way they report earnings otherwise they would have reported a nice hefty loss of over billion dollars. So, tell me, these cheap PC's are the answer??"
Underspecced and overpriced. They've got the advantage that they're selling out of date cpu, memory, motherboards and graphic card specs. They've got hefty premiums for their stunning plastic and 'X'. If they can't make a profit on that...then they're really in trouble.
They also have the advantage of storming out the gates with great designs but they fail to get aggressive with spec updates or price reductions quick enough. One a year isn't good enough.
"...they've been sub 500 bucks for quite a while and they still aren't flying off the shelves... Sheesh!"
Well. Like you say. The PC market is flooded. But Apple have 95% of the market to aim at. Dell haven't got that advantage and still make a 'profit'.
The flat panel iMac sums up everything that's wrong with Apple. They still don't get it. Apple execs still think the economy (or Quark) is the reason 'power'Macs are selling poorly?
S'funny, the iPod seems to be selling well...
Lemon Bon Bon
<strong>
Apples margins are currently 27-30%.
</strong><hr></blockquote>
On the higher end stuff, maybe.
Not on anything cheaper than the midrange PowerMac. The iMac's margins started out below 10%, and they're probably still well below 20%.
[quote]<strong>Do you really think that they can expect to make 27 to 30 cents off of every dollar in todays economy?</strong><hr></blockquote>
Revenue becomes less important during hard economic times?!
Look at their SEC filings. They've been just about breaking even operationally (i.e., product sales vs. the expenses of running the company). Most of their profits have been due to returns on their carefully managed investments. Work out the percentage of gross profits vs. operating expenses - is it anywhere near 27%? Given that, what makes you think they can suddenly slash their prices? They'd go directly into the red, and if the price cut eliminated any profit margin on the iBook and iMac they wouldn't come out.
The sales on their more profitable lines are soft, so they are depending on the more slender revenue from the consumer lines. They could lower prices on the higher end lines to stimulate sales, but they have much less room to move on the low end. Nevertheless, as Fred Anderson indicated at the beginning of this year, they're moving as much as they can at the low end, and taking the hit to their average margins to do so.
[quote]<strong>Really, drop the price of the G3 iMac in particular. I guarantee that the R&D costs have long since been made up. Push altivec optimizations to maximize the G4s potential, and to truly distinguish it from the G3.</strong><hr></blockquote>
I'd rather they brought the eMac down near the iMac's range and retired the G3 iMac. I don't see $399 PCs - after a $100 rebate, which is offered because the overwhelming majority of people never mail them in, and without a monitor - really lighting up the market. Consumers can smell desperation. Some people might snatch this up, but I doubt it will do anything for Gateway.
Besides, by the time you've bought the Gateway and a monitor and forgotten to mail in the rebate, how much have you saved over an iMac? People have accepted a $100 differential in this thread, and the iMac isn't that far from there.
[ 11-02-2002: Message edited by: Amorph ]</p>
<strong>You people really kill me. You should all read the paper, listen to the news and do your research. Don't you see?? NONE of the cheepee -PEE-Sees are selling. The only PC manufacturer turning a profit is Dull </strong><hr></blockquote>
Would you mind notifying my customers of that?
The cheap PC's are flying off the shelves, I just sold 40 of these to a customer that was up to this point all Mac,
<a href="http://www.compaq.com/products/desktops/d315mct/"; target="_blank">http://www.compaq.com/products/desktops/d315mct/</a>;
I am selling these as fast as they are arriving, and it beats the shit out of the iMac and eMac, and of about 70 sold, only two have been defective and one of those was damaged by UPS.
Also nice, is that system has a higher retailer margin than the iMac, eMac or iBook and is only a few bucks less than the margin on the low end "Concord" G4.
You also mention that Dell is the only profitable PC maker at the moment, what does Dell sell?
Cheap PC's,
If Dell is profitable that strongly suggests people are buying cheap PC's,
I am really glad that cheap high quality PC's are avaiable, it lets me hold onto my Macintosh customers when they switch to Windows.
And more are switching now than ever before,