matticus008 said:
I'll break this into two parts, since you seem to be making assumptions that are - in my mind - blind and basically unsupported. First, we'll deal with the assertions about profit margins.
While it's true that Apple's overhead is likely larger on their hardware production front, you're leaving out the massive research and design effort that goes into their software division. Unlike all but a tiny, tiny handful of companies, the Cupertino wunderkind are pushing a total solution for most common computing issues that goes from the most basic functions (kernel, interface, network services) to the most trivial and superficial (appearance, eye candy, etc.). Apple not only does most of the development and maintenance on their operating system, they also push a number of applications that cover both average consumer and high-end professional needs. While it's true that OS X is standing on the shoulders of giants right out of the gate, it's also been added to, improved, revised, and the code is often cleaned up and passed back up the FOSS channel to the originating projects. Unless you can provide some kind of figure as proof of your claims, there is little reason to believe that the software division turns in profits that are any greater than the hardware division. Even so, if we assume a rate of 50% profit instead of the arbitrarily chosen 20% I'm assigning to their hardware divisions, that still requires a massive increase in software sales to break even with current profitability.
This brings us to the second point rather nicely, in fact. You assert that Apple wouldn't need to cover their hardware losses because they'd still be making computers, but the simple fact is that they don't have the resources or setup to even begin to directly compete in the x86 market in any meaningful way. Several of the big, experienced players with their secondary market prop srtategies are floundering because of the loss-leader approach to sales. Of note, IBM and HP are both experiencing quite a bit of disappointment in their sales and analysts are predicting that we could see up to three or four of the former big players run out of the market in the next two years. Why, then, do you at all believe that Apple's comparatively pricier hardware would still be bought once people could just run it on their existing computer?
The reported profit from this past quarter was $249 million, with the hardware division reporting $1.6 billion. If you break that down by percentage, you come out with the $320 million that you suggested, but that's higher than what the figures show. That means hardware margins have to be lower and so do software, doesn't it?
Artanmotion said:
No, it's not. The software may be bundled with the hardware when you buy a computer, but it still costs Apple money to press the discs that come along with it and the programs themselves still cost money to develop. To say otherwise is foolish.
TANSTAAFL
Learn to read.
As I've already said in this thread, a mere few posts above, the licensees don't grow marketshare and only hurt Apple in their existing base. During the entirety of the last attempt at allowing cloning, the mac market grew only 3-4 points over several years while the outside companies ate some 32-35% of the revenues out from under Apple. A little simple math, even at levels of shipping that appraoch ten million units, shows what a losing proposition that is.
This isn't really worth dignifying with a response, but I have to oppose this when it's brought up so baldly.
No, Apple wouldn't massively surge in sales by offering PC hardware. The reasons are manifold and complex, but the ones that are most relevant in this case all have to do with developers and compatibility. Without set hardware requirements, OS X would fall to the kind of driver hell that plagues Linux and Windows machines, ruining quite a large part of the ease of use that makes it a pleasant experience. In addition, there's the massive, massive stumbling block of keeping two separate trees going for developers to program and compile for - OS X and OS x86 - when they could choose the x86's larger installed base and drop all PowerPC support. That leaves all past Apple customers out in the cold and basically kills the hardware division unless Apple magically manages to transform themselves into Dell at a time where Acer and the other Chinese and Taiwanese motherboard manufacturers are getting in position to take over the market from traditional OEMs.
Read the article I linked before spouting off, please. The license agreements that the cloners agreed to specifically limited them to market segments that Apple didn't do well in, mostly foreign markets and the extreme low and high ends of the scale. Every single one of them broke their agreements and competed wherever they felt like it, basically demanded the liscensing of OS 8, and were essentially killing Apple as a company. When they bought out Power Computing and enfolded many of their employees before allowing the licenses to expire, Apple did what might have been the only sane thing they could have, since a lengthy court battle over the terms would likely have dragged them even further down. Jobs slimmed and polished the product line, brought the iMac and OS X to market, and made the company a success again.
Just how, exactly, are they going to "position the product" so that a potential cloner doesn't shoot them in the back again?
