Dell still sells plenty of systems, as does HP.
Of course they do. And "plenty" of those plenty of systems are $399 computers that probably cost more in customer support than they bring in. Again, that's not the business I'd want to be in.
And in regards to lower-margin products driving marketshare and yet destroying brand image, how do you explain the likes of Toyota, Honda, and even recently Hyundai/Kia?
I think you overlooked my Toyota example.
Now look at Hyundai: while most car manufacturers have been losing marketshare or having it remain flat, Hyundia/Kia have actually been increasing their marketshare considerably. Not only that, but they're actually beginning to shed the bad reputations they have, as more and more companies consider their cars very high-quality, and yet still very much affordable.
Exactly. Their market share is increasing because they're making better quality products. Hyundai didn't decide they were going to make market share their priority. They decided to make product quality their priority. And a pleasant result of that approach has been rising market share.
I'm sorry, but both market approaches can exist. Yes, going for marketshare does often mean sacrificing margins, but it doesn't *have* to mean sacrificing your image as well.
But it very often does.
Funny that Steve would say that, given that at one time the cheapest Power Mac was around $2000. Apple eventually started selling them for as low as $1500. Eventually, they once again went back to $2000, and now they're at $2500+.
Even the iMac could once be had for < $1000, and now the introductory model sells for $1200.
What's that about never being able to raise prices again?![]()
I think Jobs actually said it's hard or difficult to raise them again. Apparently not so difficult that they couldn't do it.
I miss the days of the $1500 Power Mac.
Microsoft's game division has been turning a profit now for a couple of years. They make money on each console sold. They make quite a bit of money off of peripherals. And they have the highest attach rate in the industry. Care to revisit your "data"?
WRONG. Just because they're making money on each console sold now doesn't mean they've repaid the billions they've dumped into the effort since day one (including the hardware's horrific failure rate). Because they haven't. Not even close. High attach rate or not, Xbox will be in the red for a long time to come.
And how do you explain the Wii? How many has Nintendo sold? Something like 50 million + units. Nintendo has been making a sizable margin off of each Wii sold since the console was released.
Exactly. Nintendo took the right approach. Make a great product that people would want, price it at a profit. Sell lots of product, make lots of money, take a commanding market share. Business 101.
Sony and Microsoft did not follow Business 101 with their console strategies.
So first you say consoles *isn't* the way to go, but then you contract that argument by pointing out that Nintendo makes money on each Wii sold, which *is* a console. Which one is it?
Wrong. I'm saying selling at a big loss now and hoping you'll make up for it down the road is a mistake. Microsoft & Sony = stupid approach. Nintendo = smart approach. See above.
Says who? Show me an article where Toyota's reputation "took a dive". Their models have consistently still been ranked as among the most reliable by many different organizations (JD POwer, Consumer Reports, Car & Driver, etc.).
Wow, you must not follow automotive news. I'm not saying Toyota isn't a quality company, but the quality of their products took a marked dive when they started pushing for volume and anyone who follows car news knows it. Read any review and they'll gripe about the cheap interior quality - definitely not the Toyota of yesteryear. And their recalls have been huge. Definitely not the Toyota of yesteryear. The interior of my mother-in-law's 2004 Camry is far crappier than the quality of the 1992 Camry she had before it, and that's an observable fact.
And at the end of the day, most corporations and organizations still run Windows, and thus still end up purchasing Microsoft software. I don't think Microsoft's shareholders are sitting back, thinking "Damn, if only MS had not wanted to have so many corporations reliant on them, and instead focused on 10% of the market".
I think you've completely missed the point of my argument.
It seems like you only "discount" it because it's not Apple's approach. Sorry, that's not how things work.
Unfortunately, for many companies this is exactly how things work.
Have you tried Windows 7? It's a very, very good OS. Yes, it copies aspects of OS X. But at the end of the day, I don't care. It works. It works well.
Yes, I've been using it since RC. Better than XP? Definitely. But "very, very good?" Not really. I'd say it's "less crappy" than any version of Windows I've used before, but I certainly wouldn't give it any trophies for software design.
I guess when you specialize in mediocre products like Microsoft it's easy to keep your customers happy. They're the GM or McDonalds of the technology world. Nothing special, yet everyone buys their stuff. "Baffling" really.