What one of Apple's big announcements should be......
Speed bump the eMac, cut the margin to 10% (5% of which goes to the reseller) and put those puppies everywhere. It's time to put up or shut up, Steve-O. Really want that other 95%? Then you have to take the gloves off. I think apple could sell a 800 Mhz G4 eMac for $899 and scoot by. More importantly, it'd get these suckers onto school desks and in to the market in much bigger numbers. (I'd love to see eMacs at Wal*Mart, though I know it will never happen.) I'd love to see a G5. I'd love to see 2Ghz. I'd love to see iWhatever, but I'd really just like to see more Mac users. My bet is Apple might, too. I think Mac users "grow" in to their mac experience, like all my mac friends have. They started small, with a performa or something similar and moved into the high end when they could. Making the leap to a Mac or the leap to a computer the first time is scary for 2/3rds of the populace. They don't want to spend a ton of cash and find out they made a mistake. They'd rather ease into the experience. This is where apple needs to feast. Steve-O, are you listening?
When the G5 comes out, do you really believe first time computer buyers will say "HEY! The G5 is here! That settles it, honey, I'm gonna buy one of them Mac things"?!? Let's face it PEOPLE WHO ALREADY USE MACS care most about the G5 when it comes, Apple will sell a 1/4 million to current G4 users in that quarter alone. Let's not be greedy folks, let share the macs with everyone.
"I'd like to buy the world a mac, and keep it company (that's the real thing)"
When the G5 comes out, do you really believe first time computer buyers will say "HEY! The G5 is here! That settles it, honey, I'm gonna buy one of them Mac things"?!? Let's face it PEOPLE WHO ALREADY USE MACS care most about the G5 when it comes, Apple will sell a 1/4 million to current G4 users in that quarter alone. Let's not be greedy folks, let share the macs with everyone.
"I'd like to buy the world a mac, and keep it company (that's the real thing)"
Comments
Actually, about five - six years ago or so at MWSF IBM was promoting the PPC. I still have one of the nifty boxes they were handing out. It was a cardboard box the size of a brief case with a handle. On the side was a slot into which you could slide brochures and such as you patrolled the exhibits.
I just clicked on mine to check it and was sent somewhere else, and now Neutrino's lost in the Twilight Zone
<strong>Something weird is going on......the posts are getting mixed up..
I just clicked on mine to check it and was sent somewhere else, and now Neutrino's lost in the Twilight Zone</strong><hr></blockquote>
I think the whole thread I responded to disappeared. Someone complaining that Motorola wouldn't have a booth at MWNY.
It's nothing we did, but UBB seems to be getting flaky again.
But they could certainly try what you mention with a G3 iMac priced between 500-600.
I think its fairly obvious that you haven't sold a Mac in recent years. Resellers haven't made over 5% on Macs in 3-4 years across the line.
[quote] I think apple could sell a 800 Mhz G4 eMac for $899 and scoot by. More importantly, it'd get these suckers onto school desks and in to the market in much bigger numbers <hr></blockquote>
Ok so you want Apple to ship boxes but make no money on them? How do they turn a profit..make it up an sales. Not going to work. Apple designs their hardware a little more than the PC repackager shipping boring beige ATX Cases. Apple has never been about "just" being like the other guys. You pay a little more for Macintosh and you should expect more.
[quote] They don't want to spend a ton of cash and find out they made a mistake. They'd rather ease into the experience. <hr></blockquote>
This is EXACTLY who apple does well with. First time buyers and wouldn't you spend a little more money as a newbie to have it done right the first time?
Apple success IMO is not predicated on them being cheaper. Their success is going to be offering a compelling solution that couples good HW with GREAT SW. Computers frankly have allowed some users to accomplish tasks that previously were not capable but they also can slow you down. Efficiency is key and time is money. The relative small difference in Mac vs PC prices is severely overplayed.
Anytime you take Apple to task for prices temper your words by playing Devils Advocate. If you were a shareholder...would you think the same?
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This is EXACTLY who apple does well with. First time buyers and wouldn't you spend a little more money as a newbie to have it done right the first time?
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Nope, you've got that argument ass backwards. That's not CONSUMER thinking. "Oh Gee, I'm already spending $1000, let me kick in another $500 to get an iMac instead of a eMac. After all, I want to do this right!" LOL
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Apple success IMO is not predicated on them being cheaper. Their success is going to be offering a compelling solution that couples good HW with GREAT SW. Computers frankly have allowed some users to accomplish tasks that previously were not capable but they also can slow you down. Efficiency is key and time is money. The relative small difference in Mac vs PC prices is severely overplayed.
Anytime you take Apple to task for prices temper your words by playing Devils Advocate. If you were a shareholder...would you think the same?</strong><hr></blockquote>
If you were reading my post carefully, you would have noticed that I mentioned no other computers in Apple's lineup. For Apple to commodotize computers would be a mistake, but to push ONE MODEL out there for the little guys makes excellent sense. Would I buy one? Maybe, as a second machine. As far as being a shareholder goes, I'd rather sell 350K+ eMacs at $899 than 200K emacs at $1099. Make a little money and increase market share. LONG TERM THINKING.
It's no longer a price war. Perceived speed is killing us as well. You've seen the commercials for a Gateway 15" flat panel P4 2 Ghz system for $899, right? Do I think it's a piece of crap? ABSOLUTELY. Well they sell hundreds of thousands? ABSOLUTELY. Apple has clearly defined market share as a measure of progress, let's see them make a real effort.
[ 06-14-2002: Message edited by: Mack Damon ]</p>
The only thing Apple needs to do is be diligent in its plan (um, but a new PowerMac is sorely needed), be aggressive in advertising and be sure they can deliver the hot product when there is a demand.
Your notion that makers must kill prices to gain market share is exactly what got these PC makers in a money-bind. Nobody wins a pricing cold-war.... even the customer loses in the end.
[ 06-14-2002: Message edited by: wdegroot ]</p>
Apple is not stupid..they realize that gutting the profits on the eMac simply means that users who could and probably would move up and buy a more expensive Mac would now simply purchase the "loss leader" eMac.
I've been in Sales long enough to know it's easier to talk someone down form a more expensive item than to step off that bare bones loss leader. Sales 101 guys. Your ideas sound great on paper but would have you guys starving at the dinner table.
My experience in Seattle shows me that new users are willing to spend more if the features versus benefits are clearly shown. The Devil is always in the details.
We're talking computers here. Whatever you buy, whatever you spend, the thing won't be worth a dime after 4 years. Quality? We aren't talking about homes, or suits, or even cars (another huge money waster). We're talking computers, about the only thing that depreciates faster is an open can of tuna.
This is both a good thing and a bad thing. You buy the experience you like, that will run the software you need (of the day and near future), and be content because whatever you buy there will be faster more versatile products soon after.
However, a great many people taking honest stock of their needs know that they just don't need to spend more than 500USD on a computer. Such a machine will manage their office/internet and MP3/CDr/DVD needs without a hitch. Apple has no machine for these people -- which is the true representation of most of the other 95%.
I do think that a lot of people would pay a bit more for a better experience, but not as much more as Apple demands. Not for the typical usage we described. Sorry but burning discs, typing papers, IM, and surfing p0rn just doesn't require that much power. I use an AMD 300 at home. It is in every way a giant piece of noisy crap, but it's paid for and it handles communications and office just fine, as well as Mp3 and RTS games. Though I have little use for Mp3 as I usually just play a few CD's in the stereo while I work. Anything more demanding and I use the powermacs in the lab. I'd really like to play with some digital photography, a little 2-d illustration and page layout for print, and some music. It's been fun goofing around with these things in the dept lab. I just might get the mac. But a lot of people will just decide they don't need the extra expense. WinXP will handle (even their digital photography snap shot) needs just fine.
If you want to be serious about market share, you have to look at where the market spnds its money and adjust accordingly.
eMac is a knats chuff away from 999USD. That's good. But they need to have a cheaper still machine. I don't think it's a great idea to squeeze that margin from the eMac at this point. I'd rather see them add more power/RAM/storage/ and optical. (so long as it stays aroung 1000)
The iMac 'Classic' OTOH is the perfect machine to develop into a LOW-COST, LOW-MARGIN, HIGH- VOLUME, entry-level budget leader.
edit:
There is the danger, as Hmurchinson correctly points out, that you won't get people off the 'loss leader' and just end up switching a few higher-end sales into low-end (low margin) sales.
That's why I propose the iMac 'Classic'. It is far enough behind the other machines that people interested in altivec, a large display, more serious digital video and photshop use (maybe still home use, but a much smoother more comfortable experience) will have plenty of reason to go with eMacs, iMacs, and PowerMacs.
Right now Apple hasn't any true low price product. That's OK if you're restricted to Apple buyers -- they buy macs anyway for the reasons and uses which first enticed them. But we aren't restricted to an Apple market, its a computer market. In that sense you're right, the budget customer won't switch-up. Since there is no budget Mac, that also means that they won't switch to Mac.
It isn't a case of "better to sell the high margin product than the low margin one." It's more a case of "better to get the low-margin sale for ourselves than let it go to the other guy and not get any sale at all."
The people buying higher-end Apple produt will keep buying it (mostly) just that now the people buying low-end PC product might buy a little low-end mac product instead.
[ 06-14-2002: Message edited by: Matsu ]</p>
Gateway may ship $500 PC's but they've been struggling for 8 months now...do you want Apple to struggle? How many Acquisitions has Gateway made in the last year. Acquisitions= growth.
You make some points, but this idea that low margins lead to struggle is hogwash. There are plenty of PC makers who sell even lower than Gateway and aren't in any kind of trouble, they just have to show a lot of hustle. Gateway pissed away a small fortune with their retail dissaster and poor overseas organization. They sell very well in the US, and if not for those two big fvck-ups, they'd be just fine.
Apple needs a low end presence and cheaper prices. I'm not suggesting they halve prices or make radical drops overnight but their overall pricing strategy needs adjusting.
<strong>read my edit. I was talking to zaz.
You make some points, but this idea that low margins lead to struggle is hogwash. There are plenty of PC makers who sell even lower than Gateway and aren't in any kind of trouble, they just have to show a lot of hustle.
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Please name a low-price, low-margin PC-maker, besides Dell, that has a healthy bottom line.
Maybe a Classic "Bondi Blue" with a CD drive, 128 Mb RAM, X only loaded with the iApps, a G4 @ 450 Mhz, the same screen and I/O, maybe a GF2MX (32Mb RAM). For a low price of 599 USD.
It will be everywhere. And with that nothing will cannibalized the eMac or iBook.
This is the way to 80 to go...
[ 06-14-2002: Message edited by: jeromba ]</p>
Why don't you name this mutitude that are so near death?
Compaq and HP? They both sell a lot of stuff besides PC's. Why blame PC pricing? What about their organization/marketing, losing lots of server market...
None of these guys, even eMachines, would be in business if they were really losing money. What keeps them afloat if they aren't making money on their products?
A lot of these companies, IBM, toshiba, sony, HP, Compaq had a lot of excess bloat that had nothing to do with the price of their PC's. With all kinds of strategic ventures to support, fat payrolls, and a recession it's no wonder a lot of big companies suffered.
Apple by way of comparison had done most of its fvcking up a little earlier, had smaller payrolls, and few if any strategic concerns/diversified product lines/markets that would have been harmed. They used their money in the bank to buy up other companies cheap, whereas many of their competitors were so much more gung ho that they bought up companies left and right when the cost was high.
Now they're paying for their exuberance and Apple isn't 'cause untill recently Apple had nothing to be exuberant about. Some luck has put Apple in a position to buy key technology now that the asking price is a much more reasonable, while the other big names in computing bough when prices were VERY high. It's also good financial management/strategic investment practice on Apple's part.
The current problems of MOST large PC makers have nothing to do with prices, they ARE making money on their PC's. Their problems have to do with the insane expectations/over-confidence of 5 years ago. They ended up with way more production-warehouse-infrastructure-bureacracy- capacity than they could use or even needed. LOTS of dead-end technology, that they over-paid for, and more than a few dead product lines. Through all this they've all kept selling PC's! Why? 'cause believe it or not, they're making money on them. The internet and telco were going to turn these millionaires into multi- trillionaires, it was gonna change commerce, marketing and even industry forever. Instead we got cheap porn and free music, and they all got a lot expense.
The money problems of PC makers have NOTHING TO DO WITH CURRENT PRICE COMPETITION. That's just typical Apple apology in defense of Mac prices.
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Of course. You can price your product however you want but it's Gross Margins that will make or break your company.
<a href="http://www.macobserver.com/stockwatch/2002/01/16.1.shtml"; target="_blank">Profit is NOT Evil!! </a>
eMachines would be a poor example. The went public in 99 under to ticker "EEEE" and then in 2001 were bought out and Privatized. So they don't have to release sales figures.
HP and Compaq suck equally so they decide to merge and double their "crappiness" go figure.
A report comes out that says the market is dominated by White Box screwdriver shops which does not bode well for the Big Boys.
Dell is the only company that seems to be balanced with good presence in Edu, Enteprise and Consumer channels.
MicronPC has basically thrown in the towel.
Acer(Benq) non factor
Toshiba- laptops only
NEC- Non player
No I don't think I want to follow these guys business model.
[ 06-14-2002: Message edited by: hmurchison ]</p>
Apple's most important announcement should be price reductions on yesterday's technology.
That's the way to innovate!
I'm just saying, to get near the quality of Apple's product's, you will spend as much or more on a PC as you will on a Mac. (But in my opinion not close enough to the quality of a Mac) The difference is, PC's are expected to have problems, Mac's are expected to have results...and that's worth some extra coin to me.
If people want to deal with crappy PC boxes, let 'em. We'll just sit here enjoying our Mac lovin! <img src="graemlins/lol.gif" border="0" alt="[Laughing]" />
Personal Computers have nearly reached a maximum market saturation point, in the (U.S. & Western European market anyway). So there isn't such a large market for first time buyers as there was say five years ago. And, the used market is picking up to fill the low price niche.
Apple does know what it's doing. Steve has compared their market share with BMW and Mercedes and clearly he intends to sell Macs as a prestige product. Like it or not, this strategy has the best chance. You can't sell a prestige product at low prices and retain the image of prestige in the public eye for very long. There is a long list of designer labels that have gone this route (and not by accident they sold out ).
The Apple Store is a great idea. The new adds are a great idea. The X-serve great (though so is the challenge it faces), eMac, and iMac great great great. Apple is On Target with everything so far, except the PowerMac is still lagging behind...
So Apple's big announcement should beYou wanted MHz? Here are GHz and Bandwidth to boot!!!
...but please don't lower the prices.