<strong>If Apple were to release a budget tower around $1200, they'd just use old products to sell them out. For all purposes, that's exactly what they're doing by allowing resellers to sell out the G4 800 at $1299.
I agree a low-end tower should be sold for those who want to reuse monitors. That's about the only really valid point I see for the low-end tower. The expandability issue is still not too convincing to me, except for the video card issue, in which case you should be buying a more appropriate higher-end (and higher-priced) tower.</strong><hr></blockquote>
And if a new technology comes out, say in 6 months, which allows you to deliver HDTV via Firewire 2 to your Audio/video system you would rather replace your $1200-2000 computer than spend $100-200 on a FireWire 2 card to take advantage of the technology? Not everyone can afford to take that kind of loss on a system they purchase. Granted there is not as much of a need for PCI cards for expansion as there used to be now that FireWire and USB are here, but it still makes sense to a lot of people to have that ability.
As Matsu mentioned, it's cheap and easy to add hard drive space to a tower. But most importantly, I get to keep my monitor. I love the new LCD iMacs, but not if I have to throw out a perfectly good LCD when I upgrade. Imagine buying a 17" widescreen LCD iMac and having to toss out that gorgeous display when you upgrade three or four years from now?
I won't mind throwing out the cheap CRT that came with my all-in-one iMac. But I would hate to throw out an FP iMac along with its LCD.</strong><hr></blockquote>
This gets to one of the fundamental issues of what becomes of old computers when a user purchases a new one. In the component-ized world of x86 PCs, uses buying a new system have typically gutted their old computers and shoehorned all of the old stuff into a new bottom of the barrel PC. The old tower then gets scrapped.
I hold this largely responsible for the fact that they tend to be rather unreliable.
On the Mac side of the fence, systems tend to have vastly longer lifespans, and all-in-ones get passed on to someone else, in their fully functional state. Heck, the old Classic, LC, and PM 6500 that I used to use are all still in use.
I suppose if you really have no one to pass the old systems on to, the PC model of upgrading looks more appealing. Me, I prefer to have two fully functional systems after I buy a new computer.
I have an almost 6 year old PC as my home computer and in it there are parts nearly 10 years old. Up untill last year my brother still played star-craft diablo warcraft et al on the thing. Even with a paltry 8MB PCI video card.
About unreliability, I don't think the same issues would arise with Apple, people don't talk about their Powermacs failing, there are old powermacs living remarkably long lives. I really believe the PC side gets most of it's problems from MoBo conflicts with peripherals. You wouldn't be able to get non-Apple MoBo's so that problem should dissapear.
Optical and hard-drives on the ATA buses certainly shouldn't affect reliability so long as you use decent parts. We're really talking about Video cards, maybe sound or TV tuner cards, and interface cards for emergent standards like USB/firewire 2,3,etc etc...
Most of the periphs for mac I've read about tend to be high quality and with few problems.
Yes, but you knew this going in that with the iMac that the graphics card was not upgradeable. The same thing is true with my Pismo- the card is not upgradeable.
The machines that are going to last the longest are the towers, yes. But if you want to have the luxury of being able to upgrade your machine, you need to shell out the extra money. That's just the way it is.</strong><hr></blockquote>
This is just a dumb position to take. Are you trying to say this is a good position for Apple to take? That they shouldn't sell a budget tower?
Apple has approximately 5% of the computer market. That's just the way it is. Does that mean Steve Jobs & co. shouldn't attempt to gain more?
This is just a dumb position to take. Are you trying to say this is a good position for Apple to take? That they shouldn't sell a budget tower?
Apple has approximately 5% of the computer market. That's just the way it is. Does that mean Steve Jobs & co. shouldn't attempt to gain more?</strong><hr></blockquote>
There is no proof that Apple WILL gain marketshare from lower Tower prices. I believe Apple to have a finite amount of sales per year. Lower prices= lower margins and Profit.
First, a couple of people said something to this effect: 'Apple charges an outrageous amount for the PowerMac Towers because they can = not because the parts cost more'. Pretty much across each product line Apple's margin is 28%ish. It is the highest in the consumer computer arena, so there's room to gripe if you are so inclined.
But the key thing to notice is that the slots cost money. If they didn't and Apple _still_ sold the computers at $1600 for the 'low end', then their margins would be noticeably larger.
Product differentiation is also something Apple's been trying to do that would be cannibalized with slots & a lower price. A $1200 single CPU tower would demolish the sales of the iMac. 'Gosh, for the same price I could get a TOWER and a good LCD'...
The third point is about 'expandability'. The only consumer level upgrades I can think of that DON'T necessarily work is the graphics card. RAM, HD fine... Lots of other USB/Firewire add-ons. The 'but the DVD-burner costs more as a firewire widget' argument is true... But I still see that as a value added feature. I'm not blasting DVDs as a profession, I do it once or twice a month, and one (pricy) drive circles between me, my brother, his neighbor.
Taken to the extreme: Show me a maxed out iMac. You can max out the throughput on a either the USB or the Firewire bus, but if you have a 100+ widgets hooked up to your computer, you can pay the extra $200ish to get a tower if you need more expandability.
I don't see the PowerMacs coming down in price at _all_. There's already too much overlap with the low-end stuff. The iMac's price will slowly go down as component prices go down, aiming for the same place it was before - $900-1000 for the lowest end one.
There is no proof that Apple WILL gain marketshare from lower Tower prices. I believe Apple to have a finite amount of sales per year. Lower prices= lower margins and Profit.</strong><hr></blockquote>
I didn't say they would and I wasn't implying it. I was just saying that the logic of the argument was dumb.
And a lower price tower could easily have higher margins and equal to greater profit if Apple choose to make it that way.
bunge ...I know. But I often wonder if Apple has trepidation about attacking the market in that manner. Man if we could be flies on the wall during some of these boardroom discussions!
<strong>bunge ...I know. But I often wonder if Apple has trepidation about attacking the market in that manner. Man if we could be flies on the wall during some of these boardroom discussions!</strong><hr></blockquote>
It does seem odd because the "switch" would be made that much easier if the sales people could just say "keep your monitor and just buy this low-end tower. What? You DO want to burn a DVD? Well here's another option for you...."
I for my part would love the 17" iMac. But I will have to wait and buy a PM and a TFT screen when I have saved up enough money.
I want to add a harddrive later on, update the graphics card and stick a new sound card into it. And still when I'm finished using it I'd like the option to upgrade the CPU and RAM and give the computer to someone in my family who doesn't need the newest, but would simply like a nice machine to work on. And I would like to keep my screen for more than 1 product cycle.
Now thing is - that's how most computer users go about their hardware. iMac/eMac are perfect for most consumers (aka my grandma/mom/dad), but there are a lot of people (teenies/students, for example) who don't have loads of cash to buy a new computer every two years and while they're not a market with lots of cash to spend, they might grow into middle-class people who can afford a new computer every 2 years - and it just might be Apple will be out of the loop then.
I had posted in a different thread that Apple should offer the eMac specs minus the screen. Just put it in a mini-tower case and you have your product. I'm just guessing that the nice CRT probably costs around as much as a mini-tower case plus some extra profit margin & revenue, but I could be wrong.
I think it is a bad idea. No one bought the Cube, even when it was priced at 1299. The eMac is already going to detract from iMac sales so a new mini-tower would lower even more sales.
<strong>First, a couple of people said something to this effect: 'Apple charges an outrageous amount for the PowerMac Towers because they can = not because the parts cost more'. Pretty much across each product line Apple's margin is 28%ish.</strong><hr></blockquote>
This is wrong; their average margin is 27% or so. Their margins on the eMac, iMac and (low-end) iBook are much thinner. Fred Anderson said that the LCD iMac was barely breaking even in its first quarter, and I'll bet that even now there's maybe a 10% margin on it.
Apple gets a good margin on the PowerMac and (especially) the PowerBook, again, more on the high end configurations than the low end.
This doesn't mean they have much room to move, however: Operationally, they've been breaking even (or on the short side of breaking even) for several quarters now. Only returns on that big warchest of theirs have pushed them into the black.
Functionally, the market for consumer towers seems much larger than it is simply because there are a lot of consumer towers in the PC sector. That has nothing to do with what the consumer wants, and everything to do with what's convenient for the box maker. The fact that the cheap tower is also preferred by a small knot of hardcore gamers (a few percentage points even of the PC gaming market, at this point), hobbyists and impecunious power users is incidental. Most of these wind up either building their own (especially the hobbyists and the broke power users) or buying boutique rigs from the likes of Alienware that are comparable in price to Apple's own towers.
Apple has always offered "hot deals" on the previous lines, often with full warrantees, or you can pick them up at retailers. I don't really see what's wrong with letting these pick up the low end, especially since recently discontinued hardware is generally sold at a clearance price rather than an MSRP or MAP.
If the current numbers represent the finite limit of Apple's sales potential, then they're as good as dead. It might take a decade or more to kill them, but your children likely won't be using macs.
I think the platform can have greater overall and worldwide marketshare that it currently has. If you don't think so, you shouldn't look at Apple for any sort of long term investment.
I dont buy the agruments agenst coming out with a "headless" consumer Mac. Apple wants to gain market share, Steve has stated this. Apple needs to release as many products to achieve this goal that the market will allow. Not everyone in the market wants an All-In-One (think different, as long as its my way), nor wants to spend $1700 for Apples other solution. Apple may be able to gain a little market share with iMacs, if they are more agressive with sales/marketing and upgrades than they are right now. They may be able to make more gains if they are successfull with Xserve. But those products will only take them so far, and I doube that it will amount to doubling Apples market share, and that is Steve's stated goal. A consumer level tower could help, if it is agressively marketed.
Marketshare won't help you if you must go into the red to get it. Lot's of companies could increase marketshare if they gutted their profits. Funny..one one side we have the people saying Apple should have low cost towers..yet many of these same people may have believed that Apple should have kept to free email. Resources are always finite. I would think that Apples best chance at marketshare would be through the Education channel.
To gain Marketshare Apple needs people to "switch." It's going to be much easier to get people to "switch" if there's another option for them to take.
There is absolutely no reason why Apple would have to sell a low-end tower at a loss or cost. They could keep their margins and still sell a $1200 tower. They've already designed the Quicksilver motherboard and I'm sure it doesn't cost as much as the new one. They've got a lot of processors to choose from and now the option to use a single instead of a dual.
I have yet to hear a rational and reasonable reason why Apple can't offer a low-end tower. The margin argument doesn't work (the margins exist if Apple designs a simple mini-Tower.) The Cube argument doesn't work (it's not a mini-Tower if it has no expandability.) The "buy a close out model" or "buy and education model" argument doesn't work. This is about gaining marketshare by making people switch, not about how we as fanatical Mac users can find the cheapest Mac.
<strong>It won't happen until Apple is shipping alot more boxes.
They said they think they can double marketshare and honestly I don't see how. But if the marketshare did double then Apple would have more flexibility to offer more expandable low end units.
It's interesting how the "Thin Client" PC ideology has died.</strong><hr></blockquote>
They need the inexpensive tower to double market share. Until they do, get used to less than 5% share. Thats not good enough for long term prospects. .............................................
At the beginning of the year I was seriously looking into buying an Athlon based computer. I was not happy with Apple's hardware offerings at the time. I didn't want to abandon the platform, but I didn't want to shell out huge bucks to stay in either. My previous computer was a Wallstreet powerbook-- no usb, no firewire, and an X unsupported graphics card. Since it was a laptop I was ok with that, but there was no way I was going to give up expandability on a desktop. So when Apple started selling the low end educational tower, I bought. I can't be called a switcher, but I am pretty sure that without that low end tower I would have left Apple.
I think that there is a big big market for a low end tower. Apple has constructed this artificial divider between professionals and consumers. Let's face it, the vast majority (including me) fall somewhere in between. Those are the people who would buy the low end tower. On the flip side, such a product would definitely pull money away from the higher margin products. Many folks buying the high margin products now know they are getting ripped off, but just don't feel they have a lot of choice in the matter.
I don't think Apple wants to risk losing short term profitability in order to gain long term market share. I think that Apple has fallen in love with the idea of the iMac as the funky looking all-in-one, when really, we should have moved past that design by now.
There is simply no way to double market share without taking some bigtime risks.
Bottom line: if Apple gambled, they would either go out of business or become a player. But they are more comfortable making nice looking devices in an essentially irrelevant niche.
This is wrong; their average margin is 27% or so. Their margins on the eMac, iMac and (low-end) iBook are much thinner. Fred Anderson said that the LCD iMac was barely breaking even in its first quarter, and I'll bet that even now there's maybe a 10% margin on it.
Apple gets a good margin on the PowerMac and (especially) the PowerBook, again, more on the high end configurations than the low end.
Functionally, the market for consumer towers seems much larger than it is simply because there are a lot of consumer towers in the PC sector. </strong><hr></blockquote>
I agree with your assessment, but.
The desired volume of the 'consumer line' versus the 'pro' line sort of dictates the lower margins. I wasn't trying to imply that the margin on the maxxed out pro tower and the education-only G3 iMac was the same. (That's nuts, RAM pricing alone can tell you that But there's margin differences in the consumer line too. There's no way the margin on the maxxed iMac isn't substantially higher than that on the bare minimum one.
What's happened is that the pricy LCD on the LCD iMac has driven it up into PowerMac turf. They went LCD a year too early and they aren't seeing the components drop as quick - probably because they aren't selling enough. Catch22.
Apple could clearly cut, say, $250 off of the PowerMac and sell a viable single CPU unit. Heck, they _are_ doing it - just with the old motherboard/case. But then you've crossed your two product lines. This just is NOT a good thing. Anything that eats any of the iMac sales is bad - it's the high volume that's supposed to be driving the component prices down. I don't think Apple would be happy eating an 'iMac fiasco' along with the Cube fiasco.
For the other part, I also agree This would be 99% cannibalized sales. No one in any of Apple's supposed 'niches' fits right there. Education gets discounts, power users pay for things that get work done, home users don't know what a graphics card _is_. Mac case modders are, um, RARE.
Comments
<strong>If Apple were to release a budget tower around $1200, they'd just use old products to sell them out. For all purposes, that's exactly what they're doing by allowing resellers to sell out the G4 800 at $1299.
I agree a low-end tower should be sold for those who want to reuse monitors. That's about the only really valid point I see for the low-end tower. The expandability issue is still not too convincing to me, except for the video card issue, in which case you should be buying a more appropriate higher-end (and higher-priced) tower.</strong><hr></blockquote>
And if a new technology comes out, say in 6 months, which allows you to deliver HDTV via Firewire 2 to your Audio/video system you would rather replace your $1200-2000 computer than spend $100-200 on a FireWire 2 card to take advantage of the technology? Not everyone can afford to take that kind of loss on a system they purchase. Granted there is not as much of a need for PCI cards for expansion as there used to be now that FireWire and USB are here, but it still makes sense to a lot of people to have that ability.
<strong>
As Matsu mentioned, it's cheap and easy to add hard drive space to a tower. But most importantly, I get to keep my monitor. I love the new LCD iMacs, but not if I have to throw out a perfectly good LCD when I upgrade. Imagine buying a 17" widescreen LCD iMac and having to toss out that gorgeous display when you upgrade three or four years from now?
I won't mind throwing out the cheap CRT that came with my all-in-one iMac. But I would hate to throw out an FP iMac along with its LCD.</strong><hr></blockquote>
This gets to one of the fundamental issues of what becomes of old computers when a user purchases a new one. In the component-ized world of x86 PCs, uses buying a new system have typically gutted their old computers and shoehorned all of the old stuff into a new bottom of the barrel PC. The old tower then gets scrapped.
I hold this largely responsible for the fact that they tend to be rather unreliable.
On the Mac side of the fence, systems tend to have vastly longer lifespans, and all-in-ones get passed on to someone else, in their fully functional state. Heck, the old Classic, LC, and PM 6500 that I used to use are all still in use.
I suppose if you really have no one to pass the old systems on to, the PC model of upgrading looks more appealing. Me, I prefer to have two fully functional systems after I buy a new computer.
About unreliability, I don't think the same issues would arise with Apple, people don't talk about their Powermacs failing, there are old powermacs living remarkably long lives. I really believe the PC side gets most of it's problems from MoBo conflicts with peripherals. You wouldn't be able to get non-Apple MoBo's so that problem should dissapear.
Optical and hard-drives on the ATA buses certainly shouldn't affect reliability so long as you use decent parts. We're really talking about Video cards, maybe sound or TV tuner cards, and interface cards for emergent standards like USB/firewire 2,3,etc etc...
Most of the periphs for mac I've read about tend to be high quality and with few problems.
<strong>
Yes, but you knew this going in that with the iMac that the graphics card was not upgradeable. The same thing is true with my Pismo- the card is not upgradeable.
The machines that are going to last the longest are the towers, yes. But if you want to have the luxury of being able to upgrade your machine, you need to shell out the extra money. That's just the way it is.</strong><hr></blockquote>
This is just a dumb position to take. Are you trying to say this is a good position for Apple to take? That they shouldn't sell a budget tower?
Apple has approximately 5% of the computer market. That's just the way it is. Does that mean Steve Jobs & co. shouldn't attempt to gain more?
<strong>
This is just a dumb position to take. Are you trying to say this is a good position for Apple to take? That they shouldn't sell a budget tower?
Apple has approximately 5% of the computer market. That's just the way it is. Does that mean Steve Jobs & co. shouldn't attempt to gain more?</strong><hr></blockquote>
There is no proof that Apple WILL gain marketshare from lower Tower prices. I believe Apple to have a finite amount of sales per year. Lower prices= lower margins and Profit.
But the key thing to notice is that the slots cost money. If they didn't and Apple _still_ sold the computers at $1600 for the 'low end', then their margins would be noticeably larger.
Product differentiation is also something Apple's been trying to do that would be cannibalized with slots & a lower price. A $1200 single CPU tower would demolish the sales of the iMac. 'Gosh, for the same price I could get a TOWER and a good LCD'...
The third point is about 'expandability'. The only consumer level upgrades I can think of that DON'T necessarily work is the graphics card. RAM, HD fine... Lots of other USB/Firewire add-ons. The 'but the DVD-burner costs more as a firewire widget' argument is true... But I still see that as a value added feature. I'm not blasting DVDs as a profession, I do it once or twice a month, and one (pricy) drive circles between me, my brother, his neighbor.
Taken to the extreme: Show me a maxed out iMac. You can max out the throughput on a either the USB or the Firewire bus, but if you have a 100+ widgets hooked up to your computer, you can pay the extra $200ish to get a tower if you need more expandability.
I don't see the PowerMacs coming down in price at _all_. There's already too much overlap with the low-end stuff. The iMac's price will slowly go down as component prices go down, aiming for the same place it was before - $900-1000 for the lowest end one.
<strong>
There is no proof that Apple WILL gain marketshare from lower Tower prices. I believe Apple to have a finite amount of sales per year. Lower prices= lower margins and Profit.</strong><hr></blockquote>
I didn't say they would and I wasn't implying it. I was just saying that the logic of the argument was dumb.
And a lower price tower could easily have higher margins and equal to greater profit if Apple choose to make it that way.
<strong>bunge ...I know. But I often wonder if Apple has trepidation about attacking the market in that manner. Man if we could be flies on the wall during some of these boardroom discussions!</strong><hr></blockquote>
It does seem odd because the "switch" would be made that much easier if the sales people could just say "keep your monitor and just buy this low-end tower. What? You DO want to burn a DVD? Well here's another option for you...."
I want to add a harddrive later on, update the graphics card and stick a new sound card into it. And still when I'm finished using it I'd like the option to upgrade the CPU and RAM and give the computer to someone in my family who doesn't need the newest, but would simply like a nice machine to work on. And I would like to keep my screen for more than 1 product cycle.
Now thing is - that's how most computer users go about their hardware. iMac/eMac are perfect for most consumers (aka my grandma/mom/dad), but there are a lot of people (teenies/students, for example) who don't have loads of cash to buy a new computer every two years and while they're not a market with lots of cash to spend, they might grow into middle-class people who can afford a new computer every 2 years - and it just might be Apple will be out of the loop then.
<strong>First, a couple of people said something to this effect: 'Apple charges an outrageous amount for the PowerMac Towers because they can = not because the parts cost more'. Pretty much across each product line Apple's margin is 28%ish.</strong><hr></blockquote>
This is wrong; their average margin is 27% or so. Their margins on the eMac, iMac and (low-end) iBook are much thinner. Fred Anderson said that the LCD iMac was barely breaking even in its first quarter, and I'll bet that even now there's maybe a 10% margin on it.
Apple gets a good margin on the PowerMac and (especially) the PowerBook, again, more on the high end configurations than the low end.
This doesn't mean they have much room to move, however: Operationally, they've been breaking even (or on the short side of breaking even) for several quarters now. Only returns on that big warchest of theirs have pushed them into the black.
Functionally, the market for consumer towers seems much larger than it is simply because there are a lot of consumer towers in the PC sector. That has nothing to do with what the consumer wants, and everything to do with what's convenient for the box maker. The fact that the cheap tower is also preferred by a small knot of hardcore gamers (a few percentage points even of the PC gaming market, at this point), hobbyists and impecunious power users is incidental. Most of these wind up either building their own (especially the hobbyists and the broke power users) or buying boutique rigs from the likes of Alienware that are comparable in price to Apple's own towers.
Apple has always offered "hot deals" on the previous lines, often with full warrantees, or you can pick them up at retailers. I don't really see what's wrong with letting these pick up the low end, especially since recently discontinued hardware is generally sold at a clearance price rather than an MSRP or MAP.
[ 08-15-2002: Message edited by: Amorph ]</p>
I think the platform can have greater overall and worldwide marketshare that it currently has. If you don't think so, you shouldn't look at Apple for any sort of long term investment.
There is absolutely no reason why Apple would have to sell a low-end tower at a loss or cost. They could keep their margins and still sell a $1200 tower. They've already designed the Quicksilver motherboard and I'm sure it doesn't cost as much as the new one. They've got a lot of processors to choose from and now the option to use a single instead of a dual.
I have yet to hear a rational and reasonable reason why Apple can't offer a low-end tower. The margin argument doesn't work (the margins exist if Apple designs a simple mini-Tower.) The Cube argument doesn't work (it's not a mini-Tower if it has no expandability.) The "buy a close out model" or "buy and education model" argument doesn't work. This is about gaining marketshare by making people switch, not about how we as fanatical Mac users can find the cheapest Mac.
<strong>It won't happen until Apple is shipping alot more boxes.
They said they think they can double marketshare and honestly I don't see how. But if the marketshare did double then Apple would have more flexibility to offer more expandable low end units.
It's interesting how the "Thin Client" PC ideology has died.</strong><hr></blockquote>
They need the inexpensive tower to double market share. Until they do, get used to less than 5% share. Thats not good enough for long term prospects. .............................................
I think that there is a big big market for a low end tower. Apple has constructed this artificial divider between professionals and consumers. Let's face it, the vast majority (including me) fall somewhere in between. Those are the people who would buy the low end tower. On the flip side, such a product would definitely pull money away from the higher margin products. Many folks buying the high margin products now know they are getting ripped off, but just don't feel they have a lot of choice in the matter.
I don't think Apple wants to risk losing short term profitability in order to gain long term market share. I think that Apple has fallen in love with the idea of the iMac as the funky looking all-in-one, when really, we should have moved past that design by now.
There is simply no way to double market share without taking some bigtime risks.
Bottom line: if Apple gambled, they would either go out of business or become a player. But they are more comfortable making nice looking devices in an essentially irrelevant niche.
<strong>
This is wrong; their average margin is 27% or so. Their margins on the eMac, iMac and (low-end) iBook are much thinner. Fred Anderson said that the LCD iMac was barely breaking even in its first quarter, and I'll bet that even now there's maybe a 10% margin on it.
Apple gets a good margin on the PowerMac and (especially) the PowerBook, again, more on the high end configurations than the low end.
Functionally, the market for consumer towers seems much larger than it is simply because there are a lot of consumer towers in the PC sector. </strong><hr></blockquote>
I agree with your assessment, but.
The desired volume of the 'consumer line' versus the 'pro' line sort of dictates the lower margins. I wasn't trying to imply that the margin on the maxxed out pro tower and the education-only G3 iMac was the same. (That's nuts, RAM pricing alone can tell you that
What's happened is that the pricy LCD on the LCD iMac has driven it up into PowerMac turf. They went LCD a year too early and they aren't seeing the components drop as quick - probably because they aren't selling enough. Catch22.
Apple could clearly cut, say, $250 off of the PowerMac and sell a viable single CPU unit. Heck, they _are_ doing it - just with the old motherboard/case. But then you've crossed your two product lines. This just is NOT a good thing. Anything that eats any of the iMac sales is bad - it's the high volume that's supposed to be driving the component prices down. I don't think Apple would be happy eating an 'iMac fiasco' along with the Cube fiasco.
For the other part, I also agree