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Old Oct 27, 2004, 07:53 AM   #1
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Has Apple Abandoned The Low End?


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Link: Has Apple Abandoned The Low End?
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Old Oct 27, 2004, 10:18 AM   #2
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How does one abandon the low end when one has never competed in the low end?

Apple's low end machines are considering middle of the road for most PCs. Apple doesn't participate in the extremely low margin less then $500 machines that have in general old and inferior quality parts[1].

1 - By inferior, most of the cheap PCs tend to have the cheaper, and lower quality parts in them in order to save money. That isn't to say they don't work, it's just that the possibility of failing is higher.
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Old Oct 27, 2004, 10:49 AM   #3
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Apple is not active on the low end because they don't have to be -- they start at the middle level, with the best value in the market. You can't build a Linux or certainly Windows box with the value of an iMac G5 and I'm yet to see a laptop for $999 ($949 academic) that matches the 12" iBook.


In fact, if Apple came out with a $499 headless Mac they'd probably just sell less iMacs = less earnings, and probably less profit. Do you see a $10,000 stripped-down BMW? Of course, you can't get a new beamer for 20 either, last I checked. You can get a Mac for $800 or so.
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Old Oct 27, 2004, 10:53 AM   #4
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When I went to buy a low-end Dell for a family member, I had to upgrade the RAM, processor, video RAM, CD drive, software, monitor, etc., so it was a useable computer. Emphasize the word useable.

By the time it was all over, my new "low-end" Dell cost as much as a comparably equipped eMac.

Low-end in the PC world is simply a metaphor for unuseable computers.
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Old Oct 27, 2004, 10:53 AM   #5
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It's more like Apple is IGNORING the low end. They have never really competed there, so they cannot really abandon it.
As for Apple defining the entire spectrum of portable digital music players with the iPod mini, iPod, and iPod Photo, aren't 256MB and 512MB players with removeable media still music players? Sure, the iPod is in a class all by itself, and Apple is making money on it and enjoying unprecedented market dominance...for now.
I maintain that all of these people who are buying cheapo MP3 players (because they either can't afford an iPod or don't appreciate the cool factor that makes people want one), are going to start building a downloaded music library that is incompatible with the iPod. When time comes (and it will come) for them to replace their player (broken, more storage, whatever the reason), and they are faced with the choice of buying a Rio or other player, or abandoning their music collection and getting an iPod, it's too late for most. The choice was made when they didn't buy an iPod the first time. Apple needs to think long term dominance in downloaded content. That means putting iTMS-compatible iPod players into as many hands as possible as this burgeoning market takes off. A lower than typical (for Apple) margin is a short term concession that will lock in a larger market share down the road. A 1GB or 2GB mini (flash-based or not) that retails for $139-$199 will sell. Yes, it may siphon off some sales of the 4GB mini, but not too many. Look at the potential upside, and the long view. People would rather buy a $199 2GB iPod from Apple than a $159 2GB generic player, because of the brand. Take advantage of it now, and lock 'em in for life.

But what the heck do I know?
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Old Oct 27, 2004, 11:11 AM   #6
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Quote:
Originally Posted by bubbamac
When I went to buy a low-end Dell for a family member, I had to upgrade the RAM, processor, video RAM, CD drive, software, monitor, etc., so it was a useable computer. Emphasize the word useable.

By the time it was all over, my new "low-end" Dell cost as much as a comparably equipped eMac.

Low-end in the PC world is simply a metaphor for unuseable computers.
That sounds about right. It is kind of a bate and switch operation. The Window machine venders get a customer in the door by low prices.

Then they soon find out, that they needs to upgrade so that the machine will perform to their needs.
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Old Oct 27, 2004, 11:33 AM   #7
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Apple has said they don't intend to compete in the sub-$800 market, so that's that. They can't make a product that meets their standards AND make enough money to be worth building the thing.

That's FOR NOW, of course--components and systems get cheaper, and Macs haven't stopped dropping in price for all time. The time may even come when Apple decides to make a low-end headless and subtract the CRT from the eMac's cost. I'm sure they've done work on such a system, knowing the demand. Maybe next year... whenever it makes business sense.

Some people think Apple should make a really bad Mac--cheap parts like a low-end PC, no real 3D board, no Firewire, no built-in WiFi antennas, cheaply-built case etc. They think Apple would take the world by storm because it's the OS that makes Macs great. (And of course Apple might have to take a loss and give them away since they don't sell at Dell volumes.)

I see where they're coming from--OS X is THE most important thing about the Mac. But it's not the only thing--quality hardware counts too.

Last edited by nagromme; Oct 27, 2004 at 11:37 AM.
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Old Oct 27, 2004, 12:05 PM   #8
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Ditto for me...

I'd love to see a headless, empty "box" Mac, though. Something for about $500. Then I could add a display, some RAM, a hard drive, and... wait, it'd be an expensive eMac, then.

Forget that.

That being said, I'd rather see Apple stay in business and prosper and if that means avoiding the "low end", well, so be it. Is the low end important anyway? $500 WinPC boxes exist, yeah, but you gotta buy two so you can keep one running long enough to get Windows XP SP2 installed before all the viruses and worms hit.

As to the iPod, there are other portable players with better specs. The Rio Carbon comes to mind. Nice. Too bad it'll never sell because it NEEDS compatibility with iTunes, iTunes Music Store, et al.
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Old Oct 27, 2004, 12:40 PM   #9
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I personally am content in the mid-range market -- but the thing that aggravates me about the absence of low-end macs is the fact that Apple is selling a <i>platform</i>.

Low-End computers are called "entry-level" for a reason. People, for the most part, choose a platform once when they buy their first computer. After that, you have a collection of software, you've learned how to use it, and so on. It's much more difficult (and costly) to "switch" to the Mac than it is to start out on a Mac.

Those people who are buying a computer for the first time are the ones that are most likely to be open to the apple platform. And they're looking (mostly) for low-end computers. They won't always be looking for low-end computers -- they'll eventually want to do more with their computers or have more money or whatever.

But by then, they've already chosen Windows.


It looks like Apple's making the same mistake with the iPod. The music player market is still pretty new, and platform-dependent music is even newer. Apple is, as with their computers, making high-end products, and failing to lay the entry-level groundwork to promote their music <i>platform</i>.
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Old Oct 27, 2004, 02:22 PM   #10
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Remember when Bondi iMac came out, it was the cheapest PC out there at $1299. They were the low price leader for a month
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Old Oct 27, 2004, 02:36 PM   #11
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A low end PC is really just a PC that is using parts from a few years ago's top end machine. So why not just buy a used Mac if you want a low end machine? Get something that was top of the line 3-4 years ago and you have today's low end machine (although they usually cripple the low end PCs with less RAM and HardDrive).
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Old Oct 27, 2004, 02:48 PM   #12
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Quote:
Originally Posted by coolsoldier
It looks like Apple's making the same mistake with the iPod. The music player market is still pretty new, and platform-dependent music is even newer. Apple is, as with their computers, making high-end products, and failing to lay the entry-level groundwork to promote their music <i>platform</i>.
The major flaw to that argument is that they already control 70% of the market, despite not having a cheap low-end player and their momentum is only increasing. Besides, the digital music/player market is nothing like the computer/OS market so you really can't compare the two at all. They're two totally different animals.

This article describes things better than anything else I've come across...

Link

Last edited by Lancetx; Oct 27, 2004 at 02:52 PM. Reason: Added Link
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Old Oct 27, 2004, 03:41 PM   #13
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Quote:
Originally Posted by Lancetx
The major flaw to that argument is that they already control 70% of the market, despite not having a cheap low-end player and their momentum is only increasing. Besides, the digital music/player market is nothing like the computer/OS market so you really can't compare the two at all. They're two totally different animals.

This article describes things better than anything else I've come across...

Link
That link is a great read. In the end the writer concludes that DRM could well be the real battleground for supremacy. While there is no guarantee that DRM will even survive long term, you can bet that MS will do everything in it's formidible power to see that THEIR DRM will become the industry standard. That is exactly why I think Apple needs to dominate the "real" low end of the digital music market, by releasing a sub $200 player.
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Old Oct 27, 2004, 03:43 PM   #14
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I'm one who thinks Apple needs something like a headless eMac. I'll keep saying so, and I predict someday they will have one.

BUT... to be totally fair... I would not buy one myself!

Maybe Apple knows that the people clamoring for a low-end headless are wrong OR that they would in fact not choose that model themselves. Maybe everyone thinks a low-end headless is needed "for someone else."

I do think that ... but I won't call Apple stupid without knowing what they know about their costs and market.
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Old Oct 27, 2004, 04:03 PM   #15
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Not quality. Not functionality.
Welcome to the Windows and Dell way.


Apple probably could make a ~$500 eMac if they wanted to, but the specs would be like crap. 700MHz G4, 128 MB RAM 40 GB HD, no software (just OS), onboard video.

I hope Apple never does sell a machine below a certain price point, because when you buy a Mac, you don't get just the hardware like Dell gives you. You get tons of great software, and it's all integrated. It's all about the Apple experience, not the M$ or Dell one.
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Old Oct 27, 2004, 04:33 PM   #16
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No AAPL cash registers, please...

Our local Apple store uses the sunflower iMac as cash registers (more like terminals). That's the only place I want to see a Mac as a cash register.

The people I know who spent $500 on a WinPC are totally clueless about computers and don't get anything accomplished except...

1 - email (most of the time is spent deleting spam)
2 - browsing (most of the time is spent closing pop up ads)
3 - trying to figure out how to fix something that's not working

Those who spend more than $1,000 on a WinPC have the same problems but include time spent on word processing, spreadsheets, graphics, digital photos, etc.

Then they look at Macs and drool, but walk back home because "Macs are too expensive and there's not as much software."

I applaud Jobs and crew because they show nerve and discipline and recognize there's no money in throw away cheap computers.

What is it someone said? "Macs only make up 10% of computer users in the US. It's just the top 10%."

"Do not cast pearls before swine." That's from some place in the Bible.
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Old Oct 27, 2004, 04:53 PM   #17
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Apple doesn't use superior parts. Both Apple and Dell pretty much use the same vendors when making a computer. The only real difference is the CPU chip, a G4/G5 or a Intell/amd/celeron. I cant see they reasoning why they can't make a 700.00 computer.
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Old Oct 27, 2004, 07:20 PM   #18
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If one wants a sub- 800 Mac, go to ebay and get a used one. I got my ibook for 450.00, slow it some respects, yet still great for email, Web browsing, database, word processing, spreadsheets, coding, 2D games, chat, cd burning, DVD viewing, and it even rips DVDs using HandBrake!

If I want a new Mac, would gladly fork out >800.00 because they're great machines. Those 400.00 Dells are crap, example:

My friends got one as a gift, all excited to get a new computer. It came with a 1.8 Celeron, but only 128MB of the slower DDR, and a skimpy 40GB hard drive (ATA not SATA or SCSI); she had to invest 100.00 for a 512MB chip. She likes to play HalfLife, but the onboard video is *****, so another monetary investment of 150.00 for a graphics card. And then the spyware.... bad investment. Now some of the Dells for 2,500.00 are not that bad, yet most PeeCee users would not think of spending that kind of money on a computer. My point is that the 400.00 Dell really cost her and daddy 650.00. The computer would cost even more for a decent CPU, upgrade to 1GB of RAM, FireWire PCI card, and 160GB ATA 133 (probally 1,300.00 (+/-) for the box.)

She does not like Mac though, and would not want one even for free.

My next computer will be one that supports video chat and Tiger.
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Old Oct 28, 2004, 09:20 AM   #19
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Quote:
Originally Posted by powermac666
That link is a great read. In the end the writer concludes that DRM could well be the real battleground for supremacy. While there is no guarantee that DRM will even survive long term, you can bet that MS will do everything in it's formidible power to see that THEIR DRM will become the industry standard. That is exactly why I think Apple needs to dominate the "real" low end of the digital music market, by releasing a sub $200 player.
Yeah, but that's exactly the way computer people would see audio equipment, isn't it? In the music market, a plethora of incompatible formats is expected, and so is the idea that buying new equipment means buying music all over again. Vinyl, 8-track, cassette and CD all managed to coexist for many years, even though it wasn't until fairly late that there were affordable ways to transfer music among them.

Even though the previous generation (CD) allows universal compatibility with all players on the market, customers are still buying more and more DRM'd music, in spite of competitors being quite noisy about the compatibility issue; obviously, people buying the stuff aren't too concerned about it.
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Old Oct 28, 2004, 10:35 AM   #20
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Quote:
Originally Posted by iMeowbot
Yeah, but that's exactly the way computer people would see audio equipment, isn't it? In the music market, a plethora of incompatible formats is expected, and so is the idea that buying new equipment means buying music all over again. Vinyl, 8-track, cassette and CD all managed to coexist for many years, even though it wasn't until fairly late that there were affordable ways to transfer music among them.

Even though the previous generation (CD) allows universal compatibility with all players on the market, customers are still buying more and more DRM'd music, in spite of competitors being quite noisy about the compatibility issue; obviously, people buying the stuff aren't too concerned about it.
You are correct. The music industry has, for years, lived with changing technologies that made it necessary to re-purchase music in the new format to use it, and this is happening again today with the various digital music formats and DRM.

The cassette had enough advantages over the 8-track to reduce it's share. The CD had enough advantages over vinyl and cassette to do the same. We can discuss Kbps, AAC, lossless, etc. all we want, but there isn't much difference between file formats to most consumers once they plug in their $8 pair of ear buds. Most, myself included, can't really hear much difference. I selected an iPod because they are small in size, spacious enough to hold all my tunes and then some, easy to load, easy to operate, well made, and are freakin' cool. I'm fortunate enough to afford one. Lots of folks aren't.

All I'm saying is that I would prefer that Apple not have the same share of the pie in 5-10 years' time as the 8-track has today. Pushing their device, file format and delivery method out to as many consumers as possible now will help ensure the longest possible ride for them as a significant player in the market. I think a $149-199 1-2GB iPod would help secure that future.
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Old Oct 29, 2004, 11:08 AM   #21
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Mac360.com? Tera Patricks? and who are they? Never Heard of them until just a couple of months ago and when I did a Whois it appears the site was created in Feb of this year. Who cares what this Tera Patricks has to say. What Credentials does she have anyhow to come off as being so authorative about Mac issues?
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Old Oct 29, 2004, 12:44 PM   #22
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You need to get a little life Little Indian (sic). Who is John Dvorak? A guy who writes stuff; sometimes interesting, sometimes disagreeable. Read him or not. Why are credentials so important to you? What are your credentials to post here? People put up web sites all the time. Some are good, some worthwhile, many not. If not, no one goes back. Unlike you, that one's sometimes entertaining...



To powermac666; gotta agree with you. I'd hate to see Apple's music endeavor become the 8-track footnote in 10 years. However, since they own 70% of the market for legal downloads and 90% of the hard drive portable players, it looks like the market is voting for a dependable standard-- Apple is the standard and others will need to gravitate toward it.

Last edited by jchen; Oct 29, 2004 at 02:43 PM. Reason: sp
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Old Oct 29, 2004, 12:56 PM   #23
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Originally Posted by jchen
...To powermac666; gotta agree with you. I'd hat to see Apple's music endeavor become the 8-track footnote in 10 years. However, since they own 70% of the market for legal downloads and 90% of the hard drive portable players, it looks like the market is voting for a dependable standard-- Apple is the standard and others will need to gravitate toward it.
Apple is the standard for now, and that's a great thing. I love seeing Apple on top - it kinda feels vindicating.
One of the primary rules of business is that you must always keep pushing forward, or you will ultimately fall behind the competition. Apple is doing a great job of pushing forward right now, and there isn't really a whole lot to criticize. But as far as having a real entry level player to drive that segment, I think Apple needs to get in this market soon, like last week.
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Old Oct 29, 2004, 02:18 PM   #24
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It is a mistake to talk about new customers for computers as though the concept of computing is some new fangled fad. IT is a maturing industry, and Apple, I think, understand that there are enough discerning customers out there (and even more after a few more years of marketing education from Apple,) will get the idea that you get what you pay for with computers, and paying a bit more for Macs is in fact good value. Apple are ahead of the cheap and cheerful curve and I hope they stay there.
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