No Design Changes Expected for Next-Generation $329 iPad, Touch ID and Headphone Jack to Remain

[0924487]

DAMN rights I'm not blindly loyal to corporation or their shareholders. Also, not loyal to an operating system.

iOS is great, but it's not the best. Sorry, SIRI no where compares to the utility of google now. And what makes iOS so special these days? messages? (most of the world uses whatsapp, line, or wechat)

iOS has some great security but it's quite limited in functionality compared to Andriod. God forbid you need to run a torrent on iOS, or just need to upload files fast from someone else's phone or laptop (who isn't in the mac ecosystem).

If you blindly follow a companies products, then you get silly response like "you are holding it wrong", "one button mouse is the way to go", "4 inch screen is the best size", "Qi charging isn't something we find useful"

Apple is just like any company, but their corporate spin has been mind bogglingly silly. I would rather people think critically and push apple to excellence, because Jobs isn't there anymore and we know Tim doesn't push excellence.

Apple is a software company Steve defined it to be and it always will be.

 

[Zdigital2015]

Of course Cook's expediency won't change anytime soon while consumers condition themselves to accept it and actively attack those who don't.

Jobs-era Apple consumers remember how routinely refreshing the form factor of a device, be it base or Pro, without significant pricing changes, was part of the overall appeal and value prop.

Whatever happened to that? Especially now that Apple can actually afford to refresh their entire product line at will. Why do you carry on framing the average consumer base like they're an amorphous blob that doesn't care what a device looks like as long as it's cheap? Why are you guys making excuses for Apple and paint critics as "plaintive" whiners?

You mean how Jobs routinely refreshed the form factor of the following devices - Power Mac G3 (B&W), Power Mac G4 (PCI Graphics), Power Mac G4 (AGP Graphics), Power Mac G4 (Gigabit Ethernet), Power Mac G4 (Digital Audio), Power Mac G4 (Quicksilver), Power Mac G4 (Quicksilver 2002), Power Mac G4 (Mirrored Drive Doors), Power Mac G4 (FW800), Power Mac G4 (MDD 2003)? Or the routine refreshing of the Power Mac G5 (June 2004), Power Mac G5 (Late 2004), Power Mac G5 (Early 2005), Power Mac G5 (Late 2005), Mac Pro 1,1, Mac Pro 2,1, Mac Pro 3,1, Mac Pro 4,1, Mac Pro 5,1? Or maybe the iMac (May 1998-March 2003)?

Steve Jobs knew as well as Tim Cook that a good industrial design survives the test of time. The current iMac form factor and ID is heading towards 12 years, and in that time Apple has gone from a hybrid aluminum/plastic chassis to all-aluminum to slimmer aluminum, all the while improving the internals, not just from a technology standpoint, but also taking an refining the cooling, sound, and internal PCB layout.

Apple does not routinely refresh the form factor on any device line and never really did. Currently, I think that has a lot to do with retooling costs for the CNC milling machines and packaging design.

The 5th, 6th and soon to come 7th Gen are designed to reduce to overall entry cost into the iPad ecosystem, which initially started at $499 for a 16GB iPad Air 2 when it was introduced in October of 2014, before it got sidetracked and morphed into the iPad Pro 9.7" in March of 2016, which raised the entry cost to $599 and really screwed things up by taking the entry cost for a non-mini iPad into the stratosphere. The current $329 iPad uses a tried and true chassis that most consumers associate with the iPad (especially iPad 2 onwards, and again, iPad Air and onwards).

The non-laminated screen may not be everyone's favorite, but it is simpler to manufacturer and cheaper to replace for Apple, consumers and education institutions. The familiar chassis allows case manufacturers to have a relatively stable platform to build accessories. Contrast that with the 2018 iPad Pro, which has a drastically different ID and basically starts the whole iPP line from base after a relatively short 3 year cycle.

The $329 model is a great entry point for the iPad line, especially when attracting new customers to the iOS fold or for existing customers who would like to update from an older iPad (2, 3, 4, Air), but whose primary system is a Mac or a Windows PC. Whether Apple should try to create something intermediate between the iPad and the iPad Pro is debatable, but the iPad Pro 10.5" is a fine bridge device, although a $50 price cut and a bump to 128GB of storage might do it some good.

Bottom line, Steve Jobs Apple was not any better at this than Tim Cook's Apple, but with Steve's passing, Tim makes a convenient scapegoat for every decision Apple makes that forum users disagree with and is reported on this website.
[doublepost=1552409765][/doublepost]

I have a 2017 iPad. I would like to upgrade this year. I was hoping for a redesign. I would like a bigger screen but the pro models are so much overkil for my needs.

Why not look at the 10.5" iPad Pro? If you are looking for a 12.9" iPad Pro, they were never cheap to being with and they will not be given that Apple is reserving that size for Pro customers.

 

[puggles]

It's pretty crazy how long I've had my iPad mini 4 and it's still the newest model.

 

[lyceumHQ]

You mean how Jobs routinely refreshed the form factor of the following devices - Power Mac G3 (B&W), Power Mac G4 (PCI Graphics), Power Mac G4 (AGP Graphics), Power Mac G4 (Gigabit Ethernet), Power Mac G4 (Digital Audio), Power Mac G4 (Quicksilver), Power Mac G4 (Quicksilver 2002), Power Mac G4 (Mirrored Drive Doors), Power Mac G4 (FW800), Power Mac G4 (MDD 2003)? Or the routine refreshing of the Power Mac G5 (June 2004), Power Mac G5 (Late 2004), Power Mac G5 (Early 2005), Power Mac G5 (Late 2005), Mac Pro 1,1, Mac Pro 2,1, Mac Pro 3,1, Mac Pro 4,1, Mac Pro 5,1? Or maybe the iMac (May 1998-March 2003)?

Steve Jobs knew as well as Tim Cook that a good industrial design survives the test of time. The current iMac form factor and ID is heading towards 12 years, and in that time Apple has gone from a hybrid aluminum/plastic chassis to all-aluminum to slimmer aluminum, all the while improving the internals, not just from a technology standpoint, but also taking an refining the cooling, sound, and internal PCB layout.

Apple does not routinely refresh the form factor on any device line and never really did. Currently, I think that has a lot to do with retooling costs for the CNC milling machines and packaging design.

The 5th, 6th and soon to come 7th Gen are designed to reduce to overall entry cost into the iPad ecosystem, which initially started at $499 for a 16GB iPad Air 2 when it was introduced in October of 2014, before it got sidetracked and morphed into the iPad Pro 9.7" in March of 2016, which raised the entry cost to $599 and really screwed things up by taking the entry cost for a non-mini iPad into the stratosphere. The current $329 iPad uses a tried and true chassis that most consumers associate with the iPad (especially iPad 2 onwards, and again, iPad Air and onwards).

The non-laminated screen may not be everyone's favorite, but it is simpler to manufacturer and cheaper to replace for Apple, consumers and education institutions. The familiar chassis allows case manufacturers to have a relatively stable platform to build accessories. Contrast that with the 2018 iPad Pro, which has a drastically different ID and basically starts the whole iPP line from base after a relatively short 3 year cycle.

The $329 model is a great entry point for the iPad line, especially when attracting new customers to the iOS fold or for existing customers who would like to update from an older iPad (2, 3, 4, Air), but whose primary system is a Mac or a Windows PC. Whether Apple should try to create something intermediate between the iPad and the iPad Pro is debatable, but the iPad Pro 10.5" is a fine bridge device, although a $50 price cut and a bump to 128GB of storage might do it some good.

Bottom line, Steve Jobs Apple was not any better at this than Tim Cook's Apple, but with Steve's passing, Tim makes a convenient scapegoat for every decision Apple makes that forum users disagree with and is reported on this website.
[doublepost=1552409765][/doublepost]

Why not look at the 10.5" iPad Pro? If you are looking for a 12.9" iPad Pro, they were never cheap to being with and they will not be given that Apple is reserving that size for Pro customers.

I basically use my iPad as a media streaming device. Netflix, plex etc. A pro model would be beyond over kill. Plus I’d not really be prepared to pay for a device that’s already a few years old. Unless it was incredibly cheap. Especially not for £620 which is what the 10.5” model is currently.

I mean I’d like a bigger screen but I’m not about to be devastated if it doesn’t happen. The budget iPad is perfect for my needs so I’ll stick to that.

 

[Neodym]

Yes, actual facts can be irritating and inconvenient, even when they’re only “technically correct”. However, I live in the real world, so I prefer them to “alternative facts”. Ten years of gross margin data, Dec. ‘08 to Dec. ‘18, ranges from 36.87% to 47.37%. The last five years have been in a tight spread of 37.91% to 40.78%.

Just that I understand the term correctly: "Margin" (in layman's terms) means the percent of money left over from turnover, after all related expenses (R&D, interest, dividends, taxes etc.) have been deducted from the sales revenue?

So despite complaints about price increases, we’re at the lowest end of that range. Do the facts support a beancounter CEO that’s gone crazy raising prices amidst a decreasing BOM cost? Obviously not, since either one (or both) would increase gross margin, not decrease it.

Even facts don't necessarily tell the whole story and can be interpreted one way or the other. As we don't know Apple's internal calculations, it's still possible that there has been a hefty price hike (perhaps even combined with a BOM cost decrease) in certain areas of the product portfolio, while in other's the margin is way lower, but less obvious for various reasons (I'd suspect that the public is more sensitive to iPhone price changes than to e.g. AppleTV price changes).

And is 38% GM too high? Is Apple being greedy? Samsung’s is mid-forties, so 38% can’t be all that bad.

I feel that it's difficult to compare a consumer-only company like Apple directly to a portfolio behemoth like Samsung. But many "old-fashioned" industries would probably be happy if they'd manage to reach >25% margin, let alone >35%. The industry I'm working in is usually (significantly) <20%.

General trends aren’t relevant if BOM cost actually increases. We don’t know what 2019 will bring, but from 2017 to 2018, Apple added Pencil support, upgraded the SoC from A9 to A10, and for the cellular models, upgraded from category 4 LTE to cat 6 (doubling download speed from 150 to 300 Mbps). Prices were not increased.

That's actually confirming my POV: The general trend of cost decreases allowed Apple to implement newer/better tech (which is costly) without changing the sales price, because the BOM cost for the standard parts decreased.

That’s the opposite of selling last year’s tech at this year’s prices; we got this year’s tech at last year’s prices. A substantial upgrade, we got a much faster device (approximately a 40% increase in CPU and GPU performance) and Pencil support.

As I said, there's two possible options: Use BOM cost decrease to embed better tech at same price point or use the cost decrease to increase margin. They can even be combined: If the cost increase from the newer tech is lower than the cost decrease for "older" tech, margin is improved, even with an unchanged price point.

And since the $329 iPad is almost certainly below the 38% margin average, sales pull down GM; the more they sell, the greater the negative effect on overall GM.

Now you're mixing facts with speculation. Unless you have inside knowledge, you can't know for sure that the $329 iPad is indeed below that 38% margin. Especially, as prices on the US market are usually lower (sometimes significantly so) than in other countries. And without knowing the exact distribution of the entry-level iPad in worldwide markets, the $329 price point is not suited as base for any speculations in the first place.

We’ll never know BOM cost, and with margin actually decreasing over the last 4 to 5 years, if there are any shareholder demands for “MARGIN! NOW!”, not only is Cook quite immune to them, he’s apparently spiting them by doing the exact opposite.

From what I have read in the media, he is carefully acting to soothe his shareholders (opposed to SJ, who - at least according to what was in the media - mostly ignored the Shareholders and their demands). After all, the "MARGIN! NOW!" shouts are just a different way to say "I want more money for myself (and my investment)".

And if Cook increased the dividend (I'm not up to date there, but SJ never paid a dividend to begin with iirc) at the cost of the company margin decreasing, that's not necessarily the best for the company itself.
[doublepost=1552460628][/doublepost]

I have a 2017 iPad. I would like to upgrade this year. I was hoping for a redesign. I would like a bigger screen but the pro models are so much overkil for my needs.

I also wanted a bigger screen and looked for a 2nd hand 2017 12.9. Found one at nearly half the price of a new one. Still more expensive than the entry-level iPad, but with 256GB - and the big screen is fantastic! Going back to a 9.7" feels really cramped now.

The only thing that still nags me is the weight: In the beginning I was close to selling it again right away and go for a 10.5"(don't like the screen ratio on the 11"), but I have grown to live with it. However, if Apple ever releases a 12.9" iPad with the weight of the Air(2), I'd be first in line to buy it.

 

[PickUrPoison]

Just that I understand the term correctly: "Margin" (in layman's terms) means the percent of money left over from turnover, after all related expenses (R&D, interest, dividends, taxes etc.) have been deducted from the sales revenue?

No, gross margin is revenue minus cost of sales (which is more than just BOM cost). It doesn’t include operating expenses like G&A, R&D and interest, or taxes either. (Dividends are not an expense.) All of those expenses are “below the line” and not part of the GM calc. A quick snapshot will help I think.

This is Apple’s fourth quarter 2018 P&L (in millions). Gross Margin is 24,084/62,900, about 38%. Marketing, overhead and R&D—operating expenses—total almost $8 billion. Subtracting those out gives an Operating Margin of 16,118/62,900, about 26%. After interest income on their cash horde and other non-operating income is added, and taxes are subtracted, Apple is left with a net income of $14,125, for a net profit margin of 22%. (btw Apple’s effective tax rate is about 14%.)

Even facts don't necessarily tell the whole story and can be interpreted one way or the other. As we don't know Apple's internal calculations, it's still possible that there has been a hefty price hike (perhaps even combined with a BOM cost decrease) in certain areas of the product portfolio, while in other's the margin is way lower, but less obvious for various reasons (I'd suspect that the public is more sensitive to iPhone price changes than to e.g. AppleTV price changes).

True. But realize iPhone is upwards of two-thirds of their revenue, while Apple TV revenue is very small in comparison. So a major reason that overall margin is 38% is due to iPhone, whereas any contribution from Apple TV is completely swamped out.

I feel that it's difficult to compare a consumer-only company like Apple directly to a portfolio behemoth like Samsung. But many "old-fashioned" industries would probably be happy if they'd manage to reach >25% margin, let alone >35%. The industry I'm working in is usually (significantly) <20%.

The mid-forties GM I quoted is just for Samsung Electronics, not Samsung the huge South Korean conglomerate that also builds ocean-going freighters. As I note above, Apple’s net profit margin is about 22%, but like you say, it is very industry-dependent. Grocery stores are a notoriously low-margin business, around 1-2%.

Now you're mixing facts with speculation. Unless you have inside knowledge, you can't know for sure that the $329 iPad is indeed below that 38% margin. Especially, as prices on the US market are usually lower (sometimes significantly so) than in other countries. And without knowing the exact distribution of the entry-level iPad in worldwide markets, the $329 price point is not suited as base for any speculations in the first place.

Well I did say likely, but it is likely, based on the math. It’s not hard to imagine margins would be squeezed and it could be tough to make a 38% margin on a $329 32GB entry level iPad; it would be much easier on the $429 128GB iPad since the major cost difference is RAM (maybe a $15-20 delta?) but Apple’s charging $100. I’m sure (again, math) that the margin on a $7,000 top of the line MBP with 32GB RAM and a 4 TB SSD is way above the 38% average, albeit relatively few are sold. With Apple’s product pricing methodology it’s typical for the more expensive SKUs in the mix to subsidize the entry level model, to some extent.

From what I have read in the media, he is carefully acting to soothe his shareholders (opposed to SJ, who - at least according to what was in the media - mostly ignored the Shareholders and their demands). After all, the "MARGIN! NOW!" shouts are just a different way to say "I want more money for myself (and my investment)".

And if Cook increased the dividend (I'm not up to date there, but SJ never paid a dividend to begin with iirc) at the cost of the company margin decreasing, that's not necessarily the best for the company itself.

As I mentioned earlier, dividends aren’t an expense, they’re just a distribution of cash from free cash flow/past profits. So they don’t affect P&L; it’s just a balance sheet transaction. If Apple doesn’t distribute some of their cash to shareholders, there would just be more of their past earnings sitting in the bank instead; it’s not really the case that product prices would drop if Apple had no dividend, because that _would_ negatively affect margins.

Whether dividends (or share buybacks for that matter) are the “best” use of cash is debatable but beyond the scope of our discussion.