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Apple - What A Difference Eight Years Can Make
conq writes "It's been eight years since Michael Dell was asked after a speech at a Gartner conference in Orlando what he would do if he were in charge of Apple Computer. His answer: Shut the company down and give the money back to shareholders. BusinessWeek in its new Byte of The Apple Blog looks at how the tables have turned since then. For example, over the last four quarters Dell has been coming in with a net profit margin of about 6.5%. Meanwhile Apple just finished its fiscal 2005 with a profit margin just shy of 9.6%."
Micheal Dell would have been smarter had he reserved judgement. Arrogance can sure come back 'round and bite you in the ass. In terms of profit margin one has to consider that Dell is bringing in revenue of around 14 billion a quarter versus Apple's 4 billion so I am not sure how to judge the differences in profit margin given the difference in revenue. Dell probably has a great deal more infrastructure. Oh, well. Just saying we should make sure we are comparing Apples to Apples (funny, huh?).
http://www.busyweather.com/
Apple then vs. Apple now, the difference is night and day.
Luck favors the prepared, darling.
6% versus 9% sounds good, but how much actual profit are we talking? 9% of chump change is worse than 6% of real money.
Fundamentally, Apple Computer has invested in research and development and has come out with revolutionary products that functionally make things easier while Dell has simply operated as a reseller and box builder. Where is the innovation coming out of Dell?
Although I just yesterday placed an order for two $379 commodity boxes from Dell that I will run headless behind OS X boxes for security reasons, almost all of our purchases have been going to Apple. From the Mac Mini to iMacs to dual G5s with 30in Cinema Displays, Apple has been building systems around an operating system, OS X that meets our needs. In addition, the security issues make them easier to administrate, freeing up time to get work done that we are actually interested in.
Visit Jonesblog and say hello.
As a wise man once said to me about allowing investors in my company, "Would your rather have all of a grape or a slice of watermelon?"
Sometimes it's best to just let stupid people be stupid.
With Dell's recent quarters slipping and Apple's recent quarters showing growth there can only be one conclusion:
Apple is dying!
{ - Generic Guy - }
I'd rather have 6% of a huge number than 9% of a large number.
No seriously, Dell is an amazing company when you consider they are competing in one of the most cutthroat market segments in high tech. IBM sold the last bits of their PC business a few months ago. Gateway is now pretty much irrelevant... even the Japanese titans can't compete with Dell.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
Not being economically savvy, how much of a difference is 3% really?
(Like... in TV ratings, one point is a big deal. I honestly don't know how important 3% is in economic terms.)
Are the result of their OS and hard^H^H^H^H Ipod
The best argument against democracy is a five-minute conversation with the average voter.
- Winston Churchill
Although I've never owned an Apple Computer myself (just an iPod), I remember playing on a friend's Mac when I was younger and felt sad to see the company in trouble. It's nice to see a company turn around and become profitable again. Probably human nature to root for the underdog, but anything that stimulates competition and consumer choice can't be all bad either.
"Byte of the Apple" - That's so clever! I never would have thought of replacing bite with the homonym byte when talking about computer-related things. It must be what, 1994 now?
/sarcasm
But seriously, when about 50% of each iPod is profit, and they sell more of those than anything else, is it surprising? Dell is competing towards the bottom, it seems, with their mostly cut-rate PCs (XPS excluded) whereas Apple seems to be competing towards the top where the premium prices - and profits - are. Didn't they want to be the BMW of computers? Mission accomplished.
Not everyone is content with the same uniform workstation at home that they have to use at work / school. People used to be content with their stock Civic too, but F&F came out and people realized their vehicle could reflect their personal expression; Apple is going to do the same thing, albeit more slowly, with the PC market.* There may be a whole market of grandmothers out there willing to drop $700 for something for e-mail, but there are many more young IT and graphic design people willing to drop $2500+ for a Powermac w/ studio display. Innovation and creativity -do- matter; learn the lesson now. *F&F and Civics used purely for example, please do not flame talking about how lame a Civic with a coffee can exhaust is, we all know it. Thanks so much.
I know nothing
If he said anything else he would be criticizing his own company. Give me a break...
Be sure to remember the Programmers Prayer
I'm tired of Windows -- after 15 years of PCs, they no longer excite me. My next machine will definately be a Mac -- either a Mac Mini or iMac -- just going to wait and see how the Intel thing affects their new products in 2006.
Boxlight
A knowledgeable personal acquaintance (a mutual-fund manager) once told me never to pick a stock on the basis of its CEO, because the guy's (/gal's) potential is always factored into the share-price. I guess that rule still makes sense, but, for those seeking exceptions, Steve Jobs does seem a good place to start...
Seeing bad movies only encourages them. Watch responsibly
At the same time, the fact is that most stockholders are reasonably intelligent adults, and (IMO) it's perfectly fine that it's been left up to them to decide to keep their money there instead of investing elsewhere. If the investors had all agreed with Michael Dell, Apple would simply be gone -- or perhaps, like SGI, being de-listed for having too low of a stock price.
--
The universe is a figment of its own imagination.
The universe is a figment of its own imagination.
Apple is moving more quickly towards a more diversified product line and has done so by bringing out some interesting and exciting products, but before anyone gets too excited, the bulk of their super profits over the last year has been largely due to the iPod. If they follow-up with another great product, they'll have a pretty secure future. However, if they can't follow iPods act with something just as (or close to) exciting, it's a short slide back. Dell's efforts to diversify into TVs and the like, has so far left a lot to be desired. On the other hand, they're not dead yet.
How many PC clone manufacturers have come and gone in the time that Apple has been making computers? Hell, even IBM and Compaq are gone. Dell is trying desperately to become more than a PC clone maker - selling TVs and home theater equipment now, but I have serious doubts on the long term viability of that strategy. Not that Dell hasn't been a great story - it has been - but as far as innovation, creativity, adapting to and creating new markets, Apple wins hands down.
If you think about it, the stock market does not award companies for doing well, maintaining a good fiscal outlook and treating it's employees good, it awards companies that grow. What happens whenever a company has utterly grown itself so large that there's really no room to go anywhere (ala Microsoft)?
Sure, it's a treadmill that everyone wants to get on, but it wears down and kills all but the strongest. Not to be outdone, it drives competing companies against one another to the point that now, a little over a hundred years later, companies are little more than rabid beasts. Clawing and looking for any way to get a little larger piece of the pie. If they slip in the slightest they are injured. If they slip a few more times they can be ripped apart by other competing companies- broken apart by others more ruthless.
Anyone wonder why the laws and regulations are changing so much in favor of the big corporations?
They might not be able to get off the treadmill, but it doesn't stop them from coercing others to come to their aid.
Does that make sense?
You can't conceive that perhaps Apple isn't over-charging, but that Apple offers more value (that is consequently worth more money) than Dell?
Case in point: A soda costs $0.05 at Taco Bell. It costs you $0.99.
Yet how much value is there for you in:
1) Lugging around syrup
2) CO2 canisters
3) Mixing equipment
Myself, I drink water, but the point stands: If Apple offers more value, Apple can effectively price higher and not be over-charging.
Another example would be the $0.99 burger at Wendy's. In raw part it would cost you only $0.25
Do you want to lug around a fridge, fresh lettuce, a package of buns, a grill, ground beef, and cheese whenever you feel like eating a burger for lunch?
GPL Deconstructed
OS X is Apple's real core product yet, they are becoming more and more, instead of the Apple Computer Company, rather the iPod company. I know I may get modded troll, but I'd much rather see Apple making its sales off of OS X instead of on the iPod which is a relatively mediocre product in a sea of other mediocre products. Sure, the interface is great, the scroll wheel brilliant, but in the end it only does one thing -- play music (and videos now -- poorly).
The cost of entry to use a *nice* Apple is just too damned high -- and this coming from an Apple FAN! Microsoft is already seeing the consequences of its horrendous licensing schemes with the upstart of Linux use and development -- I am unsure why Apple cannot see the same thing.
There will be an iPod killer at some point -- when the iPod isn't as 'cool' as it is now. And just like the Windows 95 debut, the time will come that the all supreme market leader will be playing catchup. In Apple's case however, the fact that their business model is structured now around iTunes and iPods instead of the great OS they created is unfortunate and will put them in a predicament in the future.
The day Apple decides to put OS X onto a DVD and let you install it on your whitebox built computer is the day the grave is dug for Microsoft. With the closed environment of OS X right now, I liken it to Betamax and VHS. Betamax was a superior technology but because Sony wanted to keep the rights to themselves, they got beaten handily by VHS. In the future Betamax was a niche product -- and successful for video editors etc, but oh, what could have been?
I hope not to ask about Apple 5 or 10 years from now, "Oh, what could have been?" I worry more and more however, that I will wind up with a really nice and fashionable MP3 player and an OS that is used as a niche product, being better or not.
The price is always right if someone else is paying.
Buying Apple five years ago would have netted you a 450% profit. Buying Dell five years ago would have netted you...a small loss.
Crow T. Trollbot
I might actually say not.... The slice of watermelon requires a lot more work to eat. All those seeds to remove, and a messy outer skin you're left with afterwards too. The grape = instant enjoyment.
So too, it is with Apple. They might always just be a "niche company" compared to the PC/Windows market, but millions in profit is still millions in profit - and heading up a company you can truly be proud of can mean a LOT more than even more millions in profit on your ledger sheet.
As it was recently pointed out with portable MP3 players, how "cool" and "stylish" or "trendy" is it right now to wear around a player with a big, blue DELL logo stamped on the front of it? Compare that to carrying around an Apple iPod. Apple has achieved something no other computer company has ever really achieved -- the ability to make computers and technology "hip" instead of "nerdy/geeky/dorky".
So no, Michael Dell isn't "crying". He has one of the most successful businesses around mass-producing PCs as commodity items at as low a price as possible. But if I could be another Micahel Dell or another Steve Jobs, I'd have to pick Jobs. His company actually does R&D, experiments with possible product ideas just for the sake of seeing how they work out, and he still has time to head up Pixar - a company creatively doing very fun AND profitable things with computers.
No ipods in this story.
The reason is that the higher the profit margin, the higher the price. The higher the price, the lower the market-share. Dell is more interested in gaining market-share than in maximizing price. For a commodity such as PCs, the way to achieve long-term success is high volume with a more modest profit margin. Undercutting competitors is more valuable than earning more on each sale.
The key is that total profits are a second-order curve as a function of price. Too low a price results in too low a total profit. To high a price means lower sales volume and lower total profit. The optimum price foregoes some profits per PC, but makes it up in volume.
Perhaps the big lesson is that Dell and Apple are NOT in the same business. Dell is just one more PC maker that sells a commodity that is strongly subject to price competition (Dell is very good at competing on this). Apple is a sole-source for an intrinsically valued product. Sure, some people do avoid Apple because of price, but many buy Apple (and don't even consider buying a PC) because of the unique value provided by Apple.
Two wrongs don't make a right, but three lefts do.
um, why are blogs paraded as news or at the least columns? and why is the summary a copy-and-paste job? i must be new here, right?
slashdot. blogs are news. ruminations that don't matter.
The IRS is the one organization that you don't want to fuck with. Remember, these are the guys who took down Al Capone.
All this means is that apple is overcharging for its products.
What it means is that Apple is adding more value to the products between the time they come in the loading dock and the time they go off the shelves. Otherwise people wouldn't be willing to pay those higher prices.
After all, what's Dell's added value? Why would you buy a Dell rather than an HP or a Lenovo or a generic white box? Because it's better? Because you get something with a Dell you don't get with anything else? Can you conceive of anything that would make you willing to pay even 10% more for a Dell than for a comparable HP?
If ANY computer manufacturer is able to charge more for a comparable product than another, then there's something in their product that makes it worth more to the people who are buying it.
What do you suppose that is?
Dell shut down Dell's good reputation for service (probably its only strongpoint beside price) when it offshored its support services to foreign countries. I have heard numerous complaints about their new support being not very helpful. Apple, on the other hand, has produced new, highly popular products that many people seem to enjoy and actually use. People get excited about new products that are fun and well-designed. Dell seems to think that people only care about cheap PCs.a in.reut/
In a race to the bottom, Dell's stock has suffered. It is now just another PC Maker, with little or no excitement or fun. Yes they are cheap, but they are not very innovative.
Read this article, it talks a bit about Dell:
http://edition.cnn.com/2005/BUSINESS/11/01/dell.m
On a personal note: NEVER buy a DELL printer, unless you enjoy a beeping misfit that jams intermittently during times it is needed most.
He who knows best knows how little he knows. - Thomas Jefferson
Or at least if his version of "customer support" gives any hint, he's probably brainless.
Here's what's happened recently concerning my experience with Dell and a laptop I found on the side of the road. I hope this doesn't come as a surprise to anyone.
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
It's nice to see Apple turned around. May be it is just me, but knowing their major portion of the revenue comes from a MP3 player is just plain scary. If they are smart enough to hopping from one train to another (e.g. media distribution/iTune?), good for them, but I'm not holding this stock.
Well, in eight years from now, it could seem that now was the time to close Apple and give the money back to the shareholders. Who's to know that? Apple is depending too much in the iPod for its success. When the iPod frenzy abates it'll have to find some other hit to keep on sailing. That's not so easy. That said, it'll probably always have a niche in the computer field, and perhaps it can reinvent itself as a consumer-electronics company, but that's far from sure.
There is one clear difference between Dell and Apple. Dell is a lean machine of a company, offering the same as everybody else just easier, cheaper and with more options. Its margins are always going to be small, but it'll probably always make money. Apple is a boutique company that will always have fatter margins because it'll offer exclusive products. But it depends too much on fickle consumers that can change brands as easily in electronics as in shirts. Dell is like Wal-Mart, and Apple is like a successful delicatessen chain.
Rome taught me patience and assiduous application to detail. Virtues which temper the boldness of great, general views.
Do you have any numbers to back that up? My understanding is that the iMacs and laptops are flying off the shelves. The towers aren't selling like crazy but they aren't meant to.
Just looking around campus there's probably at least 50x more students with powerbooks/ibooks than 2 years ago.
As I remember it, apple was losing $700 million dollars a quarter. A 6.5% profit margin isn't very bad.
autopr0n is like, down and stuff.
Apple is selling more computers this year over last year, so those are doing rather well too.
... we can also focused on what hasn't changed: Michael Dell is still an asshole.
"I'm a leaf on the wind. Watch how I soar."
-Hoban Washburn
All nouns can be verbed.
Chill.
(See? That was another one!)
Information wants to be anthropomorphized.
Which would you rather have?
Depends on who I am. If I'm Michael Dell, probably the 6.5%. If I'm a stockholder or an employee, who has the same absolute amount of income or stock riding both percentages? I'll take the 9.5% thanks.
The fact is that Apple is still around despite the idiotic pronouncements of a decade ago. Apple has shaped the computing landscape, and while it's still a small player, in the last few years it has done some pretty darn impressive things.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Financial Data
Which is why Apple made $1.6b in computers and $1.2b in iPods right?
GPL Deconstructed
maybe not as numerous as dell, but better and better:
v =14
...
http://biz.yahoo.com/prnews/051011/sftu144.html?.
so, it is not just ipod (which may drive mac sales, though).
btw.: anyone thinking apple is expensive just should have a look at the "sale" section on their site. i just bough an 2GHz/17" widescreen/160GB/512MB/DL DVD-RW for $949. I assume it will be no "refurbished" unit, but just a retail channel clean up
If they're posting 9% profit on their boxen, I wouldn't exactly call that overcharging. Try running your own business at 9% profit and see how long you'll be in business.
That's not true at all. Apple's last earnings report showed a 47% increase over last year in Macintosh sales. While that's not quite as impressive as the nearly 200% increase they showed in iPod sales, it's still incredibly good, especially when you compare that to the computer manufacturer growth rates and take into account the coming transition to Intel.
apple is a true technology company. they spend a great deal on R&D. I don't remember exactly the numbers, but I read where dell invests the least amount of any "tech" company into R&D. infact, dell is a glorified white-box dealer. they simply assemble and repackage other peoples' technology. dell might be today's IBM (nobody ever got fired for...), but that could change. they are far too dependent on others. apple, while needing chips, etc., still innovates. dell, what? that wretchid mp3 player?
My problem? I was perfectly gruntled, until some numbnuts came by and dissed me.
You're not looking at it in the right way; the machines compared to each other may not be unique, but choosing a Mac in and of itself, is the expression. And self-expression doesn't always mean sticking it to the man...but, in this case you are. The man is Microsoft.
I know nothing
In summary, unattractive squares should stick to Linux and Windows. Vertical integration is for different thinkers.
You lie, apple came out with a mouse with more than one button...now THAT'S innovation! :P
Since Apple has branched out (pun intended) to consumer electronics (ie: the iPod). I'm not sure you can still call them a *just* a computer company. They are more of a Digital Media/Consumer Electronics and computing platform maker. Not sure what you would call that outside the fact that they have successfully diversified where Dell has not. If the computer market dries up tomorrow, Dell will be in big trouble. Apple will still have the iPod's and the digital music/media to fall back on.
Actually, I'm going to take my comment back. It's not that the apple computers aren't selling well. The point I wanted to make is the turnaround in company performance has MORE to do with the iPod peformance. Not just from a sales standpoint, but an image standpoint.
FWIW, from the latest 10-Q, sales this quarter compared to the same quarter last year show that desktop sales increased 65%, laptop sales increased 8%, and iPod sales increased 616%(!!).
link to the 10-Q: http://media.corporate-ir.net/media_files/irol/10/ 107357/reports/10QQ3FY05.pdf
Ok, I'll give you that - but HOW is it an expression? By simply choosing not to use the defacto computing platform? I guess I just don't understand the whole moral superiority complex that Mac Fanatics carry around with them.
.02 - and I'd like my change back...
Is it just because they're such a minority and feel the need to stick together? I've owned Macs and PCs and liked them both for different things, but I really didn't get any enlightenment from using either. So not sure where the mystical self-expression comes from....
Just my
As many threads have already noted, the percentages are misleading because Dell's total amount of profit is larger than Apples total profit. Dell's 4th quarter profit for 2005 was 667 million while Apple's was 430 Million.
Okay, Dell's revenue is higher, but it's not that much higher. Also, Dell's profitability is falling while Apple's is rising. Del's profit was 749 million last year. I think it's premature to rub anything in Dell's face but I do think that even thought they are percentages, they are significant. The percentage is even more significant since Dell's revenue and expenses over all are higher than Apple's. This means that they are more severely effected by slimming margins.
The article might be premature, and it's most likely hype, but there is a valid point here, and that is 8 years ago Dell wrote off Apple, and now Apple is trending up, while Dell is trending down.
Making all the "do you want a whole grape or a slick of a watermelon" analogies you want, but If the watermelon slice is dried out and sour, and the grape is perfectly ripe, I'll take the grape. (see I can make analogies too!)
"All great wisdom is contained in .signature files"
First of all, let me start by saying I love my mac. Typing this out on my 12" powerbook right now, actually.
Apple is, at this point, no longer a computer company. Now obviously they produce computers, etc. But their primary product is no longer computers - it's the iPod. What you see with Apple is the rare case where what you would normally consider an accessory has become the primary product. People buy Mac computers to go with their iPod, or because they bought an iPod, etc. But for the most part, people just looking for a computer will be wooed by the lower prices of Dell - not to mention Windows, which everyone knows.
Well, I'm pretty sure he's actually right there. Properly speaking, administrate is an erroneous back-formation. However, it's used so often that it's gaining acceptance.
See here:
noun : verb
calucation : calculate
articulation : articulate
demonstration : demonstrate
even the hideous
dissertation:dissertate
is technically correct.
However, this stuff isn't:
administration : administrate - wrong, administer
amplification : amplificate - wrong, amplify
multiplication : multiplicate - wrong, multiply
indemnification : indemnificate - wrong, indemnify
The only difference is that words like "multiplicate" are totally hilarious, whereas most people think of administrate as a an accepted part of the language. I wouldn't get out my red pen if I saw administrate, personally, though I to avoid using it in official materials.
Good point. I guess Gates got a decent return on his investment. Not that he would bother tracking such a small investment.
Anyone still remember all the "to hell with Dell" banners and stuff eight years ago, when Michael Dell first made those comments?
I support the Center for Consumer Freedom
In truth, I'd rather have recognizable, defendable, and sustainable differentiation in the market, combined with engineers that can develop new products (and proven experts to market them). Operational efficiency (Dell's primary, and perhaps only, mode of differentiation) isn't a good mode of differentiation (it was against the existing players, but new entrants can learn from Dell and eliminate Dell's advantage). From that perspective, Apple is in a better long-term position. On the other hand, Dell's scale and cash flow (both better than Apple) provides it ample opportunity to adapt and make necessary changes. IMHO, Gateway isn't the issue; nor is HP. Lenovo could be a challenge, but it depends on how that card plays out (and I doubt Lenovo wants a price war with Dell, so I doubt Lenovo is a core threat to Dell's current business). I expect Dell's largest threat is not one of the players we would think of as the potential challenger today.
Dell's problem is that their slowing growth and trouble hitting targets is indicative of their lack of differentiation that they can convert into profits. It is also indicative of the main problem in many technologies: People buy what is 'good enough'... and frankly, a $500 PC is 'good enough' for everyone except the die-hards. Ironically, Dell is now performing the same actions everyone uses when they complain about IBM (getting profit growth through expense cutting). The problem in Dell's case is that they are sacrificing customer service in the process of growing profits, which (as the article points out) could snowball into further problems for the company.
The net of all of this is that it depends... and in the cases of stock, depends on what you're paying for the profits (or what the companies invested to produce the profits, or however you'd like to phrase it to have the appropriate perspective).
From
Dell: Apple should close shop
To
Dell: We Would License Mac OS X
I was out smoking at Dell one day when I encountered a marketing exec. I mentioned that I thought PCs wouldn't really take off as home appliances until they brought out colors and made them look interesting so they matched the decor (this would have been about 1996). He scoffed and said that Dell would NEVER have a computer that was any color other than beige, because that wasn't what customers wanted. Dell's entire culture has become built around trailing the pack and just finding out a way to build the "current thing" cheaper than everyone else.
Bollocks, I typed too fast again. I just wanted to catch it before some slashturd started cat-calling "NEENER NEENER ENGLISH GEEK! You made a grammar mistake!"
Did you ever think he said this because he didn't want a competitor? He trounced Gateway at their own game; Compaq & HP did horrible things to themselves; and Sony well Sony is Sony.
Is Dell a industry leader? Yes. Is he a visionary? No. Could he take an upstart and make it profitable? Yes. Could he have turned a failing company around? Probably not.
He was just the first to figure out how to streamline hardware manufacture from a small capital into large capital and bring it to the masses.
Agreeing with everyone and telling them what they want to hear from a 'upstart' makes wall street think he has the right ideas, forward thinking paradigms outside the box which led to his success and all companies should be molded after him. (until the next great genius of our time comes along once in a life time.)
Ever hear of a guy named Mike Milkin? -Scorpio
Apple may be doing well in the home computer market. But if you're going to compare the two of these companies, consider the corporate market as well.
Dell can afford to sell its home computer stuff so cheap because it's making more money on the high-end stuff. Don't forget, Dell produces (or at least brands) backup systems, storage solutions, servers, racks, etc. You name it, Dell makes it for your business. They have captured a ton of that market, and their sales structure for businesses of all sizes makes it easier to buy there again.
So I think financially, Dell is doing very well...when you consider that solid corporate market.
argh, troll.
Apple had $4bn in the bank at that time. The $150mn was a PR stunt.
But in many cases the value is only perceived. Dell products are no better than whitebox computers you pick up locally, yet Dell sells way more units. Marketing makes people think that they have to pay more, even though they are getting a product that is mostly the same. This is especially true for apple because they make their products attractive, and there's only one place to get them. If apple was letting others sell apple compatible computers they wouldn't be able to have such a high profit margin. Apple obviously makes people think there is much more value to their products than there is with dell products. How much actual difference there is in value is not something that's easy to figure out.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
People really like to repeat that VHS vs. Betamax canard, while completely missing the important lesson.
The thing that really killed Betamax wasn't so much the licensing issues as the fact that you for early US models, you couldn't put a 2 hour movie on a betamax tape, but you could on a VHS.
That's huge. Being able to ship movies on a single VHS tape is what estabilshed the distirbution channels for those tapes and is what encouraged people to buy in to the VHS technology, in turn creating the demand for more VHS tapes, and so on.
And that's the big lesson lurking behind it all: pay attention to what your customers actually need, and what aspects of the technology will support the distribution and consumption models. It doesn't matter if your product will do a thousand things more cheaply than the other product, if most people can't easily get it to do the one thing they really buy it for. That's why the iPod has been so successful, even though there are tons of cheaper, more feature-rich products out there.
"It is our blasphemy which has made us great, and will sustain us, and which the gods secretly admire in us." - Zelazny
Dell doesn't do R&D. They use Intel CPUs and usually Intel chipsets. I believe even the motherboards are Intel reference designs. Dell assembles parts into boxes. Apple is frankly going the same route at least when you are talking about hardware. They will use Intel cpus and chipsets. That is the whole point of Apple going to Intel. They can buy solutions. At least Apple does it's own OS.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
If they hadn't gotten a $150 million cash infusion from Microsoft in 1997? That kept the company afloat when it was about to go down for the third time.
I have points and would mod you Flamebait, but assuming that you actually don't know what you're talking about: at the of MS's buying of non-voting stock, Apple still had about $5 billion of cash reserves. $150 million was nothing even at Apple's worst and never "kept the company afloat". If it did anything, it was tell investers that MS had no intentions of attacking Apple and give them confidence in buying Apple stock, but as far as the money goes, it was a token amount.
I'd argue with the validity of "Star Wars Syndrome". The quality of Star Wars really has gone down between the original trilogy and the prequels, with the tipping point being the Ewoks in Return of the Jedi which coincided with some of the brighter collaborators leaving the fold and Lucas assuming more autonomy.
Remind me. Try as I might I can't think of an interesting product from a company called "Dell". Can someone jog my memory.
Overcharging? No. More akin to getting what you pay for. A quality product that does it with style. To me, aside from the fact that I just vastly prefer OS X to Windows for a plethora of reasons, Apple just knows how to make things look good. I look at my friends' laptops here at school, and the various Dells or Sony VAIOs are just plain ugly. I think the price of my 15" Powerbook is perfectly justified.
but I really didn't get any enlightenment from using either
Actually, since you can run an Xserver on MacOS X or on a PC that's running linux, you can get enlightenment on *both*.
Say bad words about my book, in cold oatmeal, or I shall sue!
If an unstable company like Apple can prove all the arrogant folks like Dell wrong then I guess the mac and linux zealots are REALLY arrogant for thinking that an ultra-stable 800 pound gorilla like MS will die!
/. zealots!
--
I'm sorry. It's Friday and I just feel like having fun by messing with the
Well, they might indeed not be stupid, but from where I'm sitting they could have been doing better relative to Apple over the year. The legal obligation of these public companies is to do everything they can to make their line go up over the X axis, not necessarily to impress Joe Slashdot.
What does "All time record quaterly sales" mean to you? Anyone have a used Economics 101 book they could send this guy?
i got ball this is my adress 108 20 37 av corona come n do it iam give u the sidekick so I can hit you wit it
Just because he was proven wrong doesn't mean that what he said wasn't justified. I have friends who were Apple fanatics who in those days had stock in the company for sentimental reasons. They've done way better than they had any reasonable right to expect.
Apple makes money by doing everything that is supposed to be suicidally stupid. It sells hardware and software tied to each other. It tries to do many things well instead of concentrating on one area of strength. But it breaks the rules because it sees the opportunity created by others following the rules, which is that things built by this kind of cross corporate ecosystem just don't work that well together. But even seeing this possibility is a long way from taking advantage of it: there are plenty of contrarian schemes that sound good on paper but never succeed. You need actual leadership which is connected to realities of consumer behavior.
I detest Steve Jobs' personality. I think he's a self-centered, manipulative bully. But he's also got the brains to match -- I'm just grateful he's not in politics. Bastards who think they're geniuses are common enough, but bastards who are geniuses, who are way out on the right hand of the bell curve on both scales, those are rare. If Apple didn't have Jobs or somebody alike to him as two peas in a pod, they'd have been bought out by some far east PC manufacturer by now.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
"If they hadn't gotten a $150 million cash infusion from Microsoft in 1997? That kept the company afloat when it was about to go down for the third time."
It wasn't the money that kept Apple afloat. Jobs and Gates settled the old "look-and-feel" lawsuit brought against Microsoft by John Sculley, with an agreement that Microsoft would buy $150 million of non-voting stock (which they've long since sold for a tidy profit, so would all the "Microsoft bought Apple" theorists kindly go away), and much more importantly, Gates' promise to continue making Mac versions of Microsoft Office for a five year period. While the $150 million was nice, it wasn't what kept Apple afloat; Office for Macintosh did.
Incidentally, the five year agreement expired two years ago, but Office for Mac still exists for two reasons: Microsoft isn't stupid enough to cut off a source of revenue, and it provides a nice fig leaf to show the Department of Justice: "See! We play nice with others! What, us? Strangle a competitor? Perish the thought!"
I'd love to see somebody ask Steve Jobs what he'd do if he were in charge of Dell.
[cnn.com]
I was going to read it, but then I saw that, and decided that if I want to be told what to think, I'll listen to the voices in my head.
Year-over-year unit-growth rate worldwide (computers that is): Dell 17.8%, Apple 48%. Yeah, it's all about the iPod.
Lars T.
To the guy who modded me down from perfect to terrible Karma - Apple haters still suck
Wrong. Check your facts. Apple's market share is rising. It's up from 4% to 6%, and they are still in the top 10 computer companies in terms of units sold.
You're just quoting back the same old FUD the Apple bashers like to quote.
Guess what. Apple's still here, and doing well. Deal with it.
I think it has been proven to the satisfaction of the scientific community that it is impossible to correct somebody else's grammar in a web forum without making one of your own while you are at it.
It has also been demonstrated that English is a convoluted and stupid language, and deserves every ounce of abuse it receives.
Information wants to be anthropomorphized.
Uhh...sure they are not. because, if I am reading this right, and I like to think that I am, approximatly 90% of Dell's PC's are shipped without some form of Windows installed.....or is that .09% /sarcasm
Come on, do you really think that if these pc's from Dell did not come with windows, they would still sell? Most of the PC market is proped up by Microsoft. You can feel free to have an opinion and dislike Apple, but don't be a dunce about it!
"God is a comedian playing to an audience too scared to laugh"
Apple have off shored some of their tech support as well you know? Buying higher priced computers hasn't stopped them from doing the same with cutting costs.
Jonathanjk.com
Who's talking about "unit growth"? This discussion is about PROFIT MARGIN. So what's the year over year profit margin for Macs vs Dell?
Nice try though.
To ask Mike Dell about Apple seems to me to have been purely an invitation to publically "flame" a competitor. What would you expect Karl Rove to say if asked,"what would you do if you were working for the Democratic party?" What I want to know is, What Would the Flying Spagetti Monster Do?
Glad to learn that Apple is doing well. But is this a flash in the pan? Or a long term thing?
I think there is something of a trendy, faddish, element involved with ipod sales. What happens when ipods become passe?
I doubt anybody would admit to it now, but eight years ago, I bet a lot of people felt the same as Dell. And why not? Apple was dipping below it's cash value.
So true. So true.
Seth
$5 / month hosted VPS on linux = awesome!
As I recall, Apple still had a $4 Billion cash reserve at the time.
Angleyne: You can't bend that girder - it's unbendable! Bender: Well I don't know anything about lifting, so that ju
I'm not an apple basher. I love the company! I just think it's interesting how the apple zealots sound so much like the company's founder. They seem to exist in a Reality Distortion Field. Apple has a tiny market share. 6% is barely having your foot in the door!
Sure they are remarkable because they once almost owned the computer market and now they seem to be lauded everytime they succeed at what? Keeping their foot in the door? Why is that so wonderful?
Blow the door wide open and firmly put both feet inside the market and then I'll be impressed. These sporatic flash-pan ideas that keep it's lips above water don't impress me from a business standpoint.
You're an idiot. First of all, iPod's are by no means the cheapest MP3 players out there. Second, they're doing well because customers are buying their products.
Do you mean the $150 million dollar investment on non-voting shares of Apple that Microsoft made in 1997, and sold off years ago? The one that they made as a settlement for a variety of patent lawsuits that Apple had against them?
Because, really, I don't think that's relevant.
My Photography - http://ian-x.com
The Deathlings (comic) - http://thedeathlings.com
Troll? More like True. Someone got mod-happy AGAIN.
You make no sense. If most people couldn't stay in business with a 9% margin, then that means that 9% margin is too much. Most businesses don't have that high of a profit margin, Dell only has 6% and they are doing fine. If their profit margin in significantly higher than their peers, than they are over charging. I'm not sure who apple has as peers though, since they mostly sell products that no one else does. That being iPods, which nobody has really done a good job at competing with, and computers that run MacOS.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
You are correct. I thought the market share was more like 2%. I stand corrected. But my overall analysis is still accurate.
I have several Apple zealot friends and we love to spar. It's great fun for a Friday afternoon too! You have a wonderful weekend, Anonymous Coward!
And if you are to lazy to actually look up the numbers yourself, at least tell me what measure of profit margin you want.
Lars T.
To the guy who modded me down from perfect to terrible Karma - Apple haters still suck
Actually, you're missing the point of profit. Profit percentage is virtually meaningless. What matters is profit dollars. Dell is still making far more profit than Apple because they have vastly larger sales quantities. The fact that Apple doesn't have the same degree of sales can be interpreted as an indication that their profit percentage per unit is too high for the value delivered and that consumers are showing that by not buying as many units. If they lowered their profit per unit, their sales might increase disproportionately causing an increase in overall profit dollars while profit percentage is decreasing. This would be good.
Would you really take the 9.5% margin as a stockholder given that the EPS for Apple has only been at Dell's level for the last year? I mean, what do you really care about the margin percentage as a stockholder except as some sort of weak indicator of future profitability? Hell, I could run a 90% margin business but if there's not very much business, it doesn't really matter, does it?
I'm not an apple basher. I love the company! I just think it's interesting how the apple zealots sound so much like the company's founder. They seem to exist in a Reality Distortion Field. Apple has a tiny market share. 6% is barely having your foot in the door!
Now how are we supposed to take anything you say seriously when you are so rapidly backpedaling from yor "market share is a rounding error" comment. Would not a statemnet like that imply a market share well under 1%?
Sure they are remarkable because they once almost owned the computer market and now they seem to be lauded everytime they succeed at what? Keeping their foot in the door? Why is that so wonderful?
You might have a point if that's all they manage to do, but the fact is that they are not just keeping the foot in the door - they are also slowly opening that door. To any student of history on commercial OS's, that is a remarkable feat. Apple computers could just as easily have been another OS/2.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
What about the 4-way scrolling?
"Hello 911? I just tried to toast some bread, and the toaster grew an arm and stabbed me in the face!"
"Would your rather have all of a grape or a slice of watermelon?"
I think the more accurate way to put that would be "Would you rather have a grape vine or a watermelon on your table?"
The watermelon is tasty now. But for years to come the vide will continue to give you more, and someday you may have a whole vinyard if you treat it right.
The problem with the watermelon is that it will only last so long and there are no fertile seeds within that show signs you can get more watermelon in the future.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Apple's profit margin is actually bad for apple. Apple needs more users using OSX so they can attract 3rd party developers. They could make their computers ~10% cheaper and get more buyers. Apple made this mistake back when Scully was president, increased the profit margin on computers.
Have you ever been to a turkish prison?
Dell from July, Apple from September
Dell sales: $13.4b
Dell profits: $2.5b
Apple sales: $3.6b
Apple gross margin: $1b
So Dell has 18% market share to Apple's 6% (in the US at least), a 3x in sales size; this correlates surprisingly well to overall sales, where Dell is about 4x in size. Profit however is only 2.5x Apple's.
Is 2.5x the profit a lot? Yes, it is; but is it comparable given the size disparity? No. 4x the revenue, but only 2.5x the profit? Yes, Apple probably could see an increase in revenue for a slight decrease in margin; perhaps they could increase by another 3% so that instead of a 4x difference we would see a 3x difference between the two, and Apple probably would STILL maintain better margins.
Anyway, this is a tangent. The original poster was talking about how Apple overcharges, and my examples were where Taco Bell charges a huge markup, yet there is still value given to the customer, indicating they are not, in fact, over-charging.
Comparable Dell machines to Apple machines are usually only a 1.1 to 1.5 times difference; so for that difference is Apple OVER charging? I say no, Apple is charging appropriately for the value they give.
GPL Deconstructed
Though Apple support may also be offshored (and I know it is to some extent from other conversations I have had, just not sure how much) they have maintained a high level of quality with the support they offer. Apple is about the only computer support organization I have ever talked to that when I call and explain clearly the diagnosies I have done on a dead hard drive (and I mean dead, as in clicking on boot) take that at face valuae and BELIEVE WHAT I SAY. I'm sorry to have put that in all caps but I just cannot express how frustrating it is to know what is wrong, and try to explain it to a support person yet they insist on making you run through all kinds of stupid scripted tests.
So it's really an ever further indictment against Dell that they can't even offshore support properly while Apple seems to be able to do the same thing just fine. Perhaps they chose a better shore.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
However, as a home user I think Apple add far more value than Dell to a laptop, say. Mainly through the OS but also for aesthetics.
Actually Apple isnt propped up by Microsoft. As someone mentioned Apple was given 150 million by microsoft almost ten years ago. Since then they have been running on their own two feet. In terms of actual numbers: 840 million (6% of 14 billion) vs 360 million (9% of 4 billion) The numbers say Dell is making a heck of a lot more money. The reality of it is Dell isn't going anywhere. They are going to make the same machines and roughly keep the same profit margin. They are trying to branch out a little but I don't think many see it helping much. The only way Dell is going to be in any sort of trouble is if a) Someone can sell a box that is cheaper and better AND have a brand that people recognize. Apple is obviously NOT trying to do that. The fact of the matter is Apple is growing their company. You can definitely see a shift in public perception from being a niche computer company to the company that makes iPods and sells music. I'm fairly certain this is by design. You are 5-10 times more likely to see an iPod commercial vs an iMac commercial. But the fact of the matter is Apple still makes most of their money off of computer hardware. (the margin is shrinking however) They know that if they want to get to that 840 million its not going to be on the strength of the iPod alone. I see a HUGE push of their machines coming once the Intel Macs role out. They are going to cost less to make and won't go through the supply/demand hell they were in with IBM. I actually think next year is going to be a huge year for Apple either in terms of taking a step forward or a step backward in being the next big computer maker.
www.unofficiall.com
About the time iPods start declining in sales (because everyone has ten) is when Apple will probably introduce a home digital video box that will sideline cable and satellite. Then the real growth starts.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Thanks for asking!
blarg.
Dell sells music players, too. Both companies make computers and music players, so it's completely valid to compare them both.
Incidentally, Macs have been growing year over year more than Dell. In fact, Dell's financial future isn't so good since they missed predictions.
BTW, if Mac market share was any lower it would practically be a rounding error. That's a fact.
4.3% and growing. Install base of 15% according to IDC.
You're never going to see a Dell in a high-end photography room, an L.A. recording studio, a film editing room, etc.
They've had good fortune with the iPod line. And I'll give them credit for that. But there's no guarantee that that margin will last more than a year or two.
This same stupid thing has been said every year since the release of the iPod, the iMac, etc. Yet revenues keep on growin'. Why are there so many people absolutely ADAMANT that Apple "lose" in some way? Is it a disease? Something in the water?
"Sufferin' succotash."
15% of the world's computers is barely having your foot in the door? Are you serious? Over 95% of the music you hear was recorded on a Mac. A growing number of feature films are being edited in Final Cut Pro on a Mac. Apple's sales figures are the highest they've ever been, and this is before the Intel switch where suddenly Apple will be competing DIRECTLY with Dell--since Intel Macs will be able to run Windows.
Why would you buy a crippled Dell PC that can only run Windows when you could buy a Mac that could run both?
"Sufferin' succotash."
Yep, you show me the numbers when they make your offtopic point. You were the one with offtopic data about units sold. Nobody was ever talking about that. Why don't you dig up the data that shows data relavant to the topic of the main article and the point I made - which is profit margin.
And if you are to lazy to actually look up the numbers yourself, at least tell me what measure of profit margin you want
The accurate profit margin. That's all I "want".
Besides, I was never asking for the numbers. I was just outlining what a fair "apples to apples" would look like. Comparing what is essentially iPod sales to Dell PC sales is "apples to oranges".
I'm not an Apple hater. I'm just saying, get the comparison right!!!
I LOVE this! Dell sells mp3 players only because people expect them to. It is accurate to argue that Dell's revenue is from its PC sales. It is also accurate to argue that Apples's revenue is from iPods.
So from that standpoint what are you comparing when you compare the profit margins of these two companies?????? The profit margin of selling a PC versus selling iPods!!!!
Again, Apples to Oranges!!!!
Over 95% of the music you hear was recorded on a Mac.
Yea but 95% of everything else was/is done with a non-Mac.
Wow! CastrTroy on Slashdot says that's all this means! It must be true.
Meanwhile, Apple hardware kicks the butt of Dell's "break in nine months" el cheapo crap.
"Sufferin' succotash."
Here we go again...
MS bought $150M in non-voting stock. Did it help? Probably a bit. More important to Apple though, was MS' commitment to continue making Office for the Mac.
"Who's your Diaper Daddy?"
Yes, and if you extend your timeline more than 1 year, you get this chart.
Just goes to show that performance is relative to the timescale when it comes to stocks. And when you compare Dell to Apple over the "long term", it's not even close.
Apple is a MONOPOLY. They've completely taken over their own platform with all their own apps including iChat A/V, iTunes, iMovie, iDVD, iPhoto, Safari, Photobooth, Garageband, iSync, DVD Player, Final Cut Pro, Aperture, iCal, and .Mac and in doing shut most of the market out. It's like they like to make things simple and elegant, but rarely work with others to add the level of compatibility the PC side maintains. Mac are no different then PC's in terms of capabilities, but since nobody wishes to support the Mac platform Apple gets stuck doing it, then it goes down to "Nobody wants to play with us we won't play with them!" Then when they get a good popular thing like the POD, they take SNOB to a whole new level. They won't work with anyone on it. FairPlay had to be reverse engineered, thank God for RealNetworks. I wish somebody would tell Jobs that you catch more fly's with honey then you do with vineger. Qucktime and iTunes for Windows, are just because Apple wants to sell iPod and have the number one most widely used set of codecs and containers.
Apple's growth has been downward for years.
My stock portfolio begs to differ with you.
Having owned Apple hardware, and dealt with that flaky acephalous company, I'd never buy anything from Cupertino again.
Now that's funny! Either you don't know what acephalous means, or, umm, you don't know what acephalous means.
I'm not surprised to see someone rating me as a troll for saying Microsoft helped Apple out when Apple was hurting financially. They are ignorant and don't know what the hell they are talking about and doing, but hey, that's nothign new for Slashdot. Lash out supporting your favorite brand without looking up facts, that's what Slashdot is all about. The truth is Apple was hurting and they could use the $150 million as well as the hundreds of millions that Office products brought them.
+ Apple/2100-1001_3-202143.html
s tories/04biz.htm
http://news.com.com/MS+to+invest+150+million+in
http://www.mailtribune.com/archive/2005/0930/biz/
We are talking about Dell (the company, perhaps you have hard of them?), not PC's. Your comments are as irrelevant as they are uninsightful (Since I can upgrade a desktop powermac in the same manner).
Dell is withering because they invest nothing for good support or R&D - witness the many posts complaining about Dell's decline in quality. Indeed my first PC was a Dell and it was great then, but after having countless Dells die on me at work I would never consider one for a personal purchase and warn people against them.
PC makers will be around a long time to be sure. I'm just not sure sure Dell will be one of them. Thus my comparison is an accurate one.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Compare it to Dell http://finance.yahoo.com/q/bc?t=my&s=AAPL&l=on&z=m &q=l&c=dell
Had the same person invested in dell, they would have made out better.
-everphilski-
I'd disagree -- Apple is propped up by Microsoft in the form of Office for OS X. Office for OS X pretty clearly is not just a port of Office for Windows, which means it probably cost almost as much to develop as Office for Windows -- but its sales are almost certainly quite trivial by comparison.
Microsoft's SEC filings aren't detailed enough to say with certainty, but I'd venture to guess that Office for OS X has been a losing proposition for Microsoft from the beginning. In terms of current operating revenue vs. operating cost, it's probably breaking even and may even be somewhat profitable -- but there's probably no foreseeable possibility of its sales paying for its initial development.
--
The universe is a figment of its own imagination.
The universe is a figment of its own imagination.
1995 called, they want their typical anti-Mac stance back.
Prof. Farnsworth - "Oh a lesson in not changing history from Mr I'm-My-Own-Grandpa!"
You mean that my post was off topic to your offtopic post. I can live with that. It wasn't me who made up the claim that "Apple's profit margin [is] coming from [...] iPods. Not computers." Which had nothing to do with the actual numbers. Nor was it backed up by them.
The accurate profit margin. That's all I "want".
Net profit margin? Operating Profit Margin? Gross Profit Margin? Like I said, make up your mind about which measure of profit margin you want. Because I don't want you to weasel out of this by claiming I didn't "get the comparison right".
Lars T.
To the guy who modded me down from perfect to terrible Karma - Apple haters still suck
I believe you forgot to refute the $4 billion in cash reserves. Try again, please.
I am a true-blue, hardcore hardware geek. I've been building my own PCs for over a decade, and love "getting my hands dirty" in the hardware. It's both my work and my pleasure. My house is practically a monument to computer hardware, with cards and cases all over the place, and enough cabling strung around to give the hovercraft in The Matrix a run for its money. (Okay, slight exaggeration there.) I have over a dozen functioning computers, (if you count the Amiga), and enough parts to build at least 3-4 more complete machines. I use various flavors of Windows on a daily basis, am comfortable in the registry, have a Linux box that I built, installed, and configured on my own, and even play with BeOS from time to time just for the hell of it.
That said, when I actually need to get work done on a computer I use one of my Macs. My PowerBook is as integral to my day-to-day existence as one of my hands. I've opened up every machine in the house (with the exception of my wife's iBook) to do upgrades myself, including the PowerBook and a first generation iMac (living room net access machine). Yes, the Macs are less open to hardware tinkering than PCs, but for raw functionality OS X and the apps which run on it are so far ahead of Windows (and to a somewhat lesser extent Linux) that I find that it's absurd to use my PCs for anything other than games, file storage, and hobby work.
Yes I'm the exception, but I'm not unique. Your statement that "mac has always been about people who dont care enough about computers to want to swap around parts, or learn how they work" is incorrect. The user friendliness of Macs may be one of their most well-known selling points, but the people you're talking about are just as much a part of Microsoft's target market as they are Apple's.
I do agree with you that hardware lock-in is a Bad Thing from a political and economic standpoint, but from a usability and reliability perspective Apple's control over the hardware upon which their OS runs gives them an enormous edge, and I'm happy to be the beneficiary of that advantage. If Apple had the monopoly that Microsoft does then we'd have cause for concern, but they don't.
Yes, Macs are "trendy", but there's solid quality and functionality behind the shine and sparkle.
Boundless Expansion, Self-Transformation, Dynamic Optimism, Intelligent Technology, Spontaneous Order- BEST DO IT SO!
Meanwhile, Apple hardware kicks the butt of Dell's "break in nine months" el cheapo crap.
To back that up with a number, I'm a student employee in Ohio State's computer science department, and the department bought several hundred Dell Optiplex GX270's for the supported grad students and for the labs. In the first year we had a 70% failure rate on the motherboards. Eventually Dell came out and replaced the rest as a preemptive measure. The service techs said that on the previous model (which we never had) they had to do a replacement of all the optical drives.
I kind of miss the dead ass slow but reliable diskless workstations. At least they didn't ever break.
Dell products are no better than whitebox computers you pick up locally, yet Dell sells way more units.
Dell products are also not significantly more expensive than the white-box computers. That is, the "perceived added value" of the Dell name is a few percent.
If apple was letting others sell apple compatible computers they wouldn't be able to have such a high profit margin.
If Apple was letting others sell Apple-compatible computers, Mac OS X would have to cost $300-$500 instead of $130. See, Apple is really a software company. The added value in the Mac is in the software... people don't buy Macs because they're in shiny boxes, they buy them because they run Apple's software.
Dell does not have any comparable product. There is nothing that Dell adds to a Dell computer that is unique to Dell. That is why Macs are worth more, because the "Mac Tax" subsidises Mac OS X.
Net margin will work. But seperate it out between MP3 players and computers. Like I said, apples to apples.
Apple makes the news not because it dominates the computer industry, but because of its impact on the computer market. Again, as many have argued, Apple doesn't always innovate. It has become very good at bringing integrated software/hardware combinations to market and pushing the rest of the market to catch up. They've also transformed themselves in recent years from a computer company to something still being defined. Perhaps we should call Apple a User Experience Company. Opening up the legal music download market is frequently pointed to as merely a by-product of the iPod phenomenon, but it's a rather substantial achievement. Early signs indicate that Apple may be on to something with their expansion into video as well.
We see so many articles about Apple rather than Dell in large part because the DNA of the two companies is radically different. Apple moves forward by putting together very well integrated user experiences. Their products make a splash because from inception to roll-out, the focus is on user experience. Dell makes a splash when it has a good quarter and ships half a zillion units, trampling yet another also-ran into the dust. Apple is an inherently more exciting company to the layman, in part because it has to continually re-invent itself to stay competitive. Dell, on the other hand, just has to keep perfecting its initial business formula, in boring but lucrative Coca-Cola fashion.
Read the EFF's Fair Use FAQ
...since I also said you were wrong, in addition to being off topic - would you rather I just called you all-around ignorant and be done with it? I was willing to suppose you had some good idea somewhere that you'd not brought up.
Since the last post was not at all personal I thought I'd demonstrate what an actual personal insult looks like so you have an example to compare against. I'm sure you'll do your worst to me in response and demonstrate to everyone your superiour mental abilities.
As for the rest of your post - Dell simply is larger and the decline of the giant is always a slower process than the rise of a new company, as trends are right now Apple will overtake them eventually. I am just telling you what is obvious from personal experience and reading posts from other people - not just myself. If you believe what you say than by all means buy stock in Dell this moment.
You sound an awful lot like an example of a "fanboy", unable to take any critism of your beloved company (in this case Dell). While I enjoy Apple products I realize and critisize when they make stupid errors (like the iPod photo which is pretty worthless as far as I'm concerned). But you seem oddly to unable that decline in customer support is a MAJOR concern for Dell as it's a huge component of what keeps people coming to them (or not).
Lastly, if Dell is doing so well why are thier profits half of what they were at the same time last year, when the economy is on the upswing and Apples profits (even just from computers) have increased dramatically?
I bought a Mac exactly because I value functionality above all else. I use a Dell at Work and and an Mac at home. How long have YOU used a Mac for, that gives you any idea what you are talking about? My bet is somewhere from zero to one hour (leaning towards zero), and that months ago. So by all means go on about how Macs are only pretty pieces of metal and plastic with no redeeming virtue, so the rest of us might sit and stare in wonder at your effort of reputation self-immolation.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Apple makes WAY higher profits per PC sold than Dell does.. Dell only hits 3-4% over their cost... they rely on upgrades for the profit. Apple makes up to 20% per PC after expenses... They can support A LOT of R&D on that extra.
I like "administrate" for what you do with computers, "administer" for what you do with cough syrup.
Verbing nouns can be okay, but is sometimes ridiculous. For instance, he who burgles is a burglar. He who burglarizes is a burglarizer, he who burglarizerizes is a burglarizerizer...
"Wise men talk because they have something to say; fools, because they have to say something" - Plato
On the desktop I'd probably pick the Intel box, simply because of the computer's easy upgradability, but I'd never buy an Intel notebook. Most of them are heavy, loud, huge and ugly - not to forget the lousy *nix compatibility. In case you haven't heard, Apple is dumping the PPC and using Intel chips.
Yeah, sort of like the ultra-opinionated youth that tries so hard to think out outside the box and be original that he ends up looking like everyone else.
Your post is misleading. Yes, Apple's units are flat from 2000. What you're not saying is that they're significantly up from 2001-2004, and that they're inches away from eclipsing their 2000 unit sales figure.
Also, Dell's growth has been abnormally high vs. the PC industry as a whole, they're the only one that grew through the downturn. Apple is not really in direct competition with Dell, they have completely different value propositions.
PC Industry unit growth (CY): 1999 = +23%, 2000 = 14.5% , 2001 = -7%, 2002 = -1%, 2003 = +9%, 2004 = +15%, 2005 = (predicted) +0.5%
Apple's unit growth (FY, ending September): 1999 = +25%, 2000 = +32%, 2001 = -32%, 2002 = 0%, 2003 = -3%, 2004 = +9%, 2005 = (predicted) +38%
Apple's unit sales in FY 2000: 4.6 million. FY2001-2004, around 3 million. Apple's unit sales in FY 2005: 4.53 million.
Dell's unit growth in 2005 (FY, end): (predicted) +17%. They grew 50% in 1999 and well over 20% each year through most of the downturn.
Sources: Gartner & IDC stats for 2000, Dell's 10-K filings from FY2001-2005 where they reported their share vs. industry share, Apple's 10-K filings from FY2000-2004, plus their 10-Q from Q3 2005 combined with the Q4 announced figures. and Gartner's 2005 prediction.
A couple of notes: Apple's growth figures tend to lag the industry because they count "last year's" holiday season. Notwithstanding that, Apple's 38% unit jump relative to a flat industry, and nearly double that of Dell for FY 2005, is significant. Does it mean Apple is killing Dell? No! Does it mean that more people are buying Macs? Probably. I find the argument that all those 32% that bought Macs in 2000 are en-masse upgrading this year somewhat implausible. This holiday's figures are going to be very interesting to compare vs. the rest of the industry.
-Stu
One big problem with Dell is, they don't really give as high a "value" as the initial price tag makes it seem. As another person posted, their tech. support is decidely "low value" when you consider all the time you wait on hold or waste talking to a foreigner who is tough to understand, and who makes you go through 30 minutes of useless "troubleshooting" including "make sure the power cord is firmly attached to the back of your monitor" and "please shut down and restart Windows" to get a faulty video card or display replaced, or worse yet - may not let you get a defective memory DIMM replaced until you humor them by letting them swap out the CPU, motherboard and who knows what else first, over multiple support calls.
Is Apple "perfect" by comparison? Hell no... But they do a lot of things right in this area. For one, you usually do get native English speaking support reps when you call the toll-free support number in the U.S. - and my hold time has been 5 minutes or less. On the iMacs, they have a self-service system over the web, so you can order your own warranty replacement parts without getting permission first from some support rep. over the phone. They're also pretty good about eventually extending warranties to cover products with known major flaws - instead of just screwing over everyone who bought one with only a standard 1 year warranty. (By contrast, I was burnt on 2 Dell Latitude CPi series laptops now, because of design flaws and poor construction that Dell never officially admitted to.)
I don't think it's really possible to achieve "trendiness" with a shoddy/substandard product. There's simply not anything "cool" about some product that was inexpensive up-front, but most users end up underwhelmed or just "so-so" about over the long haul.
Apple's Mac business has been growing since the iPod came out. In the past year, it has grown significantly (35% or more.)
Mac sales volume is up. Mac revenue is up. Mac profits are up.
From any economic angle, the Mac is a product which has great value.
From a technical angle, Mac OS X is being improved and enhanced at a furious rate. If Microsoft were neglecting Longhorn as badly as Apple has been neglecting OS X, then it would've shipped in 2003.
The Mac only looks bad if you compare it to the growth of iPod. And that's a stupid comparison, because the Mac does not compete with the iPod.
(Incidentally, Sony eagerly sought licensees for Betamax. It lost because VHS continuously improved quality, reduced costs, extended playtime and beat Sony to market with each improvment.)
Another example would be the $0.99 burger at Wendy's. In raw part it would cost you only $0.25 Do you want to lug around a fridge, fresh lettuce, a package of buns, a grill, ground beef, and cheese whenever you feel like eating a burger for lunch?
Personally, I'd rather go to the local independent diner rather then a chain like Wendy's. There I can get anything from a burger to a BLT to a sub to an omlette. The cost is about the same, but I get waited on and don't have to fight for a table.
Hell, if I go often enough, the waitress will often bring me my coffee when she brings me the menu. IOW, I get much better service then I would get at a Wendy's. Even if I ate at that Wendy's every day of my life (and it would be a short one), you'd still be just another face.
I'd say Wendy's is more like Dell in your example. Cheap, commoditized, and you'll pay for it too. But when I'm in the mood for greek lasagna, there's no place like Stonybrook.
Wolde you bothe eate your cake, and have your cake?
Short answer: HELL NO.
Long answer: Dec 31, 1997. AAPL closes at 12.75 a share. With $1.3 Billion in the bank, their cash on hand exceeded their market cap. Today, two stock splits later, AAPL closed at 61.15 a share. Overlooking the fact that one of those splits was 3 for 1 where the company kept one share and gave investors two... Split adjusted, that's about 19 times your investment in less than 8 years. Long term, that's a solid 44.7% growth in your investment EVERY year for EIGHT SOLID YEARS. DELL on the other hand has *almost* tripled its 12/31/97 closing value (about 14.7% annual). So, let's see... which would I rather have: $19i or $3i.
If you're suggesting AAPL investors might have been better off with DELL, I'm afraid you're barking up the wrong tree. I don't have the numbers to back it up, but I'd be willing to bet AAPL has stomped every other computer hardware manufacturer in the past 8 years in share value growth. And for investors, that's what counts. Very, very, very few companies have done this well in the past eight years. AAPL is a superstar.
PS. I don't own a dime in AAPL, but I have been watching their stock closely since about 4/97.
It seems, admittedly from anecdotal evidence, that there are large numbers of people who want to buy OSX and run it on the hardware of their choice. Any normal company and any normal management team would stop bleating about controlling the total user experience (which is anyway nonsense, the Tiger experience has been no stabler, and no more immune from hardware incompatibilities than the XP experience) and just sell its customers what they want.
People keep saying in reply to this sort of thing: but Apple is a hardware company. It may be. If it is, people will carry on buying its hardware. What's the problem? Sell them the OS they seem to want, as well.
People also quote Jobs as referring to people who want to buy the software standalone as parasites. This is one of the maddest things ever to come out of California. We are talking customers . Guys with money who want to give it to you! Just take it!
I'm not sure you understand the definition of profit margin.
You can run a business at 0% profit margin and go on and on forever. You'd probably even be very competitive.
Thing is that in a small business what to a large business would be itemized as "CEO's salary" is miscategorized as "profit margin." So if you itemized correctly many small businesses would end up as 0 margin companies, though the CEO might find himself with a varying and inadequate salary.
For a corporation, if profits were 0 for a long time you'd have irate stockholders, which would result in stocks being sold, value diminishing, equity vanishing, and a net loss magically appearing due to economic forces that I do not personally comprehend. But again, if the stockholders were OK with it, a company could persist forever with a 0 or small margin. It could even grow tremendously with just a slim percentage- if, for instance, Apple slashed their prices by 8% on average to drop down to a 1% margin, it would probably result in greater sales and increased revenues, larger market share, etc, so that the company would be growing; they could just as well invest it into advertising or RD or hardware specs, and in any of these cases the margin would go below 9% and the volume would go up.
The evidence that Apple is not all about sales volume is that they haven't achieved sales volume. They could sell iBooks for $799 and maybe sell a few more. They could sell 30 gig iPods for $269 and maybe sell more (well lets see how the current round sells, my money is on "lots and lots".) They're not all about sales volume, and they're not all about per-unit profits, and so neither is really a good measure of the company's health. Apple is doing what Steve Jobs and other boardmembers want it to do, and it's doing it very well, as evidenced by the fact that you don't hear those people complaining, and the only complaint I've heard from an Apple employee was (I think) in jest, when he joked that he probably made less than me (I doubt it's true) so I suspect the company is doing ok.
So I wonder. What exactly do we care about the company's profit margin?
This is what I care about about Apple. They made the computer that I use every day. They make the music player I listen to every day. Both things are the most satisfying products I own. I'm pretty sure I'll succumb to their "marketing" again. And I know I don't mind because I like their products and yeah, I appreciate the image.
while not 4B but still had excess of 1.4B cash by 1997
game overat $150m investment it said
Apple, which ended its third quarter with $1.2 billion in cash, will use the additional $150 million to invest in its core markets of education and creative content, Anderson said. He added that the company expects to gain a higher percentage of its revenues from software and services in these core markets in the future
and also
Davis also said that given the size of Microsoft, a $150 million commitment amounts to little more than good public relations.
Neither company gives that information. And Dell won't even tell us how many MP3 players they sold. And were is the actual data for Dell's last quarter anyway?
Lars T.
To the guy who modded me down from perfect to terrible Karma - Apple haters still suck
You're exactly right. And I knew that (that's why I was being "lazy"). But I never cared what the numbers were anyways. All I wanted to point out is that the main article was an apples to oranges comparison. I can't possibly imagine that Dell would have a better profit margin than Apple at almost anything they sell. Dell's products are commodities (and super cheap) and Apple's are one of a kind (and super expensive). They serve different markets and sell different products. Have a great Saturday!
Yeah, and one company is "too much of a one-trick pony", while the other isn't. So comparing them was doomed from the start.
Lars T.
To the guy who modded me down from perfect to terrible Karma - Apple haters still suck
I've heard other people say good things about IBM gear, If I were going to buy a Windows laptop I think that'd be my top contender. I know from past experiences the AIX boxes were built like a tank...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
If you look at online stores of Dell and Apple and build out similar systems (as close as possible, similar substitutions are allowed!) you will find their prices are essentially the same - sometimes Apple will even have a price $50-$100 better, sometimes the other way.
The main exception is that Dell *also* sells an additional lower class of systems that no one should be stuck with -- their "Basic PC". It's still in the same field as a Mac mini, but stripped to the max and with few options. This is the PC that nobody in this forum would buy for themselves unless it was the last PC in the universe for sale.
If you exclude the *garbage* bottom end systems that Dell sells, over time, there's little difference in price or components.
At least by any conventional definition, Mac's are not overpriced - haven't been for a long time.
(You build it yourself-ers are working a different equation. Possibly much cheaper (or much more) than either Dell or Apple, but not an apples to apples comparison, and not what 99% of people are going to try.)
My appl stock would go up so much if people actually did think like that regarding Apple Macintoshes.
Unfortunately they don't.
GPL Deconstructed
Third party developers don't make Apple any money. Why do they "need more users using OS X so they can attract 3rd party developers"?
What Apple needs is to make their computers "valuable" enough for people to purchase them despite a 15% price difference.
GPL Deconstructed
All this talk about R&D and struggling companies, gotta mention IBM. After doing Nobel-prize winning work, they trimmed research budgets in the early 1990's when they looked to be on their corporate deathbed. Now they are again doing the sort of fundamental work - slowing light! - that will lay the foundation for optical computers. This is real research, not figuring out how to save $2.37 on a commodity computer.
to err is human, to forgive is divine, to forget is... umm...
Hey, stop it! Halloween's over.
Thwarting such monstrous danger to our endless personal consumption is why we turn so avidly to religion ("There will be poor always"), politicians ("It's yer munny! It's yer munny!") and TV pundits ("Sorry, not my problem!").
It's only semantics, but I don't believe Apple sells a single major product that qualifies as cute.
"Little" is accurate, since Apple's form factor is modernist, and modernism prizes spare, unadorned, stripped-down essences: beauty in the way a thing actually looks before it is layered over with decoration.
To be sure, some of Apple's accessories as well as a lot of the iPod aftermarket are pretty crap to make your iPod look cute, to "dress it up." This fetishistic stuff caters to the desire to play dolly, something, amusingly, that can be observed in quite a lot of adults.
That's why there's a fortune to be made by the first person to market the Burp-Your-iPod accessory. Just squeeze, and....ah, music to your ears!
I'm actually surprised. I mean, I'm not a big Dell fan, and our failure rate on their laptops at my company approaches 100% per year. (60 laptops, nearly 60 failures per year, though of course not every single one fails... some fail several times.) But as for my (14) rack-mount servers, mostly Dells, I have had only two problems in the last two years: one was on a Dell which had one drive, which I bought myself, fail (fortunately it was in a RAID), and one was on an xServe that had its memory (which I had also bought, from Crucial) die spectacularly. Aside from that, everything has been rock-solid, and I've never even had to use that 8-hour-response-time service contract I got from Dell.
What do you see failing? What are the worst models?
-fred
Sign #11 of Slashdot overdose: You see the phrase 'moderate Republican' and you wonder if that would be a +1 or a -1.
> Dell is more interested in gaining market-share than in maximizing price.
:-)
Which is to say, 'Dell is more interested in driving all of its competitors out of the business of making computers at all, so that they can then jack up their prices as high as they like, than in actually making money.'
-fred
Sign #11 of Slashdot overdose: You see the phrase 'moderate Republican' and you wonder if that would be a +1 or a -1.
Do you have a source for the numbers you used to determine that? Their Q4 2005 Unaudited Summary Data shows revenue for systems (broken down by desktops, which means "non-notebook", and portables), iPods, "Other Music Products" (iTunes Music Store sales and "iPod related services and accessories"), peripherals and other hardware, and "software & other", and shows computers being responsible for more revenue than iPods or music (I'm assuming that by "selling music" you mean "selling music and music players"), but doesn't show costs or profits for those categories, so it doesn't show that more profits came from computers than from music (and also doesn't show that it didn't come from computers).
I've yet to see a post showing the $4 billion in cash reserves Apple had. Oh that's right, they didn't have $4 billion in cash reserves. The Slashdot anti-microsoft assholes strike again though with their moderation. Kudos on making this site worse.
Put aside the profit margin and look at who has provided any substantial contabutions to computing in general. 1. Dell = a erector set builder 2. apple = Visionaries who have contributed more than even Microsoft. Shut it down pfff Michael Dell what a joke. I worked for one of his 2bit consulting companies I say maybe shut Michael Dell down and his crummy erector set business. Ok Ok I have been bad ;)