We want it for wired and wireless presentations of NATIVE Keynote and NATIVE PowerPoint files. Even the current MacBook Air is too heavy and too large for us. We want it in our pocket!
For wired can't you just use an iPhone Touch with video-out cables?
I believe there is a 100% chance that Apple would benefit by knocking $200 to $250 off the MacBook and iMac, as a way of further boosting market share. To me, it seems an opportune time to take advantage of Microsoft's bumbling and cut into their market share lead, rather than giving them time to recover (which MS might do, eventually).
If this idea is really stupid, could someone please explain why?
I doubt this is what Oppenheimer meant by "final blow to competition". iPod already has 70+% market share and iPhone is just getting started.
I think the best candidate for strategic overhaul is AppleTV. Maybe "technologies and features that others can't match," will be a set-top box which you can use with any cable or satellite provider with built in DVR and VOD. ATT's U-verse hardware can record upto 4 programs at a time. Imagine an elegant user interface that only Apple can design with access to "THE CLOUD" (email, contacts, photos, videos and God knows what else they can come up with), YouTube, music videos and movie rentals like Netflix/XBOX deal. Movies work best in a rental format.
I believe there is a 100% chance that Apple would benefit by knocking $200 to $250 off the MacBook and iMac, as a way of further boosting market share. To me, it seems an opportune time to take advantage of Microsoft's bumbling and cut into their market share lead, rather than giving them time to recover (which MS might do, eventually).
If this idea is really stupid, could someone please explain why?
Because Apple, as a corporation, exists to make as large a profit as is possible, not to have an impressive market share.
Now, it is possible that decreasing the profit margin can lead to a higher overall profit if it has a dramatic affect on sales, but that is not always the case.
Suppose they sold a $1,000 MB (it makes the math easier and I am lazy) with a 35% profit margin (which is pretty good). That would mean they make $350 in profit for each one sold. Now, if you droped the price $250 you can be sure that sales would skyrocket. But your profit per is now only $100.
Even if you doubled sales, you would be losing money.
If you trippled sales, you would still be losing money
Even if you quadrupled sales, well, you would be increasing profits somewhat but only if you assume that sales would bave been flat. given Apple's 30-50 percent year over year sales groth they have been showing with the current high margin, you would have to have 7 or 8 times increases in sales to increase profit.
Setting your company up for that would qualify as "really stupid" in my book.
I'm also afraid of price drops. My first question would be, what would we be giving up? I really don't mind paying a couple hundred extra for quality and features.
I don't believe this will happen.. Oppenheimer clearly said that margins would be lower, but it will be transitioning a product or product line to new technologies that the competition can't compete with.
I agree. It looks to me like the Piper Jaffray analyst is reading too much into Oppenheimer's words. This appears to be about aggressive pricing of a new product. My guess is the long-rumored tablet.
I'm also afraid of price drops. My first question would be, what would we be giving up? I really don't mind paying a couple hundred extra for quality and features.
Ideally they wouldn't drop any features at all and considering Opp's quote one would believe that either 1) they are going to add new, fairly expensive features and keep the same type of price point or 2) slightly lower the price and add new, not quite as expensive features. I think putting an HD capable camera along with a multi-touch trackpad and switching to aluminum all while dropping the price to $999 (don't be surprised if they ditch the edu discount with a price like that, they've done it before with the iPod...) would qualify Opp's quote. At least that's my take.
Well, either that or some crazy iPod refresh but I think they are really getting close to full saturation so the point of just saying "hey look, we can make our stuff cheaper" and costing your operating margin 4% just to gain a few extra % points in the mp3 market doesn't really seem financially viable.
In their financial results Apple is talking about Gross Margin when discussing margins. Gross margins don't include operational expenses, like salaries, R&D, advertising - that sort of stuff. Depending on how Apple handles it gross margins can include reductions for normal education discounts and back to school discounts. Gross margin is basically the cost paid for components, assembly, packaging and (generally) the transportation cost to get the completed products to the distribution centers.
In their financial results Apple is talking about Gross Margin when discussing margins. Gross margins don't include operational expenses, like salaries, R&D, advertising - that sort of stuff. Depending on how Apple handles it gross margins can include reductions for normal education discounts and back to school discounts. Gross margin is basically the cost paid for components, assembly, packaging and (generally) the transportation cost to get the completed products to the distribution centers.
Shouldn't operating (nett) profit margin be more of concern to everyone? I mean, of course the gross margin is important because without gross margin profit there would be no nett profit. But focusing on that alone... Why are the analysts and "the market" not having what I say is a more balanced approach? Yes of course gross margin is important but what about their other operations? For Tech, certainly R&D spending, and as a consumer-oriented enterprise, definitely marketing and sales expenses (hell, they're so big on retail now) are as important.
How come these anlaysts all have such a set way of doing things? Has this been beneficial to, well, whoever follows their analysis?
"We believe there is an 80% chance Apple will introduce redesigned MacBooks and possibly new MacBook Pros at lower price points," he wrote. "Specifically, Apple may re-enter the $999 price point (currently $1099) with the MacBook, or test the $1,799 price point with the MacBook Pro (currently $1999)."
Somebody really wanted to replicate what they saw in Star Wars and finally managed to convince management to pony up some bucks. Too bad it's not all that useful a visualization mechanism...
Because Apple, as a corporation, exists to make as large a profit as is possible, not to have an impressive market share.
Now, it is possible that decreasing the profit margin can lead to a higher overall profit if it has a dramatic affect on sales, but that is not always the case.
Suppose they sold a $1,000 MB (it makes the math easier and I am lazy) with a 35% profit margin (which is pretty good). That would mean they make $350 in profit for each one sold. Now, if you droped the price $250 you can be sure that sales would skyrocket. But your profit per is now only $100.
Even if you doubled sales, you would be losing money.
If you trippled sales, you would still be losing money
Even if you quadrupled sales, well, you would be increasing profits somewhat but only if you assume that sales would bave been flat. given Apple's 30-50 percent year over year sales groth they have been showing with the current high margin, you would have to have 7 or 8 times increases in sales to increase profit.
Setting your company up for that would qualify as "really stupid" in my book.
Again you are talking about Gross Profit.
Gross Profit is the difference between the manufacturing cost of something and the sell price. It does not include the cost involved with selling the product and it certainly does not include any taxes.
The money yet to come out of the GP before it can be termed operating profit will be things like salaries, stores, advertising, operating costs etc.. These things tend to stay the same regardless of how many units are sold. So yes dropping the price and selling twice as much may not result in a better overall GP but it could well result in a better overall operating profit.
The general rule is that is costs just the same to sell 10 units as it does to sell 100 (not strictly true but good enough to work in this analogy).
Comments
Apple, make an UMPC (I mean, an UMMac) with a 5-inch or so small screen like this and we will order thousands for our University:
OQO model e2
http://www.oqo.com
We want it for wired and wireless presentations of NATIVE Keynote and NATIVE PowerPoint files. Even the current MacBook Air is too heavy and too large for us. We want it in our pocket!
For wired can't you just use an iPhone Touch with video-out cables?
I believe there is a 100% chance that Apple would benefit by knocking $200 to $250 off the MacBook and iMac, as a way of further boosting market share. To me, it seems an opportune time to take advantage of Microsoft's bumbling and cut into their market share lead, rather than giving them time to recover (which MS might do, eventually).
If this idea is really stupid, could someone please explain why?
I doubt this is what Oppenheimer meant by "final blow to competition". iPod already has 70+% market share and iPhone is just getting started.
I think the best candidate for strategic overhaul is AppleTV. Maybe "technologies and features that others can't match," will be a set-top box which you can use with any cable or satellite provider with built in DVR and VOD. ATT's U-verse hardware can record upto 4 programs at a time. Imagine an elegant user interface that only Apple can design with access to "THE CLOUD" (email, contacts, photos, videos and God knows what else they can come up with), YouTube, music videos and movie rentals like Netflix/XBOX deal. Movies work best in a rental format.
I'm sure they are frustrated with the TV product.
This all may be true, but hardly counts as a mind blowing new product which seemed to be hinted at yesterday.
How did you get "mind blowing new product" out of "product transition"?
How did you get "mind blowing new product" out of "product transition"?
Perhaps the mind blowing notion was assumed when Oppenheimer suggested Apple to bring "technologies and features that others can't match."
I believe there is a 100% chance that Apple would benefit by knocking $200 to $250 off the MacBook and iMac, as a way of further boosting market share. To me, it seems an opportune time to take advantage of Microsoft's bumbling and cut into their market share lead, rather than giving them time to recover (which MS might do, eventually).
If this idea is really stupid, could someone please explain why?
Because Apple, as a corporation, exists to make as large a profit as is possible, not to have an impressive market share.
Now, it is possible that decreasing the profit margin can lead to a higher overall profit if it has a dramatic affect on sales, but that is not always the case.
Suppose they sold a $1,000 MB (it makes the math easier and I am lazy) with a 35% profit margin (which is pretty good). That would mean they make $350 in profit for each one sold. Now, if you droped the price $250 you can be sure that sales would skyrocket. But your profit per is now only $100.
Even if you doubled sales, you would be losing money.
If you trippled sales, you would still be losing money
Even if you quadrupled sales, well, you would be increasing profits somewhat but only if you assume that sales would bave been flat. given Apple's 30-50 percent year over year sales groth they have been showing with the current high margin, you would have to have 7 or 8 times increases in sales to increase profit.
Setting your company up for that would qualify as "really stupid" in my book.
I don't believe this will happen.. Oppenheimer clearly said that margins would be lower, but it will be transitioning a product or product line to new technologies that the competition can't compete with.
I agree. It looks to me like the Piper Jaffray analyst is reading too much into Oppenheimer's words. This appears to be about aggressive pricing of a new product. My guess is the long-rumored tablet.
Its exciting times....
I'm also afraid of price drops. My first question would be, what would we be giving up? I really don't mind paying a couple hundred extra for quality and features.
Ideally they wouldn't drop any features at all and considering Opp's quote one would believe that either 1) they are going to add new, fairly expensive features and keep the same type of price point or 2) slightly lower the price and add new, not quite as expensive features. I think putting an HD capable camera along with a multi-touch trackpad and switching to aluminum all while dropping the price to $999 (don't be surprised if they ditch the edu discount with a price like that, they've done it before with the iPod...) would qualify Opp's quote. At least that's my take.
Well, either that or some crazy iPod refresh but I think they are really getting close to full saturation so the point of just saying "hey look, we can make our stuff cheaper" and costing your operating margin 4% just to gain a few extra % points in the mp3 market doesn't really seem financially viable.
Multi-touch screen? Doesn't the screen get dirty enough already without people touching it?
In Soviet Russia, the screen touch YOU.
For wired can't you just use an iPhone Touch with video-out cables?
I want holo projection from an iPhone Jedi. "Alright people, we only get one shot at this... er... product launch..."
In their financial results Apple is talking about Gross Margin when discussing margins. Gross margins don't include operational expenses, like salaries, R&D, advertising - that sort of stuff. Depending on how Apple handles it gross margins can include reductions for normal education discounts and back to school discounts. Gross margin is basically the cost paid for components, assembly, packaging and (generally) the transportation cost to get the completed products to the distribution centers.
Shouldn't operating (nett) profit margin be more of concern to everyone? I mean, of course the gross margin is important because without gross margin profit there would be no nett profit. But focusing on that alone...
How come these anlaysts all have such a set way of doing things? Has this been beneficial to, well, whoever follows their analysis?
"We believe there is an 80% chance Apple will introduce redesigned MacBooks and possibly new MacBook Pros at lower price points," he wrote. "Specifically, Apple may re-enter the $999 price point (currently $1099) with the MacBook, or test the $1,799 price point with the MacBook Pro (currently $1999)."
Well, yeeeeeha. Finally.
...
I want holo projection from an iPhone Jedi. "Alright people, we only get one shot at this... er... product launch..."
Doh...I can't believe it took me this long to make the connection from Science On a Sphere and Star Wars.
http://sos.noaa.gov/
Somebody really wanted to replicate what they saw in Star Wars and finally managed to convince management to pony up some bucks. Too bad it's not all that useful a visualization mechanism...
Because Apple, as a corporation, exists to make as large a profit as is possible, not to have an impressive market share.
Now, it is possible that decreasing the profit margin can lead to a higher overall profit if it has a dramatic affect on sales, but that is not always the case.
Suppose they sold a $1,000 MB (it makes the math easier and I am lazy) with a 35% profit margin (which is pretty good). That would mean they make $350 in profit for each one sold. Now, if you droped the price $250 you can be sure that sales would skyrocket. But your profit per is now only $100.
Even if you doubled sales, you would be losing money.
If you trippled sales, you would still be losing money
Even if you quadrupled sales, well, you would be increasing profits somewhat but only if you assume that sales would bave been flat. given Apple's 30-50 percent year over year sales groth they have been showing with the current high margin, you would have to have 7 or 8 times increases in sales to increase profit.
Setting your company up for that would qualify as "really stupid" in my book.
Again you are talking about Gross Profit.
Gross Profit is the difference between the manufacturing cost of something and the sell price. It does not include the cost involved with selling the product and it certainly does not include any taxes.
The money yet to come out of the GP before it can be termed operating profit will be things like salaries, stores, advertising, operating costs etc.. These things tend to stay the same regardless of how many units are sold. So yes dropping the price and selling twice as much may not result in a better overall GP but it could well result in a better overall operating profit.
The general rule is that is costs just the same to sell 10 units as it does to sell 100 (not strictly true but good enough to work in this analogy).
Doh...I can't believe it took me this long to make the connection from Science On a Sphere and Star Wars.....
you need to post more.
"In soviet russia...."