I was making the point that people always say that Dell lose money on machines, but they don't.
I did not say Dell was making no money. But you cannot ignore their incredibly lopsided sales to profit ratio.
Quote:
I highly doubt that the $799 class machines are being sold at a loss.
If Dell sells a $799 computer with conroe, expandable slots, a second hard drive and makes $10. You can technically say they made a profit but its nothing to get too excited about.
While Apple sells a $799 computer without any of that and makes back around $120. My point is that Apple has stripped the computer of superfluous hardware and cost down to what the user will actually need to use.
A BTO-able design that starts at $999 and has the following core specs:
2 PCIe slots, one of which is used for a graphics card
4 Desktop RAM slots
Conroe CPU
one optical drive bay
two HDD bays
The $999 config would have a 1.8 GHz Conroe, 512 MB RAM, Draw-loading combo (CD-RW/DVD-ROM) drive, 160 GB HDD and ATI X1600 or equivalent NVIDIA graphics card.
Conroe speed, amount of RAM, amount of HDD space, amount of RAM, optical drive type and graphics card would all be configurable.
Could you break out the prices? Include time as well.
What about the box?
Shipping and distribution costs?
Advertising, sales and marketing allotment?
Who is your target market?
How big is this market?
What is the competition?
How much margin?
What is the cost of service and support?
What software would it run?
Is OS X included in your $999?
What about a keyboard and mouse?
How far can you expand it? With what? How much?
How much out of every box can I set aside for R&D?
Nice try at moving the goal posts, but you were talking about Apple losing money if they sold people a $999 tower instead of a Mac Mini, which is not accurate.
No I'm not saying that at all.
Quote:
I highly doubt anyone who's considering a Mac Mini ends up buying a Mac Pro. I also highly doubt that people who buy $2500 Mac Pros are really after $999 towers.
I'm saying if Apple did introduce a midrange desktop it will likely be around $1700 - $2000. This keeps the professional expandable machines and consumer machines in separate categories and protects Apple's profit margins.
People who really need expandability will be willing to pay for it. People who don't really need it won't care.
In Dell's most recently ended financial quarter, they made a profit of $605 million.
Comparatively Apple made $546M...so I'm not overwhelmed with the assertion that Apple MUST make a tower (not saying that you personally as saying that) to be successful.
The market share metric is of secondary importance to me relative to profitability and Apple's ability to continue to develop OSX, iLife, iWork, etc (all of which probably have a small independent ROI but contributes greatly to the success of the platform as a whole) and still make Wall Street happy.
With respect to the viability of the platform...as long as they ship a million or so Mac's per quarter I have no worries. If they had sold 0 desktops as opposed to 600K desktops the Mac/OSX platform is viable for 3rd party developers given 900K laptop sales.
That's fine he wants to build his own box. But its flawed at best to say I want expandability but cannot afford a MacPro. Because to gain any real performance from expanding costs money.
That doesn't make much sense. A budget is a budget is a budget. So what if he wants to add $500 of expansion cards... if his budget is $1500-2000, he still can't afford a MacPro, much less a MacPro plus what he wants to add to it. But he CAN afford a $1000-1500 minitower and the cards he wants to add on top of it.
Teno, I gotta ask... WTH? Are you thinking ultra high-end only, as in $5000 of add-ons? That's a pretty small market. \
Most companies who compete below $1000 are hemorrhaging money. The only one who did ok was HP but they did not make as much as Apple. The advantage for Apple's segment is that Apple makes far more money per computer sale than any one else.
The rest of the industry is competing on price and loosing massive amounts of money in the process while Apple is making money hand over fist. Why would Apple shift to their business model just to sell a few more machines?
You should ask Steve Jobs that, since he ok'd the Mac Mini. Seems to be doing fine with it too.
If Apple could make money configuring a low-end tower safely, and without cannibalizing its own products, it would.
The problem is, if a company is not willing to cannibalize its own products, someone else will for them.
Some cases in point: Sun, with its expensive propietary servers, trying to battle a sea of incoming, cheap Intel-Linux boxes.. Sony, unwilling to support mp3 in its music players for fear of harming its music division, thus leaving the door wide-open for the iPod. Detroit, enamored of full-size SUV profits, not willing to invest in small cars or hybrids. The list goes on and on.
Not saying that its anything near as dire as that for Apple, just that the lesson is clear.
Lets say Apple uses an aluminum Cube like case with innovative easy access to the computers interior. Bearlake chipset with 1333 MHz FSB and 667MHz DDR2-SDRAM.
Lets use the MacPro BTO as a model. The base model starts at $1699 with:
1 - 2.67 Ghz Conroe Duo
ATI X1950 GPU
1 - open PCIe slot
1 -optical bay w/ 16x double-layer SuperDrive
1- 250GB 7200-rpm Serial ATA standard
1- open HDD bay
1GB (2 x 512MB) standard
4 - RAM slots
Options:
2.4GHz Conroe $300 subtraction
2.93GHz Conroe Xtreme $800 addition
Nvidia GeForce 7900 $150 reduction
NVIDIA Quadro FX 4500 512MB, Stereo 3D $1650 addition
2GB (4 x 512MB) add $300
4GB (4 x 1GB) add $1100
8GB (4 x 2GB) add $2700
If one takes the lowest cost options the total price comes to $1249.
How much out of every box can I set aside for R&D?
Don't need to talk about these specifically. The costs are spread out across Apple's product line. It is sufficient to aim for Apple's usual 28% margins.
Quote:
Originally Posted by Abster2core
Who is your target market?
People who buy desktop (not all-in-one) computers that cost around $999.
Quote:
Originally Posted by Abster2core
How big is this market?
Pretty big given that all of Apple's competition have models that thoroughly cover this price bracket.
Quote:
Originally Posted by Abster2core
What is the competition?
Everyone else who makes computers. Just like all of Apple's other line-ups.
Quote:
Originally Posted by Abster2core
What software would it run?
It's an x86 Mac, what do you expect?
Quote:
Originally Posted by Abster2core
Is OS X included in your $999?
What about a keyboard and mouse?
Of course.
Quote:
Originally Posted by Abster2core
How far can you expand it? With what? How much?
That should be obvious from the number of PCIe slots (1 free), optical drive slots (1, filled by default), HDD bays (2, 1 filled by default), and 4 RAM slots. Prices for the upgrades would be Apple's standard prices. People could always upgrade the machine themselves after-market.
Quote:
Originally Posted by Abster2core
USB ports? FIrewire?
Licences?
Fans?
Power cord?
Install/restore DVDs?
Print and electronic documentation?
DVI?
These are all supplied with the Mac Mini and iMac, both of which have high margins.
Let's start with the current 20" iMac, which has the following specs:
2.16 GHz Merom
1 GB laptop RAM
250 GB desktop HDD
8 x dual-layer DVD burning laptop optical drive
128 MB X1600 graphics
Built-in iSight
Front Row
Airport and Bluetooth
Price: $1499
The 20" Cinema Display costs $699.
Let's say the iMac has a margin of 29% and the Cinema Display a margin of 35%
This means that the component + assembly + shipping costs of the iMac are $1065.
The component + assembly + shipping costs of the Cinema Display are $454
Assuming the assembly and shipping costs of the Cinema Display and 20" iMac are equal, that means the component costs of the iMac without display are $611.
going over the $799 tower component by component:
1.86 GHz E6300 Conroe (-$120. Intel's latest price list doesn't have Merom prices, but I believe they cost the same as the Yonahs. The price list is here. Based upon those prices, the difference would be $240. I halved that to account for the fact that Apple buy 100's of thousands of CPUs rather than thousands)
No iSight (-$5)
512 MB Desktop RAM (-$25)
160 GB HDD (-$6)
Draw-loading Combo Drive (-$40)
ATI-X1600 (+$0)
A $799 tower with 28% margin has component+assembly+shipping costs of $575.28, so that leaves $160 (575 - (611 - 120 - 5 - 25 - 6 - 40)) for a case, assembly and shipping. Which is plenty.
I'd like to say once again that it is quite possible that the desktop market is shrinking fast enough to not make it worth Apple developing this machine.
If you can save up $1500 - $2000. Its possible to be able to wait a bit longer and save up $2500.
By that rationale, there's no such thing as a pricepoint and no such thing as a budget. It's a nice sentiment when were talking about Macs, but sorry, in reality, it doesn't work that way. You always run into a figure beyond which a person is not willing to pay.
Quote:
Also you can choose the lesser options and get the MacPro down to $2124.
That's great, but 1) a lot of ppl don't know that, and 2) it's still a sky-high price for many.
Honestly Teno, Apple used to sell towers not all that long ago for $1499, even $1299 at one point. Didn't seem like it was hurting them then, probably wouldn't be a problem for them now.
(re: cannibalization) This would be true if anyone else could run OS X. But they don't so they won't.
That's what Apple told themselves in the '80s/early '90s. "People will pay a big premium for our OS, so its okay not be competitive on price." But guess what? MS made a 'good enough' OS (Win95) and the bottom fell out, because Apple overcharged for the privilege of owning a Mac.
Now we have Vista coming along (someday anyway, lol). As good as OS X? Hell no. But on the surface, it could look 'good enough' to a lot of people. Will it decrease the premium that Apple can charge for its computers? Yeah, it might. Should Apple be ready for this, with a price-competitive (within reason) lineup that meets a wide variety of consumer needs? Seems like a good idea, don't you think? 8)
Agree wholeheartedly with Mr H. How can desktop market share go up when Apple doesn't offer a mid range tower, which is the most commonly bought desk top system? I've said once and will say it again, this is the heart of the market. Apple can't avoid this forever. Perhaps when Quad core Xenons come out and can be put in the Mac Pro, Apple will intro a mid range tower. I think the mid range tower would hurt Mac Pro sales as much as iMac sales and perhaps this is what Appple fears as well. A dual Quad core Mac Pro should hopefully separate itself perfromance wise from a nice Conroe mid range system easing this concern.
Well, here's a troublesome question.
Isn't it possible that the only reason why Apple's marketshare is going up is because it mostly consists of students who now mostly buy laptops, and school systems that also mostly buy laptops?
It's also possible, because of that, that even if Apple did have that mid tower that most of us would like to see, their desktop sales might not increase by much.
They did go back up this quarter, though, so there was some pull.
But, Apple might become thought of as the laptop company if they can't figure a way out of it.
I think their marketing must change, even before they come out with a new line. The one they have now is too nebulous, and unfocused.
Actually, that post is rather old. Judging by the updated iMac's price and the Dell XPS 410, I would have thought that Apple could deliver the specs I quoted for $799, maybe $849
Of course Aopple could do it.
But with all the talk about this for the past, what, five years?
Apple won't do it.
That's the problem, and we all know it.
We are having discussions, and arguments, about something that even Apple knows they can do, if they wanted to.
So the arguments are going nowhere.
Possibly, just possibly, at some point, Apple will come out with a machine.
But, this kind of speculation, while fun, is useless.
Remember all of the arguments about a cheap Mac? Jobs said Apple wouldn't compete in that market. for years he said that, and they didn't.
Then three months after he says it again?POW!, out pops the $499 Mini.
So, they just won't do it?until they do, if they do.
The real situation is this: How do you upgrade an iMac from an x1600 to a x1900? Answer: YOU CAN'T!
In a DIY machine, you just buy the card, and put it in. With the ROM's out there, you can even buy a PC version, flash it, and put it in.
I was just using the 7600 as an example, but if you want to be all "well that's moot because nobody would ever even DO that" then fine, I'll point out that you can't pay ANY amount of money to get a top of the line video card in an iMac.
I try to be courteous but people focus on my examples, not my points.
Well, to focus on your example again, the 24" iMac IS upgradeable. The chip isn't soldered down.
Comments
I was making the point that people always say that Dell lose money on machines, but they don't.
I did not say Dell was making no money. But you cannot ignore their incredibly lopsided sales to profit ratio.
I highly doubt that the $799 class machines are being sold at a loss.
If Dell sells a $799 computer with conroe, expandable slots, a second hard drive and makes $10. You can technically say they made a profit but its nothing to get too excited about.
While Apple sells a $799 computer without any of that and makes back around $120. My point is that Apple has stripped the computer of superfluous hardware and cost down to what the user will actually need to use.
As discussed in other threads:
A BTO-able design that starts at $999 and has the following core specs:
2 PCIe slots, one of which is used for a graphics card
4 Desktop RAM slots
Conroe CPU
one optical drive bay
two HDD bays
The $999 config would have a 1.8 GHz Conroe, 512 MB RAM, Draw-loading combo (CD-RW/DVD-ROM) drive, 160 GB HDD and ATI X1600 or equivalent NVIDIA graphics card.
Conroe speed, amount of RAM, amount of HDD space, amount of RAM, optical drive type and graphics card would all be configurable.
Could you break out the prices? Include time as well.
What about the box?
Shipping and distribution costs?
Advertising, sales and marketing allotment?
Who is your target market?
How big is this market?
What is the competition?
How much margin?
What is the cost of service and support?
What software would it run?
Is OS X included in your $999?
What about a keyboard and mouse?
How far can you expand it? With what? How much?
How much out of every box can I set aside for R&D?
USB ports? FIrewire?
Licences?
Fans?
Power cord?
Install/restore DVDs?
Print and electronic documentation?
DVI? VGA?
No problem? So what is stopping you?
Nice try at moving the goal posts, but you were talking about Apple losing money if they sold people a $999 tower instead of a Mac Mini, which is not accurate.
No I'm not saying that at all.
I highly doubt anyone who's considering a Mac Mini ends up buying a Mac Pro. I also highly doubt that people who buy $2500 Mac Pros are really after $999 towers.
I'm saying if Apple did introduce a midrange desktop it will likely be around $1700 - $2000. This keeps the professional expandable machines and consumer machines in separate categories and protects Apple's profit margins.
People who really need expandability will be willing to pay for it. People who don't really need it won't care.
In Dell's most recently ended financial quarter, they made a profit of $605 million.
Comparatively Apple made $546M...so I'm not overwhelmed with the assertion that Apple MUST make a tower (not saying that you personally as saying that) to be successful.
The market share metric is of secondary importance to me relative to profitability and Apple's ability to continue to develop OSX, iLife, iWork, etc (all of which probably have a small independent ROI but contributes greatly to the success of the platform as a whole) and still make Wall Street happy.
With respect to the viability of the platform...as long as they ship a million or so Mac's per quarter I have no worries. If they had sold 0 desktops as opposed to 600K desktops the Mac/OSX platform is viable for 3rd party developers given 900K laptop sales.
Vinea
Edit: Ooops...TB covered the $546M thingy
No I'm not saying that at all.
I'm sorry, but it seems to me that it is what you said:
So I suggested the Mac mini. We went to the store and she was amazed by the mini's small size.
We took it home and hooked it up.
?
If this $999 Conroe Mac existed I probably could have convinced her to buy it.
?
Apple would be loosing money on functionality that many people would not even use.
I'm saying if Apple did introduce a midrange desktop it will likely be around $1700 - $2000.
What specs would it have and what would the profit margin be?
What specs would it have and what would the profit margin be?
Pretty flipping huge as all it would be is a Mac Pro with a Conroe and appropriate MB at that price.
Unless it was a hugely overpriced cube in which case it would sell about as well as the last one.
Vinea
That's fine he wants to build his own box. But its flawed at best to say I want expandability but cannot afford a MacPro. Because to gain any real performance from expanding costs money.
Teno, I gotta ask... WTH? Are you thinking ultra high-end only, as in $5000 of add-ons? That's a pretty small market.
.
Most companies who compete below $1000 are hemorrhaging money. The only one who did ok was HP but they did not make as much as Apple. The advantage for Apple's segment is that Apple makes far more money per computer sale than any one else.
The rest of the industry is competing on price and loosing massive amounts of money in the process while Apple is making money hand over fist. Why would Apple shift to their business model just to sell a few more machines?
You should ask Steve Jobs that, since he ok'd the Mac Mini. Seems to be doing fine with it too.
.
If Apple could make money configuring a low-end tower safely, and without cannibalizing its own products, it would.
The problem is, if a company is not willing to cannibalize its own products, someone else will for them.
Some cases in point: Sun, with its expensive propietary servers, trying to battle a sea of incoming, cheap Intel-Linux boxes.. Sony, unwilling to support mp3 in its music players for fear of harming its music division, thus leaving the door wide-open for the iPod. Detroit, enamored of full-size SUV profits, not willing to invest in small cars or hybrids. The list goes on and on.
Not saying that its anything near as dire as that for Apple, just that the lesson is clear.
.
Lets use the MacPro BTO as a model. The base model starts at $1699 with:
1 - 2.67 Ghz Conroe Duo
ATI X1950 GPU
1 - open PCIe slot
1 -optical bay w/ 16x double-layer SuperDrive
1- 250GB 7200-rpm Serial ATA standard
1- open HDD bay
1GB (2 x 512MB) standard
4 - RAM slots
Options:
2.4GHz Conroe $300 subtraction
2.93GHz Conroe Xtreme $800 addition
Nvidia GeForce 7900 $150 reduction
NVIDIA Quadro FX 4500 512MB, Stereo 3D $1650 addition
2GB (4 x 512MB) add $300
4GB (4 x 1GB) add $1100
8GB (4 x 2GB) add $2700
If one takes the lowest cost options the total price comes to $1249.
Could you break out the prices?
O.K. This is done at the bottom.
Shipping and distribution costs?
Advertising, sales and marketing allotment?
What is the cost of service and support?
How much out of every box can I set aside for R&D?
Don't need to talk about these specifically. The costs are spread out across Apple's product line. It is sufficient to aim for Apple's usual 28% margins.
Who is your target market?
People who buy desktop (not all-in-one) computers that cost around $999.
How big is this market?
Pretty big given that all of Apple's competition have models that thoroughly cover this price bracket.
What is the competition?
Everyone else who makes computers. Just like all of Apple's other line-ups.
What software would it run?
Is OS X included in your $999?
What about a keyboard and mouse?
Of course.
How far can you expand it? With what? How much?
That should be obvious from the number of PCIe slots (1 free), optical drive slots (1, filled by default), HDD bays (2, 1 filled by default), and 4 RAM slots. Prices for the upgrades would be Apple's standard prices. People could always upgrade the machine themselves after-market.
USB ports? FIrewire?
Licences?
Fans?
Power cord?
Install/restore DVDs?
Print and electronic documentation?
DVI?
These are all supplied with the Mac Mini and iMac, both of which have high margins.
Let's start with the current 20" iMac, which has the following specs:
2.16 GHz Merom
1 GB laptop RAM
250 GB desktop HDD
8 x dual-layer DVD burning laptop optical drive
128 MB X1600 graphics
Built-in iSight
Front Row
Airport and Bluetooth
Price: $1499
The 20" Cinema Display costs $699.
Let's say the iMac has a margin of 29% and the Cinema Display a margin of 35%
This means that the component + assembly + shipping costs of the iMac are $1065.
The component + assembly + shipping costs of the Cinema Display are $454
Assuming the assembly and shipping costs of the Cinema Display and 20" iMac are equal, that means the component costs of the iMac without display are $611.
going over the $799 tower component by component:
1.86 GHz E6300 Conroe (-$120. Intel's latest price list doesn't have Merom prices, but I believe they cost the same as the Yonahs. The price list is here. Based upon those prices, the difference would be $240. I halved that to account for the fact that Apple buy 100's of thousands of CPUs rather than thousands)
No iSight (-$5)
512 MB Desktop RAM (-$25)
160 GB HDD (-$6)
Draw-loading Combo Drive (-$40)
ATI-X1600 (+$0)
A $799 tower with 28% margin has component+assembly+shipping costs of $575.28, so that leaves $160 (575 - (611 - 120 - 5 - 25 - 6 - 40)) for a case, assembly and shipping. Which is plenty.
I'd like to say once again that it is quite possible that the desktop market is shrinking fast enough to not make it worth Apple developing this machine.
Unless it was a hugely overpriced cube in which case it would sell about as well as the last one.
Apple could certainly use the Cube design, everyone loved that aspect. The Cube's functionality vs its price that was the problem.
The original Cube offered a single 450 MHz G4 processor, 20 GB hard drive, a 56 kbps modem, 64 MB of RAM for $1799
The higher version had a 500 MHz G4, a 30 GB hard drive and 128 MB of RAM for $2299
The Cube did not use full size GPU cards. No extra PCI slots. Three RAM slots. No standard audio input/output
if his budget is $1500-2000, he still can't afford a MacPro,
Teno, I gotta ask... WTH? Are you thinking ultra high-end only, as in $5000 of add-ons?
If you can save up $1500 - $2000. Its possible to be able to wait a bit longer and save up $2500.
Also you can choose the lesser options and get the MacPro down to $2124.
The problem is, if a company is not willing to cannibalize its own products, someone else will for them.
Not saying that its anything near as dire as that for Apple, just that the lesson is clear.
This would be true if anyone else could run OS X. But they don't so they won't.
If you can save up $1500 - $2000. Its possible to be able to wait a bit longer and save up $2500.
By that rationale, there's no such thing as a pricepoint and no such thing as a budget. It's a nice sentiment when were talking about Macs, but sorry, in reality, it doesn't work that way. You always run into a figure beyond which a person is not willing to pay.
Also you can choose the lesser options and get the MacPro down to $2124.
That's great, but 1) a lot of ppl don't know that, and 2) it's still a sky-high price for many.
Honestly Teno, Apple used to sell towers not all that long ago for $1499, even $1299 at one point. Didn't seem like it was hurting them then, probably wouldn't be a problem for them now.
.
(re: cannibalization) This would be true if anyone else could run OS X. But they don't so they won't.
That's what Apple told themselves in the '80s/early '90s. "People will pay a big premium for our OS, so its okay not be competitive on price." But guess what? MS made a 'good enough' OS (Win95) and the bottom fell out, because Apple overcharged for the privilege of owning a Mac.
Now we have Vista coming along (someday anyway, lol). As good as OS X? Hell no. But on the surface, it could look 'good enough' to a lot of people. Will it decrease the premium that Apple can charge for its computers? Yeah, it might. Should Apple be ready for this, with a price-competitive (within reason) lineup that meets a wide variety of consumer needs? Seems like a good idea, don't you think? 8)
.
Agree wholeheartedly with Mr H. How can desktop market share go up when Apple doesn't offer a mid range tower, which is the most commonly bought desk top system? I've said once and will say it again, this is the heart of the market. Apple can't avoid this forever. Perhaps when Quad core Xenons come out and can be put in the Mac Pro, Apple will intro a mid range tower. I think the mid range tower would hurt Mac Pro sales as much as iMac sales and perhaps this is what Appple fears as well. A dual Quad core Mac Pro should hopefully separate itself perfromance wise from a nice Conroe mid range system easing this concern.
Well, here's a troublesome question.
Isn't it possible that the only reason why Apple's marketshare is going up is because it mostly consists of students who now mostly buy laptops, and school systems that also mostly buy laptops?
It's also possible, because of that, that even if Apple did have that mid tower that most of us would like to see, their desktop sales might not increase by much.
They did go back up this quarter, though, so there was some pull.
But, Apple might become thought of as the laptop company if they can't figure a way out of it.
I think their marketing must change, even before they come out with a new line. The one they have now is too nebulous, and unfocused.
Actually, that post is rather old. Judging by the updated iMac's price and the Dell XPS 410, I would have thought that Apple could deliver the specs I quoted for $799, maybe $849
Of course Aopple could do it.
But with all the talk about this for the past, what, five years?
Apple won't do it.
That's the problem, and we all know it.
We are having discussions, and arguments, about something that even Apple knows they can do, if they wanted to.
So the arguments are going nowhere.
Possibly, just possibly, at some point, Apple will come out with a machine.
But, this kind of speculation, while fun, is useless.
Remember all of the arguments about a cheap Mac? Jobs said Apple wouldn't compete in that market. for years he said that, and they didn't.
Then three months after he says it again?POW!, out pops the $499 Mini.
So, they just won't do it?until they do, if they do.
But, until then...
Well I was TRYING to be nice to Apple.
The real situation is this: How do you upgrade an iMac from an x1600 to a x1900? Answer: YOU CAN'T!
In a DIY machine, you just buy the card, and put it in. With the ROM's out there, you can even buy a PC version, flash it, and put it in.
I was just using the 7600 as an example, but if you want to be all "well that's moot because nobody would ever even DO that" then fine, I'll point out that you can't pay ANY amount of money to get a top of the line video card in an iMac.
I try to be courteous but people focus on my examples, not my points.
Well, to focus on your example again, the 24" iMac IS upgradeable. The chip isn't soldered down.
and are you saying PCIe is going obsolete any time soon? are you on the drugs?
PCI Express 2.0 nears completion
Oops.