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Original poster
Apr 12, 2001
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Setting aside the claim of analysts that Apple "missed" earnings last quarter, Apple sold record numbers of Macs (4.9 million) and iPads (11.1 million). During a conference call with analysts earlier this week, Apple CEO Tim Cook was asked about "cannibalization" -- the thought that increased sales of one type of product will impact sales of another. In this case, will iPad sales negatively affect Macintosh sales?
I do believe that we're seeing cannibalization. I think that it's showing up in 2 ways. I think that some people are electing to buy an iPad rather than a Mac. However, I believe a materially larger number of people are electing to buy an iPad instead of a Windows-based PC. And so I think we are overwhelmingly coming out very, very well in that cannibalization question. And I would point out that despite that, the Mac had its best quarter by far ever last quarter. And so even with having the best quarter on iPad with some cannibalizations in Mac, the Mac has its best quarter ever, which is almost unbelievable. And so with cannibalization like this, I hope it continues.*
Cook believes that the iPad is cannibalizing the PC market, and to a limited extent, the Macintosh as well. However, with both iPad and Mac breaking sales records, things are good so far as Apple is concerned.

There is no doubt that the Macintosh is a premium computer offering, with the most inexpensive full-featured Mac being the $999 11" MacBook Air (the Mac Mini does start at $599 but needs an additional keyboard, mouse and display to work). For the first three calendar quarters of 2011, the average selling price (ASP) of all Macs, both notebook and desktop, was $1297.75. This is more than double the ASP of a generic Windows PC. For that same time period, January through September of this year, the average selling price of a Windows PC at U.S. retail was $491, according to NPD's Retail Tracking Service**.

In October 2008, long before the iPad made its debut, then Apple CEO Steve Jobs said this:
There are some customers which we chose not to serve. We don't know how to make a $500 computer that's not a piece of junk, and our DNA will not let us ship that. But we can continue to deliver greater and greater value to those customers that we choose to serve. And there's a lot of them. We've seen great success by focusing on certain segments of the market and not trying to be everything to everybody. So I think you can expect us to stick with that winning strategy and continue to try to add more and more value to those products in those customer bases we choose to serve.
categoryasp.jpg



But these days, Apple does make a $500 computer -- the iPad. The least expensive iPad is $499, precisely the price point Jobs claimed Apple couldn't make a computer that wasn't "a piece of junk." In fact, the iPad ASP for the first three calendar quarters of 2011 was $628, more than $130 higher than the average Windows PC. Perhaps even more incredible is that Apple's smartphone offering, the iPhone, had an ASP of $653 over the same period.

All three of Apple's most profitable product categories -- the Mac, the iPhone, and the iPad -- have average selling prices significantly higher than a generic Windows PC.

Analysts and other computer industry watchers typically compare Apple's computer sales with Windows PC's, assuming that comparing computers-to-computers is an apples-to-apples comparison. However, given that the ASP of the typical Windows PC in the US is less than ASP of all Apple's major products, perhaps a better comparison -- from a financial perspective -- is to add the sales numbers for iPhone, iPad, and Mac together.

combinedcategory.jpg



The combined average selling price of the Mac and iPad -- Apple's most "computeresque" offerings -- is $852 for the first 9 months of 2011. When the iPhone is added to that, the combined ASP of Apple's three most popular products is $733, nearly 50 percent higher than average selling price of a Windows PC sold at U.S. retail.

In just 9 months, Apple sold 12.6 million Macs, 25.1 million iPads, and 56.1 million iPhones -- 93.7 million units for total sales of $68.7 billion dollars.

*Tim Cook quote via Seeking Alpha transcript

**The average selling price for a Windows PC sold at U.S. retail (for the first three quarters of 2011) was $491 based on NPD's Retail Tracking Service. The Apple ASPs used in this article are calculated from Apple's earnings reports, which are not broken out by country. This should be considered when comparing NPD's U.S. Retail numbers to Apple's worldwide numbers.

Article Link: Nearly All Apple Hardware Costs More Than the Average PC
 

gugy

macrumors 68040
Jan 31, 2005
3,882
5,295
La Jolla, CA
Makes sense. No wonder Apple products for the most part are better build and last much lounger than their counterparts.
You get what you pay for. :)
 

sasegars

macrumors newbie
Aug 19, 2009
2
0
I wouldn't trade my iPad, MBPro, iPhone 4s — for fourteen new PC products. Couldn't, shouldn't, wouldn't — the customer service ALONE makes the price difference worth it. I spent years working with PC's — and cannot adequately describe the unbelievable differences — in quality, in service, everything. No question: worth every penny. And more.
 

Naimfan

Suspended
Jan 15, 2003
4,669
2,017
I think to claim that the iPad is a fully functioning computer is disingenuous at best.

Of course Macs are more expensive - that's not a newsflash.
 

mbarriault

macrumors regular
Dec 3, 2008
109
0
Find me a Windows computer actually comparably spec'd as the iMac.

Make sure to include
  • 21.5/27" LED/IPS display
  • Bluetooth
  • 802.11n WiFi
  • Integrated camera
  • Wireless keyboard/trackpad/mouse
  • Thunderbolt (I'd settle for DisplayPort here)
  • Windows Ultimate 64-bit
  • Software comparable for iLife
  • 20W speakers
  • Firewire
  • IR receiver

Most people doing comparisons tend to ignore these details.
 

MightyMac007

macrumors member
Aug 24, 2011
51
0
I agree with some of those above me. I get an email almost every day from TigerDirect.com or Newegg.com offering Windows PCs, and sometimes laptops, for as little as $299 sometimes (especially near Black Friday). This is probably a huge contributor to the disparity in these graphs.

However, the graph that should supplement those above is the rate at which those $299 Windows PCs/Laptops are replaced versus an Apple Desktop/Laptop etc.

THAT'S the comparison that matters to me.
 

Macman45

macrumors G5
Jul 29, 2011
13,197
135
Somewhere Back In The Long Ago
I Think The Clue Is In

...The quote
There are some customers which we chose not to serve. We don't know how to make a $500 computer that's not a piece of junk, and our DNA will not let us ship that. But we can continue to deliver greater and greater value to those customers that we choose to serve. And there's a lot of them. We've seen great success by focusing on certain segments of the market and not trying to be everything to everybody. So I think you can expect us to stick with that winning strategy and continue to try to add more and more value to those products in those customer bases we choose to serve.

Are we elitist? No. Perhaps we may think we are because we choose to use Apple products. In order to retain it's market lead, the "Bling" (hate that word) factor must remain.

Who amongst us would choose a different product if it
A) Performed the same functions

B) was integrated with all other products in the family?

C) Cost a lot less?

Many I suspect, but the fact that my MBA iMac MBP iPad and iPhone all work with each other seamlessly and without hassle, keep me in the Apple family. Years ago it was all about graphics and to a certain extent it still is, Devs can do one heck of a lot with 512mb.

For me, it's about factor, not form. Yes Apple products look great, but if the performance wasn't there I'd walk. Simple market factors. I need my kit to work in and out of the house, on the move recording etc. Will this continue to be the case post Steve?

I hope so.
 

dbhopkins

macrumors newbie
Mar 11, 2011
14
0
USA
Compare Apples to, er, Apples

This "study" is flawed by comparing the "average" PC to a Mac. They should compare the price of a similarly spec'd PC to a Mac. Plus a Mac comes with far better software. To get the same software on a PC you'd be spending at least $200+.

Case in point, my 5-year-old Mac Pro is still very fast and useful. Yes it cost more but if I had bought an "average" PC in 2006 it would be scrap metal by now and I'd be on my 2nd or 3rd "average" PC.
 

SandynJosh

macrumors 68000
Oct 26, 2006
1,652
3
I read the article carefully and asked myself, "What's the point it's trying to make?" I read it again and, Lo! There is no point.

This isn't a rumor, it isn't news...it isn't even accurate or relevant.

Give me back the five minutes of my life!
 

acidfast7

macrumors 65816
Nov 22, 2008
1,437
5
EU
Find me a Windows computer actually comparably spec'd as the iMac.

Make sure to include
  • 21.5/27" LED/IPS display
  • Bluetooth
  • 802.11n WiFi
  • Integrated camera
  • Wireless keyboard/trackpad/mouse
  • Thunderbolt (I'd settle for DisplayPort here)
  • Windows Ultimate 64-bit
  • Software comparable for iLife
  • 20W speakers
  • Firewire
  • IR receiver

Most people doing comparisons tend to ignore these details.

I doubt that anyone will find anything that even has a unibody aluminum case and real glass over the screen.

It's like comparing an Audi to a GM/Ford/Chrysler product. You can compared specs all day long, but the end product is more than the sum of its parts.
 

435713

macrumors 6502a
May 19, 2010
834
153
REALLY!!! WHOA!!!

Actually I have been shopping for a friend, he wants a 15 to 17 inch laptop, and was interested in Macs since he liked my 13' MBP but the screen was too small. He saw the prices and asked for something else quickly. He asked "Do they cost that much to make?" I laughed and said "Not at all. Check their profits."

Dell's, Sony's and others ( I guess all are sh** here) but they offer a lot of bang for the buck and for less than half currently. Kind of discouraging seeing a guy ready to pay up to $1200, a good chunk of change and cannot get a laptop at 15-17 inches from one of the largest makers. I did point him to an iMac but he needed some portability for the road.

Negative voted myself dont worry I got it :cool:

EDIT: the 21 inch iMac screen is not IPS unless they changed it. Dell offers studio XPS desktops for 500-600 with a coupon, add in the other stuff and I say you get maybe 900. So $300 dollar premium. I realize its not an all in one, though and honestly dont have issues with iMac pricing. Laptops and that sorry Mac pro are another story in my view. Having that GPU in the Mac Pro should have Apple execs arrested and put in jail where they are raped for being cheap. Record breaking pro... rapes and then they would learn.

If only another company would do the whole tight integration thing at better prices with sexy software and hardware. Oh well world aint perfect.
 
Last edited:

ibwb

macrumors regular
Mar 7, 2006
170
21
Since when did MacRumors have smart, interesting analysis? Hope to see more.

To those who don't get the point: the point is that many people are looking at the market the wrong way. If people are really replacing Windows PCs with iPads, the fact that the iPad actually costs almost the same, maybe a bit more, is pretty interesting. It suggests that these two products are closer to being in the same market segment than we might have realized.

Personally, it hadn't occurred to me that the average iPhone, including carrier subsidies, costs more than the average iPad. No wonder it has the better camera.
 

SandynJosh

macrumors 68000
Oct 26, 2006
1,652
3
I agree with some of those above me. I get an email almost every day from TigerDirect.com or Newegg.com offering Windows PCs, and sometimes laptops, for as little as $299 sometimes (especially near Black Friday). This is probably a huge contributor to the disparity in these graphs.

However, the graph that should supplement those above is the rate at which those $299 Windows PCs/Laptops are replaced versus an Apple Desktop/Laptop etc.

THAT'S the comparison that matters to me.

Even HP laptops had a +30% failure rate within the first year or two...lord knows what kind of failure rate the generic laptops had. Cost of ownership trumps cost of acquisition everyday.
 

Dr McKay

macrumors 68040
Aug 11, 2010
3,430
57
Kirkland
However, the graph that should supplement those above is the rate at which those $299 Windows PCs/Laptops are replaced versus an Apple Desktop/Laptop etc.

THAT'S the comparison that matters to me.

Here you go.

squaretradenov2009-lg31.jpg


Even HP laptops had a +30% failure rate within the first year or two...lord knows what kind of failure rate the generic laptops had. Cost of ownership trumps cost of acquisition everyday.

Actually 25.6%

Then why do macs look more premiums than plasticky pc?????? Obviously microsofts dessision.

Microsoft have no say in the decisions of PC Builders. They are free to build whatever they want. And why can't you understand than plastic laptops can still look and feel premium? My $1,800 Sony Vaio is made of plastic, but feels very solid and sturdy, and has a premium look and feel to it. And not all Windows PC's are plastic.
 
Last edited:

ThanksSteve

macrumors member
Oct 19, 2011
66
0
There will certainly be some cannibalization. A lot of people only need an iPad-like device to check email and surf the Internet especially older folks. I've found that among people I know, they have a Mac or PC and want an iPad for lounging around or reading ebooks and playing games. Ebooks and games have made a major market for the iPad as an additional device for consumers.

In the end, it is likely that iPad sales would hurt Windows-based PCs more than Macs. I haven't seen anyone get rid of their Macs, but a couple have replaced their Windows laptops with iPads.
 

jmpnop

macrumors 6502a
Aug 8, 2010
821
34
Find me a Windows computer actually comparably spec'd as the iMac.

Make sure to include
  • 21.5/27" LED/IPS display
  • Bluetooth
  • 802.11n WiFi
  • Integrated camera
  • Wireless keyboard/trackpad/mouse
  • Thunderbolt (I'd settle for DisplayPort here)
  • Windows Ultimate 64-bit
  • Software comparable for iLife
  • 20W speakers
  • Firewire
  • IR receiver

Most people doing comparisons tend to ignore these details.

Apple is expensive, lets compare it to DIY PC's -

1. Apple clearly wins here.
2. +2 for Apple
3. Yes.
4. Can be included in the price.
5. Yes.
6. AMD and Nvidia graphic cards support multiple displays:cool:
7. Unless you want to just increase the cost, there's no actual reason to go for the Ultimate version. Professional or even Home Premium will be sufficient for majority of people.
8. Apple wins here again.
9. Way better speakers included in price.
10. Don't know if it comes built-in, a good card can be included in the price.
11. I don't know why you'd need it...

Even if you include iLife equivalent software, PC wins in every aspect except display. Look at MBP 15" and 17", they're clearly overpriced. Its a fact that Apple computers are expensive but the quality is what makes them worth.
 
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