The problem with his response comes from being so far removed from the average consumer which Apple originally reached to appeal to in order to get to the place they are today.
As others have commented, research and development is always going to be a factor for any company and it is incorporated as such in their balance sheets and amortized over a number of years to reach maximum benefit.
There is nothing wrong with Apple creating a premium line either.
Apple needs to make two lines - one that is affordable for average consumers and the other for professionals.
I could see a line of non pro Apple products that should range from $500 to $1000 for computers/laptops and $400 to $800 for mobile phones, tablets, and wearables.
Apple has always been a premium brand. I have no idea what "average consumer which Apple originally reached to appeal to in order to get to the place they are today" you're talking about. Windows-based machines were always significantly cheaper than any comparative Apple computer, and Apple never sought to compete for the low-margin, low-quality markets. They have always been more than happy to let others push for the price point that sells in huge volume and loses money with each unit shipped.
I'll also note here for the 'Steve Jobs' fans that Jobs' original iPhone was so expensive ($599!) at its initial release that he later dropped the price by a third, and then (after much customer anger) issued AT&T store credit to the early adopters who paid the original price. Wait. What? I thought Steve Jobs was infallible! Ten years later, and the flagship iPhone XS is less than twice the original price of the iPhone 1, and the XR is less than twice the price of the lowered price of the original phone.
I've read elsewhere in this thread the usual uninformed complaints about incrementalism in new models from year-to-year, but if you compare the iPhone 1 to the XS or XR, the advances over a mere decade are staggering.
Everybody wants something for nothing. They want Apple to innovate, but they don't want to pay for innovation. They whine about mere "incremental" improvements from year-to-year, but would surely demand a refund if their year-old device was rendered pathetically obsolete by a new model. They groused about going too long without major updates to MacBook Pro, and then complained when it came out without legacy USB ports for old gear. Imagine if Apple actually tried to do everything all these people want at the same time. You'd get a MicroSoft Surface and Windows Phone.
Not buying Apple's argument. When the cost of a Mac mini goes up 60%, Apple Pencil 30%, Apple TV 50% or so, something else is wrong. It's not inflation, it's greed. Imagine the cost of your Toyota Camry up 30% the next year for an all-new design and more HP. It's the same thing and now imagine that if the spare tire was extra.
Apple is insanely greedy these days. I remember the days when Steve Jobs stood up and say "And it's still $ xx," where xx was the same price was last year. Not anymore. Add a 30% premium and that is the new price these days.
I make a lot more money now than what I did a few years ago, but cannot stomach seeing a $129 wireless keyboard when I can buy the same thing for $40 at some other place. Sure there may be minor issues between the two, but the issues are minor and not worth the 3x premium I have to pay.
Then fine dude. You don't have to buy Apple's argument and you also don't have to buy their products. Kinda sick of this "Apple is greedy" crap. Every single person here who calls Apple greedy would be syphoning every penny they could from their customers if they were in Apple's shoes. It's business. That's the beauty of choice. You have it.
If Apple hardware are not competitive anymore, don’t sell them. Instead, sell macOS and iOS as Services installable to other hardware and compete with Microsoft Windows and Android. If iCloud is not competitive, obviously, put iCloud into DropBox. We shall pay less, Appke can keep cost down.
Uh, no. How about if you don't want to pay for Apple stuff, you just go buy Windows and Android junk.
Apple knows what they're doing, developing the hardware and software together, so that it actually works. The real oddity is that none of the other competitors in the industry have tried creating their own closed system based on Apple's business model. Instead, they all keep repeating the Microsoft model, where the one-size-fits-all OS is bloatware by necessity, and hardware vendors have to either race to the bottom for volume sales or push out barely tested (and probably incompatible) bells and whistles (requiring more OS bloatware) just to compete with each other for scraps of marketshare. The end result is lots of cheap and/or nonstandard hardware, more opportunities for internal compatibility issues, system crashes and security vulnerabilities. To even try to stay profitable, OS vendors either have to charge for each update, design the OS to harvest and sell all its customers' data, or both. OS updates are also slow to be adopted on existing hardware (because of cost and compatibility issues) necessitating even more OS bloat to accommodate not only endless variables across current device options, but also endless variables to cover legacy devices. Why on earth would Apple look at its current level of success and decide to ditch all that in order to do what everyone else is doing? So that they can become as cheap as you want them to be? I don't think so.
The problem with his response comes from being so far removed from the average consumer which Apple originally reached to appeal to in order to get to the place they are today.
As others have commented, research and development is always going to be a factor for any company and it is incorporated as such in their balance sheets and amortized over a number of years to reach maximum benefit.
There is nothing wrong with Apple creating a premium line either.
Apple needs to make two lines - one that is affordable for average consumers and the other for professionals.
I could see a line of non pro Apple products that should range from $500 to $1000 for computers/laptops and $400 to $800 for mobile phones, tablets, and wearables.
What a joke. Apple has never appealed to the average consumer when it comes to the pricing of their Macs. Not sure which universe you're living in. Their Powerbooks of yesteryear are just as expensive as their MacBook Pros are today. Around $2500-$3000. I suppose you think the original iPhone priced at $600 subsidized reached out to the average consumer when free phones were available right? The Apple overpriced argument has been going on for nearly 20 years. They've never had an "affordable" line. Don't make stuff up.
LOL, is he really!!! This is coming from an ex apple customer and a Steve Jobs fan. You people have a choice and you could get a phone or computer that will do anything that apple promises to do and much more for literally one tenth the price. They even have the worst customer service, I sent my old imac to be fixed at their stores and due to several wrong diagnosis so they can start charge me to replace the most expensive part without actually listening to me or acknowledging the real problem, they ended up stealing it because I was late a week for picking it up and told me they threw it in the trash to be recycled and I lost $2500 and a life time of memories and hard work.
Not backing up your data is basically asking to lose those memories. All hard drives fail at some point or another.
They have ave some of the best customer service in the world. You don’t have to opt in to a repair, and you could’ve taken it elsewhere if you knew you could fix it more cheaply, had you even bothered to go pick it up. Lol, a week late? How long was it sitting there? Must’ve been previous memories on that hard drive.
The first Mac I bought with my own money was a Centris 650 for $2700USD in 1993. That’s $4700 in 2019 dollars. That’s before factoring in the 14” (11.5” viewable) Macintosh Color Display which was $589 or $1026 today.
Funny, that’s almost exactly what I just paid for my maxed out 2018 MBP and iPad Pro I just bought.
This comment makes no sense. Don’t blame shareholders. A true long-term shareholder would never defend ‘greed’ that won’t work in the long run. Companies shoot themselves in the foot with these types of pricing strategies all the time. I am a long term shareholder, and sympathetic to the argument that Apple may have done it here.
As as an aside, I’ve been working on my new $4,000 15” MBP for a few weeks now, and it’s a POS product in terms of build quality. Lousy keyboard, a largely useless eye-candy touchbar, a usb-c connector that you have to yank hard to get out, no extension cord for the power brick, a cover that dings easily (I already have two, when my heavily-used 2012 and 2015 MBPs both have zero, to-date), and an Apple logo that does not light up. And, IMHO, a screen that is inferior to my 2015 model.
You haven't bought a MacBook Pro in a while, have you? Add at least a thousand bucks or more to those numbers if you want a 15" display or a decent amount of storage.
It’s always the same story. Our puny minds can’t comprehend the expenses Apple has. Well, every company has expenses that are not materials cost. Is that really the customer’s burden to bear? I think what customers want is for some of that past R&D to start to amortize, and result in stable product lines. This unpredictable continuous rise in prices for no compelling reason has everyone concerned.
Meanwhile, our puny minds can comprehend the balance sheet, and profit is obscene. The same old story doesn’t fly.
Dont get get me wrong I think it’s perfectly fine for Apple to have a wide line of iPhone, but they’ve pushed the envelope on what a flagship model can cost and they’re not doing anything they weren’t doing 5 years ago when a flagship iPhone was $650.
The $350 manufacturing cost doesn't take R&D for hardware AND software into account. Apple develops its own OS and its own processors; nobody else does both. A flagship Samsung phone at just under $1000 is also not all that much cheaper than a flagship iPhone, but of course, it's slower and most of it's features like face and fingerprint scanning don't work as well, nor are you likely to get more than 2-years of OS support. Once you take all that into account, I don't see much of a difference in cost, being that my iPhone will get 5-years or more of OS support.
I think their prices are high. Living costs are increasing, income isn't increasing nearly the same, so premium tech products are becoming unaffordable luxuries for a lot of people. There was a time I thought $2k for a laptop was expensive, now it's above $3k for a similar model.
Some of this is down to the parts they put in. For Macs, Apple buys almost everything from other manufacturers and then puts a markup on it. I think the biggest thing Apple could do to help with Mac prices is not charge so much for SSDs. They could even sell the SSD at cost and make a healthy profit on the rest of the product.
The main upgrade that people would need to buy would be the SSD and that's when prices get really high because Apple charges over $1/GB. Things like the touchbar also added a premium to the price. There are a lot of things that can be done to help with this - Intel can stop charging so much for their CPUs or Apple replaces them, Apple can stop charging so much for SSDs, Apple can drop their margins (15% would still be healthy and cut $200 off a $3k Mac).
As others have said, I didn't get the impression they plan to adjust prices from what was said but at least they are hearing the message and hopefully they will make some adjustments in future products to help.
This comment makes no sense. Don’t blame shareholders. A true long-term shareholder would never defend ‘greed’ that won’t work in the long run. Companies shoot themselves in the foot with these types of pricing strategies all the time. I am a long term shareholder, and sympathetic to the argument that Apple may have done it here.
As as an aside, I’ve been working on my new $4,000 15” MBP for a few weeks now, and it’s a POS product in terms of build quality. Lousy keyboard, a largely useless eye-candy touchbar, a usb-c connector that you have to yank hard to get out, no extension cord for the power brick, a cover that dings easily (I already have two, when my heavily-used 2012 and 2015 MBPs both have zero, to-date), and an Apple logo that does not light up. And, IMHO, a screen that is inferior to my 2015 model.
The Apple Logo does not light up because it's no longer designed to light up anymore.
Apple's margins haven't changed in decades, as Jobs said, they just don't make junk.
This comment makes no sense. Don’t blame shareholders. A true long-term shareholder would never defend ‘greed’ that won’t work in the long run. Companies shoot themselves in the foot with these types of pricing strategies all the time. I am a long term shareholder, and sympathetic to the argument that Apple may have done it here.
As as an aside, I’ve been working on my new $4,000 15” MBP for a few weeks now, and it’s a POS product in terms of build quality. Lousy keyboard, a largely useless eye-candy touchbar, a usb-c connector that you have to yank hard to get out, no extension cord for the power brick, a cover that dings easily (I already have two, when my heavily-used 2012 and 2015 MBPs both have zero, to-date), and an Apple logo that does not light up. And, IMHO, a screen that is inferior to my 2015 model.
The Apple Logo does not light up because it's no longer designed to light up anymore.
The problem with his response comes from being so far removed from the average consumer which Apple originally reached to appeal to in order to get to the place they are today.
As others have commented, research and development is always going to be a factor for any company and it is incorporated as such in their balance sheets and amortized over a number of years to reach maximum benefit.
There is nothing wrong with Apple creating a premium line either.
Apple needs to make two lines - one that is affordable for average consumers and the other for professionals.
I could see a line of non pro Apple products that should range from $500 to $1000 for computers/laptops and $400 to $800 for mobile phones, tablets, and wearables.
What a joke. Apple has never appealed to the average consumer when it comes to the pricing of their Macs. Not sure which universe you're living in. Their Powerbooks of yesteryear are just as expensive as their MacBook Pros are today. Around $2500-$3000. I suppose you think the original iPhone priced at $600 subsidized reached out to the average consumer when free phones were available right? The Apple overpriced argument has been going on for nearly 20 years. They've never had an "affordable" line. Don't make stuff up.
It was prices like that that killed the company, as this man said
What happened at Apple, to be honest, over the years was the goal used to be to make the best computers in the world. And that was goal one. Goal two, we got from Hewlett-Packard actually which was "we have to make a profit". Because if we don't make a profit we can't do goal one. So, yeah, I mean we enjoyed making a profit, but the purpose of making a profit was so we can make the best computers in the world. Along the way somewhere those two got reversed. The goal is to make a lot of money and well, if we have to make some good computers well ok we'll do that... 'cause we can make a lot of money doing that. And, it's very subtle. It's very subtle at first, but it turns out it's everything. That one little subtle flip... takes 5 years to see it, but that one little subtle flip in 5 years means everything.
I can’t even read more than a few of these posts. Such entitled whiners...I’m certain most of you have never launched a retail product before, and are completely ignorant to costs and challenges of doing so. The prices have gone up on the top tier products which happen to do more, while lower tier options still exist. But nope, you feel entitled to top tier products at the entry level prices. Pathetic. And yes the Mac mini went up, but it’s been completely refitted with non mobile hardware and a fast bus, thus doing much more...and considering inflation from when it launched almost 15 years ago (!), it was only raised a minimal amount in exchange for that hardware.
Meanwhile, cars get more expensive every single year, this despite the internal combustion engine being a very old idea of the same basic components, with only newer technology added on top...tech which you expect to get cheaper in computing but do not question its rise in cars. Hmmm.
"The prices have gone up on the top tier products which happen to do more"
BS. Like what? Having a faster SoC of which there's very little software to take full advantage of? The ability to take pictures which are better but not significantly compared to not only previous iPhones but other top-tier Android phones? The amount of extra capability one is getting is not justified by Apple's pricing at least when it comes to iPhones
As as an aside, I’ve been working on my new $4,000 15” MBP for a few weeks now, and it’s a POS product in terms of build quality. Lousy keyboard, a largely useless eye-candy touchbar, a usb-c connector that you have to yank hard to get out, no extension cord for the power brick, a cover that dings easily (I already have two, when my heavily-used 2012 and 2015 MBPs both have zero, to-date), and an Apple logo that does not light up. And, IMHO, a screen that is inferior to my 2015 model.
Disagree on the keyboard which is great IMHO. The Touch Bar, I'm building custom buttons with BetterTouchTool for apps to trigger Automator/AppleScript Services and been taking the time to actually try to use it for more and more things. It's far from "useless" — I'd take it any day over bespoke keys for Launchpad and Mission Control etc as it was before, things I never used once.
Serious question about the "Apple logo that does not light up" thing — in what way is a glowing logo on the back of your screen an advantage to you? All signs point to their displays moving to OLED or Micro LED, in either case there will not be a backlight to illuminate a logo at all — not to mention the current thinness. I'm bewildered when I see this listed as a perceived sign of hardware quality decline from Apple.
Lousy like you don't like the way it feels, or lousy like it's broken? I have the 2016, which exhibits frequent key misbehaviour. Worse, a few commonly-used keys are wearing out. If I don't hit the Command key absolute dead-center, straight down, it doesn't register.
I really wanted to love the Touch Bar. It seems like such a great idea when you're running it around in your head, but in practice I just haven't found it useful.
Apparently with a third-party tool it can be customized, but even that doesn't do much for me. Software is written with the expectation of certain keys being present, so all that's accomplished by creating custom keys is redundant versions of what already exists. I suppose people might create shortcuts for key-combo operations, but for me that's bad practice. I often have to work on systems other than my own, so forgetting which key combinations perform certain functions is something I can't afford.
a usb-c connector that you have to yank hard to get out
Count your blessings! Mine are so loose I have to constantly check to make sure the machine is actually charging, and I keep accidentally disconnecting external drives with the slightest bump. I suspect Apple tightened them up on purpose in later models like yours. Honestly, you're better off.
I get that the cord is not widely used and many probably don't miss it. But to then charge $25 for it is insulting. Things like that make Apple look miserly and greedy. It's such a trivial issue that it bewilders me how a company with such a sharp marketing department overlooks such simple reputation hits.
It's similar to USB-C cables. "We're going to give you more flexibility, but you'll have to replace all your cables. Despite you buying a premium-priced model that costs thousands of dollars, we're not going to do anything to soften the cost of that transition. In fact, we're going to charge MORE for USB-C cables than we do for USB-A equivalents." Fuckers.
Why do you care about that? It always struck me as a kind of silly but inside-joke affectation. I'm kinda glad it went away. What did it offer that you miss?
In the wake of yesterday’s terrible no good very bad earnings warning, a bunch of people have been arguing with me on Twitter that Tim Cook is at fault for greedily raising prices to increase profits. I’ve been arguing since last year with the iPhone X that Apple isn’t raising prices, per se, but rather is making more expensive products.
But as this thread on Twitter with “Cremnob” shows, there shouldn’t even be any argument. Apple’s company-wide gross margins have been 37-38 percent for the last five years. Going back 10 years, there’s a bit more fluctuation, but the fluctuations were higher, peaking at 44 percent in 2012.
And these are company-wide numbers. Apple’s Services revenue is growing quickly (as Apple is very happy to tell you — count how many times Tim Cook mentioned it in yesterday’s letter to shareholders), and it seems like their margins on services are higher than on hardware. So if high-margin services revenue is growing but overall company gross margins are stable at 38 percent, that means their margins on hardware products like iPhone are actually shrinking.
Apparently the geniuses of the AI forum expect Apple’s R&D department to work for free.
Yes, lots of companies have R&D, but get real for a second: Samsung doesn’t innovate, they copy. The Chinese brands don’t innovate, they steal. Most vacuum clearers and cars are the same as they were two decades ago, but the ones that aren’t — like Dyson’s re-engineered stuff, or most of Tesla’s products — cost more. Oh look! Serious R&D costs serious money! Who knew?
R&D is one of many costs Apple has to bear that most other tech companies do not, either because they don’t do as much custom stuff (see also: all other PC manufacturers) or because they don’t give a damn about quality, longevity, or the environment. While Apple’s profit margin is seen as very high in the computer industry, they are very low compared to industries that do little or no innovating (clothes, jewelry, most other consumer electronics). Does anyone here think Apple should cut the profit margin in half and stop bothering to create radically new stuff like AirPods (or radically reinvented stuff like the iPad)? Should they burn through their cash pile and leave themselves open for a takeover the next time a product fails to catch on or the economy goes way south?
This is literally the best management team Apple could have, and one of the most successful companies in the entire history of business, but a bunch of armchair entrepreneurs who are delivering pizza “between empires” think Apple could just cut the cost down to where the Walmart crowd could afford it without any resulting negative consequences.
Comments
Everybody wants something for nothing. They want Apple to innovate, but they don't want to pay for innovation. They whine about mere "incremental" improvements from year-to-year, but would surely demand a refund if their year-old device was rendered pathetically obsolete by a new model. They groused about going too long without major updates to MacBook Pro, and then complained when it came out without legacy USB ports for old gear. Imagine if Apple actually tried to do everything all these people want at the same time. You'd get a MicroSoft Surface and Windows Phone.
Apple knows what they're doing, developing the hardware and software together, so that it actually works. The real oddity is that none of the other competitors in the industry have tried creating their own closed system based on Apple's business model. Instead, they all keep repeating the Microsoft model, where the one-size-fits-all OS is bloatware by necessity, and hardware vendors have to either race to the bottom for volume sales or push out barely tested (and probably incompatible) bells and whistles (requiring more OS bloatware) just to compete with each other for scraps of marketshare. The end result is lots of cheap and/or nonstandard hardware, more opportunities for internal compatibility issues, system crashes and security vulnerabilities. To even try to stay profitable, OS vendors either have to charge for each update, design the OS to harvest and sell all its customers' data, or both. OS updates are also slow to be adopted on existing hardware (because of cost and compatibility issues) necessitating even more OS bloat to accommodate not only endless variables across current device options, but also endless variables to cover legacy devices. Why on earth would Apple look at its current level of success and decide to ditch all that in order to do what everyone else is doing? So that they can become as cheap as you want them to be? I don't think so.
They have ave some of the best customer service in the world. You don’t have to opt in to a repair, and you could’ve taken it elsewhere if you knew you could fix it more cheaply, had you even bothered to go pick it up. Lol, a week late? How long was it sitting there? Must’ve been previous memories on that hard drive.
Funny, that’s almost exactly what I just paid for my maxed out 2018 MBP and iPad Pro I just bought.
As as an aside, I’ve been working on my new $4,000 15” MBP for a few weeks now, and it’s a POS product in terms of build quality. Lousy keyboard, a largely useless eye-candy touchbar, a usb-c connector that you have to yank hard to get out, no extension cord for the power brick, a cover that dings easily (I already have two, when my heavily-used 2012 and 2015 MBPs both have zero, to-date), and an Apple logo that does not light up. And, IMHO, a screen that is inferior to my 2015 model.
https://d18rn0p25nwr6d.cloudfront.net/CIK-0000320193/68027c6d-356d-46a4-a524-65d8ec05a1da.pdf
Net sales $265b, net income $59b = 22% net profit margin. PC manufacturers typically deal with under 5% net margins.
https://ycharts.com/companies/AAPL/profit_margin
I think their prices are high. Living costs are increasing, income isn't increasing nearly the same, so premium tech products are becoming unaffordable luxuries for a lot of people. There was a time I thought $2k for a laptop was expensive, now it's above $3k for a similar model.
Some of this is down to the parts they put in. For Macs, Apple buys almost everything from other manufacturers and then puts a markup on it. I think the biggest thing Apple could do to help with Mac prices is not charge so much for SSDs. They could even sell the SSD at cost and make a healthy profit on the rest of the product.
Quick comparison:
https://www.amazon.com/Dell-i7-8750H-GeForce-Infinity-400-Nits/dp/B07CTHLX8B
$1400 for 15", i7-8750H CPU, 1080p, 8GB RAM, 256GB PCIe SSD (Say $1500 for 16GB)
https://www.apple.com/shop/buy-mac/macbook-pro/15-inch
$2400 for 15", i7-8750H CPU, Retina, 16GB RAM, 256GB PCIe SSD
The main upgrade that people would need to buy would be the SSD and that's when prices get really high because Apple charges over $1/GB. Things like the touchbar also added a premium to the price. There are a lot of things that can be done to help with this - Intel can stop charging so much for their CPUs or Apple replaces them, Apple can stop charging so much for SSDs, Apple can drop their margins (15% would still be healthy and cut $200 off a $3k Mac).
As others have said, I didn't get the impression they plan to adjust prices from what was said but at least they are hearing the message and hopefully they will make some adjustments in future products to help.
Apple's margins haven't changed in decades, as Jobs said, they just don't make junk.
Who’da thunk....
What happened at Apple, to be honest, over the years was the goal used to be to make the best computers in the world. And that was goal one. Goal two, we got from Hewlett-Packard actually which was "we have to make a profit". Because if we don't make a profit we can't do goal one. So, yeah, I mean we enjoyed making a profit, but the purpose of making a profit was so we can make the best computers in the world. Along the way somewhere those two got reversed. The goal is to make a lot of money and well, if we have to make some good computers well ok we'll do that... 'cause we can make a lot of money doing that. And, it's very subtle. It's very subtle at first, but it turns out it's everything. That one little subtle flip... takes 5 years to see it, but that one little subtle flip in 5 years means everything.
I do believe that is where we are.
BS. Like what? Having a faster SoC of which there's very little software to take full advantage of? The ability to take pictures which are better but not significantly compared to not only previous iPhones but other top-tier Android phones? The amount of extra capability one is getting is not justified by Apple's pricing at least when it comes to iPhones
Serious question about the "Apple logo that does not light up" thing — in what way is a glowing logo on the back of your screen an advantage to you? All signs point to their displays moving to OLED or Micro LED, in either case there will not be a backlight to illuminate a logo at all — not to mention the current thinness. I'm bewildered when I see this listed as a perceived sign of hardware quality decline from Apple.
I really wanted to love the Touch Bar. It seems like such a great idea when you're running it around in your head, but in practice I just haven't found it useful.
Apparently with a third-party tool it can be customized, but even that doesn't do much for me. Software is written with the expectation of certain keys being present, so all that's accomplished by creating custom keys is redundant versions of what already exists. I suppose people might create shortcuts for key-combo operations, but for me that's bad practice. I often have to work on systems other than my own, so forgetting which key combinations perform certain functions is something I can't afford.
Count your blessings! Mine are so loose I have to constantly check to make sure the machine is actually charging, and I keep accidentally disconnecting external drives with the slightest bump. I suspect Apple tightened them up on purpose in later models like yours. Honestly, you're better off.
I get that the cord is not widely used and many probably don't miss it. But to then charge $25 for it is insulting. Things like that make Apple look miserly and greedy. It's such a trivial issue that it bewilders me how a company with such a sharp marketing department overlooks such simple reputation hits.
It's similar to USB-C cables. "We're going to give you more flexibility, but you'll have to replace all your cables. Despite you buying a premium-priced model that costs thousands of dollars, we're not going to do anything to soften the cost of that transition. In fact, we're going to charge MORE for USB-C cables than we do for USB-A equivalents." Fuckers.
Prepare for many, many more. The front/top edge of the lid on mine looks like a steak knife. If seems to be as soft as Silly Putty.
Why do you care about that? It always struck me as a kind of silly but inside-joke affectation. I'm kinda glad it went away. What did it offer that you miss?
Technically it's superior -- wider color gamut and dynamic range -- but specs don't say anything about human perception. What don't you like about it?
In the wake of yesterday’s terrible no good very bad earnings warning, a bunch of people have been arguing with me on Twitter that Tim Cook is at fault for greedily raising prices to increase profits. I’ve been arguing since last year with the iPhone X that Apple isn’t raising prices, per se, but rather is making more expensive products.
But as this thread on Twitter with “Cremnob” shows, there shouldn’t even be any argument. Apple’s company-wide gross margins have been 37-38 percent for the last five years. Going back 10 years, there’s a bit more fluctuation, but the fluctuations were higher, peaking at 44 percent in 2012.
And these are company-wide numbers. Apple’s Services revenue is growing quickly (as Apple is very happy to tell you — count how many times Tim Cook mentioned it in yesterday’s letter to shareholders), and it seems like their margins on services are higher than on hardware. So if high-margin services revenue is growing but overall company gross margins are stable at 38 percent, that means their margins on hardware products like iPhone are actually shrinking.
Yes, lots of companies have R&D, but get real for a second: Samsung doesn’t innovate, they copy. The Chinese brands don’t innovate, they steal. Most vacuum clearers and cars are the same as they were two decades ago, but the ones that aren’t — like Dyson’s re-engineered stuff, or most of Tesla’s products — cost more. Oh look! Serious R&D costs serious money! Who knew?
R&D is one of many costs Apple has to bear that most other tech companies do not, either because they don’t do as much custom stuff (see also: all other PC manufacturers) or because they don’t give a damn about quality, longevity, or the environment. While Apple’s profit margin is seen as very high in the computer industry, they are very low compared to industries that do little or no innovating (clothes, jewelry, most other consumer electronics). Does anyone here think Apple should cut the profit margin in half and stop bothering to create radically new stuff like AirPods (or radically reinvented stuff like the iPad)? Should they burn through their cash pile and leave themselves open for a takeover the next time a product fails to catch on or the economy goes way south?
This is literally the best management team Apple could have, and one of the most successful companies in the entire history of business, but a bunch of armchair entrepreneurs who are delivering pizza “between empires” think Apple could just cut the cost down to where the Walmart crowd could afford it without any resulting negative consequences.