Fine. Their desktops were profitable because you say so. Don't forget though that Apple has been selling the iMac and Power Mac in tandem for years, and yet the iMac still survives and gets updated in 2009, but the mid-range PowerMac G5 died a slow death back in 2005.
You're saying that Apple killed the product line out of spite or something ? Because if it was profitable, that's the only explanation.
Anuba already took care of this, really.
However, I want to add some things to this.
Haven't you ever noticed that Apple has a knack for discontinuing cheaper models and raising the prices on the remaining models? And if they have nothing to discontinue, they tend to remove features.
Look at the Mac Pro as a perfect example. Back in January 2008 they made a big deal about how the 8 Core Mac Pro was the standard model for "only" $2,799. Now, a year later, the same model costs $3,299. Granted it has some updated features but nothing you don't find in computers costing more than $2,000 less and for some time before Apple offered them as standard features on their high end system.
Look at the Mac mini as well. The G4 Mac mini started at $499. The original Intel model started at $599 and offered a lowly Intel Core Solo. Granted the Core Solo was a bit faster than the G4 in the Mac mini, it had the Intel GMA 950 which was a HUGE step backwards compared to the Radeon 9200 in the G4 mini. So, again, Apple raising prices and/or sacrificing certain more useful features for less useful features.
Let's look at the MacBook. Prior to the MacBook, the iBook was priced at $999. Sure it had a slower processor, but the Radeon 9550 that was in the $999 MacBook was significantly faster than the Intel GMA 950 in the newly priced increased $1099 MacBook at that time. Now look at the current MacBook. The "top" system is up to $1,599 compared to the previous $1,499. Reasons? Backlit keyboard and..... um... what? The $1,599 MacBook is well behind other similarly priced PCs in both performance and features. So how can they justify the $100 price increase?
Again, let's look at the MacBook. The iBook was $999 and $1,299. With the MacBook it went up to $1099, $1,299, and $1,499. The base model rose by $100 and, while having a faster processor, was downgraded to a snail of a GPU. What did the newly released $300 extra model get you? At first it got you a little more speed and storage, but as time went on all you got was a different colored case.
Now let's look at the iMac. Up until recently, the iMac had dedicated graphics across the board. Granted the 9400M is more powerful at the low end than the Radeon HD 2400, that is certainly not the case compared to the 2600 used in the next model up. Sure you get a larger 24" screen now, but you take good 50% drop in GPU performance. What's the point in having a $1,500 "desktop" PC with a 24" screen if it can't perform? The only way to get dedicated graphics in an iMac is to go up to $1,799. And then you're getting something thats considered mid-range. One could ask why even bother spending $1,499 on a "desktop" computer thats an all-in-one and doesn't perform as well as notebooks in the same price range, especially when you can build a significantly more powerful PC with a better screen (and one thats 16x9 rather than 16x10!) for several hundred less.. but thats another argument for another day.
All of these are perfect examples of Apple cutting features to increase profit margin, lowing the features at the same or similar price point to upsell the more expensive model, or discontinuing the cheaper model in favor of the more expensive model that doesn't offer as much of an upgrade as the increased price would imply.
About two years ago, before they were bought out, eMachines sold about the same number of computers as Apple. eMachines had a market caps of about $700 million, while Apple at that time was worth about 100 times as much. Why? Because eMachines made about one dollar profit per machine sold in a good year; in a bad year, they lost one dollar per machine sold. Where are they now? Sold to the highest bidder.
This is a perfect example of Apple's price gouging. Oh and eMachines was making more than $1 per system
Gateway specifically bought eMachines because eMachines notebooks were killing the sales of Gateway's systems. Back in 2003 eMachines was offering a system with a 15.4" widescreen, 512MB of RAM, ~60GB HDDs, DVD writers, 2GHz+ Athlon64s, along with 128MB Radeon 9700 mobile GPUs, all for around $1,400. All with the ability to use up to 2GB of RAM as long as you removed the keyboard to upgrade the one stick.
As soon as the purchase was completed, Gateway killed eMachines notebooks immediately. Those systems were so good that they were competing with new systems two years later. I know people who were looking for notebooks in 2005 and those 2 year old eMachines (still new, just left over stock) being sold on various sites like Tigerdirect made them think twice about getting then production models from other companies.
