Some sort of update needs to happen soon with the Powermacs. I'm not gonna spend $2500+ on a 7-month old model and watch the new ones roll out a few weeks later. That would kill me.
You completely missed my point ... a car sitting on the lot for 6 months is still going to sell at the same MSRP that it sold for when it first rolled out. The same is true with computers. That's why Apple isn't dropping prices. It's the same thing people bought 10 months ago for $2500 ... nothing in the box changes and the computer sitting on a warehouse shelf is not 6 months old just because you chose to buy it 6 months after release. It's brand new ... never used, nothing wrong with it, so why shouldn't Apple still demand MSRP for it?
You're right in that the car market has the advantage of letting people know what and when when it comes to their product; however, if I have a car start dying on me in late Fall, I'm either going to have to drop the bucks to fix it or buy a new one late in the model year. If my car is still running and will get me from one place to another, I don't NEED a new one, I want a new one for the performance, looks, whatever. If the computer you bought 10 months ago will still do what you need it to do, then there's no reason you NEED a new one. IT STILL WORKS and does what you need it to do.
Ag,
This rational works as long as you ignore development time differences in computers and cars, and professional users.
While cars are generally only updated on a yearly basis (and arguably slower?up to 5?6 year development cycles for model redesigns), computers are different, and what is competitive today at a price point will not be competitive 6 months from now at the same price point. For a vertical example, note video accelerators. ATI and NVidia have, in the past, swapped top sales spot back and forth a few times based on differentials in their development cycles, and how well their products compared on a price/performance level. Apple is insulated of course on a consumer level because if we want the Mac OS experience, there is no competition. Lack of innovation does hurt their bottom line, however, since they will inspire fewer repeat buyers?why replace something when the performance benefit doesn't match the cost?
Professional users are a whole different ball of wax. Take Graphic Design for instance? a market in which Apple is not the powerhouse they once were. Now the motivation for a professional to buy a new computer, at the basic level, is that the computer will a.) let them acquire jobs they were formally not able to acquire, due to new features, or even more importantly b.) allow them to get more work done in the same amount of time, allowing them to compete in price with other professionals. So if all of a suddden an SGI or AMD or Intel box comes along and can effectively do twice as much work in the same amount of time that the Apple box does, then in order to stay price competitive the Graphic Designer either needs to earn less money or buy the competing system.
Note that for professionals the difference between $1,000 and $4,000 for a computer really shouldn't matter all that much, unless you are just starting out, and that extra $3,000 tranlates into performance.
I'm not saying it's gotten to that point yet, but it's getting close. The only thing keeping me from jumping ship at this point is an emotional attachment to the OS; software investment isn't even that big of a deal right now because of course the new version of Adobe's CS is coming along.
What would makes us real happy (you listening Apple?) is if Apple announced new, faster computers to match the release of CS2. That and made it so that AppleCare wasn't essentially useless.
[B] It's the same thing people bought 10 months ago for $2500 ... nothing in the box changes and the computer sitting on a warehouse shelf is not 6 months old just because you chose to buy it 6 months after release. It's brand new ... never used, nothing wrong with it, so why shouldn't Apple still demand MSRP for it?]
Every component in that G5 is quite a bit cheaper then it was 6 months ago. The graphics card is cheaper, the chips are cheaper, hard drives - you name it. I don't think people would complain so much if prices came down just a little.
You completely missed my point ... a car sitting on the lot for 6 months is still going to sell at the same MSRP that it sold for when it first rolled out. The same is true with computers.
I completely get your point, but it sounds like you're not seeing mine. Yes, your example is perfect for items on the showroom floor, UNTIL you buy it and the new line comes out.
This is why cars make no sense to compare with computers. If you buy a 2004 car model late in the year, and the 2005 model comes out a month later, the two cars may have the exact same MSRP, but the VALUE of your 2004 car just dropped like a cat thrown off a roof. And since you know exactly when, year after year, exactly when new car lines are rolled out, you can even leverage that knowledge into getting the best deal/performance. (Example, wait a month and get more for your $$$, or hold out and get new performance for the same cost today.)
For PowerMacs, this is why some of us wait, and wait, and wait. We hold out with our existing machine for as long as possible, hoping an announcement will help us buy accordingly. But UNLIKE cars, we don't get automated updates on models each year, and it throws the buying options off. No one wants to pull the trigger on a PM and then have the value of their machine take that large $$$ drop when the new line comes out. We're just trying to get the most bang for our buck, on top of the fact that UNLIKE a car, a newer machine could have completely new hardware designs that you may ultimately need in your professional setup down the road.
The example isn't really true. I see prices for the same exact PCs decline REGULARLY. $50 drop here, $100 there, free bonus here, MIR there. This is especially true of online BTO OEMs. They don't have sudden drops at only 6 or 12 months or whatever. They've been dropping all along as their costs drop.
You can see system and component prices slip with age on pricewatch.com (where I do most of my price-compare window shopping).
Personally speaking, I think it's annoying that Apple holds prices so steady. As a consumer, it screws the people that miss a refresh. As a company, it can hurt quarterly earnings since knowledgeable shoppers know to wait rather than get the older hardware.
Apple's bean counters factor in the drop in component, and thus manufacturing costs, over the life a product. So in the beginning of a Powermac model's life, large volume makes up for small margins, and then later larger margins make up for the smaller volume.
If Apple cut prices as component costs dropped, then either they wouldn't sell more and their profits would take a hit, or they would sell more, but then there would be fewer buyers when the new models came out. Since Apple is dealing with a fixed customer pool, the rules are different than for Wintels.
If Apple slashed Powermac prices by 50%, what would happen? Would Mac users buy Powermacs instead of iMacs? Or would Wintel users suddenly see the light and switch to OS X? Apple, for whatever reason, believe it would largely be the former.
Doesn't sound very consumer friendly. I think being the only supplier in their customer pool factors into their pricing more than anything else.
But anyway, there wouldn't necessarily be a switch from one platform to another if the price adjustments were consistent across their product lines. Even if there was, so what?
If you buy a 2004 car model late in the year, and the 2005 model comes out a month later, the two cars may have the exact same MSRP, but the VALUE of your 2004 car just dropped like a cat thrown off a roof.
Car manufacturers really know how to play the game - that's why they release 2005 models towards the end of summer 2004 and will release 2006 during 2005 - so you can't walk into the showroom Jan1 2006 and say "Hey, i want a deal on a 2005 car"
I will agree with JYD though, Apple is in a tough position regarding pricing.
Comments
Originally posted by AgNuke1707
You completely missed my point ... a car sitting on the lot for 6 months is still going to sell at the same MSRP that it sold for when it first rolled out. The same is true with computers. That's why Apple isn't dropping prices. It's the same thing people bought 10 months ago for $2500 ... nothing in the box changes and the computer sitting on a warehouse shelf is not 6 months old just because you chose to buy it 6 months after release. It's brand new ... never used, nothing wrong with it, so why shouldn't Apple still demand MSRP for it?
You're right in that the car market has the advantage of letting people know what and when when it comes to their product; however, if I have a car start dying on me in late Fall, I'm either going to have to drop the bucks to fix it or buy a new one late in the model year. If my car is still running and will get me from one place to another, I don't NEED a new one, I want a new one for the performance, looks, whatever. If the computer you bought 10 months ago will still do what you need it to do, then there's no reason you NEED a new one. IT STILL WORKS and does what you need it to do.
Ag,
This rational works as long as you ignore development time differences in computers and cars, and professional users.
While cars are generally only updated on a yearly basis (and arguably slower?up to 5?6 year development cycles for model redesigns), computers are different, and what is competitive today at a price point will not be competitive 6 months from now at the same price point. For a vertical example, note video accelerators. ATI and NVidia have, in the past, swapped top sales spot back and forth a few times based on differentials in their development cycles, and how well their products compared on a price/performance level. Apple is insulated of course on a consumer level because if we want the Mac OS experience, there is no competition. Lack of innovation does hurt their bottom line, however, since they will inspire fewer repeat buyers?why replace something when the performance benefit doesn't match the cost?
Professional users are a whole different ball of wax. Take Graphic Design for instance? a market in which Apple is not the powerhouse they once were. Now the motivation for a professional to buy a new computer, at the basic level, is that the computer will a.) let them acquire jobs they were formally not able to acquire, due to new features, or even more importantly b.) allow them to get more work done in the same amount of time, allowing them to compete in price with other professionals. So if all of a suddden an SGI or AMD or Intel box comes along and can effectively do twice as much work in the same amount of time that the Apple box does, then in order to stay price competitive the Graphic Designer either needs to earn less money or buy the competing system.
Note that for professionals the difference between $1,000 and $4,000 for a computer really shouldn't matter all that much, unless you are just starting out, and that extra $3,000 tranlates into performance.
I'm not saying it's gotten to that point yet, but it's getting close. The only thing keeping me from jumping ship at this point is an emotional attachment to the OS; software investment isn't even that big of a deal right now because of course the new version of Adobe's CS is coming along.
What would makes us real happy (you listening Apple?) is if Apple announced new, faster computers to match the release of CS2. That and made it so that AppleCare wasn't essentially useless.
Originally posted by AgNuke1707
[B] It's the same thing people bought 10 months ago for $2500 ... nothing in the box changes and the computer sitting on a warehouse shelf is not 6 months old just because you chose to buy it 6 months after release. It's brand new ... never used, nothing wrong with it, so why shouldn't Apple still demand MSRP for it?]
Every component in that G5 is quite a bit cheaper then it was 6 months ago. The graphics card is cheaper, the chips are cheaper, hard drives - you name it. I don't think people would complain so much if prices came down just a little.
Originally posted by AgNuke1707
You completely missed my point ... a car sitting on the lot for 6 months is still going to sell at the same MSRP that it sold for when it first rolled out. The same is true with computers.
I completely get your point, but it sounds like you're not seeing mine. Yes, your example is perfect for items on the showroom floor, UNTIL you buy it and the new line comes out.
This is why cars make no sense to compare with computers. If you buy a 2004 car model late in the year, and the 2005 model comes out a month later, the two cars may have the exact same MSRP, but the VALUE of your 2004 car just dropped like a cat thrown off a roof. And since you know exactly when, year after year, exactly when new car lines are rolled out, you can even leverage that knowledge into getting the best deal/performance. (Example, wait a month and get more for your $$$, or hold out and get new performance for the same cost today.)
For PowerMacs, this is why some of us wait, and wait, and wait. We hold out with our existing machine for as long as possible, hoping an announcement will help us buy accordingly. But UNLIKE cars, we don't get automated updates on models each year, and it throws the buying options off. No one wants to pull the trigger on a PM and then have the value of their machine take that large $$$ drop when the new line comes out. We're just trying to get the most bang for our buck, on top of the fact that UNLIKE a car, a newer machine could have completely new hardware designs that you may ultimately need in your professional setup down the road.
So we wait...
You can see system and component prices slip with age on pricewatch.com (where I do most of my price-compare window shopping).
Personally speaking, I think it's annoying that Apple holds prices so steady. As a consumer, it screws the people that miss a refresh. As a company, it can hurt quarterly earnings since knowledgeable shoppers know to wait rather than get the older hardware.
As a company, it can hurt quarterly earnings since knowledgeable shoppers know to wait rather than get the older hardware.
Maybe Apple thinks we're all stupid.
If Apple cut prices as component costs dropped, then either they wouldn't sell more and their profits would take a hit, or they would sell more, but then there would be fewer buyers when the new models came out. Since Apple is dealing with a fixed customer pool, the rules are different than for Wintels.
If Apple slashed Powermac prices by 50%, what would happen? Would Mac users buy Powermacs instead of iMacs? Or would Wintel users suddenly see the light and switch to OS X? Apple, for whatever reason, believe it would largely be the former.
But anyway, there wouldn't necessarily be a switch from one platform to another if the price adjustments were consistent across their product lines. Even if there was, so what?
Originally posted by inaka
If you buy a 2004 car model late in the year, and the 2005 model comes out a month later, the two cars may have the exact same MSRP, but the VALUE of your 2004 car just dropped like a cat thrown off a roof.
Car manufacturers really know how to play the game - that's why they release 2005 models towards the end of summer 2004 and will release 2006 during 2005 - so you can't walk into the showroom Jan1 2006 and say "Hey, i want a deal on a 2005 car"
I will agree with JYD though, Apple is in a tough position regarding pricing.
Originally posted by tacojohn
My department just bought 28 G5's with cinema displays....
What the hell does Mc Donalds want with 28 G5's? 8)
Originally posted by Celco
What the hell does Mc Donalds want with 28 G5's? 8)
Funny...
More than White Castle does.
lol 8)