As I said, don't make those same arguments and I don't have to roll out the same rejoinders. Its not like I'm bringing it up out of thin air. Nor have you manage to refute those arguments by showing real world examples of the feasiblity of what you state.
And there was me thinking that I was having to repeat myself because you kept on bringing up the same arguments I don't know which of us is the guilty party.
I'll say again that there's no way to prove who is right on the cannibalisation front without the machine being introduced. You cannot give "real-world" examples that prove that the xMac would cannibalise iMacs. You can give reasons why you think it would happen, and I can give reasons that I think it won't. But neither can prove their point.
Never mind you can't show an example of a company that does that...
You mean in the computer world? No-one else has Apple's industrial design skills, OS X, or brand, so I'm not surprised.
In other markets, there must be loads of companies that have more than 10% global market share in their field with ≥28% gross margins. I'm going to go out on a limb and guess that Gillette have higher than 28% gross margins and greater than 10% market share in razors. Scurries off to see if he can find out…
Well, the numbers I found on Gillette (can't be bothered to find more) state that they had 72.5 % global market share in 2004 (see here), and that currently, they have 52.8% gross margins (see here)! Sweet!
And there was me thinking that I was having to repeat myself because you kept on bringing up the same arguments I don't know which of us is the guilty party.
I'll say again that there's no way to prove who is right on the cannibalisation front without the machine being introduced. You cannot give "real-world" examples that prove that the xMac would cannibalise iMacs. You can give reasons why you think it would happen, and I can give reasons that I think it won't. But neither can prove their point.
Uhhh... He just gave the "real-world" example in the post RE Sony, Gateway, Dell, HP.
Er, No. That doesn't prove that a $399/499 mini tower would cannibalise sales of iMacs. It is possible for the $399/499 model to constitute 51% of Apple's sales and not cannibalise other models at all.
And there was me thinking that I was having to repeat myself because you kept on bringing up the same arguments I don't know which of us is the guilty party.
How about this. You can simply post
"Argument A"
and I can respond with
"Rejoinder A"
in the future.
As far as canniblization goes, I suppose if I were Apple I might have access to the sales performance of LC IIIs vs their almost exact AIO counterparts. Even then the data is old.
Er, No. That doesn't prove that a $399/499 mini tower would cannibalise sales of iMacs. It is possible for the $399/499 model to constitute 51% of Apple's sales and not cannibalise other models at all.
Mkay, but given the potential reduction in revenue and gross profits isn't the burden of proof on you that cannibilization wont occur? The current evidence of market share seems to indicate the contrary.
You ALSO haven't shown that you can maintain 28% margins at $399/$499...and real world evidence shows that neither Dell, HP or Gateway can do so at that price point and I really really doubt Apple can reduce costs below those three.
You ALSO haven't shown that you can maintain 28% margins at $399/$499...and real world evidence shows that neither Dell, HP or Gateway can do so at that price point and I really really doubt Apple can reduce costs below those three.
I've already stated several times that the $399/499 model would have lower specification than the Dell et al. counterparts in order to maintain margins.
It is also trivial to demonstrate that Apple could have a $399/499 machine and maintain margins.
Take the current low-end Mac Mini. Replace CPU with Celeron 430, remove wireless, remove Apple Remote. This would not require the casework to change. Maybe you don't think $399 is achievable, but I don't see how you could possibly deny that $499 is not (The Celeron M is a $155 saving by itself, and you will note that component saving costs of $144 over the $599 mini are necessary to maintain 28% margin at $399).
I'm also advocating: replace laptop HDD with desktop HDD, replace laptop optical drive with desktop optical drive, replace laptop RAM with desktop RAM. All of which I think help to lower the component costs enough to offset the higher cost of the required larger casework, higher-rated PSU and shipping.
Mkay, but given the potential reduction in revenue and gross profits isn't the burden of proof on you that cannibilization wont occur?
I guess so, but I've already said it's impossible to prove. All I can do is state my belief that in the short term it would hit revenues by cannibalising iMacs, but after a year or so market share gains would return iMac sales to the original level and provide further revenue from large sales of a $399/499 - $1999 machine that didn't exist before.
Quote:
Originally Posted by vinea
The current evidence of market share seems to indicate the contrary.
I think the current evidence shows that 51% of the PC market are buying desktops (with desktop parts and a bit of expandability) that cost less than $500 and that Apple could make a desktop with desktop parts (except CPU) that costs less than $500 and have 28% margins on said machine. With the introduction of said machine, Apple would start to capture some of that 51% (who are not buying iMacs, so no iMacs cannibalised). I don't think the $399/499 model would cannibalise the iMac any more measurably than the current Mini.
Once you've got to the $799 mini-tower model with Conroe, that probably would cannibalise iMacs, but as I said, I think this would be a short-term hit to iMac sales numbers which would then rebound after a year or so with increasing market share.
There is still the question of how many people are so obsessed with having PCI slots and a space for a second hard drive that they would buy a Mac instead of a PC just because the Mac had those things. Past experience at Apple has shown that more than 90% of the people who bought the Mac II and similar machines, with slots, did not add any cards to their machine.
That is the kind of research that Apple needs to do, and I can't imagine that they are not doing it. If it is really true that there are millions of PC users who want to switch to OS X but decide not to because the Mac hardware doesn't have slots and extra drive bays, then it should be easy to demonstrate with some surveys.
That is the kind of research that Apple needs to do, and I can't imagine that they are not doing it. If it is really true that there are millions of PC users who want to switch to OS X but decide not to because the Mac hardware doesn't have slots and extra drive bays, then it should be easy to demonstrate with some surveys.
Indeed. But I wonder if Steve is so averse to the idea of a "mini tower" and afraid of iMac / Mac Pro cannibalisation that he doesn't bother doing the surveys. I'm also not sure how they'd do the surveys without the information leaking out (how many Joe Blogses are going to respect NDAs?*), and you know how much Steve hates leaky information.
* In order to get statistically significant results you have to survey hundreds, maybe even a couple of thousand, people. That's a lot of potentially NDA-dissing Joes.
That is the kind of research that Apple needs to do, and I can't imagine that they are not doing it. If it is really true that there are millions of PC users who want to switch to OS X but decide not to because the Mac hardware doesn't have slots and extra drive bays, then it should be easy to demonstrate with some surveys.
And choice of LCD, And faster cpu, and cheaper / faster desktop ram, and graphic card expandibility and sound card expandibility.
The Mac II is a horrible example. There was very VERY few expansion cards available at that time. What is a good example... the 9600 / clone days. These came with 5 pci slots. Hell I have every one of my slots full in my Umax s900 (9600 clone). Ata card, sound card, usb 2.0 card, firewire card, graphics card. Course I don't use it any more.
A few things cards could be used for:
external sata
sound (apple's on-board sound isn't the best)
Certified Wireless USB 1.0
Midi input
Video import / tv tuners
fiber networking cards
802.11n cards (when it's finalized)
With the adoption of windows on apple, every card imaginable is possible now. But the above in the list will have real apple cards available eventually. The mac pro is a small market to make cards for. So there isn't a huge abundance of cards to be had. If there were more machines with pci or pci-express slots, it'd be a differnt story.
And choice of LCD, And faster cpu, and cheaper / faster desktop ram, and graphic card expandibility and sound card expandibility.
The Mac II is a horrible example. There was very VERY few expansion cards available at that time. What is a good example... the 9600 / clone days. These came with 5 pci slots. Hell I have every one of my slots full in my Umax s900 (9600 clone). Ata card, sound card, usb 2.0 card, firewire card, graphics card. Course I don't use it any more.
A few things cards could be used for:
external sata
sound (apple's on-board sound isn't the best)
Certified Wireless USB 1.0
Midi input
Video import / tv tuners
fiber networking cards
802.11n cards (when it's finalized)
With the adoption of windows on apple, every card imaginable is possible now. But the above in the list will have real apple cards available eventually. The mac pro is a small market to make cards for. So there isn't a huge abundance of cards to be had. If there were more machines with pci or pci-express slots, it'd be a differnt story.
MIDI, sound, and TV tuners are almost exclusively Firewire/USB now-a-days.
Particularly for sound cards: you don't want those in a computer because there's two much electrical noise, all the high-end cards are external.
Someone who bought an iMac or a Mac mini isn't going to spend $500 on a fibre channel card.
Wireless USB will have to be standard before it can take off.
That leaves eSATA and 11n, which would be nice upgrades, but will both probably be standard before PCI slots are.
That's pro stuff. What percentage of Windows users have any of that stuff in there? It's just not something that is on the radar of a consumer buyer. Sure, there is a subset of people who might want all that expansion and would pay for it, but unless that subset is large enough AND doesn't want to run Windows, Apple isn't going to bother. Not to mention the support costs for people sticking all kinds of different stuff in there and then calling for support. I think you have to consider these issues to understand why this might not be at the top of Apple's "to do" list.
With over 22,000 views I would say its way,way,way,way ,.......past time for a Macintosh Again. I said it before Apples Pods offer every kind of configuration you could want,Apples Computers are marketing games with iMac in the center of it all.
The only reason I viewed this thread a couple of hundred times is because I hoped for some good posts against this plain old minitower idea.
The sad thing is that most of the posters repeat their opinion in favor of this machine trisillion times. I'm still waiting for a post that convinces me that it's time for a plain old Macintosh again. So I don't have to read this thread again.
With over 22,000 views I would say its way,way,way,way ,.......past time for a Macintosh Again. I said it before Apples Pods offer every kind of configuration you could want,Apples Computers are marketing games with iMac in the center of it all.
Those 22,000 views are people laughing over how some people simply don't get it.
You can keep arguing until 2011 or 2382 over how Apple needs to do X and Y, but guess what? They're doing great. They're growing in just about every imaginable way, and to go off their current course would be a needlessly risky decision.
Apart from in the desktop market, which is what this thread is discussing
A market that's disappearing, as has been pointed out numerous times. Expandability was important in days where PCs didn't even ship with a sound card, let alone a network card. These days, with so many on-board components, not so much.
All Apple has to do is have its Sales Associates mark off the reason a customer didn't buy a computer. I would bet that "it doesn't have 3 or more PCIe slots" or "it doesn't have a second hard drive bay" or "I can't change out the video card" are very near the bottom of the resulting list, if those reasons even appear at all.
Sure, there are people for whom those things are important. There just aren't very many of those people who aren't already in the Pro market. The Pros would be getting the Mac Pro anyway. Slots, special video cards and extra hard drives all point to Pro users doing 3-D rendering, capturing, maybe data acquisition.
Except the gamers, of course. With virtually no games on the Mac, gamers would want to run Windows games. The only ones who would buy a Mac are those who also prefer OS X for non-game computing. Who knows - this market may be larger than Apple thinks, and I am assuming they are sizing it up.
All Apple has to do is have its Sales Associates mark off the reason a customer didn't buy a computer. I would bet that "it doesn't have 3 or more PCIe slots" or "it doesn't have a second hard drive bay" or "I can't change out the video card" are very near the bottom of the resulting list, if those reasons even appear at all.
Sure, there are people for whom those things are important. There just aren't very many of those people who aren't already in the Pro market. The Pros would be getting the Mac Pro anyway. Slots, special video cards and extra hard drives all point to Pro users doing 3-D rendering, capturing, maybe data acquisition.
Except the gamers, of course. With virtually no games on the Mac, gamers would want to run Windows games. The only ones who would buy a Mac are those who also prefer OS X for non-game computing. Who knows - this market may be larger than Apple thinks, and I am assuming they are sizing it up.
I think you summed it up well. There is a third group, those that want to get a cheap box that they can upgrade to save money (get a video card from NewEgg, etc.), save their monitor from iteration to iteration, maybe even change a motherboard... again, to keep current. I've done that on the PC side for years... but I don't think that gives Apple a good profit, or any control over the Mac experience.
Comments
As I said, don't make those same arguments and I don't have to roll out the same rejoinders. Its not like I'm bringing it up out of thin air. Nor have you manage to refute those arguments by showing real world examples of the feasiblity of what you state.
I'll say again that there's no way to prove who is right on the cannibalisation front without the machine being introduced. You cannot give "real-world" examples that prove that the xMac would cannibalise iMacs. You can give reasons why you think it would happen, and I can give reasons that I think it won't. But neither can prove their point.
Never mind you can't show an example of a company that does that...
You mean in the computer world? No-one else has Apple's industrial design skills, OS X, or brand, so I'm not surprised.
In other markets, there must be loads of companies that have more than 10% global market share in their field with ≥28% gross margins. I'm going to go out on a limb and guess that Gillette have higher than 28% gross margins and greater than 10% market share in razors. Scurries off to see if he can find out…
Well, the numbers I found on Gillette (can't be bothered to find more) state that they had 72.5 % global market share in 2004 (see here), and that currently, they have 52.8% gross margins (see here)! Sweet!
I'll say again that there's no way to prove who is right on the cannibalisation front without the machine being introduced. You cannot give "real-world" examples that prove that the xMac would cannibalise iMacs. You can give reasons why you think it would happen, and I can give reasons that I think it won't. But neither can prove their point.
Uhhh... He just gave the "real-world" example in the post RE Sony, Gateway, Dell, HP.
Post #1017 above.
Uhhh... He just gave the "real-world" example in the post RE Sony, Gateway, Dell, HP.
Post #1017 above.
Er, No. That doesn't prove that a $399/499 mini tower would cannibalise sales of iMacs. It is possible for the $399/499 model to constitute 51% of Apple's sales and not cannibalise other models at all.
How about this. You can simply post
"Argument A"
and I can respond with
"Rejoinder A"
in the future.
As far as canniblization goes, I suppose if I were Apple I might have access to the sales performance of LC IIIs vs their almost exact AIO counterparts. Even then the data is old.
Vinea
Er, No. That doesn't prove that a $399/499 mini tower would cannibalise sales of iMacs. It is possible for the $399/499 model to constitute 51% of Apple's sales and not cannibalise other models at all.
Mkay, but given the potential reduction in revenue and gross profits isn't the burden of proof on you that cannibilization wont occur? The current evidence of market share seems to indicate the contrary.
You ALSO haven't shown that you can maintain 28% margins at $399/$499...and real world evidence shows that neither Dell, HP or Gateway can do so at that price point and I really really doubt Apple can reduce costs below those three.
Vinea
You ALSO haven't shown that you can maintain 28% margins at $399/$499...and real world evidence shows that neither Dell, HP or Gateway can do so at that price point and I really really doubt Apple can reduce costs below those three.
I've already stated several times that the $399/499 model would have lower specification than the Dell et al. counterparts in order to maintain margins.
It is also trivial to demonstrate that Apple could have a $399/499 machine and maintain margins.
Take the current low-end Mac Mini. Replace CPU with Celeron 430, remove wireless, remove Apple Remote. This would not require the casework to change. Maybe you don't think $399 is achievable, but I don't see how you could possibly deny that $499 is not (The Celeron M is a $155 saving by itself, and you will note that component saving costs of $144 over the $599 mini are necessary to maintain 28% margin at $399).
I'm also advocating: replace laptop HDD with desktop HDD, replace laptop optical drive with desktop optical drive, replace laptop RAM with desktop RAM. All of which I think help to lower the component costs enough to offset the higher cost of the required larger casework, higher-rated PSU and shipping.
Mkay, but given the potential reduction in revenue and gross profits isn't the burden of proof on you that cannibilization wont occur?
I guess so, but I've already said it's impossible to prove. All I can do is state my belief that in the short term it would hit revenues by cannibalising iMacs, but after a year or so market share gains would return iMac sales to the original level and provide further revenue from large sales of a $399/499 - $1999 machine that didn't exist before.
The current evidence of market share seems to indicate the contrary.
I think the current evidence shows that 51% of the PC market are buying desktops (with desktop parts and a bit of expandability) that cost less than $500 and that Apple could make a desktop with desktop parts (except CPU) that costs less than $500 and have 28% margins on said machine. With the introduction of said machine, Apple would start to capture some of that 51% (who are not buying iMacs, so no iMacs cannibalised). I don't think the $399/499 model would cannibalise the iMac any more measurably than the current Mini.
Once you've got to the $799 mini-tower model with Conroe, that probably would cannibalise iMacs, but as I said, I think this would be a short-term hit to iMac sales numbers which would then rebound after a year or so with increasing market share.
That is the kind of research that Apple needs to do, and I can't imagine that they are not doing it. If it is really true that there are millions of PC users who want to switch to OS X but decide not to because the Mac hardware doesn't have slots and extra drive bays, then it should be easy to demonstrate with some surveys.
That is the kind of research that Apple needs to do, and I can't imagine that they are not doing it. If it is really true that there are millions of PC users who want to switch to OS X but decide not to because the Mac hardware doesn't have slots and extra drive bays, then it should be easy to demonstrate with some surveys.
Indeed. But I wonder if Steve is so averse to the idea of a "mini tower" and afraid of iMac / Mac Pro cannibalisation that he doesn't bother doing the surveys. I'm also not sure how they'd do the surveys without the information leaking out (how many Joe Blogses are going to respect NDAs?*), and you know how much Steve hates leaky information.
* In order to get statistically significant results you have to survey hundreds, maybe even a couple of thousand, people. That's a lot of potentially NDA-dissing Joes.
That is the kind of research that Apple needs to do, and I can't imagine that they are not doing it. If it is really true that there are millions of PC users who want to switch to OS X but decide not to because the Mac hardware doesn't have slots and extra drive bays, then it should be easy to demonstrate with some surveys.
And choice of LCD, And faster cpu, and cheaper / faster desktop ram, and graphic card expandibility and sound card expandibility.
The Mac II is a horrible example. There was very VERY few expansion cards available at that time. What is a good example... the 9600 / clone days. These came with 5 pci slots. Hell I have every one of my slots full in my Umax s900 (9600 clone). Ata card, sound card, usb 2.0 card, firewire card, graphics card. Course I don't use it any more.
A few things cards could be used for:
external sata
sound (apple's on-board sound isn't the best)
Certified Wireless USB 1.0
Midi input
Video import / tv tuners
fiber networking cards
802.11n cards (when it's finalized)
With the adoption of windows on apple, every card imaginable is possible now. But the above in the list will have real apple cards available eventually. The mac pro is a small market to make cards for. So there isn't a huge abundance of cards to be had. If there were more machines with pci or pci-express slots, it'd be a differnt story.
And choice of LCD, And faster cpu, and cheaper / faster desktop ram, and graphic card expandibility and sound card expandibility.
The Mac II is a horrible example. There was very VERY few expansion cards available at that time. What is a good example... the 9600 / clone days. These came with 5 pci slots. Hell I have every one of my slots full in my Umax s900 (9600 clone). Ata card, sound card, usb 2.0 card, firewire card, graphics card. Course I don't use it any more.
A few things cards could be used for:
external sata
sound (apple's on-board sound isn't the best)
Certified Wireless USB 1.0
Midi input
Video import / tv tuners
fiber networking cards
802.11n cards (when it's finalized)
With the adoption of windows on apple, every card imaginable is possible now. But the above in the list will have real apple cards available eventually. The mac pro is a small market to make cards for. So there isn't a huge abundance of cards to be had. If there were more machines with pci or pci-express slots, it'd be a differnt story.
MIDI, sound, and TV tuners are almost exclusively Firewire/USB now-a-days.
Particularly for sound cards: you don't want those in a computer because there's two much electrical noise, all the high-end cards are external.
Someone who bought an iMac or a Mac mini isn't going to spend $500 on a fibre channel card.
Wireless USB will have to be standard before it can take off.
That leaves eSATA and 11n, which would be nice upgrades, but will both probably be standard before PCI slots are.
external sata
sound (apple's on-board sound isn't the best)
Certified Wireless USB 1.0
Midi input
Video import / tv tuners
fiber networking cards
802.11n cards (when it's finalized)
That's pro stuff. What percentage of Windows users have any of that stuff in there? It's just not something that is on the radar of a consumer buyer. Sure, there is a subset of people who might want all that expansion and would pay for it, but unless that subset is large enough AND doesn't want to run Windows, Apple isn't going to bother. Not to mention the support costs for people sticking all kinds of different stuff in there and then calling for support. I think you have to consider these issues to understand why this might not be at the top of Apple's "to do" list.
The only reason I viewed this thread a couple of hundred times is because I hoped for some good posts against this plain old minitower idea.
The sad thing is that most of the posters repeat their opinion in favor of this machine trisillion times. I'm still waiting for a post that convinces me that it's time for a plain old Macintosh again. So I don't have to read this thread again.
With over 22,000 views I would say its way,way,way,way ,.......past time for a Macintosh Again. I said it before Apples Pods offer every kind of configuration you could want,Apples Computers are marketing games with iMac in the center of it all.
Those 22,000 views are people laughing over how some people simply don't get it.
You can keep arguing until 2011 or 2382 over how Apple needs to do X and Y, but guess what? They're doing great. They're growing in just about every imaginable way, and to go off their current course would be a needlessly risky decision.
They're growing in just about every imaginable way
Apart from in the desktop market, which is what this thread is discussing
Apart from in the desktop market, which is what this thread is discussing
A market that's disappearing, as has been pointed out numerous times. Expandability was important in days where PCs didn't even ship with a sound card, let alone a network card. These days, with so many on-board components, not so much.
Sure, there are people for whom those things are important. There just aren't very many of those people who aren't already in the Pro market. The Pros would be getting the Mac Pro anyway. Slots, special video cards and extra hard drives all point to Pro users doing 3-D rendering, capturing, maybe data acquisition.
Except the gamers, of course. With virtually no games on the Mac, gamers would want to run Windows games. The only ones who would buy a Mac are those who also prefer OS X for non-game computing. Who knows - this market may be larger than Apple thinks, and I am assuming they are sizing it up.
All Apple has to do is have its Sales Associates mark off the reason a customer didn't buy a computer. I would bet that "it doesn't have 3 or more PCIe slots" or "it doesn't have a second hard drive bay" or "I can't change out the video card" are very near the bottom of the resulting list, if those reasons even appear at all.
Sure, there are people for whom those things are important. There just aren't very many of those people who aren't already in the Pro market. The Pros would be getting the Mac Pro anyway. Slots, special video cards and extra hard drives all point to Pro users doing 3-D rendering, capturing, maybe data acquisition.
Except the gamers, of course. With virtually no games on the Mac, gamers would want to run Windows games. The only ones who would buy a Mac are those who also prefer OS X for non-game computing. Who knows - this market may be larger than Apple thinks, and I am assuming they are sizing it up.
I think you summed it up well. There is a third group, those that want to get a cheap box that they can upgrade to save money (get a video card from NewEgg, etc.), save their monitor from iteration to iteration, maybe even change a motherboard... again, to keep current. I've done that on the PC side for years... but I don't think that gives Apple a good profit, or any control over the Mac experience.