<strong>That's not so far out there, negativity aside.
..(one now distilled nearly to its most fanatical followers)... </strong><hr></blockquote>
I agree with your post completely. The thing that troubles me the most is this statement and I have realized this over the last few days, it is true.
People, the Macintosh group is getting smaller and smaller. At the current trend rate (unless new numbers show the bleeding differently) Apple will be another Commodore, NeXT, Be in a few years - ought of business or bought out.
Sad. I've helped 4 people now to switch since September '02 or so.
Apple has got to change somewhere. It got to address this. New products, new prices, new something, and it has to been real soon.
Apple has got to change somewhere. It got to address this. New products, new prices, new something, and it has to been real soon.</strong><hr></blockquote>
mm, I guess you missed the SuperDrive PB update, it addressed most of your issues.
the $399 PC after rebate... I'm going to say about $450 since a LARGE number of people don't send in their rebates.. so they figure they have about $450 to work with.
About $35 will go to Microsoft for licensing XP Home.. do you really think they pay retail? Of course not...
Case manufacturered will cost them $10 or less (probably less).
Chip from intel celeron 1.8 is probably around $60 in lots of 1000 for them.
The mobo made by them with video and sound integrated will be less than $35.
40GB drive is no doubt a 5400 clunker at about $35. (remember these are their approximate costs)
128ram.. haha.. $10 or less.
CD burner $30 their price.
They have an arrangement with AOL I'm sure... probably less than $50 for the year with AOL... (you have to remember AOL Marketing currently spews out over $500 per customer aquisition.
$035 to microsoft
$010 for the case
$060 for the Intel Celeron
$035 for mobo costs
$035 for 40GB drive
$010 for 128 ram
$030 for CDRW
$050 for AOL
$030 for marketing
$020 for packaging, kb, mouse, manuals, etc, etc
$315 or so if my calculations are correct. Give a leeway of $30 or so either way. They're still making money on these things. Of course I might have missed a few things.. like I'm not sure of modem or ethernet was installed (modem probably is)... the licensing for other programs if in there, $3 for a floppy... $3 for al the cables... $5 for the powersupply... etc
mm, I guess you missed the SuperDrive PB update, it addressed most of your issues.</strong><hr></blockquote>
A superdrive in the powerbook is not going to turn 3% marketshare into 20% marketshare.
Apple needs to eat it own dogfood and "think different" if it wants to survive. Jobs is milking the Macintosh for all its worth and its future is starting to look like the failures of Be, NeXT and Commodore. Cute little niche computers that do a tiny little thing. They all failed.
Apple needs to introduce a computer in the sub $500 space if it wants to increase its marketshare. Even if the margins are 5%.
2/3rds gone, no not yet. Maybe when this has bottomed out, but I doubt it would go that far. You did pick a pretty large number to be on the safe side for your argument, but the changes don't need to be so drastic, even a 10% to 20% change would be a big effect on the market. Go to a store and look at Computer Shopper compare that mag to the phone book size thing it used to be. Many of those companies have switched to web based sales, but several are gone. Go to a Compusa and see who is there and not there anymore.
Gateway on the way out.
eMachines on life support
Packard Bell gone
IBM left the PC consumer market
Acer no longer in the US market, I think they are still in the Asian ones
If Compaq hadn't merged with HP they would be on this list.
Toshiba has a much reduced presence on the desktop side
Sun in trouble
Silicon Graphics in deep trouble
On the parts side
Creative Labs loosing money
3Com loosing money
Adaptec loosing money
Micron Technology loosing money
ATI loosing money
Visiontek has had their assets seized by their creditors
Number 9 gone
Diamond bought video chipset maker S3, then it left the video card business and modem business, changed their name to Sonicblue and is loosing money
IBM sold its hard drive division which has been loosing money for about 2 years to Hitachi
Quantum sold its hard drive division to Maxstor and now mainly sells tape drives is loosing money
Maxstor is loosing money
Hynix should have died a while ago.
AMD in trouble, may survive
Transmeta bleeding
I haven't listed the many of the Asian and European companies, I don't have the numbers for them. Several of these companies will turnaround and survive. Some will be bought out. Some won't survive.
Your contention that Gateway can make money is true as long as people working at gateway are willing to not pay their house payments, car payments, feed and clothe their children, walk to work barefoot, and skip a few meals a day such as breakfast, lunch and dinner.
<strong>If Compaq hadn't merged with HP they would be on this list.</strong><hr></blockquote>
I disagree, but that is just a matter of opinion and I don't think the merger was a bad thing
[quote]Originally posted by Frost:
<strong>Toshiba has a much reduced presence on the desktop side</strong><hr></blockquote>
They never had much of one to begin with
[quote]Originally posted by Frost:
<strong>Diamond bought video chipset maker S3, then it left the video card business </strong><hr></blockquote>
No, S3 is alive and well and they were bought by VIA, S3 continues to make graphics cards and their graphics cores are intergrated into chipsets made by VIA
As of June 30 Gateway's total assets were 2.6B. This includes $500 M in plant and property, which would come into play if they declare backruptcy. So they have about $2.1Billion. Total liablity is $1.Billion. Assest-libilies= $1.1 Billion. They have lost $392Million over the last 9 months. If they continue at their current pace they will be out of business in 2 years. I will admit that they do have the opportunity to turn it around in that 2 years, however if they have another bad quarter like they did last year when they lost half a billion it will come sooner.
If you notice on their website Packard Bell has no US link. They are shadow of their former self when they were 2nd or 3 largest PC manufacturer.
Acer isn't likely to go out of business anytime soon, they were just added as company whose focus has changed.
The comment on S3 was not as much as them as it was on Diamond who used to be one of the better video card companies.
Economies of scale are there for anyone who can create the neccessary scale. IF Apple, with money in the bank, and an exceedingly loyal customer base (one now distilled nearly to its most fanatical followers) finds this proposition too risky, then it's too risky for anyone. 2 out of every 3 computer makers should already be out of business by that logic. And who knows, they may be shortly, but let's keep it brief for now.
<hr></blockquote>
You define what economies of scale is, but you still don't see the picture.
EVERY company general want to be an economies of scale. BUT as we see, it doesn't happen.
Apple has 4 billion in the bank. They'll run out of money in a week. They need at least 6x that to even make an effort.
Besides that, they lack infrustucture. They would need to expand their trained staff by 3x, get 3x more factories and get 20x more stores to carry Macs.
After that Apple would need a SUPER-SUPER-SUPER- SUPER-SUPER genius to consolodate that into a consumer demand report to avoid massive sortage or surplus.
Basically it's like asking a lightweight to become a heavyweight in 3 months. It'll be costly,painful, and high risk of death from trying.
So I won't call people idiots, but com'on the shear FACT that there are RARELY any Economies of scale companies in any field gives you an idea how hard it is.
This isn't rocket science.
For people who don't believe me, read an artical on DSL disaster. They tried to be an economies of scale, and ran out of money when they defaulted on their loan, and died. You don't get 200% growth in a year and live.
This ofcourse is relative to Dell, since economies of scale is depending on your goal.
I wouldn't go so far. The more computers Apple sells, the more of them should be relatively simple "plug together" boxes using more affordable components. One hopes that an Xserve spawns a business model and attracts some business customers willing to pay for other business solutions (software, support, eBusiness, etc etc)... Apple is in a place where it's hard to get those other revenue streams, but people have gone further with less. I wouldn't characterize it as asking a lightweight to become a heavyweight, more like asking a middleweight to go light heavyweight.
Part of the problem with Apple now is that they demand a bit of a specialist's approach to sales and marketing. Because of the small (relative to all X86) market, consumer electronics and computing outlets have less of an interest in selling macs. Apple certainly wouldn't need 3X the stores: if people demanded three times the machines, more retailers would be interested in selling mac (and doing it passably well).
Apple has a good web site/channel. People get their product in a reasonable amount of time and it's a straight-forward experience. This can deal with more product, it's just a matter of warehousing and distribution.
But the big hurdle is product update and channel inventory. Apple has had well publicized battles with stale inventory, and if they were to get 3X bigger, an inability to update, PPC stall, or inventory backlog could be devasting.
What can you do to solve this problem? For one, you can't count on highly specialized AIO architectures. You need a model where updates are as simple as: unplug old component, troubleshoot new component, release updated product. In a sense, the model of a cheap mac has to be more like a powermac than an iMac. Have new GPU? Plug it in. New CPU? Plug it in. Then you can just slot in the newest features and let backlog inventory migrate down the price ladder. Not so much a case of new model roll outs anymore, and expensive re-designing, as a continuous state of updating.
The problem is how to make more or less standard "plug together" component boxen look an feel like macs when they don't have any costly fanless or slot loading gimmickry involved. And, it should be noted that these elements don't even have to cost more in terms of production costs, but they cost you in update cycles when you have to wait for a CPU process that's cool enough, or a slot loader that's as fast/flexible as tray loding competition.
I think the cube was a good try, but the price was wrong and the gee-wizz gimmicry a little too emphatic. Make a slightly bigger cube -- one optical bay, 2 HDD bays, one AGP, one daughtercard, and one PCI slot, fan cooled, front loaded drive -- price it for 999 (monitor not included) and sell a ton of them. When the PPC or GPU moves on, no need to re-jig the mobo or fret over heat characteristics, just plug in newer components and go. Older product moves down the price chain, same motherboard and case get used for a couple of years at a time. Easy peasy. If an iBook can sell for 999 including an LCD, battery, and pricier laptop components, then a straightforward cube redux can do the same without any of those added expenses.
<strong>Make a slightly bigger cube -- one optical bay, 2 HDD bays, one AGP, one daughtercard, and one PCI slot, fan cooled, front loaded drive -- price it for 999 (monitor not included) and sell a ton of them. When the PPC or GPU moves on, no need to re-jig the mobo or fret over heat characteristics, just plug in newer components and go. Older product moves down the price chain, same motherboard and case get used for a couple of years at a time.</strong><hr></blockquote>
I've been in corporate IT for 15 years now, and I don't think any medium or large companies (more than 500 employees) and going to be upgrading a video card during the relatively short lifespan of a machine. Especially if they lease them!
I think this is where Apple is going soon - with the updated service and support commitments, OS X playing well in Windows-centric networks I think the future is bright. Now, they just need to develop (or release) the product in the $599-699 ballpark.
It all goes back to creating the scale. While neither business nor consumer will might ever fully realize the expansion/upgrade potential of such a machine, Apple could. Right now they have a Mobo for CRt iMacs, one for FP iMacs, one for eMacs, and one for Powermacs. Each of the consumer Mobo's is fully integrated, so while it's cheap to make, it's costly and time consuming to update.
Having a cube redux Mobo could let [b]Apple[/i] more cheaply tailor their offerings to business or consumer or even professional needs, and to continue to make timely updates during the product life cycle.
Neither would Apple face the integration problems of the Wintelon world because they're basically using ONE single Mobo. PPC upgrdes would have to conform to it (and Apple wouldn't support them anyway) and there really are only a handful of true GPU options anyway. Everything else is built into the Mobo and the PCi is more of a courtesy for eventualities like new connectrivity standards or sound/video-capture cards.
I say even most consumers would leave well enough alone, but instead of selling 100K per quarter of each of three different enclosures and absorbing all the costs specific to each model and board, they could sell 300+K of essentially one Mobo and case with different component CPU and GPU, and possibly PCI, as suits the target market.
Comments
<strong>That's not so far out there, negativity aside.
..(one now distilled nearly to its most fanatical followers)... </strong><hr></blockquote>
I agree with your post completely. The thing that troubles me the most is this statement and I have realized this over the last few days, it is true.
People, the Macintosh group is getting smaller and smaller. At the current trend rate (unless new numbers show the bleeding differently) Apple will be another Commodore, NeXT, Be in a few years - ought of business or bought out.
Sad. I've helped 4 people now to switch since September '02 or so.
Apple has got to change somewhere. It got to address this. New products, new prices, new something, and it has to been real soon.
<strong>
Apple has got to change somewhere. It got to address this. New products, new prices, new something, and it has to been real soon.</strong><hr></blockquote>
mm, I guess you missed the SuperDrive PB update, it addressed most of your issues.
About $35 will go to Microsoft for licensing XP Home.. do you really think they pay retail? Of course not...
Case manufacturered will cost them $10 or less (probably less).
Chip from intel celeron 1.8 is probably around $60 in lots of 1000 for them.
The mobo made by them with video and sound integrated will be less than $35.
40GB drive is no doubt a 5400 clunker at about $35. (remember these are their approximate costs)
128ram.. haha.. $10 or less.
CD burner $30 their price.
They have an arrangement with AOL I'm sure... probably less than $50 for the year with AOL... (you have to remember AOL Marketing currently spews out over $500 per customer aquisition.
$035 to microsoft
$010 for the case
$060 for the Intel Celeron
$035 for mobo costs
$035 for 40GB drive
$010 for 128 ram
$030 for CDRW
$050 for AOL
$030 for marketing
$020 for packaging, kb, mouse, manuals, etc, etc
$315 or so if my calculations are correct. Give a leeway of $30 or so either way. They're still making money on these things. Of course I might have missed a few things.. like I'm not sure of modem or ethernet was installed (modem probably is)... the licensing for other programs if in there, $3 for a floppy... $3 for al the cables... $5 for the powersupply... etc
<strong>
mm, I guess you missed the SuperDrive PB update, it addressed most of your issues.</strong><hr></blockquote>
A superdrive in the powerbook is not going to turn 3% marketshare into 20% marketshare.
Apple needs to eat it own dogfood and "think different" if it wants to survive. Jobs is milking the Macintosh for all its worth and its future is starting to look like the failures of Be, NeXT and Commodore. Cute little niche computers that do a tiny little thing. They all failed.
Apple needs to introduce a computer in the sub $500 space if it wants to increase its marketshare. Even if the margins are 5%.
Gateway on the way out.
eMachines on life support
Packard Bell gone
IBM left the PC consumer market
Acer no longer in the US market, I think they are still in the Asian ones
If Compaq hadn't merged with HP they would be on this list.
Toshiba has a much reduced presence on the desktop side
Sun in trouble
Silicon Graphics in deep trouble
On the parts side
Creative Labs loosing money
3Com loosing money
Adaptec loosing money
Micron Technology loosing money
ATI loosing money
Visiontek has had their assets seized by their creditors
Number 9 gone
Diamond bought video chipset maker S3, then it left the video card business and modem business, changed their name to Sonicblue and is loosing money
IBM sold its hard drive division which has been loosing money for about 2 years to Hitachi
Quantum sold its hard drive division to Maxstor and now mainly sells tape drives is loosing money
Maxstor is loosing money
Hynix should have died a while ago.
AMD in trouble, may survive
Transmeta bleeding
I haven't listed the many of the Asian and European companies, I don't have the numbers for them. Several of these companies will turnaround and survive. Some will be bought out. Some won't survive.
Your contention that Gateway can make money is true as long as people working at gateway are willing to not pay their house payments, car payments, feed and clothe their children, walk to work barefoot, and skip a few meals a day such as breakfast, lunch and dinner.
<strong>Gateway on the way out.</strong><hr></blockquote>
I think they will be able to pull it together, but your right about eMachines, they should have died in 1999
[quote]Originally posted by Frost:
<strong>Packard Bell gone</strong><hr></blockquote>
you might like the share the bad news with them,
<a href="http://www.packardbell.com/"; target="_blank">http://www.packardbell.com/</a>;
[quote]Originally posted by Frost:
<strong>Acer no longer in the US market, I think they are still in the Asian ones</strong><hr></blockquote>
That might come as a suprise to Acer,
<a href="http://www.acer.com/us"; target="_blank">http://www.acer.com/us</a>;
[quote]Originally posted by Frost:
<strong>If Compaq hadn't merged with HP they would be on this list.</strong><hr></blockquote>
I disagree, but that is just a matter of opinion and I don't think the merger was a bad thing
[quote]Originally posted by Frost:
<strong>Toshiba has a much reduced presence on the desktop side</strong><hr></blockquote>
They never had much of one to begin with
[quote]Originally posted by Frost:
<strong>Diamond bought video chipset maker S3, then it left the video card business </strong><hr></blockquote>
No, S3 is alive and well and they were bought by VIA, S3 continues to make graphics cards and their graphics cores are intergrated into chipsets made by VIA
If you notice on their website Packard Bell has no US link. They are shadow of their former self when they were 2nd or 3 largest PC manufacturer.
Acer isn't likely to go out of business anytime soon, they were just added as company whose focus has changed.
The comment on S3 was not as much as them as it was on Diamond who used to be one of the better video card companies.
Economies of scale are there for anyone who can create the neccessary scale. IF Apple, with money in the bank, and an exceedingly loyal customer base (one now distilled nearly to its most fanatical followers) finds this proposition too risky, then it's too risky for anyone. 2 out of every 3 computer makers should already be out of business by that logic. And who knows, they may be shortly, but let's keep it brief for now.
<hr></blockquote>
You define what economies of scale is, but you still don't see the picture.
EVERY company general want to be an economies of scale. BUT as we see, it doesn't happen.
Apple has 4 billion in the bank. They'll run out of money in a week. They need at least 6x that to even make an effort.
Besides that, they lack infrustucture. They would need to expand their trained staff by 3x, get 3x more factories and get 20x more stores to carry Macs.
After that Apple would need a SUPER-SUPER-SUPER- SUPER-SUPER genius to consolodate that into a consumer demand report to avoid massive sortage or surplus.
Basically it's like asking a lightweight to become a heavyweight in 3 months. It'll be costly,painful, and high risk of death from trying.
So I won't call people idiots, but com'on the shear FACT that there are RARELY any Economies of scale companies in any field gives you an idea how hard it is.
This isn't rocket science.
For people who don't believe me, read an artical on DSL disaster. They tried to be an economies of scale, and ran out of money when they defaulted on their loan, and died. You don't get 200% growth in a year and live.
This ofcourse is relative to Dell, since economies of scale is depending on your goal.
~Kuku
[ 11-21-2002: Message edited by: Kuku ]</p>
Part of the problem with Apple now is that they demand a bit of a specialist's approach to sales and marketing. Because of the small (relative to all X86) market, consumer electronics and computing outlets have less of an interest in selling macs. Apple certainly wouldn't need 3X the stores: if people demanded three times the machines, more retailers would be interested in selling mac (and doing it passably well).
Apple has a good web site/channel. People get their product in a reasonable amount of time and it's a straight-forward experience. This can deal with more product, it's just a matter of warehousing and distribution.
But the big hurdle is product update and channel inventory. Apple has had well publicized battles with stale inventory, and if they were to get 3X bigger, an inability to update, PPC stall, or inventory backlog could be devasting.
What can you do to solve this problem? For one, you can't count on highly specialized AIO architectures. You need a model where updates are as simple as: unplug old component, troubleshoot new component, release updated product. In a sense, the model of a cheap mac has to be more like a powermac than an iMac. Have new GPU? Plug it in. New CPU? Plug it in. Then you can just slot in the newest features and let backlog inventory migrate down the price ladder. Not so much a case of new model roll outs anymore, and expensive re-designing, as a continuous state of updating.
The problem is how to make more or less standard "plug together" component boxen look an feel like macs when they don't have any costly fanless or slot loading gimmickry involved. And, it should be noted that these elements don't even have to cost more in terms of production costs, but they cost you in update cycles when you have to wait for a CPU process that's cool enough, or a slot loader that's as fast/flexible as tray loding competition.
I think the cube was a good try, but the price was wrong and the gee-wizz gimmicry a little too emphatic. Make a slightly bigger cube -- one optical bay, 2 HDD bays, one AGP, one daughtercard, and one PCI slot, fan cooled, front loaded drive -- price it for 999 (monitor not included) and sell a ton of them. When the PPC or GPU moves on, no need to re-jig the mobo or fret over heat characteristics, just plug in newer components and go. Older product moves down the price chain, same motherboard and case get used for a couple of years at a time. Easy peasy. If an iBook can sell for 999 including an LCD, battery, and pricier laptop components, then a straightforward cube redux can do the same without any of those added expenses.
<strong>Make a slightly bigger cube -- one optical bay, 2 HDD bays, one AGP, one daughtercard, and one PCI slot, fan cooled, front loaded drive -- price it for 999 (monitor not included) and sell a ton of them. When the PPC or GPU moves on, no need to re-jig the mobo or fret over heat characteristics, just plug in newer components and go. Older product moves down the price chain, same motherboard and case get used for a couple of years at a time.</strong><hr></blockquote>
I've been in corporate IT for 15 years now, and I don't think any medium or large companies (more than 500 employees) and going to be upgrading a video card during the relatively short lifespan of a machine. Especially if they lease them!
I think this is where Apple is going soon - with the updated service and support commitments, OS X playing well in Windows-centric networks I think the future is bright. Now, they just need to develop (or release) the product in the $599-699 ballpark.
[ 11-22-2002: Message edited by: Rhumgod ]</p>
Having a cube redux Mobo could let [b]Apple[/i] more cheaply tailor their offerings to business or consumer or even professional needs, and to continue to make timely updates during the product life cycle.
Neither would Apple face the integration problems of the Wintelon world because they're basically using ONE single Mobo. PPC upgrdes would have to conform to it (and Apple wouldn't support them anyway) and there really are only a handful of true GPU options anyway. Everything else is built into the Mobo and the PCi is more of a courtesy for eventualities like new connectrivity standards or sound/video-capture cards.
I say even most consumers would leave well enough alone, but instead of selling 100K per quarter of each of three different enclosures and absorbing all the costs specific to each model and board, they could sell 300+K of essentially one Mobo and case with different component CPU and GPU, and possibly PCI, as suits the target market.