Prices are not an issue in the matter of Apple acquiring more marketshare, not entirely anyway. Apple has the first iMacs available for $799 as of this moment, and even cheaper at other retail stores. I must say that Apple is heading in the right direction in the aspect of marketshare, but they're missing something. Their new ad campaign (apple.com/switch) is probably one of their many first steps in obtaining more marketshare, but whenever I see my PC friends watch TV and that ad comes up, they switch the channel because it simply does not interest them. I believe they should also advertise more on the computers they offer, including the older iMacs. This makes sense because not everyone wants to pay $2000 for an LCD iMac or $3000 for a G4, but alot of people are completely oblivious to the cheaper computers Apple offers, and I wish they would advertise those, even if it's not what they want consumers to buy.
The first priority is getting PC users into the Mac world (hopefully OS X as well). Advertising the $799 iMac will raise some eyebrows for PC users interested in change.
The $799 iMac is on its way out. I was in the Roosevelt Field Apple Store last month, and I overheard a woman enquiring what was the least expensive Mac? The mac told her that the $1099 eMac was the least expensive Mac, regardless of the fact that the crt iMac was only a few feet away. Was this an isolated incident? I think not. Apple is probably telling its employees not to sell the crt iMac unless the person asks for it. I think MWSF will be the death of the crt iMac. The emac will drop in price:$899 home user, $799 education. This will help, but Apple needs a cheaper hedless machine. So how about this: Take the eMac motherboard, add a physical AGP slot (easy), put it in a pizza box case. Sell it for $799. Most consumers will opt for the eMac, while Mac users and "geek switchers) will opt for the $799 machine. You save a hundred bucks, get an AGP slot, and can use an existing monitor or purchase any VGA or Apple monitor they want. What do you think?
Apple would do well to get the word out that their low-end products actually have very favorable prices when compared to name brand Windows PCs.
I don't think they can afford to release a cheaper machine until the PowerMacs can further distance themselves from the low-end. But in the long run, I think it's Apple's best chance at survival.
Stop being such cheapskates... you get what you pay for! Apple will never be able to compare with the budget PC industry, and you want Apple, one of the industry's largest beacon of innovation, to not only compare, but beat out the competition, all of it, in price and innovation. Not gonna happen. Apple may exceed their necessary margins sometimes, but it never lasts for long. Macs do cost more than some bargain bin PCs, even supposedly comparable ones?and they always will. Deal.
I'm always amazed when people say that Apple is barely making any profit on the eMac. Let's take a look at some of the parts in the eMac if they were to be bought at RETAIL prices in the store, eh?
Processor: 700MHz PowerPC G4 $unknown
G4 Motherboard $unknown
Memory: 128MB $25
Hard drive: 40GB Ultra ATA $70
Optical drive: CD-RW $70
Graphics support: NVIDIA GeForce2 MX with 32MB of DDR SDRAM $40
FireWire: Two ports $35
USB: Five ports $35
Modem: 56K $25
Ethernet: 10/100BASE-T $15
Monitor: 17" CRT $135
Case: All In One $unknown
So, if we were to go into any store in America, and pay RETAIL prices for all of the individual parts, then we'd be somewhere around $450. And, let's say that the 700MHz G4 is roughly equivilent to the Athlon 1.4GHz, which sells for about $80. Now, throw in a motherboard for about $100, and the case for about $100 (both of which are above average for the PC).
That means that a gross retail estimate of the parts inside an eMac cost about $730.
One might argue that R&D and assembly costs add to the amount, but we're talking store RETAIL here, and Apple buys and builds EVERYTHING in bulk, so I'm gonna call it a wash.
Which means that Apple could feesibly be making a profit of $1100 - $730 = $370 for each eMac they sell (presuming the numbers are correct, here).
[[[Apple's cheapest computer is 1100 dollars. Bottom line: this is too expensive.]]]
Well, it doesn't seem that many of those sub $1000.00 WinPCs are selling very well.
What would it do for Apple's bottom line, considering that Apple and Dull are the only companies turning a profit? Dull has absolutely ruined the Windows-PC market in that the gross profit on any of those machines is abysmally low. To counter that, PC manufacturers must try and make that up in volume -- it doesn't seem to be happening and now they are getting a double whammy. Again, the cheap machines aren't selling either.
NUM wrote:
[[[The demographic that you are targeting with sub 1k prices may be too much of a liability for Apple. Isn't it easier to have mac people who KNOW how to add? Saves them bundles on tech support to be sure. ]]]
Good perspective.
What I think people are missing is the fact that when looking at things "in perspective" we see that Apple's machines are priced accordingly, considering Apple does ALL the R&D on the hardware. In fact, they "touch" every aspect of it. Furthermore, the do ALL the R&D on the Operating System AND all good chunk of quality software -- be it iApps or the Pro line. Name me one other PC company that does ANY of that. They are ALL "Windows repackagers" running on who-knows-what-and-where-it-came-from hardware.
JYD wrote:
[[[The eMac is a good low-end computer...in fact it's far better than the original iMac. If Apple had introduced it even a year earlier it would have made a big difference. The only drawback to the eMac is that it doesn't have an AGP slot, and this will drive away many potential buyers who are interested in gaming. ]]]
LOL Just what we want, our students playing games rather than doing anything study-related. ;-) I'm glad the "e" in eMac stands for "everyone".
muah wrote: \t
\t
[[[I am a PC user at home (and at work) and I would love to get back to using macs. My biggest problem is that none of my software will work if I switch (and I don't think M$ will be offering a rebate for PC owners of Office to switch to Mac Office) ]]]\t
Which means that Apple could feesibly be making a profit of $1100 - $730 = $370 for each eMac they sell (presuming the numbers are correct, here).
Still think they're barely getting by?
<hr></blockquote>
The gross margin actually reported for all of Apple's computer lines is around 27% (it does fluctuate ±2% or so each quarter).
730 x 1.27 = 921.1 << 1100.
So, no. I don't think they are making $370 on an eMac.
Note also that even if the same box was $927 - it would still be "overpriced and underpowered". Apple would be losing 1100-927 for a questionable gain.
The 'cheap' computers tend to have lower than the average margin, while the decked out PowerMac should have (by far) the highest margin. If the margin on an eMac is $100, that's about 10% margin - that would be closer to what I expect. Or even less.
This isn't saying Apple _couldn't_ put the boxes together for less. If they were really focused of driving the box price of a particular model down, down, down, they could. But you do that by doing _more_ engineering... which costs money... which will be essentially wasted when they go to the next box design. Most boxen either a) never change, or b) had basically no design in the first place. Recouping design costs is almost a non-issue in that case. Almost. That wouldn't be an Apple.
<strong> [snip] Apple needs a cheaper hedless machine. So how about this: Take the eMac motherboard, add a physical AGP slot (easy), put it in a pizza box case. Sell it for $799. Most consumers will opt for the eMac, while Mac users and "geek switchers) will opt for the $799 machine. You save a hundred bucks, get an AGP slot, and can use an existing monitor or purchase any VGA or Apple monitor they want. What do you think?</strong><hr></blockquote>
I like it. God I want a cheaper headless mac... I've already got a great 19" crt monitor.
I like it. God I want a cheaper headless mac... I've already got a great 19" crt monitor.</strong><hr></blockquote>
You and me both. But ain't going to happen until the top end truely becomes top end. A reasonably spec'd(1.0 - 1.2GHz G4 on 0.13µ process, crippled bus, no or low amount L3 cache, PCI slot, AGP standard size board, blah, blah, blah) low end headless Mac would scavenge too much sales from the other lines and not provide the margins Apple currently needs.
The slow development of the G4 really has destroyed Apple's options. Apple knows this and it is affecting the switcher campaign.
A low end Mac may make a lot of sense, if Apple picks out the right target markets. I am thinking about the lowest cost option, without monitor, but can be connected to an ordinary VGA or Apple display. Consider this. I have a 233 MHz G3 desktop running OS X.1.5. The RAGE II graphic chip does not even work in OS X. I have just a CD-ROM drive. Yet, this takes care of almost everything I use a computer for, now. Sure, I'll get a new one someday. For now, the old beige G3 is fine. How many people might consider getting grandma a computer so she can do email? Does she need the performance of an eMac? No. How about very young children, who do not play action games, but want Sesame Street? Apple could limit performance on such a Mac, and keep manufacturing cost way down. What are they selling? OS X and its rock solid stability and reliability. People don't want to be running over to grandma's house every time she has a computer problem, or always fussing with the kid's computer. Sure, people could buy a used Mac for these situations, but that doesn't make any money for Apple. Think of the low end Mac as an alternative to a used Mac, for times when you just need a simple computer. Many might buy it. I would, but not for my only computer.
You know, it seems to me that the whole "cheap consumer computer" age is over for now. Apple missed the boat. The sad part is that they missed the boat on the trend they started. The iMac is the real reason all the PC companies started selling appliance computers (I hate the term "consumer computer". Personal computers are not a capitol good, so really, they are all consumer goods).
The problem is rooted in the whole idea of an appliance computer. The people who were in the market bought one. Now that they have a computer, they don't feel compelled to upgrade. Think about it. All computers are so fast now. If you bought a computer to use the Internet, word process, play with photos, etc. two years ago, it's still doing all of those tasks just fine. Even basic digital video such as the iMovie clones will run fine. Why are you going to buy a new computer if the old one works just fine?
PC manufacturers didn't know what they were getting into when they did this. The market for appliances and traditional PC's is totally different, the latter relying on an upgrade cycle of two to three years, the former, seven to ten or more. PC manufacturers did not pay attention to this fact, and overproduced "consumer PC's", that nobody now wants.
Until a new killer app is created (such as desktop publishing or the Internet) that requires more from the hardware, there isn't going to be another cheap PC buying frenzy. It's going to be a long winter.
Cheap computers may not be best selling computers, however for many users thinking about switching a low cost computer is more compelling. Linux geeks are excited about Mac OS X. Do you think they want to spend a lot of money on a new machine. The eMac is a good machine, but we need an alternative sans monitor. Apple is just making there hardware too closed. A cheaper eMac without monitor and an AGP slot would be cheap (r&d). Even at $100 dollars cheaper than an equivalent eMac, people would still buy this machine because of Monitor and Graphics card options. With this machine "Users will have options, and we like options"
<strong>You know, it seems to me that the whole "cheap consumer computer" age is over for now. Apple missed the boat. The sad part is that they missed the boat on the trend they started. The iMac is the real reason all the PC companies started selling appliance computers....</strong><hr></blockquote>
The "Cheap" computers bring in consumers, and the "add-ons" push up the price. The 599 computer began when networking companies likeMSN and CompuServe started offering rebates with a service contract for their internet service. It sold a lot of computers, and made for a number of disatisfied customers of these same ISP's. My Stepfather bought one agenst my advise, and has since droped that ISP, but still has the Wintel hardware.
Apple dosnt have to have the chepest hardware, just maintain a good level entry computer of around $799. Adding a sub $1000 computer without a monitor would bring some switchers over who already have monitors and or want to upgrade video cards. Drop the PCI, or leave 1 (for a firewire 2 card) on with an AGP slot, which would help sell Apple monitors, and keep the Video Card companies making products for Macs. It would probably eat away a little at the iMac/eMac sales, and some at the low end PM sales as well, but if it brought enough new customers over for Apple to gain another % point of market share it would be worth it. Another market for just such a system, with the proper case, would be to build render farms for animation and video...for the price of 3 high end Duals you could buy about 7 low end computers...(4 processors vs. 7 in a render farm).
[[[The eMac is a good low-end computer...in fact it's far better than the original iMac. If Apple had introduced it even a year earlier it would have made a big difference. The only drawback to the eMac is that it doesn't have an AGP slot, and this will drive away many potential buyers who are interested in gaming. ]]]
LOL Just what we want, our students playing games rather than doing anything study-related. ;-) I'm glad the "e" in eMac stands for "everyone".
<hr></blockquote>
Students aren't robots, they like to have fun just like anyone else.
And an eMac would be awesome if you could rip out the POS video card it comes with and drop in a GeForce4 Ti. That sucker would be set for DOOM III and every other game that comes out a year from now.
Yet again, Apple stupidly assumes that "consumers" don't play games, and that "pros" are most interested in gameing. It is utterly backasswards to put high end video cards in their towers but utter crap in their iMacs and eMacs.
Apple needs to understand that it's CONSUMERS who play games, not graphic artists at work using photoshop.
Comments
The first priority is getting PC users into the Mac world (hopefully OS X as well). Advertising the $799 iMac will raise some eyebrows for PC users interested in change.
That's my 2¢.
I don't think they can afford to release a cheaper machine until the PowerMacs can further distance themselves from the low-end. But in the long run, I think it's Apple's best chance at survival.
<img src="graemlins/oyvey.gif" border="0" alt="[No]" />
that was a big mistake, IMO. probably the stupidest thing they've done other than switching their monitors to ADB
edit: (sorry, ADC) abc, adb, adc, whatever. they're all stupid.
[ 10-03-2002: Message edited by: alcimedes ]</p>
[ 10-02-2002: Message edited by: bradbower ]</p>
<strong>anyone ever wonder where we'd be today if apple had released the cube at a more realistic price point?
<img src="graemlins/oyvey.gif" border="0" alt="[No]" />
that was a big mistake, IMO. probably the stupidest thing they've done other than switching their monitors to ADB</strong><hr></blockquote>
Of course it was stupid switching to ADB. Why bring back dead and old technologies?
Processor: 700MHz PowerPC G4 $unknown
G4 Motherboard $unknown
Memory: 128MB $25
Hard drive: 40GB Ultra ATA $70
Optical drive: CD-RW $70
Graphics support: NVIDIA GeForce2 MX with 32MB of DDR SDRAM $40
FireWire: Two ports $35
USB: Five ports $35
Modem: 56K $25
Ethernet: 10/100BASE-T $15
Monitor: 17" CRT $135
Case: All In One $unknown
So, if we were to go into any store in America, and pay RETAIL prices for all of the individual parts, then we'd be somewhere around $450. And, let's say that the 700MHz G4 is roughly equivilent to the Athlon 1.4GHz, which sells for about $80. Now, throw in a motherboard for about $100, and the case for about $100 (both of which are above average for the PC).
That means that a gross retail estimate of the parts inside an eMac cost about $730.
One might argue that R&D and assembly costs add to the amount, but we're talking store RETAIL here, and Apple buys and builds EVERYTHING in bulk, so I'm gonna call it a wash.
Which means that Apple could feesibly be making a profit of $1100 - $730 = $370 for each eMac they sell (presuming the numbers are correct, here).
Still think they're barely getting by?
-theMagius
[ 10-02-2002: Message edited by: theMagius ]</p>
Well, it doesn't seem that many of those sub $1000.00 WinPCs are selling very well.
What would it do for Apple's bottom line, considering that Apple and Dull are the only companies turning a profit? Dull has absolutely ruined the Windows-PC market in that the gross profit on any of those machines is abysmally low. To counter that, PC manufacturers must try and make that up in volume -- it doesn't seem to be happening and now they are getting a double whammy. Again, the cheap machines aren't selling either.
NUM wrote:
[[[The demographic that you are targeting with sub 1k prices may be too much of a liability for Apple. Isn't it easier to have mac people who KNOW how to add? Saves them bundles on tech support to be sure. ]]]
Good perspective.
What I think people are missing is the fact that when looking at things "in perspective" we see that Apple's machines are priced accordingly, considering Apple does ALL the R&D on the hardware. In fact, they "touch" every aspect of it. Furthermore, the do ALL the R&D on the Operating System AND all good chunk of quality software -- be it iApps or the Pro line. Name me one other PC company that does ANY of that. They are ALL "Windows repackagers" running on who-knows-what-and-where-it-came-from hardware.
JYD wrote:
[[[The eMac is a good low-end computer...in fact it's far better than the original iMac. If Apple had introduced it even a year earlier it would have made a big difference. The only drawback to the eMac is that it doesn't have an AGP slot, and this will drive away many potential buyers who are interested in gaming. ]]]
LOL Just what we want, our students playing games rather than doing anything study-related. ;-) I'm glad the "e" in eMac stands for "everyone".
muah wrote: \t
\t
[[[I am a PC user at home (and at work) and I would love to get back to using macs. My biggest problem is that none of my software will work if I switch (and I don't think M$ will be offering a rebate for PC owners of Office to switch to Mac Office) ]]]\t
\t
There sure is a discount ;-)
See here:
<a href="http://maccentral.macworld.com/news/0210/01.applems.php"; target="_blank">http://maccentral.macworld.com/news/0210/01.applems.php</a>;
--
Ed M.
<strong>
Still think they're barely getting by?
-theMagius
[ 10-02-2002: Message edited by: theMagius ]</strong><hr></blockquote>
It might be easier to just look at Apple's annual reports or SEC fillings
[ 10-02-2002: Message edited by: rickag ]</p>
Which means that Apple could feesibly be making a profit of $1100 - $730 = $370 for each eMac they sell (presuming the numbers are correct, here).
Still think they're barely getting by?
<hr></blockquote>
The gross margin actually reported for all of Apple's computer lines is around 27% (it does fluctuate ±2% or so each quarter).
730 x 1.27 = 921.1 << 1100.
So, no. I don't think they are making $370 on an eMac.
Note also that even if the same box was $927 - it would still be "overpriced and underpowered". Apple would be losing 1100-927 for a questionable gain.
The 'cheap' computers tend to have lower than the average margin, while the decked out PowerMac should have (by far) the highest margin. If the margin on an eMac is $100, that's about 10% margin - that would be closer to what I expect. Or even less.
This isn't saying Apple _couldn't_ put the boxes together for less. If they were really focused of driving the box price of a particular model down, down, down, they could. But you do that by doing _more_ engineering... which costs money... which will be essentially wasted when they go to the next box design. Most boxen either a) never change, or b) had basically no design in the first place. Recouping design costs is almost a non-issue in that case. Almost. That wouldn't be an Apple.
"It might be easier to just look at Apple's annual reports or SEC fillings"<hr></blockquote>
[quote]Nevyn wrote:
"The gross margin actually reported for all of Apple's computer lines is around 27% (it does fluctuate ±2% or so each quarter)."<hr></blockquote>
Well, I'm not one to argue with the numbers. I guess I just don't have a grasp of WHAT numbers they're using to come up with these figures.
Perhaps someday I'll be wise enough to be able to comprehend "Apple math".
Dazed and Confused,
-theMagius
<strong> [snip] Apple needs a cheaper hedless machine. So how about this: Take the eMac motherboard, add a physical AGP slot (easy), put it in a pizza box case. Sell it for $799. Most consumers will opt for the eMac, while Mac users and "geek switchers) will opt for the $799 machine. You save a hundred bucks, get an AGP slot, and can use an existing monitor or purchase any VGA or Apple monitor they want. What do you think?</strong><hr></blockquote>
I like it. God I want a cheaper headless mac... I've already got a great 19" crt monitor.
<strong>
I like it. God I want a cheaper headless mac... I've already got a great 19" crt monitor.</strong><hr></blockquote>
You and me both. But ain't going to happen until the top end truely becomes top end. A reasonably spec'd(1.0 - 1.2GHz G4 on 0.13µ process, crippled bus, no or low amount L3 cache, PCI slot, AGP standard size board, blah, blah, blah) low end headless Mac would scavenge too much sales from the other lines and not provide the margins Apple currently needs.
The slow development of the G4 really has destroyed Apple's options. Apple knows this and it is affecting the switcher campaign.
just my uninformed opinion
The problem is rooted in the whole idea of an appliance computer. The people who were in the market bought one. Now that they have a computer, they don't feel compelled to upgrade. Think about it. All computers are so fast now. If you bought a computer to use the Internet, word process, play with photos, etc. two years ago, it's still doing all of those tasks just fine. Even basic digital video such as the iMovie clones will run fine. Why are you going to buy a new computer if the old one works just fine?
PC manufacturers didn't know what they were getting into when they did this. The market for appliances and traditional PC's is totally different, the latter relying on an upgrade cycle of two to three years, the former, seven to ten or more. PC manufacturers did not pay attention to this fact, and overproduced "consumer PC's", that nobody now wants.
Until a new killer app is created (such as desktop publishing or the Internet) that requires more from the hardware, there isn't going to be another cheap PC buying frenzy. It's going to be a long winter.
<strong>
Well, I'm not one to argue with the numbers. I guess I just don't have a grasp of WHAT numbers they're using to come up with these figures.
Perhaps someday I'll be wise enough to be able to comprehend "Apple math".
Dazed and Confused,
-theMagius</strong><hr></blockquote>
You might, if you one day, god forbid, make it to college. (hint: it's much better than your wild guesstimates)
<strong>You know, it seems to me that the whole "cheap consumer computer" age is over for now. Apple missed the boat. The sad part is that they missed the boat on the trend they started. The iMac is the real reason all the PC companies started selling appliance computers....</strong><hr></blockquote>
The "Cheap" computers bring in consumers, and the "add-ons" push up the price. The 599 computer began when networking companies likeMSN and CompuServe started offering rebates with a service contract for their internet service. It sold a lot of computers, and made for a number of disatisfied customers of these same ISP's. My Stepfather bought one agenst my advise, and has since droped that ISP, but still has the Wintel hardware.
Apple dosnt have to have the chepest hardware, just maintain a good level entry computer of around $799. Adding a sub $1000 computer without a monitor would bring some switchers over who already have monitors and or want to upgrade video cards. Drop the PCI, or leave 1 (for a firewire 2 card) on with an AGP slot, which would help sell Apple monitors, and keep the Video Card companies making products for Macs. It would probably eat away a little at the iMac/eMac sales, and some at the low end PM sales as well, but if it brought enough new customers over for Apple to gain another % point of market share it would be worth it. Another market for just such a system, with the proper case, would be to build render farms for animation and video...for the price of 3 high end Duals you could buy about 7 low end computers...(4 processors vs. 7 in a render farm).
<strong>
You might, if you one day, god forbid, make it to college. (hint: it's much better than your wild guesstimates)</strong><hr></blockquote>
Dear Nebrie,
Can you please explain the following to me:
1) Why do you presume that I have not attended/graduated from college?
2) Why do you assume that the numbers I've listed are "wild guesstimates"?
Thanks,
-theMagius
JYD wrote:
[[[The eMac is a good low-end computer...in fact it's far better than the original iMac. If Apple had introduced it even a year earlier it would have made a big difference. The only drawback to the eMac is that it doesn't have an AGP slot, and this will drive away many potential buyers who are interested in gaming. ]]]
LOL Just what we want, our students playing games rather than doing anything study-related. ;-) I'm glad the "e" in eMac stands for "everyone".
<hr></blockquote>
Students aren't robots, they like to have fun just like anyone else.
And an eMac would be awesome if you could rip out the POS video card it comes with and drop in a GeForce4 Ti. That sucker would be set for DOOM III and every other game that comes out a year from now.
Yet again, Apple stupidly assumes that "consumers" don't play games, and that "pros" are most interested in gameing. It is utterly backasswards to put high end video cards in their towers but utter crap in their iMacs and eMacs.
Apple needs to understand that it's CONSUMERS who play games, not graphic artists at work using photoshop.