Apple's Mac sales rock-steady despite Vista

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  • Reply 61 of 72
    chuckerchucker Posts: 5,089member
    Quote:
    Originally Posted by BenRoethig View Post


    Funny, while laptop sales are way up, desktop sales lost ground the last couple of years.



    You mean, just like the market trend. Funny that!



    Quote:

    your belief that AIO desktops are what everyone really wants.



    Quite the strawman. Apple believes that. Maybe they have reason to.



    Quote:

    Must be a lot of people named Ben. It's cool looking, saves space, and the integrated iSight is neat, but it's a family machine with a higher end prosumer price tag. Families can't afford it save the GMA model and the prosumers find it rather anemic.



    Families can't afford it?



    Quote:

    Take a look at Apple's financials before the iPod came about.



    I did.



    Quote:

    They were either losing money or just barely making a profit.



    If you say so.



    Code:


    1/002.340 Mio.183 Mio.

    2/001.940 Mio.233 Mio.

    3/001.820 Mio.203 Mio.

    4/001.870 Mio.170 Mio.

    1/011.000 Mio.-195 Mio.

    2/011.430 Mio.40 Mio.

    3/011.480 Mio.61 Mio.







    If you only look at the "we totally screwed up with the Cube" quarter, famously coinciding with the "the entire PC industry is screwed, and the only two companies with good prospects are Dell and Apple" quarter, as well as the "oh, look at that, the dot com bubble burst" quarter, then yes, they indeed lost money. Other than that, they made profits. Barely. So barely, Steve couldn't even afford vegan meals.



    Quote:

    There were some dark days between the success and profits of the original iMac and where we're at today.



    Where?
  • Reply 62 of 72
    physguyphysguy Posts: 919member
    Quote:
    Originally Posted by BenRoethig View Post


    I think it's the usual "Apple is always right and if Apple doesn't make it, there just not be a market" stuff.



    Why turn this into a fanboi runoff? All we're trying to do is understand/explain why Apple is doing what they're doing.



    1) Fact - They're not producing 'consumer towers' as defined in this thread.



    2) Fact - They're being very successful for that last few years doing this. This is a fact as judged by market capitalization (stock price), cash generation, profit generation. These are the usual business metrics by which managers are judged (for the most part).



    3) Opinion - Apple manages their product line quite well resulting in number (2). Some events/decisions by apple as examples to support this opinion

    - replacing the iPod mini with the nano at the height of its popularity - this is the right thing to do but its a very hard decision

    - focussing on the iPod functionality rather than features. i.e. iTunes integration, iTunes Store, no FM radio, no voice recording, etc.

    - focussing on design such as the iMac form factor changes

    - pricing very accurately at what the market will bear on both Mac and iPod lines





    Given these it would be nice to try and understand what based on the facts we know, such as Dell's performance in this space.
  • Reply 63 of 72
    vineavinea Posts: 5,585member
    Quote:
    Originally Posted by physguy View Post


    Given these it would be nice to try and understand what based on the facts we know, such as Dell's performance in this space.



    Hard to do without Apple's internal numbers they base their forecasting on. However, it seems in most of these discussion the pro-tower folks discount the value of branding and the difficulty in comparing AIOs to mid-priced towers. Apple is price competitive on the higher end of the spectrum.



    Were it to compete directly with Dell and HP in that mid or lower tower segment the ASPs would plummet and nobody is looking at 28%+ profit in those markets.



    As is, the AIOs are niche but their very form factor hides how uncompetitive they are from a bang for the buck perspective. So, Apple desktop sales are low but help supplement the bottom line while maintaining high ASPs and profitability allowing them to invest in areas they are far more competitive in: notebooks and workstations for the content creation folks.



    Prosumers...well heck, if you're going to sink $3K into a rig anyways not just holding off a couple month so you have that extra $600 for a Mac Pro or dropping back to a MBP is silly. If you really really must have a tower...wait a year and get a used Mac Pro off ebay.



    Vinea
  • Reply 64 of 72
    physguyphysguy Posts: 919member
    Quote:
    Originally Posted by vinea View Post


    Hard to do without Apple's internal numbers they base their forecasting on. However, it seems in most of these discussion the pro-tower folks discount the value of branding and the difficulty in comparing AIOs to mid-priced towers. Apple is price competitive on the higher end of the spectrum.



    Were it to compete directly with Dell and HP in that mid or lower tower segment the ASPs would plummet and nobody is looking at 28%+ profit in those markets.



    As is, the AIOs are niche but their very form factor hides how uncompetitive they are from a bang for the buck perspective. So, Apple desktop sales are low but help supplement the bottom line while maintaining high ASPs and profitability allowing them to invest in areas they are far more competitive in: notebooks and workstations for the content creation folks.



    Prosumers...well heck, if you're going to sink $3K into a rig anyways not just holding off a couple month so you have that extra $600 for a Mac Pro or dropping back to a MBP is silly. If you really really must have a tower...wait a year and get a used Mac Pro off ebay.



    Vinea



    I agree re internal numbers. My only quibble is the statement that the AIO are uncompetitive. Looking at shootout iMac It seems they are at least competitive. I understand the + and - of these comparisons but having the AIO form factor and space savings, for me and many others I deal with, is a huge benefit. Also the simplicity re cables (with wireless keyboard/mouse).



    Do you have handy reference for the unit sales breakdown of the desktops? The 2006 annual report shows equivalent numbers for desktops and 'portables' 2.4 vs 2.9 million respectively. I would have thought the majority of the 2.4 million were AIO but I don't know where to find out.
  • Reply 65 of 72
    ipeonipeon Posts: 1,122member
    Quote:
    Originally Posted by Hiro View Post


    The reasons Dell has to push their prices down are the precise reasons the consumer tower market is unprofitable.



    Dell loosing money...

    Dell makes consumer towers...

    therefore consumer towers are unprofitable.









    Sorry, but that is funny Hiro. No insult intended.



    I can think of many reasons as to why Dell "is loosing money", but one thing is for sure, that Dell is losing money does not equal that consumer towers have no market. By the same token, that Apple is making money does not equal that they shouldn't make a consumer tower.



    Associative logic results in assumptions. If you want to discover the real why you have to analyze data.
  • Reply 66 of 72
    physguyphysguy Posts: 919member
    Quote:
    Originally Posted by iPeon View Post


    Dell loosing money...

    Dell makes consumer towers...

    therefore consumer towers are unprofitable.









    Sorry, but that is funny Hiro. No insult intended.



    I can think of many reasons as to why Dell "is loosing money", but one thing is for sure, that Dell is losing money does not equal that consumer towers have no market. By the same token, that Apple is making money does not equal that they shouldn't make a consumer tower.



    Associative logic results in assumptions. If you want to discover the real why you have to analyze data.



    Your taking one post out of a long line of reasoning in this thread. I still haven't seen a business reason based on at least one example of success that shows that Apple either NEEDs to or SHOULD do this. These are not my words but those that keep bringing up this issue - 'Apple NEEDs to do this'. None of us have the real background and raw data to argue the Market from first principles.



    So we don't go around another circle - by Market I mean profitable (~25%+ margin) and significant in size for that product (not a large market served by many differentiated products).



    I believe that these are likely criteria the Apple is using based on the products they choose to produce.



    If ALL your saying is the you WANT them to do this, that's fine. That's not debatable. I want them to do this also. As I've said I'd likely buy one of these (although I really like the AIO form factor for the obvious reasons). But my wanting doesn't translate into Apple NEEDing to.
  • Reply 67 of 72
    ipeonipeon Posts: 1,122member
    Quote:
    Originally Posted by physguy View Post


    I still haven't seen a business reason based on at least one example of success that shows that Apple either NEEDs to or SHOULD do this.



    I haven't seen a business reason why Apple shouldn't. I'm still waiting for a valid reason. Those that believe Apple shouldn't offer a consumer tower base their argument from irrelevant assumptions. So what is the real reason for Apple not offering a consumer tower? No one here has offered the business reason for it.



    I'm not trying to be difficult, I'm very curious as to why Apple doesn't.



    To recap:



    Some point to Dell and say, "Look they aren't making money, they sell consumer towers..." Fair enough, but so what? Maybe they are losing money because they sell low quality hardware therefore losing money fixing it when it breaks down. I know of one friend who has had support tech come over to his house to fix his Dell laptop - twice - for free (under warranty)! It doesn't take a genius to figure out that this can't be good for business. Or maybe Dell is being miss-managed, or maybe this or maybe that, but who cares, that is all irrelevant to this question: Why doesn't Apple sell a consumer tower? The point is, you can't point to Dell and say, "Look they aren't making money selling consumer towers therefore..." as proof. That's silly. Their business success or lack of is irrelevant. Apple sells an iMac for $999.00, a Mac mini for $599 and is doing well. So why can't Apple offer a consumer tower for say $1,099.00 - it's selling an AIO for less already? Explain that.



    Others say that Apple is doing well when compared to Dell because Apple does not sell consumer towers. That's even sillier. If Apple was solely in the business of selling computers one could form such a deduction, but even that would be an assumption. Apple's success isn't solely based on selling Macs. One can prove that Apple is very successful at providing solutions for professionals as well as digital media for the consumer. But we also see Apple interested in winning over PC consumers with the Mac vs PC commercials. So one can safely say that Apple wants the consumer market as well.



    So why isn't Apple offering a consumer tower? This question has not be answered here. Yet!
  • Reply 68 of 72
    vineavinea Posts: 5,585member
    Quote:
    Originally Posted by physguy View Post


    I understand the + and - of these comparisons but having the AIO form factor and space savings, for me and many others I deal with, is a huge benefit. Also the simplicity re cables (with wireless keyboard/mouse).



    See?



    Yes, the form factor and space savings represents value. How much value vs some other technical specification? Up to the individual user right? Comparing a tower to an AIO is not...no pun intended...an apples to apples comparison.



    Quote:

    Do you have handy reference for the unit sales breakdown of the desktops? The 2006 annual report shows equivalent numbers for desktops and 'portables' 2.4 vs 2.9 million respectively. I would have thought the majority of the 2.4 million were AIO but I don't know where to find out.



    I don't think Apple has said. I recall a few analysts asking at various quarterly telecons but the answer was invariably "As I just said a few moments ago we aren't going to go through breakdowns by model...you idiot". Okay, they skipped the "you idiot" part but there was typically a short pause where everyone else listening heard it anyway.



    You can try to guess based on some industry reports on the Mac mini and pro sales but these are spotty.



    Vinea
  • Reply 69 of 72
    vineavinea Posts: 5,585member
    Quote:
    Originally Posted by iPeon View Post


    I haven't seen a business reason why Apple shouldn't. I'm still waiting for a valid reason. Those that believe Apple shouldn't offer a consumer tower base their argument from irrelevant assumptions. So what is the real reason for Apple not offering a consumer tower? No one here has offered the business reason for it.



    I'm not trying to be difficult, I'm very curious as to why Apple doesn't.



    Dell has gross margins in the 18% range, Gateway 14% (numbers from memory) and Apple in the 29% range.



    Take a mid range base $1000 desktop that Dell sells below this 18% gross margin range...lets say 10% for $1100 and compare to the Apple tower at the 28% margin range for $1280...if everything was equal.



    But they aren't.



    Dell moves more volume in terms of desktop components. This reduces their costs.

    Apple moves nearly zero. Almost all of Apple's current desktops use largely notebook parts. Apple isn't likely to overtake Dell or HP any time soon...even if they double desktop sales.



    Dell's branding is for inexpensive machines at volume. Using inexpensive components (which typically isn't bad for $1K+ machines) doesn't harm their image.

    Apple's branding is a premium brand. Form and fit must be higher than Dell's to maintain branding. Meaning a case more like the Mac Pro or Dell XPS than their Dimension line.



    So Apple's mid-tower, as designed and implemented by Apple, would be more costly even before the difference in margins.



    Quote:

    Apple sells an iMac for $999.00, a Mac mini for $599 and is doing well. So why can't Apple offer a consumer tower for say $1,099.00 - it's selling an AIO for less already? Explain that.



    Because Apple's $1099 consumer tower will compare unfavorably with the Dell $1099 consumer tower and more like a $799 Dell tower.



    Whereas currently their desktop lines are either AIOs, SFF (which a harder to make a direct comparison) or workstations that compare very favorably vs Dell since Dell's margins are as high or higher at this price point.



    The market at $1K is very price/performance conscious. Margins are thin, though not as razor thin as in the sub $500 entry market.



    The only thing a $1K Apple tower is likely to do is kill their AIO lines...which currently adds 0.5M/qtr notebook component buys for Apple allowing Apple to maintain notebook component volume within striking distance of far larger HP and Dell.



    Dell and HP notebook sales are growing faster than Apple's. Wont be a few more years before Apple notebooks are all pro models or ultra-thins or tablets...or phones. Whatever is harder to compare with a low margin Dell or HP traditional notebooks.



    Quote:

    One can prove that Apple is very successful at providing solutions for professionals as well as digital media for the consumer. But we also see Apple interested in winning over PC consumers with the Mac vs PC commercials. So one can safely say that Apple wants the consumer market as well.



    Yes, they want it...at their 28% margin and highest ASPs in the industry terms. Not too hard to understand if you can get it. Apple can.



    Quote:

    So why isn't Apple offering a consumer tower? This question has not be answered here. Yet!



    So why isn't Porsche offering a $30K sports coupe? Honda and Nissan seem to make a nice bundle on their RSX and 350Z lines...



    The question has been answered multiple times in multiple threads. That pro-tower folks wont accept these answers is a different issue.



    IBM left the PC market...even the more lucrative notebook one. Sony doesn't have a tower in their VAIO desktop line anymore. Toshiba and other higher end PC makers don't have desktop lines.



    So, how many 28% margin $1000 mid-range tower makers are there?



    Vinea
  • Reply 70 of 72
    physguyphysguy Posts: 919member
    Quote:
    Originally Posted by vinea View Post


    Dell has gross margins in the 18% range, Gateway 14% (numbers from memory) and Apple in the 29% range.



    .....Much good stuff removed to save screen space....





    So why isn't Porsche offering a $30K sports coupe? Honda and Nissan seem to make a nice bundle on their RSX and 350Z lines...



    The question has been answered multiple times in multiple threads. That pro-tower folks wont accept these answers is a different issue.



    IBM left the PC market...even the more lucrative notebook one. Sony doesn't have a tower in their VAIO desktop line anymore. Toshiba and other higher end PC makers don't have desktop lines.



    So, how many 28% margin $1000 mid-range tower makers are there?



    Vinea



    Vinea, thanks - you saved me a lot of time.



    (Oh, and did it better than I would have )
  • Reply 71 of 72
    ipeonipeon Posts: 1,122member
    Quote:
    Originally Posted by vinea View Post


    Dell has gross margins in the 18% range, Gateway 14% (numbers from memory) and Apple in the 29% range.



    Who said anything about having Apple reduce it's margins?



    Quote:

    Take a mid range base $1000 desktop that Dell sells below this 18% gross margin range...lets say 10% for $1100 and compare to the Apple tower at the 28% margin range for $1280...if everything was equal.



    I would rather buy a product from Apple for $1280 even if Dell's $1100 had the same specs. Again, no one is saying that Apple should sacrifice profit. Apple has a reputation for making high quality products, this is where Dell fails. I see you agree with me on this:



    Quote:

    Dell's branding is for inexpensive machines at volume. Using inexpensive components (which typically isn't bad for $1K+ machines) doesn't harm their image.

    Apple's branding is a premium brand. Form and fit must be higher than Dell's to maintain branding. Meaning a case more like the Mac Pro or Dell XPS than their Dimension line.



    The consumer knows this and is whiling to pay for it. But the consumer who wants a consumer tower isn't getting one from Apple. You go on to give more numbers and reasons why Apple doesn't offer a consumer tower because it saves money by using notebook components on their consumer machines and repeat the margins thingy with good ol' car analogies. Very good reading!



    Did you forget that Apple makes towers as well? Apple DOES make towers, did you know? So what relevancy does the AIO, Mac mini and laptop segment have to do with the tower market? Nada, zero. There's people interested in AIOs, Mac minis and laptops and there's people interested in towers.
  • Reply 72 of 72
    vineavinea Posts: 5,585member
    Quote:
    Originally Posted by iPeon View Post


    Who said anything about having Apple reduce it's margins?



    The point about margins is that an Apple tower would end up looking like VAIO towers. Overpriced and underpowered (for the cost...sorta a double hit for the same thing but perception isn't always fair).



    Quote:

    I would rather buy a product from Apple for $1280 even if Dell's $1100 had the same specs. Again, no one is saying that Apple should sacrifice profit. Apple has a reputation for making high quality products, this is where Dell fails. I see you agree with me on this:



    Yes, but the number of folks like you appear limited. The demographic that the majority of tower sales goes to appears to me to be price sensitive vs capability sensitive or asthetic sensitive.



    Otherwise there would still be premium tower makers.



    Quote:

    The consumer knows this and is whiling to pay for it. But the consumer who wants a consumer tower isn't getting one from Apple.



    Or Sony or IBM or Toshiba or...



    Apple branding is powerful but so was/is Sony's. The consumer has voted with their wallets and only Dell, HP and other commodity makers still exist in the tower market.



    Quote:

    Did you forget that Apple makes towers as well? Apple DOES make towers, did you know? So what relevancy does the AIO, Mac mini and laptop segment have to do with the tower market? Nada, zero. There's people interested in AIOs, Mac minis and laptops and there's people interested in towers.



    They make towers yes. In the one segment where their margins are the same or lower than commodity makers. Dell's margins are in the same 25%+ region as Apple in their Precision lines. Thus when folks review the Mac Pro and compare them to their Dell and HP equivalents the Mac Pro is very competitive and it reviews well. This helps branding by showing that while Apple products ARE expensive they still represent good value vs a brand known for "competitive pricing".



    This translates down the entire line to the iMacs and Mini which cannot be directly compared against towers because there are obvious visible differences in form factor.



    An Apple tower in the $1000-$1200 range would be judged against their 25% less expensive (where there would be technical parity) or 25% more capable (where there was price parity) competitors within that market segment. How well would these be reviewed? Not so well IMHO and that hurts branding not helps it and increases the impression that Apple products represents poor value.



    You asked for business reasons. I provide a few. You reject them. Paint me surprised.



    Perhaps I'm not explaining it very clearly. Ah well.



    Vinea
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