Slashdot Mirror
Apple's Secret Weapon To Influence Industry Pricing
Hugh Pickens writes "Nick Wingfield writes in the NY Times that Apple's present pricing strategy is a big change from the 1990s, when consumers regarded Apple as a producer of overpriced tech baubles, unable to compete effectively with its Macintosh family of computers against the far cheaper Windows PCs. Now within the premium product categories where Apple is most at home, comparable devices often do no better than match or slightly undercut Apple's prices. 'They're not cheap, but I don't think they're viewed as high-priced anymore,' says Stewart Alsop. Winfield writes that Apple uses its growing manufacturing scale and logistics prowess to deliver Apple products at far more aggressive prices, which in turn gives it more power to influence pricing industrywide, and one of Apple's pricing secrets has been it's willingness to tap into its huge war chest — $82 billion in cash and marketable securities last quarter — to take big gambles by locking up supplies of parts for years."
This isn't exactly true for computers, but it sure is true for tablets. I can easily find better and more capable computers for lesser price than Macs, but it's an another issue with tablets. The current Android tablets either have bad hardware, bad design, are buggy or uninteresting and have less apps and games available. The good Android-tablets cost the same or even more than an iPad. At least with iPad I know to get consistent quality and a huge app store. And I don't mind paying a little for the apps and games, developers deserve support when they make good programs.
Hence, my current valuation for things is:
For desktop, Windows 7
For servers, CentOS Linux
For tablets, iPad
I didn't think tablets were that nice for a long time, but once I got mine I understand it now. It's really awesome when I'm laying down at the pool or hanging with my girlfriend in bed.
I've heard that the reason you see so few 9.5" "ipad size" tablet displays is that Apple bought up the entire stock. This is also why the iPad 2 had the same resolution as the ipad 1, and why the Android tablets are mostly stuck at 7". Can anyone confirm/deny this? Or explain that better. My knowledge of LCD manufacturing plants and capability is minimal, to say the least.
moox. for a new generation.
Windows 7? CentOS Linux?? I call bullshit on the "hanging with my girlfriend in bed" part. Never happened.
The whole tablet phenomenon is a fad. It was basically created via media hype, and the willingness of many of Apple's customers to buy just about anything with an Apple logo on it.
Despite millions upon millions being sold, very few people actually use tablets. Once the novelty wears off, it becomes obvious that they aren't practical at all. They take the worst of smart phones, without any of the benefits, and combine it with the worst of netbooks, without any of the benefits. Sure, the tablets look interesting, but after you buy one and try to use it you find that you're better off using your smart phone or your netbook. That's why despite so many being sold, it's extremely rare to see anyone actually using one.
The fact that there's basically no real demand for tablets is exactly why no other company besides Apple has been able to produce a successful competitor. There are many other tablets out there that are technically equivalent or superior to Apple's tablets, but nobody wants to use them, leading to situations like the one with HP where they liquidated their stock an unprofitable prices.
Contrast this to the uptake of useful devices like PCs, laptops, netbooks, PDAs and smart phones. People actually wanted to use these, so we quickly saw many viable devices from many vendors appear. Since the demand was authentic, these devices have had staying power. This just isn't the case with tablets. The tablet fad will likely be over by the summer of 2012, if not completely by early 2013.
as a non-native speaker, I find it painful to read "it's" instead of "its" in almost every /. post ...
"I love my job, but I hate talking to people like you" (Freddie Mercury)
People who view Apple's decisions as "big gambles" simply are not giving Apple the credit they deserve. Quite frankly, Apple hasn't gambled in quite a while - they are making very smart, very well thought out decisions and they are executing those decisions with skill and refinement. That isn't a gamble.
Regardless of what you think of Apple - love 'em or hate 'em - it's simply inaccurate to describe their moves as "big gambles". They are making bold business decisions.
Now, admittedly, that doesn't sound impressive but it actually is - too few companies are able to come up with a well thought out plan and to boldly follow it, sadly...
What is a certainty is that Apple does volume buying at a scale nobody else can or is willing to match. It is a huge gamble for Apple. They got a lot of money but it is still a publicly traded company so if they screw up they can loose their value really quickly.
You said it yourself, the iPad2 is very conspicious in the its screen usage. Maybe they bought a little bit to many? Remember HP and the dump of its tablet? That wasn't just done to upset the market. Grinding up old stock is costly in itself. If say an iPad3 were to fail, how much obsolete stock would Apple have to get rid off?
All that has to happen is some chinese factory to open up and sell either better tech for the same price of the same tech for less and Apples strategy is shot.
Apple is also making a LOT of enemies. MS did the same once and those who thought that in business their is no room for hard feelings and rancor were ignoring moves by old MS rivals that didn't benefit the rivals as much as screw MS over.
And right now, with Apple fighting the other tablet makers that are also its suppliers Apple is feeding the hand it is scratching at the same time. Samsungs lawyers are paid by component purchases by Apple... how odd is that?
Apple is riding a wave of success but other companies have done it before them and crashed horribly. Will Apple have the same fate? Hard to say but seeing Apple giving up its old mainstays in the high end, they sure are playing a high risk game on a very narrow playing field. Samsung won't go bust if it can't make tablets and phones anymore, they got a lot of different products. Apple on the other hand would be dead in the water if something were to happen to their iLine of products. Unlikely... but then, did anyone really for see the fall of Amiga, Commodore? IBM PC's? Or indeed, Apple PC's? Once they were a major player and then dwindled. And it is unlikely Steve Jobs will return a 2nd time to save the company.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Yes having little variation in the range results in economies for the manufacturer, but the "one size fits all" approach combined with Apple's resistance to letting the people who buy their stuff do any changes to it means that very few people are perfectly served by the model range . The more choices you have in choosing a device and what you run on it the more like is the result you end up with something that severs your needs, rather that the needs the manufacturer feels you should have.
N.B. this user is far too lazy to write a witty and intelligent sig.
Not sure that is a fair comparison given that Dell laptop is reported to have poor build quality, poor battery life (some people report 2 hours), a poor quality screen, and I'm not even sure Dell sell it anymore. Also, the Apple laptop in question has Thunderbolt, backlit keyboard, firewire 800, 7 hour battery, solid aluminium (not plastic) and magsafe power connector. Not to mention a better operating system. It is clearly a better designed and engineered machine than the Dell.
You'll always find laptops that are cheaper than Apple. But you get what you pay for.
Interestingly the Dell 13" version of your example is the same price, with lesser specs (notably, i3).
But AFAIK the Inspiron is Dell's "cheap" brand. Apple don't do cheap. So you might be better off comparing with Alienware or Latitude. Both of which cost more than a similar spec MBP.
Apple (and most companies) do rip off us Aussies, but remember that in the USA prices are advertised without tax, so you have to add 10% GST. Still higher, but not the full $200. One thing that really annoys me is they charge us more money to "service us", but don't make changes to actually service us, like spelling in the autocorrect. When the iPad first came out it was actually cheaper here than in the States!
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no sig for you. come back one year.
Look at the report to the President on Ensuring American Leadership in Advanced Manufacturing. (http://www.whitehouse.gov/sites/default/files/microsites/ostp/pcast-advanced-manufacturing-june2011.pdf)
Laptops, semiconductor memory device, flat panel displays, and lithium-ion batteries are all technologies that America has lost the capability to manufacture. Apple could not manufacture their products in the US anymore.
Reposted to help get this AC's point out where people who ignore ACs will see it, and also to add an anchor tag to the "linked" document, so those of us who hate seeing URLs without links can just click the darn thing.
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Only recently have they started getting cheaper, but not by much. Those that are noticeably cheaper are also of noticeably worse quality.
...nobody on earth is out shopping for an Apple Server...
You'd be surprised...
Apple is at the crest of a wave but the iPod/iPhone/iPad is not going to be the must-have christmas item forever.
I've been hearing people say that for ten years.
Apple hit it out of the park with the iPad because everyone has been looking for a way for the last 30 years to sell more computers to women and women buy them.
For the last 30 years people have been loading a Microsoft PC operating system whose UI was designed for a mouse and keyboard onto tablets and then wondering why hardly anybody wants to use it. Apple hit it out of the park with the iPad because they designed a handy tablet that came with a proper tablet UI.
If I read your point further, you are saying that Apple should be forced to build their phones in the US.
I never said they should be forced to do anything. I said they probably could make them in the US. What gets me is that most consumers think they are "buying American" when they buy Apple, when in actual fact there is not much here in America apart from some offices in Cupertino and pimply teenagers at Apple stores. What I don't get is that Japan - with incredibly high labor costs and costs of living - manages to continue to be a manufacturer. As does Germany. Yet the US seems to be completely incapable of doing this. At one point buy the damned robots and upgrade your plants, you know?
Seven puppies were harmed during the making of this post.
Here's a leaked excerpt from the next edition of Walt Mossberg's Wall Street Journal column, where he reports on a recent interview with Tim Cook, Apple's newly ascended CEO:
I asked Cook what he thought his biggest challenges were. "Clearly," he replied, "China is our next big challenge. After the U.S. it's our second-largest market. But we're doing well there. We have 6 Apple Stores in China now."
And after China? "Our biggest challenge in the U.S. is the Slashdot market," he said without hesitation. "We haven't executed successfully in that market. But it's a big market, vital to our success, and we're going to aggressively pursue it. I've asked Phil (Phil Schiller, Apples Senior VP of Worldwide Product Marketing) to sit down with John Frazier and figure out a way to get our products onto the ThinkGeek web site."
Cook can't explain why the Slashdot crowd won't buy Apple products. "I don't understand it. OS X is based on Unix. We've been big contributors to the open source movement. But they persist in calling our customers 'Appletards' and 'fanbois.'"
Cook is normally a low-key guy, but the more he thought about all the lost Slashdot sales the more agitated he got. "I want the Slashdot market. I will have it. Once I have the Slashdotters, the world will be mine! MINE I TELL YOU!"
At this point I had to terminate the interview.
"some offices in Cupertino and pimply teenagers at Apple stores", huh?
Apple employ ~60,000 people now, with very very few (if any) of those being in China...
It's not Apple's job to make your country a better place or more biased towards manufacture than design, that's your governments job. Unfortunately your government prefers to play with its dangerous toys, declare war left, right, and centre, try to make its rich richer at the expense of everyone else, ignore the healthcare requirements of its populace (seriously? No single-payer system in this day and age?), destroy human rights in the name of 'the war on terror', and generally have its two parties more involved with acting like dicks to each other than actually, you know, running the country.
When you can vote the government in and out of office, you get the government you deserve. I can only assume a majority of Americans are seriously screwed up. Or masochists. Or something!
Simon
Physicists get Hadrons!
So their 'secret weapon' is that they think ahead, price aggressively in shrewdly chosen market segments, and take carefully measured strategic risks with their resources?
Does it strike anyone as ironic that it's so unusual for a company to act the way a capitalist company is *supposed* to act that it's called a 'secret weapon'?
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Yes –the point of this article being that they're not actually over priced –they're just not cheap crap ;)