I have thought about this problem almost from the release of the iMac. The iMac 2 does not have mass appeal. It never has. It got mass attention, but it never had a chance of being a great seller IMO. Early on, I believe there was a realization that there was a problem. Further, I believe that there was a split in the ranks between those who wanted to push forward with the iMac 2 and those who wanted to bail and cut their losses. (No, I am not an insider. This is just rank speculation.) Remember the price hike/supply debacle? As early as that, people started losing interest and the iMac never recovered. The reason I believe that it is at least thinkable that it might be dropped is because it sat for 13 months without so much as a minor component update. That is unthinkable for any computer product. During that time, Apple practically killed the product themselves. They just simply let it go. Since then, they have tried throwing a larger monitors on it as if that would somehow magically revive it, but there is still no sign of a pulse. I believe there is still a raging debate going on behind the scenes and at some point, those who believe that the product should be dropped will soon win the day. At some point, the lamp design will do as much to bring down the legend of the iMac as the gumdrop did to build it up. It is a failure and Apple is trying to cover up just how big of a failure it has been.
The biggest clue that the product was dead was when they slapped the 17" monitor on it. People were screaming for an update and would have been happy with just a mild refresh. Apple did nothing but up the screen size and call it a day. Think about it. Any other type of update would have cost money. Motherboards, i/o, drives, processors and such would all have cost serious R&D and manufacturing dollars. A bigger screen must cost next to nothing by comparison. I believe at that time, they had reached a compromise. They had already decided not to sink any more money into it. (Remember the persistent rumors around that time that the iMac would soon be EOL?) The compromise was to upgrade it without spending any money on it. Hence, the monitor upgrades. All other updates to this product have felt less like a company proudly bolstering its flagship consumer product, and more like a company grudgingly keeping a product on life support. They are either going to have to perform major reconstructive surgery, or pull the plug. If they were going to do surgery, I believe they would have done it by now. I believe that the days of the product we know as the iMac are numbered.
One thing Apple has to deal with is their pricing schemes, up until just very recently Apple hardware has been grossly over priced. It is not a perception that dies easly. That is especially so when you walk into a computer store and find i86 laptops with twice the memory and half the price of Apple hardware. The G5 is a mixed bag price wise, but does not hold up well aganst i86 desk top machines but does do well when compared to more advance workstations.
Apple does release new hardware at somewhat competitive prices, then they keep that hardware around forever while the performance curve on PC hardare continues to climb. Often an Apple that started out at a resonable price is grossly over priced six months down the road.
Then there is the issue of base RAM. It is very common to walk into a computer store and see Apple hardare with base RAM installs that are a quarter or half of what you get from PC's in the same price range. This particular bit burns my behind to no end as Apple has the ability to put RAM in their machines at a cost far below what you can do yourself. It is a sign of extreme cheapness and poor quality. It is especially and issue in the IBook where some of that RAM is soldered in place.
Apple will start regaining market share when the positively start addressing these issues. In part they can do this buy selling a machine at $600 that doesn't suck! That implies a 2GHz processor and enough memory to run the OS in a reasonable manner. It is strange that Apple can do well in the laptop segment but can't seem to grasp what the desktop market needs. The days of putting computers on desk that cost more than a thousand dollars are gone. We aren't talking about the work station market where Apple does much better, but that is a tiny market. The other problem with the workstation market is compatability, without a low cost solutions for the "other" desks in a company there is little incentive to go with Apple hardware. One way to change the incentive equation is to go high performance, unfortunately Apple really doesn't have a commanding lead here either.
As it is now Apple hardware simply doesn't appeal to a good portion of the population. At this point the IMac is nothing more than a high end office computer that appeals to the snobbish. The PowerMac G5 won't be going on many home or business desktops either. Agian it is to expensive to be placed as a general purpose computer, especially for a computer that runs only word and a web browser.
This is a little scatterred due to the time of the morning but I think some of my points made it through.
Dave
Quote:
Originally posted by Amorph
That's the question, really, and it's not an easy question. I'm not going to sit here and pretend that I know the answer to it, either. Apple got the attention of the press; they released a killer OS; they released one bit of killer hardware after another; they ran an ad campaign targeting the easiest switchers (people who, fairly or unfairly, are completely fed up with Windows) and got it out everywhere. And... *crickets chirp*
That's despite the fact that OS X and the G5 and the PowerBook have an unprecedented amount of gatekeeper cred.
So they're going indirectly. Look at how completely the iPod mini has flummoxed the tech press. They can't understand why you'd buy one, and by all accounts people just have to have them. People who ordinarily don't go ga-ga over gadgetry are demanding them. Apple can use this in two different ways: They can hope that the iPod mini establishes a strong enough link between Apple and the folks on the other side of the gate that they feel confident in going out and getting a Mac themselves, and failing that, they can keep releasing things that get Apple more press and more market penetration and more money so that they can afford to keep trying other ideas.
I say not to wait a few years, but not to expect results for a few years at worst. That's assuming that Apple fights hard the whole time. That's just because Apple is up against network effects, and network effects are incredibly stubborn and resilient. You can't really make linear progress against them. They hold until they collapse. Of course, you can't predict when that'll happen, really, but Apple has to be firing on all cylinders when it does. I say a few years so that people don't get their hopes up that this or that strategy will work. If it were that simple, Apple would have 10% market share now.
Lets face it the IMac is underpowered and over priced. It was overpriced the first day it was introduced, as you say the price bump didn't help at all.
Part of the problem of course belongs with the G4 but that only limits upgrades in one direction. As you noted a year of no updates will kill any machine.
All that being said though I do love the IMac design. But I'm not crazy enough to buy one at the price they have on them. The issue with the attiquated processor you point out is real also. It does make you wonder how Apple ever expected the machine to sell. They didn't even try the easy things such as significant RAM upgrades.
Dave
Quote:
Originally posted by Mac Voyer
I have thought about this problem almost from the release of the iMac. The iMac 2 does not have mass appeal. It never has. It got mass attention, but it never had a chance of being a great seller IMO. Early on, I believe there was a realization that there was a problem. Further, I believe that there was a split in the ranks between those who wanted to push forward with the iMac 2 and those who wanted to bail and cut their losses. (No, I am not an insider. This is just rank speculation.) Remember the price hike/supply debacle? As early as that, people started losing interest and the iMac never recovered. The reason I believe that it is at least thinkable that it might be dropped is because it sat for 13 months without so much as a minor component update. That is unthinkable for any computer product. During that time, Apple practically killed the product themselves. They just simply let it go. Since then, they have tried throwing a larger monitors on it as if that would somehow magically revive it, but there is still no sign of a pulse. I believe there is still a raging debate going on behind the scenes and at some point, those who believe that the product should be dropped will soon win the day. At some point, the lamp design will do as much to bring down the legend of the iMac as the gumdrop did to build it up. It is a failure and Apple is trying to cover up just how big of a failure it has been.
The biggest clue that the product was dead was when they slapped the 17" monitor on it. People were screaming for an update and would have been happy with just a mild refresh. Apple did nothing but up the screen size and call it a day. Think about it. Any other type of update would have cost money. Motherboards, i/o, drives, processors and such would all have cost serious R&D and manufacturing dollars. A bigger screen must cost next to nothing by comparison. I believe at that time, they had reached a compromise. They had already decided not to sink any more money into it. (Remember the persistent rumors around that time that the iMac would soon be EOL?) The compromise was to upgrade it without spending any money on it. Hence, the monitor upgrades. All other updates to this product have felt less like a company proudly bolstering its flagship consumer product, and more like a company grudgingly keeping a product on life support. They are either going to have to perform major reconstructive surgery, or pull the plug. If they were going to do surgery, I believe they would have done it by now. I believe that the days of the product we know as the iMac are numbered.
Lets face it the IMac is underpowered and over priced. It was overpriced the first day it was introduced, as you say the price bump didn't help at all.
absolutely.......
toooooo many times have I seen the spinning wheel of death on a 1GHz iMac.
The problem is that it is both underpowered and overpriced. If it were just overpriced (by that I mean a premium price for a computer) then I'd just buy one because the initial price is only one part of the equation.
While us guys worry about specs I think it really was the choice of colors that made the original iMac appeal strongly to the opposite sex. At least it has been my experience that my sister and other female family members who I talked into switching where most excited about choosing the color rather than worrying about how fast the processor or how much RAM.
While I have one of the 17 inch iMacs and am satisfied with it for what I do now, I haven't felt comfortable recommending it to others for awhile. I do like the lamp design, but I think there has to be more choice. I also think Apple has done a poor job of advertising by not showing off people actually using an iMac. A simple add showing a family sitting around looking at photos, swinging the screen around to each person, lowering it for the kids to get a look...that sort of thing. Having it stick out its "tongue" out at some guy walking by a window was cute, but didn't give people the impression of how convenient moving the screen around really is.
As for lame amount of RAM Macs come with these days it is mostly to keep resellers happy since they make so little profit off a stock machine they need to have something to add to make more money. And of course just think of the profit Apple makes when someone adds RAM at the Apple Store at the outrageous prices they charge there.
I am sure something different is coming, just hope it is soon so I can start evangelizing again
$2199 20"/ these specs should make a $1399 machine
$1299 is where comparable PC's were 4 years ago, that is why my five year old iMac was a good deal 5 years ago. Also, that machine is still huming along duing everything my wife and kids want it to do. I made my first iMovie on that machine. A similar PC from that time period would have crapped out trying to do that. Now as good PC's have come down in price, They start at $799 and go to $1499. IMO, anything less than $799 is garbage and above $1499 is more comparable to the powermac. Apple makes a good machine, but it is not keeping pace with the market as it once did.
If Steve would have made the iMac fill the price range above, with the current specs, he would not have been able to make enough of them. As for the eMac, it should be the "Dell special of the week" $499-$699 range. This is the get them in the door model.
$2199 20"/ these specs should make a $1399 machine
If Apple sold the 15" for $799, they'd be losing money on every iMac sold. Dell's production and assembly routines are far more streamlined than Apple's, so they can afford to build only what they need, unlike Apple, which creates a boatload and hope it sells, based on interest estimates. Granted, Dell makes far less per machine than Apple does, but they make it up in volume ? something Apple can't hope for.
There's a reason people aren't buying Macs, and it's not because of the price. Where do you suppose these legions of buyers will come from to pick up the subsidization costs? Dropping the price of iMacs will do nothing but kill profitability from the market Apple can depend on ? the Mac fans.
Unamazingly, a thread that turned itself into a thread about iMacs costing too much!
Yep. Agree with most everyone here. Apple's iMacs cost too much. When Apple can ship an iMac, with a G5 system inside, in the range of $900 to $1500, Apple will see more old Mac users upgrade to iMacs. The current iMac pricing is $400 to $600 too much for most consumers to swallow, even if they want to buy an iMac. I know I'm not tempted. One can even get an iBook G4 of nearly equivalent performance for less than or the same price as an iMac 15".
I've been to the Dell store a lot, and one can buy a decent - in the same way one would call a 1 GHz G4 system decent - a 15" LCD system for $900 and a 17" LCD system for $1000. Apple really has to stay within about hundred dollars of those prices to maintain their marketshare and have old Mac users upgrade. (And the eMacs should drop into $700 to $800 super specials.)
If they want to gain marketshare, well, I'm not sure what they can do. They need to start over again and create a lot of mindshare among future IT managers and coordinators so they have an open mind about block purchases. They have to have higher performing Macs at competitive prices.
There's a reason people aren't buying Macs, and it's not because of the price. Where do you suppose these legions of buyers will come from to pick up the subsidization costs? Dropping the price of iMacs will do nothing but kill profitability from the market Apple can depend on ? the Mac fans.
Steve, this type of thinking suggests that Apple has no chance at getting switchers. Is that what you really believe? Is Apple's market fated to be incestuous forever? Is cannibalization the only inevitable result? I don't think so.
A lot of people, including myself, have blamed the iMac's problems on the eMac. I have since come to realize that is not fair or accurate. the eMac is not the iMac's problem. The iMac is the eMac's problem. There was no eMac until after the iMac was rejected. In fact, the iMac was rejected twice and the eMac was there to save the day. First, education rejected the iMac. They were afraid of it and they couldn't afford it. The iMac was perhaps one of the single biggest reasons for the decline in education sales. The original iMac was a boost to education sales.
The second rejection came when the people clamored for the eMac instead of the iMac. For all the reasons given throughout this thread, the iMac was not the right machine at the right time. To this day, I cannot recommend an iMac to a potential switcher. At $799 and $1099, the eMac is the only logical choice. Size does not matter because both machines are just lumps that are fated to sit on the desk for the rest of their natural lives. Grant it, the iMac is a decidedly cuter lump, but it is still a lump, (or should I say "lamp"). But make no mistake about it. The emac did not cause the iMac's problems. The iMac's problems caused the eMac's existence. The iMac has been dead since about three months after its release. Apple just has too much pride to admit that it made another cube and too much sense to sink a lot of money into it. That's my take.
Some things I agree with. But some of the stuff...I don't know. Talks about "expandability" and so forth. Here's my thing: would would the target iMac crowd be interested in expanding? Who, honestly, besides higher-end pros, legitimate envelope pushers, content creators (or Spec Whore types) truly, truly "upgrade" and "expand" their computers?
I mean, if an iMac comes with a 60-80GB hard drive, 64MB graphics, FireWire (400 or 800), USB 2.0, Bluetooth, AirPort Extreme, Ethernet, audio-in, Combo or SuperDrive, built-in modem, good sound, etc. what, exactly, is there to expand?
I think that stuff is overstated and overrated. I'd be willing to bet that most people buy their box and add RAM only. Hell, most people will continue to use the OS that came on their machine (my Mom and Dad both using Windows ME on four-year-old PCs), so they're sure as hell not going to be "expanding" with hardware, are they? Not all, I know. But MOST.
It's a lot less about IF you will expand, and add cards, but CAN you. It's about not painting yourself into a corner. A monitor will typically last you 2 or 3 generations of computers. At least in PC's.
They sell a 20" iMac.
Are you telling me that in 4 years when they want to upgrade their computer a 20" widescreen LCD display is going to be old hat. Come on. I could use this 17" LCD in front of me for at least another computer, maybe 2.
Why upgrade and buy a new computer if you have to buy a whole new display to go along with it. It was fine with cheap ass CRT's in the original iMac, because they really are limited and you might as well buy a new monitor. 15" CRT is cheap and doesn't seem lilke it would kill you. But a 20" or even 17" LCD is just going to waste on a non-removable arm.
Now that Fred Anderson has come out and said that the iMac's overpriced (relative to the market "sweet spot"), and given that the eMac and iMac combined sell about half as well as the jellybean iMacs did at their peak, I think we can safely say that Apple's aware of the problem. So let's discuss the future, OK? If the current iMac can't be made at a cost that targets the "sweet spot" then it needs to be reengineered. In fact, I don't think Anderson would have said that right out unless Apple had already figured out a solution.
The iMac is currently selling much better than the Cube did, although it did have a similar problem off selling really well in the first quarter and then settling down. The comments about the eMac being a solution to the iMac are spot on, though. Apple should have realized they had a problem as soon as people clamored for a consumer eMac - maybe they did, and it's just taken them this long to solve it?
If you keep the monitor from your previous machine, you can't hand the whole system down to a friend/relative/child when you buy your whole new system - which a lot of people do.
I don't believe that correctly pricing the iMac will solve everything either, because I agree that pricing isn't the main issue (nor is the AIO factor the main issue). The main obstacle is the fear of having a machine that you have to learn to use (since you already know Windows), that isn't like anyone else's machine, and that no-one you know can troubleshoot, and that the people who you do lean on to troubleshoot don't like.
But that's for another thread. In this thread, we can at least try to figure out the smaller problem of what Apple can do for the next generation iMac. Even if it sells half a million units per quarter, it will only represent an uptick in market share. Better than nothing, but not a solution to the bigger problem.
I've been one of the loudest "the color thing is over...get over it, people!" guys here. But damn. I think about it and...
Eye appeal, and what amorph mentions above: fear. That's where Apple's marketing (or lack of) has a DIRECT effect on things. People (and I run into them all the time) don't know they can run Office on a Mac. Or use their current peripherals (Epson, Canon, HP and others seem to have pretty good OS X support at this point). A little information, reassuring, etc. in the form of print or broadcast ads might fix that particular issue rather quickly.
But yes, the jellybeans...you felt like it was "yours". It matched your colors. It felt more personal and cute. It was so different. And they weren't that powerful, but it didn't really seem to matter then too much?
It's no secet we're a image/visual-fixated society. If Apple could make a Janet Jackson titty iMac, why...imagine the possibilities!
Maybe not colors. What about those patterns? I find it kinda tough to believe Apple spent all that time and effort to roll out only two machines using that injection modling business. Was that a test run? Or did they bomb so horribly that Steve murdered the Blue Dalmation/Flower Power project team?
I'd be curious to see a two-prong approach: new iMacs available in the non-offensive, cool-looking white as they currently are. BUT...offer them in a choice of, say, 5 or so patterns (not sure what they should be, but covering a wide range of tastes/styles).
Yeah, Fred pretty much copping to the iMac/price thing does indeed give me confidence that they're "on it" and will roll out something rather cool in 2004.
I trust them. I like to think they learn lessons. Well...sometimes.
Well, Mac Voyer and Wizard69 have absolutely demolished Apple's pricing policy and left the iMac 2 pole-axed.
Two engaging posts which call it as they see it.
People aren't buying the iMac2 in numbers and the lumping in of eMac numbers is patently transparent.
The interesting points above are concerning the lack of bump for 13 months. Nothing! Obviously, something wrong in the Apple camp there. And interesting to note that the iMac 2 has had screen size bumps and little esle in its two year plus existence.
The original iMac had downward pricing pressure almost from the off. Brought out colours to work the press and mindshare mojo. Small wonder that it sold as many as half a million per quarter. It wasn't just jelly bean razzmatazz, it was AFFORDABLE. That's not something I'd level at the iMac 2. While the iMac's G3 was kicking Pentium booty, the iMac 2's G4 is painfully out of touch.
Heck, prices on the original iMac even got as low as £595 in the UK for the low end model! Something Apple is barely managing years late with the pale-shadow eMac.
iMac2? The eMac was its apologetic after thought. Insurance and hi-carb.
The iMac2 never drove the price downward. It has consistently held the line above the 'sweet spot'. Misguidedly presuming a 'Son of Cube' mantle. It aint selling because it outside what most people consider 'fair' in terms of bang for buck. It's nice but. It isn't compelling enough at the price to make people walk for it.
Somebody brilliantly outlines where the prices SHOULD be above.
Unless you make something 'cheap' or 'reasonably' priced enough at points people are prepared to pay for then you get shrinking marketshare. (Hello, Mac land...)
Why should people have to subsidize Apple? Geez, at least get within a £100. But at times it's several hundred. Compare a £799 PC vs an eMac.
It's embarrassing.
I wish Apple would quit with the this dead end design equation. People are buying laptops in increasing numbers but on the consumer desktop the PC tower is still ruling. Apple should give people (the PC market they're supposedly chasing...M$ customers...) what they are familiar with. A simple, scalable and smart tower case design that scales the eMac to iMac2 price point.
A mini-G5 tower from £495 to £995.
Job done.
2 gig to 2.4 gig singles. Integrated to upgradeable graphics.
Everything above 1K?
Dual. More expandability. More ram. Better graphics cards.
It's so simple the PC market does it and sells bucket loads more towers than the poxy lamp or the lard-ass eMac.
So much of their desktop product is a two legged chair. Why?
It IS a doozy: AIO or 2-piece? Colors or no? G4 or G5? Price too high? Price too low? Limited appeal? Not enough consumer knowledge about things? Expandability or closed box? At what point does an iMac become "just another computer"? How much is quality/coolness sacrificed to hit those magical low prices? How much does design (and Ive) play into that?
They can't seem to get TOO cute or clever because those articulated chrome arms seem to add price. Funky upside-down cereal bowl shapes probably require funky upside-down engineering to fit stuff.
Do they bring back a better, improved (and reasonably-priced) "cube" sort of thing? Do they split the line? A cube, a minitower? Two iMacs?
AIO?
I prefer AIO. Marketing? Specs? What's lacking? What's the beef? Where's the taters?
I'm SOOOO glad I'm not Jonathan Ive right now.
IMO, the iMac got as cool-looking as it's ever going to get with this current model. Unless they just go completely 180-degrees, I can't imagine improving on that design...the "anywhere you want" screen is amazing!
It IS a doozy: AIO or 2-piece? Colors or no? G4 or G5? Price too high? Price too low? Limited appeal? Not enough consumer knowledge about things? Expandability or closed box? At what point does an iMac become "just another computer"? How much is quality/coolness sacrificed to hit those magical low prices? How much does design (and Ive) play into that?
They can't seem to get TOO cute or clever because those articulated chrome arms seem to add price. Funky upside-down cereal bowl shapes probably require funky upside-down engineering to fit stuff
These are the reasons that the iMac is priced as it is. Honestly, I think Apple is going to have to sacrifice some coolness and some ergnomic appeal for price points. Right now, they can just be happy that they sell the coolest music player and laptops. Their pro desktop is also cool, but it is the iMac that just seems oddly cool (somehow out of place) yet gorgeous.
The iMac can still be cool, just make it a reprint, not a priceless original piece of artwork that it currently is.
iBooks and PowerBooks are cool because they are slim, compact and light. The PowerMac is cool to power hungry users that dont care what it looks like that much. The iPod is cool because of how it does what it does, how small it is, and how light.
The iMac and eMac just dont fit in right now, much like the display lineup...
Make a list of what, exactly, a new iMac's design and functionality requirements should be. Look to cost-cutting ideas (avoid, perhaps, goofy shapes, arms, complex engineering, etc.). The things that need to be met, IMO:
1. Keep optical drives flat (don't they work faster/better that way? Steve mentioned it two years ago)
2. Display has to have mobility...tilt and swivel at least.
If you have wide 17" and 20" displays, what's to say that the body couldn't be larger side to side (matching the display width) and short, front to back? Imagine a loaf of bread, if you will. The body is hidden behind the display anyway, so who says it has to be small and compact, especially if that entails extra engineering or cuteness to make things fit and work?
A sideways one. Rectangular in basic form (motherboard, cards, hard drive, optical drive, etc. all fitting nicely...no curves, angles, domes, etc. to speak of or design to).
Gentle slopes and curves, sure. But something more like an iBook rather than an eMac or current iMac. But not a dome or sphere or anything like that.
What if a display tilted up and down on a length-wise cylinder? It would be an all-in-one. But, like the current iMac, the body would remain the same.
Square shape, enough internal room to let drives sit horizontally. Not a simple "glom onto the back of an LCD" design, which Steve ragged on two years ago (I doubt he'd want to go back on that).
If Apple sold the 15" for $799, they'd be losing money on every iMac sold. Dell's production and assembly routines are far more streamlined than Apple's, so they can afford to build only what they need, unlike Apple, which creates a boatload and hope it sells, based on interest estimates. Granted, Dell makes far less per machine than Apple does, but they make it up in volume ? something Apple can't hope for.
There's a reason people aren't buying Macs, and it's not because of the price. Where do you suppose these legions of buyers will come from to pick up the subsidization costs? Dropping the price of iMacs will do nothing but kill profitability from the market Apple can depend on ? the Mac fans.
OK, here's the solution. But I warn you, it's unconventional...
Apple needs to institute a subscription program for the iMac/AIO line. Here's how it would work:
1. Initial purchase, $1K to 1.7K range. The only differentiation is monitor size. All have up-to-date internals and i/o. Only ram would be user upgradable.
2. Every year, the iMac owner brings her machine to a store for the annual upgrade. At that time, the unit gets a faster drive, USB 3.0, a slightly better graphics card and a slightly faster CPU. This service would cost $500 per year. This service must be paid for one year in advance. This way, the initial cost for the iMac subscription will be $500 more than the sticker price and each year you pay for next years upgrades.
2b. Another scenario would guarantee good processor, motherboard, and graphics card upgrades one year, and other internal upgrades like drives and I/O the following year. This way, you would have a completely new system every two years. The $500 subscription part would remain the same.
3. The upgrade would only be offered once a year. A person would be free to skip an update. But that would effectively cancel their subscription. They would then have to buy a new machine for future updates.
This is a win-win situation.
The consumer wins because it is much easier to pay $500 once a year than it is to pay $2000 once every four years. Also, your system never gets four years behind the times. It will never be outdated. No matter where technology goes, you will be there. Another benefit is that you will never be forced to prematurely get rid of a beloved machine because of outdated specs. It will be as great and as useful in four years as it was the day you bought it.
For education, it's "game over". For the same price that institutions pay to maintain old equipment, they can just subscribe to an always-up-to-date program. No more major purchases every few years. Naturally, onsite upgrades would be offered to institutions.
I can't even begin to calculate the benefit to Apple. They would have a predictable and sustainable base of income for future products. They would not be forced to come up with the "next big thing" so often. They would make more profit because upgrade costs would be much lower than manufacturing costs.
The best benefit yet is that with the old parts that Apple collects every year. They can finally afford to sell a bargain priced Mac that is pure profit based on last year's parts. In essence, Apple gets to sell these parts twice. Why not?
The beauty of the subscription plan is its flexibility. I am flexible on the types of upgrades you get every year, just as long as they are predictable. Perhaps they can offer a discount when subscriptions are purchased two and four years in advance. Perhaps they can offer a $50 per month subscription to those that would rather pay monthly than yearly. Either way, the actual upgrade would only happen once a year.
Clearly, I am not describing a new type of computer. Rather, I am describing a new way to sell it. With a program like this, even the 20" iMac looks pretty good. Everybody wins.
Comments
The biggest clue that the product was dead was when they slapped the 17" monitor on it. People were screaming for an update and would have been happy with just a mild refresh. Apple did nothing but up the screen size and call it a day. Think about it. Any other type of update would have cost money. Motherboards, i/o, drives, processors and such would all have cost serious R&D and manufacturing dollars. A bigger screen must cost next to nothing by comparison. I believe at that time, they had reached a compromise. They had already decided not to sink any more money into it. (Remember the persistent rumors around that time that the iMac would soon be EOL?) The compromise was to upgrade it without spending any money on it. Hence, the monitor upgrades. All other updates to this product have felt less like a company proudly bolstering its flagship consumer product, and more like a company grudgingly keeping a product on life support. They are either going to have to perform major reconstructive surgery, or pull the plug. If they were going to do surgery, I believe they would have done it by now. I believe that the days of the product we know as the iMac are numbered.
Apple does release new hardware at somewhat competitive prices, then they keep that hardware around forever while the performance curve on PC hardare continues to climb. Often an Apple that started out at a resonable price is grossly over priced six months down the road.
Then there is the issue of base RAM. It is very common to walk into a computer store and see Apple hardare with base RAM installs that are a quarter or half of what you get from PC's in the same price range. This particular bit burns my behind to no end as Apple has the ability to put RAM in their machines at a cost far below what you can do yourself. It is a sign of extreme cheapness and poor quality. It is especially and issue in the IBook where some of that RAM is soldered in place.
Apple will start regaining market share when the positively start addressing these issues. In part they can do this buy selling a machine at $600 that doesn't suck! That implies a 2GHz processor and enough memory to run the OS in a reasonable manner. It is strange that Apple can do well in the laptop segment but can't seem to grasp what the desktop market needs. The days of putting computers on desk that cost more than a thousand dollars are gone. We aren't talking about the work station market where Apple does much better, but that is a tiny market. The other problem with the workstation market is compatability, without a low cost solutions for the "other" desks in a company there is little incentive to go with Apple hardware. One way to change the incentive equation is to go high performance, unfortunately Apple really doesn't have a commanding lead here either.
As it is now Apple hardware simply doesn't appeal to a good portion of the population. At this point the IMac is nothing more than a high end office computer that appeals to the snobbish. The PowerMac G5 won't be going on many home or business desktops either. Agian it is to expensive to be placed as a general purpose computer, especially for a computer that runs only word and a web browser.
This is a little scatterred due to the time of the morning but I think some of my points made it through.
Dave
Originally posted by Amorph
That's the question, really, and it's not an easy question. I'm not going to sit here and pretend that I know the answer to it, either. Apple got the attention of the press; they released a killer OS; they released one bit of killer hardware after another; they ran an ad campaign targeting the easiest switchers (people who, fairly or unfairly, are completely fed up with Windows) and got it out everywhere. And... *crickets chirp*
That's despite the fact that OS X and the G5 and the PowerBook have an unprecedented amount of gatekeeper cred.
So they're going indirectly. Look at how completely the iPod mini has flummoxed the tech press. They can't understand why you'd buy one, and by all accounts people just have to have them. People who ordinarily don't go ga-ga over gadgetry are demanding them. Apple can use this in two different ways: They can hope that the iPod mini establishes a strong enough link between Apple and the folks on the other side of the gate that they feel confident in going out and getting a Mac themselves, and failing that, they can keep releasing things that get Apple more press and more market penetration and more money so that they can afford to keep trying other ideas.
I say not to wait a few years, but not to expect results for a few years at worst. That's assuming that Apple fights hard the whole time. That's just because Apple is up against network effects, and network effects are incredibly stubborn and resilient. You can't really make linear progress against them. They hold until they collapse. Of course, you can't predict when that'll happen, really, but Apple has to be firing on all cylinders when it does. I say a few years so that people don't get their hopes up that this or that strategy will work. If it were that simple, Apple would have 10% market share now.
Part of the problem of course belongs with the G4 but that only limits upgrades in one direction. As you noted a year of no updates will kill any machine.
All that being said though I do love the IMac design. But I'm not crazy enough to buy one at the price they have on them. The issue with the attiquated processor you point out is real also. It does make you wonder how Apple ever expected the machine to sell. They didn't even try the easy things such as significant RAM upgrades.
Dave
Originally posted by Mac Voyer
I have thought about this problem almost from the release of the iMac. The iMac 2 does not have mass appeal. It never has. It got mass attention, but it never had a chance of being a great seller IMO. Early on, I believe there was a realization that there was a problem. Further, I believe that there was a split in the ranks between those who wanted to push forward with the iMac 2 and those who wanted to bail and cut their losses. (No, I am not an insider. This is just rank speculation.) Remember the price hike/supply debacle? As early as that, people started losing interest and the iMac never recovered. The reason I believe that it is at least thinkable that it might be dropped is because it sat for 13 months without so much as a minor component update. That is unthinkable for any computer product. During that time, Apple practically killed the product themselves. They just simply let it go. Since then, they have tried throwing a larger monitors on it as if that would somehow magically revive it, but there is still no sign of a pulse. I believe there is still a raging debate going on behind the scenes and at some point, those who believe that the product should be dropped will soon win the day. At some point, the lamp design will do as much to bring down the legend of the iMac as the gumdrop did to build it up. It is a failure and Apple is trying to cover up just how big of a failure it has been.
The biggest clue that the product was dead was when they slapped the 17" monitor on it. People were screaming for an update and would have been happy with just a mild refresh. Apple did nothing but up the screen size and call it a day. Think about it. Any other type of update would have cost money. Motherboards, i/o, drives, processors and such would all have cost serious R&D and manufacturing dollars. A bigger screen must cost next to nothing by comparison. I believe at that time, they had reached a compromise. They had already decided not to sink any more money into it. (Remember the persistent rumors around that time that the iMac would soon be EOL?) The compromise was to upgrade it without spending any money on it. Hence, the monitor upgrades. All other updates to this product have felt less like a company proudly bolstering its flagship consumer product, and more like a company grudgingly keeping a product on life support. They are either going to have to perform major reconstructive surgery, or pull the plug. If they were going to do surgery, I believe they would have done it by now. I believe that the days of the product we know as the iMac are numbered.
Originally posted by wizard69
Lets face it the IMac is underpowered and over priced. It was overpriced the first day it was introduced, as you say the price bump didn't help at all.
absolutely.......
toooooo many times have I seen the spinning wheel of death on a 1GHz iMac.
The problem is that it is both underpowered and overpriced. If it were just overpriced (by that I mean a premium price for a computer) then I'd just buy one because the initial price is only one part of the equation.
While I have one of the 17 inch iMacs and am satisfied with it for what I do now, I haven't felt comfortable recommending it to others for awhile. I do like the lamp design, but I think there has to be more choice. I also think Apple has done a poor job of advertising by not showing off people actually using an iMac. A simple add showing a family sitting around looking at photos, swinging the screen around to each person, lowering it for the kids to get a look...that sort of thing. Having it stick out its "tongue" out at some guy walking by a window was cute, but didn't give people the impression of how convenient moving the screen around really is.
As for lame amount of RAM Macs come with these days it is mostly to keep resellers happy since they make so little profit off a stock machine they need to have something to add to make more money. And of course just think of the profit Apple makes when someone adds RAM at the Apple Store at the outrageous prices they charge there.
I am sure something different is coming, just hope it is soon so I can start evangelizing again
$1299 15"/ these specs should make a $799 machine
$1799 17"/ these specs should make a $999 machine
$2199 20"/ these specs should make a $1399 machine
$1299 is where comparable PC's were 4 years ago, that is why my five year old iMac was a good deal 5 years ago. Also, that machine is still huming along duing everything my wife and kids want it to do. I made my first iMovie on that machine. A similar PC from that time period would have crapped out trying to do that. Now as good PC's have come down in price, They start at $799 and go to $1499. IMO, anything less than $799 is garbage and above $1499 is more comparable to the powermac. Apple makes a good machine, but it is not keeping pace with the market as it once did.
If Steve would have made the iMac fill the price range above, with the current specs, he would not have been able to make enough of them. As for the eMac, it should be the "Dell special of the week" $499-$699 range. This is the get them in the door model.
Originally posted by oldmacfan
This is the problem.
$1299 15"/ these specs should make a $799 machine
$1799 17"/ these specs should make a $999 machine
$2199 20"/ these specs should make a $1399 machine
If Apple sold the 15" for $799, they'd be losing money on every iMac sold. Dell's production and assembly routines are far more streamlined than Apple's, so they can afford to build only what they need, unlike Apple, which creates a boatload and hope it sells, based on interest estimates. Granted, Dell makes far less per machine than Apple does, but they make it up in volume ? something Apple can't hope for.
There's a reason people aren't buying Macs, and it's not because of the price. Where do you suppose these legions of buyers will come from to pick up the subsidization costs? Dropping the price of iMacs will do nothing but kill profitability from the market Apple can depend on ? the Mac fans.
Yep. Agree with most everyone here. Apple's iMacs cost too much. When Apple can ship an iMac, with a G5 system inside, in the range of $900 to $1500, Apple will see more old Mac users upgrade to iMacs. The current iMac pricing is $400 to $600 too much for most consumers to swallow, even if they want to buy an iMac. I know I'm not tempted. One can even get an iBook G4 of nearly equivalent performance for less than or the same price as an iMac 15".
I've been to the Dell store a lot, and one can buy a decent - in the same way one would call a 1 GHz G4 system decent - a 15" LCD system for $900 and a 17" LCD system for $1000. Apple really has to stay within about hundred dollars of those prices to maintain their marketshare and have old Mac users upgrade. (And the eMacs should drop into $700 to $800 super specials.)
If they want to gain marketshare, well, I'm not sure what they can do. They need to start over again and create a lot of mindshare among future IT managers and coordinators so they have an open mind about block purchases. They have to have higher performing Macs at competitive prices.
Originally posted by Steve
There's a reason people aren't buying Macs, and it's not because of the price. Where do you suppose these legions of buyers will come from to pick up the subsidization costs? Dropping the price of iMacs will do nothing but kill profitability from the market Apple can depend on ? the Mac fans.
Steve, this type of thinking suggests that Apple has no chance at getting switchers. Is that what you really believe? Is Apple's market fated to be incestuous forever? Is cannibalization the only inevitable result? I don't think so.
A lot of people, including myself, have blamed the iMac's problems on the eMac. I have since come to realize that is not fair or accurate. the eMac is not the iMac's problem. The iMac is the eMac's problem. There was no eMac until after the iMac was rejected. In fact, the iMac was rejected twice and the eMac was there to save the day. First, education rejected the iMac. They were afraid of it and they couldn't afford it. The iMac was perhaps one of the single biggest reasons for the decline in education sales. The original iMac was a boost to education sales.
The second rejection came when the people clamored for the eMac instead of the iMac. For all the reasons given throughout this thread, the iMac was not the right machine at the right time. To this day, I cannot recommend an iMac to a potential switcher. At $799 and $1099, the eMac is the only logical choice. Size does not matter because both machines are just lumps that are fated to sit on the desk for the rest of their natural lives. Grant it, the iMac is a decidedly cuter lump, but it is still a lump, (or should I say "lamp"). But make no mistake about it. The emac did not cause the iMac's problems. The iMac's problems caused the eMac's existence. The iMac has been dead since about three months after its release. Apple just has too much pride to admit that it made another cube and too much sense to sink a lot of money into it. That's my take.
Some things I agree with. But some of the stuff...I don't know. Talks about "expandability" and so forth. Here's my thing: would would the target iMac crowd be interested in expanding? Who, honestly, besides higher-end pros, legitimate envelope pushers, content creators (or Spec Whore types) truly, truly "upgrade" and "expand" their computers?
I mean, if an iMac comes with a 60-80GB hard drive, 64MB graphics, FireWire (400 or 800), USB 2.0, Bluetooth, AirPort Extreme, Ethernet, audio-in, Combo or SuperDrive, built-in modem, good sound, etc. what, exactly, is there to expand?
I think that stuff is overstated and overrated. I'd be willing to bet that most people buy their box and add RAM only. Hell, most people will continue to use the OS that came on their machine (my Mom and Dad both using Windows ME on four-year-old PCs), so they're sure as hell not going to be "expanding" with hardware, are they? Not all, I know. But MOST.
Interesting article, either way.
They sell a 20" iMac.
Are you telling me that in 4 years when they want to upgrade their computer a 20" widescreen LCD display is going to be old hat. Come on. I could use this 17" LCD in front of me for at least another computer, maybe 2.
Why upgrade and buy a new computer if you have to buy a whole new display to go along with it. It was fine with cheap ass CRT's in the original iMac, because they really are limited and you might as well buy a new monitor. 15" CRT is cheap and doesn't seem lilke it would kill you. But a 20" or even 17" LCD is just going to waste on a non-removable arm.
Now that Fred Anderson has come out and said that the iMac's overpriced (relative to the market "sweet spot"), and given that the eMac and iMac combined sell about half as well as the jellybean iMacs did at their peak, I think we can safely say that Apple's aware of the problem. So let's discuss the future, OK?
The iMac is currently selling much better than the Cube did, although it did have a similar problem off selling really well in the first quarter and then settling down. The comments about the eMac being a solution to the iMac are spot on, though. Apple should have realized they had a problem as soon as people clamored for a consumer eMac - maybe they did, and it's just taken them this long to solve it?
If you keep the monitor from your previous machine, you can't hand the whole system down to a friend/relative/child when you buy your whole new system - which a lot of people do.
I don't believe that correctly pricing the iMac will solve everything either, because I agree that pricing isn't the main issue (nor is the AIO factor the main issue). The main obstacle is the fear of having a machine that you have to learn to use (since you already know Windows), that isn't like anyone else's machine, and that no-one you know can troubleshoot, and that the people who you do lean on to troubleshoot don't like.
But that's for another thread. In this thread, we can at least try to figure out the smaller problem of what Apple can do for the next generation iMac.
I've been one of the loudest "the color thing is over...get over it, people!" guys here. But damn. I think about it and...
Eye appeal, and what amorph mentions above: fear. That's where Apple's marketing (or lack of) has a DIRECT effect on things. People (and I run into them all the time) don't know they can run Office on a Mac. Or use their current peripherals (Epson, Canon, HP and others seem to have pretty good OS X support at this point). A little information, reassuring, etc. in the form of print or broadcast ads might fix that particular issue rather quickly.
But yes, the jellybeans...you felt like it was "yours". It matched your colors. It felt more personal and cute. It was so different. And they weren't that powerful, but it didn't really seem to matter then too much?
It's no secet we're a image/visual-fixated society. If Apple could make a Janet Jackson titty iMac, why...imagine the possibilities!
Maybe not colors. What about those patterns? I find it kinda tough to believe Apple spent all that time and effort to roll out only two machines using that injection modling business. Was that a test run? Or did they bomb so horribly that Steve murdered the Blue Dalmation/Flower Power project team?
I'd be curious to see a two-prong approach: new iMacs available in the non-offensive, cool-looking white as they currently are. BUT...offer them in a choice of, say, 5 or so patterns (not sure what they should be, but covering a wide range of tastes/styles).
Yeah, Fred pretty much copping to the iMac/price thing does indeed give me confidence that they're "on it" and will roll out something rather cool in 2004.
I trust them. I like to think they learn lessons. Well...sometimes.
Two engaging posts which call it as they see it.
People aren't buying the iMac2 in numbers and the lumping in of eMac numbers is patently transparent.
The interesting points above are concerning the lack of bump for 13 months. Nothing! Obviously, something wrong in the Apple camp there. And interesting to note that the iMac 2 has had screen size bumps and little esle in its two year plus existence.
The original iMac had downward pricing pressure almost from the off. Brought out colours to work the press and mindshare mojo. Small wonder that it sold as many as half a million per quarter. It wasn't just jelly bean razzmatazz, it was AFFORDABLE. That's not something I'd level at the iMac 2. While the iMac's G3 was kicking Pentium booty, the iMac 2's G4 is painfully out of touch.
Heck, prices on the original iMac even got as low as £595 in the UK for the low end model! Something Apple is barely managing years late with the pale-shadow eMac.
iMac2? The eMac was its apologetic after thought. Insurance and hi-carb.
The iMac2 never drove the price downward. It has consistently held the line above the 'sweet spot'. Misguidedly presuming a 'Son of Cube' mantle. It aint selling because it outside what most people consider 'fair' in terms of bang for buck. It's nice but. It isn't compelling enough at the price to make people walk for it.
Somebody brilliantly outlines where the prices SHOULD be above.
Unless you make something 'cheap' or 'reasonably' priced enough at points people are prepared to pay for then you get shrinking marketshare. (Hello, Mac land...)
Why should people have to subsidize Apple? Geez, at least get within a £100. But at times it's several hundred. Compare a £799 PC vs an eMac.
It's embarrassing.
I wish Apple would quit with the this dead end design equation. People are buying laptops in increasing numbers but on the consumer desktop the PC tower is still ruling. Apple should give people (the PC market they're supposedly chasing...M$ customers...) what they are familiar with. A simple, scalable and smart tower case design that scales the eMac to iMac2 price point.
A mini-G5 tower from £495 to £995.
Job done.
2 gig to 2.4 gig singles. Integrated to upgradeable graphics.
Everything above 1K?
Dual. More expandability. More ram. Better graphics cards.
It's so simple the PC market does it and sells bucket loads more towers than the poxy lamp or the lard-ass eMac.
So much of their desktop product is a two legged chair. Why?
Lemon Bon Bon
It IS a doozy: AIO or 2-piece? Colors or no? G4 or G5? Price too high? Price too low? Limited appeal? Not enough consumer knowledge about things? Expandability or closed box? At what point does an iMac become "just another computer"? How much is quality/coolness sacrificed to hit those magical low prices? How much does design (and Ive) play into that?
They can't seem to get TOO cute or clever because those articulated chrome arms seem to add price. Funky upside-down cereal bowl shapes probably require funky upside-down engineering to fit stuff.
Do they bring back a better, improved (and reasonably-priced) "cube" sort of thing? Do they split the line? A cube, a minitower? Two iMacs?
AIO?
I prefer AIO. Marketing? Specs? What's lacking? What's the beef? Where's the taters?
I'm SOOOO glad I'm not Jonathan Ive right now.
IMO, the iMac got as cool-looking as it's ever going to get with this current model. Unless they just go completely 180-degrees, I can't imagine improving on that design...the "anywhere you want" screen is amazing!
Oh, iMac...what are you going to be?
Originally posted by pscates
It IS a doozy: AIO or 2-piece? Colors or no? G4 or G5? Price too high? Price too low? Limited appeal? Not enough consumer knowledge about things? Expandability or closed box? At what point does an iMac become "just another computer"? How much is quality/coolness sacrificed to hit those magical low prices? How much does design (and Ive) play into that?
They can't seem to get TOO cute or clever because those articulated chrome arms seem to add price. Funky upside-down cereal bowl shapes probably require funky upside-down engineering to fit stuff
These are the reasons that the iMac is priced as it is. Honestly, I think Apple is going to have to sacrifice some coolness and some ergnomic appeal for price points. Right now, they can just be happy that they sell the coolest music player and laptops. Their pro desktop is also cool, but it is the iMac that just seems oddly cool (somehow out of place) yet gorgeous.
The iMac can still be cool, just make it a reprint, not a priceless original piece of artwork that it currently is.
iBooks and PowerBooks are cool because they are slim, compact and light. The PowerMac is cool to power hungry users that dont care what it looks like that much. The iPod is cool because of how it does what it does, how small it is, and how light.
The iMac and eMac just dont fit in right now, much like the display lineup...
1. Keep optical drives flat (don't they work faster/better that way? Steve mentioned it two years ago)
2. Display has to have mobility...tilt and swivel at least.
If you have wide 17" and 20" displays, what's to say that the body couldn't be larger side to side (matching the display width) and short, front to back? Imagine a loaf of bread, if you will. The body is hidden behind the display anyway, so who says it has to be small and compact, especially if that entails extra engineering or cuteness to make things fit and work?
A sideways one. Rectangular in basic form (motherboard, cards, hard drive, optical drive, etc. all fitting nicely...no curves, angles, domes, etc. to speak of or design to).
Gentle slopes and curves, sure. But something more like an iBook rather than an eMac or current iMac. But not a dome or sphere or anything like that.
What if a display tilted up and down on a length-wise cylinder? It would be an all-in-one. But, like the current iMac, the body would remain the same.
Square shape, enough internal room to let drives sit horizontally. Not a simple "glom onto the back of an LCD" design, which Steve ragged on two years ago (I doubt he'd want to go back on that).
Originally posted by Steve
If Apple sold the 15" for $799, they'd be losing money on every iMac sold. Dell's production and assembly routines are far more streamlined than Apple's, so they can afford to build only what they need, unlike Apple, which creates a boatload and hope it sells, based on interest estimates. Granted, Dell makes far less per machine than Apple does, but they make it up in volume ? something Apple can't hope for.
There's a reason people aren't buying Macs, and it's not because of the price. Where do you suppose these legions of buyers will come from to pick up the subsidization costs? Dropping the price of iMacs will do nothing but kill profitability from the market Apple can depend on ? the Mac fans.
Maybe Steve needs to Think Different
Apple needs to institute a subscription program for the iMac/AIO line. Here's how it would work:
1. Initial purchase, $1K to 1.7K range. The only differentiation is monitor size. All have up-to-date internals and i/o. Only ram would be user upgradable.
2. Every year, the iMac owner brings her machine to a store for the annual upgrade. At that time, the unit gets a faster drive, USB 3.0, a slightly better graphics card and a slightly faster CPU. This service would cost $500 per year. This service must be paid for one year in advance. This way, the initial cost for the iMac subscription will be $500 more than the sticker price and each year you pay for next years upgrades.
2b. Another scenario would guarantee good processor, motherboard, and graphics card upgrades one year, and other internal upgrades like drives and I/O the following year. This way, you would have a completely new system every two years. The $500 subscription part would remain the same.
3. The upgrade would only be offered once a year. A person would be free to skip an update. But that would effectively cancel their subscription. They would then have to buy a new machine for future updates.
This is a win-win situation.
The consumer wins because it is much easier to pay $500 once a year than it is to pay $2000 once every four years. Also, your system never gets four years behind the times. It will never be outdated. No matter where technology goes, you will be there. Another benefit is that you will never be forced to prematurely get rid of a beloved machine because of outdated specs. It will be as great and as useful in four years as it was the day you bought it.
For education, it's "game over". For the same price that institutions pay to maintain old equipment, they can just subscribe to an always-up-to-date program. No more major purchases every few years. Naturally, onsite upgrades would be offered to institutions.
I can't even begin to calculate the benefit to Apple. They would have a predictable and sustainable base of income for future products. They would not be forced to come up with the "next big thing" so often. They would make more profit because upgrade costs would be much lower than manufacturing costs.
The best benefit yet is that with the old parts that Apple collects every year. They can finally afford to sell a bargain priced Mac that is pure profit based on last year's parts. In essence, Apple gets to sell these parts twice. Why not?
The beauty of the subscription plan is its flexibility. I am flexible on the types of upgrades you get every year, just as long as they are predictable. Perhaps they can offer a discount when subscriptions are purchased two and four years in advance. Perhaps they can offer a $50 per month subscription to those that would rather pay monthly than yearly. Either way, the actual upgrade would only happen once a year.
Clearly, I am not describing a new type of computer. Rather, I am describing a new way to sell it. With a program like this, even the 20" iMac looks pretty good. Everybody wins.