Dell loses money on every low end computer they sell. They admitted that a few months ago. They said that to help change that situation they were going to now charge for shipping, cut back the warrantees (it's now 90 days on these machines, you buy an upgrade), and eventually cut back on the cupon discounts they sometimes give. They also said that simply going after marketshare wasn't where they were going to be at.
It's why they introduced their new hi-end computer line.
Dell makes most of its profits from its servcers, and business services.
And, yes, we DON"T know what Apple could have done for $399-$499. You think you do,but you don't know Apple's costs.
We know that the Core Sole costs about $200. I don't remember the actual price, but the G4 7447a was supposed to be costing Apple somewhere around $50 - $75. That's quite a jump! What do you want them to do?
Chip prices will fall at least two times this year. Possibly three. That's Intel's normal procedure. We already know that they will drop somewhat when the faster 2.33GHz version comes out. They will drop further when Merom comes out, and possibly when the faster Merom chips come out near the end of the year. If Apple continues to use the Yonah in the Mini this year, the price drops will be significant. The Core Solo could drop, eventually, late this year, to under $100.
If you want Apple to sell a machine for $399, good luck. I don't think Apple will produce a loss leader like that.
we DON"T know what Apple could have done for $399-$499. You think you do,but you don't know Apple's costs.
Look, Mel, this is hardly brain surgery or rocket science. Apple make a profit on a $599 machine that uses a Core solo, laptop drives, laptop RAM, wireless, and includes an Apple remote. Take all those things out, and you have the basis for a profitable $399 - $499 machine.
Quote:
Originally posted by melgross
I don't think Apple will produce a loss leader like that.
How much bitchin would people do if they had to pay extra for a version of OS X that could play iTunes?
A lot. No one is seriously suggesting that Apple should introduce a tiered software charging policy. Someone just said that to take the piss out of me.
edit:
The difference between software and hardware is that the software engineering has already been done. It doesn't actually cost Apple anything to include it.
Every piece of hardware Apple gives you, on the other hand, costs them money. Leave some of the hardware out, and use cheaper components (full size drives vs laptop drives), and you can charge the customer less (if they don't want those features) and still make a profit.
And if it does more than they need it to do, they won't think it is worth the extra price. Why are you so resistant to offer people more choices? You have provided absolutely zero reasons why Apple could not make a profit from selling a $399 machine with the specs. I outlined.
I'm not. But you have to understand that Apple will not get that 95% of the US market they don't have, nor the 97% of the world market they don't have.
They will increase their share with what they are doing now.
But the vast majority of people don't switch to Apple because of software issues, not machine issues.
You are ignoring all of the argument except for the one thing you want to pound on. And that simply isn't the most important thing.
If the cheapest machine Apple offered cost $1,000, sans monitor, etc., and had no software with it, then I would heartily agree. But as it is, I can't!
It's not a matter of limiting choices. Apple has a lineup from $599 to $3,200. That's choices! If they don't think they should, or could, compete at $399, that's fine. I trust their marketing more than I trust guesses. I firmly believe that, at this time, Apple could not have offered a machine for $499.
I simply do not agree that taking away the very things that make these machines more desirable, and make them stand out from the crowd, would help Apple, either in sales, or as a company. If a consumer decided to buy a machine without these features, which are now very popular, and wanted to add them later, they could not. That would get them more upset than the extra $100 in price. It is the responsibility of the store staff to explain what they are buying. If that doesn't happen, then Apple and its resellers better get on the ball.
We don't agree on this, and that's fine, but we are not going to resolve our differences on this issue, so possibly we should, figuratively, shake hands, and drop it.
Look, Mel, this is hardly brain surgery or rocket science. Apple make a profit on a $599 machine that uses a Core solo, laptop drives, laptop RAM, wireless, and includes an Apple remote. Take all those things out, and you have the basis for a profitable $399 - $499 machine.
It wouldn't be a loss-leader. That's my point.
Ok, I can't help but respond to this, it's too much to ask of anyone.
You are correct, no doubt, absolutely!
If, as you suggest, Apple removes, and I quote from the above sentence:
" a Core solo, laptop drives, laptop RAM, wireless, and includes an Apple remote. Take all those things out, and you have the basis for a profitable $399 - $499 machine."
I agree completely, if Apple does remove all of that from the machine, they will make a profit on a $399-$499 selling price. No doubt!
EDIT: I'm putting this in because Idon't want you to think I'm being mean here. I know you didn't mean it the way it came out. I just thought a little levity was called for.
I'm not. But you have to understand that Apple will not get that 95% of the US market they don't have, nor the 97% of the world market they don't have.
They will increase their share with what they are doing now.
But the vast majority of people don't switch to Apple because of software issues, not machine issues.
You are ignoring all of the argument except for the one thing you want to pound on. And that simply isn't the most important thing.
If the cheapest machine Apple offered cost $1,000, sans monitor, etc., and had no software with it, then I would heartily agree. But as it is, I can't!
It's not a matter of limiting choices. Apple has a lineup from $599 to $3,200. That's choices! If they don't think they should, or could, compete at $399, that's fine. I trust their marketing more than I trust guesses. I firmly believe that, at this time, Apple could not have offered a machine for $499.
I simply do not agree that taking away the very things that make these machines more desirable, and make them stand out from the crowd, would help Apple, either in sales, or as a company. If a consumer decided to buy a machine without these features, which are now very popular, and wanted to add them later, they could not. That would get them more upset than the extra $100 in price. It is the responsibility of the store staff to explain what they are buying. If that doesn't happen, then Apple and its resellers better get on the ball.
We don't agree on this, and that's fine, but we are not going to resolve our differences on this issue, so possibly we should, figuratively, shake hands, and drop it.
Very well said.
I would just say this. The biggest thing that makes Apple machines stand out is OS X, iLife, and elegant boxes. Building an inexpensive machine as I suggest does not take away any of this (a low-spec machine can still run OS X, iLife and have an elegant box).
You say that having a cheaper box will not actually bring that many extra people to the party. I do think that Apple's market share will continue to increase without a line of computers such as the ones that I suggest, but that it'll probably stick at about 5 - 6 %, and that isn't high enough to stop the marginalisation of our platform (please note, I'm not saying that that leads to Apple is teh DOOMED!). Now we are at a point where I feel that we can agree to disagree. Before this, people were just flat not undertanding what I was saying.
Ok, I can't help but respond to this, it's too much to ask of anyone.
You are correct, no doubt, absolutely!
If, as you suggest, Apple removes, and I quote from the above sentence:
" a Core solo, laptop drives, laptop RAM, wireless, and includes an Apple remote. Take all those things out, and you have the basis for a profitable $399 - $499 machine."
I agree completely, if Apple does remove all of that from the machine, they will make a profit on a $399-$499 selling price. No doubt!
Looks like I may have spoken too soon. You know what I meant, there's no need to be facetious.
Looks like I may have spoken too soon. You know what I meant, there's no need to be facetious.
I'm sorry. I just added to the bottom of the post. When I read it, after I posted it, I realised that it could be taken the wrong way. No insult intended.
I'm sorry. I just added to the bottom of the post. When I read it, after I posted it, I realised that it could be taken the wrong way. No insult intended.
O.K.
Consider your hand shaken. We agree to disagree, and look forward to an exciting year from Apple?
Apple is becoming a vertically integrated company IMO. Who made ilife, iworks, fcp, aperature? Why depend on Adobe? Sure its great if they want to develope for macs, but mac users are only about 25%. To substantially increase this means fighting the whole OS war with MS again. I just don't see it happening. Apple is trying to put out profitable products and they don't seem to be concerned about market share. Time will tell if they are right.
Why depend on adobe? Because Graphics artists and houses depend on their products and thats the main reason they buy Macs? Because Apple has no replacement for photoshop, illustrator, or whatever thet make?
Apple cannot replace third party software vendors.
Not neccessarily having to do with the mini, but I found some interesting info about Core on Wiki:
Quote:
Advantages and Shortcomings
Yonah represents a breakthrough in industry power consumption and performance per watt. It also offers the latest in cache technology, in dual core cache coherency and cache snooping; it supports 667 MHz (166 MHz quad-pumped) FSB, and Dual Channel DDR-II Memory Bus. The power management components of the core features finer grained thermal control, as well as independent scaling of power between the two cores, significantly reducing power consumption.
The shortcomings of Yonah are largely inherited from previous Pentium M architectures, such as high memory latency due to the lack of on-die memory controller (while DDR-II itself has higher latency problem over DDR) and the slower performance of Floating Point Units (FPU) due to the smaller number of FP units in each CPU core. Also, while processors that support AMD64/EM64T offer both 32-bit and 64-bit computation, the Core Duo is a 32-bit processor. It limits the size of a process's (linear) address space to 4 GiB minus the address space allocated for ISA/PCI devices (IOMMU), so a single process cannot easily access more than 4 GiB of physical memory and can only use up to 2 GiB of address space per process on Windows (although the processor can address more than 4 GiB of physical memory), and cannot take advantage of the additional general-purpose registers, and the ability of those registers to store 64-bit quantities and to participate in 64-bit arithmetic, that AMD64/EM64T offer.
Look, Mel, this is hardly brain surgery or rocket science. Apple make a profit on a $599 machine that uses a Core solo, laptop drives, laptop RAM, wireless, and includes an Apple remote. Take all those things out, and you have the basis for a profitable $399 - $499 machine.
It wouldn't be a loss-leader. That's my point.
Yup, at least they could have kept it at $499.
The $499 model should have looked like this:
Intel Chip
60Gb Hard Drive
512Mb RAM
64 Mb Dedicated 3D Graphics Card.
Internal Modem.
iWork.
At the same $499 price point everyone would have been happy. Apple blew it with this $599 model, IMHO.
[B]Huh? It has plenty bearing on the issue. Dell make computers. So does Apple. Now, Apple even uses the same platform as Dell. Your comment would have made more, although not total, sense, in the PPC days.
Sony makes computers too and they don't shoot for the $299/$399 market either.
Why do folks assume that Apple is targeting the low end segments for their pool of switchers and not the pool of windows users that buy mid to high end PCs like the VIAO?
The iMacs are well positioned against the VA TV-PC series (20" WS + Pentium 4 630 3.0 Ghz, 1GB DDR2, 250GB HD, DVD-RW, Radeon X700, $2K) in both features and mindshare.
The mini does well against the VAIO RB53 (Pentium 4 630 3.0 Ghz, 512 MB RAM DDR SDRAM, 200 GB HD, DVD+/-RW, $799). Which uses a Intel GMA 900 but does have expansion ports as a tower.
The target demographic IMHO buys iPods, XBox 360s, PSP, PS3, VIAO, B&O, Bose, etc and tend toward form over value. That's not the $399 PC demographic.
Nor is that $399 demographic all that valuable to a company like Apple. It's likely a detriment to value of the branding.
Vinea
PS Yeah, I wrote this elsewhere but that thread went somewhere odd.
At the same $499 price point everyone would have been happy. Apple blew it with this $599 model, IMHO.
The difference between you and me is that what I'm suggesting for $499 is possible, what you are suggesting is not. Apple could not do that and make a profit.
Comments
Originally posted by Mr. H
You have provided absolutely zero reasons why Apple could not make a profit from selling a $399 machine with the specs. I outlined.
Instead of builing cheap boxes for minimal profit, why not make innovative products that consumers will pay a premium for?
Originally posted by melgross
Dell loses money on every low end computer they sell. They admitted that a few months ago. They said that to help change that situation they were going to now charge for shipping, cut back the warrantees (it's now 90 days on these machines, you buy an upgrade), and eventually cut back on the cupon discounts they sometimes give. They also said that simply going after marketshare wasn't where they were going to be at.
It's why they introduced their new hi-end computer line.
Dell makes most of its profits from its servcers, and business services.
And, yes, we DON"T know what Apple could have done for $399-$499. You think you do,but you don't know Apple's costs.
We know that the Core Sole costs about $200. I don't remember the actual price, but the G4 7447a was supposed to be costing Apple somewhere around $50 - $75. That's quite a jump! What do you want them to do?
Chip prices will fall at least two times this year. Possibly three. That's Intel's normal procedure. We already know that they will drop somewhat when the faster 2.33GHz version comes out. They will drop further when Merom comes out, and possibly when the faster Merom chips come out near the end of the year. If Apple continues to use the Yonah in the Mini this year, the price drops will be significant. The Core Solo could drop, eventually, late this year, to under $100.
If you want Apple to sell a machine for $399, good luck. I don't think Apple will produce a loss leader like that.
Well said and enough said.
Originally posted by hmurchison
Here's what Apple should do.
Drop the price of Macs down to skin n bones.
Serialize all the software so that none of you can buy Tiger and install it on your computer and your buddies computer.
Offer OS X Home and OS X Pro. Charge more money for the Pro version.
Create add on packs for money. Want more desktops and other widgets to spice of your computer. Buy the OS X Extreme Pack $39.98
Charge for any meaninful upgrades that come with new features. Use product activation to ensure proper compensation.
Doesn't someone already do that?
Originally posted by melgross
we DON"T know what Apple could have done for $399-$499. You think you do,but you don't know Apple's costs.
Look, Mel, this is hardly brain surgery or rocket science. Apple make a profit on a $599 machine that uses a Core solo, laptop drives, laptop RAM, wireless, and includes an Apple remote. Take all those things out, and you have the basis for a profitable $399 - $499 machine.
Originally posted by melgross
I don't think Apple will produce a loss leader like that.
It wouldn't be a loss-leader. That's my point.
Originally posted by melgross
Doesn't someone already do that?
Wait till vista comes out. 6 versions with 6 prices.
How much bitchin would people do if they had to pay extra for a version of OS X that could play iTunes?
Originally posted by backtomac
How much bitchin would people do if they had to pay extra for a version of OS X that could play iTunes?
A lot. No one is seriously suggesting that Apple should introduce a tiered software charging policy. Someone just said that to take the piss out of me.
edit:
The difference between software and hardware is that the software engineering has already been done. It doesn't actually cost Apple anything to include it.
Every piece of hardware Apple gives you, on the other hand, costs them money. Leave some of the hardware out, and use cheaper components (full size drives vs laptop drives), and you can charge the customer less (if they don't want those features) and still make a profit.
Originally posted by Mr. H
And if it does more than they need it to do, they won't think it is worth the extra price. Why are you so resistant to offer people more choices? You have provided absolutely zero reasons why Apple could not make a profit from selling a $399 machine with the specs. I outlined.
I'm not. But you have to understand that Apple will not get that 95% of the US market they don't have, nor the 97% of the world market they don't have.
They will increase their share with what they are doing now.
But the vast majority of people don't switch to Apple because of software issues, not machine issues.
You are ignoring all of the argument except for the one thing you want to pound on. And that simply isn't the most important thing.
If the cheapest machine Apple offered cost $1,000, sans monitor, etc., and had no software with it, then I would heartily agree. But as it is, I can't!
It's not a matter of limiting choices. Apple has a lineup from $599 to $3,200. That's choices! If they don't think they should, or could, compete at $399, that's fine. I trust their marketing more than I trust guesses. I firmly believe that, at this time, Apple could not have offered a machine for $499.
I simply do not agree that taking away the very things that make these machines more desirable, and make them stand out from the crowd, would help Apple, either in sales, or as a company. If a consumer decided to buy a machine without these features, which are now very popular, and wanted to add them later, they could not. That would get them more upset than the extra $100 in price. It is the responsibility of the store staff to explain what they are buying. If that doesn't happen, then Apple and its resellers better get on the ball.
We don't agree on this, and that's fine, but we are not going to resolve our differences on this issue, so possibly we should, figuratively, shake hands, and drop it.
Originally posted by Mr. H
Look, Mel, this is hardly brain surgery or rocket science. Apple make a profit on a $599 machine that uses a Core solo, laptop drives, laptop RAM, wireless, and includes an Apple remote. Take all those things out, and you have the basis for a profitable $399 - $499 machine.
It wouldn't be a loss-leader. That's my point.
Ok, I can't help but respond to this, it's too much to ask of anyone.
You are correct, no doubt, absolutely!
If, as you suggest, Apple removes, and I quote from the above sentence:
" a Core solo, laptop drives, laptop RAM, wireless, and includes an Apple remote. Take all those things out, and you have the basis for a profitable $399 - $499 machine."
I agree completely, if Apple does remove all of that from the machine, they will make a profit on a $399-$499 selling price. No doubt!
EDIT: I'm putting this in because Idon't want you to think I'm being mean here. I know you didn't mean it the way it came out. I just thought a little levity was called for.
Mel.
Originally posted by melgross
I'm not. But you have to understand that Apple will not get that 95% of the US market they don't have, nor the 97% of the world market they don't have.
They will increase their share with what they are doing now.
But the vast majority of people don't switch to Apple because of software issues, not machine issues.
You are ignoring all of the argument except for the one thing you want to pound on. And that simply isn't the most important thing.
If the cheapest machine Apple offered cost $1,000, sans monitor, etc., and had no software with it, then I would heartily agree. But as it is, I can't!
It's not a matter of limiting choices. Apple has a lineup from $599 to $3,200. That's choices! If they don't think they should, or could, compete at $399, that's fine. I trust their marketing more than I trust guesses. I firmly believe that, at this time, Apple could not have offered a machine for $499.
I simply do not agree that taking away the very things that make these machines more desirable, and make them stand out from the crowd, would help Apple, either in sales, or as a company. If a consumer decided to buy a machine without these features, which are now very popular, and wanted to add them later, they could not. That would get them more upset than the extra $100 in price. It is the responsibility of the store staff to explain what they are buying. If that doesn't happen, then Apple and its resellers better get on the ball.
We don't agree on this, and that's fine, but we are not going to resolve our differences on this issue, so possibly we should, figuratively, shake hands, and drop it.
Very well said.
I would just say this. The biggest thing that makes Apple machines stand out is OS X, iLife, and elegant boxes. Building an inexpensive machine as I suggest does not take away any of this (a low-spec machine can still run OS X, iLife and have an elegant box).
You say that having a cheaper box will not actually bring that many extra people to the party. I do think that Apple's market share will continue to increase without a line of computers such as the ones that I suggest, but that it'll probably stick at about 5 - 6 %, and that isn't high enough to stop the marginalisation of our platform (please note, I'm not saying that that leads to Apple is teh DOOMED!). Now we are at a point where I feel that we can agree to disagree. Before this, people were just flat not undertanding what I was saying.
Originally posted by melgross
Ok, I can't help but respond to this, it's too much to ask of anyone.
You are correct, no doubt, absolutely!
If, as you suggest, Apple removes, and I quote from the above sentence:
" a Core solo, laptop drives, laptop RAM, wireless, and includes an Apple remote. Take all those things out, and you have the basis for a profitable $399 - $499 machine."
I agree completely, if Apple does remove all of that from the machine, they will make a profit on a $399-$499 selling price. No doubt!
Looks like I may have spoken too soon. You know what I meant, there's no need to be facetious.
Originally posted by Mr. H
Looks like I may have spoken too soon. You know what I meant, there's no need to be facetious.
I'm sorry. I just added to the bottom of the post. When I read it, after I posted it, I realised that it could be taken the wrong way. No insult intended.
Originally posted by melgross
I'm sorry. I just added to the bottom of the post. When I read it, after I posted it, I realised that it could be taken the wrong way. No insult intended.
O.K.
Consider your hand shaken. We agree to disagree, and look forward to an exciting year from Apple?
Originally posted by stw
They do: Smart
That 4 door smart is the first smart I've seen that I liked, wow.
Originally posted by Mr. H
O.K.
Consider your hand shaken. We agree to disagree, and look forward to an exciting year from Apple?
I always do.
(I thought you would get a chuckle before, oh, well.)
Originally posted by backtomac
Apple is becoming a vertically integrated company IMO. Who made ilife, iworks, fcp, aperature? Why depend on Adobe? Sure its great if they want to develope for macs, but mac users are only about 25%. To substantially increase this means fighting the whole OS war with MS again. I just don't see it happening. Apple is trying to put out profitable products and they don't seem to be concerned about market share. Time will tell if they are right.
Why depend on adobe? Because Graphics artists and houses depend on their products and thats the main reason they buy Macs? Because Apple has no replacement for photoshop, illustrator, or whatever thet make?
Apple cannot replace third party software vendors.
Advantages and Shortcomings
Yonah represents a breakthrough in industry power consumption and performance per watt. It also offers the latest in cache technology, in dual core cache coherency and cache snooping; it supports 667 MHz (166 MHz quad-pumped) FSB, and Dual Channel DDR-II Memory Bus. The power management components of the core features finer grained thermal control, as well as independent scaling of power between the two cores, significantly reducing power consumption.
The shortcomings of Yonah are largely inherited from previous Pentium M architectures, such as high memory latency due to the lack of on-die memory controller (while DDR-II itself has higher latency problem over DDR) and the slower performance of Floating Point Units (FPU) due to the smaller number of FP units in each CPU core. Also, while processors that support AMD64/EM64T offer both 32-bit and 64-bit computation, the Core Duo is a 32-bit processor. It limits the size of a process's (linear) address space to 4 GiB minus the address space allocated for ISA/PCI devices (IOMMU), so a single process cannot easily access more than 4 GiB of physical memory and can only use up to 2 GiB of address space per process on Windows (although the processor can address more than 4 GiB of physical memory), and cannot take advantage of the additional general-purpose registers, and the ability of those registers to store 64-bit quantities and to participate in 64-bit arithmetic, that AMD64/EM64T offer.
Originally posted by Mr. H
Look, Mel, this is hardly brain surgery or rocket science. Apple make a profit on a $599 machine that uses a Core solo, laptop drives, laptop RAM, wireless, and includes an Apple remote. Take all those things out, and you have the basis for a profitable $399 - $499 machine.
It wouldn't be a loss-leader. That's my point.
Yup, at least they could have kept it at $499.
The $499 model should have looked like this:
Intel Chip
60Gb Hard Drive
512Mb RAM
64 Mb Dedicated 3D Graphics Card.
Internal Modem.
iWork.
At the same $499 price point everyone would have been happy. Apple blew it with this $599 model, IMHO.
Originally posted by Mr. H
[B]Huh? It has plenty bearing on the issue. Dell make computers. So does Apple. Now, Apple even uses the same platform as Dell. Your comment would have made more, although not total, sense, in the PPC days.
Sony makes computers too and they don't shoot for the $299/$399 market either.
Why do folks assume that Apple is targeting the low end segments for their pool of switchers and not the pool of windows users that buy mid to high end PCs like the VIAO?
The iMacs are well positioned against the VA TV-PC series (20" WS + Pentium 4 630 3.0 Ghz, 1GB DDR2, 250GB HD, DVD-RW, Radeon X700, $2K) in both features and mindshare.
The mini does well against the VAIO RB53 (Pentium 4 630 3.0 Ghz, 512 MB RAM DDR SDRAM, 200 GB HD, DVD+/-RW, $799). Which uses a Intel GMA 900 but does have expansion ports as a tower.
The target demographic IMHO buys iPods, XBox 360s, PSP, PS3, VIAO, B&O, Bose, etc and tend toward form over value. That's not the $399 PC demographic.
Nor is that $399 demographic all that valuable to a company like Apple. It's likely a detriment to value of the branding.
Vinea
PS Yeah, I wrote this elsewhere but that thread went somewhere odd.
Originally posted by steve666
Yup, at least they could have kept it at $499.
The $499 model should have looked like this:
Intel Chip
60Gb Hard Drive
512Mb RAM
64 Mb Dedicated 3D Graphics Card.
Internal Modem.
iWork.
At the same $499 price point everyone would have been happy. Apple blew it with this $599 model, IMHO.
The difference between you and me is that what I'm suggesting for $499 is possible, what you are suggesting is not. Apple could not do that and make a profit.