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View Full Version : Apple changes pricing strategy, dropping premium pricing.


Nostromo
Oct 24, 2011, 01:32 PM
Here's an interesting article in the New York Times that analyzes Apple's pricing strategy:

http://www.nytimes.com/2011/10/24/technology/apples-lower-prices-are-all-part-of-the-plan.html?_r=1&hpw

Result: Apple, known for pumping up the prices more than any competitor could ever do, has now several items that cannot be beat by price, like the iPhone and the iPad.

Also, so the article, the industry was surprised by the low price the now and enhanced MacBook Air generation was introduced.

Apple is using it's large scale manufacturing to get better pricing in producing the goods and is more willing to give pricing advantages to its customers.

I hope this will also be true for the next generation MacPro, which is probably the last Apple item that is hugely overpriced in its single processor models.

thejadedmonkey
Oct 24, 2011, 01:40 PM
I don't see it at all. My smartphone was recently for sale at $.01. That's something like $200 less than an iPhone. The Macbook Air is still $1000, for a 11" PC that has crappy graphics and an even smaller screen. My Dell cost me less than that, for a larger screen (albiet it's larger and not as high-res), but it has a next-day on site warranty.

Apple's never been overpriced if you're looking at the high-end (eg, comparing Apple to Sony). But if all you need is a PC for facebook, $1000 for anything is too much, let alone $1200 for a 13" version. If we're comparing tablets, the HP Touchpad showed that the sweet spot for them, in consumer's mind, is still way below $500... so a $500 iPad is still too expensive, IMO.

*LTD*
Oct 24, 2011, 02:28 PM
If we're comparing tablets, the HP Touchpad showed that the sweet spot for them, in consumer's mind, is still way below $500... so a $500 iPad is still too expensive, IMO.

Please don't use the Touchpad as an example. It's an abject failure and it's best not to draw any conclusions from it as examples of what to do. There's not much we can learn from it, aside from lessons on what *not* to do.

Wait until a low-cost competitor comes along that does very well, and that actually sticks around! So far, there isn't one.

thejadedmonkey
Oct 24, 2011, 02:38 PM
Please don't use the Touchpad as an example. It's an abject failure and it's best not to draw any conclusions from it as examples of what to do. There's not much we can learn from it, aside from lessons on what *not* to do.

Wait until a low-cost competitor comes along that does very well, and that actually sticks around! So far, there isn't one.

Quite the contrary. The Touchpad prooves that people want tablets, and it also shows that an app ecosystem isn't important, but more importantly, that there's a huge market segment that wants basic, internet tablets, for much less than $500.

If you want a low-cost competetor, look at the Barnes and Noble Nook Color. It sells very well, especially considering it's marketed as an ebook reader and not a tablet.

Darth.Titan
Oct 24, 2011, 02:51 PM
I don't see it at all. My smartphone was recently for sale at $.01. That's something like $200 less than an iPhone. The Macbook Air is still $1000, for a 11" PC that has crappy graphics and an even smaller screen. My Dell cost me less than that, for a larger screen (albiet it's larger and not as high-res), but it has a next-day on site warranty.

As far as your smartphone, you have heard of subsidies I assume. Do you really think your Windows phone costs $.01? That's just naive. Microsoft is practically paying wireless providers to give those things away. Their market is being crushed beneath the weight of Android and iOS.

Also, please don't tell me you're comparing a Dell Vostro with a MacBook Air.:eek:
(For what it's worth, your Dell laptop is running the same "crappy graphics" chipset as the Air. Just so you know. The extra VRAM on yours offers negligible speed improvements)

When comparing prices on electronics, the comparisons have to be made between electronics in the same class. Comparably equipped smartphone vs. comparably equipped smartphone, ultrabook vs. ultrabook, etc.

You cannot compare a 5 pound Dell to a 2.4 pound Air. They're not in remotely the same class.

* This post was written on the assumption that you're referring to the gear in your signature.

rhett7660
Oct 24, 2011, 02:59 PM
As far as your smartphone, you have heard of subsidies I assume. Do you really think your Windows phone costs $.01? That's just naive. Microsoft is practically paying wireless providers to give those things away. Their market is being crushed beneath the weight of Android and iOS.

Also, please don't tell me you're comparing a Dell Vostro with a MacBook Air.:eek:
(For what it's worth, your Dell laptop is running the same "crappy graphics" chipset as the Air. Just so you know. The extra VRAM on yours offers negligible speed improvements)

When comparing prices on electronics, the comparisons have to be made between electronics in the same class. Comparably equipped smartphone vs. comparably equipped smartphone, ultrabook vs. ultrabook, etc.

You cannot compare a 5 pound Dell to a 2.4 pound Air. They're not in remotely the same class.

* This post was written on the assumption that you're referring to the gear in your signature.

Easy, the Jaded one will still find ways to compare his Dell and say it is better. Not to mention his almost fully subsidized phone. :rolleyes:

*LTD*
Oct 24, 2011, 03:00 PM
Quite the contrary. The Touchpad prooves that people want tablets

No, it proves people want something - anything - at ridiculously reduced (sometimes unsustainable) prices.

rhett7660
Oct 24, 2011, 03:04 PM
No, it proves people want something - anything - at ridiculously reduced (sometimes unsustainable) prices.

Exactly.. Because they were flying off the shelves when they sitting there at their regular price. :rolleyes:

decafjava
Oct 24, 2011, 03:08 PM
Easy, the Jaded one will still find ways to compare his Dell and say it is better. Not to mention his almost fully subsidized phone. :rolleyes:

Ummm yea iphone 3gs are now being practically given away I've seen no difference between iphone 4 models and other similar android etc. phones. I myself paid 100 CHF for my iphone 4 in January because I got the 32 Gb model. the 16 GB went for 1 franc at the time...and currently Samsung Galaxy S2s go for the same as I pad with similar dataplans. Yea hugely overpriced. :rolleyes:

FX120
Oct 24, 2011, 03:43 PM
No, it proves people want something - anything - at ridiculously reduced (sometimes unsustainable) prices.

WHOOSH!

That's the sound of his point flying over your head.

zap2
Oct 24, 2011, 03:51 PM
I don't see it at all. My smartphone was recently for sale at $.01. That's something like $200 less than an iPhone. The Macbook Air is still $1000, for a 11" PC that has crappy graphics and an even smaller screen. My Dell cost me less than that, for a larger screen (albiet it's larger and not as high-res), but it has a next-day on site warranty.


The Air is a netbook, other PC makers are selling them for very similar price(see Asus and Acer)

velocityg4
Oct 24, 2011, 03:53 PM
I hope this will also be true for the next generation MacPro, which is probably the last Apple item that is hugely overpriced in its single processor models.

I wouldn't be too optimistic.

As I recall the 2006 MP and 2008 MP when introduced where actually cheaper than any DIY you could build at Newegg using like parts. This meant the same Xeon CPU, ECC Memory, equivalent or superior ports and expansion slots on Motherboard, High quality case, PSU and CPU.

I don't remember if the change happened with the 2009 or 2010 MP. But when introduced it was quite cheaper to DIY. Now the price difference is huge especially on the dual CPU's. The biggest price difference being the 12 core 2.93 Ghz. This using a board with numerous PCI-e x16 slots.

I compared Xeon to Xeon not Xeon to Core like many people do when saying how rediculous Apple's pricing is.

For the most part Apples pricing is usually on par or better when comparing like product to like product. With laptops it is rarely possible to even find one that offers equal to or superior ratios of size, weight, battery life and performance.

Demosthenes X
Oct 24, 2011, 03:56 PM
I don't see it at all. My smartphone was recently for sale at $.01. That's something like $200 less than an iPhone. The Macbook Air is still $1000, for a 11" PC that has crappy graphics and an even smaller screen. My Dell cost me less than that, for a larger screen (albiet it's larger and not as high-res), but it has a next-day on site warranty.

Apple's never been overpriced if you're looking at the high-end (eg, comparing Apple to Sony). But if all you need is a PC for facebook, $1000 for anything is too much, let alone $1200 for a 13" version. If we're comparing tablets, the HP Touchpad showed that the sweet spot for them, in consumer's mind, is still way below $500... so a $500 iPad is still too expensive, IMO.

Way to completely miss the point. You can't compare one product to a completely unrelated product, like you're trying to do. The question is whether certain Apple products are expensive relative to other products in the same class.

Your argument is like saying that an Aston Martin is expensive compared to a Ford F150. Yes, it's technically true, but it's also a useless comparison.

So yeah, Apple stuff still tends to be expensive overall. And yeah, $1000 is a lot to pay for a machine to do Facebook and email. But that's not the point the article is trying to make. The point is, it's well-priced when comparing to similar products from other manufacturers. So for someone looking for an ultraportable, a MBA is a good buy.

:rolleyes:

KnightWRX
Oct 24, 2011, 05:39 PM
The Touchpad prooves that people want tablets

No it doesn't. The TouchPad proves that if you price anything within "impulse" buy territory, people will buy it regardless of want or need. I bought one, I frankly use it about 2 minutes per week, and that's usually just its calculator.

I didn't even want a tablet. It was just priced so low I figured I'd get one and try to figure out if tablets were useful to me. I found out my gut feeling of "no, tablets are not useful to you you damn clutz" was right all along.

Though for anyone wondering, HP have pushed out a new version of webOS last week, 3.0.4 or something, so it's still supported on the software side. :D

thejadedmonkey
Oct 24, 2011, 05:53 PM
Also, please don't tell me you're comparing a Dell Vostro with a MacBook Air.:eek:
(For what it's worth, your Dell laptop is running the same "crappy graphics" chipset as the Air. Just so you know. The extra VRAM on yours offers negligible speed improvements)

* This post was written on the assumption that you're referring to the gear in your signature.
Close. I upgraded to the ATI 6630, the base model was about $500 though. All my point is, is that even if Apple is pricing competitively for high-end products, they're in no way dropping their price premium.

No it doesn't. The TouchPad proves that if you price anything within "impulse" buy territory, people will buy it regardless of want or need. I bought one, I frankly use it about 2 minutes per week, and that's usually just its calculator.Ok, I got nothing to say to that.

dejo
Oct 24, 2011, 06:02 PM
Quite the contrary. The Touchpad prooves that people want tablets...

What, specifically, about the Touchpad proves that people want tablets? The fact that HP discontinued the device? Or was it something else?

boss.king
Oct 24, 2011, 06:28 PM
What, specifically, about the Touchpad proves that people want tablets? The fact that HP discontinued the device? Or was it something else?

The fact that even though it was discontinued people bought it.

thejadedmonkey
Oct 24, 2011, 06:40 PM
The fact that even though it was discontinued people bought it.

And not just that pople bought them, but that they were completely sold out within a day (days?).

Nostromo
Oct 24, 2011, 11:17 PM
I wouldn't be too optimistic.

As I recall the 2006 MP and 2008 MP when introduced where actually cheaper than any DIY you could build at Newegg using like parts. This meant the same Xeon CPU, ECC Memory, equivalent or superior ports and expansion slots on Motherboard, High quality case, PSU and CPU.

I don't remember if the change happened with the 2009 or 2010 MP. But when introduced it was quite cheaper to DIY. Now the price difference is huge especially on the dual CPU's. The biggest price difference being the 12 core 2.93 Ghz. This using a board with numerous PCI-e x16 slots.

I compared Xeon to Xeon not Xeon to Core like many people do when saying how rediculous Apple's pricing is.

For the most part Apples pricing is usually on par or better when comparing like product to like product. With laptops it is rarely possible to even find one that offers equal to or superior ratios of size, weight, battery life and performance.

I was underlining the single-processor Mac Pros, that are very overpriced.

The dual processor Mac Pros are a much better value.

I mean, the single six-core costs more than the 8-core dual...

But I guess in every price decision is an economic goal.

The Mac Pro became such a niche product. I hope for a comeback of workstations... for people with higher end software and more gpu demand than an iMac can offer... including that iMacs have a certain limit to power as they are getting hotter and hotter with rising power. This could be a point for a comeback of workstations for demanding users: a quiet machine that stays cool, and that is filled to the brim with RAM and hard drives.

That's the interesting thing: as long as a product is regarded a niche product, its price is much higher - even when it's not clearly justified like with the single processor Mac Pros.

roadbloc
Oct 25, 2011, 05:35 AM
EXCELLENT! The irradiation of Apple Tax. I've been waiting a long time for this. Get them prices down Apple and I'll get my cash card out.

fat jez
Oct 25, 2011, 06:48 AM
Also, please don't tell me you're comparing a Dell Vostro with a MacBook Air.:eek:


Yeah, for a fair comparison it needs to be up against another Ultrabook.

http://en.wikipedia.org/wiki/Ultrabook#First_phase_.28Q4_2011.29_2