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Apple plans to price more aggressively?


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Apple plans to price more aggressively?
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cosus
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2008-07-22, 07:56

http://www.iht.com/articles/2008/07/...ness/apple.php

I've been personally happy with the way they price, at least I have rationalized so. However, is this a good thing? I just hope R&D stays up and quality doesn't significantly decrease. As they say, Apple is now the third largest computer seller in the US, I suppose the price of Macs are at time prohibitively expensive and for a company that wants to remain a "growth" company, pricing is the most straight forward method. Innovation can only go so far if the price is still too high. I guess we can see example of price decreases in the MacBook Air and the SSD option, or maybe that was just by virtue of SSDs being cheaper just a few months after the computer inception.

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Last edited by cosus : 2008-07-22 at 08:07. Reason: Clicked the "post" button too often due to non-reaction from browser.
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bassplayinMacFiend
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2008-07-22, 09:24

Sounds like a mid-sized tower that will probably destroy Mac Pro sales. At least one can hope this is the case.

The only other margin destroyer I can imagine (and it shouldn't even be in my imagination) is if Apple decided to include Vista with every Mac. This of course would never happen as it would instantly destroy most OS X development.
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colivigan
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2008-07-22, 09:37

AI spins it a little differently.

Apple plans mystery "product transition" before September's end

Laptops with solid-state drives, perhaps? That would certainly put a dent in margins.
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almost2mac
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2008-07-22, 12:02

What about if they made a consumer tower that is Core2Duo, perhaps the same spec as a current iMac, has only 2 drive bays, a replaceable graphics card and two RAM slots for a max of 4 gig?

That would be a sweet gaming machine that would be sufficient for home users, and wouldn't compete with the Pro. Make a white and a black one, starting at $899.
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Swox
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2008-07-22, 12:53

Nice, we finally have a crumb to fuel mid-tower speculation again! Maybe I won't have to build a hackintosh afterall!
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ezkcdude
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2008-07-22, 12:55

Won't a middle-of-the-price-range tower compete with the iMac, though? I think so. Anyway, it wouldn't surprise me if we finally get an Eee competitor from Apple - yeah, I know, nobody else around here thinks it will ever happen. I've made this prediction before (or something similar):

10"
2 GB RAM
32 GB SSD
under 3 lbs
$799

Take that, Asus.

Last edited by ezkcdude : 2008-07-22 at 15:13.
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709
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2008-07-22, 13:04

Hmm. I'm reading it as a transition of existing product(s), not an altogether new one. SSDs in laptops would be nice, but I think that capacity would be a concern for MBP owners (unless they doubled them up, in which case cost would be a huge concern). Maybe LED panels across the board? Even in the iMacs and ACDs (barring the 30-incher, I'd guess)?

So it goes.
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Fahrenheit
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2008-07-22, 13:05

Oh this is a fucking pain, I was gonna by an iMac 24 mid September.

WHAT TO DO!!?!?!!?!!?!?!seven!?!
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Luca
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2008-07-22, 13:20

I really don't think Apple will come out with a midrange tower. It just wouldn't make any sense to do so, for the following reasons:

1. Sticking to an ATX form factor (the only way to keep costs really low) would restrict Apple's ability to design a pretty case.
2. The market for desktop computers is shrinking.
3. They still won't be able to compete on price with the likes of Dell.
4. Businesses and people on very tight budgets who want Macs will just go to the Mac Mini anyway.
5. The few people who do fit into the market segment of wanting something more powerful than the Mini, on par with the iMac, but who don't want an all-in-one, and who can't afford and don't need a Mac Pro, are mostly computer nerds who will just build a Windows box on their own for much less than even Dell would charge, not to mention Apple.

This has to be something else. Plain desktops are such non-news in today's computer industry that Apple would never bother announcing something like this. They might be converging the iPod Classic and Touch into a single product line that's cheaper in order to represent a better value when compared with the new iPhone. Or maybe it is an eeeMac. Whether that's an entirely new product or a new, cut-down version of the MacBook Air, we don't know.

Should be interesting, though, whatever it is.
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thegeriatric
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2008-07-22, 13:23

Quote:
Originally Posted by Farenheit View Post
Oh this is a fucking pain, I was gonna by an iMac 24 mid September.

WHAT TO DO!!?!?!!?!!?!?!seven!?!
Wait. Be patient, all will be revealed. If you are willing to wait until September, then what difference will a few more weeks make?
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ezkcdude
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2008-07-22, 13:24

Quote:
Originally Posted by Farenheit View Post
Oh this is a fucking pain, I was gonna by an iMac 24 mid September.

WHAT TO DO!!?!?!!?!!?!?!seven!?!
I'm in the same boat, waiting until they rev up the Mac Pro.
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ezkcdude
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2008-07-22, 13:28

Quote:
Originally Posted by 709 View Post
Hmm. I'm reading it as a transition of existing product(s), not an altogether new one.
If you read the article from AI linked above about Oppenheimer's statement, it says,

Quote:
The new, unnamed product will continue to have "technologies and features that others can't match," according to the CFO.
Of course, the author of the article could be misstating the case, but I think it's definitely highly likely that there will be a new product or even product category.
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709
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2008-07-22, 13:37

I just skimmed UncleJohn's link, really. But if there was mention of a new product I'll bet it's that mythical Tablet/PDA everyone was so jazzed about last year (1.5x - 2x the size of the iPhone, iirc). If Apple can price that sort of thing competitively they'd absolutely own the market. I know I'd hit it (the smaller version at least, I'm not especially keen on carrying a MBA lid around).

So it goes.
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Capella
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2008-07-22, 13:41

I WANT it to be a mid-range tower, but now I'm hoping it isn't- with the death of my laptop, I need to buy a new computer for myself when I go back to college August 15th (I can't take the computer I'm using at my house as it's my mother's.) I'd be so devastated if I bought a Dell tower and THEN Apple offered a midrange.

That said, I think it would be coolest if it was an Eee competitor, because I think that Apple could do a fantastic job with that. They're definitely capable of designing something slim and light, and with their experience with OS X for iPhone and iPod Touch it'd be easier to use than an XP or Linux machine. All they need to do is get around their price premium that makes it impractical for many people to buy (the MBA's price is way too much- if only it was cheaper than the MacBook), and they'd have a sure hit.

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Artap99
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2008-07-22, 18:13

I think it would be funny if it's just Snow Leopard costing less than other OSes that they put out. Instead of $129 for a full upgrade, $60 for tightening. Something like that.
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PB PM
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2008-07-22, 18:23

Honestly, they shouldn't charge a dime for Snow Leopard, its a service pack for goodness sake.
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Wrao
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2008-07-22, 23:51

I'm thinking it will be a restructuring of their notebook line-up. Perhaps we will see a ~$800 entry level Macbook, scaling upto a $2199 top-level Macbook pro. With 4 or 5 models total. All aluminum enclosures, with a redesigned case to make them more homogenous.

If not that, then perhaps the mythical legendary tablet PC is to be materialized. Oppenheimer did mention that they expect to pull something their competitors cannot match. Apple tends to only enter a new market when they have a novel way of re-inventing the wheel. A New generation tablet PC from Apple would likely be marketed or tied-in with the iPhone in some way. But, as appealing as such a device can sound on paper(or tablet as it were), the fact remains that, no one really likes the tablet format, at all.

I think for a tablet to succeed, it would need to be incredibly small, thin and light, with minimal excess space, and maximal power/features. But even then, I do not think the sci-fi 'wow' factor would be enough to make it a significant product for Apple, or anyone. I mean, this thing would have to be ballpoint pen useful.


Less likely, but still possible, would be an across the board price shift, shave a hundred here, a hundred there. Try and inch out another % or two in market share.

Whatever it is, one thing for certain is that it will not be the fanboy tower(small, iMac specs, HDD bays and upgradeable GPU for $699)
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Brave Ulysses
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2008-07-22, 23:57

The timing and vague description would really only support an argument that it is a restructuring of the iPod line.

Think about it guys. All of you talking about desktops and laptops and such.... it makes no sense. It wouldn't impact guidance enough. It wouldn't fit the description provided.

Apple's iPod line is their bread and butter... it's what has gotten them to this point. No denying that. It's also stale and almost an afterthought now. Apple is at an extremely critical point, this holiday season. The iPod line needs to be rejuiced. Apple is still the leader there but needs to ensure they remain the leader. This fits the description provided during the conference call.

All new iPod line, utilizing the best of the iPhone I'm sure at very aggressive pricing. Apple doesn't want to lose their crown in the MP3 world.
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Swox
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2008-07-23, 14:18

Quote:
Originally Posted by Brave Ulysses View Post
Apple's iPod line is their bread and butter... it's what has gotten them to this point. No denying that.
Correct me if I'm wrong, but I believe Apple makes a hell of a lot more money from computer sales than anything else. While the iPods have helped them achieve the "cool" status, that has come from a line of "cool" products dating back to the original iMacs and iBooks.

Either way, you may well be right about the iPods. I have no idea whatsoever what's coming up, and I don't think there's any way to accurately predict it at this point. These stories are just opportunities for Apple users/fans to speculate that the release of their dream product is imminent .

Do not be oppressed by the forces of ignorance and delusion! But rise up now with resolve and courage! Entranced by ignorance, from beginningless time until now, You have had more than enough time to sleep. So do not slumber any longer, but strive after virtue with body, speech, and mind!
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bassplayinMacFiend
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2008-07-23, 14:32

IIRC, the earnings call said ~60% came from computers. I don't remember if the ~60% related to revenues or net income though.
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Luca
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2008-07-23, 15:00

Quote:
Originally Posted by Brave Ulysses View Post
The timing and vague description would really only support an argument that it is a restructuring of the iPod line.

Think about it guys. All of you talking about desktops and laptops and such.... it makes no sense. It wouldn't impact guidance enough. It wouldn't fit the description provided.

Apple's iPod line is their bread and butter... it's what has gotten them to this point. No denying that. It's also stale and almost an afterthought now. Apple is at an extremely critical point, this holiday season. The iPod line needs to be rejuiced. Apple is still the leader there but needs to ensure they remain the leader. This fits the description provided during the conference call.

All new iPod line, utilizing the best of the iPhone I'm sure at very aggressive pricing. Apple doesn't want to lose their crown in the MP3 world.
100% agree. Even if they don't make the majority of their money from iPods (I don't know what the case is either way), they're still a huge part of Apple's income. They haven't really been updated in a long time. Some spec bumps here and there, but no major changes in the line since the addition of the Touch.

Yes, it's only July, but the holiday season is still "just around the corner." In order to build up enough supplies of a hypothetical new product, they'll have to announce it soon. Holiday sales start as early as late September.
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apple007
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2008-07-23, 15:10

Quote:
Originally Posted by Wrao View Post
I'm thinking it will be a restructuring of their notebook line-up. Perhaps we will see a ~$800 entry level Macbook, scaling upto a $2199 top-level Macbook pro. With 4 or 5 models total. All aluminum enclosures, with a redesigned case to make them more homogenous.
I could see some of the above, but a "$2199 top-level MBP" seems highly unlikely. I doubt Apple is really feeling pressure at its current prices for its 17" MBP, and $2199 would be a $500 price cut.
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psmith2.0
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2008-07-23, 15:22

Quote:
Originally Posted by Luca View Post
Yes, it's only July, but the holiday season is still "just around the corner." In order to build up enough supplies of a hypothetical new product, they'll have to announce it soon. Holiday sales start as early as late September.
Target seems to put all their Christmas and Halloween stuff out in May these days, so...
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Moogs
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2008-07-23, 15:35

It's going to be a new kind of device. Not something as mundane as a mini-tower. In either case I doubt you will see SSDs in any but pro level Macs or the airbook, and even then probably not for a year or two on the pro stuff. The GB quantity factor is way too low for a pro product right now, [and they are way too expensive]. You can forget about margin. There's not enough margin in the rest of a typical computing product to make up for the increase in price a decent sized SSD would cost. We're talking thousands for a single drive that is low capacity by today's standards.

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Wrao
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2008-07-23, 17:06

While I do expect the iPods to get some serious loving this next holiday season, I think that Apple has been generally very good about their iPod pricing, keeping them competitive with Zunes and Zens within $20-30 usually. That does not seem like an area where they are gouging on profit margins. I think the next iPod update will be significant though. Seems like we are [i]almost[/] at the point where all iPods will be using solid state memory. Which means, Apple will probably do it first.

Meanwhile, Apple notebooks tend to be very price competitive when they are released, but they go 6-10 months without an update and by then become pretty bad deals comparatively.

I don't think Apple needs to worry about pricing iPods more aggressively, iPod so thoroughly owns that market that even if they lost a tiny bit of market share or growth, they would still be raking in revenue. However, in recent years Apple's computer market share has gained substantially, and they are approaching a point where they stand to break into a much larger segment of the population. But the number one thing, still holding them back, is their pricing relative to their competitors.

With Apple, you generally get very good price:performance, but the initial price is still very often $100-300 more expensive than what you can get from Dell or HP. Apple might be offering better 'value', but better 'value' doesn't sell computers, as Dell and HP have thoroughly demonstrated. Low prices do.

Last edited by Luca : 2008-07-23 at 17:14. Reason: Disabled smilies for you :)
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Luca
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2008-07-23, 17:14

Wrao, I don't think it's the pricing with the iPods but rather the structure of their iPod products. Right now you have the Shuffle, Nano, Classic, Touch, and to some extent, the iPhone. The Shuffle and Nano are great and I don't think they really need updates, but there's something that seems off about having to choose between large capacity and a cool interface with the Classic and Touch. Not to mention the lower price of the iPhone compared to the Touch (and I know that the iPhone requires a contract that makes it a lot more expensive in the long run). I just think they're going to do something about that situation - perhaps by offering one flash-based Touch and one hard drive-based one and eliminating the Classic entirely.

Maybe, in addition to that, they'll transition the Nano to a miniaturized iPod Touch form factor, giving it a full sized touch screen. It's too small to be practical for most PDA functionality, but it could at least be used to watch videos with a screen that's more than twice as large as the current Nano.
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cosus
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2008-07-24, 03:29

Quote:
Originally Posted by Wrao View Post
...However, in recent years Apple's computer market share has gained substantially, and they are approaching a point where they stand to break into a much larger segment of the population. But the number one thing, still holding them back, is their pricing relative to their competitors.

With Apple, you generally get very good priceerformance, but the initial price is still very often $100-300 more expensive than what you can get from Dell or HP. Apple might be offering better 'value', but better 'value' doesn't sell computers, as Dell and HP have thoroughly demonstrated. Low prices do.
Nice you mentioned Dell and HP. They are the only ones selling more units than apple in the US. I don't think they are especially trying to grow in the US, I think it's the overseas market that can see the most growth.

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bassplayinMacFiend
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2008-07-24, 07:19

Quote:
Originally Posted by Luca View Post
Wrao, I don't think it's the pricing with the iPods but rather the structure of their iPod products. Right now you have the Shuffle, Nano, Classic, Touch, and to some extent, the iPhone. The Shuffle and Nano are great and I don't think they really need updates, but there's something that seems off about having to choose between large capacity and a cool interface with the Classic and Touch. Not to mention the lower price of the iPhone compared to the Touch (and I know that the iPhone requires a contract that makes it a lot more expensive in the long run). I just think they're going to do something about that situation - perhaps by offering one flash-based Touch and one hard drive-based one and eliminating the Classic entirely.

Maybe, in addition to that, they'll transition the Nano to a miniaturized iPod Touch form factor, giving it a full sized touch screen. It's too small to be practical for most PDA functionality, but it could at least be used to watch videos with a screen that's more than twice as large as the current Nano.
While the iPod Touch and iPhone may be cooler and do more things, the iPod has a much better interface for music control. I could control my 2G 20GB iPod through my pocket via touch. Never had to take it out to skip forward, back, alter the volume or pause/play music. Contrast this with the iTouch & iPhone, which has no tactile feedback and I have to take it out of my pocket to change these settings.
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Xaqtly
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2008-07-24, 10:40

Not entirely true if you're using the earbuds that come with the iPhone. The button in the cable allows you to skip to the next track, pause and resume, and there are physical volume buttons on the side of the iPhone so you don't have to unlock it or look at it, or take it out of your pocket.

As an added bonus the cable button also allows you to answer incoming calls, which will pause the music, and it has a mic built into it. All that being said, the iPod does have a better interface for music control. But the control you get with the cable button and the physical volume buttons on the iPhone is generally sufficient for me.
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bassplayinMacFiend
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2008-07-24, 10:53

Yes, I have an iPhone so I understand how the headphones & rocker switch work. Unfortunately for me, the earbuds don't fit in my ears so I had to ditch them back at day 1.

Also, the times I've had to pause a song to take a call I like to restart because I hate being interrupted in the middle of it. Can't do that via the click box on the headset.
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