<strong>I have to say that I don't know what "below the line costs" refers to, but I would wager that a fair amount of the work put into development of components for the Cube were transferable to the lcd iMac - miniaturization, innovative mobo design development tools, etc.</strong><hr></blockquote>
It just means that the cost of creating each completed iMac. The factors you mention in development of the Cube don't count - that's included in R&D. The below the line costs are the actual costs to Apple of the components required to build each iMac.
The problematic components in the new iMac are the LCD display and the SuperDrive (and possibly the neck), which even though Apple will buy in bulk, are very expensive compared to the alternatives (i.e. Apple's decision to make "killer new hardware" means it needs more expensive components than are required to make a complete unit). The 800MHz G4 is also a lot more expensive than, say, a fast G3 or 500MHz G4, but Apple chose the "killer" option. The neck is essential to the design of the new iMac, but an alternative design would have made the display support cheaper to manufacture.
AirSluf, the R&D costs are covered by the gross margin. If the margin is "thinner" than the typical 30% of most of Apple's product lines, then there is less profit on each iMac even if R&D costs remain constant.
There isn't a question of the R&D costs not being covered, just that making a profit becomes very tight with a reduced margin and increased below the line costs (see above).
My comparison of initial sales figures of the original iMac and the LCD iMac was based on pre-orders in the first week after each product announcement. I admit it's not a solid basis for making judgements, but it's the only indication we have at this stage.
[quote]I doubt the costs of developing the plastics, for instance, of the new iMac are more than for the old iMac. The old iMac used lots of plastic in very new ways, that required a tremendous investment in technique and equipmsnt. This new iMac isn't nearly as revolutionary as the old one ...and they saved alot on pigment costs...<hr></blockquote>
And the new iMac use a lot of metal in extraordinary ways. The armature for the LCD is stainless steel--not cheap, and not easy to work with as a material. The hemispherical shell that supports the arm is actually a metal shell (looks cast) covered by Apple's trademark white polycarb. Actually very impressive. Reminds me of a IIci in build quality.
The latest BusinessWeek on-line has a pretty good description (without details) about the new iMac and the editors didn't seem to worried about the iMac itself. They are of course guarded about Apple, but the iMac as a product line seems fine.
I think the casing and lcd came in at about $600 as under the line costs.
It just seems to me that time and time again, people have predicted Apple's death.
Not only has this not happened but Apple's future seem pretty bright despite a low market share.
These days, it's profits that matter. A bigger marketshare would be great, but what good is it if you don't make any money.
However, something tells me, Apple's on a roll. The TIME magazine cover along with Apple's retail stores and generally good press about OSX, will do wonders. It wouldn't surprise me if Apple's marketshare doubled by this time next year.
Belle, I don't think you realize how huge the new iMac is going to be. Every person I've shown it to thinks it kicks ass and they want one, and they all say how incredible the price/performance is. I've read many stories of people going into Apple stores and being blown away by this thing! Once Apple gets all the models into the channel, they are going to sell like hotcakes. Sure, the margin may not be as good, but increased unit sales will make that point moot. Apple is not going to be able to make enough of these.
Dell is just dumbfounded. He has been saying this crap for years, and Apple continues to churn out one kickass product after another and still remain profitable AND increase their marketshare, slowly, but surely. 5 years from now, I bet Dell will be saying the same thing... "Almost now, they can't hold on much longer... they're still gonna die.." and Apple will probably have around 6-7 % marketshare.
actually belle, for once i totally disagree with you.
i think Dell is slowly killing itself, and i'm not sure what they're going to do about it. Dell is hoping to drive out all competition by undercutting their prices. people get used to low prices, or they just end up creating a cadre of tiny, no budget garage PC builders. with the internet the way it is anyone can buy components dirt cheap and build a machine for less than what Dell sells them for.
Dell's problem is that i can put together a machine at 66% of the cost of the machine from Dell any day of the week, and still make money if i sell it. and Dell is working on almost no margin.
they can't last forever doing this. unlike WalMart, you don't need to go to Dell to get those good prices, and there's no store near you where you can just walk in and pick up a machine from Dell. if i've got to wait a week anyway, might as well save the money and build a machine myself.
the other huge factor that i think you may not be counting on is that people really want to be able to make home movies on DVD's. (not just for that reason all you sick minded people)
but being able to put family movies on a medium that won't degrade, and that has tons of storage space is wonderful. i know people who would have never considered a mac before taking a look at that iMac and thinking for the first time a Mac may be worth it.
all Apple has to do is provide people with a cheaper way to get a task done that people want to do, and you'll see Apple's machines selling. that's always been what has brought them up in marketshare. Apple is now trying to move into DVD authoring, and i think that's great. it's an area where they have a shot.
he he, i went back home and visited my parents and my dad, who's always hated macs for as long as i can remember was asking me about the new iMacs. when i asked him why, he said that he and my mom wanted to be able to have family movies for when we have grandkids, and would like to be able to do the DVD's themselves, and from what he's read, a mac is the only way to go.
unlike people who already have a PC and need a reason to buy something else next time around, there is a huge market of people who are looking for machines to do something completly different than what they're used to, in which case the departure from a PC to a Mac isn't that big of a leap after all.
and hell, it's got to be more secure than XP.
while apple works on the hardware side, MS is busy scaring people off with their psycho software licenses and security holes. one two combo baby!
The latest BusinessWeek on-line has a pretty good description (without details) about the new iMac and the editors didn't seem to worried about the iMac itself. They are of course guarded about Apple, but the iMac as a product line seems fine.
I think the casing and lcd came in at about $600 as under the line costs.</strong><hr></blockquote>
Thank you for the heads up about BusinessWeek. You know, $600 before you factor in other costs - hard disk, optical disk, 700/800MHz G4, motherboard, RAM, etc. is actually quite a lot. I'd bet a lot more than the old iMac case and CRT display.
[quote]Originally posted by Tarbash:
<strong>Belle, I don't think you realize how huge the new iMac is going to be.</strong><hr></blockquote>
I'm not so sure. I won't argue the point, though, it's really too hard to make predictions. Someone save this thread, we can argue next January.
[quote]Originally posted by alcimedes:
<strong>actually belle, for once i totally disagree with you.</strong><hr></blockquote>
Yikes, this is the first time you've totally disagreed with me? I should warn you that instantly lessens the value of any post you make.
Dell will do fine so long as the computer industry holds up. I too could build computer with the same specification as a Dell for a fraction of the price. Unfortunately, the vast majority of people I know outside the industry couldn't. Most "consumers" are happy to pay the extra to get the machine made, and some sort of come back if it goes wrong (no matter how miserable Dell's service and support may be).
Despite not having stores where you can walk in and pick up a Dell, it's still #1. A lot of consumers do get that - Amazon has brought online ordering to the masses. And those annoying TV commercials will have brought in a lot of new customers who are pissed at the experience of buying a PC in an electronics store.
As for the small profit margin on Dell's computers, that's fine. It's just a different model from Apple - buy all your components in bulk, get them dirt cheap, pay people peanuts to assemble them, sell them dirt cheap but by the truckload, and you're making good money.
Now I know there are arguments about quality involved here, but regarding DVD creation - I can get a Dell (equivalent spec to iMac but with 17in CRT) with a DVD+RW drive plus a free printer, and 1 year service and phone support for less than the $1799 iMac. It also comes with a $100 rebate - more than enough to buy Sonic's MyDVD Plus.
say what you want about RDF, and propaganda, but the cold truth is that 99% of all 'incompatibility' problems come from Windows being incapable, not MacOS.</strong><hr></blockquote>
And I'd assume you're the type to believe Jon Rubenstein talk about MHz Myth. So, it's true to a point. But don't tell me that the DP 800 G4 will quash a top of the line Athlon MP system. It falls drastically short. I'm aware of the '10 Myths' on Apple's page, but the car analogy as they have it is bad. I'm not saying that all of the rest of the PC only programs are all worth using or that there aren't equivalents for Mac OS. I know that most of the mainstream apps and games are ported to the Mac OS platform. With those in mind, look at all of the great software titles that are available for Windows only. Look at all of the sweet hardware that currently lack drivers for Mac OS. If things are ported, it's usually not a simultaneous release. The Jeep vs regular car analogy is a bit better.
Fred Anderson covered a lot of this ground in the conference call:
The profit margin on the new iMac for this quarter will be abnormally thin because of component costs and the sort of inefficiencies that crop up when you start assembling a product.
The profit margin on the new iMac is not expected to be as good as it was on the old iMac in the forseeable future. Apple will strive to improve it, of course, but Fred basically told the analysts to say goodbye to 30%.
Apple is intentionally trading profit margin in an attempt to gain market share. That's straight from the CFO. So it's not surprising that Apple will have to gain market share, is it? They're basing their financial model on it, after all.
I don't believe that Apple is going to try to grow market share purely in the consumer market. I see a multi-pronged strategy. But there's no question that they're pushing aggressively now, and they're making the necessary adjustments (volume vs. profit per unit) in order to do so.
I have to agree with Belle that most of the furor expressed in this thread over Dell's statement seems to come from the fact that Dell said it. All he did, essentially, was quote Fred Anderson back to the reporter. After all, imitation is what he's good at.
<strong>Firstly, do you dispute that Apple's below the line costs are increased due to the cost of components for the new iMac? If this is the case, the model is not sustainable, even maintaining margins at 30%. Apple is making a minimal profit so far in 2002, and made a loss in 2001. It needs to make more money, and the only way to do that is ship more units.</strong><hr></blockquote>
I probably should keep my nose out of this, but:
You're right, obviously. If the profit from each new iMac is less than the profit from each old iMac, they need to sell more of the new ones to maintain the same iMac profit level. However, since you're talking year-over-year (you mentioned last year's loss), how well did the old iMacs sell last year? You can't talk about just last year for profits and then talk about the entire lifetime of the iMac for units sold. Stick to the same time frame.
Personally, I think the new iMac will sell more units this year than the old one sold last year. Could be wrong. Like I said, it all depends on how well the iMac did last year.
According to unnamed marketing sources from within Dell, approximately $320 million of their R&D costs went toward determining that 67% of people in the 18-34 age group are "much more likely" to feel good about buying a Dell computer when prompted to do so by a young man named Steve wearing tight trousers.
<strong>[Lots of stuff I deleted]</strong><hr></blockquote>
Dagnabbit, I hate it when someone comes along and makes the point I've been trying to make (before getting distracted) much more succinctly than I could ever manage.
You make a very good point about Apple's plans hinging on all products, not just the iMac. I used that example because it's the product that elicited the comment from Dell.
But can Apple afford to take a risk on reduced profit across the range, with no guarantees of increasing its customer base? Especially because it would appear it doesn't currently have the necessary components to "bump" the Power Mac range in such an impressive way as it has just bumped the iMac, an act that the vast majority of posters here seem to think is vital.
[quote]Originally posted by spotbug:
<strong>I probably should keep my nose out of this, but:
You're right, obviously. If the profit from each new iMac is less than the profit from each old iMac, they need to sell more of the new ones to maintain the same iMac profit level. However, since you're talking year-over-year (you mentioned last year's loss), how well did the old iMacs sell last year? You can't talk about just last year for profits and then talk about the entire lifetime of the iMac for units sold. Stick to the same time frame.
Personally, I think the new iMac will sell more units this year than the old one sold last year. Could be wrong. Like I said, it all depends on how well the iMac did last year.</strong><hr></blockquote>
No! Stick your nose in. It's kind of fun.
I did talk about last years loss, but my comparison of iMac sales was with the initial release in 1998, which brought a good increase in revenues and decent profit. If the new iMac (which I think we're all finally agreed will make a great deal less profit per unit) doesn't sell as well as the original Bondi iMac, that good increase and decent profit could well be a loss.
I do get your point that iMac sales in 2001 were pretty miserable, due to the products age and specifications as much as any economic issues, and therefore sales could not be any worse than last year. But as far as profits are concerned, you have to examine the recent launch with a comparable new product introduction, and with a time in Apple's history where it was actually making some money.
[quote]Originally posted by Super Flippy:
<strong>According to unnamed marketing sources from within Dell, approximately $320 million of their R&D costs went toward determining that 67% of people in the 18-34 age group are "much more likely" to feel good about buying a Dell computer when prompted to do so by a young man named Steve wearing tight trousers.</strong><hr></blockquote>
Apparently there was also an unexplained $40,000 spend in Dell's financial report. Investigators found Gap receipts for jeans and black polo-necks totalling $40,000 in Michael Dell's trash. Coincidence?
[quote]Originally posted by tsukurite:
<strong>hmmm....
Belle
Dell
Belle
Dell
Sorta interestin' don't cha think?</strong><hr></blockquote>
You got me, I work for Dell.*
* Untrue. I do however work for a one time "enemy" of Apple.
[quote]<strong>You make a very good point about Apple's plans hinging on all products, not just the iMac. I used that example because it's the product that elicited the comment from Dell.</strong><hr></blockquote>
Actually, that's not what I meant, although I do agree with it. I posted a more detailed <a href="http://www.xsorbit1.com/users/flamingo/index.cgi?board=General_Discussion&action=display&; num=1011404468" target="_blank">analysis</a> over at Bad Flamingo. In a nutshell: I see signs pointing to a push into enterprise, part of which involves reconceptualizing some traditional markets as enterprise.
[quote]<strong>But can Apple afford to take a risk on reduced profit across the range, with no guarantees of increasing its customer base?</strong><hr></blockquote>
If the result was guaranteed it wouldn't be a risk, would it? But then, since risk-taking is a longtime Apple strategy I don't see anything unusual or exceptional going on.
[quote]<strong>I do however work for a one time "enemy" of Apple.</strong><hr></blockquote>
<strong>Actually, that's not what I meant, although I do agree with it. I posted a more detailed analysis over at Bad Flamingo. In a nutshell: I see signs pointing to a push into enterprise, part of which involves reconceptualizing some traditional markets as enterprise.</strong><hr></blockquote>
The problem I see with this is something mentioned in your Bad Flamingo thread that wasn't really covered in any depth.
The general perception is that the "enterprise" market is full of companies running Microsoft Office on Windows PCs sitting on networks served by huge banks of Windows servers (, I know there's Sun, Linux, etc. but it comes down to the same thing).
However the truth is that most big enterprises (Insurance companies, banks, call centers, support services, etc.) run bespoke software applications. Admittedly these are generally written on top of generic databases like Oracle, but these companies have typically invested huge amounts of money in software development and maintenance, licenses, hardware, and support. If a company made the decision to switch to Mac, chances are the software developer (which also maintains the applications and offers support) doesn't develop for Mac. They're typically Windows-only outfits (and still quite often DOS!). So the code would have to be handed over to a Mac development outfit (if you can find one) and either ported or completely rewritten. Neither option is cheap.
The alternative is for Apple to just offer back office hardware - servers which are often Sun or Linux systems with a Windows network running off them. Trouble is, Microsoft have made it too easy to choose servers running Microsoft server products unless you operate an intranet or use Sun workstations (Whatever happened to thin clients?).
And if you require Intel/AMD based hardware to run Windows out in the office, Dell will make you an offer you can't refuse if you also buy its server products for the back office.
[quote]<strong>If the result was guaranteed it wouldn't be a risk, would it? But then, since risk-taking is a longtime Apple strategy I don't see anything unusual or exceptional going on.</strong><hr></blockquote>
There certainly aren't any guarantees, and without a solid foothold in one market, it's incredibly dangerous (almost foolish) to attempt to corner another.
[quote]<strong>IBM?</strong><hr></blockquote>
For a bonus point.
And we've got some serious processing power here that'll make the Athlon look like an abacus with missing beads.*
Comments
<strong>I have to say that I don't know what "below the line costs" refers to, but I would wager that a fair amount of the work put into development of components for the Cube were transferable to the lcd iMac - miniaturization, innovative mobo design development tools, etc.</strong><hr></blockquote>
It just means that the cost of creating each completed iMac. The factors you mention in development of the Cube don't count - that's included in R&D. The below the line costs are the actual costs to Apple of the components required to build each iMac.
The problematic components in the new iMac are the LCD display and the SuperDrive (and possibly the neck), which even though Apple will buy in bulk, are very expensive compared to the alternatives (i.e. Apple's decision to make "killer new hardware" means it needs more expensive components than are required to make a complete unit). The 800MHz G4 is also a lot more expensive than, say, a fast G3 or 500MHz G4, but Apple chose the "killer" option. The neck is essential to the design of the new iMac, but an alternative design would have made the display support cheaper to manufacture.
AirSluf, the R&D costs are covered by the gross margin. If the margin is "thinner" than the typical 30% of most of Apple's product lines, then there is less profit on each iMac even if R&D costs remain constant.
There isn't a question of the R&D costs not being covered, just that making a profit becomes very tight with a reduced margin and increased below the line costs (see above).
My comparison of initial sales figures of the original iMac and the LCD iMac was based on pre-orders in the first week after each product announcement. I admit it's not a solid basis for making judgements, but it's the only indication we have at this stage.
And the new iMac use a lot of metal in extraordinary ways. The armature for the LCD is stainless steel--not cheap, and not easy to work with as a material. The hemispherical shell that supports the arm is actually a metal shell (looks cast) covered by Apple's trademark white polycarb. Actually very impressive. Reminds me of a IIci in build quality.
The latest BusinessWeek on-line has a pretty good description (without details) about the new iMac and the editors didn't seem to worried about the iMac itself. They are of course guarded about Apple, but the iMac as a product line seems fine.
I think the casing and lcd came in at about $600 as under the line costs.
Not only has this not happened but Apple's future seem pretty bright despite a low market share.
These days, it's profits that matter. A bigger marketshare would be great, but what good is it if you don't make any money.
However, something tells me, Apple's on a roll. The TIME magazine cover along with Apple's retail stores and generally good press about OSX, will do wonders. It wouldn't surprise me if Apple's marketshare doubled by this time next year.
Dell is just dumbfounded. He has been saying this crap for years, and Apple continues to churn out one kickass product after another and still remain profitable AND increase their marketshare, slowly, but surely. 5 years from now, I bet Dell will be saying the same thing... "Almost now, they can't hold on much longer... they're still gonna die.." and Apple will probably have around 6-7 % marketshare.
i think Dell is slowly killing itself, and i'm not sure what they're going to do about it. Dell is hoping to drive out all competition by undercutting their prices. people get used to low prices, or they just end up creating a cadre of tiny, no budget garage PC builders. with the internet the way it is anyone can buy components dirt cheap and build a machine for less than what Dell sells them for.
Dell's problem is that i can put together a machine at 66% of the cost of the machine from Dell any day of the week, and still make money if i sell it. and Dell is working on almost no margin.
they can't last forever doing this. unlike WalMart, you don't need to go to Dell to get those good prices, and there's no store near you where you can just walk in and pick up a machine from Dell. if i've got to wait a week anyway, might as well save the money and build a machine myself.
the other huge factor that i think you may not be counting on is that people really want to be able to make home movies on DVD's. (not just for that reason all you sick minded people)
but being able to put family movies on a medium that won't degrade, and that has tons of storage space is wonderful. i know people who would have never considered a mac before taking a look at that iMac and thinking for the first time a Mac may be worth it.
all Apple has to do is provide people with a cheaper way to get a task done that people want to do, and you'll see Apple's machines selling. that's always been what has brought them up in marketshare. Apple is now trying to move into DVD authoring, and i think that's great. it's an area where they have a shot.
he he, i went back home and visited my parents and my dad, who's always hated macs for as long as i can remember was asking me about the new iMacs. when i asked him why, he said that he and my mom wanted to be able to have family movies for when we have grandkids, and would like to be able to do the DVD's themselves, and from what he's read, a mac is the only way to go.
unlike people who already have a PC and need a reason to buy something else next time around, there is a huge market of people who are looking for machines to do something completly different than what they're used to, in which case the departure from a PC to a Mac isn't that big of a leap after all.
and hell, it's got to be more secure than XP.
while apple works on the hardware side, MS is busy scaring people off with their psycho software licenses and security holes. one two combo baby!
-alcimedes
<strong>Thanks for the explanation, Belle.
The latest BusinessWeek on-line has a pretty good description (without details) about the new iMac and the editors didn't seem to worried about the iMac itself. They are of course guarded about Apple, but the iMac as a product line seems fine.
I think the casing and lcd came in at about $600 as under the line costs.</strong><hr></blockquote>
Thank you for the heads up about BusinessWeek. You know, $600 before you factor in other costs - hard disk, optical disk, 700/800MHz G4, motherboard, RAM, etc. is actually quite a lot. I'd bet a lot more than the old iMac case and CRT display.
[quote]Originally posted by Tarbash:
<strong>Belle, I don't think you realize how huge the new iMac is going to be.</strong><hr></blockquote>
I'm not so sure. I won't argue the point, though, it's really too hard to make predictions. Someone save this thread, we can argue next January.
[quote]Originally posted by alcimedes:
<strong>actually belle, for once i totally disagree with you.</strong><hr></blockquote>
Yikes, this is the first time you've totally disagreed with me? I should warn you that instantly lessens the value of any post you make.
Dell will do fine so long as the computer industry holds up. I too could build computer with the same specification as a Dell for a fraction of the price. Unfortunately, the vast majority of people I know outside the industry couldn't. Most "consumers" are happy to pay the extra to get the machine made, and some sort of come back if it goes wrong (no matter how miserable Dell's service and support may be).
Despite not having stores where you can walk in and pick up a Dell, it's still #1. A lot of consumers do get that - Amazon has brought online ordering to the masses. And those annoying TV commercials will have brought in a lot of new customers who are pissed at the experience of buying a PC in an electronics store.
As for the small profit margin on Dell's computers, that's fine. It's just a different model from Apple - buy all your components in bulk, get them dirt cheap, pay people peanuts to assemble them, sell them dirt cheap but by the truckload, and you're making good money.
Now I know there are arguments about quality involved here, but regarding DVD creation - I can get a Dell (equivalent spec to iMac but with 17in CRT) with a DVD+RW drive plus a free printer, and 1 year service and phone support for less than the $1799 iMac. It also comes with a $100 rebate - more than enough to buy Sonic's MyDVD Plus.
<strong>
umm, yeah, ok...
how about you pull your ford festiva over and read this...
<a href="http://www.apple.com/myths/"; target="_blank">http://www.apple.com/myths/</a>;
in particular, myth #2.
say what you want about RDF, and propaganda, but the cold truth is that 99% of all 'incompatibility' problems come from Windows being incapable, not MacOS.</strong><hr></blockquote>
And I'd assume you're the type to believe Jon Rubenstein talk about MHz Myth. So, it's true to a point. But don't tell me that the DP 800 G4 will quash a top of the line Athlon MP system. It falls drastically short. I'm aware of the '10 Myths' on Apple's page, but the car analogy as they have it is bad. I'm not saying that all of the rest of the PC only programs are all worth using or that there aren't equivalents for Mac OS. I know that most of the mainstream apps and games are ported to the Mac OS platform. With those in mind, look at all of the great software titles that are available for Windows only. Look at all of the sweet hardware that currently lack drivers for Mac OS. If things are ported, it's usually not a simultaneous release. The Jeep vs regular car analogy is a bit better.
The profit margin on the new iMac for this quarter will be abnormally thin because of component costs and the sort of inefficiencies that crop up when you start assembling a product.
The profit margin on the new iMac is not expected to be as good as it was on the old iMac in the forseeable future. Apple will strive to improve it, of course, but Fred basically told the analysts to say goodbye to 30%.
Apple is intentionally trading profit margin in an attempt to gain market share. That's straight from the CFO. So it's not surprising that Apple will have to gain market share, is it? They're basing their financial model on it, after all.
I don't believe that Apple is going to try to grow market share purely in the consumer market. I see a multi-pronged strategy. But there's no question that they're pushing aggressively now, and they're making the necessary adjustments (volume vs. profit per unit) in order to do so.
I have to agree with Belle that most of the furor expressed in this thread over Dell's statement seems to come from the fact that Dell said it. All he did, essentially, was quote Fred Anderson back to the reporter. After all, imitation is what he's good at.
[ 01-22-2002: Message edited by: Amorph ]</p>
<strong>Firstly, do you dispute that Apple's below the line costs are increased due to the cost of components for the new iMac? If this is the case, the model is not sustainable, even maintaining margins at 30%. Apple is making a minimal profit so far in 2002, and made a loss in 2001. It needs to make more money, and the only way to do that is ship more units.</strong><hr></blockquote>
I probably should keep my nose out of this, but:
You're right, obviously. If the profit from each new iMac is less than the profit from each old iMac, they need to sell more of the new ones to maintain the same iMac profit level. However, since you're talking year-over-year (you mentioned last year's loss), how well did the old iMacs sell last year? You can't talk about just last year for profits and then talk about the entire lifetime of the iMac for units sold. Stick to the same time frame.
Personally, I think the new iMac will sell more units this year than the old one sold last year. Could be wrong. Like I said, it all depends on how well the iMac did last year.
<strong>
Dell
Net Revenue - $31888 million
R&D costs - $482 million
</strong><hr></blockquote>
According to unnamed marketing sources from within Dell, approximately $320 million of their R&D costs went toward determining that 67% of people in the 18-34 age group are "much more likely" to feel good about buying a Dell computer when prompted to do so by a young man named Steve wearing tight trousers.
Belle
Dell
Belle
Dell
Sorta interestin' don't cha think?
tsukurite
<strong>[Lots of stuff I deleted]</strong><hr></blockquote>
Dagnabbit, I hate it when someone comes along and makes the point I've been trying to make (before getting distracted) much more succinctly than I could ever manage.
You make a very good point about Apple's plans hinging on all products, not just the iMac. I used that example because it's the product that elicited the comment from Dell.
But can Apple afford to take a risk on reduced profit across the range, with no guarantees of increasing its customer base? Especially because it would appear it doesn't currently have the necessary components to "bump" the Power Mac range in such an impressive way as it has just bumped the iMac, an act that the vast majority of posters here seem to think is vital.
[quote]Originally posted by spotbug:
<strong>I probably should keep my nose out of this, but:
You're right, obviously. If the profit from each new iMac is less than the profit from each old iMac, they need to sell more of the new ones to maintain the same iMac profit level. However, since you're talking year-over-year (you mentioned last year's loss), how well did the old iMacs sell last year? You can't talk about just last year for profits and then talk about the entire lifetime of the iMac for units sold. Stick to the same time frame.
Personally, I think the new iMac will sell more units this year than the old one sold last year. Could be wrong. Like I said, it all depends on how well the iMac did last year.</strong><hr></blockquote>
No! Stick your nose in. It's kind of fun.
I did talk about last years loss, but my comparison of iMac sales was with the initial release in 1998, which brought a good increase in revenues and decent profit. If the new iMac (which I think we're all finally agreed will make a great deal less profit per unit) doesn't sell as well as the original Bondi iMac, that good increase and decent profit could well be a loss.
I do get your point that iMac sales in 2001 were pretty miserable, due to the products age and specifications as much as any economic issues, and therefore sales could not be any worse than last year. But as far as profits are concerned, you have to examine the recent launch with a comparable new product introduction, and with a time in Apple's history where it was actually making some money.
[quote]Originally posted by Super Flippy:
<strong>According to unnamed marketing sources from within Dell, approximately $320 million of their R&D costs went toward determining that 67% of people in the 18-34 age group are "much more likely" to feel good about buying a Dell computer when prompted to do so by a young man named Steve wearing tight trousers.</strong><hr></blockquote>
Apparently there was also an unexplained $40,000 spend in Dell's financial report. Investigators found Gap receipts for jeans and black polo-necks totalling $40,000 in Michael Dell's trash. Coincidence?
[quote]Originally posted by tsukurite:
<strong>hmmm....
Belle
Dell
Belle
Dell
Sorta interestin' don't cha think?</strong><hr></blockquote>
You got me, I work for Dell.*
* Untrue. I do however work for a one time "enemy" of Apple.
[quote]<strong>You make a very good point about Apple's plans hinging on all products, not just the iMac. I used that example because it's the product that elicited the comment from Dell.</strong><hr></blockquote>
Actually, that's not what I meant, although I do agree with it.
[quote]<strong>But can Apple afford to take a risk on reduced profit across the range, with no guarantees of increasing its customer base?</strong><hr></blockquote>
If the result was guaranteed it wouldn't be a risk, would it? But then, since risk-taking is a longtime Apple strategy I don't see anything unusual or exceptional going on.
[quote]<strong>I do however work for a one time "enemy" of Apple.</strong><hr></blockquote>
IBM?
<strong>Actually, that's not what I meant, although I do agree with it. I posted a more detailed analysis over at Bad Flamingo. In a nutshell: I see signs pointing to a push into enterprise, part of which involves reconceptualizing some traditional markets as enterprise.</strong><hr></blockquote>
The problem I see with this is something mentioned in your Bad Flamingo thread that wasn't really covered in any depth.
The general perception is that the "enterprise" market is full of companies running Microsoft Office on Windows PCs sitting on networks served by huge banks of Windows servers (, I know there's Sun, Linux, etc. but it comes down to the same thing).
However the truth is that most big enterprises (Insurance companies, banks, call centers, support services, etc.) run bespoke software applications. Admittedly these are generally written on top of generic databases like Oracle, but these companies have typically invested huge amounts of money in software development and maintenance, licenses, hardware, and support. If a company made the decision to switch to Mac, chances are the software developer (which also maintains the applications and offers support) doesn't develop for Mac. They're typically Windows-only outfits (and still quite often DOS!). So the code would have to be handed over to a Mac development outfit (if you can find one) and either ported or completely rewritten. Neither option is cheap.
The alternative is for Apple to just offer back office hardware - servers which are often Sun or Linux systems with a Windows network running off them. Trouble is, Microsoft have made it too easy to choose servers running Microsoft server products unless you operate an intranet or use Sun workstations (Whatever happened to thin clients?).
And if you require Intel/AMD based hardware to run Windows out in the office, Dell will make you an offer you can't refuse if you also buy its server products for the back office.
[quote]<strong>If the result was guaranteed it wouldn't be a risk, would it? But then, since risk-taking is a longtime Apple strategy I don't see anything unusual or exceptional going on.</strong><hr></blockquote>
There certainly aren't any guarantees, and without a solid foothold in one market, it's incredibly dangerous (almost foolish) to attempt to corner another.
[quote]<strong>IBM?</strong><hr></blockquote>
For a bonus point.
And we've got some serious processing power here that'll make the Athlon look like an abacus with missing beads.*
* Should be shipping sometime around 2015-2020.
[ 01-22-2002: Message edited by: Belle ]</p>
i tried a few but didn't find any.