I think Apple would care. Solid State does not provide as good sound. Solid State is synonymous with cheap, low capacity older technology. That's why Dell and Gateway are going HD. That's why Toshiba is increasing HD capacity (along with Hitachi).
Huh? Digital data is digital data regardless of the medium they are stored on. It all depends on D/A-converter quality.
Price is going to be the deciding factor and I see Apple repeating past mistakes by believing they can sell at a premium based on quality.
Apple has made a terrible mistake with the iPod? The best-selling MP3 hard disk player? Dell and Gateway introduced HD players! Why? Because that's what customers want. They're not that much cheaper then the iPod yet they have not gotten nearly as good reviews, even from the PC Press. Only so-called Mac supporters contiously complain.
Once again, some folks want Apple to become a comodity maker like Dell and sell cheap, poorly made product so they can "compete" with them on their level. Why?
That's gotta be bull. First off, Apple keeps it's margins under lock and key and I highly doubt such a specific leak could occur without more media coverage. Second, there is no way Apple is turning over 35% on these things...maybe on gross margins, not profit. In the manufacturing business, 10% is considered highway robbery. However, given the fact that Apple typically doesn't drop prices much in a single product cycle, it's possible they pull in up to 20% or so toward the end of a particular cycle if prices on several components drop at once, but I'm sure that's a rarity.
I believe it was Steve Jobs himself saying during the last Keynote that Apple had a 50 % profit margin on the iPod. If they sell it for $400, they earn $200.
I believe it was Steve Jobs himself saying during the last Keynote that Apple had a 50 % profit margin on the iPod. If they sell it for $400, they earn $200.
he never said such thing and that is completely and utterly wrong
I just ordered the 20 gig... I'll probably get it in by christmas though oh well yay for 10% off unfortunately if monday they come out with a new one I'll just be stupid
I believe it was Steve Jobs himself saying during the last Keynote that Apple had a 50 % profit margin on the iPod. If they sell it for $400, they earn $200.
In almost any case, the most popular, least expensive products are the ones with the lowest margins.
It is pretty neat to see retailers discounting Apple products like they do every other device. For the longest time, Apples prices have always been list at retailers. It must mean that Apple is giving retailers more margin to play with. In any case, its nice to know you can shop for deals on Apple equipment and not just the iPods, but it looks like their computers too!
I don't want to beat a dead horse, but while not utterly necessary, it would be nice if Apple occupied some of the mid-range MP3 player market.
I was just at the local BestBuy and this customer was hemming and hawing about the iPod on display. He tells the sales guy that he knows he wants one...but dropping $450 (cdn) is what's holding him back.
On the next isle were MP3 players all priced around the $150-$200 price ranging from 128-256mb in capacity.
I'm certain, should a 5gig model were to re-introduced priced at $250 (CDN) or about $199 (US), that customer along with many others doing their x-mas shopping would easily choose the iPod.
satchmo, I can only hope that Apple could sell an MP3 with at least twenty times the capacity (not to mention its other advantages) for a CAN$50 premium. If not, they're in more trouble than we can possibly imagine.
KANE, the 50% number you're thinking of was iPod's %age of the market by revenue, not its profit margin.
I can't agree that everything comes down to price. Exhibit A is the iPod itself, which would have pulled a Cube if price was the overriding concern. More factors go into pricing than most people realize here, and some of them (cachet, perception of quality, manufacturer confidence in the product) push the price upward. Price is the most significant feature only in commodity markets where there is no other differentiation between products. The iPod isn't a commodity.
Price is the most significant feature only in commodity markets where there is no other differentiation between products. The iPod isn't a commodity.
True, but isn't it best to keep ahead of the competition? It's always harder to hit a moving target. The iPod may not be a commodity now, but could quickly become one.
More and more players are beginning to flood the market. You've even got knockoffs with similar capacities selling for less from the likes of Dell (granted they're butt ugly).
Sitting on this side of the fence, we Mac users can appreciate the nuances, details and user interface of an iPod.
But don't underestimate the acceptance of mediocrity of the buying public. Not everyone is concerned about cachet or aesthetics. However what they may perceive, is that a "PC" MP3 player will work better with their "PC".
the Veblin effect usually does not come into play when considering the prices of consumer electronics, (especially computers for that matter) however, Apple has somehow made this possible, to a certain degree...
True, but isn't it best to keep ahead of the competition? It's always harder to hit a moving target. The iPod may not be a commodity now, but could quickly become one.
Apple can cross that bridge when they get to it. For now, it is a moving target. It's been redesigned twice, it has four times its initial capacity for the same price, more features, more peripherals, and Steve has just hinted in a NYT Magazine article that there's more to come.
The thing is that Apple keeps it a moving target by improving it. If they made it a moving target by dropping the price, it would inevitably become commodified.
Quote:
More and more players are beginning to flood the market. You've even got knockoffs with similar capacities selling for less from the likes of Dell (granted they're butt ugly).
Sitting on this side of the fence, we Mac users can appreciate the nuances, details and user interface of an iPod.
But don't underestimate the acceptance of mediocrity of the buying public. Not everyone is concerned about cachet or aesthetics. However what they may perceive, is that a "PC" MP3 player will work better with their "PC".
Perhaps. There've always been players flooding the market, though. The iPod was a late comer, not a groundbreaker. The iPod has tremendous momentum, great features, an aggressive update schedule (how long did the 15GB iPod last?) and a pervasive and highly successful ad campaign. Also, the white earbuds were an inadvertent stroke of genius: You can spot them anywhere, and they mean "iPod." People stop me on the street all the time because they see that telltale white cord, and they already know the name "iPod," and they already know it plays music. It's hard to battle that kind of vibe with something ugly and cheap.
What if Apple were to release a $99 5 gig iPod as a trojan horse for the iPod.
They make these, knowing they will have a very very low profit margin, or even no profits, or even a loss but they also know that once people take a bite from apple(especially in the iPod sense) they are hooked, and that means increasing the market of people who will be upgrading to 10, 20, or 40 gig models in a couple years.
I think this could work, because A ) the iPod is already VERY notorious, and people want to be able to associate themselves with it(as perverted as that sounds) and B ) There are a lot of people out there that want one, but they can't justify the cost. C ) as weird as this might sound, having a $99 might even prompt people towards getting the $199 model(assuming that exists too) because they play mind games on themselves "oh I COULD settle for this bottom end one, but hmm...maybe I will need that extra 5 gigs"
$99 iPods would make the expensive iPods rot on the shelves while providing little more gross revenues and no profits. $99 iPods. If Apple's not interested in selling the $499 computer, they sure as hell aren't interested in selling the $99 iPod.
Comments
Originally posted by MacsRGood4U
I think Apple would care. Solid State does not provide as good sound. Solid State is synonymous with cheap, low capacity older technology. That's why Dell and Gateway are going HD. That's why Toshiba is increasing HD capacity (along with Hitachi).
Huh? Digital data is digital data regardless of the medium they are stored on. It all depends on D/A-converter quality.
Price is going to be the deciding factor and I see Apple repeating past mistakes by believing they can sell at a premium based on quality.
Once again, some folks want Apple to become a comodity maker like Dell and sell cheap, poorly made product so they can "compete" with them on their level. Why?
Originally posted by Michael Wilkie
That's gotta be bull. First off, Apple keeps it's margins under lock and key and I highly doubt such a specific leak could occur without more media coverage. Second, there is no way Apple is turning over 35% on these things...maybe on gross margins, not profit. In the manufacturing business, 10% is considered highway robbery. However, given the fact that Apple typically doesn't drop prices much in a single product cycle, it's possible they pull in up to 20% or so toward the end of a particular cycle if prices on several components drop at once, but I'm sure that's a rarity.
I believe it was Steve Jobs himself saying during the last Keynote that Apple had a 50 % profit margin on the iPod. If they sell it for $400, they earn $200.
Originally posted by KANE
I believe it was Steve Jobs himself saying during the last Keynote that Apple had a 50 % profit margin on the iPod. If they sell it for $400, they earn $200.
he never said such thing and that is completely and utterly wrong
Originally posted by KANE
I believe it was Steve Jobs himself saying during the last Keynote that Apple had a 50 % profit margin on the iPod. If they sell it for $400, they earn $200.
In almost any case, the most popular, least expensive products are the ones with the lowest margins.
You can still buy them today at 15% off list, which is beter than Apple's "sale."
Didn't they teach any of you consumer tips in grade school?
MSKR
Originally posted by bauman
It seems like you even get the 10% off the education pricing if you're in Edu.
The promo still appears.
Where do you the promo in the edu store, bauman? The banner on the on-line edu store is for iMacs, and when I click through no discount appears.
I was just at the local BestBuy and this customer was hemming and hawing about the iPod on display. He tells the sales guy that he knows he wants one...but dropping $450 (cdn) is what's holding him back.
On the next isle were MP3 players all priced around the $150-$200 price ranging from 128-256mb in capacity.
I'm certain, should a 5gig model were to re-introduced priced at $250 (CDN) or about $199 (US), that customer along with many others doing their x-mas shopping would easily choose the iPod.
KANE, the 50% number you're thinking of was iPod's %age of the market by revenue, not its profit margin.
I can't agree that everything comes down to price. Exhibit A is the iPod itself, which would have pulled a Cube if price was the overriding concern. More factors go into pricing than most people realize here, and some of them (cachet, perception of quality, manufacturer confidence in the product) push the price upward. Price is the most significant feature only in commodity markets where there is no other differentiation between products. The iPod isn't a commodity.
Originally posted by Amorph
Price is the most significant feature only in commodity markets where there is no other differentiation between products. The iPod isn't a commodity.
True, but isn't it best to keep ahead of the competition? It's always harder to hit a moving target. The iPod may not be a commodity now, but could quickly become one.
More and more players are beginning to flood the market. You've even got knockoffs with similar capacities selling for less from the likes of Dell (granted they're butt ugly).
Sitting on this side of the fence, we Mac users can appreciate the nuances, details and user interface of an iPod.
But don't underestimate the acceptance of mediocrity of the buying public. Not everyone is concerned about cachet or aesthetics. However what they may perceive, is that a "PC" MP3 player will work better with their "PC".
the Veblin effect usually does not come into play when considering the prices of consumer electronics, (especially computers for that matter) however, Apple has somehow made this possible, to a certain degree...
Originally posted by satchmo
True, but isn't it best to keep ahead of the competition? It's always harder to hit a moving target. The iPod may not be a commodity now, but could quickly become one.
Apple can cross that bridge when they get to it. For now, it is a moving target. It's been redesigned twice, it has four times its initial capacity for the same price, more features, more peripherals, and Steve has just hinted in a NYT Magazine article that there's more to come.
The thing is that Apple keeps it a moving target by improving it. If they made it a moving target by dropping the price, it would inevitably become commodified.
More and more players are beginning to flood the market. You've even got knockoffs with similar capacities selling for less from the likes of Dell (granted they're butt ugly).
Sitting on this side of the fence, we Mac users can appreciate the nuances, details and user interface of an iPod.
But don't underestimate the acceptance of mediocrity of the buying public. Not everyone is concerned about cachet or aesthetics. However what they may perceive, is that a "PC" MP3 player will work better with their "PC".
Perhaps. There've always been players flooding the market, though. The iPod was a late comer, not a groundbreaker. The iPod has tremendous momentum, great features, an aggressive update schedule (how long did the 15GB iPod last?) and a pervasive and highly successful ad campaign. Also, the white earbuds were an inadvertent stroke of genius: You can spot them anywhere, and they mean "iPod." People stop me on the street all the time because they see that telltale white cord, and they already know the name "iPod," and they already know it plays music. It's hard to battle that kind of vibe with something ugly and cheap.
Originally posted by superkarate monkeydeathcar
i tunes for windows?
HANDS DOWN, BEST LINE AND BEST USERNAME FOR THE NIGHT !!
What if Apple were to release a $99 5 gig iPod as a trojan horse for the iPod.
They make these, knowing they will have a very very low profit margin, or even no profits, or even a loss but they also know that once people take a bite from apple(especially in the iPod sense) they are hooked, and that means increasing the market of people who will be upgrading to 10, 20, or 40 gig models in a couple years.
I think this could work, because A ) the iPod is already VERY notorious, and people want to be able to associate themselves with it(as perverted as that sounds) and B ) There are a lot of people out there that want one, but they can't justify the cost. C ) as weird as this might sound, having a $99 might even prompt people towards getting the $199 model(assuming that exists too) because they play mind games on themselves "oh I COULD settle for this bottom end one, but hmm...maybe I will need that extra 5 gigs"
Kind of like a Dell tactic I guess
The loss-leader is the iTMS, not the iPod.
Originally posted by Eugene
The loss-leader is the iTMS, not the iPod.
Ding, ding, ding.
This is exactly what nobody (especially Wall Street) understands.
But I guess they're selling a ton anyway. What I mean is they'll sell one to me if they got the price down to $199.