Apple drives one supplier's profits, despite PC shipment drop
Apple's premium-priced line of computers has provided a boost for Taiwanese notebook maker Quanta Computer, even though the company's overall shipments are down.
In November, Quanta's notebook shipments shrunk by about 100,000 to a total of 3.8 million. But the company still reported a record $2.88 billion in revenue in November -- its highest month ever. That was a 36.6 percent year-over-year increase, and represents 8.5 percent growth from a month prior, according to DigiTimes.
"The increased proportion of Apple models, which had higher selling prices, as well as strong all-in-one PC and consumer electronics shipments helped the company's November revenues reach a new high."
In 2008, Quanta was awarded a contract to build Apple's slim MacBook Air.
Apple's MacBook line has been consistently shown to be a top seller, even though its price comes in higher than competitors. In June of this year, it was found that Apple made up 91 percent of the computer market priced $1,000 and up. Apple sells only three consumer computers below $1,000: the 13-inch MacBook, and both versions of the Mac mini.
Competitors like Microsoft have tried to peg those higher prices as an "Apple tax." And while the growth of low-cost netbooks has led many to speculate that Apple would try to compete in that low-margin market, the Cupertino, Calif., company has passed on that segment thus far.
So far, the strategy has been working. Last quarter, Apple reported a 46 percent increase in profits as the company sold a record 3 million Macs. That helped the company earn a total of $1.67 billion for the three-month period ending in September.
In November, Quanta's notebook shipments shrunk by about 100,000 to a total of 3.8 million. But the company still reported a record $2.88 billion in revenue in November -- its highest month ever. That was a 36.6 percent year-over-year increase, and represents 8.5 percent growth from a month prior, according to DigiTimes.
"The increased proportion of Apple models, which had higher selling prices, as well as strong all-in-one PC and consumer electronics shipments helped the company's November revenues reach a new high."
In 2008, Quanta was awarded a contract to build Apple's slim MacBook Air.
Apple's MacBook line has been consistently shown to be a top seller, even though its price comes in higher than competitors. In June of this year, it was found that Apple made up 91 percent of the computer market priced $1,000 and up. Apple sells only three consumer computers below $1,000: the 13-inch MacBook, and both versions of the Mac mini.
Competitors like Microsoft have tried to peg those higher prices as an "Apple tax." And while the growth of low-cost netbooks has led many to speculate that Apple would try to compete in that low-margin market, the Cupertino, Calif., company has passed on that segment thus far.
So far, the strategy has been working. Last quarter, Apple reported a 46 percent increase in profits as the company sold a record 3 million Macs. That helped the company earn a total of $1.67 billion for the three-month period ending in September.
Comments
Jess
http://www.web-anonymity.se.tc
Apple knows the market better than any other player. There is no "Apple Tax", just consumers with taste, willing to pay a little more for a lot more quality and value, on average. And Apple consistently posts the numbers to back this up.
But I really wish that Apple had their production facilities right here in the USA. We desperately need the money that is being spent overseas. Apple could become a trend setter.
Then again, if you read the previous thread with nobody wanting to pay more than $400.00 for a tablet, without even knowing what it is going to be, I guess that the time is not ripe for that idea. Yet.
The 'Walmart' model, 'make a little profit on each item, but sell a lot of items' has infected American business. Many CEO's subscribe to it because it's easier than actually putting your ass on the line making superior products, but low profit margins are a mug's game....just ask GM.
So many CEO's use the Walmart model because it's not their money their spending.
Not many companies are so positioned and have the luxury of selling lots of crap products and making a little profit on each item and have continued success.
The lucky ones like Cocoa Cola, (Coke is crap) McDonalds, (their food is crap) and MS (there SW is crap) come to mind.
So many CEO's look to replicate the above mentioned companies because, again, it's easy. It's so much more difficult to develop a game changing product, think iPhone here or the Toyota Prius!
I read it takes 300 man years to do a year over year refresh on a Camry-That just a minor product refresh not introducing a brand new model!
Competitors like Microsoft have tried to peg those higher prices as an "Apple tax." And while the growth of low-cost netbooks has led many to speculate that Apple would try to compete in that low-margin market, the Cupertino, Calif., company has passed on that segment thus far.
Apple knows the market better than any other player. There is no "Apple Tax", just consumers with taste, willing to pay a little more for a lot more quality and value, on average. And Apple consistently posts the numbers to back this up.
Right again, Quado!
Swell.
But I really wish that Apple had their production facilities right here in the USA. We desperately need the money that is being spent overseas. Apple could become a trend setter.
Then again, if you read the previous thread with nobody wanting to pay more than $400.00 for a tablet, without even knowing what it is going to be, I guess that the time is not ripe for that idea. Yet.
I agree Roos. That is my only qualm with Apple, if Toyota, Nissan, BMW, etc. can produce products here why can't Apple at least have a few 'Assembly' plants here. I think it would be great PR.
I know cars are different from iPods but Apple could make it work. I mean really there is no competition for ipods.
Anyway there is probably an economies of scale aspect to it, unions, state regulation, state taxes, etc., that make it prohibitive.
it was found that Apple made up 91 percent of the computer market priced $1,000 and up.
Hold on! This is one of those random statistics again. You're telling us (or someone is telling us) that out of every 100 computers sold that cos $1000 or over (in the US), 91 of them are Macs?
That is quite obviously complete rubbish. Even assuming that's just the consumer market (as opposed to corporate), I fail to believe that statistic.
Or is it just misleading- is it just saying that of the available computer models over $1000, 91% of them are Macs? I still find that hard to believe - surely Dell and HP and the like offer relatively similar, if not greater numbers of computer models over $1000?
Instead of me guessing, could someone explain what it really means? What are these statistics of, exactly?
Hold on! This is one of those random statistics again. You're telling us (or someone is telling us) that out of every 100 computers sold that cos $1000 or over (in the US), 91 of them are Macs?
That is quite obviously complete rubbish. Even assuming that's just the consumer market (as opposed to corporate), I fail to believe that statistic.
Or is it just misleading- is it just saying that of the available computer models over $1000, 91% of them are Macs? I still find that hard to believe - surely Dell and HP and the like offer relatively similar, if not greater numbers of computer models over $1000?
Instead of me guessing, could someone explain what it really means? What are these statistics of, exactly?
Good question. I just took it at face value that it's 91 out of 100 sold are macs. Even so, it seems plausible since most of what I've been reading as far as PC sales are the sub $500 netbooks. Netbooks seem to be the only growth segment for PC's. As far as sales, that is not necessarily profits!
Before computers were getting more powerful and more feature laden to attract sales, now because of the processor heat barrier, they are dropping features and making them practically useless.
I don't know, glossy screens and underpowered under performing netbooks, it's like the industry is committing business suicide or something.
Before computers were getting more powerful and more feature laden to attract sales, now because of the processor heat barrier, they are dropping features and making them practically useless.
if you think computers are now ?practically useless? and feel that vendors are making too make mistakes to attract users and be successful then you have a grande opportunity to take advantage of that.
I don't know, glossy screens and underpowered under performing netbooks, it's like the industry is committing business suicide or something.
Before computers were getting more powerful and more feature laden to attract sales, now because of the processor heat barrier, they are dropping features and making them practically useless.
All netbooks are is recession-bait. They are smaller, cheaper, less-powerful notebooks. That's it.
Swell.
But I really wish that Apple had their production facilities right here in the USA. We desperately need the money that is being spent overseas. Apple could become a trend setter.
If they were made here in the USA, they would be even more expensive and less competitive.
An American worker makes in 1 hour what many Chinese make in 1 day.
Then there are OSHA regulations and environmental regulations...
it was found that Apple made up 91 percent of the computer market priced $1,000 and up.
Hold on! This is one of those random statistics again. You're telling us (or someone is telling us) that out of every 100 computers sold that cos $1000 or over (in the US), 91 of them are Macs?
That is quite obviously complete rubbish. Even assuming that's just the consumer market (as opposed to corporate), I fail to believe that statistic.
Or is it just misleading- is it just saying that of the available computer models over $1000, 91% of them are Macs? I still find that hard to believe - surely Dell and HP and the like offer relatively similar, if not greater numbers of computer models over $1000?
Instead of me guessing, could someone explain what it really means? What are these statistics of, exactly?
The statistic was in reference to RETAIL PROFITS.
The statistic did not take into account corporate sales or consumers who bought via the web.
The statistic is only considering US RETAIL stores(Apple, Best Buy, Frys, etc.)
The statistic is also looking at PROFITS not SALES.
PCs are sold for more than a $1000 but typically don't make as much PROFIT on the sale.
Apple's typical profit margin is 30-40% so a $2000 MacBook Pro = $600-800 profit
A $2000 Sony VAIO may only generate $250-500 profit because of SONY high cost of doing business.
Apple is very good at keeping its costs down thanks to COO, Tim Cook running a very tight ship.
If they were made here in the USA, they would be even more expensive and less competitive.
An American worker makes in 1 hour what many Chinese make in 1 day.
Then there are OSHA regulations and environmental regulations...
All laptops are Taiwanese engineered and made in China nowadays. What computer part isn't made in China? Dell doesn't even make anything here in the states anymore.
Oh, and just to add, absolutely not true; Chinese workers are far more focused on their tasks.
The statistic was in reference to RETAIL PROFITS.
The statistic did not take into account corporate sales or consumers who bought via the web.
The statistic is only considering US RETAIL stores(Apple, Best Buy, Frys, etc.)
The statistic is also looking at PROFITS not SALES.
PCs are sold for more than a $1000 but typically don't make as much PROFIT on the sale.
Apple's typical profit margin is 30-40% so a $2000 MacBook Pro = $600-800 profit
A $2000 Sony VAIO may only generate $250-500 profit because of SONY high cost of doing business.
Apple is very good at keeping its costs down thanks to COO, Tim Cook running a very tight ship.
where is the data showing profit margin on >1000$ computers seperated out from the wider product range?
If they were made here in the USA, they would be even more expensive and less competitive.
An American worker makes in 1 hour what many Chinese make in 1 day.
Then there are OSHA regulations and environmental regulations...
Out of sight, out of mind I suppose. At least Apple tries to make the stuff as green as they can. With a billion+, I don't see chinese worker's rights at the forefront of any discussions. I'd bet they just drag the dead to the side so they don't have to stand on a carcass all day on the assembly line. I'm picturing something like Hoover Dam working conditions.
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