I'm not suggesting Apple stoop to such levels... but certainly a ~$700 laptop would be a reasonable offering. Use a last-gen CPU/chipset, slightly smaller HDD and Combo Drive. Basically, the current base MacMini's internals in a laptop's shell. It would basically be the $599 Mini plus $100 display.
As for a desktop, Apple's failure is using laptop components, which are significantly more expensive than standard desktop components. Instead of doing a typical "Look at what I can build for $600" argument, let me take each component and compare what I can get in laptop variety and desktop variety on Newegg.com. I'll take the specs of the base Mac Mini compared to standard retail components (some of which, i.e. RAM, are slightly more expensive to assure they match the hardware set I picked out.
* - This Mo-Board is NOT custom-made, does NOT have 4 USB2 ports, and does NOT have any firewire ports, making it potentially cheaper than a MacMini motherboard. The ASUS board, on the other hand, has a firewire port, 6 USB2 ports, an optical port, a coax port, 2 eSATA ports, and 6 audio ports.
So the point show here is that Apple can replace the MacMini's components for cheaper, yet more-powerful alternatives, which would spank the current offering. I would gladly take the above setup for even $800 versus the out-of-date Mini's $600. I think many others would agree. Of course a computer like this would also spank the iMac, so Apple would be forced to offer a watered-down version. The point though is that desktop parts go way further than laptop parts. They're Apple's weakest link, and by using them, Apple is stifling their sub-$1000 market share.
-Clive
Apple is not interested in cheaper parts, ala PCs, and the company is doing quite well while avoiding your suggestions. IOW, I think they're doing exactly what they want to do, and making buckets full of money while they're at it.
Apple is not interested in cheaper parts, ala PCs, and the company is doing quite well while avoiding your suggestions. IOW, I think they're doing exactly what they want to do, and making buckets full of money while they're at it.
Look, I'm not saying Apple isn't doing well. They're doing fantastic in the $1000+ market as the data shows. They have billions in the bank. OS X is a hit and Macs are more popular than ever.
Why wouldn't they want to also tap the sub-$1000 market if there is money to be had there (you'll have a hard time convincing me there isn't). Like I said in a previous post, the profits may be narrower but the profits are still there. Besides, it's not like folks in the sub-$1000 just automatically stop being rational about purchases! Even bargain-hunters will pay a little extra for a premium product - but only if the premium is warranted. The reason people don't buy the mini isn't because they're too cheap to pay $600. It's because the Mini is a bad deal compared to other $600 machines... even if it is plagued with Windows.
Apple can continue to make "buckets" selling their iMacs, Mac Pros and MacBooks. Meanwhile, they can tame the sub-$1000 market with a fair-priced Mini, or pseudo-xMac built of quality standard desktop PC parts as I showed above.
Remember how (in post 21) I said I'd pay $800 for a computer built from components priced less than those of MacMini parts? That's $200 profit in Apple's pocket just for offering me a computer that isn't a ripoff. I know I'm not alone in my xMac yen [v.] and the mid-tower's dominance in the Wintel world (especially over AIOs which can never seem to gain traction) shows that such a unit would be more popular to switchers than an easy-to-use iMac.
Your post points out exactly Apple's failure in market acquisition: the sub-$1000 market. You can argue day and night whether you think Apple cares about this market but I happen to know they do. Just as when they first launched the iPod, they ripped on the cheaper budget-friendly players arguing that you couldn't make a good player for under $400. Lo and behold, two years later, they released the iPod Mini, followed a year later by the $150 flash-based iPod Shuffle. Apple wanted desperately to capture the %75 of the market who thought a $299 iPod was just too damn expensive.
This is because the iPod market was able to be captured. The larger PC market is mature and largely a commodity business. Apple isn't going to go against Dell or HP to try and capture 75% of the market share because...hey, it can't.
Not only that, there's damn little money in it because it IS a commodity business.
Quote:
The numbers here show that roughly the same number of people think a $1000 computer is too damn expensive - even if it does have the best freaking software on the planet. The Mac Mini was Apple's failed attempt at an iPod Mini for the Macintosh. Unlike the iPod Mini/Nano, however, Apple has completely stopped trying to improve on the Mac Mini.
No, it's not. The Mini is carefully positioned so it does not cannibalize the iMac. Why?
Because 66% market share in the $1K+ market is far far better than being Dell or HP.
This is exactly why I say the xMac won't happen. Any xMac that comes in below the iMac means lower ASPs and lower revenue for Apple and competes directly with HP and Dell at their strengths (cost).
Any sale below $1000 sucks for Apple from an ASP perspective.
Quote:
People want OS X, people want simple hardware configurations. People DON'T want crippled, laptop-grade components in an over-inflated, laptop-grade price.
If that were true then iMac sales would not be growing faster than the US market. And yet it is.
How folks can take an obvious statement that Apple's strategy is working great and turn it into a negative is amazing.
"iMacs are growing and the Windows desktop ain't."
Jesus. Does it get ANY clearer than that? AIOs have higher margins and ASPs than equivalent towers. Apple has zero incentive to sell that equivalent tower.
Apple can continue to make "buckets" selling their iMacs, Mac Pros and MacBooks. Meanwhile, they can tame the sub-$1000 market with a fair-priced Mini, or pseudo-xMac built of quality standard desktop PC parts as I showed above.
Remember how (in post 21) I said I'd pay $800 for a computer built from components priced less than those of MacMini parts? That's $200 profit in Apple's pocket just for offering me a computer that isn't a ripoff.
No, they can't because:
a) if they sell that uberMini you propose they'll sell a lot few iMacs. People, as you say, aren't stupid. Pricing out the Mini vs the iMac the iMac currently wins every time.
b) if they sell you an $800 Mini over a $1000+ iMac they just lost $60 if the margins are both 30%. And you don't have a clear idea of Apple's part cost in terms of Merom vs Kentsfield because Apple buys a lot of mobile CPUs and no desktop CPUs. The mini as-is is probably pretty cheap.
People want OS X, people want simple hardware configurations. People DON'T want crippled, laptop-grade components in an over-inflated, laptop-grade price.
Quote:
Originally Posted by vinea
If that were true then iMac sales would not be growing faster than the US market. And yet it is.
Allow me to restate: People in the untapped sub-$1000 PC market want OS X and simple hardware configurations. They don't value form over function, and are willing to sacrifice some of the aesthetic frills for better hardware.
Quote:
Originally Posted by vinea
[everything else]
The problem with your argument is that ASP is just a statistic which means little. The key factor is ASP * volume (= profit). If Apple could produce such a machine that'll lure more of the un-tapped 86% of Windows/Linux users, they'll have the opportunity to be more profitable - even with some cannibalization.
Situation 1: If you sell 2000 unit (A)s at $2000 & 40% margins, your ASP is $2000, revenue is $4M and profit is $1.6M.
Situation 2 (new product with 25% cannibalization): If you sell 1500 unit (A)s and 2000 unit (B)s at $1500 & 30% margin, your ASP is ~$1700 revenue is $3M + $3M = $6M. Your profit is $1.2M + ~$0.9M = $2.15M, which is > $1.6M.
In the end, it's not about margins, or ASPs. It's about total profit. One can acheive higher total profits with greater volume... even with a smaller ASP.
This is because the iPod market was able to be captured. The larger PC market is mature and largely a commodity business. Apple isn't going to go against Dell or HP to try and capture 75% of the market share because...hey, it can't.
I agree, but think the bigger issue is the profit margin that can be had.
Quote:
Originally Posted by zinfella
With regard to Apple's lineup, I say if it ain't broke, don't fix it.
I think we can agree with Clive that they should update the damn thing. It's been 286 days since the last update and the average update is 188 days for the Mac Mini.
Clive, we strongly disagree. With regard to Apple's lineup, I say if it ain't broke, don't fix it.
Obviously the lineup IS broken because I see a sub-$1000 unit there (the Mac Mini), but I don't see any sub-$1000 Mac market-share. Apple should either stop trying, or they should start trying. Either way they'd cease being apathetic about the Mini, which is worse than either of the two I listed.
In the end, it's not about margins, or ASPs. It's about total profit. One can acheive higher total profits with greater volume... even with a smaller ASP.
It's a sliding scale. If I can only sell 10% more product by lowing my profit margin by 50% I have made a grave error. (that is a hyperbolic example)
First, we have to see if Apple can compete on the same level of HP and Dell. How much do they get from the developers who put their dozens of trial and crippleware apps on their budget machines? How would the a low-budget Mac affect the long term nature of the brand (there is a reason why Honda created Acura, Toyota created Lexus and Nissan created Infiniti)? Will the owners of these cheaper machines use Apple's included free services more (like the Genius Bar and call center)? How about the storage of all these cost-cutter machines? Now multiple that by the excessive new low-end Macs that are being sold and Apple may have to spend too much on upping their infrastructure to accommodate these machines.
...I can keep going on with "what if..." scenarios, but I think the most damning one is the initial profit margin that can be had in the budget PC market.
Obviously the lineup IS broken because I see a sub-$1000 unit there (the Mac Mini), but I don't see any sub-$1000 Mac market-share. Apple should either stop trying, or they should start trying. Either way they'd cease being apathetic about the Mini, which is worse than either of the two I listed.
The problem with your argument is that ASP is just a statistic which means little. The key factor is ASP * volume (= profit).
No...ASP * margin * volume = profit (more or less).
ASP is a significant statistic given that if you reduce asp by 50% you need to double volume just to stay even.
Quote:
If Apple could produce such a machine that'll lure more of the un-tapped 86% of Windows/Linux users, they'll have the opportunity to be more profitable - even with some cannibalization.
Except that not all of the 85% of Window/Linux users are willing to pay $800 for a PC or willing to migrate from Windows or Linux.
Quote:
Situation 1: If you sell 2000 unit (A)s at $2000 & 40% margins, your ASP is $2000, revenue is $4M and profit is $1.6M.
Situation 2 (new product with 25% cannibalization): If you sell 1500 unit (A)s and 2000 unit (B)s at $1500 & 30% margin, your ASP is ~$1700 revenue is $3M + $3M = $6M. Your profit is $1.2M + ~$0.9M = $2.15M, which is > $1.6M.
In the end, it's not about margins, or ASPs. It's about total profit. One can acheive higher total profits with greater volume... even with a smaller ASP.
That's assuming you can nearly double your unit sales in a declining market against current market leaders.
Apple ASP is currently around $1500. Your $800 PC is about half that. Plug that into the equation above and that $1500 unit is $1006 leading to 640K + 1.2M = 1.84M. Nearly double the work for $200K more.
Push that 25% cannibalization up to 50% and you show a loss ($800K + 640K = 1.44M).
Mkay...this is why being Apple is better than being Dell. The point is you gotta move a whole lot more units to do what you suggest. Which is selling a WHOLE lot more mini's at $800 instead of the mid grade iMac at $1500.
It's about time that the market research firms that investigate computer sales started segmenting their research. Every time I see a report about Apple's marketshare, I always ask if anyone has seen the numbers segmented into different markets, especially corporate vs consumer purchases and price segments. I'm not at all surprised at that market share number for consumer market $1,000+ PCs. I think it is most likely even higher if we had all the data. The NPD data only counts large B&R retailers, right? It leaves out not just Apple's online store, but also leaves out all the physical Apple stores right? Or does it include the Apple stores?
The NPD data only counts large B&R retailers, right? It leaves out not just Apple's online store, but also leaves out all the physical Apple stores right? Or does it include the Apple stores?
Obviously the lineup IS broken because I see a sub-$1000 unit there (the Mac Mini), but I don't see any sub-$1000 Mac market-share. Apple should either stop trying, or they should start trying. Either way they'd cease being apathetic about the Mini, which is worse than either of the two I listed.
-Clive
I'm surprised no one has mentioned the reason Steve Jobs gave some months back about why Apple doesn't compete at the bottom level. I don't remember the quote precisely (maybe someone here can help me out?), but it was along the lines of: We can't sell dreck; it's not in our DNA.
No...ASP * margin * volume = profit (more or less).
ASP is a significant statistic given that if you reduce asp by 50% you need to double volume just to stay even.
Except that not all of the 85% of Window/Linux users are willing to pay $800 for a PC or willing to migrate from Windows or Linux.
That's assuming you can nearly double your unit sales in a declining market against current market leaders.
Apple ASP is currently around $1500. Your $800 PC is about half that. Plug that into the equation above and that $1500 unit is $1006 leading to 640K + 1.2M = 1.84M. Nearly double the work for $200K more.
Push that 25% cannibalization up to 50% and you show a loss ($800K + 640K = 1.44M).
Mkay...this is why being Apple is better than being Dell. The point is you gotta move a whole lot more units to do what you suggest. Which is selling a WHOLE lot more mini's at $800 instead of the mid grade iMac at $1500.
Also, investors tend to assign a higher P/E ratio to companies with high margins than
to companies with low margins. Wishing for Apple to have lower margins is wishing for
Comments
I'm not suggesting Apple stoop to such levels... but certainly a ~$700 laptop would be a reasonable offering. Use a last-gen CPU/chipset, slightly smaller HDD and Combo Drive. Basically, the current base MacMini's internals in a laptop's shell. It would basically be the $599 Mini plus $100 display.
As for a desktop, Apple's failure is using laptop components, which are significantly more expensive than standard desktop components. Instead of doing a typical "Look at what I can build for $600" argument, let me take each component and compare what I can get in laptop variety and desktop variety on Newegg.com. I'll take the specs of the base Mac Mini compared to standard retail components (some of which, i.e. RAM, are slightly more expensive to assure they match the hardware set I picked out.
Intel C2D 1.83GHz Merom CPU, $252.00 -- Intel C2 Quad 2.4GHz Kentsfield CPU, $219.00 -- SAVINGS: $33.00
~Jetway Mini ITX 667MHz FSB Mo-Board, $189.99 * -- ASUS 1066MHz FSB w/802.11g Mo-Board, $169.99 -- SAVINGS: $20.00
Integrated GPU, $0.00 -- MSI GeForce 7300LE 128MB GPU, $25.99 -- SAVINGS: -$25.99
Built-in Bluetooth, $0.00 -- Belkin Bluetooth Adapter, $24.99 -- SAVINGS: -$23.99
2 x 512MB Crucial 667MHz DDR2 SO-DIMM RAM, $27.98 -- 1GB Crucial 1066MHZ DDR2 SDRAM, $36.49 -- SAVINGS: -$8.51
Samsung 80GB 2.5" HDD, $81.99 -- Samsung 320GB 3.5" HDD, $69.99 -- SAVINGS: $12.00
Sony/NEC Combo Drive, $39.99 -- PHILLIPS (Dual-Layer) DVD-Burner, $23.99 -- SAVINGS: $23.99
TOTAL SAVINGS: $30.50
* - This Mo-Board is NOT custom-made, does NOT have 4 USB2 ports, and does NOT have any firewire ports, making it potentially cheaper than a MacMini motherboard. The ASUS board, on the other hand, has a firewire port, 6 USB2 ports, an optical port, a coax port, 2 eSATA ports, and 6 audio ports.
So the point show here is that Apple can replace the MacMini's components for cheaper, yet more-powerful alternatives, which would spank the current offering. I would gladly take the above setup for even $800 versus the out-of-date Mini's $600. I think many others would agree. Of course a computer like this would also spank the iMac, so Apple would be forced to offer a watered-down version. The point though is that desktop parts go way further than laptop parts. They're Apple's weakest link, and by using them, Apple is stifling their sub-$1000 market share.
-Clive
Apple is not interested in cheaper parts, ala PCs, and the company is doing quite well while avoiding your suggestions. IOW, I think they're doing exactly what they want to do, and making buckets full of money while they're at it.
That must really stick in Steve's craw... Apple now supports the military-industrial complex.
If Steve ran the military I think it would something like THIS.
Apple is not interested in cheaper parts, ala PCs, and the company is doing quite well while avoiding your suggestions. IOW, I think they're doing exactly what they want to do, and making buckets full of money while they're at it.
Look, I'm not saying Apple isn't doing well. They're doing fantastic in the $1000+ market as the data shows. They have billions in the bank. OS X is a hit and Macs are more popular than ever.
Why wouldn't they want to also tap the sub-$1000 market if there is money to be had there (you'll have a hard time convincing me there isn't). Like I said in a previous post, the profits may be narrower but the profits are still there. Besides, it's not like folks in the sub-$1000 just automatically stop being rational about purchases! Even bargain-hunters will pay a little extra for a premium product - but only if the premium is warranted. The reason people don't buy the mini isn't because they're too cheap to pay $600. It's because the Mini is a bad deal compared to other $600 machines... even if it is plagued with Windows.
Apple can continue to make "buckets" selling their iMacs, Mac Pros and MacBooks. Meanwhile, they can tame the sub-$1000 market with a fair-priced Mini, or pseudo-xMac built of quality standard desktop PC parts as I showed above.
Remember how (in post 21) I said I'd pay $800 for a computer built from components priced less than those of MacMini parts? That's $200 profit in Apple's pocket just for offering me a computer that isn't a ripoff. I know I'm not alone in my xMac yen [v.] and the mid-tower's dominance in the Wintel world (especially over AIOs which can never seem to gain traction) shows that such a unit would be more popular to switchers than an easy-to-use iMac.
-Clive
Your post points out exactly Apple's failure in market acquisition: the sub-$1000 market. You can argue day and night whether you think Apple cares about this market but I happen to know they do. Just as when they first launched the iPod, they ripped on the cheaper budget-friendly players arguing that you couldn't make a good player for under $400. Lo and behold, two years later, they released the iPod Mini, followed a year later by the $150 flash-based iPod Shuffle. Apple wanted desperately to capture the %75 of the market who thought a $299 iPod was just too damn expensive.
This is because the iPod market was able to be captured. The larger PC market is mature and largely a commodity business. Apple isn't going to go against Dell or HP to try and capture 75% of the market share because...hey, it can't.
Not only that, there's damn little money in it because it IS a commodity business.
The numbers here show that roughly the same number of people think a $1000 computer is too damn expensive - even if it does have the best freaking software on the planet. The Mac Mini was Apple's failed attempt at an iPod Mini for the Macintosh. Unlike the iPod Mini/Nano, however, Apple has completely stopped trying to improve on the Mac Mini.
No, it's not. The Mini is carefully positioned so it does not cannibalize the iMac. Why?
Because 66% market share in the $1K+ market is far far better than being Dell or HP.
This is exactly why I say the xMac won't happen. Any xMac that comes in below the iMac means lower ASPs and lower revenue for Apple and competes directly with HP and Dell at their strengths (cost).
Any sale below $1000 sucks for Apple from an ASP perspective.
People want OS X, people want simple hardware configurations. People DON'T want crippled, laptop-grade components in an over-inflated, laptop-grade price.
If that were true then iMac sales would not be growing faster than the US market. And yet it is.
How folks can take an obvious statement that Apple's strategy is working great and turn it into a negative is amazing.
"iMacs are growing and the Windows desktop ain't."
Jesus. Does it get ANY clearer than that? AIOs have higher margins and ASPs than equivalent towers. Apple has zero incentive to sell that equivalent tower.
Apple can continue to make "buckets" selling their iMacs, Mac Pros and MacBooks. Meanwhile, they can tame the sub-$1000 market with a fair-priced Mini, or pseudo-xMac built of quality standard desktop PC parts as I showed above.
Remember how (in post 21) I said I'd pay $800 for a computer built from components priced less than those of MacMini parts? That's $200 profit in Apple's pocket just for offering me a computer that isn't a ripoff.
No, they can't because:
a) if they sell that uberMini you propose they'll sell a lot few iMacs. People, as you say, aren't stupid. Pricing out the Mini vs the iMac the iMac currently wins every time.
b) if they sell you an $800 Mini over a $1000+ iMac they just lost $60 if the margins are both 30%. And you don't have a clear idea of Apple's part cost in terms of Merom vs Kentsfield because Apple buys a lot of mobile CPUs and no desktop CPUs. The mini as-is is probably pretty cheap.
People want OS X, people want simple hardware configurations. People DON'T want crippled, laptop-grade components in an over-inflated, laptop-grade price.
If that were true then iMac sales would not be growing faster than the US market. And yet it is.
Allow me to restate: People in the untapped sub-$1000 PC market want OS X and simple hardware configurations. They don't value form over function, and are willing to sacrifice some of the aesthetic frills for better hardware.
[everything else]
The problem with your argument is that ASP is just a statistic which means little. The key factor is ASP * volume (= profit). If Apple could produce such a machine that'll lure more of the un-tapped 86% of Windows/Linux users, they'll have the opportunity to be more profitable - even with some cannibalization.
Situation 1: If you sell 2000 unit (A)s at $2000 & 40% margins, your ASP is $2000, revenue is $4M and profit is $1.6M.
Situation 2 (new product with 25% cannibalization): If you sell 1500 unit (A)s and 2000 unit (B)s at $1500 & 30% margin, your ASP is ~$1700 revenue is $3M + $3M = $6M. Your profit is $1.2M + ~$0.9M = $2.15M, which is > $1.6M.
In the end, it's not about margins, or ASPs. It's about total profit. One can acheive higher total profits with greater volume... even with a smaller ASP.
-Clive
This is because the iPod market was able to be captured. The larger PC market is mature and largely a commodity business. Apple isn't going to go against Dell or HP to try and capture 75% of the market share because...hey, it can't.
I agree, but think the bigger issue is the profit margin that can be had.
With regard to Apple's lineup, I say if it ain't broke, don't fix it.
I think we can agree with Clive that they should update the damn thing. It's been 286 days since the last update and the average update is 188 days for the Mac Mini.
Clive, we strongly disagree. With regard to Apple's lineup, I say if it ain't broke, don't fix it.
Obviously the lineup IS broken because I see a sub-$1000 unit there (the Mac Mini), but I don't see any sub-$1000 Mac market-share. Apple should either stop trying, or they should start trying. Either way they'd cease being apathetic about the Mini, which is worse than either of the two I listed.
-Clive
In the end, it's not about margins, or ASPs. It's about total profit. One can acheive higher total profits with greater volume... even with a smaller ASP.
It's a sliding scale. If I can only sell 10% more product by lowing my profit margin by 50% I have made a grave error. (that is a hyperbolic example)
First, we have to see if Apple can compete on the same level of HP and Dell. How much do they get from the developers who put their dozens of trial and crippleware apps on their budget machines? How would the a low-budget Mac affect the long term nature of the brand (there is a reason why Honda created Acura, Toyota created Lexus and Nissan created Infiniti)? Will the owners of these cheaper machines use Apple's included free services more (like the Genius Bar and call center)? How about the storage of all these cost-cutter machines? Now multiple that by the excessive new low-end Macs that are being sold and Apple may have to spend too much on upping their infrastructure to accommodate these machines.
...I can keep going on with "what if..." scenarios, but I think the most damning one is the initial profit margin that can be had in the budget PC market.
If Steve ran the military I think it would something like THIS.
But they'd be the 'cool' bad guys...
Obviously the lineup IS broken because I see a sub-$1000 unit there (the Mac Mini), but I don't see any sub-$1000 Mac market-share. Apple should either stop trying, or they should start trying. Either way they'd cease being apathetic about the Mini, which is worse than either of the two I listed.
-Clive
The new sub-$1,000 computer is the iPhone.
The problem with your argument is that ASP is just a statistic which means little. The key factor is ASP * volume (= profit).
No...ASP * margin * volume = profit (more or less).
ASP is a significant statistic given that if you reduce asp by 50% you need to double volume just to stay even.
If Apple could produce such a machine that'll lure more of the un-tapped 86% of Windows/Linux users, they'll have the opportunity to be more profitable - even with some cannibalization.
Except that not all of the 85% of Window/Linux users are willing to pay $800 for a PC or willing to migrate from Windows or Linux.
Situation 1: If you sell 2000 unit (A)s at $2000 & 40% margins, your ASP is $2000, revenue is $4M and profit is $1.6M.
Situation 2 (new product with 25% cannibalization): If you sell 1500 unit (A)s and 2000 unit (B)s at $1500 & 30% margin, your ASP is ~$1700 revenue is $3M + $3M = $6M. Your profit is $1.2M + ~$0.9M = $2.15M, which is > $1.6M.
In the end, it's not about margins, or ASPs. It's about total profit. One can acheive higher total profits with greater volume... even with a smaller ASP.
That's assuming you can nearly double your unit sales in a declining market against current market leaders.
Apple ASP is currently around $1500. Your $800 PC is about half that. Plug that into the equation above and that $1500 unit is $1006 leading to 640K + 1.2M = 1.84M. Nearly double the work for $200K more.
Push that 25% cannibalization up to 50% and you show a loss ($800K + 640K = 1.44M).
Mkay...this is why being Apple is better than being Dell. The point is you gotta move a whole lot more units to do what you suggest. Which is selling a WHOLE lot more mini's at $800 instead of the mid grade iMac at $1500.
The NPD data only counts large B&R retailers, right? It leaves out not just Apple's online store, but also leaves out all the physical Apple stores right? Or does it include the Apple stores?
Good questions.
Obviously the lineup IS broken because I see a sub-$1000 unit there (the Mac Mini), but I don't see any sub-$1000 Mac market-share. Apple should either stop trying, or they should start trying. Either way they'd cease being apathetic about the Mini, which is worse than either of the two I listed.
-Clive
I'm surprised no one has mentioned the reason Steve Jobs gave some months back about why Apple doesn't compete at the bottom level. I don't remember the quote precisely (maybe someone here can help me out?), but it was along the lines of: We can't sell dreck; it's not in our DNA.
good news iphone coming to spain !!! bad news i have a contract with vodafone
Didn't they say 3-6 month exclusivity?
You can bet Vodafone will expand into Spain as soon as it can.
No...ASP * margin * volume = profit (more or less).
ASP is a significant statistic given that if you reduce asp by 50% you need to double volume just to stay even.
Except that not all of the 85% of Window/Linux users are willing to pay $800 for a PC or willing to migrate from Windows or Linux.
That's assuming you can nearly double your unit sales in a declining market against current market leaders.
Apple ASP is currently around $1500. Your $800 PC is about half that. Plug that into the equation above and that $1500 unit is $1006 leading to 640K + 1.2M = 1.84M. Nearly double the work for $200K more.
Push that 25% cannibalization up to 50% and you show a loss ($800K + 640K = 1.44M).
Mkay...this is why being Apple is better than being Dell. The point is you gotta move a whole lot more units to do what you suggest. Which is selling a WHOLE lot more mini's at $800 instead of the mid grade iMac at $1500.
Also, investors tend to assign a higher P/E ratio to companies with high margins than
to companies with low margins. Wishing for Apple to have lower margins is wishing for
Apple to have a lower stock price.
DING DING DING! We have a winner!!!!
You hit it perzactly! I don't want a POS cheap Apple product. I can get that with countless PCs.