Your post is basically providing a few numbers and a new angle on the cannibalization argument that we agreed to drop several pages back, because people had agreed to disagree.
What your analysis fails to do is account for extra people that an xMac could attract to the platform - i.e. extra sales that don't take away from iMac sales or Mac Pro sales.
So the argument comes down to this:
Will an xMac attract enough new users to the platform to offset any cannibalization that may occur in the installed user-base? Some people (like me), think yes it would, others, like Vinea, think no it wouldn't.
Hey, your post came in just before mine and I missed it. It seems we agree. This topic came up on another thread too, and here is what I posted.
Quote:
To increase market share Apple must attract customers who now purchase elsewhere. If some of those folks are buying "a product that other companies have negative growth in," than it is necessary for Apple to make a product somewhat like that too. Whether or not Apple's margins would be too low is a matter of cleaver design and pricing. Apple can't get all the people to switch, but can aim for the cream of the crop of Windows buyers --- those who would be willing to pay a little more to get a well designed and built computer with the extra Apple goodies.
Your post is basically providing a few numbers and a new angle on the cannibalization argument that we agreed to drop several pages back, because people had agreed to disagree.
What your analysis fails to do is account for extra people that an xMac could attract to the platform - i.e. extra sales that don't take away from iMac sales or Mac Pro sales.
So the argument comes down to this:
Will an xMac attract enough new users to the platform to offset any cannibalization that may occur in the installed user-base? Some people (like me), think yes it would, others, like Vinea, think no it wouldn't.
Hey, your post came in just before mine and I missed it. It seems we agree. This topic came up on another thread too, and here is what I posted.
Quote:
To increase market share Apple must attract customers who now purchase elsewhere. If some of those folks are buying "a product that other companies have negative growth in," than it is necessary for Apple to make a product somewhat like that too. Whether or not Apple's margins would be too low is a matter of cleaver design and pricing. Apple can't get all the people to switch, but can aim for the cream of the crop of Windows buyers --- those who would be willing to pay a little more to get a well designed and built computer with the extra Apple goodies.
I agree.
Giving what PC users recognise would more than offset lost iMac sales. There's just nothing inbetween the Mac Mini and Mac Pro for desktrop users that want a decent cpu and a good GPU. A conroe tower with a decent GPU would open up Apple to many windows using 'head shakes' ergo: not Mac takers.
With the scalability of Leopard re: iPhone, it is clear Apple have got the flexibility to put out whatever computer/toasters/gadjets they want.
But the desktop line isn't as well catered for as the laptop line.
A consumer tower under and over the £1000 mark woud be a good start. A range of 3 towers based on the Conroe. 3 models. Done. Priced from £799 to £1195-ish. Job done. Using either the Mac Pro case or a slimmed version of. Those new consumer PC tower cases look nice in some cases...plastic or not.
After reading a few pages on this thread, I can see there are a some people who do want the 'xMac', but how many people are there in the PC buying world that want this? You have to do a cost analysis on this, as in if there is a significant profit to be made by producing the headless Mac. Example:
Say you have 100 people that want to buy a Mac. The 100 people are a ratio of the total people buying, (like 1 person would equal 10 people out of the 'real population' of 1000). 50 would like to buy the $1500 iMac and 50 want to buy a $3000 Mac Pro. We will also say that the product cost is 50% of the sale price, or $750 for the iMac and $1500 for the Mac Pro. If the xMac comes out at a even $1500 as well, with a cost of $700. It will really depend on how many want to buy.
Now these calculations are extremely simple to make a basic comparison that shows that by losing iMac customers to a xMac if it is similarly priced, but less costly, then the company will make more profit. However, the more customers that drop from the Mac Pro to the xMac will cause lower overall profit, especially if the cost to making the Mac Pro is not very high.
There is probably an entire finance department devoted to the case analysis of a xMac, once they find a way to not to lose profit, it will come . On the other hand, you can always turn your old Windows machine into a headless Mac, but it is not entirely legal. http://www.insanelymac.com, Steve Jobs even said to think different, sometimes you have to, to get what you want >_>.
You're missing the most likely scenario which they buy a PC instead which has a profit for Apple of $0. It takes a person who has a radical commitment to a platform to buy a professional workstation as a consumer desktop when a person has completely ruled out the iMac because of the lack of expansion and slow notebook optical drive, the only logical option they have to stay with the PC ranks. Then there are people who have historically bought Macs but have either left the platform or have a low end mac to do the basic stuff, but have a PC for the higher end stuff.
You're missing the most likely scenario which they buy a PC instead which has a profit for Apple of $0.
And that is happening. All the time. But there are still plenty of people who don't know about 'Macs' because Apple doesn't advertise them on TV. Maybe Leopard will bring us many of the things I want. Marketshare for the Mac. A new GUI. A new 'mid' range Mac Tower tween the Mini and Pro. Slightly cheaper prices on Mac Book (low end model) and Mac Mini. Or release a 17 inch display that they can bundle with the Mac Mini. It's a bit silly selling a premium priced biscuit tin with nice design but no monitor or keyboard. At least sell a desktop cheap bundle of a Display, keyboard and Mini and make it cheap but stylish.
And that is happening. All the time. But there are still plenty of people who don't know about 'Macs' because Apple doesn't advertise them on TV. Maybe Leopard will bring us many of the things I want. Marketshare for the Mac. A new GUI. A new 'mid' range Mac Tower tween the Mini and Pro. Slightly cheaper prices on Mac Book (low end model) and Mac Mini. Or release a 17 inch display that they can bundle with the Mac Mini. It's a bit silly selling a premium priced biscuit tin with nice design but no monitor or keyboard. At least sell a desktop cheap bundle of a Display, keyboard and Mini and make it cheap but stylish.
8)
Lemon Bon Bon
They advertising them all the time. They just portray them as some kind of rich teenagers computer.
One important part of the equation you guys are leaving out is the fact that Apple is primarily a consumer company.
Looking at the PC side if you subtract enterprise sales and the many other esoteric tasks that PC desktops perform. Boil it down to the same consumer markets that Apple serves. I bet the desktop numbers would go down quite a bit.
One important part of the equation you guys are leaving out is the fact that Apple is primarily a consumer company.
Looking at the PC side if you subtract enterprise sales and the many other esoteric tasks that PC desktops perform. Boil it down to the same consumer markets that Apple serves. I bet the desktop numbers would go down quite a bit.
Apple knows these numbers, but we don't.
Yes Apple concentrates on only portions of the PC market. Edu, home (sans gamers) and content creation (video, photo, etc). Apple has not pursued the business market segment in some time.
Economies of scale that HP and Dell achieves from business sales won't happen for Apple even with Bootcamp. It's also different to build your business model on volume vs margins. Even given Apple's success in iPod volume sales iPods do require less tech support than PCs. Especially business critical ones.
I used to work at Computermart of Detroit when the first PC's came out. We sold 6,000 computers sight unseen and untested, because they had the IBM name on it. Chrysler, Ford and GM dumped all thier Apples and bought PCs. Not because they were better, but because they were PCs. SO if you think there is some kind of level playing field out there to be won over, you're just to young to know different.
I also remember the Mac Clones. Everyone said this woulde increase Apple's market share. It didn't, the clones cut into Apple's market share and didn't incease the percentage of MacOS users at all. Steve Jobs came back, killed the clones and turned Apple into a profitable company.
I have a great deal of trouble understanding how people can sit on here and argue with Apple's marketing strategy. Sorry but I've heard it all before and I saw Apple almost die when their CEO took bad advice. You guys are sounding an awful lot like those guys who were claiming apple market share would increase by allowing third parties to manufacture motherboards and put together systems. It sounded really great at the time, but, it almost cost us Apple. And no, the PC guys didn't flock to MacOS to use those "windows style" machines. If you want a PC , buy a friggin PC, leave Apple out of it. And also for your information, those "high end" customized systems on the PC side way to often turn out to be garbage. I once has a guy so frustrated trying to edit video on his PC he offerd to trade his brand new 4 gig machine straight up for a 500mhz iMac. If you want a great machine, pay for it. You say you can make better system cheaper, prove it. You can't sell your soul for market share. You'll lose.
Well, IBM is pushing Linux these days and Microsoft doesn't have the same weightiness that IBM had back in the day even if it has better marketshare (I think anyways...the seven dwarfs probably held more share then MS's current competitors).
Still, no CIO is trading in their Dells for Apples even if they own iPods and have one docked in their Mercedes and some of their backed stuff are LAMP servers with big blue's name on them.
Nor does the fact that OSX is the best desktop unix in the world going to sway many folks from Linux much less Vista.
I used to work at Computermart of Detroit when the first PC's came out. We sold 6,000 computers sight unseen and untested, because they had the IBM name on it. Chrysler, Ford and GM dumped all thier Apples and bought PCs. Not because they were better, but because they were PCs. SO if you think there is some kind of level playing field out there to be won over, you're just to young to know different.
I also remember the Mac Clones. Everyone said this woulde increase Apple's market share. It didn't, the clones cut into Apple's market share and didn't incease the percentage of MacOS users at all. Steve Jobs came back, killed the clones and turned Apple into a profitable company.
I have a great deal of trouble understanding how people can sit on here and argue with Apple's marketing strategy. Sorry but I've heard it all before and I saw Apple almost die when their CEO took bad advice. You guys are sounding an awful lot like those guys who were claiming apple market share would increase by allowing third parties to manufacture motherboards and put together systems. It sounded really great at the time, but, it almost cost us Apple. And no, the PC guys didn't flock to MacOS to use those "windows style" machines. If you want a PC , buy a friggin PC, leave Apple out of it. And also for your information, those "high end" customized systems on the PC side way to often turn out to be garbage. I once has a guy so frustrated trying to edit video on his PC he offerd to trade his brand new 4 gig machine straight up for a 500mhz iMac. If you want a great machine, pay for it. You say you can make better system cheaper, prove it. You can't sell your soul for market share. You'll lose.
What you say is true, but \\different times, different set of circumstances today.
Consumer awareness of Apple is at it highest in a long long time. There is the iPod, there will be the iPhone. There has been a backlash against Microsoft due to maleware for quite some time.
The most significant example being the relative increase in market share Apple's laptop sales have enjoyed over PC laptops sales and lack of a corresponding increase in Apple desktop market increases.
Over the last few quarters, Apples increase in market share has been due to laptop sales and in spite of desktop sales.
I translate this into an increased desire by consumers to switch to OS X. However, it hasn't increased desktop sales proportionately with laptop sales. Why?
It can not be explained by the overall rush to laptops over desktop sales. People are still buying desktops, yet Apple sales are stagnant and actually losing market share compared to their desktop competitors.
The most significant example being the relative increase in market share Apple's laptop sales have enjoyed over PC laptops sales and lack of a corresponding increase in Apple desktop market increases.
Over the last few quarters, Apples increase in market share has been due to laptop sales and in spite of desktop sales.
I translate this into an increased desire by consumers to switch to OS X. However, it hasn't increased desktop sales proportionately with laptop sales. Why?
It can not be explained by the overall rush to laptops over desktop sales. People are still buying desktops, yet Apple sales are stagnant and actually losing market share compared to their desktop competitors.
Apple seems to make good margins on their laptops while remaining price competitive at their market price points (mid to high range). Note that while they are #5 in share almost their entire line is built with some or mostly mobility parts. That probably gives them the equivalent to #3 or better in terms of volume purchases with suppliers.
It seems their entire strategy is geared toward competing in the mobility market where they are indeed doing well. Introduction of a desktop machine would cannibalize their iMac, Mini and Mac pro lines and there are a finite number of switchers.
I think folks overestimate the number of folks truly pissed at MS and willing to change from the market leader. Especially since Vista looks even more like OSX and a good percentage of "switchers" went to Ubuntu and other Linux distros despite the superiority of OSX on the desktop. 800K switchers/qtr is pretty good and the laptop strategy appears to be working.
We should mess with a winning strategy because we like to take risk in pursuing a fully developed market and going toe to toe on Dell and HP's chosen ground? Where they are optimized to fight in the low and mid range desktop markets tooth and nail?
It seems their entire strategy is geared toward competing in the mobility market where they are indeed doing well. Introduction of a desktop machine would cannibalize their iMac, Mini and Mac pro lines and there are a finite number of switchers.
"Cannibalize" is a negative term. Why wouldn't they want to upsell from the mini? Why wouldn't they want to upsell from the iMac? (Insofar the iMac even occupies the same product space.)
So on one hand we have
+ mini upsells
+ iMac upsells
+ added sales to people who would buy nothing / less frequently if this product was not available
+ additional switchers and new users / expanding userbase / expanding platform
-> + network effect, more software, things get cheaper
+ group of potential expansion card buyers grows many-fold
-> + better, cheaper, more available parts
-> + increased part selection makes Mac Pro better value than before
And on the other hand we have
- design cost
- inventory cost
- Mac Pro cannibalization
I don't think this machine needs any switchers to be profitable, but it will also help with that.
"Cannibalize" is a negative term. Why wouldn't they want to upsell from the mini? Why wouldn't they want to upsell from the iMac? (Insofar the iMac even occupies the same product space.)
You upsell from a $599 mini to a $499 tower as some folks proposed? Okay its an upsell to a $699 tower...unless you are a $799 mini.
You cannibalize iMacs unless you sell an ACD as well. Lemme see...a $699/$799 tower with Conroe and PICe slots vs a $999 Merom AIO with GMA graphics. Lemme think if we're going to lose any iMac sales...
Yes indeedy cannibalize is a negative term for good reason.
Quote:
So on one hand we have
+ mini upsells
One model upsells a $100-$200. The other is cannibalized by $100 to $0.
Quote:
+ iMac upsells
Right...because $999-$1999 is less than $699-$799.
Quote:
+ added sales to people who would buy nothing / less frequently if this product was not available
+ additional switchers and new users / expanding userbase / expanding platform
Its not a + until after doubling your desktop sales. Its a - until then.
Quote:
-> + network effect, more software, things get cheaper
+ group of potential expansion card buyers grows many-fold
-> + better, cheaper, more available parts
-> + increased part selection makes Mac Pro better value than before
- more expensive laptop parts because volumes are decreased making the MB and MBP less competitive.
- cannibalized Mac Pro sales if you stick a high end Conroe in there.
It does little for Mac Pro parts since the Mac pro uses workstation parts.
More software from what? An extra 400K desktop sales?
Quote:
And on the other hand we have
- design cost
- inventory cost
- Mac Pro cannibalization
I don't think this machine needs any switchers to be profitable, but it will also help with that.
You're kidding right? You just converted $279-$559 gross margins/unit into $223 gross margins/unit on EVERY sale of the tower except those to switchers, mini purchasers and those that buy a $699 20" ACD instead of ordering a $251 20" WS or $649 24" WS Dell monitor. Lemme think a moment...do I want to spend $50 more and get a 4" smaller monitor?
Or HEY...I could get a $699 Conroe box running OSX and a $1300 30" UltraSharp from Dell for the same price as a 24" iMac! With SLOTS! Woot.
You DONT think you need ANY switchers? Riiiight. And absolutely no cannibalization will occur...these are all UPSELLS!
For new Apple commercials lets hire Baghdad Bob as the new Apple guy...
Apple seems to make good margins on their laptops while remaining price competitive at their market price points (mid to high range). Note that while they are #5 in share almost their entire line is built with some or mostly mobility parts. That probably gives them the equivalent to #3 or better in terms of volume purchases with suppliers.
It seems their entire strategy is geared toward competing in the mobility market where they are indeed doing well. Introduction of a desktop machine would cannibalize their iMac, Mini and Mac pro lines and there are a finite number of switchers.
I think folks overestimate the number of folks truly pissed at MS and willing to change from the market leader. Especially since Vista looks even more like OSX and a good percentage of "switchers" went to Ubuntu and other Linux distros despite the superiority of OSX on the desktop. 800K switchers/qtr is pretty good and the laptop strategy appears to be working.
We should mess with a winning strategy because we like to take risk in pursuing a fully developed market and going toe to toe on Dell and HP's chosen ground? Where they are optimized to fight in the low and mid range desktop markets tooth and nail?
OSX isn't that much an advantage.
Vinea
Virtually nothing in the above post addresses the huge disparity in market share increases in Apple's laptop sales as opposed to the stagnant sales of their desktop market.
One might argue there was a large pent up demand for Apple laptops, but this flys in the face of the fact that the Intel versions were available before the large increases in sales the last two quarters.
One might argue that the back to school(college) crowd seems hell bent on buying laptops from Apple for some peculiar reason over desktops.
Or, one might argue that Apple laptops fulfill most peoples expectations in a laptop and they have switched to Mac OS X, but few switchers have found the same attributes in Apple's desktop line-up.
But just noting Apple's stragegy does not explain this disparity in market share numbers between Apple's laptops and desktops.
Nobody is looking to caniblize the iMac's sale. We're looking to caniblize sales from the PC ranks in the mid to upper end of the consumer market and the low end of the professional market. The iMac isn't going to get it done.
You upsell from a $599 mini to a $499 tower as some folks proposed? Okay its an upsell to a $699 tower...unless you are a $799 mini.
You cannibalize iMacs unless you sell an ACD as well. Lemme see...a $699/$799 tower with Conroe and PICe slots vs a $999 Merom AIO with GMA graphics. Lemme think if we're going to lose any iMac sales...
Yes indeedy cannibalize is a negative term for good reason.
FIRST OFF. Anyone who thinks there is going to be a 699/799 tower can forget that wet dream right now. Apple is not here to give away machines. Could they beef up the mac mini and up the retail price? Sure. But a Mac TOWER with pcie slots, and conroe / kentsfield / full size mobo. It's not going to be under 1199. If we were talking about dell or HP, I'd fully expect a 799 tower. During the move to G5s, Apple dropped their $1500 tower. It's never returned. This tower was a great balance for pro-sumers. It's been there for a long time. Since its absence, there has been a pretty big hole between imacs and mac pros / power macs.
Quote:
It does little for Mac Pro parts since the Mac pro uses workstation parts.
... Besides graphics cards, burners, harddrives (though they are in imacs too), fans, power supplies, etc.
On a personal note. Vinea I respect your opinion, but it seems lately you attack every single person. Can't you be a bit nicer?
Comments
Your post is basically providing a few numbers and a new angle on the cannibalization argument that we agreed to drop several pages back, because people had agreed to disagree.
What your analysis fails to do is account for extra people that an xMac could attract to the platform - i.e. extra sales that don't take away from iMac sales or Mac Pro sales.
So the argument comes down to this:
Will an xMac attract enough new users to the platform to offset any cannibalization that may occur in the installed user-base? Some people (like me), think yes it would, others, like Vinea, think no it wouldn't.
Hey, your post came in just before mine and I missed it. It seems we agree. This topic came up on another thread too, and here is what I posted.
To increase market share Apple must attract customers who now purchase elsewhere. If some of those folks are buying "a product that other companies have negative growth in," than it is necessary for Apple to make a product somewhat like that too. Whether or not Apple's margins would be too low is a matter of cleaver design and pricing. Apple can't get all the people to switch, but can aim for the cream of the crop of Windows buyers --- those who would be willing to pay a little more to get a well designed and built computer with the extra Apple goodies.
Originally Posted by Mr. H
Your post is basically providing a few numbers and a new angle on the cannibalization argument that we agreed to drop several pages back, because people had agreed to disagree.
What your analysis fails to do is account for extra people that an xMac could attract to the platform - i.e. extra sales that don't take away from iMac sales or Mac Pro sales.
So the argument comes down to this:
Will an xMac attract enough new users to the platform to offset any cannibalization that may occur in the installed user-base? Some people (like me), think yes it would, others, like Vinea, think no it wouldn't.
Hey, your post came in just before mine and I missed it. It seems we agree. This topic came up on another thread too, and here is what I posted.
Quote:
To increase market share Apple must attract customers who now purchase elsewhere. If some of those folks are buying "a product that other companies have negative growth in," than it is necessary for Apple to make a product somewhat like that too. Whether or not Apple's margins would be too low is a matter of cleaver design and pricing. Apple can't get all the people to switch, but can aim for the cream of the crop of Windows buyers --- those who would be willing to pay a little more to get a well designed and built computer with the extra Apple goodies.
I agree.
Giving what PC users recognise would more than offset lost iMac sales. There's just nothing inbetween the Mac Mini and Mac Pro for desktrop users that want a decent cpu and a good GPU. A conroe tower with a decent GPU would open up Apple to many windows using 'head shakes' ergo: not Mac takers.
With the scalability of Leopard re: iPhone, it is clear Apple have got the flexibility to put out whatever computer/toasters/gadjets they want.
But the desktop line isn't as well catered for as the laptop line.
A consumer tower under and over the £1000 mark woud be a good start. A range of 3 towers based on the Conroe. 3 models. Done. Priced from £799 to £1195-ish. Job done. Using either the Mac Pro case or a slimmed version of. Those new consumer PC tower cases look nice in some cases...plastic or not.
Lemon Bon Bon
I don't know why they don't just 'shuttle' the Mac Mini. Integrated crappics at the low end. Decent GPU at the top end ie configurable.
To me, it's jaw droppingly obvious.
Scratches head.*
Lemon Bon Bon
After reading a few pages on this thread, I can see there are a some people who do want the 'xMac', but how many people are there in the PC buying world that want this? You have to do a cost analysis on this, as in if there is a significant profit to be made by producing the headless Mac. Example:
Say you have 100 people that want to buy a Mac. The 100 people are a ratio of the total people buying, (like 1 person would equal 10 people out of the 'real population' of 1000). 50 would like to buy the $1500 iMac and 50 want to buy a $3000 Mac Pro. We will also say that the product cost is 50% of the sale price, or $750 for the iMac and $1500 for the Mac Pro. If the xMac comes out at a even $1500 as well, with a cost of $700. It will really depend on how many want to buy.
if 10% will switch:
Original=(50*$1500+50*$3000)-(50*750+50*$1500)=$225,000-$112500=$112,500 profit
New=(45*$1500+45*$3000+10*1500)-(45*750+45*$1500+10*700)=$217,500-$108,250=$109,250 profit
if 20% will switch:
Original=(50*$1500+50*$3000)-(50*750+50*$1500)=$225,000-$112500=$112,500 profit
New=(40*$1500+40*$3000+20*1500)-(40*750+40*$1500+20*700)=$210,000-$104,000=$106,000 profit
Now these calculations are extremely simple to make a basic comparison that shows that by losing iMac customers to a xMac if it is similarly priced, but less costly, then the company will make more profit. However, the more customers that drop from the Mac Pro to the xMac will cause lower overall profit, especially if the cost to making the Mac Pro is not very high.
There is probably an entire finance department devoted to the case analysis of a xMac, once they find a way to not to lose profit, it will come
You're missing the most likely scenario which they buy a PC instead which has a profit for Apple of $0. It takes a person who has a radical commitment to a platform to buy a professional workstation as a consumer desktop when a person has completely ruled out the iMac because of the lack of expansion and slow notebook optical drive, the only logical option they have to stay with the PC ranks. Then there are people who have historically bought Macs but have either left the platform or have a low end mac to do the basic stuff, but have a PC for the higher end stuff.
You're missing the most likely scenario which they buy a PC instead which has a profit for Apple of $0.
And that is happening. All the time. But there are still plenty of people who don't know about 'Macs' because Apple doesn't advertise them on TV. Maybe Leopard will bring us many of the things I want. Marketshare for the Mac. A new GUI. A new 'mid' range Mac Tower tween the Mini and Pro. Slightly cheaper prices on Mac Book (low end model) and Mac Mini. Or release a 17 inch display that they can bundle with the Mac Mini. It's a bit silly selling a premium priced biscuit tin with nice design but no monitor or keyboard. At least sell a desktop cheap bundle of a Display, keyboard and Mini and make it cheap but stylish.
8)
Lemon Bon Bon
And that is happening. All the time. But there are still plenty of people who don't know about 'Macs' because Apple doesn't advertise them on TV. Maybe Leopard will bring us many of the things I want. Marketshare for the Mac. A new GUI. A new 'mid' range Mac Tower tween the Mini and Pro. Slightly cheaper prices on Mac Book (low end model) and Mac Mini. Or release a 17 inch display that they can bundle with the Mac Mini. It's a bit silly selling a premium priced biscuit tin with nice design but no monitor or keyboard. At least sell a desktop cheap bundle of a Display, keyboard and Mini and make it cheap but stylish.
8)
Lemon Bon Bon
They advertising them all the time. They just portray them as some kind of rich teenagers computer.
They advertising them all the time. They just portray them as some kind of rich teenagers computer.
Touche'
at least that's what the PC said wasn't it.
Looking at the PC side if you subtract enterprise sales and the many other esoteric tasks that PC desktops perform. Boil it down to the same consumer markets that Apple serves. I bet the desktop numbers would go down quite a bit.
Apple knows these numbers, but we don't.
One important part of the equation you guys are leaving out is the fact that Apple is primarily a consumer company.
Looking at the PC side if you subtract enterprise sales and the many other esoteric tasks that PC desktops perform. Boil it down to the same consumer markets that Apple serves. I bet the desktop numbers would go down quite a bit.
Apple knows these numbers, but we don't.
Yes Apple concentrates on only portions of the PC market. Edu, home (sans gamers) and content creation (video, photo, etc). Apple has not pursued the business market segment in some time.
Economies of scale that HP and Dell achieves from business sales won't happen for Apple even with Bootcamp. It's also different to build your business model on volume vs margins. Even given Apple's success in iPod volume sales iPods do require less tech support than PCs. Especially business critical ones.
Vinea
I also remember the Mac Clones. Everyone said this woulde increase Apple's market share. It didn't, the clones cut into Apple's market share and didn't incease the percentage of MacOS users at all. Steve Jobs came back, killed the clones and turned Apple into a profitable company.
I have a great deal of trouble understanding how people can sit on here and argue with Apple's marketing strategy. Sorry but I've heard it all before and I saw Apple almost die when their CEO took bad advice. You guys are sounding an awful lot like those guys who were claiming apple market share would increase by allowing third parties to manufacture motherboards and put together systems. It sounded really great at the time, but, it almost cost us Apple. And no, the PC guys didn't flock to MacOS to use those "windows style" machines. If you want a PC , buy a friggin PC, leave Apple out of it. And also for your information, those "high end" customized systems on the PC side way to often turn out to be garbage. I once has a guy so frustrated trying to edit video on his PC he offerd to trade his brand new 4 gig machine straight up for a 500mhz iMac. If you want a great machine, pay for it. You say you can make better system cheaper, prove it. You can't sell your soul for market share. You'll lose.
Still, no CIO is trading in their Dells for Apples even if they own iPods and have one docked in their Mercedes and some of their backed stuff are LAMP servers with big blue's name on them.
Nor does the fact that OSX is the best desktop unix in the world going to sway many folks from Linux much less Vista.
Vinea
I used to work at Computermart of Detroit when the first PC's came out. We sold 6,000 computers sight unseen and untested, because they had the IBM name on it. Chrysler, Ford and GM dumped all thier Apples and bought PCs. Not because they were better, but because they were PCs. SO if you think there is some kind of level playing field out there to be won over, you're just to young to know different.
I also remember the Mac Clones. Everyone said this woulde increase Apple's market share. It didn't, the clones cut into Apple's market share and didn't incease the percentage of MacOS users at all. Steve Jobs came back, killed the clones and turned Apple into a profitable company.
I have a great deal of trouble understanding how people can sit on here and argue with Apple's marketing strategy. Sorry but I've heard it all before and I saw Apple almost die when their CEO took bad advice. You guys are sounding an awful lot like those guys who were claiming apple market share would increase by allowing third parties to manufacture motherboards and put together systems. It sounded really great at the time, but, it almost cost us Apple. And no, the PC guys didn't flock to MacOS to use those "windows style" machines. If you want a PC , buy a friggin PC, leave Apple out of it. And also for your information, those "high end" customized systems on the PC side way to often turn out to be garbage. I once has a guy so frustrated trying to edit video on his PC he offerd to trade his brand new 4 gig machine straight up for a 500mhz iMac. If you want a great machine, pay for it. You say you can make better system cheaper, prove it. You can't sell your soul for market share. You'll lose.
What you say is true, but \\different times, different set of circumstances today.
Consumer awareness of Apple is at it highest in a long long time. There is the iPod, there will be the iPhone. There has been a backlash against Microsoft due to maleware for quite some time.
The most significant example being the relative increase in market share Apple's laptop sales have enjoyed over PC laptops sales and lack of a corresponding increase in Apple desktop market increases.
Over the last few quarters, Apples increase in market share has been due to laptop sales and in spite of desktop sales.
I translate this into an increased desire by consumers to switch to OS X. However, it hasn't increased desktop sales proportionately with laptop sales. Why?
It can not be explained by the overall rush to laptops over desktop sales. People are still buying desktops, yet Apple sales are stagnant and actually losing market share compared to their desktop competitors.
The most significant example being the relative increase in market share Apple's laptop sales have enjoyed over PC laptops sales and lack of a corresponding increase in Apple desktop market increases.
Over the last few quarters, Apples increase in market share has been due to laptop sales and in spite of desktop sales.
I translate this into an increased desire by consumers to switch to OS X. However, it hasn't increased desktop sales proportionately with laptop sales. Why?
It can not be explained by the overall rush to laptops over desktop sales. People are still buying desktops, yet Apple sales are stagnant and actually losing market share compared to their desktop competitors.
Apple seems to make good margins on their laptops while remaining price competitive at their market price points (mid to high range). Note that while they are #5 in share almost their entire line is built with some or mostly mobility parts. That probably gives them the equivalent to #3 or better in terms of volume purchases with suppliers.
It seems their entire strategy is geared toward competing in the mobility market where they are indeed doing well. Introduction of a desktop machine would cannibalize their iMac, Mini and Mac pro lines and there are a finite number of switchers.
I think folks overestimate the number of folks truly pissed at MS and willing to change from the market leader. Especially since Vista looks even more like OSX and a good percentage of "switchers" went to Ubuntu and other Linux distros despite the superiority of OSX on the desktop. 800K switchers/qtr is pretty good and the laptop strategy appears to be working.
We should mess with a winning strategy because we like to take risk in pursuing a fully developed market and going toe to toe on Dell and HP's chosen ground? Where they are optimized to fight in the low and mid range desktop markets tooth and nail?
OSX isn't that much an advantage.
Vinea
It seems their entire strategy is geared toward competing in the mobility market where they are indeed doing well. Introduction of a desktop machine would cannibalize their iMac, Mini and Mac pro lines and there are a finite number of switchers.
"Cannibalize" is a negative term. Why wouldn't they want to upsell from the mini? Why wouldn't they want to upsell from the iMac? (Insofar the iMac even occupies the same product space.)
So on one hand we have
+ mini upsells
+ iMac upsells
+ added sales to people who would buy nothing / less frequently if this product was not available
+ additional switchers and new users / expanding userbase / expanding platform
-> + network effect, more software, things get cheaper
+ group of potential expansion card buyers grows many-fold
-> + better, cheaper, more available parts
-> + increased part selection makes Mac Pro better value than before
And on the other hand we have
- design cost
- inventory cost
- Mac Pro cannibalization
I don't think this machine needs any switchers to be profitable, but it will also help with that.
"Cannibalize" is a negative term. Why wouldn't they want to upsell ....
√√√√√√
"Cannibalize" is a negative term. Why wouldn't they want to upsell from the mini? Why wouldn't they want to upsell from the iMac? (Insofar the iMac even occupies the same product space.)
You upsell from a $599 mini to a $499 tower as some folks proposed? Okay its an upsell to a $699 tower...unless you are a $799 mini.
You cannibalize iMacs unless you sell an ACD as well. Lemme see...a $699/$799 tower with Conroe and PICe slots vs a $999 Merom AIO with GMA graphics. Lemme think if we're going to lose any iMac sales...
Yes indeedy cannibalize is a negative term for good reason.
So on one hand we have
+ mini upsells
One model upsells a $100-$200. The other is cannibalized by $100 to $0.
+ iMac upsells
Right...because $999-$1999 is less than $699-$799.
+ added sales to people who would buy nothing / less frequently if this product was not available
+ additional switchers and new users / expanding userbase / expanding platform
Its not a + until after doubling your desktop sales. Its a - until then.
-> + network effect, more software, things get cheaper
+ group of potential expansion card buyers grows many-fold
-> + better, cheaper, more available parts
-> + increased part selection makes Mac Pro better value than before
- more expensive laptop parts because volumes are decreased making the MB and MBP less competitive.
- cannibalized Mac Pro sales if you stick a high end Conroe in there.
It does little for Mac Pro parts since the Mac pro uses workstation parts.
More software from what? An extra 400K desktop sales?
And on the other hand we have
- design cost
- inventory cost
- Mac Pro cannibalization
I don't think this machine needs any switchers to be profitable, but it will also help with that.
You're kidding right? You just converted $279-$559 gross margins/unit into $223 gross margins/unit on EVERY sale of the tower except those to switchers, mini purchasers and those that buy a $699 20" ACD instead of ordering a $251 20" WS or $649 24" WS Dell monitor. Lemme think a moment...do I want to spend $50 more and get a 4" smaller monitor?
Or HEY...I could get a $699 Conroe box running OSX and a $1300 30" UltraSharp from Dell for the same price as a 24" iMac! With SLOTS! Woot.
You DONT think you need ANY switchers? Riiiight. And absolutely no cannibalization will occur...these are all UPSELLS!
For new Apple commercials lets hire Baghdad Bob as the new Apple guy...
Vinea
Apple seems to make good margins on their laptops while remaining price competitive at their market price points (mid to high range). Note that while they are #5 in share almost their entire line is built with some or mostly mobility parts. That probably gives them the equivalent to #3 or better in terms of volume purchases with suppliers.
It seems their entire strategy is geared toward competing in the mobility market where they are indeed doing well. Introduction of a desktop machine would cannibalize their iMac, Mini and Mac pro lines and there are a finite number of switchers.
I think folks overestimate the number of folks truly pissed at MS and willing to change from the market leader. Especially since Vista looks even more like OSX and a good percentage of "switchers" went to Ubuntu and other Linux distros despite the superiority of OSX on the desktop. 800K switchers/qtr is pretty good and the laptop strategy appears to be working.
We should mess with a winning strategy because we like to take risk in pursuing a fully developed market and going toe to toe on Dell and HP's chosen ground? Where they are optimized to fight in the low and mid range desktop markets tooth and nail?
OSX isn't that much an advantage.
Vinea
Virtually nothing in the above post addresses the huge disparity in market share increases in Apple's laptop sales as opposed to the stagnant sales of their desktop market.
One might argue there was a large pent up demand for Apple laptops, but this flys in the face of the fact that the Intel versions were available before the large increases in sales the last two quarters.
One might argue that the back to school(college) crowd seems hell bent on buying laptops from Apple for some peculiar reason over desktops.
Or, one might argue that Apple laptops fulfill most peoples expectations in a laptop and they have switched to Mac OS X, but few switchers have found the same attributes in Apple's desktop line-up.
But just noting Apple's stragegy does not explain this disparity in market share numbers between Apple's laptops and desktops.
You upsell from a $599 mini to a $499 tower as some folks proposed? Okay its an upsell to a $699 tower...unless you are a $799 mini.
You cannibalize iMacs unless you sell an ACD as well. Lemme see...a $699/$799 tower with Conroe and PICe slots vs a $999 Merom AIO with GMA graphics. Lemme think if we're going to lose any iMac sales...
Yes indeedy cannibalize is a negative term for good reason.
FIRST OFF. Anyone who thinks there is going to be a 699/799 tower can forget that wet dream right now. Apple is not here to give away machines. Could they beef up the mac mini and up the retail price? Sure. But a Mac TOWER with pcie slots, and conroe / kentsfield / full size mobo. It's not going to be under 1199. If we were talking about dell or HP, I'd fully expect a 799 tower. During the move to G5s, Apple dropped their $1500 tower. It's never returned. This tower was a great balance for pro-sumers. It's been there for a long time. Since its absence, there has been a pretty big hole between imacs and mac pros / power macs.
It does little for Mac Pro parts since the Mac pro uses workstation parts.
... Besides graphics cards, burners, harddrives (though they are in imacs too), fans, power supplies, etc.
On a personal note. Vinea I respect your opinion, but it seems lately you attack every single person. Can't you be a bit nicer?