Breakdown of Costs in an Intel iMac

[matthiasgoodman]

Never?

. . .the new Powerbooks (I will never call them a Macbook) . . .

I agree that the consumer machines, such as the iMac and even iBook are not overpriced. As far as NEVER calling it a MacBook, there will come a day when no one will know what a Powerbook is, no?

 

[BenRoethig]

Microsoft came to the dance pretty late with the Xbox. We will have to see what happens with the 360.

Anyway, I am not sure that comparing Apple's business plan with the game consoles business plan is a smart for Apple anyway. Last time I checked, Sony and Nintendo's stock was in the toilet, and Microsoft's stock has not done anything in a couple years...

I think Apple is wise to continue to be a niche player that makes beautiful looking machines that run their OS very well. Just about any consumer can afford a Mac now if you look across the lineup and Apple offers something for everyone from a high end graphics designer to a grandmother who just wants to surf the net, check email, and have photos of her grandchildren...

I think Apple is going to be laughing in a few years when the rest of America starts to figure out that there is an alternative to Windows, and that it works really great with their iPod too

Microsoft also targeted the game selection toward PC gamers with tons of First person shooters and MMORPGs while neglecting console favorites like turn based RPGs.

 

[Josey Wales]

By that logic, why haven't those people bought a Mac mini ($500) and a cheap LCD monitor ($100) and keyboard/mouse ($20) => $620 total and you've got a usable Mac.

arn

Why nobody buy the mac mini?

Short Answer: Undesirable Design

Long Answer:
I don't know why other people have not bought the mac mini but I can tell you why I have not:
1. The design makes it hard to work on, like a simple upgrade: Adding RAM. You have to break out the pudding knife & risk breaking the computer.
2. It's got the slowest hardware Apple puts in their computers.
3. No speakers, keyboard or mouse. There's a 100 dollars right there.
4. Short on USB ports
5. A slow laptop Hard Drive.

 

[EricNau]

Why nobody buy the mac mini?

Short Answer: Undesirable Design

Long Answer:
I don't know why other people have not bought the mac mini but I can tell you why I have not:
1. The design makes it hard to work on, like a simple upgrade: Adding RAM. You have to break out the pudding knife & risk breaking the computer.
2. It's got the slowest hardware Apple puts in their computers.
3. No speakers, keyboard or mouse. There's a 100 dollars right there.
4. Short on USB ports
5. A slow laptop Hard Drive.

1. You are not supposed to open it up.
2. It has the slowest hardware - it's also the cheapest computer - it makes sense
3. It has a built in speaker, and a keyboard and mouse do not cost $100
4. Buy a $5 USB hub

 

[Josey Wales]

1. You are not supposed to open it up.
2. It has the slowest hardware - it's also the cheapest computer - it makes sense
3. It has a built in speaker, and a keyboard and mouse do not cost $100
4. Buy a $5 USB hub

1. You are not supposed to open it up. I know that's the part that sucks!
2. It has the slowest hardware - it's also the cheapest computer - it makes sense. To me it doesn’t make sense to put a laptop hard drive that is slower & more expensive, just so the computer can be so small.
3. It has a built in speaker, and a keyboard and mouse do not cost $100. So if you purchased a mac mini you would be happy with the crapping internal speaker? Give me a break!!
4. Buy a $5 USB hub Sure I go buy one because Apple was smart enough to put more in.

 

[lexlimo]

Please. There's absolutely no way Apple would pay 2.6x for these processors,
and there's no need to believe they are.

1) Do you think Intel may have "sweetened the pot" to entice Apple to switch,
merely for the prestige?

2) $265 (and no doubt the other prices quoted) is the 1,000 piece pricing.
http://www.heise.de/english/newsticker/news/67961

How much do you think they cost when you're ordering 500,000 per
quarter?

You nailed it, I don't care who took this machine apart of where they get their info from, Jobs has deals that nobody knows about and if they did they wouldn't be posting it. Maybe they make $400 a machine and maybe they make $800 a machine, we have no way of knowing. But I am confident that whatever Mac does, it does to put out the best product at the most reasonable price they can afford.

 

[jbernie]

I think that's optimistic at best.

If Apple sells 500,000 ppc iMacs per year now (no idea of the real number), you don't think they can sell 550,000 intel iMacs with all the speed changes? I guess the question would be, can they sell even more because of the speed increase and the "intel" chip in side without dropping the price.

With such a dramatic change in configuration and performance, this is the one time Apple should be able to boost sales alot. No incrimental yearly upgrade will attract this interest, when you are doubling, tripling etc the speed, it is the biggest performance change in a long time.

It will be interesting to see how consumers react, I wonder how many people with pc's were afraid of macs because of that foreign (to them) ppc chip, and who will suddenly be comfortable with the idea of a mac because it has an intel chip inside just like their current pc. This alone should get some switchers.

 

[macidiot]

I have read this thread and continue to be amazed at the poor job our government schools do in teaching that there is more to how a computer market works than a rudimentary supply and demand diagram.

For example, there is the concept of "loss leader." The argument goes that Apple should sell below cost, or at least below this magic supply and demand intersection people speak of, in order to grow their user base. Lose some money now, make that money back later when people upgrade their Macs and Mac software. This loss-leader strategy also has the added benefit potential of increasing the number of developers for Mac OS X which in turn will make Macs more attractive to different market segments.

The counter-argument to this loss-leader strategy is that the demand for Macs is not very price-sensitive, meaning even if they lowered the price quite a bit, there won't be much increase in sales. Now this is something ONLY Apple knows because they don't break down the sales figures by different models. If you had individual sales figures, you could track how changes in price of a given model affected its sales.

Personally, I think Apple can gamble a bit with all that money in the bank. I'm not a corporate strategist so I don't know the benefits of keeping so much cash on hand but Apple certainly is not saving that money for a major acquisition. Apple is not the kind of company to, let's say, go out and buy cable company or something. That's Google. Apple makes small technology-oriented acquisitions and partners with big companies. So what's the point of saving all that money? Surely Apple can afford to blow off a billion or two (say through a $200 rebate across the board) to get some momentum to increase the market share.

Apple tried this before in a grab for market share. Apple got marketshare but it almost bankrupted them. They can not compete with no name white box computer makers on price. Neither can Dell, HP, or any other tier one brand. The simple truth is that the only pc companies that consistently make money from computers are Apple and Dell. All the others are break even at best. Which is why IBM sold off its pc business. Dell does it by brutal efficiency and using the most common parts available. Even so, Dell really makes its money from servers, not consumer pcs. Apple does it by value-adding and being efficient.

The most common model in the pc industry is for some company to get big volume, but never achieve a profit. eMachines is a perfect example... it survived on cashflow. Sort of like how Boston Chicken could hide its fundamental problems simply by opening more franchises.

Besides, the margins on the imac aren't that much at all. Looks to be 20% at best after adding in software, manufacturing, peripherals, packaging, marketing, etc. (which I peg at around another 100-150).

And the mac mini is the low cost leader, not the iMac.

 

[macidiot]

hasnt the xbox lost over a billion dollars so far? Thats not what one would consider a good business model. Last i read microsoft got paid 5 dollar royalty for each game sold but they still lost over a billion dollars. Nintendo sells there system at a profit and make money over every game sold. Im not to sure about sony but it seems like now they are selling systems at a profit but at the begining were selling them at a loss.

The xbox has lost over 4 billion.

Nintendo prices its hardware to make money. But I think they were losing money when they dropped the Gamecube to $99.

Sony sells its consoles at a loss. I think it took them until about year 3 for the ps2 to start making money. Part of that is actual cost of making a ps2 drops (hardware is older, less cutting edge, cheaper), and software royalties are big enough to cover any loss.

 

[johnpaul191]

Macs still cost too much. Apple should take the playbook from Microsoft's XBOX 360 and take a loss to build marketshare. Or take Cringely's suggestion and sell below cost. Seems to be heading that way, with the inclusion of the ATI Radeon X1600... they are gunning for the home livingroom.

the thing about Xbox, PlayStation, Game Cube etc is that every disc/cartridge of software sold pays a royalty to the owner of the system. you can not sell games for the Xbox unless you are paying Microsoft for each one. MS didn't invent this tactic btw, so in this case they are not doing anything out of order with the industry.

that's part of the reason that they crack down on mods the more the systems are becoming just like a PC inside. if you can just turn it into a desktop linux box, the company really will lose money.

the reason this would never work for computers.....
1) software makers are encouraged to develop for the good of the platform

2) the idea of shareware/freeware/OSS is the total opposite of this, and even Microsoft is fine with those for MS Windows. Apple has adopted a lot of OSS greatness into OS X, and knowing the origins of the company they would never stop freeware/shareware. those apps can be the stepping stones of new software developers, let alone hobbyist coders.

 

[johnpaul191]

Please. There's absolutely no way Apple would pay 2.6x for these processors,
and there's no need to believe they are.

1) Do you think Intel may have "sweetened the pot" to entice Apple to switch,
merely for the prestige?

2) $265 (and no doubt the other prices quoted) is the 1,000 piece pricing.
http://www.heise.de/english/newsticker/news/67961

How much do you think they cost when you're ordering 500,000 per
quarter?

agreed, but the figures you get for the G4, G4, G3 prices were for batches of 1,000 as well. i think some of that price is to compare what they pay for Intel vs IBM chips? that's also standard prices given on spec sheets.
who knows how much of a deal Apple gets in the end. with PPC a lot of those chips were pretty obviously going to be mostly for Macs. you figure they are not buying more than Dell will, or HP. Apple is also not buying all 500,000 of the exact same chip. they will be using different chips at different speeds, as will other computer manufacturers. i guess that will start little price bidding battles, or fights over supply of new chips?

 

[johnpaul191]

I can't believe that margins are so low considering they have been making the imac for a few years and the basic design is done. They really need to concentrate on getting those costs down and making them cheaper so all could afford. In the pc world that 17" would probably cost $800 compared to apple $1299 price. Perhaps they should enlist dell to make them !

but the money coming in from today's iMac is paying for the research into building tomorrow's designs. they also pay for ideas that never see the light of day. the windows version of the iMac would cost less because they take the one Apple already designed and built, and figure out how to make something that looks like it for a predetermined lower price. things like cheaper drives, crappy LCDs etc etc. Macs are not low cost, but they always use quality components.

if Apple just sat on their ass when they came up with one good idea, ran it into the ground, then started to ponder something new they would not have made it the last 30 years.