...but they're more fun to play with ;>)
Posted on 01/16/2005 1:58:25 AM PST by Swordmaker
You have to love Apple Computer. Not, however, for its products. Those are over-glossy fashion plates designed for the people who like to overpay for products and then brag about it.
No, you have to love Apple for its ability to manipulate the press. Here is a tiny company with 3% market share in the personal computer, and yet Steve Jobs' new product announcements at Macworld earlier this week were treated as if they were auguries of the future of computing from a descending deity.
They weren't. Instead it was mostly Apple -- and more specifically, chairman and founder Steve Jobs -- backing and filling as he tried to put a happy face on a radical and self-refuting change in Apple product strategy.
Why self-refuting? Because Apple has long called itself the BMW of personal computers. In other words, it priced its products 30% to 40% above comparable Windows-based product because of a conscious premium-pricing market strategy, not because its costs were out of control.
Fair enough. While many people would never buy a BMW-style personal computer, the same way many people who can afford a BMW car would rather buy something cheaper and more functional for half the price, there is no denying tastes, so there is undoubtedly a market for people who want to buy opalescent over-priced computers from Apple.
But this week's announcement flies in the face of that prior strategy. By launching products -- its Mac Mini and iPod Shuffle -- at low-low prices, undercutting comparable products from computer-makers and portable music player makers, respectively, Apple is getting down and dirty and fighting it out on price.
Where, in other words, is the BMW strategy? It is as if BMW suddenly tried to undercut Honda's Accord or Toyota's Camry. While there's no denying there is a large market for value-priced cars, by competing directly against those products BMW would be putting its margins at risk. More importantly, it would be ample reason for investors to wonder whether BMW executives had lost their minds. Why would they suddenly abandon what they did best -- engineering interesting products -- and start trying to sell family econo-boxes?
It is precisely the same with Apple. So why is the company doing it?
Because Apple has a problem. Most of the company's growth in recent years has come from its foray into consumer electronics. From a standing start only a few years ago, the company's popular iPod music player has becoming a standout performer, accounting for something like 30% of the company's sales -- and more sales units than the company's Macintosh personal computers.
It is a remarkable performance from a nominally personal-computer-oriented company. It has competed head-on with some of the largest consumer electronics companies in the world and come out on top.
Now, however, Apple has to figure out what to do with all this "success."
Because iPods get lower margins, generally, than Apple's personal computers, so being successful at selling iPods, however glamorous and attention-getting that might be, doesn't contribute to profits the same way Mac sales do. Apple would like to find a way to turn iPod sales into Macintosh sales before the bloom goes off iPod in the fickle consumer electronics market.
Hence the company's announcements this week. Far from being forward-thinking and strategic, Jobs was busily shoring up a currently foundering product line -- Apple's over-priced Macintosh -- by leveraging a soon-to-be foundering product line -- Apple's iPod.
Why did no one call Apple on it? And why do people pay so much attention to this company with so little share of the personal computer market? After all, Dell sells more in personal computers in any three-week period than Apple does in an entire quarter. But when Dell CEO Michael Dell announces new prices for his products you don't get saturation coverage from the major North American business press.
It is partly because people want a horse-race in personal computers -- they want there to be someone selling PCs other than the Windows-compatible sorts. But that is not all. There is also the so-called reality distortion field that surrounds Steve Jobs. He is a mesmerizing speaker, someone skilled at turning sows' ears into silk purses. Case in point: His new iPod product plays songs in any order because it lacks a screen or any way to select songs, so he is pushing the slogan that "life is random." Nice trick.
So, kudos to Apple. It is the consummate media manipulator, a company that, puffer-fish-style, blows out its cheeks and convinces people that it is much bigger and more formidable than it actually is, thus attracting oodles of media coverage -- including, I suppose, this column.
Way to go, Steve.
That's a good point, antiRepublicrat. Mercedes actually makes a lot of taxis as well as a lot of luxurious cars, but their all-luxury image is strictly for the US.
That being said, the author of this article must have missed where Steve said their profit margin on this is the same as the eMac. Which makes sense because if you subtract the cost of a CRT monitor and the cost of a keyboard and mouse from the eMac price you get something close to $499.
They are still making a premium priced product - Dell sells similar systems in the $350 range. However, if you don't want to buy mail order, their prices are very competitive with what's actually available in retail stores.
I think Steve's problem with this concept before is that he couldn't figure out a way to make it chic. So he turned Johnathan Ive on it and he came up with what looks like a brilliant design idea. And you don't get any of those for $350.
D
Then you have infinitely more experience than most of the trolls here who have "never actually seen one but my friend who had to use one in 1986 told me they suck."
Apple's customers are the most satisfied of any other PC vendor measured in this index... Dell Inc.'s customers were only slightly less satisfied than Apple's, according to the index. The PC market-share leader received a score of 79." -- source
The only problem is the inclusion of Apple's product in the category of computers, when it is clearly a misengineered tangle of power-wasting wires and malfunctioning circuitry.
...but they're more fun to play with ;>)
Dell and Microsoft are two great American companies, but their strength is in marketing and mass production, not design or quality. Dell has been a decent company for investors over the last couple of years, but Microsoft has been flat as a pancake.
The company I feel sorry for is Intel. They know their x86 architecture is a dog from the Seventies, but they're stuck with it because of Microsoft.
It will be difficult for Microsoft, Intel and the clone manufacturers to escape the problems associated with their combined platform. When Microsoft eventually moves into hardware manufacturing, the clone manufacturers will not have a bright future.
"Selling Swill to Newbies" is Microsoft's specialty.
Every day on this forum, Wintel users are constantly whining and complaining about their computer problems - crappy components, spyware, worms, viruses, etc.
And every day, more FReepers are switching to Macs. Our computers just work better, period.
Apple's products are leading the way with innovation, quality and value.
Congratulations. If I read you right, this is the closest to proper use of "sour grapes" I've seen in a long time, including on the floor of Congress.
It's already available. Minus Windows, of course. Small box, low power consumption, 20-year warranty -- running Linux.
This has already been discussed a lot on other threads. Depending on what you want or neeed, the Mac mini is price-competitive with a Dell, with features give and take on both sides.
Look in a Dell case, then look in a G5 case. The Mac looks like it was designed by neat freeks. The Mac is the Felix to the general-market PC's Oscar.
Dell workstation:
Mac G5:
It may be a mess, but I call it home.
That Dell computer looks like a rat nest inside.
I like it.
Baling wire and chewing gum are okay for emergency repairs, but computers shouldn't be designed that way.
Look, at least *I* have a place to put my half-eaten pizza, dirty dishes, and filled ashtray in *my* computer. Do you have a place to put them in *your* obsessive-compulsive neat-freak computer?
The old OS problems were a reason for my going W2K instead of OS 9 several years ago. But Apple wasn't that late -- they had already been designing OS 10 by the time W2K came out.
However, while being late to market with things like those good OS features, DDR RAM and CD writing, Apple has also been the first to push new technologies and ideas in the marketplace, such as the GUI, USB, IEEE 1394 (Firewire), DVD writers, the trashcan, RISC, easy-open cases and no more floppies. All of these are extensively copied by the PC world these days.
It's home for me most of the time, too, but the "misengineered tangle of power-wasting wires" you mentioned is definitely the domain of the PC world.
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