Apple, Inc. and the pursuit of affordable luxury electronics

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  • Reply 61 of 270
    hill60hill60 Posts: 6,992member
    Quote:
    Originally Posted by drblank View Post



    Samsung just got a head start with the large screen phones, but once Apple focuses in on that market segment,

     

    HTC were the ones that got the "head start with the large screen phones", fat lot of good it did them.

     

    I see Samsung's campaign is still active, one of the points brought out in the latest Apple vs Samsung trial, and I quote from Samsung's email directly:-

     

    "- PR attack plan by pointing out iPhone 5's weakness (small 4 inch LCD size)"

     

    Are you really so easily misled by Samsung's propaganda?

  • Reply 62 of 270
    fearlessfearless Posts: 138member
    Wèll I'm a colourist by trade and I can tell you there is a lot of difference. I won't have a LCD screen in my suite. I barely tolerate my professional plasma. My needs are special, and I can tell the difference. The Sony LCD at home is awful. But if Apple were to choose to make a decent one, and it met my needs for accuracy and stability, I'd gladly pay its 'luxury' premium. For most people, 3D or 4K are the media- driven differentiators. For me, it's about a screen that shows me what right, what's wrong, what looks amazing or foul and looks the same tomorrow. That's what I'll pay for., and it's very hard to find.
  • Reply 63 of 270
    danielswdanielsw Posts: 906member
    Thank you for another excellent article, Mr. Dilger.

    I wish more companies were like Apple. Not just in technology but in all walks of life, I so often get the feeling that businesses think that they have to cater for the lowest common denominator. They do this because they see the cheap end of things selling well and think that that is the only way to survive.

    Create something loveable, something which has had a lot of thought, care and attention to detail invested in it, and we will buy it.

    Hear, hear!
  • Reply 64 of 270
    asdasdasdasd Posts: 5,686member
    The question shouldn't be whether the author has a goal of propagandizing. The question should be, is the information basically correct? Having said that, I'm sure I've just opened the door to those who will dig through every article written by DED and pull out tiny bits they feel aren't 100% accurate. But that's not the point either. Is this basically an accurate portrayal of the last 40 years of Apple versus its competition? Seems to me it is, given what I have seen myself and given the facts of how business has gone for those in the markets in which Apple participates. Maybe there's another theory of why Apple's competition has so often bitten the dust, one that has nothing at all to do with Apple. But that's not even the point. Apple is still standing and showing good health in each of these markets; PCs, music sales and players, smartphones, tablets. The record stands by itself.

    The problem with this attitude is it's a rewriting of history. Apple was bleeding money in the mid to late nineties, at one stage it was merely a few months from bankruptcy.

    What started Apple down that path was - as Steve Jobs pointed out - too many salesmen milking the brand in the early nineties. Keeping prices too high for too long.

    The past is not prelude but DED's propoganda is based on fetishing profit share over market share, which was actually a decision which put old Apple in jeopardy. He also ignores major declines in some markets like Spain.

    He also ignores that Tim Cook himself in the Q&A in the last conference call, who while dismissing the very cheap Android phones as mere feature phones, did say Apple was looking at some European markets where it was falling behind relative to real smart phones, and the response to that was the release of the cheaper 8G 5C. ( which most people don't understand either as it is a significant reduction in sticker prices at the £28 or €35 contract mark).

    So they do care about market share and are probably going to make the 5C the cheap off contract phone while maintaining higher margins on the top level products which might be higher priced. This is how you maintain brand and margin. The 5C is a good machine, better than most Android phones.

    Lastly profit is profit. If Apple sells more and each phone makes a profit its profit share will increase not decrease.
  • Reply 65 of 270
    dewmedewme Posts: 5,361member

    Overall good article. The only point I would emphasize to a greater extent is that "luxury" in the markets that Apple serves is not simply aesthetics. The luxury in a technology product is not about slathering on some fine "Corinthian Leather" like in a '75 Cordoba (like Samsung is humorously emulating in their latest luxury line products). Instead, technology luxury is about very effectively delivering the quality attributes that consumers really value in the products, be it reliability, performance, application and data portability across platforms and form factors, connectivity, ease of use, sustainability, security, etc.

     

    True "technology luxuries" require continuous investment in improvements by the maker that don't follow the cost reduction models that many products exhibit. A manufacturer can often find alternate or less expensive suppliers for certain components that allows them to lower product pricing while maintaining profitability. How do you cost reduce things like reliability, security, performance, usability, etc., in the face of increasing demands and necessity for these qualities? You can hire better designers and engineers and invest in improving the competencies of your existing staff, but that is only adding cost to your product. This becomes a challenge to simply sustain costs if you want to continuously improve all of those qualities in your products and product lines. The overall product can still realize some benefits from cost reduction of components and materials, but when the race to the bottom in pricing becomes the driving force you'd better believe that you're experiencing sacrifices and compromises in the essential "technology luxuries" and inherent quality of the products.

     

    No matter how much fake Corinthian Leather look you apply to the shell of your products, the true indicator of "luxury" for technology products will always be reflected in how well the products can deliver on the quality attributes that matter most to customers today and in the future. True luxury doesn't come cheap.

  • Reply 66 of 270
    fithianfithian Posts: 82member
    And then we have Tesla. That is the way that Apple would make an automobile. Compare that to the efforts of BMW who seem to have lost its way. As a hobbyist and retired mathematician, I need a new MacPro like I need a hole in my head. $6500 later I am in love with my MacPro with 12TB raid. Actually the cost was only $31 in AAPL that I purchased in the 1990's.
  • Reply 67 of 270
    Right on the money ! Now its time forApple to buy Bmw's iLine of cars, merge with Tesla and forever end the slavery of being a car owner.
  • Reply 68 of 270
    wigbywigby Posts: 692member
    cpsro wrote: »
    Samsung must be "really feeling it" now--time to spend another couple billion dollars on advertising!

    Like most people, I don't do video editing, so I can build a linux compute server that's twice as fast for my purposes as the 2013 Mac Pro (and configurable with 4X the memory) for less $$.

    So in your world most people don't do video editing but it sounds like most people can build a Linux server that is faster and cheaper than a Mac Pro. Narnia or just generic Fantasy Land?
  • Reply 69 of 270
    drblankdrblank Posts: 3,385member
    Quote:

    Originally Posted by hill60 View Post

     

     

    HTC were the ones that got the "head start with the large screen phones", fat lot of good it did them.

     

    I see Samsung's campaign is still active, one of the points brought out in the latest Apple vs Samsung trial, and I quote from Samsung's email directly:-

     

    "- PR attack plan by pointing out iPhone 5's weakness (small 4 inch LCD size)"

     

    Are you really so easily misled by Samsung's propaganda?


    HTC only makes smartphones and they are a small company with limited amounts of money to spend on advertising, etc. so they get lost in the siege of Samsung marketing/advertisements.  Samsung is sorta like the Apple of the Android market.



    Samsung will never cease to mislead people, it's obviously what they do.  

     

    Samsung never could compete by making the same size phone, their 4inch models never sold well.

     

    What's going to be funny is how long it's going to take for the Android platform to shift over to 64 bit over the entire platform.  Apple will complete that task by the end of next year.  Android platform?  They haven't even started.   I'd give the Android platform about 7 or 8 years from the date they spit out their first 64 bit product to make the transition.  Samsung's biggest problem is that they continue to make these old models that only run a ancient OS called Gingerbread for dirt cheap and they lose money on those product.  Oh well.  I think people will eventually shift away from Android for just this reason. 

     

    I honestly think Microsoft wasted money buying Nokia.  If they can't do much in sales of that platform even after the buyout, the Windows phones may just end up like Zune. 

  • Reply 70 of 270
    clemynxclemynx Posts: 1,552member
    solipsismx wrote: »
    The pundits will likely do their usual dance like they've done with the Mac, iPod, iPhone and iPad. They'll claim that Apple isn't moving fast enough and should just release something but no matter how revolutionary the product is they'll say that it's not good enough even as it becomes the de facto standard as the only viable solution moving forward.

    Of course they will. That kind of behavior is so much in their DNA now that they don't know how to write something different than that. And even if they did, their readers wouldn't like it. They are like robots now, condemned to always follow the same reasoning, however illogical it may be.
  • Reply 71 of 270
    tallest skiltallest skil Posts: 43,388member
    Originally Posted by Haggar View Post

    Seems perfectly reasonable, not "artificial". Do you dispute those reasons? Do you expect Sculley to admit that he was "artificially inflating prices" for no sensible reason? 


     

    Nope, yep, and yep. Respectively.

     


    Since every defense that people offer for Apple’s prices today can be applied just as easily in Sculley’s defense…


     

    Mmm… no.

     

    By the way, if you are going to bold Hertzfeld's words about artificially inflating prices, why not bold his last sentence also?


     

    Because his last sentence has absolutely nothing to do with modern Apple, modern Apple’s prices, and modern Apple’s way of working.

     

    That’s probably why.

     

    But I suppose now that the person whose words you bold in Steve's defense and Sculley's vilification, you would say it's a good thing Hertzfeld no longer works at Apple because he is the one betraying Apple?  


     

    Hey, look. Bold.

  • Reply 72 of 270
    All excellent points. Apple's success depends on not standing still. Revenue from their iPods has dropped off as their iPhones have taken off. But this necessity to innovate is baked into their business model and isn't some market driven externality.
  • Reply 73 of 270

    I imagine that you can't argue with much of the conclusions if the stats and sources are reliable - but you can't help but get a feeling of intense arrogance and elitism in the piece as if the most important thing that Apple should be remembered or noted for is that it made profitable desirable electronics that brought together existing technology but elevated it to cultural 'success'. Good, even great - but not noble. Its like looking at that movie 'My Big Fat Greek Wedding' and taking the time to point out all the dysfunction in the Greek family and all those who would rather be that type of family (the majority probably - for whatever reason) than the 'Dry Bread' English-like Family - though the english-like family is more stable, successful, and a better role model for society in general. So what? So what is Apple to do? Well - they could build an Apple store in sub-Saharan African complete with all the solar powered, off-the-grid, no-income, population and actually create an electronic eco-system for the 'rest of us' as in the majority of the world's population - those in poverty. The charitable tax right-off or at least public exposure would be a boon. Could Apple still be profitable, as a whole, by setting up a non(or less)-profit, poverty-based electronics market - likely. But there is possible low power, non-grid, extreme weather circumstances that scream for research and development - and the utter lack of regulation and competition could mean the development of the people through education of the techs and commercial aspect would go unopposed. Even the biggest successes in society are turning their expertise, not just money, to poverty-based technological enrichment. Besides, the upsides to the market in these places is unbounded. Its always good to be a winner, but even moreso to be a humble and charitable winner. 

  • Reply 74 of 270
    radarthekatradarthekat Posts: 3,842moderator
    Quote:
    Originally Posted by Haggar View Post

     

    Everyone should take a look at this article by Andy Hertzfeld from the original Macintosh team:

     

    http://www.folklore.org/StoryView.py?project=Macintosh&story=Price_Fight.txt

     

    In this article he recounts how Steve Jobs wanted the Mac to be affordable for everyone, and felt betrayed by John Sculley's idea to raise the price significantly.  There was even a scene of this in the Jobs movie with Ashton Kutcher.

     

    Back then, Steve had little choice but to go along with the price increase.  But when Steve came back to Apple, he had all the power to do what he believed in.  Instead of doing something about it, he ended up defending Apple's premium prices, as if he believed in it all along.

     

    So all the Apple fans who vilify Sculley now owe him a debt of gratitude for having the wisdom and vision to sell Macs with premium pricing.  I guess even Steve came around to Sculley's vision, so he also owes Sculley.


     

    Price is what you pay, value is what you get.  Apple's products, especially after considering resale price, offer much more value than the competition.

  • Reply 75 of 270
    solipsismxsolipsismx Posts: 19,566member
    Price is what you pay, value is what you get.  Apple's products, especially after considering resale price, offer much more value than the competition.

    I don't think he'll ever understand that. He's always off in some other dimension. You say that a MBP is a better value for you than a WinPC and he brings up Sculley and some comment about iSuppli. How do you have a conversation with someone that can't focus a conversation. How do you have a debate with someone you have to constantly correct over simple facts before moving on? If he was willing to learn I want to engage him more but his mission only seems to be proving that anyone that buys an Apple product is some sort of hypocrite. You should see his other posts where he copy and pastes a list of things no one has ever said but he's sure that every Apple user says constantly.
  • Reply 76 of 270
    jpellinojpellino Posts: 697member
    Luxury items? Nope.
    So I buy a $900 refurb'd Apple Laptop every five years.
    (The first big thing that'll go wrong with it already has and was fixed).
    Three years on Applecare, two on novenas.
    I part it out on eBay when the OS is no longer supported.
    Net outlay usually around $600 or $120 per year.
    My wife buys a NIB $300 HP/Acer/Dell every two or three years.
    We scramble to rescue the contents when it hardware-borks.
    We have a pile of them.
    Net outlay $600 over 5 years, or $120 per year.
    It's a wash, except for the updates and malware hair-pulling and Windows 8.

    Confounding retail model? Also nope.
    Build a better mousetrap and the world will beat a path to your door.
    (Note that this old chestnut does NOT say build the mousetrap cheaper or build it faster.)

    I'll be upgrading my iPhone 4 to a 4s this spring.
    $0 outlay.
    Why?
    It fits everything I already have.
    BT 4.0 solves my only issue.
    My arms can stand the weight difference.
    I have a real camera.
    There is no black 5c.
  • Reply 77 of 270
    radarthekatradarthekat Posts: 3,842moderator
    Quote:

    Originally Posted by asdasd View Post





    The problem with this attitude is it's a rewriting of history. Apple was bleeding money in the mid to late nineties, at one stage it was merely a few months from bankruptcy.



    What started Apple down that path was - as Steve Jobs pointed out - too many salesmen milking the brand in the early nineties. Keeping prices too high for too long.



    The past is not prelude but DED's propoganda is based on fetishing profit share over market share, which was actually a decision which put old Apple in jeopardy. He also ignores major declines in some markets like Spain.



    He also ignores that Tim Cook himself in the Q&A in the last conference call, who while dismissing the very cheap Android phones as mere feature phones, did say Apple was looking at some European markets where it was falling behind relative to real smart phones, and the response to that was the release of the cheaper 8G 5C. ( which most people don't understand either as it is a significant reduction in sticker prices at the £28 or €35 contract mark).



    So they do care about market share and are probably going to make the 5C the cheap off contract phone while maintaining higher margins on the top level products which might be higher priced. This is how you maintain brand and margin. The 5C is a good machine, better than most Android phones.



    Lastly profit is profit. If Apple sells more and each phone makes a profit its profit share will increase not decrease.

     

    Apple is not repeating the era of "keeping prices too high for too long."  This is based upon a false assumption.  A price higher than the competition represents a too high price only if the value provided does not match the price.  Today, Apple products offer more value than the competition.  iOS devices, for example, do not suffer from malware to the extent that Android devices do.  iOS devices receive updates on a regular schedule and are able to be updated more times than the typical Android device.  iOS has an app ecosystem that is better optimized for the available iDevice display sizes (pixel counts) than Android.  iOS devices have, in general, higher resale value as a percentage of their retail price (higher retained value).  So one cannot speak of prices as a means of comparing competition or determining whether price is too high.  you must think in terms of intrinsic value.  The value of Apple products, as I have just argued, is higher than the competition, which supports higher price points to reflect the higher value.

  • Reply 78 of 270
    Quote:

    Originally Posted by SolipsismX View Post





    I don't think he'll ever understand that. He's always off in some other dimension. You say that a MBP is a better value for you than a WinPC and he brings up Sculley and some comment about iSuppli. How do you have a conversation with someone that can't focus a conversation. How do you have a debate with someone you have to constantly correct over simple facts before moving on? If he was willing to learn I want to engage him more but his mission only seems to be proving that anyone that buys an Apple product is some sort of hypocrite. You should see his other posts where he copy and pastes a list of things no one has ever said but he's sure that every Apple user says constantly.

     

    Unless he is John Sculley.

  • Reply 79 of 270
    solipsismxsolipsismx Posts: 19,566member
    Unless he is John Sculley.

    I read recently that Sculley said he shouldn't have fired Jobs.

    Personally, I wonder if being pushed out of Apple was the best thing for Steve, Apple, and the consumer in the long run.
  • Reply 80 of 270
    aaronjaaronj Posts: 1,595member
    Quote:

    Originally Posted by drblank View Post

     

    I honestly think Microsoft wasted money buying Nokia.  If they can't do much in sales of that platform even after the buyout, the Windows phones may just end up like Zune. 


     

    Eh.  Microsoft's problem in the devices arena is pretty much that they were so late into the game.  It almost doesn't matter whether it's a good platform or not at this point.  They entered an arena that was already established.  The only way to be successful doing that is to come out with something revolutionary (a la Apple entering the phone arena with the iPhone).  Microsoft's never going to do that, and thus the devices are never going to be a big part of their business.

     

    MS is always -- ALWAYS -- going to be a company that primarily (if not nearly exclusively) makes profits off of licensing Windows and Office.  And let's not kid ourselves: They make a LOT of money doing that.  Why they try to be something that they aren't, something that isn't in their DNA in the first place, I have no idea really.

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