Except that repeatedly Steve Jobs and Apple have specifically stated that they don't do market research, particularly focus groups. Otherwise, Pippen, Newton, Cube, etc. would never have seen the light of day.
Steve and Apple have said all sorts of things that turned out to be head fakes. A magician will tell you his act is real magic, not tricks -- and he'd be one dumb magician if he told you how he fools you.
You can bet your bottom dollar that Apple does market research. They may not do it in some of the more conventional ways, but they do it.
What's the big deal. So, Apple wants to make more affordable computers. I think that's great! It will make the millions of $$ MS is spending on these "Macs are overpriced" ads a total waste of money and render them ineffective.
In the time it takes Microsoft to release a new version of Windows, Apple can create a whole new line of less expensive computers and release a vastly superior OS.
My girlfriend and I have a 2.53GHz MB Pro, a 2.4GHz MB and a G1 MB Air (refurbished from Apple, best 13.3" screen!). I posted several comments in other places and Amazon complaining about the price of these unibody machines. Frankly, they are pricey.
But now I just realized that I want them to remain that way, so the resale value of mine were higher. But there is another reason... Last week, I went to London by train... In my coach, there was a middle-aged, bold man in an 80's style tweed suit. He's had a white plastic MacBook. Suddenly, I felt soooo relieved that my computers were expensive.
like my wife's iphone and will probably get one this year for myself, but mac's are overpriced
99% the exact same hardware as PC's except they cost more. they are even made by the same companies in asia that make PC's the difference is the price of OS X Apple charges.
...
it's not like the old days when computers cost a lot of money and you bought one to last. technology moves fast, computers are cheap, cell phones are cheap and it makes sense to buy something cheaper and dump it in 2-3 years and buy the new thing that's out.
Actually, I have found that there is much longevity in Mac products. I'm currently typing this on a 12-inch PowerBook G4 i got in 2004. It only has a 1 Ghz processor and 768M of DDR ram but it's still a highly functional computer. And it still draws the occasional "ooohs" and "ahhs" from random strangers when I pull it out at a wifi hotspot.
People who buy PC's tend to think in terms of "what is it capable of" whereas Mac users tend to think in terms of "how efficiently does it do what it is capable of". The assumption behind the Apple business model is that the consumer is intelligent or at least more sophisticated than some other companies appear to believe. That's why apple is pushing hard at things like user interface which, at this stage, would affect your ability to perform an average computing task far more than incremental increases in CPU clock speed.
It's little things like putting the menu bar against the edge of the screen rather than nesting it within an application window that make a big difference. Experiments have shown Mac users fling the mouse pointer right up there with great force and because the edge of the screen stops the mouse they can access menu items in less time than a Windows user can. In my opinion Exposé is the greatest thing to happen to computing since the internet.
This is NOT good. I repeat, NOT good. Thus begins the slow, downward spiral to mediocrity. Do the previous posters really think Apple can produce cheap PCs like Dell without sacrificing quality, customer service, and margins? If so then you live in a fantasy world. Just imagine what a $500 Macbook would look like. It would look like an Acer of course. I'm sorry but even Jon Ive can't make a silk purse out of a sow's ear. The drive for market share also drives down margins as Michael Dell has found out the hard way. You have to keep selling more and more just to break even.
I hope the "we want cheap Macs" crowd doesn't get their wish any time soon. I would rather see Apple stop making Macs altogether before producing drab, black plastic abominations. Leave the trailer park market segment to Dell and the design-impaired nerd crowd.
don't fret
dude
apple makes over %34 percent markup on its goods
and they have 29 billion in cash
they can buy top quality in bulk and pass on the savings to us
what they will do is lower the existing line by 10 percent or more while keeping it the same .
and then add a new high end line w/ faster processors and stuff at todays prices .
Nobody outside Steve Jobs' brain knows what his personal goals are. But I'd imagine that when you have more money than you could possibly spend, you're getting old and have major health issues, then maybe you want to do "one more thing", like, say, one last shot at world domination, rather than die as the guy who failed to make a major dent in Microsoft's marketshare. He doesn't want Star Wars to end with Luke failing to blow up the Death Star and the evil Empire running the galaxy for another thosand years.
You have to remember that he was kind of a loser who had to come crawling back to Apple through an acquisition. His company was bought by a company on the ropes, kind of like Chrysler merging with Fiat. But after that, he has fulfilled his goal of creating his dream products AND enjoying massive commercial success. So where can he go from there? Keep making more well-designed products and sell them to the same 3% of the world population as always? Nah, time for the next step.
dude
since mac's last so much longer
less will sell duh
and mac only lives in the middle and high end market place . minus out the low end crap wear and mac has a much higher market share .
as for steve jobs
well he saved apple dude . single handed .
you are the loser
not steve
look at pixar
ipod
imac
mac os 9.2
mac os 10
mini
iphone
itunes
imovie
macbook
macbookpro
mac air
quick time
app store
pod casts
i tunes store
apple stores
machine tooled alum mac's
on and on
of course steve has a great staff making all this
possible
are apple products over priced
YES
and they are becoming way over priced .
and i ho[pe and pray that steve jobs gets well soon .
the crucial price factor that nearly everyone ignores in debating Mac pricing is the basic economic consideration of the full "life cycle" costs for durable goods like PC's. no one (except the uber rich) replaces their computer every year with a new one. generally computers have a 4-5 year lifespan. and even when a principal computer is replaced with a new one during that period, it usually continues in use as a second or third computer for someone else in that home or office.
for people with tight budgets or who are just plain hard-core cheap, yes, the initial price is most often the deciding factor. but for everyone else, it is about getting what they really want (like Tim Cook said). because a $200 purchase price differential spread over 5 years is just $40 per year - too little to really matter to most. the other costs of ownership, like monthly ISP service fees, are much more significant. and at the office, ongoing IT costs are much more significant than the up front hardware expense.
then the other standard economic consideration these debates omit is the value of your time. you tell me how much per hour your time doing computer maintenance and service yourself is worth. (if you hire someone else, that's at least $50 per hour, but they are supposed to be "skilled").
so what are the total hours of maintenance/service per year for Windows PC ownership compared to Mac ownership? i don't mean playing with it like geeks and hobbyists do, i mean just necessary set up, upkeep, troubleshooting, and updating. i've never seen any figures about this, but i have the distinct impression my PC using friends spend quite a bit of time fussing with Windows to keep it working right. more than i do on Mac. and i think my time is worth a lot. then add to that the cash cost of tech support - free at the Apple Store, but definitely not free from PC OEM's and retailers - and you get another significant annual cost of ownership for life cycle analysis.
bottom line is, smart shopping is not just about the sticker price. just looking at that is bad economics.
fine post
yet mac is still over priced by at least 15 percent .
yet mac is still over priced by at least 15 percent .
1) You have actually beaten out Lemon Bon Bon for having the most anoying posting style on these forums.
2) Since Apple only makes a net profit of 9% you are suggesting that they lose 6% on each sale. Does that make financial sense to you or are suggesting they make it up in volume?
Not only is the "time" right given the economy, but this is a good response to the direct advertising blitz.
AAPL may be wise to adopt an approach where they sell the machines much cheaper and then make money on the software and let uses stock the machine how they want.....Vs the bundle approach. If you really want to play in the big hardware game, then you must target the "average" customer. The average customer, unfortunately, has no idea the "value" of the Mac bundle. And, I'm afraid no amt of advertising will educate them either. Therefore, break your products out and make your money back via line item pricing.
Will be interesting to see their approach....Probably will be just less specs for less money, is my guess.
Did you forget that you have already posted this on page one? Did it also slip your mind that that you just joined this forum.... using another name?
"[QUOTE=DoctorBenway;1411062]Way to allow dissenting opinions choirboy. Did you type that while waiting for those bloodstains to soak out of your Nazi brownshirt? Did you get the creases out of the armband? Can't have a wrinkly swastika.
The MacJihad would be amusingly cute if they weren't tiresome and making life difficult for people who use Macs professionally and don't want to be associated with fanboi assholes who need to contract swine flu.
In this case, I'd have to side with the original poster. F U."
-Like I posted to the other guy...when you start spouting off of the mouth, you should expect a reaction!! Perhaps there's enough duct tape for the both of you! Having said that, "MacJihad" would be clever if not for the useless collection of words before and after it.
Nice to see the whiners, cheapskates and those with cereal packet MBAs are out in full force. These typically delusional types all think they know what Apple should do and that amazingly coincidentally, it is exactly what would benefit them (xMac, cheaper Macs, etc,). When will you realize that Apple doesn?t owe you what you want, no matter how many Macs you?ve owned and that your insights are worth about as much as that crap you took after breakfast? For the record, I think Macs are disproportionately overpriced in Britain, I would buy an xMac in a heartbeat and will probably put OSX on an ASUS 1000HE soon ? but I don?t think Apple should pander to my views.
Who is the most profitable car company in the world? Porsche (sales volume ~100K). It is so financially powerful that it recently bought VW which sells over 60x the volume of Porsche. Who would you rather be? Does BMW make cars for the masses? Do they yearn to sell the numbers of GM or Ford (at GM/Ford margins)? Do they make an entry level car to take on a Corolla or Versa? No ? they make the Mini and super-premium price it. When they tried to do ?cheap? with the 3XXti models, they bombed. So did Mercedes with the SportKompact hatchback. Premium brands care about margin and volume growth regardless of share. Are BMW making cheap cars for BRIC countries? No, they are selling 7-Series to the newly super rich ? all revenue growth, all at nice margins.
If the PC market is only growing because of netbooks, but those things have very low $ margins, why should Apple make them? They will definitely cannibalize some Macbook sales which we know make a large multiple of that profit, which will negatively impact bottom line results. You can live in a dreamland where selling half a million units per quarter at $20-$50 profit per unit is great business but in quarters where Apple makes $1.2-1.6Bn in profit, that $10-25M is chump change for the risk and investment required to achieve it. What if it bombs, what if there is a HW component issue, what if it costs Apple 50,000+ MacBook sales, etc. For the other ?great Apple hope?, the xMac? why go head to head with commodity desktop boxes where comparisons to PC hardware are too obvious to command a desired premium from a typical geeky, value-oriented user. A square box with room for PCI expansion and stock Intel HW just does not have the margin generating advantage over a necessarily similar box from HP/Dell. It will also likely cannibalize iMac and MacPro sales. Again, bad business for Apple (though great for you (and me). For perspective, the iPhone/iTouch App store has probably made ~$300M dollars for Apple on a billion apps in 3Qs (assuming an ASP of $1 and 30% to Apple - I know lots are free, but many top selling games etc. are $5-20). Even at half that, that is the kind of money (at fantastic margins) Apple should invest in.
Apple knows its core Mac customer segments ?
1) non-geek consumers - who want style, ease of use, few cables, etc. (key growth, lots of potential)
2) education (reasonable growth, re-acquiring lost share, but lower margin HW)
3) media professionals - who amortize the high-priced HW against real revenues (low growth)
We, the diehard Apple geeks and (dare I say it) Fanbois are now a minority and are not a target group. Thus they make the iMac & MacBooks (stylish, easy, cool, uniquely designed), MBPro/Mac Pros (Pro grade HW in (almost) every respect) and the Mac Mini (differentiated on style/size, used as a switcher gateway). The iPod/iPhone are both far better ways to introduce people to Mac than any cheap-ass Mac will ever be ? create net new Mac users and do it amazingly profitably.
All good Apple fans want Apple to sell more boxes, bring more people into the cult of Mac (BTW you know this no longer exists except within these hallowed pages?) What if Apple could sell Dell volumes at Apple margins? They can?t. No-one can. We all know that Apple already has the lion?s share of the US consumer market by revenue & margin $ value (66% of PCs >$1500) so why should they need to sell Dell?s volume at Dell/Acer/HP?s margins? All this market share by unit volume is nice bragging rights but not what matters to Apple. Current OSX installed base/annual sales already justifies a reasonable and growing software library plus cloud computing is making the OS irrelevant. Apple is valued by the markets largely on its net income performance and we know how sensitive the stock price is to margin changes. Netbooks would gut this number as would cheap-ass xMacs to compete with your imaginary BYO PC makers who hang outside Apple stores stealing customers. People not buying a Mac or switching back are already factored into Apple?s calculations.
Cut the price of the plastic MacBook, re-introduce a cheaper previous generation Mini, or whatever to maintain topline sales for now, but when things turn around, cut these dinosaurs and get back on strategy. In the meantime, the new tablet/iPhone 3 will hopefully be kicking ass, taking names and up-selling full-price Macs.
Overall, to cut a long story short? stop conflating what you want (cheap-ass Macs) and your grade school economic analysis with what Apple should do as a company.
(Sorry for the long post but where I am today has no TV and sporadic internet service ? too much time on my hands)
Nice to see the whiners, cheapskates and those with cereal packet MBAs are out in full force. These typically delusional types all think they know what Apple should do and that amazingly coincidentally, it is exactly what would benefit them (xMac, cheaper Macs, etc,). When will you realize that Apple doesn?t owe you what you want
It's only logical to draw comparisons between what people are buying in huge numbers and what Apple sell. It's got nothing to do with Apple owing anything, it's a comment on what would benefit them based on what is benefitting their competitors.
Quote:
Originally Posted by Capnbob
Who is the most profitable car company in the world? Porsche (sales volume ~100K). It is so financially powerful that it recently bought VW which sells over 60x the volume of Porsche. Who would you rather be?
It's not as clean cut as that, Porsche use engines from VW and their purchase was of majority controlling shareholdings. I get your point that being a seller of premium products isn't necessarily a bad thing if you make a lot of profit but the computer industry is significantly different from the car industry despite the continual use of these analogies.
There will come a day in the not too distant future when we have a computer that can virtualize the Mac OS transparently and the machine will be so small as to be irrelevant to the aesthetics of the machine. This won't happen with a porsche. Apple need to seriously start thinking about volume and keeping their eco-system alive.
Quote:
Originally Posted by Capnbob
They will definitely cannibalize some Macbook sales which we know make a large multiple of that profit, which will negatively impact bottom line results.
How much do we know exactly about what Apple's margins are? If Apple made a smaller machine than a Macbook with lower spec parts then they may make lower dollar amount revenue per model but the target audience grows significantly. Apple certainly won't compete price for price with current netbook manufacturers but they can do a lot better than the prices they have on their current lineup.
Quote:
Originally Posted by Capnbob
Overall, to cut a long story short? stop conflating what you want (cheap-ass Macs) and your grade school economic analysis with what Apple should do as a company.
The prices in this thread are far from cheap when you compare them with the rest of the industry and most are what Apple used to sell their machines at. The main point is that Apple's prices have gone up so that entry points for each model of machine are unreasonable.
I can't recall when Apple's only tower had a £1900 entry point. On the last model, it was about 25% less than that.
These typically delusional types all think they know what Apple should do and that amazingly coincidentally, it is exactly what would benefit them (xMac, cheaper Macs, etc,).
This has always been the crux of the matter IMO. To hear some say it, you'd think that Apple is obligated to satisfy every potential buyer of their products, and to do it right now, this minute, and precisely in the way they wanted -- or be seen as having failed. Any company which tries to be everything to everyone is likely to end up being not much of anything to anyone. See: Microsoft.
This has always been the crux of the matter IMO. To hear some say it, you'd think that Apple is obligated to satisfy every potential buyer of their products, and to do it right now, this minute, and precisely in the way they wanted -- or be seen as having failed. Any company which tries to be everything to everyone is likely to end up being not much of anything to anyone. See: Microsoft.
You gotta love the "Apple would make so much money if they made a machine exactly like <this> because I would buy it and my friends would too."
1) You have actually beaten out Lemon Bon Bon for having the most anoying posting style on these forums.
2) Since Apple only makes a net profit of 9% you are suggesting that they lose 6% on each sale. Does that make financial sense to you or are suggesting they make it up in volume?
apple inc. mark up went from 32 to over 38% percent last 1/4.
I thought it was 36% but regardless, you are talking gross profit, not net profit.
Quote:
also the 29 billion they have amassed in cash comes from some where
Apple is a for profit company. They, lke all other companies have assets, including cash for expenses. To say that Apple is charging too much for making too much money because they are not bankrupt is ludicrous. There are other companies that make more gross and net profits on both HW and SW. These are successful companies.
It's the one that are struggling that have had to shave more and more off their sales in order to even get a sale. When you decide to sell cheap wares with high volume in a highly competitive market segment you have no choice but to shave the price to even make the sale. This is way and Dell have increasing financial issues despite the ability to gain marketshare. Netbooks will be the same for Acer. Sales ≠ Profit. Marketshare ≠ Profit.
Quote:
lately as part prices have fallen very fast and very far down .apple prices in the last 3 yrs have not followed suit . except of course for the 2 entry level mac books .which is priced fairly i guess
Really? What was the price of DDR3 notebook RAM 3 years ago? How about a 2.4GHz Montevina CPU or the Nvidia 9400M? I guess if you consider the fab cost of a sample chip then, yes, the prices have fallen considerably. I don't see how that it could have since the major parts in Apple's products weren't even on the market that long ago.
Quote:
what is a lemon bon bon ??
He is a poster here that likes to post in an annoyingly odd style.
Comments
Except that repeatedly Steve Jobs and Apple have specifically stated that they don't do market research, particularly focus groups. Otherwise, Pippen, Newton, Cube, etc. would never have seen the light of day.
Steve and Apple have said all sorts of things that turned out to be head fakes. A magician will tell you his act is real magic, not tricks -- and he'd be one dumb magician if he told you how he fools you.
You can bet your bottom dollar that Apple does market research. They may not do it in some of the more conventional ways, but they do it.
Leave the trailer park market segment to Dell and the design-impaired nerd crowd.
Jeez classist much. Talk about making sweeping generalizations.
In the time it takes Microsoft to release a new version of Windows, Apple can create a whole new line of less expensive computers and release a vastly superior OS.
But now I just realized that I want them to remain that way, so the resale value of mine were higher. But there is another reason... Last week, I went to London by train... In my coach, there was a middle-aged, bold man in an 80's style tweed suit. He's had a white plastic MacBook. Suddenly, I felt soooo relieved that my computers were expensive.
like my wife's iphone and will probably get one this year for myself, but mac's are overpriced
99% the exact same hardware as PC's except they cost more. they are even made by the same companies in asia that make PC's the difference is the price of OS X Apple charges.
...
it's not like the old days when computers cost a lot of money and you bought one to last. technology moves fast, computers are cheap, cell phones are cheap and it makes sense to buy something cheaper and dump it in 2-3 years and buy the new thing that's out.
Actually, I have found that there is much longevity in Mac products. I'm currently typing this on a 12-inch PowerBook G4 i got in 2004. It only has a 1 Ghz processor and 768M of DDR ram but it's still a highly functional computer. And it still draws the occasional "ooohs" and "ahhs" from random strangers when I pull it out at a wifi hotspot.
People who buy PC's tend to think in terms of "what is it capable of" whereas Mac users tend to think in terms of "how efficiently does it do what it is capable of". The assumption behind the Apple business model is that the consumer is intelligent or at least more sophisticated than some other companies appear to believe. That's why apple is pushing hard at things like user interface which, at this stage, would affect your ability to perform an average computing task far more than incremental increases in CPU clock speed.
It's little things like putting the menu bar against the edge of the screen rather than nesting it within an application window that make a big difference. Experiments have shown Mac users fling the mouse pointer right up there with great force and because the edge of the screen stops the mouse they can access menu items in less time than a Windows user can. In my opinion Exposé is the greatest thing to happen to computing since the internet.
This is NOT good. I repeat, NOT good. Thus begins the slow, downward spiral to mediocrity. Do the previous posters really think Apple can produce cheap PCs like Dell without sacrificing quality, customer service, and margins? If so then you live in a fantasy world. Just imagine what a $500 Macbook would look like. It would look like an Acer of course. I'm sorry but even Jon Ive can't make a silk purse out of a sow's ear. The drive for market share also drives down margins as Michael Dell has found out the hard way. You have to keep selling more and more just to break even.
I hope the "we want cheap Macs" crowd doesn't get their wish any time soon. I would rather see Apple stop making Macs altogether before producing drab, black plastic abominations. Leave the trailer park market segment to Dell and the design-impaired nerd crowd.
don't fret
dude
apple makes over %34 percent markup on its goods
and they have 29 billion in cash
they can buy top quality in bulk and pass on the savings to us
what they will do is lower the existing line by 10 percent or more while keeping it the same .
and then add a new high end line w/ faster processors and stuff at todays prices .
Nobody outside Steve Jobs' brain knows what his personal goals are. But I'd imagine that when you have more money than you could possibly spend, you're getting old and have major health issues, then maybe you want to do "one more thing", like, say, one last shot at world domination, rather than die as the guy who failed to make a major dent in Microsoft's marketshare. He doesn't want Star Wars to end with Luke failing to blow up the Death Star and the evil Empire running the galaxy for another thosand years.
You have to remember that he was kind of a loser who had to come crawling back to Apple through an acquisition. His company was bought by a company on the ropes, kind of like Chrysler merging with Fiat. But after that, he has fulfilled his goal of creating his dream products AND enjoying massive commercial success. So where can he go from there? Keep making more well-designed products and sell them to the same 3% of the world population as always? Nah, time for the next step.
dude
since mac's last so much longer
less will sell duh
and mac only lives in the middle and high end market place . minus out the low end crap wear and mac has a much higher market share .
as for steve jobs
well he saved apple dude . single handed .
you are the loser
not steve
look at pixar
ipod
imac
mac os 9.2
mac os 10
mini
iphone
itunes
imovie
macbook
macbookpro
mac air
quick time
app store
pod casts
i tunes store
apple stores
machine tooled alum mac's
on and on
of course steve has a great staff making all this
possible
are apple products over priced
YES
and they are becoming way over priced .
and i ho[pe and pray that steve jobs gets well soon .
peace
the crucial price factor that nearly everyone ignores in debating Mac pricing is the basic economic consideration of the full "life cycle" costs for durable goods like PC's. no one (except the uber rich) replaces their computer every year with a new one. generally computers have a 4-5 year lifespan. and even when a principal computer is replaced with a new one during that period, it usually continues in use as a second or third computer for someone else in that home or office.
for people with tight budgets or who are just plain hard-core cheap, yes, the initial price is most often the deciding factor. but for everyone else, it is about getting what they really want (like Tim Cook said). because a $200 purchase price differential spread over 5 years is just $40 per year - too little to really matter to most. the other costs of ownership, like monthly ISP service fees, are much more significant. and at the office, ongoing IT costs are much more significant than the up front hardware expense.
then the other standard economic consideration these debates omit is the value of your time. you tell me how much per hour your time doing computer maintenance and service yourself is worth. (if you hire someone else, that's at least $50 per hour, but they are supposed to be "skilled").
so what are the total hours of maintenance/service per year for Windows PC ownership compared to Mac ownership? i don't mean playing with it like geeks and hobbyists do, i mean just necessary set up, upkeep, troubleshooting, and updating. i've never seen any figures about this, but i have the distinct impression my PC using friends spend quite a bit of time fussing with Windows to keep it working right. more than i do on Mac. and i think my time is worth a lot. then add to that the cash cost of tech support - free at the Apple Store, but definitely not free from PC OEM's and retailers - and you get another significant annual cost of ownership for life cycle analysis.
bottom line is, smart shopping is not just about the sticker price. just looking at that is bad economics.
fine post
yet mac is still over priced by at least 15 percent .
fine post
yet mac is still over priced by at least 15 percent .
1) You have actually beaten out Lemon Bon Bon for having the most anoying posting style on these forums.
2) Since Apple only makes a net profit of 9% you are suggesting that they lose 6% on each sale. Does that make financial sense to you or are suggesting they make it up in volume?
Not only is the "time" right given the economy, but this is a good response to the direct advertising blitz.
AAPL may be wise to adopt an approach where they sell the machines much cheaper and then make money on the software and let uses stock the machine how they want.....Vs the bundle approach. If you really want to play in the big hardware game, then you must target the "average" customer. The average customer, unfortunately, has no idea the "value" of the Mac bundle. And, I'm afraid no amt of advertising will educate them either. Therefore, break your products out and make your money back via line item pricing.
Will be interesting to see their approach....Probably will be just less specs for less money, is my guess.
Did you forget that you have already posted this on page one? Did it also slip your mind that that you just joined this forum.... using another name?
The MacJihad would be amusingly cute if they weren't tiresome and making life difficult for people who use Macs professionally and don't want to be associated with fanboi assholes who need to contract swine flu.
In this case, I'd have to side with the original poster. F U."
-Like I posted to the other guy...when you start spouting off of the mouth, you should expect a reaction!! Perhaps there's enough duct tape for the both of you! Having said that, "MacJihad" would be clever if not for the useless collection of words before and after it.
Who is the most profitable car company in the world? Porsche (sales volume ~100K). It is so financially powerful that it recently bought VW which sells over 60x the volume of Porsche. Who would you rather be? Does BMW make cars for the masses? Do they yearn to sell the numbers of GM or Ford (at GM/Ford margins)? Do they make an entry level car to take on a Corolla or Versa? No ? they make the Mini and super-premium price it. When they tried to do ?cheap? with the 3XXti models, they bombed. So did Mercedes with the SportKompact hatchback. Premium brands care about margin and volume growth regardless of share. Are BMW making cheap cars for BRIC countries? No, they are selling 7-Series to the newly super rich ? all revenue growth, all at nice margins.
If the PC market is only growing because of netbooks, but those things have very low $ margins, why should Apple make them? They will definitely cannibalize some Macbook sales which we know make a large multiple of that profit, which will negatively impact bottom line results. You can live in a dreamland where selling half a million units per quarter at $20-$50 profit per unit is great business but in quarters where Apple makes $1.2-1.6Bn in profit, that $10-25M is chump change for the risk and investment required to achieve it. What if it bombs, what if there is a HW component issue, what if it costs Apple 50,000+ MacBook sales, etc. For the other ?great Apple hope?, the xMac? why go head to head with commodity desktop boxes where comparisons to PC hardware are too obvious to command a desired premium from a typical geeky, value-oriented user. A square box with room for PCI expansion and stock Intel HW just does not have the margin generating advantage over a necessarily similar box from HP/Dell. It will also likely cannibalize iMac and MacPro sales. Again, bad business for Apple (though great for you (and me). For perspective, the iPhone/iTouch App store has probably made ~$300M dollars for Apple on a billion apps in 3Qs (assuming an ASP of $1 and 30% to Apple - I know lots are free, but many top selling games etc. are $5-20). Even at half that, that is the kind of money (at fantastic margins) Apple should invest in.
Apple knows its core Mac customer segments ?
1) non-geek consumers - who want style, ease of use, few cables, etc. (key growth, lots of potential)
2) education (reasonable growth, re-acquiring lost share, but lower margin HW)
3) media professionals - who amortize the high-priced HW against real revenues (low growth)
We, the diehard Apple geeks and (dare I say it) Fanbois are now a minority and are not a target group. Thus they make the iMac & MacBooks (stylish, easy, cool, uniquely designed), MBPro/Mac Pros (Pro grade HW in (almost) every respect) and the Mac Mini (differentiated on style/size, used as a switcher gateway). The iPod/iPhone are both far better ways to introduce people to Mac than any cheap-ass Mac will ever be ? create net new Mac users and do it amazingly profitably.
All good Apple fans want Apple to sell more boxes, bring more people into the cult of Mac (BTW you know this no longer exists except within these hallowed pages?) What if Apple could sell Dell volumes at Apple margins? They can?t. No-one can. We all know that Apple already has the lion?s share of the US consumer market by revenue & margin $ value (66% of PCs >$1500) so why should they need to sell Dell?s volume at Dell/Acer/HP?s margins? All this market share by unit volume is nice bragging rights but not what matters to Apple. Current OSX installed base/annual sales already justifies a reasonable and growing software library plus cloud computing is making the OS irrelevant. Apple is valued by the markets largely on its net income performance and we know how sensitive the stock price is to margin changes. Netbooks would gut this number as would cheap-ass xMacs to compete with your imaginary BYO PC makers who hang outside Apple stores stealing customers. People not buying a Mac or switching back are already factored into Apple?s calculations.
Cut the price of the plastic MacBook, re-introduce a cheaper previous generation Mini, or whatever to maintain topline sales for now, but when things turn around, cut these dinosaurs and get back on strategy. In the meantime, the new tablet/iPhone 3 will hopefully be kicking ass, taking names and up-selling full-price Macs.
Overall, to cut a long story short? stop conflating what you want (cheap-ass Macs) and your grade school economic analysis with what Apple should do as a company.
(Sorry for the long post but where I am today has no TV and sporadic internet service ? too much time on my hands)
Nice to see the whiners, cheapskates and those with cereal packet MBAs are out in full force. These typically delusional types all think they know what Apple should do and that amazingly coincidentally, it is exactly what would benefit them (xMac, cheaper Macs, etc,). When will you realize that Apple doesn?t owe you what you want
It's only logical to draw comparisons between what people are buying in huge numbers and what Apple sell. It's got nothing to do with Apple owing anything, it's a comment on what would benefit them based on what is benefitting their competitors.
Who is the most profitable car company in the world? Porsche (sales volume ~100K). It is so financially powerful that it recently bought VW which sells over 60x the volume of Porsche. Who would you rather be?
It's not as clean cut as that, Porsche use engines from VW and their purchase was of majority controlling shareholdings. I get your point that being a seller of premium products isn't necessarily a bad thing if you make a lot of profit but the computer industry is significantly different from the car industry despite the continual use of these analogies.
There will come a day in the not too distant future when we have a computer that can virtualize the Mac OS transparently and the machine will be so small as to be irrelevant to the aesthetics of the machine. This won't happen with a porsche. Apple need to seriously start thinking about volume and keeping their eco-system alive.
They will definitely cannibalize some Macbook sales which we know make a large multiple of that profit, which will negatively impact bottom line results.
How much do we know exactly about what Apple's margins are? If Apple made a smaller machine than a Macbook with lower spec parts then they may make lower dollar amount revenue per model but the target audience grows significantly. Apple certainly won't compete price for price with current netbook manufacturers but they can do a lot better than the prices they have on their current lineup.
Overall, to cut a long story short? stop conflating what you want (cheap-ass Macs) and your grade school economic analysis with what Apple should do as a company.
The prices in this thread are far from cheap when you compare them with the rest of the industry and most are what Apple used to sell their machines at. The main point is that Apple's prices have gone up so that entry points for each model of machine are unreasonable.
I can't recall when Apple's only tower had a £1900 entry point. On the last model, it was about 25% less than that.
These typically delusional types all think they know what Apple should do and that amazingly coincidentally, it is exactly what would benefit them (xMac, cheaper Macs, etc,).
This has always been the crux of the matter IMO. To hear some say it, you'd think that Apple is obligated to satisfy every potential buyer of their products, and to do it right now, this minute, and precisely in the way they wanted -- or be seen as having failed. Any company which tries to be everything to everyone is likely to end up being not much of anything to anyone. See: Microsoft.
This has always been the crux of the matter IMO. To hear some say it, you'd think that Apple is obligated to satisfy every potential buyer of their products, and to do it right now, this minute, and precisely in the way they wanted -- or be seen as having failed. Any company which tries to be everything to everyone is likely to end up being not much of anything to anyone. See: Microsoft.
You gotta love the "Apple would make so much money if they made a machine exactly like <this> because I would buy it and my friends would too."
You gotta love the "Apple would make so much money if they made a machine exactly like <this> because I would buy it and my friends would too."
That would be called an "unfocused group."
1) You have actually beaten out Lemon Bon Bon for having the most anoying posting style on these forums.
2) Since Apple only makes a net profit of 9% you are suggesting that they lose 6% on each sale. Does that make financial sense to you or are suggesting they make it up in volume?
Yes..
apple inc. mark up went from 32 to over 38% percent last 1/4.
I thought it was 36% but regardless, you are talking gross profit, not net profit.
also the 29 billion they have amassed in cash comes from some where
Apple is a for profit company. They, lke all other companies have assets, including cash for expenses. To say that Apple is charging too much for making too much money because they are not bankrupt is ludicrous. There are other companies that make more gross and net profits on both HW and SW. These are successful companies.
It's the one that are struggling that have had to shave more and more off their sales in order to even get a sale. When you decide to sell cheap wares with high volume in a highly competitive market segment you have no choice but to shave the price to even make the sale. This is way and Dell have increasing financial issues despite the ability to gain marketshare. Netbooks will be the same for Acer. Sales ≠ Profit. Marketshare ≠ Profit.
lately as part prices have fallen very fast and very far down .apple prices in the last 3 yrs have not followed suit . except of course for the 2 entry level mac books .which is priced fairly i guess
Really? What was the price of DDR3 notebook RAM 3 years ago? How about a 2.4GHz Montevina CPU or the Nvidia 9400M? I guess if you consider the fab cost of a sample chip then, yes, the prices have fallen considerably. I don't see how that it could have since the major parts in Apple's products weren't even on the market that long ago.
what is a lemon bon bon ??
He is a poster here that likes to post in an annoyingly odd style.
Congrats to both ikrupp and Virgil-TB2, you're now both famous.
Scroll down to "Cheaper Macs on the Way?"
http://www.macnewsworld.com/story/Ap...ces-66958.html