If you controlled the pricing on Apple how would you price Macs?

[gunraidan]

I hear constant debates of how much Macs should cost, if they are too expensive or not. So I'm curious to see what everyone thinks they should cost.
Should they be more expensive? cheaper? Same as they are now? It's your go.

[thegoldenmackid]

Look to this (http://forums.macrumors.com/showthread.php?t=745759) thread. In addition to releasing numerous products, most people seemed to lower prices.

[jessica.]

< $1000 for all notebooks
< $1500 for all desktops.

In the end I will pay whatever they charge.

[pdjudd]

I hear constant debates of how much Macs should cost, if they are too expensive or not. So I'm curious to see what everyone thinks they should cost.
Should they be more expensive? cheaper? Same as they are now? It's your go.

I would love them to be about $300 cheaper - I would love to get a MacBook Pro 15" for about $1300 instead of the current price.

But thats just me.

[iBookG4user]

I think that the current pricing scheme is smart. It is not so expensive that it is priced out of the market, yet not so cheap that they retain a very good profit margin. Except the Mac Pro, that is too expensive for what you get, the Quad should start at $1999 and the Octad at $2499.

[upinflames900]

If I controlled apple pricing that would mean I was an apple executive and as such my bonus is based on profit margin, so I would be pricing them pretty close to where they are so that they are affordable, but not cheep. From a consumer standpoint, of course I want them cheeper.

[miiles]

Competitively.

[gunraidan]

Entry Levels -

Macbook - $849

Macbook Pro - $999

iMac - $899

Mac Pro - $1799

[Buzz Bumble]

If "I controlled the pricing on Apple", then I would be an employee and get the "employee discount", so I wouldn't bother changing anything and you guys can continue to pay the current prices so that I can get a huge "executive salary" and "executive bonus". ;)

[talkingfuture]

I'm happy with current pricing. Maybe the 15 and 17" MacBook Pro are a bit pricey. Perhaps non pro versions of these would be a good idea. Otherwise I think others are pretty good value for what you get.

[eawmp1]

Whatever the consumer is willing to pay. The basic tenet of consumer capitalism.

[djellison]

About 30% off everything, 50% of the farce that is the Mac Mini. Seriously.... £650 for THAT?

[gonyr]

Buy one, get one free.

Seriously, I would cut about $200 at the lower end models and $4-500 at the higher end. They don't have to be the cheapest computer, but they should be at least in the ballpark.

[polaris20]

The low end notebooks (MB, 13" MBP) should be lowered another $300, and the 15" should start at $1299.

The quad MP should start at $1700; which is what an equivalent HP workstation would run. The octos are right where they should be.

[talkingfuture]

I think an interesting second part to this question would be for the people who want to see cuts: How would you achieve them? Poorer materials and construction? Or sacrifice some of the components inside?

The shareholders won't like a cut in margins.

[Jabbamk1]

i Would want to release a Mid Range tower (which apple will never do). It would be larger than an mac mini but smaller than a power mac. It would be supplied without a monitor but with a keyboard and mouse.

It would vary between £599-£1,199 I would call it the sMac (S standing for speed:p).

Base specs
_____________________
2.26GHz Core 2 Duo
2GB Memory
320GB Hard Drive
Nvidia GT120
OS X 10.6

Top specs
____________
3.06GHz Core 2 Duo
4GB memory
1TB HD
Nvidia GTX 260/GTS 250
OS X 10.6

A man can dream... :D

As for the others i would keep prices slightly lower by about £150.

[gunraidan]

I think an interesting second part to this question would be for the people who want to see cuts: How would you achieve them? Poorer materials and construction? Or sacrifice some of the components inside?

The shareholders won't like a cut in margins.

Lower the profit margin per computer to get more sales overall.

Yes you can sell your fancy lemonade costs a bit more to make than regular lemonade for $5 but if the stand across the street is selling lemonade that's for $1 and is having 10 times the sales, who's making more profit?


Seriously, I would cut about $200 at the lower end models and $4-500 at the higher end. They don't have to be the cheapest computer, but they should be at least in the ballpark.

True.

[LethalWolfe]

Lower the profit margin per computer to get more sales overall.

Yes you can sell your fancy lemonade costs a bit more to make than regular lemonade for $5 but if the stand across the street is selling lemonade that's for $1 and is having 10 times the sales, who's making more profit?

But you are making a huge assumption that your lowering of prices will result in a significant enough increase in sales volume to make up the lower amount of revenue per sale. Over the past 10 years or so Apple has been getting more and more profitable as other hardware providers (Dell, Gateway, HP, etc.,) have struggled to grow let alone keep their head above water.

Also, if you lower the cost per machine you'll need to raise the cost first party software which is basically used as a loss leader to get people to buy Apple hardware.


Lethal

[djellison]

Poorer materials and construction? Or sacrifice some of the components inside?

The shareholders won't like a cut in margins.

None of the above. The materials are already fairly poor ( second palm wrest and counting on my old MB. Worst viewing angles EVER on by UBMB ) - and the components are already bare bone ( still no BR options, still crappy hissy audio, still not enough connectors )

I would reduce margins, and in doing so increase volume, thus retain profit. I think Apple simply has it too far in the direction of high price and low volume. I think people like Asus have it too far the other way with their very cheap EEE PC's. There is a middle ground in which Apple could do better than it does imho.

[Adam0306]

Although everyone would like the price to be.... "FREE" I am content with the price as it is. Just to be rid of Windows and have the quality and security of a Mac. It would help to lower it another 2 or 300 though.

[gunraidan]

But you are making a huge assumption that your lowering of prices will result in a significant enough increase in sales volume to make up the lower amount of revenue per sale. Over the past 10 years or so Apple has been getting more and more profitable as other hardware providers (Dell, Gateway, HP, etc.,) have struggled to grow let alone keep their head above water.

Also, if you lower the cost per machine you'll need to raise the cost first party software which is basically used as a loss leader to get people to buy Apple hardware.


Lethal

I didn't say that Apple should sell their stuff as cheap as Dell and HP, but more so that they should lower their prices to be in the same ball park. It's common knowledge that what scares off consumers the most from Macs is their price. And while Dell and HP haven't grown much they still sell many more PC units. Yes I know they might not be as profitable but its an indication that consumers would prefer computers to be under the thousand dollar mark and if Apple could just cheapen their computers a bit more they may grab a nice chunk of this demographic thus increasing their marketshare.

None of the above. The materials are already fairly poor ( second palm wrest and counting on my old MB. Worst viewing angles EVER on by UBMB ) - and the components are already bare bone ( still no BR options, still crappy hissy audio, still not enough connectors )

I would reduce margins, and in doing so increase volume, thus retain profit. I think Apple simply has it too far in the direction of high price and low volume. I think people like Asus have it too far the other way with their very cheap EEE PC's. There is a middle ground in which Apple could do better than it does imho.

True. I mean I may not agree on everything you've said but I do agree that the price we pay for performance is too high, especially for the non-entry Macs and Mac Pro's.

[LethalWolfe]

I didn't say that Apple should sell their stuff as cheap as Dell and HP, but more so that they should lower their prices to be in the same ball park.
From Apple's perspective why would they do this? Doing things 'the Apple way' has increased profitability and market share. Also, if Apple drops the cost of their hardware significantly how much do you think they'll need to increase the cost of their software which is basically a loss leader? For example, Final Cut Studio 2 sells for $1300 but contains around $30,000 worth of apps.


It's common knowledge that what scares off consumers the most from Macs is their price. And while Dell and HP haven't grown much they still sell many more PC units.
Yet Mac market share is around 8% today and was barely pushing 2% 7 years ago.

Yes I know they might not be as profitable but its an indication that consumers would prefer computers to be under the thousand dollar mark and if Apple could just cheapen their computers a bit more they may grab a nice chunk of this demographic thus increasing their marketshare.
Market share does not equal profits though. Before Jobs came back to Apple the Mac had much greater market share but the company was circling the drain financially. Over the past decade the only two computer providers that haven't slid down hill are Dell and Apple. Dell did it by providing low prices and keeping very low overhead and Apple did it by offering a 'unique' experience that came at a higher price tag. Every company that tried to compete w/Dell's 'race to the bottom' (HP, Compaq, Gateway, IBM, etc.,) was bleeding money like a stuck big. Heck, IBM got completely out of the personal computer business and they were the company that pretty much started the PC business.

Not every company's goal is to mass produce the most product at the lowest cost, and as much as people b*tch about Apple's pricing more people are buying Macs now than 10-15 years ago.


Lethal

[gunraidan]

From Apple's perspective why would they do this? Doing things 'the Apple way' has increased profitability and market share. Also, if Apple drops the cost of their hardware significantly how much do you think they'll need to increase the cost of their software which is basically a loss leader? For example, Final Cut Studio 2 sells for $1300 but contains around $30,000 worth of apps.


Yet Mac market share is around 8% today and was barely pushing 2% 7 years ago.

Market share does not equal profits though. Before Jobs came back to Apple the Mac had much greater market share but the company was circling the drain financially. Over the past decade the only two computer providers that haven't slid down hill are Dell and Apple. Dell did it by providing low prices and keeping very low overhead and Apple did it by offering a 'unique' experience that came at a higher price tag. Every company that tried to compete w/Dell's 'race to the bottom' (HP, Compaq, Gateway, IBM, etc.,) was bleeding money like a stuck big. Heck, IBM got completely out of the personal computer business and they were the company that pretty much started the PC business.

Not every company's goal is to mass produce the most product at the lowest cost, and as much as people b*tch about Apple's pricing more people are buying Macs now than 10-15 years ago.


Lethal

I understand these things but again I'm not saying that Macs should drop down the price where Macs are competing to Dell in terms of cost, but they should not cost at times near twice the amount of your average computer. This really scares consumers away. I'm just saying that they should put the computers at least in the same ballpark as PC's.

I admit my previous examples were a bit too much but I think doing a 7-12% price drops on their current hardware (more for the Mac Pro's but that's due to being radically overpriced) so they'll attract a bit more consumers. Seems that Apple may be experimenting with that with the price drop on the Macbook Pro as well as sticking with the $999 Macbook (though that may be phasing out), and looking at the past Apple has dropped down their prices over the years (or haven't brought them up due to inflation).

Yes marketshare /= profit, but sacrificing a bit of profit on the average unit to sell many more units could turn in more profit than before (this is not like loss leader at all). That's all I'm saying.

[LethalWolfe]

I understand these things but again I'm not saying that Macs should drop down the price where Macs cost as much as your average Dell or HP, but they should not cost at times near twice the amount of your average computer. This really scares consumers away. I'm just saying that they should put the computers at least in the same ballpark as PC's.
When you match computers feature for feature Macs do not cost twice as much as Dells and there's more than one type of consumer out there. Not every business needs to try to appeal to every type of consumer to be successful.

Yes marketshare /= profit, but sacrificing a bit of profit on the average unit to sell many more units could turn in more profit than before (this is not like loss leader at all). That's all I'm saying.
And I assume you have proof that shows that dropping the prices by the amount that you want will increase sales enough significantly enough to be worth the risk?

I'm not trying to bust yer balls or anything, but it's a common thing for people to say X costs too much w/o understanding why X costs what it costs.


Lethal

[Consultant]

Have you looked at how much Sony is charging? Some of their POS cost even more than Apple.

No, you cannot reduce Apple, a technology INNOVATOR, to sell things at the price of commodity resellers that don't spend any money on R&D.

Also, design is worth something for quite a number of people. Why do you think a Picasso costs millions of dollars? It's just canvas and some paint, so the design must be worth nothing. :rolleyes:

[gunraidan]

When you match computers feature for feature Macs do not cost twice as much as Dells

Some models get pretty close while some exceed (Mac Pro).



and there's more than one type of consumer out there. Not every business needs to try to appeal to every type of consumer to be successful.

This is true but Apple is missing out on a huge consumer base.


And I assume you have proof that shows that dropping the prices by the amount that you want will increase sales enough significantly enough to be worth the risk?

Even if things don't go according to plan Apple can just raise the products up again stealthily (I.E. The diminish of the $999 iMac).

I'm not trying to bust yer balls or anything, but it's a common thing for people to say X costs too much w/o understanding why X costs what it costs.


Lethal

It's easy to see why Macs cost more than PC's.

- R & D in hardware

- Paying top notch designers

- Justification of going all in on your own

- etc.

I'm just saying they should try bumping down their prices a bit more to attract more consumers while still maintaining a profit.


EDIT - What do you mean about Dell keeping low prices because of a "low overhead"?

[LethalWolfe]

Some models get pretty close while some exceed (Mac Pro).
Link, please.


This is true but Apple is missing out on a huge consumer base.

Apple currently seems to be doing fantastic w/the demographic they are targeting.


Even if things don't go according to plan Apple can just raise the products up again stealthily (I.E. The diminish of the $999 iMac).

Or Apple just doesn't risk anything and keeps the prices relatively static until market forces dictate they need to change them.

[QUUOTE]
I'm just saying they should try bumping down their prices a bit more to attract more consumers while still maintaining a profit.[/QUOTE]
Why? Because it would be a solid businesses decision for Apple or because you want to pay less for a Mac? You know what they say, if it ain't broke don't fix it.;)


EDIT - What do you mean about Dell keeping low prices because of a "low overhead"?
Lower operating costs in part because of a very efficient supply, manufacturing and shipping chain.


Lethal

[gunraidan]

Link, please.

Just read through this thread (http://forums.macrumors.com/showthread.php?t=744346&page=10)for Mac Pro examples. Also I take back what I said about the iMac as I foolishy forgot about the "all-in-one" aspect.

Apple currently seems to be doing fantastic w/the demographic they are targeting.

And some of the things they've done are lowering the prices on their products.

Apple just doesn't risk anything and keeps the prices relatively static until market forces dictate they need to change them.



Why wait for the market to force? Why not test it out? Apple has been lowering their products bit by bit overtime.


Why? Because it would be a solid businesses decision for Apple or because you want to pay less for a Mac?

...I don't think you understood this part of my post.



You know what they say, if it ain't broke don't fix it.;)

That doesn't mean that you can further improve the model.


Lower operating costs in part because of a very efficient supply, manufacturing and shipping chain.


Lethal

I see thanks.

[11800506]

I personally think the Mac lineup is priced well as it is now. If I were in charge of Apple pricing I think instead of lowering prices, I would try and make hard drive and RAM more competitive, like raising the HDD capacity in the Mac Mini or Macbooks. I might lower the price of the Mac Pro a bit, but overall I think they are priced well to maximize profits while maintaining the relative exclusivity that Apple enjoys with its products.

[LethalWolfe]

Just read through this thread (http://forums.macrumors.com/showthread.php?t=744346&page=10)for Mac Pro examples. Also I take back what I said about the iMac as I foolishy forgot
about the "all-in-one" aspect.
Yet another thread where someone says Dells are way cheaper, then someone else says you didn't compare like-to-like and shows that Dells aren't way cheaper, and another person says you can buy all the parts from NewEgg for $900 and build it yourself as if everyone on Earth wants to build their own computer from scratch. Sorry, but this same stuff that has been going on for years. No matter what price point a Mac comes out at someone complains, points at Dell and it turns into a dozen pages of crap. The 'Apple Tax' is more fiction than fact.


Why wait for the market to force? Why not test it out? Apple has been lowering their products bit by bit overtime.

What do you want Apple to test out, an overnight, across the board price cut? Why? They just had their most profitable quarter ever that didn't involved a holiday season.


...I don't think you understood this part of my post.

Care to elaborate on it or do I have to guess?:p


That doesn't mean that you can further improve the model.

Again, do you have any numbers that show how much better off Apple would be if they cut their hardware prices down to where you want them?


I see thanks.
If you google stuff like "dell supply chain" you'll find some interesting articles (assuming you are interested in stuff like that). Dell pushes supply management in a similar way that Apple pushers computer design and functionality.


Lethal

[Buzz Bumble]

Yes you can sell your fancy lemonade costs a bit more to make than regular lemonade for $5 but if the stand across the street is selling lemonade that's for $1 and is having 10 times the sales, who's making more profit?
But you are making a huge assumption that your lowering of prices will result in a significant enough increase in sales volume to make up the lower amount of revenue per sale. ...

There's two even bigger assumptions:A. The $1 lemonade is equal in quality to the $5 lemonade, and

B. The $1 lemondae actually is lemonade, and not just dog wee.
You have to remember that your comparing Apples with lemons (aka Windoze PCs), so the cheaper PC across the street is very rarely ever even remotely going to match up ... which is why Microsoft opening stores next door to Apple Stores is a massive mistake on their part.

[djellison]

For example, Final Cut Studio 2 sells for $1300 but contains around $30,000 worth of apps.

Are you drunk? FCS2 competes with a PART of CS4. It's priced at the right level. No more. No less.

[LethalWolfe]

Are you drunk? FCS2 competes with a PART of CS4. It's priced at the right level. No more. No less.
Nope, not drunk. Do you know how much Apple's ProApps used to cost before Apple bought and/or bundled them? Color alone was a $25,000, 'budget-priced' grading app before Apple bought it and bundled it w/FCS2. FCP by itself used to be $1k. Cinema Tools by itself used to be $1k. Pretty much every app that's in FCS2 now used to be a stand alone app that cost between $500-$1k. Motion is derived from Shake which used to be a $10k app. The first thing Apple did after they bought it was drop the price to $4k. Apple eventually stopped developing Shake and dropped the price to $500. Nuke, which seems to be the most popular app choice to replace Shake is around $3.5-4k, IIRC. So, as I look at it Shake is about $3k worth of app being sold for $500. Final Cut Server ($1k for 10 clients, $2k for unlimited clients) used to be a program called ArtBox that sold for $20k. The price tag Apple hangs on it's software is often well below what would be the 'going rate' if the same app was sold by a different company.

And how can I try this late night rant into the thread you ask? Apple can afford to sell very powerful software a rock bottom prices because they make their money selling hardware.


Lethal

EDIT: And don't even get me started about bang for your buck when FCP's biggest competitor was an Avid system (hardware+software) that was $25k on the low end.

[gunraidan]

Yet another thread where someone says Dells are way cheaper, then someone else says you didn't compare like-to-like and shows that Dells aren't way cheaper, and another person says you can buy all the parts from NewEgg for $900 and build it yourself as if everyone on Earth wants to build their own computer from scratch. Sorry, but this same stuff that has been going on for years. No matter what price point a Mac comes out at someone complains, points at Dell and it turns into a dozen pages of crap. The 'Apple Tax' is more fiction than fact

That isn't what was going on in that thread. The main point is that the 2009 Mac Pro had far less value than Mac Pro's of previous years that even Dell had alternatives for far cheaper that offered more of everything the Mac Pro did.

Essentially the thread's point was that the 2009 Mac Pro was overpriced compared to other Mac Pro's from the previous years by a very significant margin.


do you want Apple to test out, an overnight, across the board price cut? Why? They just had their most profitable quarter ever that didn't involved a holiday season.

I wouldn't be surprised if some of this profit is coming from their hardware (particularly notebooks) decreasing. Next quarter should be even more interesting with the new cheaper Macbook Pro.



Care to elaborate on it or do I have to guess?:

Read the quote again:



I'm just saying they should try bumping down their prices a bit more to attract more consumers while still maintaining a profit.

If you sell more of a product to such a point that minimizing of a profit becomes irrelevant. Saying that I think most (not all) of their products are priced right, just that some need to either lower their pricing to get a piece of the common consumer market. Possibly pull a 3G with the White Macbook?

Again, do you have any numbers that show how much better off Apple would be if they cut their hardware prices down to where you want them?

Again as Apple's computer prices decline their sales go up. Than again this could be because as Macs get more and more popular more people are willing to buy them?

If you google stuff like "dell supply chain" you'll find some interesting articles (assuming you are interested in stuff like that). Dell pushes supply management in a similar way that Apple pushers computer design and functionality.


Lethal

Wow thanks a lot. Will read.:D

Are you drunk? FCS2 competes with a PART of CS4. It's priced at the right level. No more. No less.

You'd be amazed how much plug-ins and add-ons cost with programs. Yes those features may look worthless, but to an editor that many features for such a price is a wet dream.

[SnowLeopard2008]

I wouldn't change the pricing at all. When you change the pricing, you usually lower it, not increase it. Therefore we do the Dell route, where cheaper means better. So far, HP is trampling all over Dell's face.

[InvalidUserID]

Nothing.

If anything, bump up the price and include some of the higher end features (Blu-Ray!).