Stuff and Nonsense

Apple's Refreshed Macs an Unlikely Catalyst of Growth - RBC

Abramsky said "70% more than the average selling price" - that is, if you average all the stuff they sell, pro machines right on down to netbooks. Abramsky's probably right about that. But Apple has already said that they don't know how to make a $500 laptop that's not a piece of junk, and that it's not in their DNA to ship junk. Many analysts want Apple to join the hardware cost race to the bottom, destroying their margins in the process. Apple's products aren't luxury items, in the sense of a "luxury" like a Prada purse; they are tools that can be used to generate value - and yes, they can be enjoyable and even be status symbols. But underneath it all, they are still computers, and those are used as means to an end. If they make you more productive, or they make you a lot happier while allowing you to operate at a comparable level of productivity, then there is a reason to pay extra for them. Apple therefore charges extra.

Apple's market share is growing for those segments in which they compete, so they have apparently figured out a model that works. Could Apple sell more units by lowering price? According to the law of supply and demand, that's how it's supposed to work. If Apple lowered the price too far, they'd probably see declines in customer satisfaction, since they'd have to skimp and cut corners to maintain reasonable margins. One of the reasons I buy Apple products is because I prefer having a superior customer experience relative to, say, Dell.

Abramsky's analyses are interesting to me in that he frequently gets the data right, but always manages to interpret things in the worst possible way for Apple. His firm is in the tank for RIMM, and as far as I'm concerned, he's completely tainted.


On Mar 05 09:25 AM Petoveritas wrote:

> Abramsky estimates Macs cost 70% more than the industry average.
> Interesting, because Yair Reiner from Oppenheimer took the iMac and
> did a spec-by-spec comparison with comparable Dell and HP machines.
> His surprising conclusion... iMacs are "a better value than competing
> Windows-based products - ($100-$250 cheaper [though it lacks a TV
> Tuner, ~$60-$100 upgrade])”
>
> apple20.blogs.fortune....
>