Apple's Focus, Digital Music and More to Come?

[Playball]

I think y'all are fighting the wrong battle when talking about Apple hardware price points and product positioning. It's not that Apple needs to change the product lines to meet new price points, but rather, Apple nees to change the prices of their products on an ongoing basis to meet the market's new price/performance expectations.

sure, I'm upset that the upgrade cycles are so long (and unpredictable), but what mystifies me is why there isn't periodic discounting during between upgrades? Isn't there a tremendous disincentive to buy any Mac right now, if a purchaser knows that you're buying the price & value proposition that existed when the product was introduced? (i.e. if I'm looking at a 17" iMac, I'm looking at the price performance combination of ?6 months ago. Since I'm not a dummy, I know that performance doubles and prices half every 18 months (Moore's law), so that example iMac should - if not more powerful - be lower priced.

Really, Apple could break the cycle by just loping off $50 every calenday month until the next upgrade & repricing.

(that iMac price/performance would be a whole lot better if it cost $300.)

 

[macnews]

I am glad to see Apple focusing on other areas but what about the G5 upgrades? Unlike Intel, Apple will suffer if they don't have 3 Ghz machines by summer (at least announced by July/August). The G5 was a long awaited processor and lived up to its billing for many mac fans (not talking about the pc folk).

Right now, the digital music and "more to come" makes up 20% of their bottom line. They still need to worry about the other 80% - and that other 80% means G5 upgrades and other product upgrades. The G5 was announced in June 03 - six months is Dec 03, one year is June 04. Actual product shipped (in qty) Sept 03. - six months is March 04, one year is Sept 04. I would expect to see a product upgrade sometime between now and March (end of). No upgrade by this time would be very disappointing - although I wouldn't expect a loud announcement. If no March announcement, things would look very bad. I doubt there would be a jump from a 2Ghz G5 to 3 Ghz - but you never know with Apple.

 

[Bilba]

Originally posted by Playball
I think y'all are fighting the wrong battle when talking about Apple hardware price points and product positioning. It's not that Apple needs to change the product lines to meet new price points, but rather, Apple nees to change the prices of their products on an ongoing basis to meet the market's new price/performance expectations.

sure, I'm upset that the upgrade cycles are so long (and unpredictable), but what mystifies me is why there isn't periodic discounting during between upgrades? Isn't there a tremendous disincentive to buy any Mac right now, if a purchaser knows that you're buying the price & value proposition that existed when the product was introduced? (i.e. if I'm looking at a 17" iMac, I'm looking at the price performance combination of ?6 months ago. Since I'm not a dummy, I know that performance doubles and prices half every 18 months (Moore's law), so that example iMac should - if not more powerful - be lower priced.

Really, Apple could break the cycle by just loping off $50 every calenday month until the next upgrade & repricing.

(that iMac price/performance would be a whole lot better if it cost $300.)

This does make a lot of sense. Apple cannot compet with the entire P.C industry and no one expects it to. On the other hand, fixing pricing for 6 or more months dosent make sense.

 

[Playball]

one other thing....

since this thread started with the article, I'll comment on one thing that occurred to me....

Everyone is rightly excited about Apple's market share in the digital audio, and that they might not make the same mistake they did in the '80s that led them down the path to <5% of the current market.

Unfortunately, the news isn't all good. Did you see the reported market shares in the article? (70% share of downloaded music, 30% share of players.)

While this is good at this moment, I can't see how Apple can continue to fight gravity for much longer. Since Apple's music format is closed, I really don't see how the share of downloads won't over the long term gravitate to a share similar to their share of the player marker (i.e. 30%).

The other bad news is that I'd expect Apple's share of the player market will fall as well for 2 reasons:

1) as the market matures, more products will compete on price (not Apple's forte), and so while unit shipments may rise, share will fall as Apple is undercut for below.

2) Apple isn't a consumer products company, so I can't believe that they'll ever offer enough different product/price/performance combinations to meet the market. (For example, look at Sony's range of Walkman products (analog audio) - they alone sell 6 different ones, which is what it will eventually take to compete in digital audio.digital cameras. The market for portable analog audio isn't one served by binary value propositions, and neither will digital audio.

So, I'd have to say that

 

[Playball]

one other thing....

since this thread started with the article, I'll comment on one thing that occurred to me....

Everyone is rightly excited about Apple's market share in the digital audio, and that they might not make the same mistake they did in the '80s that led them down the path to <5% of the current market.

Unfortunately, the news isn't all good. Did you see the reported market shares in the article? (70% share of downloaded music, 30% share of players.)

While this is good at this moment, I can't see how Apple can continue to fight gravity for much longer. Since Apple's music format is closed, I really don't see how the share of downloads won't over the long term gravitate to a share similar to their share of the player marker (i.e. 30%).

The other bad news is that I'd expect Apple's share of the player market will fall as well for 2 reasons:

1) as the market matures, more products will compete on price (not Apple's forte), and so while unit shipments may rise, share will fall as Apple is undercut for below.

2) Apple isn't a consumer products company, so I can't believe that they'll ever offer enough different product/price/performance combinations to meet the market. (For example, look at Sony's range of Walkman products (analog audio) - they alone sell 6 different ones, which is what it will eventually take to compete in digital audio.digital cameras. The market for portable analog audio isn't one served by binary value propositions, and neither will digital audio.

So, I'd have to say that this is one more reason Apple needs to refocus on great computers, as to be distracted by the digital audio market will likely prove frustrating.

 

[deejemon]

*

 

[jedi180]

G6...

I'm not sure if this has been very well confirmed, but I've heard about the PowerPC 980 coming out within a year from now, and will be dubbed as the G6. Whether this is true or not, I think that Apple should definitely move the G5 chips into the eMacs, iMacs, iBooks, and PowerBooks. Though I also think they should do that right NOW. The production cost of the G5 chips is, I've heard, not even as high as the cost of the G4 chips.

Apple can make more of a profit and please more consumers by speeding up the lower end of ther products. Heck, who ever goes into a Gateway store an sees a 900 Mhz laptop!?!??!

jedi180

 

[jocknerd]

Re: I'm sick of the 'I need a G5 imac'

Originally posted by gwuMACaddict
im sick of the 'i need a g5 imac' rant... do you all REALLY honestly think that the everday consumer needs a g5 to surf the web and check email and word process.....??

You obviously haven't used a PC have you? Sit down on an iMac for 20 minutes and then a new PC and see which one is more painful to use because its so slow.

Do you really think the average consumer (by your definition of one) even needs a Mac at all?

I'm what you would call a prosumer. I've got an iBook and a PC at home running an Athlon 1.4ghz processor. I'm looking to replace it with a Mac this year. What are my choices? I could get an iMac or a PowerMac G5. I talked my mother into an iMac last year. She got the 1.0ghz 17". I never realized how SLOW it actually was. I thought it would run circles around my iBook, but it doesn't.

I tried to talk my sister into an iMac, but after she used my mom's she said no way. She had me build her a PC with an Athlon 2.2ghz processor. It screams.

So for me, it looks like a G5 PowerMac unless Apple introduces a G5 iMac. Then I might be swayed over to it in order to save a $1000. But I'll probably wind up going with the PowerMac.

 

[Bunzi2k4]

Re: Re: I'm sick of the 'I need a G5 imac'

Originally posted by jocknerd

Originally posted by gwuMACaddict
im sick of the 'i need a g5 imac' rant... do you all REALLY honestly think that the everday consumer needs a g5 to surf the web and check email and word process.....??

You obviously haven't used a PC have you? Sit down on an iMac for 20 minutes and then a new PC and see which one is more painful to use because its so slow.

Do you really think the average consumer (by your definition of one) even needs a Mac at all?

I'm what you would call a prosumer. I've got an iBook and a PC at home running an Athlon 1.4ghz processor. I'm looking to replace it with a Mac this year. What are my choices? I could get an iMac or a PowerMac G5. I talked my mother into an iMac last year. She got the 1.0ghz 17". I never realized how SLOW it actually was. I thought it would run circles around my iBook, but it doesn't.

So for me, it looks like a G5 PowerMac unless Apple introduces a G5 iMac. Then I might be swayed over to it in order to save a $1000. But I'll probably wind up going with the PowerMac.

well my pb 12" 867 seems to be running fine when it comes to word processing, but then again, my laptop is the fastest computer in my family... heck i have the only g4 in my family. i think in general, the macs need to have a big speed bump, they need to be able to compete in speed. when an average person looks at computers, they look at hd space, speed, and price. Apple doesn't really win in any of these contests if you look at the specs (by that i mean comparing a pc at the same price)...

 

[Phobophobia]

Originally posted by Playball

Really, Apple could break the cycle by just loping off $50 every calenday month until the next upgrade & repricing.

(that iMac price/performance would be a whole lot better if it cost $300.)

With wit like that, you could start your own computer manufacturing company!!!

 

[cuneglasus]

Originally posted by gwuMACaddict
huh? i'm tired and confused and grumpy... i do get tired of people moaning about needing a g5 to surf the web... that was my only real point...

But the real point is that Apple must spec and price its consumer items to be competative with the rest of the industry or consumers will look elsewhere.What a minute thats exactly whats happening now.The G4 is dead in the water so the only option is the G5,unless the mythical IBM G4 is real (and ready to go).

 

[Frobozz]

Originally posted by evilbert420
I have to buy Pro to get the features I want, yet I consider myself a consumer.

Well, you've hit the head of the nail there. You're not a consumer... you're a "prosumer." A prosumer would buy a low end Professional machine. In this case, you'd probably have a 1.8 Ghz G5 PowerMac.

Also, it's important to note that the consumer desktop is a dying computer. Most consumers do not care about adding hard drives or PCI cards. They buy laptops. Not only does Apple's figures show that the laptop is king, but so does independant market research.

An increasingly large number of consumers buy laptops. Today, the figure is almost 50%. Let's face it-- the iMac is nothing more than a non-portable laptop. It has the same limited expandability options as a laptop, but you can't take it with you. In fact, I am suprised that Apple doesn't shake up it's product line:

1) They nuke the eMac and make what is currently the iMac into the low end educational machine. Drop the price to $799 and they'll sell.

2) Create a low end non-monitor-integrated computer. That way I'm not locked into a monitor size/hardware feature deadlock. The resulting line could look like this:

Education:
iMac and iBook

Consumers:
PowerMac Lite (or whatever sounds good) $1299.
iBook

Prosumer/Pro:
PowerMac
PowerBook

 

[cuneglasus]

Re: Just to get some points out...

Originally posted by Phobophobia
1. Consumer machines will NOT be upgradeable. People who upgrade their computer make up a very small percentage of the entire computing market. There is no reason for Apple to make consumer products upgradeable. Apple doesn't get money from parts being bought, the third-party companies do. To reiterate, consumer machines will not be upgradeable. I am not saying that it is impossible that they will every be upgradeable, but it is EXTREMELY unlikely. (In other words, no.) If you want upgradeability, get a Powermac--Apple will thank you for it. (Higher profit margin )

2.Apple is not going to make a 64-bit OS. Although it is definitely the next step for the future, Apple is not going to make a 64-bit OS until AT LEAST 5 years from now. They wouldn't desert customers like that, just trust me.

3. Apple is not going to compete with pricing. Apple doesn't need to compete with Dell, or any other company for that matter, on prices. Although Apple will definitely stride to make a computer that is $100 or so less than the current eMac, they WILL NOT sell a computer for less than $700. Lowering prices has less of a benefit than you think, especially since people who shop mainly by price aren't very loyal customers.

Thank you for your time, I don't want to see any arguments in relation to the above brought up again in this thread.

There is so much sad stuff here I dont know how to start! PC's in the imac price range are upgradeable,look mainly we are going to be talking about a graphics card that is replaceable.Why shouldnt Apple respect its consumer customers enough to give us that? Oh yes,higher profit margins.Lets see,what does that do for Apple.Oh yes,24% decline in imac/emac sales(the only consumer desktops they make,what about choice for the consumer).
Apple will make a 64 bit os.So will microshaft but neither will abandon the 32 bit os for years.Apple is not going to compete with priceing?I fear you may be right.They seem only interested in milking the installed base (customer loyalty-you know,those people who want to be burried with their mac).So what you are saying is Apple is an expensive,marginalized platform for people with money to burn? That isnt the Apple I want to see.

A G5 imac.It's not more than you need,just more than you are used to.

 

[Frobozz]

Originally posted by cuneglasus
But the real point is that Apple must spec and price its consumer items to be competative with the rest of the industry or consumers will look elsewhere.What a minute thats exactly whats happening now.The G4 is dead in the water so the only option is the G5,unless the mythical IBM G4 is real (and ready to go).

No, people are buying laptops because the average consumer does not need more power than a 1.25 Ghz G4. Ask the people who comprised the 44% laptop sales for Apple this quarter.

What people are getting at are kids interested in games, but they don't have cash. Those people want to get into the game cheaply (pun intended) and upgrade as they have the dough. I hear you, brother... but I think the low end G5 PowerMac might be the answer.

 

[Frobozz]

Re: Tend to agree

Originally posted by deejemon
I tend to agree with the guy from MacUser UK.

I've had the feeling lately that Apple would rather sell me an iPod (or mini variant) than a new Mac. Lately it's been all about the music and the player and the store, and it's all non-stop.

Quickly, what was the most recently released Macintosh model? How hard did you have to think about it?

Do you realize Apple's US home page currently isn't touting a single Macintosh model? (I'm not counting the iMac in the background of the box for the Pepsi ad, since it's incidental, not something they're hawking.)

I want cool new Macs, not yet-another variation on listening to music.

I know iTunes/iPod/Store are the crossover products, and I know it's doing them a lot of good as far as exposure and product recognition, but Apple should be about Macs at the end of the day. Clearly it's not like they've forgotten about their bread-and-butter products, but it's hard not to wonder what's going on when you get months of endless promotion of their lowest-margin (or near-lowest) products and bupkis on the rest of their stuff.

You make excellent points. And yes, I tend to agree.

 

[cuneglasus]

Originally posted by Frobozz
No, people are buying laptops because the average consumer does not need more power than a 1.25 Ghz G4. Ask the people who comprised the 44% laptop sales for Apple this quarter.

What people are getting at are kids interested in games, but they don't have cash. Those people want to get into the game cheaply (pun intended) and upgrade as they have the dough. I hear you, brother... but I think the low end G5 PowerMac might be the answer.

People buy laptops because it fits their lifestyle/usage needs,often for school,not because a 1.25 is "more power than they need".It isnt Apples place to tell me what is "good enough" for my needs.That is insulting.It is Apples place to provide the best for the consumer's money and that means competative features and performance.It's not just cpu performance.Apple skimps on memory.hard drive space,and in the imac (not emac) price range,graphics cards.A low end G5 tower might be an answer if it was 400-500 dallors cheaper,but most consumers are not going to give an 1800 dallors box a second thought,when a comparable pc is much cheaper.Thats just the reality of the market.

 

[Dave_B]

Originally posted by starpolyp
This iMac 500 DVse that im on (3yrs old) is doing fine but, ive been itching for something new. I dont like the specs of the current iMacs and the PM is too big for my area. Something that i can upgrade, but can still fit in my room would be greatly appreciated. I dont care if it is headless, or has an attached LCD, I just want the ability to upgrade the graphics card, etc. The ability to have access the hardrive would be nice.
I'm not buying anything w/o a G5 either. Why spend a ton of money on old technology? I will wait as long as it takes to get a G5. The sooner the better.

I half agree with you. I also have a CRT iMac that's doing fine (with 10.2, 10.3 may need a larger HD), but I'm looking for a new toy and the current range isn't it.

The flat panel iMac is too pricey for, what is for me, a toy and the eMac is too ugly for my front room. I considered an iBook but the entry level model only has a 12" screen and with the 14" option you start getting into the "too much to spend on a toy" department again.

Oh, and any-colour-so-long-as-its-white doesn't say "buy me" in any language I know.

Looking forward to Apple's next brightly-coloured, competitvely priced offering!

 

[evilbert420]

" average consumer does not need more power than a 1.25 Ghz G4"

I'm guessing you don't use iDVD or Garageband. Last I checked iLife is a consumer product, and my Dual 1Ghz MDD Power Mac is downright pokey. Especially compared to my 1.7Ghz Pentium-M laptop.

 

[jocknerd]

Originally posted by Frobozz

1) They nuke the eMac and make what is currently the iMac into the low end educational machine. Drop the price to $799 and they'll sell.

2) Create a low end non-monitor-integrated computer. That way I'm not locked into a monitor size/hardware feature deadlock. The resulting line could look like this:

Education:
iMac and iBook

Consumers:
PowerMac Lite (or whatever sounds good) $1299.
iBook

Prosumer/Pro:
PowerMac
PowerBook

Apple can't drop the iMac to $799. It costs too much to manufacture. Therein lies the problem. Its a consumer oriented computer that costs too much to produce. Its a nice design, but it has no market.

I agree that a headless unit with a single G5 could be the consumer level computer Apple needs. Sell it for $1199 or $1299.

 

[Steven1621]

the imac line really upsets me. expensive and little options. this is the biggest area for apple to improve.

 

[takao]

for me personnaly apple is/was _the_ most consumer focused computer manufacturer... i mean : the ipod is targeted at the consumer but the iMac isn't... it's a good computer (very nice looking) ...but it's "all in one" design is outdated... most computer are sold _without_ LCD/CRT screen...

there is nothing wrong with portables ... they sell more portables here than desktops (emac,imac,powermac: 18.000, ibook,powerbook: 19.000, this are the 62% improved sales compared to last year...)

i think there are some big chances coming for the consumerline this year...keeping the G4 in the same imac for an other year would be a bad idea ..they would have to bump up the specs very high to justify the premium price

 

[billyboy]

Originally posted by lewdvig
Centrino laptops are selling quite poorly compared to desktop replacements. People buy bigger numbers - AMD's sucfcessful rating scheme proves it.

The real MHz myth is here, and in every other Mac forum or NG, that somehow the lowly G4 is superior to a much faster clocked P4 or Athlon. As the owner of multiple Macs and PCs I can say this with certainty.

The main point of the MHz myth reference was that the market for all computers sold is shifting favourably towards notebooks, which the world assumes pack less bang than desktops. This aint necessarily so, especially with the Centrino notebooks whose 1.6 MHz I see from reading around are a match for a 2.4GHz PC. This sort of power from a small notebook would be plenty powerful enough for most users.

Intel will be shifting the Centrino type focus from corporate sales, where Centrinos have been successful, onto the consumer side, where they are still struggling against desktiop replacement "portables". This shift will generate lots of publicity aimed at destroying the MHz myth - which Apple have been plagued with for years. If they open enough eyes, this will help Apple no end.

I guess though if you can say in your experience that a 1.6 Centrino notebook is in fact outclassed by a 2.4 Hz desktop replacement, and a Mac doesnt punch well above its weight too, then I would stand corrected and drop the idea that Intel and AMD are heading for good times with Centrino type processors.

I will also have to admit that Apple wont benefit from the deluded PC world's massive propoganda machine soon to be launched.

The funny thing about the MHz thing is, literally nobody has ever asked me how many GHz my sad little G4 powerbook is. They just go wow at what it does and how well it does it. Some people have even gone, How much? That isnt bad.

The average price for a PC sold now is $1275 - the first time it has ever dipped under $1300. Maybe Apple can direct their thoughts at shedding some light on the price myth too.

 

[pgwalsh]

Originally posted by jocknerd
Apple can't drop the iMac to $799. It costs too much to manufacture. Therein lies the problem. Its a consumer oriented computer that costs too much to produce. Its a nice design, but it has no market.

I agree that a headless unit with a single G5 could be the consumer level computer Apple needs. Sell it for $1199 or $1299.

Can you give me exact numbers on the cost to produce the iMac or eMac? Does anyone here know the cost of the computers... You may gestimate while compairing retail value products, but Apple is an OEM and they get heavy discounts. So how much does the entire line of Apple computers actually cost? Anyone?

 

[lewdvig]

Originally posted by pgwalsh
Can you give me exact numbers on the cost to produce the iMac or eMac? Does anyone here know the cost of the computers... You may gestimate while compairing retail value products, but Apple is an OEM and they get heavy discounts. So how much does the entire line of Apple computers actually cost? Anyone?

The iMac is too fragile for schools. eMac form factor is perfect. Less cables, easy to move, solid and abuse proof. It just needs new guts.

Bill of materials on the 1299 iMac is 550-600. Shipping marketing and other overhead probably push the total to 800-900.

The beautiful neck is very expensive. Ditch the LCD and put the thing in a simple ATX case and it would undercut the Dell machines.

 

[lewdvig]

Originally posted by billyboy
I guess though if you can say in your experience that a 1.6 Centrino notebook is in fact outclassed by a 2.4 Hz desktop replacement, and a Mac doesnt punch well above its weight too, then I would stand corrected and drop the idea that Intel and AMD are heading for good times with Centrino type processors.

I don't know how you could possibly get the above from what I wrote.

I said Centrino is not selling well - I explain this as the MHz rating of a PC still being a major factor in people's buying decisions. What I would call desirable Centrino laptops are outsold by a massive margin by clunky fat desknotes.

I said that the fastest G4 is slower than current P4 and Athlons.