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."

Comments

Gambling

[whisper_jeff]

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...

Re:True for tablets, not computers

[beelsebob]

Really? The iMac is reaching end of release cycle, so isn't at its peak of value, but...

27" iMac built from scratch (prices from newegg):
27" 2560x1440 S-IPS monitor including camera: $999 (from apple, 1099 if you buy it from dell)
i5 2300: $179.99
DH67GD: $102.99
2x2GB DDR3 1333: $22.99
1TB 7200rpm HDD: $139.99
Radeon 6670 (aproximating the speed of the 6770m here): $79.99
Corsair CX430 PSU: $44.99
Antec 300: $69.99
Total: $1639.93
Apple's price: $1699

That really doesn't look like too bad to me. Were you by any chance ignoring the price of a 2560x1440 S-IPS monitor when you were finding they cost twice the price?

Aside –the system built here will be significantly louder than an iMac too, and significantly bulkier. Factoring that in, I'm sure we can forgive apple $60 at the end of their release cycle ;)

Re:Tablets aren't actually useful, though.

[Eponymous Coward]

Wow, rarely has there been a post that I disagree with more.

Right now, the tablet market is iPad and people who have them, mostly love them. The iPad is wreaking havoc on the low end PC market and they are still selling more iPads quarter after quarter. Apple is rumored to be dumping part of their desktop line up. There's no indication that the tablet line up is going anywhere.

after you buy one and try to use it you find that you're better off using your smart phone or your netbook

If this were true, I think you would be seeing a resurgence in netbook sales. The reality is that sales are way down and are stagnant. I think a lot of Slashdotters are really out of touch with how normal people use computers.

There are many other tablets out there that are technically equivalent or superior to Apple's tablets, but nobody wants to use them

Technically equivalent or superior? You must be measuring by clock cycle or memory size. I don't know of any tablet that even comes close to the iPad in areas that matter like build quality, battery life, and software. Apple has figured out that saying no to a feature is a bolder move than adding yet another switch or option and their product is subjectively better for it.

Contrast this to the uptake of useful devices like PCs, laptops, netbooks, PDAs and smart phones. People actually wanted to use these ... these devices have had staying power

How's that PDA working for you? Netbook sales are way down from their peak and not recovering. And who wants to use their PC? That's their work machine. The iPad is their play machine.

Talk to people who compete in the low end PC market. The iPad has them terrified. It's a huge part of what spurred Apotheker to conclude that the PC business is dead. And have you seen Windows 8? That has me thinking that Microsoft is also turning away from the desktop market. It almost seems like they are splitting Windows into server and tablet versions.

Re:I'm having trouble

[Space cowboy]

"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