Mac Marketshare Growth in High End Retail Market

[k2k koos]

Apple's future

From what I can gather, Apple has two ways of growinG:

Continue the +$1000,- offerings, the market isn't saturated yet, there are yet more customers, and earlier adopters(long term mac users) may need to or want to upgrade their current machines,

Second: Grow by adopting the low end market, be it the higher end of the low end market, as Apple's engineering and design investments need to be paid for, but a new generation of Mac mini's and derivatives is not unlikely.

 

[MacFly123]

The low-end cutthroat PC market has been there for ages, and barriers to entry are huge in comparison with the ROI. Therefore, it makes little sense for Apple to fight for every inferior Acer out there.

I agree with you, but I also think that Apple should try a little harder to keep the Mini up to date and offer at least SOMETHING decent in the sub $1,000.00 range so that more people can join the Mac family. Not too much to ask I think!

Those Mini purchasers would probably buy a more expensive Mac the next time around and it would allow a lot more people to become switchers as another form of easy transition halo effect.

 

[jbernie]

Creating desire for a product is just as important as it's function. All the reasons you listed for why Apple products are popular are valid. That said, they can charge whatever the market allows. It's been working for an awfully long time.

Yup, and just wandering through this thread and many others there would appear to be a definate desire amongst the crowd for a non MacPro mini tower product which can be upgraded over time. They don't need to compete at the $400 level, but they sure need more at below the current $1200 starting point of an iMac.

Take an average person, no Apple or Windows fanboi's! Just someone who wants to get a computer at home. I present to you lots of cheap Windows all in one options around the $400-500 or we can start at $600 for just the MacMini, must buy keyboard, mouse & screen extra, or $1100 for a MacBook or $1200 for a iMac.

Yes you might be buying the Apple "experience" that makes it all warm and fuzzy, but lets be honest people, you can't sell alot of people a computer with 90% of the warm and fuzzies available and get them to spend 2-3 times the amount of money compared to the Windows box.

 

[Dmac77]

Newegg is a place where consumers are welcome - $180 is the retail street price for Vista OEM version.




Two things:

• Nobody pays Microsoft list price
• If you're building or upgrading a system, you don't need the "full version" - you can get the OEM version legitimately

I just don't like to see arguments that are based on wildly inflated prices. A claim that a product is $400 when it is widely available for under $200 is at best careless writing.

I realize that consumers are welcome at newegg. but for a consumer to use the OEM version violates microsoft's EULA. And I paid the suggested price. So if you want to use something legally then you pay the consumer price.

 

[inkswamp]

My opinion is that a low cost Tower with upgradable components like CPU and Video card, and maybe PCI and eSATA slots, would drastically hurt the Mac Pro's sales. Maybe?

Of course a mid-range tower will hurt Mac Pro sales, but only inasmuch as it will give buyers who don't need that much power a reasonable headless alternative. There will still be big corporate and government buyers who think nothing of grabbing tons of the high-end models. There will still be power users who need multiple upgrade slots and as much as RAM as possible. The Mac Pros won't die.

The thing that would offset the lost Mac Pro sales is the enormous number of new switchers, Windows users who won't buy a Mac because Apple offers nothing they can really relate to. I suspect there's a huge pent-up demand for it but Apple doesn't hear it because their customers (a self-selecting group who have decided they don't need a mid-range tower) aren't asking for it. I see it all over the place, online and in real life. I just wish Apple would cater to those potential customers instead of presuming to dictate to them what they must buy because they are "consumer level."

 

[SodiumBenzoate]

My opinion is that a low cost Tower with upgradable components like CPU and Video card, and maybe PCI and eSATA slots, would drastically hurt the Mac Pro's sales. Maybe?

I don't know the exact business models, but a lot of computer companies - essentially everyone other than Apple - sell many overlapping products and do just fine. IIRC, Dell has three different 15" laptops. (Vostro, XPS, Latitude)

Apple almost certainly has higher margins with the Mac Pro than they would with a mid-range product. However, since they would attract new costumers, it's potentially still worth it. The main factor is how many Mac Pro buyers are buying more computer than they need. If a lot of Mac Pro buyers would rather buy a mid-range tower, then Mac Pro sales would suffer, obviously. However, is that the case? Are a lot of Mac Pro buyers buying more computer than they need?

 

[DMann]

sub 1k

That's pretty impressive...but the majority of the market (consumers) want a computer under $1k.

True, but if one wants to upgrade their computer, by the time one spends $600 for a bulky tower, $300 for a non HiDef monitor, and an additional $400 for add-ons like blue-tooth, wi-fi, optical drive, extra RAM, etc., one can instead have a slim, elegant, state-of-the-art iMac 24" with all of that included plus HiDef, all designed to work seamlessly together, not to mention the iLife suite, a solid and advanced OS, and an extraordinary user experience. By this jump in numbers, it seems that the masses are beginning to realize this and act on it.

 

[MagnusVonMagnum]

Given most Windows PCs sell for less than $1000 these days, the 66% doesn't mean much, IMO. 66% of <10% is only ~6% which is Apple's overall figure forever anyway. Nice way to spin the real facts, though....

 

[AidenShaw]

I realize that consumers are welcome at newegg. but for a consumer to use the OEM version violates microsoft's EULA. And I paid the suggested price. So if you want to use something legally then you pay the consumer price.

I suggest that you read the Microsoft licensing terms at http://oem.microsoft.com/downloads/Public/sblicense/2007_SB_Licenses/FY07_SB_License_English.pdf ...

OEM licensing and EULA are opposing terms - one for the system builder (the Newegg customer) and one for the user of the system (the same individual, in the case of a DIY).

Do you really think that Microsoft would be shipping hundreds of thousands of copies of individually packaged OEM kits to Newegg, Fry's, Tiger and everyone else if they couldn't be legitimately sold?

 

[DMann]

Dell Windows PC <$1000

Given most Windows PCs sell for less than $1000 these days, the 66% doesn't mean much.

Not true, these days, computer upgrades involve purchasing extras like RAM, Wi-Fi, Blue Tooth, Optical Super-Drives, Larger HDs, etc., taking the price above $1000. For the same price, you can have an all-in-one state-of-the-art iMac 24", and people are making this choice.

 

[BongoBanger]

Not true, these days, computer upgrades involve purchasing extras like RAM, Wi-Fi, Blue Tooth, Optical Super-Drives, Larger HDs, etc., taking the price above $1000. For the same price, you can have an all-in-one state-of-the-art iMac 24", and people are making this choice.

People aren't making the choice to spend more on an iMac, they're making the choice to spend less on a PC. If you buy a decent Apple machine it'll cost you more than $1,000. A decent Dell or HP will cost you about $700-900.

Which is not to say that Apple aren't making gains because they are, I just think statistics like this are a bit meaningless.

 

[AidenShaw]

You should actually price a PC before making claims like that

Not true, these days, computer upgrades involve purchasing extras like RAM, Wi-Fi, Blue Tooth, Optical Super-Drives, Larger HDs, etc., ...

See today's Fry's ad below. Quad core 2.4 GHz, 4 GiB DDR2, HDMI output, Optical Super-multi, wireless kbd mouse, 750 GB drive - most of the upgrades you mention are already there.

$700. Add a 24" LCD, you'll just break the $1000 line.

...taking the price above $1000. For the same price, you can have an all-in-one state-of-the-art iMac 24", and people are making this choice.

Oh really?

When I open the Apple store website, the cheapest 20" Imac is $1200. Add 4 GiB RAM and a 500 GB drive (750 not available), it's a nice $1600. And it's still dual core, not quad core.

For a 24", 4 GiB and 750 GB sets you back $2150. It's still dual core instead of quad, but it's a bit faster and has better graphics.

The Gateway *plus* the base 20" Imac is still less than the 24" Imac configured with 4 GiB/750GB

http://www.gateway.com/systems/product/529668056.php

 

[stiles]

Whoever needs one.
I don't, but I don't have a choice.

I don't need a new monitor.
I don't need 8 Cores.
I don't need fancy-pants ram.
I do need/want a machine that is about as powerful as the 24" imac, with the possiblity of upgrading to a quad (or in the future if I want). I want N and Bluetooth as options. I want the ability to change or add a HD or 2 or set up RAID without buying a special controller.

If you can build a decent homemade quad PC for $400, then apple can sell me one for $999 and still make a killing on it.

I think I paid ~1299 for my G4 933 in 2001, which was just a little more than my PC the year before. Why is there no comparable mac now?

I can't really justify buying a MacPro right now and I don't really want an iMac.

I want my mid range tower!
(or any other form factor with user accessible parts and room for upgrade)

So, i'm holding off and not making any purchase at all, and still using my G4, which runs pretty darn well. Not buying 10.5 becuase it will be on the new machine (whenver I get it) and not buying iLife 08 for the same reason.

I'm just one person who isn't forking over the cash (yet) for a machine he doesn't really need.

I don't think everyone has the will power that you have. I know i'm in the same predicament as you. I'll probably end up giving in and getting a mac pro because i need more power than an imac, i want expandability, and i still want a mac. I guess apple figures if you want a midrange tower for a reasonable price, go buy an older mac pro or g5.

 

[DMann]

reliable and stylish PCs for less

People aren't making the choice to spend more on an iMac, they're making the choice to spend less on a PC. If you buy a decent Apple machine it'll cost you more than $1,000. A decent Dell or HP will cost you about $700-900.

Which is not to say that Apple aren't making gains because they are, I just think statistics like this are a bit meaningless.

True, however, when those same people wander into an Apple store, and actually interact with the new iMacs, the response is often: "For the same price, or a little more, I can have this - a BMW instead of a Ford Escort - a machine which work's well, is designed to work well, includes great software and no bloatware, and has impeccable service if anything goes wrong. By comparison, a descent $700-900 Dell or HP running Windows seems much less enticing. Although the stats can be misleading, people might now be inclined to spend a little more for a superior user experience.

 

[AidenShaw]

Elitists R Us

True, however, when those same people wander into an Apple store, and actually interact with the new iMacs, the response is often: "For the same price, or a little more, I can have this - a BMW instead of a Ford Escort

I seriously doubt that many car shoppers have both BMW and Escort on their short lists . (Especially considering that the Ford Focus is the name of Ford's current entry car - the Escort was last sold in the 2002 model year.)

Besides, you've now completely changed your argument.

I was replying to a statement that you made that "For the same price [after addons], you can have an all-in-one state-of-the-art iMac 24in" - which I showed is a steaming pile of BS.

Now you're playing the tired old "Apples are like BMWs - cost more but I'm worth it" song.

One argument, please .

 

[DMann]

See today's Fry's ad below. Quad core 2.4 GHz, 4 GiB DDR2, HDMI output, Optical Super-multi, wireless kbd mouse, 750 GB drive - most of the upgrades you mention are already there.

$700. Add a 24" LCD, you'll just break the $1000 line.

True, add any descent monitor to this $849.99 (with temporary discount) Blue-Tooth, Wi-Fi, descent graphics card, and your looking at $1000+

If someone wants a cheaper machine, using an education or government discount, one can opt for a $1.149.00 iMac 20."

Seems a majority of consumers are opting for a hassle-free, superior user experience - I'm not speaking only of the stats, but of the quarterly earnings reports.

Eventually down the line, it would be great if a customizable, mid-sized tower were to be offered, but this will happen only after the used Intel and older used G5 towers sell off.

 

[AidenShaw]

$849.99 (with temporary discount)

Temporary discount?

Yes, today this particular model of Gateway is $150 off. Tomorrow, probably a quad core HP at Fry's for similar price, or a Dell special offer, or Acer, or....

The fact is that at any time you can find a quad core PC with good specs in the $600 to $750 range. While the price on this particular model is temporary, the price point is not.

True, add any descent monitor...

Why do you descend to this argument again?

Name brand 19" to 20" LCDs can be found for about $200-$220 - that brings us to $920.

Lots of people already have monitors, or don't need a great monitor for email/surf/whatever. It's disingenuous to bump the price with a monitor that's more than a user might need.

Blue-Tooth, Wi-Fi, descent graphics card, and your looking at $1000+

If you want BlueTooth...that'll set you back $7-$10.
If you want WiFi on a desktop...that'll set you back $15.
If you want better graphics...you can, not like the Imac.

The key word is "IF" - people buy a Ford Focus because it has appropriate value for them. They don't worry that it doesn't have builtin XM and GPS like the BMW - those things don't have value to them.

If someone wants a cheaper machine, using an education or government discount, one can opt for a $1.149.00 iMac 20."

LOL - you say that the Gateway price is "temporary", then assume that everyone can get an education or government discount!

...consumers are opting for a hassle-free, superior user experience

Work on this argument - it might get you somewhere. But don't say "majority", NPD still says 16% on their narrow sample.

 

[AtariKee]

We can all argue the merits Apple's current line of computers, but it's painfully obvious at this point that Apple should just take the components of a couple of the iMacs and repackage them into headless machines for around $900-1400. I don't think that would so much cannibalize the existing line-up as it would attract a ton of new customers.

Not. Ever. Gonna. Happen. PERIOD.

Look at Dell and Gateway. Enough said.

Apple's business strategy is to build machines for specific markets and make a profit, not jump into the bottom-scraping morass of building cheapo boxes just because a couple thousand geeks are crying for one. And the strategy works (ahem... 11 billion in the bank with no debt). Apple's market isn't geeks who tinker and constantly upgrade their boxes. Build a PC if you want to do that. Apple definitely won't miss the vocal couple thousand or so who constantly whine about a "headless Mac".

Steve's been back at Apple for over 10 years now, and some people STILL don't get it.

 

[DMann]

Name brand 19" to 20" LCDs can be found for about $200-$220 - that brings us to $920.

Sure, if you want to nickel and dime - we're talking quality here - for those who don't care about resolution or brightness, or for those who already have a monitor, this route would be the more practical choice. I agree with you, a solution, other than the mini, would be ideal for consumers who only need a tower. Clearly, Apple is trying to push 'the package' to consumers, for the time being.

you say that the Gateway price is "temporary", then assume that everyone can get an education or government discount!

Perhaps not everyone, but for students, teachers, affiliates at educational institutions, government employees of all branches, at least this discount doesn't come and go. This lower price point is partly driven by the competitive pricing of Macs and other PCs, which all in all, is a good thing. But one can argue, why do I need a quad-core processor when a dual core would meet my needs? Let's drop the price down further, why don't we?

don't say "majority", NPD still says 16% on their narrow sample.

I did not say 'the' majority, I referred to 'a' majority of consumers who would prefer a hassle-free and great user experience over a system which requires
incessant tech support and trouble shooting a very unreliable OS. The 55% jump in quarterly sales for Macs supports a significant shift.

 

[AtariKee]

Apple's strategy has been quite clear for some time. In a market that was a race to the bottom, Apple decided to differentiate itself. It did so with quality and design. This is why companies like Dell will and have faltered. Why buy a Dell over any other brand when literally only a plastic logo differentiates it?

As for eventually entering the low end for continued growth, Apple doesn't need it. And frankly, what would be the point of competing in a zero profit market? The next growth area will be business use. It won't be a lot in overall terms, but substantial enough to maintain growth.

<snip>

Thank you. Someone who actually GETS IT.

 

[Eidorian]

Perhaps not everyone, but for students, teachers, affiliates at educational institutions, government employees of all branches, at least this discount doesn't come and go.

The quad cores have had the same $150 discount for months now. AidenShaw pointed this fact out as well. I could dig through every ad and find it for you but you can as well. It's also available as an open retail discount.

This lower price point is partly driven by the competitive pricing of Macs and other PCs, which all in all, is a good thing. But one can argue, why do I need a quad-core processor when a dual core would meet my needs? Let's drop the price down further, why don't we?

I can get a quad core elsewhere for less then a dual core from Apple and you want to drop down to a dual core which costs even less from other manufacturers?

Why even bring up cheaper dual cores?

 

[IJ Reilly]

Not. Ever. Gonna. Happen. PERIOD.

Look at Dell and Gateway. Enough said.

Apple's business strategy is to build machines for specific markets and make a profit, not jump into the bottom-scraping morass of building cheapo boxes just because a couple thousand geeks are crying for one. And the strategy works (ahem... 11 billion in the bank with no debt). Apple's market isn't geeks who tinker and constantly upgrade their boxes. Build a PC if you want to do that. Apple definitely won't miss the vocal couple thousand or so who constantly whine about a "headless Mac".

Steve's been back at Apple for over 10 years now, and some people STILL don't get it.

I would never say never, but in general I agree that Apple isn't building these boxes now because they don't see it as good business sense, and I don't seem much room to question Apple's business sense over the last several years, which appears to be almost flawless. The logic supporting a contrary opinion has never appeared in any of debates, strangely enough, but that doesn't keep them from going on and on and on.

BTW, Apple's cash hoard is now $19 billion.

Some money, but not healthy margins. Apple's margins are the envy of the industry because they are not trying to sell in the parts of the market where the margins are poor, which is the bottom end. The margins in the Windows PC business stink, and they pretty much alway have. What we are seeing now is a manifestation of a characteristic which has always separated Apple's business from the Windows OEMs. The PC makers are selling a virtual commodity product. They all function the way Microsoft dictates, which forces the OEMs to distinguish their products mainly on price, resulting in a race to the bottom. They have few opportunities for creating a value-added product, which is what Apple does so well.

Thank you. Someone who actually GETS IT.

Really.

 

[AtariKee]

<snip>

It's time for Apple to decide what they want more: profits or marketshare.

They already made that decision. Profits, by selling to profitable markets. The rest of your post is just drivel. Products do not make the world a better place. They make them more fun, sure, but I'm sure the Chinese will survive without an iPhone or other frivolous luxury products.

*nudges Eidorian and Kan-O-Z*

Um, guys... go here... That's an 11 year old server.

So yes, I use 10+ year old hardware. However, it's Apple hardware and not some WinTel piece of garbage from that era. Oh, and it's running Debian Etch, thank you very much.

I still carry around my 10 year old Wallstreet. Maxed-out and running beautifully. Doesn't earn me any points in the "cool" department, but I don't lose sleep over that

 

[DMann]

The quad cores have had the same $150 discount for months now. AidenShaw pointed this fact out as well. I could dig through every ad and find it for you but you can as well. It's also available as an open retail discount.

I can get a quad core elsewhere for less then a dual core from Apple and you want to drop down to a dual core which costs even less from other manufacturers?

Why even bring up cheaper dual cores?

Just making a point about nickel and dime-ing. If you can get a Quad-Core for less than Apple's, surely you can find a Dual-Core chip option for cheaper than the advertised Quad-Core deals mentioned above. If you really want to build your own box - you can do it for MUCH cheaper than what Dell, Gateway, and HP are offering.

As stated by macidiot and AtariKee, Apple doesn't need to compete for rock bottom prices at a near zero profit margin. It is noteworthy, however, that they make a descent profit selling quality products, and yet still remain competitive enough - much more now than 10 years ago.

 

[Eidorian]

Just making a point about nickel and dime-ing. If you can get a Quad-Core for less than Apple's, surely you can find a Dual-Core chip option for cheaper than the advertised Quad-Core deals mentioned above. If you really want to build your own box - you can do it for MUCH cheaper than what Dell, Gateway, and HP are offering.

As stated by macidiot and AtariKee, Apple doesn't need to compete for rock bottom prices at a near zero profit margin. It is noteworthy, however, that they make a descent profit selling quality products, and yet still remain competitive enough - much more now than 10 years ago.

I'm going to let you slide but we wouldn't be complaining if Apple went with LGA775 in the iMac in the first place.

When did I say Apple needed to go rock bottom and cutthroat again? They'd be making even greater margins if they had just built the iMac around desktop processors like it did in the past.