If low volume on high priced PowerMacs was such a brilliant strategy for profits, Apple would be showing better numbers and getting better ratings from stock analysts.
It's not brilliant, it's CONSERVATIVE. And with the economy as it is now, perhaps it's time to be conservative. Compare Apple's financial stutters with the sea of red ink spewing forth from HP/Compaq, Gateway, eMachines, and just about every other beige box maker.
Would they sell more at a lower margin? Probably yes, but don't forget it would cost them more to move more boxes. Selling 10 at $1000 is quite more expensive for Apple than selling 1 at $10,000, not just because of production costs, but distribution as well.
Dropping the Powermac into the oversaturated, low-to-midrange PC market (where most PC box makers are leaving like rats bailing from a sinking ship) might not be the wisest thing to do right at this juncture.
Let's summarize, since people seem to be missing my points.
1)The low-to-midrange PC market is collapsing. It's not a growth market, it has little opportunities for strong PC makers like Gateway, and even less for Apple.
2)Apple is doing much better financially than most PC box makers. The sky is not falling; they are not in danger of losing developers, market share, etc. This is not a time for them to try something desperate.
3)Apple has nothing to offer on the high end. Any upgradeable "tower" with a G4 that they offer for $999 or less is a better deal than the current Powermacs. Thus, a cheap headless machine would cannibalize Powermac sales, eliminating potential high margin sales.
4)Powermacs have NEVER been cheap. $1500 has always been about where they started, and I don't understand why they would suddenly abandon this price point.
What I am not arguing:
1)That Apple should never offer an expandable machine for under $1499. Once they have something on the high end, then they can afford to offer something on the low end.
2)That Apple is morally good or bad for charging such prices.
3)That they wouldn't sell any more Macs if they dropped prices. I'm sure they would; but I don't think they would make any more money. And making money is how Apple stays open.
Apple's strategy makes perfect sense. When people pay tons of hard earned cash on a powermac, they want the machine to age well, and that is where expandability comes in. The consumer line, on the other hand, makes more sense, at the consumer prices, to buy a new mac rather than upgrading. <img src="graemlins/hmmm.gif" border="0" alt="[Hmmm]" />
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If low volume on high priced PowerMacs was such a brilliant strategy for profits, Apple would be showing better numbers and getting better ratings from stock analysts.
All the above numbers can be found on <a href="http://biz.yahoo.com/rc/030115/tech_apple_table_1.html"; target="_blank"> Yahoo! Finance</a>.</strong><hr></blockquote>
It's not brilliant, it's CONSERVATIVE. And with the economy as it is now, perhaps it's time to be conservative. Compare Apple's financial stutters with the sea of red ink spewing forth from HP/Compaq, Gateway, eMachines, and just about every other beige box maker.
Would they sell more at a lower margin? Probably yes, but don't forget it would cost them more to move more boxes. Selling 10 at $1000 is quite more expensive for Apple than selling 1 at $10,000, not just because of production costs, but distribution as well.
Dropping the Powermac into the oversaturated, low-to-midrange PC market (where most PC box makers are leaving like rats bailing from a sinking ship) might not be the wisest thing to do right at this juncture.
Let's summarize, since people seem to be missing my points.
- 1)The low-to-midrange PC market is collapsing. It's not a growth market, it has little opportunities for strong PC makers like Gateway, and even less for Apple.
- 2)Apple is doing much better financially than most PC box makers. The sky is not falling; they are not in danger of losing developers, market share, etc. This is not a time for them to try something desperate.
- 3)Apple has nothing to offer on the high end. Any upgradeable "tower" with a G4 that they offer for $999 or less is a better deal than the current Powermacs. Thus, a cheap headless machine would cannibalize Powermac sales, eliminating potential high margin sales.
- 4)Powermacs have NEVER been cheap. $1500 has always been about where they started, and I don't understand why they would suddenly abandon this price point.
What I am not arguing: