I would only add that if the question is, if Apple wishes to expand market share, they will have to gain switchers. By default, switchers have computers the vast majority of which are towers that have PCI slots and are not AIO.
Why would they fear a similar computer? Why would they place an extraordinary premium on saving space, as does the Mac mini and iMac? The use of laptop parts add expense at the cost of speed and flexibility, BOTH OF WHICH ANY CURRENT SWITCHERS HAVE NOT PLACED A PREMIUM. The proof of this lays in the fact that on the PC side AIOs have existed for a long time, have been tried by most of the major manufactures, yet still lag miserably in sales.
Someday when the hardware so far exceeds the demands of software this may change and will all run around with star tek like tricorders, but not in my lifetime. The desktop will remain a viable option due to lower costs and greater speeds/cost and flexibility. The AIO has most of the disadvantages of a laptop but lacks the greatest advantage, it is not portable and requires an outlet.
I believe irahodges has the right of it regarding what many folks would like to see out of Mac.
Lemme 'splain...
Personally, I'm a PC user who is desperately trying to get into a Mac but I really don't like my VERY LIMITED options. Being a card carrying, Rat Bastard Capitalist I'm not really into a company telling me what my options are. That is the very reason why I'm leaving PC's and Microsoft; They are trying to make consumers buy Vista. Not me.
I then come over to look at the Mac side of the world and all looks really nice. Very inviting...
Right up until I see that in order to get into a Mac I must either:
a) Buy an iMac with very limited options and no real future expansion.
b) Spend about 25-30% more to get a stripped Mac Pro.
When I look at the financial metrics of switching to Mac they really aren't there. If Apple had something like a mid Mac Pro that could compete w/ the PC contemporaries like the configurable Dell XPS line that would seal the deal right there. I would pay a bit more for a comparably equipped Mac, but as of right now that is just not an option.
Why Apple doesn't try for an obviously large market (it is where most PC manufacturers make their money) is beyond me.
If Apple had something like a mid Mac Pro that could compete w/ the PC contemporaries like the configurable Dell XPS line that would seal the deal right there. I would pay a bit more for a comparably equipped Mac, but as of right now that is just not an option.
Why Apple doesn't try for an obviously large market (it is where most PC manufacturers make their money) is beyond me.
I would love to know why.
Thanks!
FOXPhotog
Would you pay $1300 for a $1000 machine? Do you think that Apple would sell a lot more thousand dollar machines for $1300 than they do iMacs? Because that doesn't sound too competitive and reviews would trash Mac towers I would think. AIOs have the advantage that they aren't towers and its not an "apples to apples" comparison (no pun intended).
Apple has the best ASPs and margins in the business with a positive growth rate, good branding and mindshare. They make as much as larger companies but with lower infrastructure needs for inventory and support.
An Apple tower would cost more to make (lower volumes than Dell or HP, higher component costs because Apple is a "premium" brand and must have better fit and finish), have higher margins than its competitors (35% average Apple vs 18% average Dell) and would have to sell more units than iMacs (which has a higher ASP) to maintain total revenue stream and doesn't contribute to Apple's total notebook component buys (like the current iMacs do).
Name a premium brand tower maker. Not Sony. All their VAIO towers are gone. Nothing left but an AIO and a "Digital Living System"...a Core 2 Duo TiVO on steroids that is typically attached to a 200 DVD jukebox. Not IBM. Not Toshiba. Not Fujitsu. Heck, even Alienware is now Dell. There are a few boutique game tower makers like Voodoo but not a premium brand like has existed in the past with VAIO. Apple is a premium brand and has expended a good amount of effort to build that branding.
Why SHOULD Apple enter a mature highly competitive commodity market with entrenched combatants who's business models are built around high volume, low ASPs and thin margins? Especially with a product that would be judged much like the VAIO towers of the past...pretty case and accessories but overpriced and underpowered.
Compare that to what reviewers say of the Mac Pro...surprisingly competitive with Dell's offerings, expensive but good value, great workstation, editor's choice, yadda yadda yadda. Now with 8 cores.
Better to invest in product lines like Apple TV and iPhone where real market share gains and dominance can be achieved. Besides, Apple is sufficiently not a PC maker anymore that they dropped computer from the name. That should have clued folks in that a commodity PC market wasn't anywhere in Apple's future plans.
IMHO a $1499-$1699 Cube might fit in the product line but the thrashing Apple took from the last cube makes this an unlikely possibility.
The only tower like thingy you're likely to see from Apple is an Apple branded NAS. Probably an Apple TV class machine with Mac Pro like drive bays using ZFS to support TimeMachine and storage of more iTunes content that sits wirelessly on a bookshelf (needing only power).
Realistically, we're talking about a very small chunk. Not everyone who buys a low-end tower PC is interested in altering its components. I'd say that less than 2% of the PC market buys low-end towers with plans to modify them. Office buildings full of boilerplate PCs account for massive amounts of the overal market. The enthusiast market is quite small.
rickag: And which PCI cards do you need?
Anyway, I proposed a challenge to come up with real reasons why you need a low-end tower. So far, no real answers.
I wasn't referring to low-end towers. Someone who wants a low-end tower will most likely be interested in the Mac mini. What is missing is a mid-range tower between the iMac and the Mac Pros. I'm a long time Mac user and have no interest in AIOs or closed boxes like the Mac mini. I want to have the option to upgrade as new technologies are introduced. With the iMac and the Mac mini you are locked in. We aren't talking about enthusiast here, we are talking about those of us that do not want a closed box. There's a huge consumer market here that Apple is missing.
IMHO a $1499-$1699 Cube might fit in the product line but the thrashing Apple took from the last cube makes this an unlikely possibility.
A Cube isn't a tower. The Cube was overpriced and had limited expandability. That's why it only catered to a few. Apple's consumer Macs are well designed and do have a market, but there is also a market for consumer towers, just look at the PC market.
Do you think that Apple would sell a lot more thousand dollar machines for $1300 than they do iMacs?
Um, no, but using those figures as the basis for a discussion is not realistic.
While I'll not speak of "ASPs" (I have no idea what that is) "margins" , "mindshare" or other industry-specific language what I will say is that the relative benefits for Apple to expand into a Mid market seem to be plentiful.
No not in the terms of a Dell or an HP, but in the terms that Apple likes, smaller areas of untapped growth.
Why make an iPod? The answer now is self evident. But rewind to pre-2001 and I'll bet you didn't see everyone walking around with a CD player. Why?
And what of the iPhone? Steve Jobs very strategy for getting into the overly saturated mobile phone arena is to get only 1% of the 20 million phones in use. (Taken from a recent Newsweek article with Steve Jobs)
That is a HUGE amount of cash coming to Apple if his goals are realistic, and clearly they are.
I think all of those folks, myself included, who are wanting another option are not wanting Apple to change itself or its business model. Much to the contrary, I like what Apple offers and I have a need/want in my computing life for something they do not yet make, but could.
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Apple has the best ASPs and margins in the business with a positive growth rate, good branding and mindshare. They make as much as larger companies but with lower infrastructure needs for inventory and support.
They have snakes? :^)
Quote:
An Apple tower would cost more to make (lower volumes than Dell or HP, higher component costs because Apple is a "premium" brand and must have better fit and finish), have higher margins than its competitors (35% average Apple vs 18% average Dell) and would have to sell more units than iMacs (which has a higher ASP) to maintain total revenue stream and doesn't contribute to Apple's total notebook component buys (like the current iMacs do).
Then by using that model, the current MacPro platform would be a just dandy jumping off point for a smaller midsize type computer. They already make an 8 core, 16g of RAM beast. Why not allow that to be paired down for those of us who have no desire for a beast that big yet want to be able to add components as we see fit?
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Why SHOULD Apple enter a mature highly competitive commodity market with entrenched combatants who's business models are built around high volume, low ASPs and thin margins?
Yes, I think they would be better served entering the very minimally competitive world of Broadcast Newsroom intergration.
Having re-read what I wrote I can see how one could read that I was advocating for Apple to go tete-a-tete with the Dell's of the world. No. I believe that Apple is missing a larger market for cross over defectors who don't want to buy an all-in-one and aren't even going near the MacPro.
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Better to invest in product lines like Apple TV and iPhone where real market share gains and dominance can be achieved.
Dominance in the mobile phone market? Is that what one would really consider a more viable and "open" avenue for dominance? Hmmm... that is a tough sell.
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Besides, Apple is sufficiently not a PC maker anymore that they dropped computer from the name. That should have clued folks in that a commodity PC market wasn't anywhere in Apple's future plans.
Really. That's not at all what I got from it. But what do I know...
Apple . . . have higher margins than its competitors (35% average Apple vs 18% average Dell) . . .
Using your figures, Apple should compete just fine with a small tower. Say a particular Dell tower is equipped to sell for $799. Apple could sell a comparable Mac tower for $999. At that difference, the Mac price seems reasonable, considering that you get a professional OS, not a lite home edition. Plus you get iLife software that is equivalent to what you pay extra for with a Windows PC.
If Apple's Mac Pro can compete with Dell, a Mac mini tower can also compete.
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Why SHOULD Apple enter a mature highly competitive commodity market with entrenched combatants who's business models are built around high volume, low ASPs and thin margins?
Sounds like you speak of the iPhone, rather than a mini tower. A highly competitive market is usually a big market, and therefore an opportunity to increase market share.
2 PCI slots (one for the video card and one extra)
Assorted ports (USB, FireWire a & b, Sata, Digital Sound, Hdmi, Ethernet)
Selling price $1300-1400 Base with 20" monitor $1900-2000.
This price range and capability put it above the iMac (the combo cost the same or a little more than a 24" iMac) keeping Apples margins, Lowering price to consumers who want more versatility, and hopefully not cannibalizing iMac sales.
2 PCI slots (one for the video card and one extra)
Assorted ports (USB, FireWire a & b, Sata, Digital Sound, Hdmi, Ethernet)
Selling price $1300-1400 Base with 20" monitor $1900-2000.
This price range and capability put it above the iMac (the combo cost the same or a little more than a 24" iMac) keeping Apples margins, Lowering price to consumers who want more versatility, and hopefully not cannibalizing iMac sales.
One of those PCI slots would have to be PCIx16 for a video card.
One of those PCI slots would have to be PCIx16 for a video card.
They could both be PCIx or what ever version of the Spec is current or needed. The ports should be of the latest spec but somewhat backward compatible.
Apple has the best ASPs and margins in the business with a positive growth rate, good branding and mindshare. They make as much as larger companies but with lower infrastructure needs for inventory and support.
...Vinea
Apple's growth rate is a result of laptop sales. Desktop sales were stagnant again this quarter.
An Apple tower would cost more to make (lower volumes than Dell or HP, higher component costs because Apple is a "premium" brand and must have better fit and finish), have higher margins than its competitors (35% average Apple vs 18% average Dell) and would have to sell more units than iMacs (which has a higher ASP) to maintain total revenue stream and doesn't contribute to Apple's total notebook component buys (like the current iMacs do).
...Vinea
Regarding your post concerning costs, the Mac Pro actually costs less than an equivalently configured Dell, splain that, since their components obviously don't effect Apple's overall component laptop costs.
I've have yet to find a single customer that went into a store and thought gee, I guess I'll buy an Apple computer because their margins are 35% and Dell's is only 18%.
IMHO a $1499-$1699 Cube might fit in the product line but the thrashing Apple took from the last cube makes this an unlikely possibility.
The only tower like thingy you're likely to see from Apple is an Apple branded NAS. Probably an Apple TV class machine with Mac Pro like drive bays using ZFS to support TimeMachine and storage of more iTunes content that sits wirelessly on a bookshelf (needing only power).
Vinea
A $1499 - $1699 Cube would be another failure, guaranteed. Another overpriced niche market item that consumers would avoid.
Apple's just released quarterly results prove one thing.
Apple's growth in computer sales is overwhelmingly a result of laptop sales. "Why?" you ask. Because they are configured with what the consumer expects in a laptop. People are in fact switching to Mac OS X.
Apple's desktop sales are stagnant again. Apple is not gaining market share with desktops. Why? IMHO it is obvious. Apple doesn't offer anything, and I mean anything, that the consumer considers of value in their current line up.
I like the iMac, I have an iMac, but even I value Mac OS X over the iMac. I settled because I like OS X. Switchers aren't so inclined.
edit: To add emphasis, Apple's growth rate was 30%, let that sink in a minute. It blows away other manufacturer's results. Then, when it becomes apparent the the growth is exclusively in laptops, I mean wow, really wow. No one on any board has come up with anything remotely logical to explain this other than consumers are not buying AIO and Mac minis because they are considered odd.
So you answered the question. Apple wouldn't sell many mid range towers because they would be uncompetitive.
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Um, no, but using those figures as the basis for a discussion is not realistic.
Why? Which part do you disagree with?
That Apple maintains higher margins?
That Apple typically needs higher build quality to maintain brand image?
That these two factors results in a machine that would be more expensive than their Dell/HP counterparts?
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While I'll not speak of "ASPs" (I have no idea what that is) "margins" , "mindshare" or other industry-specific language what I will say is that the relative benefits for Apple to expand into a Mid market seem to be plentiful.
ASP = Average Sales Price.
And I say that those "relative benefits" are illusory rather than plentiful. If they were not then there would be premium tower manufacturers still.
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Then by using that model, the current MacPro platform would be a just dandy jumping off point for a smaller midsize type computer. They already make an 8 core, 16g of RAM beast. Why not allow that to be paired down for those of us who have no desire for a beast that big yet want to be able to add components as we see fit?
Sure. And I have never objected to the idea that Apple can and possibly should offer a single Xeon 2.66GHz BTO in their Mac Pro line for $1,699...something $50 less than the equivalent Dell Precision 490.
I do not believe that Apple would be successful trying to compete with Dell's Precision 390 line. Dell enjoys a lot of cost savings becuase it moves a lot of Conroe based machines in the lower tiers.
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Yes, I think they would be better served entering the very minimally competitive world of Broadcast Newsroom intergration.
A market segment that Apple does already compete in (content creation).
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Having re-read what I wrote I can see how one could read that I was advocating for Apple to go tete-a-tete with the Dell's of the world. No. I believe that Apple is missing a larger market for cross over defectors who don't want to buy an all-in-one and aren't even going near the MacPro.
And no one has shown that these folks exist in any large number.
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Dominance in the mobile phone market? Is that what one would really consider a more viable and "open" avenue for dominance? Hmmm... that is a tough sell.
Using your figures, Apple should compete just fine with a small tower. Say a particular Dell tower is equipped to sell for $799. Apple could sell a comparable Mac tower for $999. At that difference, the Mac price seems reasonable, considering that you get a professional OS, not a lite home edition. Plus you get iLife software that is equivalent to what you pay extra for with a Windows PC.
If Apple's Mac Pro can compete with Dell, a Mac mini tower can also compete.
An Apple mini tower looks like a Precision 390. Compare this to the Dimension E520 and ask yourself how many Precisions does Dell sell in comparison the Dimensions. Now ask yourself how much more Core 2 Duo (Conroe) parts cost Apple vs Dell due to the volume discounts differences and attach that to the Precision's price and wonder how well this machine would review.
No, I dunno that I would agree that Apple would appear very competitive vs the Precision 390 much less the Dimension line simply because Dell has significant competitive advantages in the cost of the 390.
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Sounds like you speak of the iPhone, rather than a mini tower. A highly competitive market is usually a big market, and therefore an opportunity to increase market share.
The iPhone is fighting in a limited Smartphone market. This market is a good match for Apple since a) its underserved in the usability department and b) the demographic is time poor and cash rich.
Apple has the opportunity to dominate the smart phone market because of perceived limitations of the current offerings and the lack of a very strong dominant player. RIM is no Del, HPl or Microsoft. A lot more like Creative. The smartphone market is still emerging, not quite mature but mature enough that there is enough demand that the iPhone can move good volume if Apple does a good job. The push into true mainstream use hasn't quite happened.
They say they delayed Leopard to make iPhone happen. That tells you Apple's priorities.
A $1499 - $1699 Cube would be another failure, guaranteed. Another overpriced niche market item that consumers would avoid.
Another niche market item that apple would have high margins and ASPs and compete with a company like Shuttle and not a company like Dell.
The SFF market is said to be growing. A larger SFF computer (with more drives) used to feed the apple TV fits within the product strategy better than the current Mini.
Apple's just released quarterly results prove one thing.
Apple's growth in computer sales is overwhelmingly a result of laptop sales. "Why?" you ask. Because they are configured with what the consumer expects in a laptop. People are in fact switching to Mac OS X.
Arguably, notebooks are an area where Apple can be price competitive and is a high growth area where gains can be made without trying to take share away from an incumbent.
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Apple's desktop sales are stagnant again. Apple is not gaining market share with desktops. Why? IMHO it is obvious. Apple doesn't offer anything, and I mean anything, that the consumer considers of value in their current line up.
600,000 people per quarter disagree with this assessment.
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edit: To add emphasis, Apple's growth rate was 30%, let that sink in a minute. It blows away other manufacturer's results. Then, when it becomes apparent the the growth is exclusively in laptops, I mean wow, really wow. No one on any board has come up with anything remotely logical to explain this other than consumers are not buying AIO and Mac minis because they are considered odd.
What it says to me that Apple has optimized its entire product line to support the pc growth area where it is price competitive and this has paid handsome dividends.
Intel has stated it offers no pricing discounts except on the basis of volume. Apple has a strategy that by accident or plan maximizes its mobile parts volume by leveraging an additional 600K desktop sales as much as feasible to reduce its notebook component costs.
The notebook market is not as price sensitive as the desktop market. Yet.
Dell, HP and other commodity makers have not engaged in the pricing war to make the notebook market a commodity one. Yet. Premium brand notebook makers still exist. Don't expect this condition to last more than a few years. In time we will be having the same discussion about traditional notebooks and how Apple only offers UMPCs, ultrathin notebooks and phones. I suppose some folks already gripe that Apple has no desktop replacement notebook offering so this has already started.
Rather than conceed the desktop market entirely as Sony has effectively done, Apple offers SFF and AIO products that are sufficiently competitive that they have significant sales. It then uses these sales to optimize its ability to compete in the notebook market.
Apple is not a commodity manufacturer and therefore wisely avoids the commodity tower market.
Comments
I would only add that if the question is, if Apple wishes to expand market share, they will have to gain switchers. By default, switchers have computers the vast majority of which are towers that have PCI slots and are not AIO.
Why would they fear a similar computer? Why would they place an extraordinary premium on saving space, as does the Mac mini and iMac? The use of laptop parts add expense at the cost of speed and flexibility, BOTH OF WHICH ANY CURRENT SWITCHERS HAVE NOT PLACED A PREMIUM. The proof of this lays in the fact that on the PC side AIOs have existed for a long time, have been tried by most of the major manufactures, yet still lag miserably in sales.
Someday when the hardware so far exceeds the demands of software this may change and will all run around with star tek like tricorders, but not in my lifetime. The desktop will remain a viable option due to lower costs and greater speeds/cost and flexibility. The AIO has most of the disadvantages of a laptop but lacks the greatest advantage, it is not portable and requires an outlet.
I believe irahodges has the right of it regarding what many folks would like to see out of Mac.
Lemme 'splain...
Personally, I'm a PC user who is desperately trying to get into a Mac but I really don't like my VERY LIMITED options. Being a card carrying, Rat Bastard Capitalist I'm not really into a company telling me what my options are. That is the very reason why I'm leaving PC's and Microsoft; They are trying to make consumers buy Vista. Not me.
I then come over to look at the Mac side of the world and all looks really nice. Very inviting...
Right up until I see that in order to get into a Mac I must either:
a) Buy an iMac with very limited options and no real future expansion.
b) Spend about 25-30% more to get a stripped Mac Pro.
When I look at the financial metrics of switching to Mac they really aren't there. If Apple had something like a mid Mac Pro that could compete w/ the PC contemporaries like the configurable Dell XPS line that would seal the deal right there. I would pay a bit more for a comparably equipped Mac, but as of right now that is just not an option.
Why Apple doesn't try for an obviously large market (it is where most PC manufacturers make their money) is beyond me.
I would love to know why.
Thanks!
FOXPhotog
Why Apple doesn't try for an obviously large market (it is where most PC manufacturers make their money) is beyond me.
I would love to know why.
Many of us would love to know why. It makes no sense, and yes, it is very obvious.
By the way, welcome to the discussion.
If Apple had something like a mid Mac Pro that could compete w/ the PC contemporaries like the configurable Dell XPS line that would seal the deal right there. I would pay a bit more for a comparably equipped Mac, but as of right now that is just not an option.
Why Apple doesn't try for an obviously large market (it is where most PC manufacturers make their money) is beyond me.
I would love to know why.
Thanks!
FOXPhotog
Would you pay $1300 for a $1000 machine? Do you think that Apple would sell a lot more thousand dollar machines for $1300 than they do iMacs? Because that doesn't sound too competitive and reviews would trash Mac towers I would think. AIOs have the advantage that they aren't towers and its not an "apples to apples" comparison (no pun intended).
Apple has the best ASPs and margins in the business with a positive growth rate, good branding and mindshare. They make as much as larger companies but with lower infrastructure needs for inventory and support.
An Apple tower would cost more to make (lower volumes than Dell or HP, higher component costs because Apple is a "premium" brand and must have better fit and finish), have higher margins than its competitors (35% average Apple vs 18% average Dell) and would have to sell more units than iMacs (which has a higher ASP) to maintain total revenue stream and doesn't contribute to Apple's total notebook component buys (like the current iMacs do).
Name a premium brand tower maker. Not Sony. All their VAIO towers are gone. Nothing left but an AIO and a "Digital Living System"...a Core 2 Duo TiVO on steroids that is typically attached to a 200 DVD jukebox. Not IBM. Not Toshiba. Not Fujitsu. Heck, even Alienware is now Dell. There are a few boutique game tower makers like Voodoo but not a premium brand like has existed in the past with VAIO. Apple is a premium brand and has expended a good amount of effort to build that branding.
Why SHOULD Apple enter a mature highly competitive commodity market with entrenched combatants who's business models are built around high volume, low ASPs and thin margins? Especially with a product that would be judged much like the VAIO towers of the past...pretty case and accessories but overpriced and underpowered.
Compare that to what reviewers say of the Mac Pro...surprisingly competitive with Dell's offerings, expensive but good value, great workstation, editor's choice, yadda yadda yadda. Now with 8 cores.
Better to invest in product lines like Apple TV and iPhone where real market share gains and dominance can be achieved. Besides, Apple is sufficiently not a PC maker anymore that they dropped computer from the name. That should have clued folks in that a commodity PC market wasn't anywhere in Apple's future plans.
Vinea
IMHO a $1499-$1699 Cube might fit in the product line but the thrashing Apple took from the last cube makes this an unlikely possibility.
The only tower like thingy you're likely to see from Apple is an Apple branded NAS. Probably an Apple TV class machine with Mac Pro like drive bays using ZFS to support TimeMachine and storage of more iTunes content that sits wirelessly on a bookshelf (needing only power).
Vinea
Realistically, we're talking about a very small chunk. Not everyone who buys a low-end tower PC is interested in altering its components. I'd say that less than 2% of the PC market buys low-end towers with plans to modify them. Office buildings full of boilerplate PCs account for massive amounts of the overal market. The enthusiast market is quite small.
rickag: And which PCI cards do you need?
Anyway, I proposed a challenge to come up with real reasons why you need a low-end tower. So far, no real answers.
I wasn't referring to low-end towers. Someone who wants a low-end tower will most likely be interested in the Mac mini. What is missing is a mid-range tower between the iMac and the Mac Pros. I'm a long time Mac user and have no interest in AIOs or closed boxes like the Mac mini. I want to have the option to upgrade as new technologies are introduced. With the iMac and the Mac mini you are locked in. We aren't talking about enthusiast here, we are talking about those of us that do not want a closed box. There's a huge consumer market here that Apple is missing.
Slight addition:
IMHO a $1499-$1699 Cube might fit in the product line but the thrashing Apple took from the last cube makes this an unlikely possibility.
A Cube isn't a tower. The Cube was overpriced and had limited expandability. That's why it only catered to a few. Apple's consumer Macs are well designed and do have a market, but there is also a market for consumer towers, just look at the PC market.
Would you pay $1300 for a $1000 machine?
For the same machine no, would you?
That was not at all of what I was speaking...
Do you think that Apple would sell a lot more thousand dollar machines for $1300 than they do iMacs?
Um, no, but using those figures as the basis for a discussion is not realistic.
While I'll not speak of "ASPs" (I have no idea what that is) "margins" , "mindshare" or other industry-specific language what I will say is that the relative benefits for Apple to expand into a Mid market seem to be plentiful.
No not in the terms of a Dell or an HP, but in the terms that Apple likes, smaller areas of untapped growth.
Why make an iPod? The answer now is self evident. But rewind to pre-2001 and I'll bet you didn't see everyone walking around with a CD player. Why?
And what of the iPhone? Steve Jobs very strategy for getting into the overly saturated mobile phone arena is to get only 1% of the 20 million phones in use. (Taken from a recent Newsweek article with Steve Jobs)
That is a HUGE amount of cash coming to Apple if his goals are realistic, and clearly they are.
I think all of those folks, myself included, who are wanting another option are not wanting Apple to change itself or its business model. Much to the contrary, I like what Apple offers and I have a need/want in my computing life for something they do not yet make, but could.
Apple has the best ASPs and margins in the business with a positive growth rate, good branding and mindshare. They make as much as larger companies but with lower infrastructure needs for inventory and support.
They have snakes? :^)
An Apple tower would cost more to make (lower volumes than Dell or HP, higher component costs because Apple is a "premium" brand and must have better fit and finish), have higher margins than its competitors (35% average Apple vs 18% average Dell) and would have to sell more units than iMacs (which has a higher ASP) to maintain total revenue stream and doesn't contribute to Apple's total notebook component buys (like the current iMacs do).
Then by using that model, the current MacPro platform would be a just dandy jumping off point for a smaller midsize type computer. They already make an 8 core, 16g of RAM beast. Why not allow that to be paired down for those of us who have no desire for a beast that big yet want to be able to add components as we see fit?
Why SHOULD Apple enter a mature highly competitive commodity market with entrenched combatants who's business models are built around high volume, low ASPs and thin margins?
Yes, I think they would be better served entering the very minimally competitive world of Broadcast Newsroom intergration.
Having re-read what I wrote I can see how one could read that I was advocating for Apple to go tete-a-tete with the Dell's of the world. No. I believe that Apple is missing a larger market for cross over defectors who don't want to buy an all-in-one and aren't even going near the MacPro.
Better to invest in product lines like Apple TV and iPhone where real market share gains and dominance can be achieved.
Dominance in the mobile phone market? Is that what one would really consider a more viable and "open" avenue for dominance? Hmmm... that is a tough sell.
Besides, Apple is sufficiently not a PC maker anymore that they dropped computer from the name. That should have clued folks in that a commodity PC market wasn't anywhere in Apple's future plans.
Really. That's not at all what I got from it. But what do I know...
Thanks!
FOXPhotog
Apple . . . have higher margins than its competitors (35% average Apple vs 18% average Dell) . . .
Using your figures, Apple should compete just fine with a small tower. Say a particular Dell tower is equipped to sell for $799. Apple could sell a comparable Mac tower for $999. At that difference, the Mac price seems reasonable, considering that you get a professional OS, not a lite home edition. Plus you get iLife software that is equivalent to what you pay extra for with a Windows PC.
If Apple's Mac Pro can compete with Dell, a Mac mini tower can also compete.
Why SHOULD Apple enter a mature highly competitive commodity market with entrenched combatants who's business models are built around high volume, low ASPs and thin margins?
Sounds like you speak of the iPhone, rather than a mini tower. A highly competitive market is usually a big market, and therefore an opportunity to increase market share.
It should be a single chip model
2 non externally accessible drive bays
2 externally accessible drive bays (dvd, BD, tape drive)
4 Memory slots (1GB Ram Standard)
2 PCI slots (one for the video card and one extra)
Assorted ports (USB, FireWire a & b, Sata, Digital Sound, Hdmi, Ethernet)
Selling price $1300-1400 Base with 20" monitor $1900-2000.
This price range and capability put it above the iMac (the combo cost the same or a little more than a 24" iMac) keeping Apples margins, Lowering price to consumers who want more versatility, and hopefully not cannibalizing iMac sales.
I think that there is a market for a smaller non-AOI in the mac pantheon.
It should be a single chip model
2 non externally accessible drive bays
2 externally accessible drive bays (dvd, BD, tape drive)
4 Memory slots (1GB Ram Standard)
2 PCI slots (one for the video card and one extra)
Assorted ports (USB, FireWire a & b, Sata, Digital Sound, Hdmi, Ethernet)
Selling price $1300-1400 Base with 20" monitor $1900-2000.
This price range and capability put it above the iMac (the combo cost the same or a little more than a 24" iMac) keeping Apples margins, Lowering price to consumers who want more versatility, and hopefully not cannibalizing iMac sales.
One of those PCI slots would have to be PCIx16 for a video card.
One of those PCI slots would have to be PCIx16 for a video card.
They could both be PCIx or what ever version of the Spec is current or needed. The ports should be of the latest spec but somewhat backward compatible.
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Apple has the best ASPs and margins in the business with a positive growth rate, good branding and mindshare. They make as much as larger companies but with lower infrastructure needs for inventory and support.
...Vinea
Apple's growth rate is a result of laptop sales. Desktop sales were stagnant again this quarter.
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An Apple tower would cost more to make (lower volumes than Dell or HP, higher component costs because Apple is a "premium" brand and must have better fit and finish), have higher margins than its competitors (35% average Apple vs 18% average Dell) and would have to sell more units than iMacs (which has a higher ASP) to maintain total revenue stream and doesn't contribute to Apple's total notebook component buys (like the current iMacs do).
...Vinea
Regarding your post concerning costs, the Mac Pro actually costs less than an equivalently configured Dell, splain that, since their components obviously don't effect Apple's overall component laptop costs.
I've have yet to find a single customer that went into a store and thought gee, I guess I'll buy an Apple computer because their margins are 35% and Dell's is only 18%.
Slight addition:
IMHO a $1499-$1699 Cube might fit in the product line but the thrashing Apple took from the last cube makes this an unlikely possibility.
The only tower like thingy you're likely to see from Apple is an Apple branded NAS. Probably an Apple TV class machine with Mac Pro like drive bays using ZFS to support TimeMachine and storage of more iTunes content that sits wirelessly on a bookshelf (needing only power).
Vinea
A $1499 - $1699 Cube would be another failure, guaranteed. Another overpriced niche market item that consumers would avoid.
Apple's growth in computer sales is overwhelmingly a result of laptop sales. "Why?" you ask. Because they are configured with what the consumer expects in a laptop. People are in fact switching to Mac OS X.
Apple's desktop sales are stagnant again. Apple is not gaining market share with desktops. Why? IMHO it is obvious. Apple doesn't offer anything, and I mean anything, that the consumer considers of value in their current line up.
I like the iMac, I have an iMac, but even I value Mac OS X over the iMac. I settled because I like OS X. Switchers aren't so inclined.
edit: To add emphasis, Apple's growth rate was 30%, let that sink in a minute. It blows away other manufacturer's results. Then, when it becomes apparent the the growth is exclusively in laptops, I mean wow, really wow. No one on any board has come up with anything remotely logical to explain this other than consumers are not buying AIO and Mac minis because they are considered odd.
For the same machine no, would you?
So you answered the question. Apple wouldn't sell many mid range towers because they would be uncompetitive.
Um, no, but using those figures as the basis for a discussion is not realistic.
Why? Which part do you disagree with?
That Apple maintains higher margins?
That Apple typically needs higher build quality to maintain brand image?
That these two factors results in a machine that would be more expensive than their Dell/HP counterparts?
While I'll not speak of "ASPs" (I have no idea what that is) "margins" , "mindshare" or other industry-specific language what I will say is that the relative benefits for Apple to expand into a Mid market seem to be plentiful.
ASP = Average Sales Price.
And I say that those "relative benefits" are illusory rather than plentiful. If they were not then there would be premium tower manufacturers still.
Then by using that model, the current MacPro platform would be a just dandy jumping off point for a smaller midsize type computer. They already make an 8 core, 16g of RAM beast. Why not allow that to be paired down for those of us who have no desire for a beast that big yet want to be able to add components as we see fit?
Sure. And I have never objected to the idea that Apple can and possibly should offer a single Xeon 2.66GHz BTO in their Mac Pro line for $1,699...something $50 less than the equivalent Dell Precision 490.
I do not believe that Apple would be successful trying to compete with Dell's Precision 390 line. Dell enjoys a lot of cost savings becuase it moves a lot of Conroe based machines in the lower tiers.
Yes, I think they would be better served entering the very minimally competitive world of Broadcast Newsroom intergration.
A market segment that Apple does already compete in (content creation).
Having re-read what I wrote I can see how one could read that I was advocating for Apple to go tete-a-tete with the Dell's of the world. No. I believe that Apple is missing a larger market for cross over defectors who don't want to buy an all-in-one and aren't even going near the MacPro.
And no one has shown that these folks exist in any large number.
Dominance in the mobile phone market? Is that what one would really consider a more viable and "open" avenue for dominance? Hmmm... that is a tough sell.
Smartphone market.
Vinea
Using your figures, Apple should compete just fine with a small tower. Say a particular Dell tower is equipped to sell for $799. Apple could sell a comparable Mac tower for $999. At that difference, the Mac price seems reasonable, considering that you get a professional OS, not a lite home edition. Plus you get iLife software that is equivalent to what you pay extra for with a Windows PC.
If Apple's Mac Pro can compete with Dell, a Mac mini tower can also compete.
An Apple mini tower looks like a Precision 390. Compare this to the Dimension E520 and ask yourself how many Precisions does Dell sell in comparison the Dimensions. Now ask yourself how much more Core 2 Duo (Conroe) parts cost Apple vs Dell due to the volume discounts differences and attach that to the Precision's price and wonder how well this machine would review.
No, I dunno that I would agree that Apple would appear very competitive vs the Precision 390 much less the Dimension line simply because Dell has significant competitive advantages in the cost of the 390.
Sounds like you speak of the iPhone, rather than a mini tower. A highly competitive market is usually a big market, and therefore an opportunity to increase market share.
The iPhone is fighting in a limited Smartphone market. This market is a good match for Apple since a) its underserved in the usability department and b) the demographic is time poor and cash rich.
Apple has the opportunity to dominate the smart phone market because of perceived limitations of the current offerings and the lack of a very strong dominant player. RIM is no Del, HPl or Microsoft. A lot more like Creative. The smartphone market is still emerging, not quite mature but mature enough that there is enough demand that the iPhone can move good volume if Apple does a good job. The push into true mainstream use hasn't quite happened.
They say they delayed Leopard to make iPhone happen. That tells you Apple's priorities.
Thus far no one has answered the challenge:
Name one premium brand tower maker.
Vinea
A $1499 - $1699 Cube would be another failure, guaranteed. Another overpriced niche market item that consumers would avoid.
Another niche market item that apple would have high margins and ASPs and compete with a company like Shuttle and not a company like Dell.
The SFF market is said to be growing. A larger SFF computer (with more drives) used to feed the apple TV fits within the product strategy better than the current Mini.
Vinea
Apple's just released quarterly results prove one thing.
Apple's growth in computer sales is overwhelmingly a result of laptop sales. "Why?" you ask. Because they are configured with what the consumer expects in a laptop. People are in fact switching to Mac OS X.
Arguably, notebooks are an area where Apple can be price competitive and is a high growth area where gains can be made without trying to take share away from an incumbent.
Apple's desktop sales are stagnant again. Apple is not gaining market share with desktops. Why? IMHO it is obvious. Apple doesn't offer anything, and I mean anything, that the consumer considers of value in their current line up.
600,000 people per quarter disagree with this assessment.
edit: To add emphasis, Apple's growth rate was 30%, let that sink in a minute. It blows away other manufacturer's results. Then, when it becomes apparent the the growth is exclusively in laptops, I mean wow, really wow. No one on any board has come up with anything remotely logical to explain this other than consumers are not buying AIO and Mac minis because they are considered odd.
What it says to me that Apple has optimized its entire product line to support the pc growth area where it is price competitive and this has paid handsome dividends.
- Intel has stated it offers no pricing discounts except on the basis of volume. Apple has a strategy that by accident or plan maximizes its mobile parts volume by leveraging an additional 600K desktop sales as much as feasible to reduce its notebook component costs.
- The notebook market is not as price sensitive as the desktop market. Yet.
- Dell, HP and other commodity makers have not engaged in the pricing war to make the notebook market a commodity one. Yet. Premium brand notebook makers still exist. Don't expect this condition to last more than a few years. In time we will be having the same discussion about traditional notebooks and how Apple only offers UMPCs, ultrathin notebooks and phones. I suppose some folks already gripe that Apple has no desktop replacement notebook offering so this has already started.
- Rather than conceed the desktop market entirely as Sony has effectively done, Apple offers SFF and AIO products that are sufficiently competitive that they have significant sales. It then uses these sales to optimize its ability to compete in the notebook market.
- Apple is not a commodity manufacturer and therefore wisely avoids the commodity tower market.
Vinea