thank you alcimedes. appearently apple feels that from a business stand point, this is the best thing to do. from a consumer standpoint, it sucks that the price is up $100, but apple can't just look from the consumer standpoint. they've got a business to run. right now, they're probably going to loose money this quarter, which will f*ck with their stock price and the stock market. they're trying to offsett their losses as much as possible.
Then again, alcimedes did raise a good point while I was typing.
Personally, I would have rather seen them increase supply somehow, rather than lower demand. Afterall, they are trying to increase marketshare.
Increasing marketshare while making a profit seems to be a tricky thing to do in the computer industry these days. But it's the name of the game apparently.
Apple could have simply increased the iMac by $100-$200 when an updated Rev. B is introduced a few months later. This can be justified by adding a few improvements or speed bumps.
While charging $100 extra may net them a greater margin today, the perception of greed and general bad taste left in the mouths of many users perhaps may one day come back to haunt Apple.
<strong>Apple is handling this price increase like as if the iMac was a freaking commodity which given the price, they aren't selling it as one.</strong><hr></blockquote>
Exactly. And what if LCD prices and RAM were to drop suddenly, would the price of the iMac follow?
<strong>Apple could have simply increased the iMac by $100-$200 when an updated Rev. B is introduced a few months later. This can be justified by adding a few improvements or speed bumps.
While charging $100 extra may net them a greater margin today, the perception of greed and general bad taste left in the mouths of many users perhaps may one day come back to haunt Apple.</strong><hr></blockquote>
the goal in the business world is to make a profit. that is all apple's trying to do. they're f*ck this quarter and probably the next. they need the extra money.
you cannot tell you stock holders that your number 1 selling item is selling for a loss.
you can tell your stock holders that you have increased the margins by 8% on your best selling product due to cost decreases, or manufacturing effeciences.
apple may not lower prices every time components drop in price because they are a company that needs to make a profit to continue to exist!
you all sound like your best friend just ripped you off or something. it's Apple Corp., not Uncle John's (who you've known for years) computer shack in the basement. apple makes money. apple reports to stock holders. apple is in no position to piss off stockholders.
they have more orders than they know what to do with people. the fact that you're here bitching about how you might not place an order now is exactly what they need. not to mention making a profit on the iMacs. that's always a good thing.
repeat after me, Apple is a company, not a friend. they are in business to make money, not to make you happy. apple reports to stockholders, not you. (unless you're a stockholder, in which case take out your frustrations there)
right now Dell is doing all they can to cut the legs out from underneath every other comptuer manufacturer in the world. every company that has played into Dell's price war has gotten their asses handed to them on a silver platter.
Apple cannot compete on price, and under no circumstances should they be selling hardware for a loss.
repeat after me, Apple is a company, not a friend. they are in business to make money, not to make you happy. apple reports to stockholders, not you. (unless you're a stockholder, in which case take out your frustrations there)
</strong><hr></blockquote>
While much of what you said, I agree with I take exception to this point.
If I'm not happy (I, being a loyal Apple customer and possible future purchaser), it doesn't matter what the stockholders feel.
Sure, Apple can tell shareholders that they've got a greater margin but at what cost?
The bottomline is that the customer is the one who forks out the cash that drives the business. If the customer is not happy, there is no business.
Part of why Apple has been successful for so long is because of it's brand. It's culture and almost cult-like following.
A company like Apple who depends greatly on it's loyal customer base must treat them with respect. And while they are a corporation, the relationship in this case is a very personal one.
You gotta keep in mind that when you raise prices to reduce demand, you also reduce your overall revenue. On your pretty animated cost-sales curves, the shift is from (3x30=90 revenue) to (4x20=80 revenue). What Apple needs even less than reduced margins right now is reduced revenues. They've been steadily slipping for years, Profits are icing. Without revenue, your R&D starves.
Is there anyone else who isn't tired of this "Apple can do anything they want as long as it makes a profit" reasoning?
Hey, the Apple stores aren't making a profit so I suppose they are a bad idea right even though they expand awareness about the Mac. However in the long term, they are a great idea that will likely lead to more profits.
If Apple took a loss on these machines in the short term and it helped the platform produce larger profits in the long term, that would a better proposition.
A move like this generates tremendous bad will. It kills confidence. It angers the most loyal customers. It makes possible converts leery.
Also, while Apple will pass on supposed cost increases, the NEVER pass on component decreases. Apple added a cd-rw to the PowerMac line, raised the price $100 and finally gave that $100 back just LAST MONTH.
Where are the cost decreases from using the UMA-1 motherboard chipset? Apple hasn't introduced a new one, and the cost of producing this one must be next to nothing now since it is available even in the $799 iMac as well. Nothing has changed about the number of USB or Firewire ports. (just their locations)
Has Apple passed on the price decrease on their Airport Base Station? The entire mechanism can be had for $150 by several different vendors who are configuring the same third party hardware. Instead the price remains $300 and the option of using our computers as software base stations has disappeared as well.
How about how Apple began to worry that the iBook was a little too popular and removed the option to operate it with the lid closed? (Even though the G3 is low power and low heat)
I do not care if Apple posts a profit this quarter. The decisions they make continue to hurt their ability to make LONG TERM PROFITS. It also harms the long term prospects of the platform because of marketshare numbers.
If they had announced $150 pricedrop on the airport base station and $200 price drops on the classic iMacs, then I would believe they were really acting in the best interest of the platform and that this was just about components. But that isn't what it is about obviously.
What an unbelievably stupid move on Apple's part. I'm shocked that Apple would do this...surely they would have learned from the Cube debacle?
What I see here is that Apple cannot meet demand for the new iMacs, for whatever reason, Apple is losing sales because they cannot make enough iMacs fast enough. Apple made a choice, and it was the wrong choice. They could have:
1. Increased production to meet demand. This is the optimal long term solution, because it puts iMacs into the hands of as many users as possible. Market share increases, everyone is happy, and Apple still turns a tidy profit because volume made up for margins.
2. Don't try to meet demand, simply jack up the price so that demand falls and profits increase.
By choosing to raise the price of the iMac, Apple has demonstrated that they are not committed to increasing market share. How unfortunate.
The grim reality is that the iMac is competing with Wintel hardware that is half the price, and yet superior in every way to the new iMac: Faster RAM, faster bus speeds, higher resolution displays, more expandability, greater upgradeability. The ONLY advantage of the iMac is OS X, and there is a limit to the premium people are willing to pay for the privelidge of using OS X. Certainly Windows XP has lowered this premium further.
What is so incredibly absurd is the piss poor planning of the iMac launch. This is certainly among the worst of Apple's computer launches in history. Not only can Apple not meet demand, but they abruptly raised the price of a new computer model, WITHOUT a single update to any of the iMac's mediocre hardware.
Apple had a hit on their hands with the G4 iMac, but they are now tempting fate....a Cube debacle is brewing once again. Apple built the coolest, most awesome entry level desktop computer, and then they priced it out of everyone's reach. That was the cube, but this is the iMac. Does history repeat itself? I fear doom for the fruity computer maker. So sad...
For the record, what should Apple have done? They should have used the iMac to spearhead an effort to capture precious market share by the following means:
1. Bring iMac manufacturing up to speed so as to meet demand.
2. Lower the price on all models by $100 to even further increase demand.
3. Kick up their feet and watch the money roll in.....yes, lower margins work if volume is great enough, and the iMac had the potential to be something great for Apple.
Now the iMac is just another Apple computer. Nothing more, nothing less.
What the HELL is Apple going to do for those consumers who want a Mac but don't want to spend $1400??? Did Jobs even think about this before jacking up the iMac price?
Yeah, sure, they can buy a CRT iMac...a computer entirely incapable of competing with ANY Wintel computer. Undersized display, ancient motherboard, G3, and did I mention the tiny 15" CRT?
Apple has nothing to offer the consumer looking for a $1000 desktop computer. This is a tragic turn of events...things were looking up prior to this price increase because it seemed inevitable that the iMac's price would drop after the initial demand wore off. But it is now clear that Apple's intent is to position the iMac as a high end, professional workstation.
Again, what does Apple have to offer consumers, like students, who want a desktop for $1000 or so?
Hear that? Listen closely....it is the sound of Apple's market share plummeting into an abyss from which there is no escape.
[quote]You gotta keep in mind that when you raise prices to reduce demand, you also reduce your overall revenue. On your pretty animated cost-sales curves, the shift is from (3x30=90 revenue) to (4x20=80 revenue). <hr></blockquote> edit: oops, didn't read your post carefully enough, it was late. and i was having a hell of a time finding any image that was showing demand change due to pricing change, so that one had to do.
few things. first, you don't always lose money by increasing costs to lower demand. it depends on how much you increase cost, and what the effect on demand is (if you look at those numbers up there, you actually do make more selling 3 units at $30 than selling 4 units at $20). no one outside of Apple will know what to expect from this price increase on demand, and even they won't until a few weeks have past. that said, i'm sure they looked into this before they decided.
second, in this case, it's not that they are actually moving less units. right now they are producing at 100% capacity. so they are actually moving 5,000 per day.
for an example, let's say that Apple is taking in 7,500 orders for iMacs per day. Apple does not charge you until your order ships. so Apple gets 7,500 orders in per day, and ships and charges 5,000 iMacs per day. what happens is that every day you have 2,500 more orders that are getting backlogged. you aren't making any money on those back orders until you ship them. that means that every two days you're taking in orders, you are getting three days worth of full production for your demand. in this case the delay times just keep increasing for people to get their new product.
perhaps in the first month a few weeks delay in production is acceptable, but in the computer world, you cannot afford to have your customers placing orders and not receiving their products for close to a month or two. the hardware depreciates to quickly for that.
now let's shoot for the worst case scenario here and say that by raising the price a mere 5.5% - 7% or $100, your demand drops from 7,500 units a day to 5,000 units per day. your production capacity is still 5,000 units per day. if this were the case, Apple will always have a 3 - 5 week backorder on iMacs, and never catch up. they would be making the exact same number of sales per day, and therefore much more money by increasing the cost of the unit, while not losing a thing as far as total units sold.
but hopefully the back orders will stabilize or decrease with the increased price and therefore lower demand.
there are two things i'd like to say at this point. first, i would like to reiterate that apple cannot afford to sell the iMacs at a loss. i believe them when they said they were. (as i mentioned earlier, i believe their stockholders could/would sue if they lied about this). if apple had no backorder issues at all with the iMac line, i would approve of the price increase to keep the line profitable. the backorders just give you one more reason to raise the price.
however, raising the price on your product is a really shitty way to control demand. consumers don't like it for the most part, as they are used to products getting cheaper over time. this basically means that apple f*ed up when they estimated the cost to produce the iMacs. companies usually make assumptions as to the average long-termcost of a unit when they first make it, and price it initially below the cost to manufacture, assuming that as they make more of them, they will be more efficient in production and save money long-term.
it seems to me that apple has run into some production issues, as well as underestimating the cost of parts for their computer.
again, nothing they can do but raise the price to keep the line making money. odds are now that the line is so close to minimal margins that they won't have any leeway for price cuts in the iMac line for a long time.
ok, next....
[quote]Also, while Apple will pass on supposed cost increases, the NEVER pass on component decreases. Apple added a cd-rw to the PowerMac line, raised the price $100 and finally gave that $100 back just LAST MONTH.<hr></blockquote>
um, you just disproved your own statement. they never give it back. they finally gave it back last month. please redefine never to me while you're at it. maybe it has a different meaning when it's in all CAPS.
usually a manufacturer is not going to change their prices like gas prices. there isn't some dude who goes around and changes the ram prices every single day at the apple store based on what he finds at pricewatch.com.
they get prices, they stick with them for a few months. if the prices are high after a few months, they lower them accordingly.
[quote]I do not care if Apple posts a profit this quarter. The decisions they make continue to hurt their ability to make LONG TERM PROFITS. It also harms the long term prospects of the platform because of market share numbers.
<hr></blockquote>
many a company has run itself into the ground forsaking profits now on the pipe dream of big money in the future. long term profits are made up of quarterly profits on consistently sold items. you can't take your flagship product and sell it for a loss and hope to make long term profits. it make work in rare instances, but it is not the way to run a company.
what do you propose you do next quarter when the iMac is still selling for less than is costs to make? raise the price then? why would people be any less pissed of then than they are right now?
and finally....
[quote]If I'm not happy (I, being a loyal Apple customer and possible future purchaser), it doesn't matter what the stockholders feel.
Sure, Apple can tell shareholders that they've got a greater margin but at what cost?
<hr></blockquote>
i completely agree with you. i'm just trying to temper the rowdier of the bunch with a little common sense. giving a little air time to the other side of the coin. may have overstated its importance in the effort to balance out some of the colorful statements to the contrary.
[quote]1. Increased production to meet demand. This is the optimal long term solution, because it puts iMacs into the hands of as many users as possible. Market share increases, everyone is happy, and Apple still turns a tidy profit because volume made up for margins.
<hr></blockquote>
oh shit, i bet apple never even thought of that. increase production to meet demand
i believe this suggestion would fall into the "no shit sherlock" category.
dude, if they could make more they would. they are running production at 100%. therefore increasing production is not a viable option at this point in time.
even if they were to try and add additional plants/production facilities, it would take months to get everything retooled and ramped up to production capacity. in the short term, raising price was the only way to slow down orders to a point where they could catch up.
Comments
Wow. I didn't even know MWTY was today. I thought it was tomorrow.<hr></blockquote>
It actually was tomorrow. It's already Thursday there.
[ 03-20-2002: Message edited by: EmAn ]</p>
<strong>dumb.
I shudder to think what the press will make of this. They were doing so well with the columnists too...</strong><hr></blockquote>
Yeah, that's what I'm afraid of.
Personally, I would have rather seen them increase supply somehow, rather than lower demand. Afterall, they are trying to increase marketshare.
Increasing marketshare while making a profit seems to be a tricky thing to do in the computer industry these days. But it's the name of the game apparently.
While charging $100 extra may net them a greater margin today, the perception of greed and general bad taste left in the mouths of many users perhaps may one day come back to haunt Apple.
<strong>Apple is handling this price increase like as if the iMac was a freaking commodity which given the price, they aren't selling it as one.</strong><hr></blockquote>
Exactly. And what if LCD prices and RAM were to drop suddenly, would the price of the iMac follow?
I think not.
<strong>Apple could have simply increased the iMac by $100-$200 when an updated Rev. B is introduced a few months later. This can be justified by adding a few improvements or speed bumps.
While charging $100 extra may net them a greater margin today, the perception of greed and general bad taste left in the mouths of many users perhaps may one day come back to haunt Apple.</strong><hr></blockquote>
Nicely said.
<strong>
Exactly. And what if LCD prices and RAM were to drop suddenly, would the price of the iMac follow?
I think not.</strong><hr></blockquote>
Of course not because Steve's just looking for money this time.
you can tell your stock holders that you have increased the margins by 8% on your best selling product due to cost decreases, or manufacturing effeciences.
apple may not lower prices every time components drop in price because they are a company that needs to make a profit to continue to exist!
you all sound like your best friend just ripped you off or something. it's Apple Corp., not Uncle John's (who you've known for years) computer shack in the basement. apple makes money. apple reports to stock holders. apple is in no position to piss off stockholders.
they have more orders than they know what to do with people. the fact that you're here bitching about how you might not place an order now is exactly what they need. not to mention making a profit on the iMacs. that's always a good thing.
repeat after me, Apple is a company, not a friend. they are in business to make money, not to make you happy. apple reports to stockholders, not you. (unless you're a stockholder, in which case take out your frustrations there)
right now Dell is doing all they can to cut the legs out from underneath every other comptuer manufacturer in the world. every company that has played into Dell's price war has gotten their asses handed to them on a silver platter.
Apple cannot compete on price, and under no circumstances should they be selling hardware for a loss.
<strong>
repeat after me, Apple is a company, not a friend. they are in business to make money, not to make you happy. apple reports to stockholders, not you. (unless you're a stockholder, in which case take out your frustrations there)
</strong><hr></blockquote>
While much of what you said, I agree with I take exception to this point.
If I'm not happy (I, being a loyal Apple customer and possible future purchaser), it doesn't matter what the stockholders feel.
Sure, Apple can tell shareholders that they've got a greater margin but at what cost?
The bottomline is that the customer is the one who forks out the cash that drives the business. If the customer is not happy, there is no business.
Part of why Apple has been successful for so long is because of it's brand. It's culture and almost cult-like following.
A company like Apple who depends greatly on it's loyal customer base must treat them with respect. And while they are a corporation, the relationship in this case is a very personal one.
You gotta keep in mind that when you raise prices to reduce demand, you also reduce your overall revenue. On your pretty animated cost-sales curves, the shift is from (3x30=90 revenue) to (4x20=80 revenue). What Apple needs even less than reduced margins right now is reduced revenues. They've been steadily slipping for years, Profits are icing. Without revenue, your R&D starves.
<img src="graemlins/surprised.gif" border="0" alt="[Surprised]" />
Hey, the Apple stores aren't making a profit so I suppose they are a bad idea right even though they expand awareness about the Mac. However in the long term, they are a great idea that will likely lead to more profits.
If Apple took a loss on these machines in the short term and it helped the platform produce larger profits in the long term, that would a better proposition.
A move like this generates tremendous bad will. It kills confidence. It angers the most loyal customers. It makes possible converts leery.
Also, while Apple will pass on supposed cost increases, the NEVER pass on component decreases. Apple added a cd-rw to the PowerMac line, raised the price $100 and finally gave that $100 back just LAST MONTH.
Where are the cost decreases from using the UMA-1 motherboard chipset? Apple hasn't introduced a new one, and the cost of producing this one must be next to nothing now since it is available even in the $799 iMac as well. Nothing has changed about the number of USB or Firewire ports. (just their locations)
Has Apple passed on the price decrease on their Airport Base Station? The entire mechanism can be had for $150 by several different vendors who are configuring the same third party hardware. Instead the price remains $300 and the option of using our computers as software base stations has disappeared as well.
How about how Apple began to worry that the iBook was a little too popular and removed the option to operate it with the lid closed? (Even though the G3 is low power and low heat)
I do not care if Apple posts a profit this quarter. The decisions they make continue to hurt their ability to make LONG TERM PROFITS. It also harms the long term prospects of the platform because of marketshare numbers.
If they had announced $150 pricedrop on the airport base station and $200 price drops on the classic iMacs, then I would believe they were really acting in the best interest of the platform and that this was just about components. But that isn't what it is about obviously.
Nick
What I see here is that Apple cannot meet demand for the new iMacs, for whatever reason, Apple is losing sales because they cannot make enough iMacs fast enough. Apple made a choice, and it was the wrong choice. They could have:
1. Increased production to meet demand. This is the optimal long term solution, because it puts iMacs into the hands of as many users as possible. Market share increases, everyone is happy, and Apple still turns a tidy profit because volume made up for margins.
2. Don't try to meet demand, simply jack up the price so that demand falls and profits increase.
By choosing to raise the price of the iMac, Apple has demonstrated that they are not committed to increasing market share. How unfortunate.
The grim reality is that the iMac is competing with Wintel hardware that is half the price, and yet superior in every way to the new iMac: Faster RAM, faster bus speeds, higher resolution displays, more expandability, greater upgradeability. The ONLY advantage of the iMac is OS X, and there is a limit to the premium people are willing to pay for the privelidge of using OS X. Certainly Windows XP has lowered this premium further.
What is so incredibly absurd is the piss poor planning of the iMac launch. This is certainly among the worst of Apple's computer launches in history. Not only can Apple not meet demand, but they abruptly raised the price of a new computer model, WITHOUT a single update to any of the iMac's mediocre hardware.
Apple had a hit on their hands with the G4 iMac, but they are now tempting fate....a Cube debacle is brewing once again. Apple built the coolest, most awesome entry level desktop computer, and then they priced it out of everyone's reach. That was the cube, but this is the iMac. Does history repeat itself? I fear doom for the fruity computer maker. So sad...
For the record, what should Apple have done? They should have used the iMac to spearhead an effort to capture precious market share by the following means:
1. Bring iMac manufacturing up to speed so as to meet demand.
2. Lower the price on all models by $100 to even further increase demand.
3. Kick up their feet and watch the money roll in.....yes, lower margins work if volume is great enough, and the iMac had the potential to be something great for Apple.
Now the iMac is just another Apple computer. Nothing more, nothing less.
What the HELL is Apple going to do for those consumers who want a Mac but don't want to spend $1400??? Did Jobs even think about this before jacking up the iMac price?
Yeah, sure, they can buy a CRT iMac...a computer entirely incapable of competing with ANY Wintel computer. Undersized display, ancient motherboard, G3, and did I mention the tiny 15" CRT?
Apple has nothing to offer the consumer looking for a $1000 desktop computer. This is a tragic turn of events...things were looking up prior to this price increase because it seemed inevitable that the iMac's price would drop after the initial demand wore off. But it is now clear that Apple's intent is to position the iMac as a high end, professional workstation.
Again, what does Apple have to offer consumers, like students, who want a desktop for $1000 or so?
Hear that? Listen closely....it is the sound of Apple's market share plummeting into an abyss from which there is no escape.
<img src="confused.gif" border="0">
few things. first, you don't always lose money by increasing costs to lower demand. it depends on how much you increase cost, and what the effect on demand is (if you look at those numbers up there, you actually do make more selling 3 units at $30 than selling 4 units at $20). no one outside of Apple will know what to expect from this price increase on demand, and even they won't until a few weeks have past. that said, i'm sure they looked into this before they decided.
second, in this case, it's not that they are actually moving less units. right now they are producing at 100% capacity. so they are actually moving 5,000 per day.
for an example, let's say that Apple is taking in 7,500 orders for iMacs per day. Apple does not charge you until your order ships. so Apple gets 7,500 orders in per day, and ships and charges 5,000 iMacs per day. what happens is that every day you have 2,500 more orders that are getting backlogged. you aren't making any money on those back orders until you ship them. that means that every two days you're taking in orders, you are getting three days worth of full production for your demand. in this case the delay times just keep increasing for people to get their new product.
perhaps in the first month a few weeks delay in production is acceptable, but in the computer world, you cannot afford to have your customers placing orders and not receiving their products for close to a month or two. the hardware depreciates to quickly for that.
now let's shoot for the worst case scenario here and say that by raising the price a mere 5.5% - 7% or $100, your demand drops from 7,500 units a day to 5,000 units per day. your production capacity is still 5,000 units per day. if this were the case, Apple will always have a 3 - 5 week backorder on iMacs, and never catch up. they would be making the exact same number of sales per day, and therefore much more money by increasing the cost of the unit, while not losing a thing as far as total units sold.
but hopefully the back orders will stabilize or decrease with the increased price and therefore lower demand.
there are two things i'd like to say at this point. first, i would like to reiterate that apple cannot afford to sell the iMacs at a loss. i believe them when they said they were. (as i mentioned earlier, i believe their stockholders could/would sue if they lied about this). if apple had no backorder issues at all with the iMac line, i would approve of the price increase to keep the line profitable. the backorders just give you one more reason to raise the price.
however, raising the price on your product is a really shitty way to control demand. consumers don't like it for the most part, as they are used to products getting cheaper over time. this basically means that apple f*ed up when they estimated the cost to produce the iMacs. companies usually make assumptions as to the average long-termcost of a unit when they first make it, and price it initially below the cost to manufacture, assuming that as they make more of them, they will be more efficient in production and save money long-term.
it seems to me that apple has run into some production issues, as well as underestimating the cost of parts for their computer.
again, nothing they can do but raise the price to keep the line making money. odds are now that the line is so close to minimal margins that they won't have any leeway for price cuts in the iMac line for a long time.
ok, next....
[quote]Also, while Apple will pass on supposed cost increases, the NEVER pass on component decreases. Apple added a cd-rw to the PowerMac line, raised the price $100 and finally gave that $100 back just LAST MONTH.<hr></blockquote>
um, you just disproved your own statement. they never give it back. they finally gave it back last month. please redefine never to me while you're at it. maybe it has a different meaning when it's in all CAPS.
usually a manufacturer is not going to change their prices like gas prices. there isn't some dude who goes around and changes the ram prices every single day at the apple store based on what he finds at pricewatch.com.
they get prices, they stick with them for a few months. if the prices are high after a few months, they lower them accordingly.
[quote]I do not care if Apple posts a profit this quarter. The decisions they make continue to hurt their ability to make LONG TERM PROFITS. It also harms the long term prospects of the platform because of market share numbers.
<hr></blockquote>
many a company has run itself into the ground forsaking profits now on the pipe dream of big money in the future. long term profits are made up of quarterly profits on consistently sold items. you can't take your flagship product and sell it for a loss and hope to make long term profits. it make work in rare instances, but it is not the way to run a company.
what do you propose you do next quarter when the iMac is still selling for less than is costs to make? raise the price then? why would people be any less pissed of then than they are right now?
and finally....
[quote]If I'm not happy (I, being a loyal Apple customer and possible future purchaser), it doesn't matter what the stockholders feel.
Sure, Apple can tell shareholders that they've got a greater margin but at what cost?
<hr></blockquote>
i completely agree with you. i'm just trying to temper the rowdier of the bunch with a little common sense. giving a little air time to the other side of the coin. may have overstated its importance in the effort to balance out some of the colorful statements to the contrary.
[ 03-21-2002: Message edited by: alcimedes ]</p>
[quote]1. Increased production to meet demand. This is the optimal long term solution, because it puts iMacs into the hands of as many users as possible. Market share increases, everyone is happy, and Apple still turns a tidy profit because volume made up for margins.
<hr></blockquote>
oh shit, i bet apple never even thought of that. increase production to meet demand
i believe this suggestion would fall into the "no shit sherlock" category.
dude, if they could make more they would. they are running production at 100%. therefore increasing production is not a viable option at this point in time.
even if they were to try and add additional plants/production facilities, it would take months to get everything retooled and ramped up to production capacity. in the short term, raising price was the only way to slow down orders to a point where they could catch up.