I have a friend who had one of those $500 Dell set ups. She owned the computer for about 3 years. It has five expansion slots and a dedicated GPU slot. All of which went unused. She doesn't have any need for expansion and doesn't even know what a graphics card is.
She finally got tired of the computer because of viruses. Her life does not revolve around her computer so she doesn't pay much attention to when a serious virus threat is coming or making sure her virus security is updated. She just wants a computer that can work with the absolute minimum effort form her. Because of this lax attitude her computer has been over run with viruses to the point she needed someone to come and completely restore her system. She has been through this process a couple of time and has finally gotten fed up with it.
She has heard about the Mac but feels a little overwhelmed with going through the process of buying another computer and does not really want to spend much money on it. She has a VGA monitor, a USB keyboard, and a USB mouse. The only thing she needs is the computer. So I suggested the Mac mini. We went to the store and she was amazed by the mini's small size.
We took it home and hooked it up. I advised her about downloading strange software or giving anything unfamiliar permission to download itself. After that she has been perfectly happy and virus free.
She will never have need to expand anything. She will never buy a new hard drive. I seriously doubt she will ever add more RAM. As is the same with nearly everyone I know with a Dell that has expansion slots. They don't upgrade anything.
I believe these people represent the majority of the consumer computer market. The functionality of the Mac mini fits their needs perfectly fine. Because mostly the computer will be used to write documents, write e-mails, instant message with friends, check out friends on MySpace, download pictures on Flickr, and watch movies on YouTube.
If this $999 Conroe Mac existed I probably could have convinced her to buy it. She would use it for the same tasks as the Mac mini. She would not need the speed of conroe, she would not use the second hard drive slot, she would not use all four memory slots, nor would she use any of the empty PCI slots. This would be the same with many of the people who bought this machine. Apple would be loosing money on functionality that many people would not even use.
That's the reason why its smart for Apple to have expandability on its professional products, and little to no expandability in its consumer level products. That is one of the reasons why Apple's profit margins are so high and why everyone else's profit margins are so low.
I hope she never becomes intersted in home photography or video editing as a hobby.
Comparatively Apple made $546M...so I'm not overwhelmed with the assertion that Apple MUST make a tower (not saying that you personally as saying that) to be successful.
The market share metric is of secondary importance to me relative to profitability and Apple's ability to continue to develop OSX, iLife, iWork, etc (all of which probably have a small independent ROI but contributes greatly to the success of the platform as a whole) and still make Wall Street happy.
With respect to the viability of the platform...as long as they ship a million or so Mac's per quarter I have no worries. If they had sold 0 desktops as opposed to 600K desktops the Mac/OSX platform is viable for 3rd party developers given 900K laptop sales.
I did not say Dell was making no money. But you cannot ignore their incredibly lopsided sales to profit ratio.
If Dell sells a $799 computer with conroe, expandable slots, a second hard drive and makes $10. You can technically say they made a profit but its nothing to get too excited about.
While Apple sells a $799 computer without any of that and makes back around $120. My point is that Apple has stripped the computer of superfluous hardware and cost down to what the user will actually need to use.
So Dell only makes $10 on this computer. I seriously doubt that. And Apple makes $120. Could be, but it has more expensive laptop parts.
No one here is really in a position to break out the profits of either company to the point we can compare margins.
Honestly Teno, Apple used to sell towers not all that long ago for $1499, even $1299 at one point. Didn't seem like it was hurting them then, probably wouldn't be a problem for them now.
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Yes, but the later models at least, Apple crippled them making them unattractive and they didn't sell well.
I hope she never becomes intersted in home photography or video editing as a hobby.
You saying the 1.83 Core Duo cannot handle pictures and video?
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People who really need expandability will be willing to pay for it. People who don't really need it won't care.
You forgot the people who buy an upgraded video card at the time of purchase of their computer.
Wouldn't those people fall into the second category I listed?
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So Dell only makes $10 on this computer. I seriously doubt that. And Apple makes $120. Could be, but it has more expensive laptop parts.
No one here is really in a position to break out the profits of either company to the point we can compare margins.
No I don't know Dell or Apple's margins. That was just an example to illustrate why Apple is making significantly more money than Dell with significantly fewer sales.
Now we have Vista coming along (someday anyway, lol). As good as OS X? Hell no. But on the surface, it could look 'good enough' to a lot of people. Will it decrease the premium that Apple can charge for its computers? Yeah, it might. Should Apple be ready for this, with a price-competitive (within reason) lineup that meets a wide variety of consumer needs? Seems like a good idea, don't you think? 8)
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But Apple's computers ARE price competitive. Really.
Go price up another small form factor computer as small as the Mac Mini, or AIO as well designed as the iMac or even a workstation like the MacPro.
Their laptop prices are ok too. Go price Core Duo laptops from decent manufactuers not the Packard Bell end of the market. They're pretty competitive.
What they don't do is produce cheap crap with low margins and generic design and that seems to be what you're asking them to do.
So Dell only makes $10 on this computer. I seriously doubt that. And Apple makes $120. Could be, but it has more expensive laptop parts.
No one here is really in a position to break out the profits of either company to the point we can compare margins.
Actually, you can look to Dells financial conferences yourself if you want the info.
They have said quite publicly, in response to criticism from the financial community, that they make no, or little money on their lower end machines. The aggressive sales hurt as well. They've stopped free shipping, and free upgrades for most of the lower end machines.
They started a high price line, and bought Alien, to sell profitable machines to offset the cheap ones that gain them marketshare, but otherwise, are of little value to the company.
What they don't do is produce cheap crap with low margins and generic design and that seems to be what you're asking them to do.
People or your side of the argument do seem to really love this statement or something similar. All it does is highlight the fact that you have made no attempt whatsoever to understand the other side of the debate.
It has been demonstrated many times that Apple could deliver a $999 ish mini tower and that there would be no need for such a machine to be of "generic design" or that it would be "cheap crap with low margins". Given the fact that there are plenty of legitimate issues such as cannibalisation of the Mac Pro, how many people actually would want such a machine, and how quickly is the desktop market shrinking, it's highly frustrating that people keep on coming back to this utterly spurious point.
They have said quite publicly, in response to criticism from the financial community, that they make no, or little money on their lower end machines. The aggressive sales hurt as well. They've stopped free shipping, and free upgrades for most of the lower end machines.
The XPS 410 and XPS 210 are not in this category though. They must be in the "machines that actually have a respectable margin" category. If they were in the "machines sold at a loss" or "machines with negligible margin" category, Dell would be making no money at all.
It would be nice if apple release an stand alone desktop that is not based on laptop tech, ie a decent desktop with Core 2 duo, 7200rpm FDD,decent videocard.
All the non pro systems are AIOs or the Mini and both are really laptop systems. the performance is much greater on the 7200 RPM drives with core 2 duo.
The XPS 410 and XPS 210 are not in this category though. They must be in the "machines that actually have a respectable margin" category. If they were in the "machines sold at a loss" or "machines with negligible margin" category, Dell would be making no money at all.
Look at Dells sales. $60 billion dollars. But their profit is pretty small these days for that amount. Much smaller, dollar for dollar, than Apple's, for example.
Yet, Dell sells highly profitable servers, and services, as well as networking and other expensive, and profitable, corporate hardware and software.
Their low end business is killing them. Everything below $700 is either making very little profit, or is selling at a loss, particularly when the sales, free upgrades, and shipping, had been thrown in.
Dell said that the concern with marketshare had caused them to think this strategy to be a good one, but it has been failing as of late.
Their low end business is killing them. Everything below $700 is either making very little profit, or is selling at a loss, particularly when the sales, free upgrades, and shipping, had been thrown in.
I agree with all that. You will note, though, that $700 is below $799 and $899, which is the cheapest that you can make an XPS 410 and XPS 210 respectively (by removing the included 19" monitors). At $799, I'm sure their margins are significantly slimmer than Apple's (which is why I suggested lower specs. for the Apple price-equivalent machine), and that as the prices go up, so do the margins.
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Originally Posted by melgross
Dell said that the concern with marketshare had caused them to think this strategy to be a good one, but it has been failing as of late.
I've got no idea why Dell are so obsessed with market share? What's the point of them gaining 1% or whatever if they make no financial gain out of it? The hope of customer loyalty? And why would they even need that if when the customers come back, they won't make any money out of them anyway?
With Apple on the other hand, gaining market share without increasing profits (which isn't something I think they should aim to do at the moment, since they currently appear able to increase share without sacrificing margins) has considerable benefits for the OS X platform, which has significant long term benefits for Apple.
I agree with all that. You will note, though, that $700 is below $799 and $899, which is the cheapest that you can make an XPS 410 and XPS 210 respectively (by removing the included 19" monitors). At $799, I'm sure their margins are significantly slimmer than Apple's (which is why I suggested lower specs. for the Apple price-equivalent machine), and that as the prices go up, so do the margins.
I've got no idea why Dell are so obsessed with market share? What's the point of them gaining 1% or whatever if they make no financial gain out of it? The hope of customer loyalty? And why would they even need that if when the customers come back, they won't make any money out of them anyway?
With Apple on the other hand, gaining market share without increasing profits (which isn't something I think they should aim to do at the moment, since they currently appear able to increase share without sacrificing margins) has considerable benefits for the OS X platform, which has significant long term benefits for Apple.
Dell was growing at 30% a year, substantially faster than the pc business as a whole, at 10% a year. Now, it has slowed down to below that 10% rate, as Dell is trying to reign in it's losses, and as Hp, and others, are catching up to, and surpassing, Dells cost structure.
D) People who bought a Mac mini with integrated graphics. Oh wait, they can't.
You didn't even try to respond to that. If you don't have something remotely coherent to say, why bother? Did you think this was a gibberish board? It's an English one.
There actually was a time, in the '80s, when the Mac was a GREAT place for games, much better than the PC.
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Apple was a very good place for both prosumers and gamers until about 2000. Bungie made quite possibly best FPS series of the era primarily for the Mac. Then there was the G4 fiasco and by the time they finally came out of it, they were delusional enough to think that everyone not running Mathematica wanted an iMac.
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The problem is, if a company is not willing to cannibalize its own products, someone else will for them.
Some cases in point: Sun, with its expensive propietary servers, trying to battle a sea of incoming, cheap Intel-Linux boxes...
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Sun gained server share recently too. Surprised me but Sun servers do have some advantages over Opteron or Xeon servers.
Vinea
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A) People that bought a top of the line graphics card, and are upgrading to a new top of the line graphics card when it comes out.
C) Suckers.
Seriously. Not only is $2,124 not worth the performance increase in this case, but neither is $150.
D) People who bought a Mac mini with integrated graphics. Oh wait, they can't.
I have a friend who had one of those $500 Dell set ups. She owned the computer for about 3 years. It has five expansion slots and a dedicated GPU slot. All of which went unused. She doesn't have any need for expansion and doesn't even know what a graphics card is.
She finally got tired of the computer because of viruses. Her life does not revolve around her computer so she doesn't pay much attention to when a serious virus threat is coming or making sure her virus security is updated. She just wants a computer that can work with the absolute minimum effort form her. Because of this lax attitude her computer has been over run with viruses to the point she needed someone to come and completely restore her system. She has been through this process a couple of time and has finally gotten fed up with it.
She has heard about the Mac but feels a little overwhelmed with going through the process of buying another computer and does not really want to spend much money on it. She has a VGA monitor, a USB keyboard, and a USB mouse. The only thing she needs is the computer. So I suggested the Mac mini. We went to the store and she was amazed by the mini's small size.
We took it home and hooked it up. I advised her about downloading strange software or giving anything unfamiliar permission to download itself. After that she has been perfectly happy and virus free.
She will never have need to expand anything. She will never buy a new hard drive. I seriously doubt she will ever add more RAM. As is the same with nearly everyone I know with a Dell that has expansion slots. They don't upgrade anything.
I believe these people represent the majority of the consumer computer market. The functionality of the Mac mini fits their needs perfectly fine. Because mostly the computer will be used to write documents, write e-mails, instant message with friends, check out friends on MySpace, download pictures on Flickr, and watch movies on YouTube.
If this $999 Conroe Mac existed I probably could have convinced her to buy it. She would use it for the same tasks as the Mac mini. She would not need the speed of conroe, she would not use the second hard drive slot, she would not use all four memory slots, nor would she use any of the empty PCI slots. This would be the same with many of the people who bought this machine. Apple would be loosing money on functionality that many people would not even use.
That's the reason why its smart for Apple to have expandability on its professional products, and little to no expandability in its consumer level products. That is one of the reasons why Apple's profit margins are so high and why everyone else's profit margins are so low.
I hope she never becomes intersted in home photography or video editing as a hobby.
Dell's operating income is $605 million.
Apple's operating income is $566 million.
Dell sells five to six times more computers than Apple while only making $39 million more in profit.
er, um, where in this post did you break out ipod sales?
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People who really need expandability will be willing to pay for it. People who don't really need it won't care.
You forgot the people who buy an upgraded video card at the time of purchase of their computer.
Comparatively Apple made $546M...so I'm not overwhelmed with the assertion that Apple MUST make a tower (not saying that you personally as saying that) to be successful.
The market share metric is of secondary importance to me relative to profitability and Apple's ability to continue to develop OSX, iLife, iWork, etc (all of which probably have a small independent ROI but contributes greatly to the success of the platform as a whole) and still make Wall Street happy.
With respect to the viability of the platform...as long as they ship a million or so Mac's per quarter I have no worries. If they had sold 0 desktops as opposed to 600K desktops the Mac/OSX platform is viable for 3rd party developers given 900K laptop sales.
Vinea
Edit: Ooops...TB covered the $546M thingy
er, um where did you break out the ipod sales?
I did not say Dell was making no money. But you cannot ignore their incredibly lopsided sales to profit ratio.
If Dell sells a $799 computer with conroe, expandable slots, a second hard drive and makes $10. You can technically say they made a profit but its nothing to get too excited about.
While Apple sells a $799 computer without any of that and makes back around $120. My point is that Apple has stripped the computer of superfluous hardware and cost down to what the user will actually need to use.
So Dell only makes $10 on this computer. I seriously doubt that. And Apple makes $120. Could be, but it has more expensive laptop parts.
No one here is really in a position to break out the profits of either company to the point we can compare margins.
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Honestly Teno, Apple used to sell towers not all that long ago for $1499, even $1299 at one point. Didn't seem like it was hurting them then, probably wouldn't be a problem for them now.
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Yes, but the later models at least, Apple crippled them making them unattractive and they didn't sell well.
er, um where did you break out the ipod sales?
The same place where we broke out Dell profits from selling printers, plasma TVs, projectors, PDAs, etc.
Vinea
I hope she never becomes intersted in home photography or video editing as a hobby.
You saying the 1.83 Core Duo cannot handle pictures and video?
People who really need expandability will be willing to pay for it. People who don't really need it won't care.
You forgot the people who buy an upgraded video card at the time of purchase of their computer.
Wouldn't those people fall into the second category I listed?
So Dell only makes $10 on this computer. I seriously doubt that. And Apple makes $120. Could be, but it has more expensive laptop parts.
No one here is really in a position to break out the profits of either company to the point we can compare margins.
No I don't know Dell or Apple's margins. That was just an example to illustrate why Apple is making significantly more money than Dell with significantly fewer sales.
Now we have Vista coming along (someday anyway, lol). As good as OS X? Hell no. But on the surface, it could look 'good enough' to a lot of people. Will it decrease the premium that Apple can charge for its computers? Yeah, it might. Should Apple be ready for this, with a price-competitive (within reason) lineup that meets a wide variety of consumer needs? Seems like a good idea, don't you think? 8)
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But Apple's computers ARE price competitive. Really.
Go price up another small form factor computer as small as the Mac Mini, or AIO as well designed as the iMac or even a workstation like the MacPro.
Their laptop prices are ok too. Go price Core Duo laptops from decent manufactuers not the Packard Bell end of the market. They're pretty competitive.
What they don't do is produce cheap crap with low margins and generic design and that seems to be what you're asking them to do.
So Dell only makes $10 on this computer. I seriously doubt that. And Apple makes $120. Could be, but it has more expensive laptop parts.
No one here is really in a position to break out the profits of either company to the point we can compare margins.
Actually, you can look to Dells financial conferences yourself if you want the info.
They have said quite publicly, in response to criticism from the financial community, that they make no, or little money on their lower end machines. The aggressive sales hurt as well. They've stopped free shipping, and free upgrades for most of the lower end machines.
They started a high price line, and bought Alien, to sell profitable machines to offset the cheap ones that gain them marketshare, but otherwise, are of little value to the company.
What they don't do is produce cheap crap with low margins and generic design and that seems to be what you're asking them to do.
People or your side of the argument do seem to really love this statement or something similar. All it does is highlight the fact that you have made no attempt whatsoever to understand the other side of the debate.
It has been demonstrated many times that Apple could deliver a $999 ish mini tower and that there would be no need for such a machine to be of "generic design" or that it would be "cheap crap with low margins". Given the fact that there are plenty of legitimate issues such as cannibalisation of the Mac Pro, how many people actually would want such a machine, and how quickly is the desktop market shrinking, it's highly frustrating that people keep on coming back to this utterly spurious point.
They have said quite publicly, in response to criticism from the financial community, that they make no, or little money on their lower end machines. The aggressive sales hurt as well. They've stopped free shipping, and free upgrades for most of the lower end machines.
The XPS 410 and XPS 210 are not in this category though. They must be in the "machines that actually have a respectable margin" category. If they were in the "machines sold at a loss" or "machines with negligible margin" category, Dell would be making no money at all.
All the non pro systems are AIOs or the Mini and both are really laptop systems. the performance is much greater on the 7200 RPM drives with core 2 duo.
The XPS 410 and XPS 210 are not in this category though. They must be in the "machines that actually have a respectable margin" category. If they were in the "machines sold at a loss" or "machines with negligible margin" category, Dell would be making no money at all.
Look at Dells sales. $60 billion dollars. But their profit is pretty small these days for that amount. Much smaller, dollar for dollar, than Apple's, for example.
Yet, Dell sells highly profitable servers, and services, as well as networking and other expensive, and profitable, corporate hardware and software.
Their low end business is killing them. Everything below $700 is either making very little profit, or is selling at a loss, particularly when the sales, free upgrades, and shipping, had been thrown in.
Dell said that the concern with marketshare had caused them to think this strategy to be a good one, but it has been failing as of late.
Their low end business is killing them. Everything below $700 is either making very little profit, or is selling at a loss, particularly when the sales, free upgrades, and shipping, had been thrown in.
I agree with all that. You will note, though, that $700 is below $799 and $899, which is the cheapest that you can make an XPS 410 and XPS 210 respectively (by removing the included 19" monitors). At $799, I'm sure their margins are significantly slimmer than Apple's (which is why I suggested lower specs. for the Apple price-equivalent machine), and that as the prices go up, so do the margins.
Dell said that the concern with marketshare had caused them to think this strategy to be a good one, but it has been failing as of late.
I've got no idea why Dell are so obsessed with market share? What's the point of them gaining 1% or whatever if they make no financial gain out of it? The hope of customer loyalty? And why would they even need that if when the customers come back, they won't make any money out of them anyway?
With Apple on the other hand, gaining market share without increasing profits (which isn't something I think they should aim to do at the moment, since they currently appear able to increase share without sacrificing margins) has considerable benefits for the OS X platform, which has significant long term benefits for Apple.
I agree with all that. You will note, though, that $700 is below $799 and $899, which is the cheapest that you can make an XPS 410 and XPS 210 respectively (by removing the included 19" monitors). At $799, I'm sure their margins are significantly slimmer than Apple's (which is why I suggested lower specs. for the Apple price-equivalent machine), and that as the prices go up, so do the margins.
I've got no idea why Dell are so obsessed with market share? What's the point of them gaining 1% or whatever if they make no financial gain out of it? The hope of customer loyalty? And why would they even need that if when the customers come back, they won't make any money out of them anyway?
With Apple on the other hand, gaining market share without increasing profits (which isn't something I think they should aim to do at the moment, since they currently appear able to increase share without sacrificing margins) has considerable benefits for the OS X platform, which has significant long term benefits for Apple.
Dell was growing at 30% a year, substantially faster than the pc business as a whole, at 10% a year. Now, it has slowed down to below that 10% rate, as Dell is trying to reign in it's losses, and as Hp, and others, are catching up to, and surpassing, Dells cost structure.
D) People who bought a Mac mini with integrated graphics. Oh wait, they can't.
You didn't even try to respond to that. If you don't have something remotely coherent to say, why bother? Did you think this was a gibberish board? It's an English one.
There actually was a time, in the '80s, when the Mac was a GREAT place for games, much better than the PC.
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Apple was a very good place for both prosumers and gamers until about 2000. Bungie made quite possibly best FPS series of the era primarily for the Mac. Then there was the G4 fiasco and by the time they finally came out of it, they were delusional enough to think that everyone not running Mathematica wanted an iMac.