SiliconValley.com discussion
I came across this discussion by some silicon-valley watchers on the future of apple hardware. If you have time to waste, it's an interesting read. One intriguing (though disputable) quote:
"But the real story that hasn't been covered is how Apple is going to grow at the expense of Dell. If you look at the consumer space today, you basically have Dell, Gateway, and HP. Only Dell is making money. Gateway is slowly bleeding its way to death, and in five years, they will be gone. And HP is still basically selling PCs to sell ink. But the printer market is getting more competitive and I am not sure they can keep this up. The retailers will all switch to private label brands supplied by Asian ODMs and possibly HP. But Dell has steadly continued to gain profitable share because of their business model.
Apple is on better footing than even Dell. Apple is as effcient in inventory management. Direct is the majority of their business. They have great reach through the Apple Store. And they have the advertising budget that only Dell has in the PC world. But they have something else - Mac OS X. Not only is it a better OS, they own it. Dell pays $55 per unit for WinXP. Apple pays less than half that for Mac OS X. And the more boxes Apple sells, the lower their OS cost goes. So Apple can compete head-to-head with Dell on price and still be more profitable.
Don't believe that Apple will do this? Think they want a premium for the Mac? Look at the pricing for any iPod. Shuffle, Nano, and even the big daddy are all priced to compete. Apple's not looking for a premium on iPod, they are looking for scale. They will do the same with the Mac and gain huge share."
"But the real story that hasn't been covered is how Apple is going to grow at the expense of Dell. If you look at the consumer space today, you basically have Dell, Gateway, and HP. Only Dell is making money. Gateway is slowly bleeding its way to death, and in five years, they will be gone. And HP is still basically selling PCs to sell ink. But the printer market is getting more competitive and I am not sure they can keep this up. The retailers will all switch to private label brands supplied by Asian ODMs and possibly HP. But Dell has steadly continued to gain profitable share because of their business model.
Apple is on better footing than even Dell. Apple is as effcient in inventory management. Direct is the majority of their business. They have great reach through the Apple Store. And they have the advertising budget that only Dell has in the PC world. But they have something else - Mac OS X. Not only is it a better OS, they own it. Dell pays $55 per unit for WinXP. Apple pays less than half that for Mac OS X. And the more boxes Apple sells, the lower their OS cost goes. So Apple can compete head-to-head with Dell on price and still be more profitable.
Don't believe that Apple will do this? Think they want a premium for the Mac? Look at the pricing for any iPod. Shuffle, Nano, and even the big daddy are all priced to compete. Apple's not looking for a premium on iPod, they are looking for scale. They will do the same with the Mac and gain huge share."
Comments
Apple: The Next Generation
If there's any area in which Apple Computer has maintained unrivaled dominance over the years, it's in public market for speculation and rumor.
That is so totally true.