[quote] What gets me is that Sony has shipped 50 million Playstation II's in less than 3 years. By March or so, 1% of the population of every man, woman and child on planet earth will have a Playstation II. For flippin entertainment.
That's an incredible product at an incredible volume. The only thing I can think of that comes with that type of fast volume is cellphones.
Apple can and should introduce a product that has fast growth and can appeal to a world market. I believe if they want to grow the marketshare, they have to introduce a mac based system at a price point for consumption. What if Apple did introduce a Mac at $399? How many people would buy it? About everybody....
<hr></blockquote>
If it's a 'Pippin', maybe they don't. If it's a Newton, maybe they don't. If it's an iMac original...they nearly do...if it's a Cube, they don't. An iMac2 they...hmmm. Why didn't they do it with any of those? Will the iPod do it? Or its successor?
Sony came out of nowhere with the Playstation and took on Nintendo and won. In a way 'mighty' Redmond failed to do with the X-Box. M$ has deep pockets, so whose to say they can't take on Sony in the next round. So what did Sony do that M$ and Nintendo couldn't? IBM and M$ kicked Apple around in the 80s and 90s and Apple had the gui...the jewel in the crown, so what stopped them when they 'had it all'?
If Apple could build a guaranteed 50 million seller...would they for £399? But what would it be? Have they got the mindset or bottle or imagination to do it?
Sony have a mindshare that Apple can only dream of. Yet when I look at Apple's computer products vs Sony's...?
I do think Apple have it in them to cross the great divide. To go from the 'nearly men' of I.T Land to a true 'critical mass' brand. But, with what?
A 970 'Power'Mac? A cheaper iCube at £399? An X-serve? An iMac2? An iPod? A video Pod?
I guess that's up to Steve and his Merry Men. I'd sure like to see them finally kill that sacred cow...
Lemon Bon Bon
...and hey, in another year they'll probably have nearly a hundred stores to sell it in too!
[quote] I think it's part covering for lagging desktop sales, part going with an industry trend toward notebooks, and part playing to the strengths of their current platform: The G4 might not do so well in a tower setting, where it's up against much bigger, hotter chips, but within a heat- and power- constrained environment it's just about unbeatable. Apple's legendary ID also comes into play more with notebooks.<hr></blockquote>
<strong>Nevyn's analysis was absolutely right. </strong><hr></blockquote>
No, he misses a very important fact. If you increase your volume you can spread your fixed costs over more machines.
To give an example. If you are an airplane manufacturer and it costs you $5M to design an airplane and $2M to build it. Lets say you consider $100K to be a decent profit per plane. So if you build only one you would have to sell it for $7.1M But if you decide to double your market share and sell 2 then you would be able to sell them for $4.6M each and still make $100K per plane. As each plane will only have to pay off $2,5M each for the developement costs. This is admitedly an extreme example and very simplifed but it does illustrate the point.
And another thing. With the way things are manufactured today you worry less about Apple being able achieving economies of scale and more about whether Compal or Quanta can.
[quote] If you increase your volume you can spread your fixed costs over more machines.
<hr></blockquote>
Elementary my Dear Watson.
...and Xype is also right. Have you enough buyers to take that risk..? Make more, sell them cheaper but who's going to buy them. Perhaps all the skinflints who buy Dell? Or...
How about all those folks that visit the Apple Retail Stores but walk out empty handed?
Apple may hit nearish 100 stores in the next year or so. I think that might be a good place to think about 'making more of them' and introduce cheaper prices.
Apple are already increasing component buying from Taiwan manufacturers in order to get the costs down. So Apple are aware that they need to be 'cheaper' or 'competitive' (and yawn, no, they don't have to be the cheapest, that's not the point...but they have to be less than a 50% premium or people are going to walk back out of those stores of theirs.)
Getting back to the thread top title , 'The $399 question...' In Sterling, I'd guess that's £299 inc VAT. That's very cheap. As cheap as the lowest cost iPod. I don't, for the forseeable future see Apple being able to get that cheap. But it is encouraging that they can make something below £500 inc VAT!!!
But, clearly they sold nearly 60K of iMac G3 (for a machine that's been out five years, it's putting the iMac2 sales to shame...) at its £695 inc VAT price. So?
1. There's clearly a market for a cheaper Mac computer.
2. Apple can clearly make a profit on it. Otherwise I'm guessing they, like the Cube, wouldn't make it.
3. They removed the CDRW option. It's bare ram/HD. It's got an ancient ATi and motherboard and 'slow' G3 processor in it.
If Apple couldn't make a profit of that, they'd have to be incompetant. It's A-N-C-I-E-N-T!
They must be making more money on that model NOW then when it was first introduced. It's feature set seemed to have been frozen since the dawn of time. And they haven't killed it yet. I wonder why...? They once sold the bottom end iMac for £595 inc VAT. So, several years on, they can surely sell it for £495 and bump the spec slightly. So we're getting very close to that mythical $399 or £299 inc VAT. Take away the crt and...?
And this iMac G3 comes in one vanilla flavour and its selling 60K units. Who's buying them, I wonder? Edu' customers? Skinflint consumers? Dell Defectors?
Can they make this 'cheapo' computer of theirs cheaper and better specked? I believe they can. Let's look towards towards the laptop line for inspiration (an area where Apple are doing well, despite 'a' tech'.)
iBook, cheapo model. £799 inc VAT. Bare ram etc. But a G3 processor at 700 mhz. Not bad. And you get a great 12 inch flat screen with it.
- Tear off the screen and save how much?
- Take off the premium for 'laptop'.
- Use standard desktop components.
What do you have?
- a machine that more than runs 'X' acceptably (especially if Apple can use the ANCIENT/CHEAPO Quartz supporting Geforce2MX graphics card or chip glued onto the motherboard...)
- a slimline desktop computer. i-Slab
- fairly portable desktop for Unreal parties.
- A space saving and cheapo edu' machine.
- no need to buy new monitor. Hook up with your existing display.
Price?
I don't know the price lists of manufacturer's components. But I'm guessing this 'iSlab' could be cheaper than the current G3 iMac by at least a hundred pounds. And if Apple only made 10% off each one and they sold it for £495 inc VAT - £545 inc VAT for each one, then that's £50 made on each one.
(Don't tell me a Apple can't do. B*ll*cks! Commodore were doing this in the early 90s and made a stack of profit off their Amigas... AND x86 computers...and Wallmarts of the world are doing it too with machines as low as £299. Will such a Mac for £495 be crap? Not if its got 'X' in it.)
Sell 100 K of those to your edu' markets and yes, you're making a profit. It all goes to the bottom line. Every bit helps. And it gets a Mac into the hands of those skin flints who walk out the Apple stores without.
And I'm betting Ives can make it gorgeous. A nice, hip, cheapo Mac. Apple can make a hip cheapo Laptop iBook for £799.
I'm falling off my seat, rolling about on the floor laughing my ass off at the fact (and a pinch of irony here) that Apple can do it for a premium product like a laptop but NOT a desktop.
£799 iBook?
£495-595 iCube/iSlab/iHeadless.
Who'd buy. I would.
Who else? Well, I talk to some Apple dealers, and back when Apple had the £595 inc VAT iMac G3, many 'serious' Pro Mac heads would buy a 'power'Mac for themselves...and a G3 iMac cheapo for their daughter. With that famous price hike a few years back (I remember it well, on iMacs and Towers...), Apple took this option away. It's this kind of almost, but not quite 'throw away' attitude they need to encourage on the bottom of their consumer lines.
They've just about cracked it with the iBook and look like being able to take on Dell with it. Where's the desktop answer? The eMac isn't it.
[quote]So what did Sony do that M$ and Nintendo couldn't? <hr></blockquote>
Why don't you look up the history behind this with the original Playstation. And you will find that they were the first console to really take on using cd as a medium for their games while everyone else was still playing with cartridges. Sheesh, funnily enough Sony originally fabbed this for one of the other biggies in Console games. They put Sony on the back-burner so to speak even though Sony went through a lot of R&D. Sony then took the fruits of their labour up on their own and everything flowed on to what is today.
Hell! How do you think Nintendo first became big? Same sort of thing happened...
For everyone making comments on the price of the playstation keep in mind that:
1. The cost of R& D is spread out over a longer time than in the computer market. Consoles have a lifespan of about 4 years between upgrades.
2. Typically consoles are sold at or below cost, and profit comes in licensing fees from the sales of games, a buisness model that could not work in the computer industry.
[quote] Why don't you look up the history behind this with the original Playstation. <hr></blockquote>
I'm quite aware of the history of Sony's Playstation, Sega, Nintendo, Atari, Commodore et al.
I was merely being quizzical.
Homenow has a point about the longer shelf life of the console. Having said that, we mustn't forget how well the Commodore 64 did. Selling at least ten million home computers. Or the iMac, with over five million sold.
Apple did a better job of keeping the original iMac buzz going than they have with the iMac 2. They also got it under a grand quicker. With as many as about three models under a K and one as cheap as £595 inc VAT at one point.
If they want the iMac 2 to be same success they're going to have to be more aggressive. No fundamental spec' update in over a year is quite unforgiveable. If they've got problems, if they're a good company, they should be able to sort those manufactering problems out.
Come on, Apple, show me an imac2 that will make me break down and cry and hand over my hard earned cash.
The point is, apple is not trying to play the dell game. They are not trying to obtain world domination. They are sticking by their principles of innovation and pushing forward new software and hardware technologies. If you have read The Fountainhead, picture apple as Howard Roark. They are masters at what they do, and if they change, they will become nothing just like everybody else. Also, Apple doesn't cater to the interests of the masses(in the general sense), although it may seem like they do at times. This is because [steve] has a vision .....ok i am done. I know when i start thinking of PC users as souless second handers, i need to go to bed. g'night and try not to worry about Apple. They know what they're doing. </strong><hr></blockquote>
I think that makes Dell take the roll of Peter Keating ? heh heh, a pathetic hollow shell of man that was still popular for some reason.
[quote] They need a new chip to further differentiate the high end model. Low end, low priced G4 towers are fine if there's a compelling product for higher margins still available.
<hr></blockquote>
That's an interesting point. It'll be intriguing to see how Apple's desktops line up once the 970 is out the gates...
Comments
"Oh, please. The iPod is not a Mac. It's not even in the ballpark. If you think it is, get OS X running on it and come back to me."
But it IS an Apple...
Lemon Bon Bon
That's an incredible product at an incredible volume. The only thing I can think of that comes with that type of fast volume is cellphones.
Apple can and should introduce a product that has fast growth and can appeal to a world market. I believe if they want to grow the marketshare, they have to introduce a mac based system at a price point for consumption. What if Apple did introduce a Mac at $399? How many people would buy it? About everybody....
<hr></blockquote>
If it's a 'Pippin', maybe they don't. If it's a Newton, maybe they don't. If it's an iMac original...they nearly do...if it's a Cube, they don't. An iMac2 they...hmmm. Why didn't they do it with any of those? Will the iPod do it? Or its successor?
Sony came out of nowhere with the Playstation and took on Nintendo and won. In a way 'mighty' Redmond failed to do with the X-Box. M$ has deep pockets, so whose to say they can't take on Sony in the next round. So what did Sony do that M$ and Nintendo couldn't? IBM and M$ kicked Apple around in the 80s and 90s and Apple had the gui...the jewel in the crown, so what stopped them when they 'had it all'?
If Apple could build a guaranteed 50 million seller...would they for £399? But what would it be? Have they got the mindset or bottle or imagination to do it?
Sony have a mindshare that Apple can only dream of. Yet when I look at Apple's computer products vs Sony's...?
I do think Apple have it in them to cross the great divide. To go from the 'nearly men' of I.T Land to a true 'critical mass' brand. But, with what?
A 970 'Power'Mac? A cheaper iCube at £399? An X-serve? An iMac2? An iPod? A video Pod?
I guess that's up to Steve and his Merry Men. I'd sure like to see them finally kill that sacred cow...
Lemon Bon Bon
...and hey, in another year they'll probably have nearly a hundred stores to sell it in too!
[ 01-18-2003: Message edited by: Lemon Bon Bon ]</p>
Lemon Bon Bon
<strong>Nevyn's analysis was absolutely right. </strong><hr></blockquote>
No, he misses a very important fact. If you increase your volume you can spread your fixed costs over more machines.
To give an example. If you are an airplane manufacturer and it costs you $5M to design an airplane and $2M to build it. Lets say you consider $100K to be a decent profit per plane. So if you build only one you would have to sell it for $7.1M But if you decide to double your market share and sell 2 then you would be able to sell them for $4.6M each and still make $100K per plane. As each plane will only have to pay off $2,5M each for the developement costs. This is admitedly an extreme example and very simplifed but it does illustrate the point.
And another thing. With the way things are manufactured today you worry less about Apple being able achieving economies of scale and more about whether Compal or Quanta can.
<strong>No, he misses a very important fact. If you increase your volume you can spread your fixed costs over more machines.</strong><hr></blockquote>
If you have a buyer for it, that is.
<hr></blockquote>
Elementary my Dear Watson.
...and Xype is also right. Have you enough buyers to take that risk..? Make more, sell them cheaper but who's going to buy them. Perhaps all the skinflints who buy Dell? Or...
How about all those folks that visit the Apple Retail Stores but walk out empty handed?
Apple may hit nearish 100 stores in the next year or so. I think that might be a good place to think about 'making more of them' and introduce cheaper prices.
Apple are already increasing component buying from Taiwan manufacturers in order to get the costs down. So Apple are aware that they need to be 'cheaper' or 'competitive' (and yawn, no, they don't have to be the cheapest, that's not the point...but they have to be less than a 50% premium or people are going to walk back out of those stores of theirs.)
Getting back to the thread top title
But, clearly they sold nearly 60K of iMac G3 (for a machine that's been out five years, it's putting the iMac2 sales to shame...) at its £695 inc VAT price. So?
1. There's clearly a market for a cheaper Mac computer.
2. Apple can clearly make a profit on it. Otherwise I'm guessing they, like the Cube, wouldn't make it.
3. They removed the CDRW option. It's bare ram/HD. It's got an ancient ATi and motherboard and 'slow' G3 processor in it.
If Apple couldn't make a profit of that, they'd have to be incompetant. It's A-N-C-I-E-N-T!
They must be making more money on that model NOW then when it was first introduced. It's feature set seemed to have been frozen since the dawn of time. And they haven't killed it yet. I wonder why...? They once sold the bottom end iMac for £595 inc VAT. So, several years on, they can surely sell it for £495 and bump the spec slightly. So we're getting very close to that mythical $399 or £299 inc VAT. Take away the crt and...?
And this iMac G3 comes in one vanilla flavour and its selling 60K units. Who's buying them, I wonder? Edu' customers? Skinflint consumers? Dell Defectors?
Can they make this 'cheapo' computer of theirs cheaper and better specked? I believe they can. Let's look towards towards the laptop line for inspiration (an area where Apple are doing well, despite 'a' tech'.)
iBook, cheapo model. £799 inc VAT. Bare ram etc. But a G3 processor at 700 mhz. Not bad. And you get a great 12 inch flat screen with it.
- Tear off the screen and save how much?
- Take off the premium for 'laptop'.
- Use standard desktop components.
What do you have?
- a machine that more than runs 'X' acceptably (especially if Apple can use the ANCIENT/CHEAPO Quartz supporting Geforce2MX graphics card or chip glued onto the motherboard...)
- a slimline desktop computer. i-Slab
- fairly portable desktop for Unreal parties.
- A space saving and cheapo edu' machine.
- no need to buy new monitor. Hook up with your existing display.
Price?
I don't know the price lists of manufacturer's components. But I'm guessing this 'iSlab' could be cheaper than the current G3 iMac by at least a hundred pounds. And if Apple only made 10% off each one and they sold it for £495 inc VAT - £545 inc VAT for each one, then that's £50 made on each one.
(Don't tell me a Apple can't do. B*ll*cks! Commodore were doing this in the early 90s and made a stack of profit off their Amigas... AND x86 computers...and Wallmarts of the world are doing it too with machines as low as £299. Will such a Mac for £495 be crap? Not if its got 'X' in it.)
Sell 100 K of those to your edu' markets and yes, you're making a profit. It all goes to the bottom line. Every bit helps. And it gets a Mac into the hands of those skin flints who walk out the Apple stores without.
And I'm betting Ives can make it gorgeous. A nice, hip, cheapo Mac. Apple can make a hip cheapo Laptop iBook for £799.
I'm falling off my seat, rolling about on the floor laughing my ass off at the fact (and a pinch of irony here) that Apple can do it for a premium product like a laptop but NOT a desktop.
£799 iBook?
£495-595 iCube/iSlab/iHeadless.
Who'd buy. I would.
Who else? Well, I talk to some Apple dealers, and back when Apple had the £595 inc VAT iMac G3, many 'serious' Pro Mac heads would buy a 'power'Mac for themselves...and a G3 iMac cheapo for their daughter. With that famous price hike a few years back (I remember it well, on iMacs and Towers...), Apple took this option away. It's this kind of almost, but not quite 'throw away' attitude they need to encourage on the bottom of their consumer lines.
They've just about cracked it with the iBook and look like being able to take on Dell with it. Where's the desktop answer? The eMac isn't it.
Lemon Bon Bon
[ 01-19-2003: Message edited by: Lemon Bon Bon ]
[ 01-19-2003: Message edited by: Lemon Bon Bon ]</p>
Why don't you look up the history behind this with the original Playstation. And you will find that they were the first console to really take on using cd as a medium for their games while everyone else was still playing with cartridges. Sheesh, funnily enough Sony originally fabbed this for one of the other biggies in Console games. They put Sony on the back-burner so to speak even though Sony went through a lot of R&D. Sony then took the fruits of their labour up on their own and everything flowed on to what is today.
Hell! How do you think Nintendo first became big? Same sort of thing happened...
1. The cost of R& D is spread out over a longer time than in the computer market. Consoles have a lifespan of about 4 years between upgrades.
2. Typically consoles are sold at or below cost, and profit comes in licensing fees from the sales of games, a buisness model that could not work in the computer industry.
I'm quite aware of the history of Sony's Playstation, Sega, Nintendo, Atari, Commodore et al.
I was merely being quizzical.
Homenow has a point about the longer shelf life of the console. Having said that, we mustn't forget how well the Commodore 64 did. Selling at least ten million home computers. Or the iMac, with over five million sold.
Apple did a better job of keeping the original iMac buzz going than they have with the iMac 2. They also got it under a grand quicker. With as many as about three models under a K and one as cheap as £595 inc VAT at one point.
If they want the iMac 2 to be same success they're going to have to be more aggressive. No fundamental spec' update in over a year is quite unforgiveable. If they've got problems, if they're a good company, they should be able to sort those manufactering problems out.
Come on, Apple, show me an imac2 that will make me break down and cry and hand over my hard earned cash.
Lemon Bon Bon
[ 01-19-2003: Message edited by: Lemon Bon Bon ]</p>
<strong>
....
The point is, apple is not trying to play the dell game. They are not trying to obtain world domination. They are sticking by their principles of innovation and pushing forward new software and hardware technologies. If you have read The Fountainhead, picture apple as Howard Roark. They are masters at what they do, and if they change, they will become nothing just like everybody else. Also, Apple doesn't cater to the interests of the masses(in the general sense), although it may seem like they do at times. This is because [steve] has a vision .....ok i am done. I know when i start thinking of PC users as souless second handers, i need to go to bed. g'night and try not to worry about Apple. They know what they're doing.
I think that makes Dell take the roll of Peter Keating ? heh heh, a pathetic hollow shell of man that was still popular for some reason.
<hr></blockquote>
That's an interesting point. It'll be intriguing to see how Apple's desktops line up once the 970 is out the gates...
Wonder how it will all look circa Jan' 2004...
Lemon Bon Bon