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Signs of a weak economy?

T

Tattoo

macrumors 6502
Original poster
Mar 30, 2005
273
0
Miami, Florida
Its amazing to me to see 1TB Hard Drives for just under $200.00 and 2GB Mac Pro Memory hovering around $100.00!!

Must be signs that so few are buying - prices seem to be so low!!:eek:
 
Cheaper to Make?

:confused:
Eidorian said:
I'll just ignore the fact that it gets easier to produce those products and sate demand.
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Based on that concept - you would think Apple Computers would "get easier" to make and hence we wouldnt have the same price throughout the product cycle!

I would like to see a price drop on Apple Computers that are over a year old and never updated - case in point, the Mac Mini - Dare I say that is NOT indeed "easier to produce today"?
 
Tattoo said:
:confused:

Based on that concept - you would think Apple Computers would "get easier" to make and hence we wouldnt have the same price throughout the product cycle!

I would like to see a price drop on Apple Computers that are over a year old and never updated - case in point, the Mac Mini - Dare I say that is NOT indeed "easier to produce today"?
Click to expand...
Perceived value of Apple computers. You're still buying Macs at their prices.
 
Eidorian said:
I don't remember saying that hard drives had a low value. Did you buy 1 TB hard drives at launch?
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I know you didnt I was being sarcastic :p

I just got one last week and paid $250.00 - Best Buy is going to credit me the difference and I'm going to buy another one tonight! :D

I just got my Mac Pro but I remeber RAM cost HUNDREDS of $$$

I just got 2BG for $104.00 :D

Its crazy what this stuff goes for now!:cool:
 
This just in: The pricing of goods is determined by several factors, mainly supply and demand. Producers of goods will price something where they feel they will maximize profits based on demand for said goods. If the market feels the price is too high, demand will drop causing the seller of said goods to lower the price and the cost, if they want to maintain profit margins.:rolleyes:
 
slu said:
This just in: The pricing of goods is determined by several factors, mainly supply and demand. Producers of goods will price something where they feel they will maximize profits based on demand for said goods. If the market feels the price is too high, demand will drop causing the seller of said goods to lower the price and the cost, if they want to maintain profit margins.:rolleyes:
Click to expand...

Except when it comes to gas :rolleyes:
 
Tattoo said:
Except when it comes to gas :rolleyes:
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Not to de-rail this thread too much, but the price of gas is generally priced the exact way I describe. Gas has a relatively inelastic demand curve. Knowing this, the oil companies price gas as high as they possible can to maximize profits now without negatively affecting demand. They make obscene profits now because you are paying for the uncertainty in the price of oil going forward. Basically, they taking their money now, because they have to keep paying more and more for gas and they don't know if or when they will be able to reduce costs.

Now one can argue that gas is priced artificially high by cartels like OPEC from the beginning, but all they are doing is controlling the price by controlling supply. Once the crude or whatever the oil companies get in US is here, outside of taxes, the market sets the price with the price of crude just another cost component of gasoline. This is why gas is cheaper in rural areas. It is more expensive to get gas there, but with reduced demand and generally a lower average income, gas is priced to what people will pay in those areas. People will pay more in the city, even though it is easier to get gas there and there are more people to buy it.

Obviously this a simplification and many things factor into the price of most goods, but generally the market does a pretty good job of setting a price that people will pay.

And back on topic, Apple prices things to demand as well. If RAM prices in CTO Macs are cheaper, my guess is it is because Apple realized that people were not getting their RAM from them and decided to lower the price to increase demand and maximize profits. If they could get away with charging double for RAM, but not lose any sales because of it, they would.
 
slu said:
Not to de-rail this thread too much, but the price of gas is generally priced the exact way I describe. Gas has a relatively inelastic demand curve. Knowing this, the oil companies price gas as high as they possible can to maximize profits now without negatively affecting demand. The make obscene profits now because you are paying for the uncertainty in the price of oil going forward. Basically, they taking their money now, because they have to keep paying more and more for gas and they don't know if or when they will be able to reduce costs.
Click to expand...

But demand is increasing rapidly; it will not drop, no way. Is it 10m new cars on the roads in China alone, per year? And as you said, the demand curves are highly inelastic- oil is practically a dependence good.

Too much money chasing too few goods -> Price inflation.
 
Much Ado said:
But demand is increasing rapidly; it will not drop, no way. Is it 10m new cars on the roads in China alone, per year? And as you said, the demand curves are highly inelastic- oil is practically a dependence good.

Too much money chasing too few goods -> Price inflation.
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Exactly. I was looking at this from a US perspective, but you are 100% correct. With world wide demand for gas going up and a finite supply of oil given current technology, the market is generally doing what it does when supply decreases and demand increases. You said it much better than I did!
 
As I was Saying....

Signs of a weak economy where demand for Computer Products must be very low (Memory, Hard Drives, etc..) becuase I see Hard Drive prices dropping by the day. In less than a week $75.00 price drop. Memory is simply stupid cheap. Owning a Mac Pro has never been more affordable.

Less Demand = Cheaper Prices. :D
 
yeah...

Tattoo said:
Signs of a weak economy where demand for Computer Products must be very low (Memory, Hard Drives, etc..) becuase I see Hard Drive prices dropping by the day. In less than a week $75.00 price drop. Memory is simply stupid cheap. Owning a Mac Pro has never been more affordable.

Less Demand = Cheaper Prices. :D
Click to expand...

What's that you say? The US is teetering on the edge of/is in a RECESSION? What rock have you been hiding under?

We all knew this.

Prices for computer goods always drops when existing tech makes things easier to produce in large quantities. Apple computers don't drop prices because they are not a basic computer good, they are a specialized product that isn't subject to all the normal rules that accompany supply and demand.
 
Tattoo said:
Signs of a weak economy where demand for Computer Products must be very low (Memory, Hard Drives, etc..) becuase I see Hard Drive prices dropping by the day. In less than a week $75.00 price drop. Memory is simply stupid cheap. Owning a Mac Pro has never been more affordable.

Less Demand = Cheaper Prices. :D
Click to expand...

Or, as was stated earlier, demand is the same, but the costs of the components is now cheaper, so the prices are lowered to increase demand and make more money at the same margins.

Globally, demand for computer products is generally increasing. Prices are dropping because costs are dropping and competition is high.
 
appleretailguy said:
Prices for computer goods always drops when existing tech makes things easier to produce in large quantities. Apple computers don't drop prices because they are not a basic computer good, they are a specialized product that isn't subject to all the normal rules that accompany supply and demand.
Click to expand...

Yes on the first part. No on the second.

Apple computers are definitely subject to the rules of supply and demand; there is just a different perceived value in the market for Apple computers (and iPods for that matter). People are willing to pay more for Apple computers because they perceive to be getting a better value for an Apple than a Dell. Period. I generally hate the car analogy, but here it is appropriate. People pay more for a BWM than a Hyundai because they perceive that they get better value from the BWM. Same thing. If the perceived utility of an Apple and a Dell were exactly the same, then they would be priced the same. For RAM and HDDs, the perceived utility is generally the same no matter who the manufacturer is, which is why they are all priced about the same.
 
Okay.

slu said:
Yes on the first part. No on the second.

Apple computers are definitely subject to the rules of supply and demand; there is just a different perceived value in the market for Apple computers (and iPods for that matter). People are willing to pay more for Apple computers because they perceive to be getting a better value for an Apple than a Dell. Period. I generally hate the car analogy, but here it is appropriate. People pay more for a BWM than a Hyundai because they perceive that they get better value from the BWM. Same thing. If the perceived utility of an Apple and a Dell were exactly the same, then they would be priced the same. For RAM and HDDs, the perceived utility is generally the same no matter who the manufacturer is, which is why they are all priced about the same.
Click to expand...

You're correct here. I really should have taken a business class.

The OP is still wrong.
 
slu said:
If the perceived utility of an Apple and a Dell were exactly the same, then they would be priced the same. For RAM and HDDs, the perceived utility is generally the same no matter who the manufacturer is, which is why they are all priced about the same.
Click to expand...

That makes sense. I'm not too sure if the "goods" are getting cheaper to make - I mean the price of oil affects everything even the Trucks that deliver those Hard Drives.

I might be wrong but I really think demand has gone off the deep end. I percieve people needing to pay a crazy mortgage, high gas, high heating/cooling, crazy Health Care costs - all taking its toll on "Computer Stuff".

In any case, like I was saying - Im happy its the cheapest time to own a Mac Pro since its inception! :D
 
appleretailguy said:
What's that you say? The US is teetering on the edge of/is in a RECESSION? What rock have you been hiding under?

We all knew this.

Prices for computer goods always drops when existing tech makes things easier to produce in large quantities. Apple computers don't drop prices because they are not a basic computer good, they are a specialized product that isn't subject to all the normal rules that accompany supply and demand.
Click to expand...

By the way, I just got my Mac Pro a week ago. Normally Apple Retail Store Employees are HO-HUM about a customer walking in. For the most part, they left you alone and could care less if you bought anything in the store. Basically, the products sold themselves and if you had a 30 min conversation with a Retail Employee and decided to leave - you never really felt like you had to buy something or was being pressured into any purchase.

Fast foward to last week and WOW - what a difference!
I was attacked (not literally) like someone looking for a car and a sleezy used car lot. Everyone was on top of you and would do ANYTHING for a sale.

I dare not mention what those tactics were because I dont want to put it in writting on the Internet - let me just tell you that I got discounts I would of had NEVER been offered (on the down low) by complete strangers in hopes of securing a sale.

The discounts were so appealing that I purchased my first Mac Pro with a 30" Apple Cinema Display saving over $600.00

I would venture to say that "demand" is MUCH lower these days.
Thats my only point - most certainly does not appear to be - lower manufacturing costs! :)
 
Wtf?

Tattoo said:
By the way, I just got my Mac Pro a week ago. Normally Apple Retail Store Employees are HO-HUM about a customer walking in. For the most part, they left you alone and could care less if you bought anything in the store. Basically, the products sold themselves and if you had a 30 min conversation with a Retail Employee and decided to leave - you never really felt like you had to buy something or was being pressured into any purchase.

Fast foward to last week and WOW - what a difference!
I was attacked (not literally) like someone looking for a car and a sleezy used car lot. Everyone was on top of you and would do ANYTHING for a sale.

I dare not mention what those tactics were because I dont want to put it in writting on the Internet - let me just tell you that I got discounts I would of had NEVER been offered (on the down low) by complete strangers in hopes of securing a sale.

The discounts were so appealing that I purchased my first Mac Pro with a 30" Apple Cinema Display saving over $600.00

I would venture to say that "demand" is MUCH lower these days.
Thats my only point - most certainly does not appear to be - lower manufacturing costs! :)
Click to expand...

Yeah, you're definitely an adequate sample size.

They might have been bored, you know. They don't work on commission, you know.

Maybe the store in your area was slow. The Biltmore (Phoenix) store I went into today was packed. Does that mean the economy is different here?
 
I'd like to start this by saying that I too enjoy the cheaper prices on electronics and am happy when Apple lowers prices or gives you more for the same price, but Apple's recent sales numbers for Macs in the last quarter do not agree with your anecdotal evidence.

Basically it boils down to this:

Macs are getting cheaper because the components cost less. When Macs get cheaper, they sell more Macs. When they sell more Macs, they need to buy more components, so components get cheaper. When components get cheaper, Macs get cheaper, etc. to a certain point where everyone has a new Mac.:)

The variable here is why are the components getting cheaper? In the case of Macs, they are getting cheaper because Macs use the same components as most other computers on the planet so they benefit from that economy of scale and competition. Also, because globally, the market for computer components is increasing.

One could even argue that, in the case of consumer computer components, growing demand for the product reduces prices in the long term because, through innovation and competition, supply has been able to rise to meet the price levels that most of the market can afford. The component manufacturers see their profits grow by moving more units because the market won't pay anymore for them so they have no other choice. So everybody wins until the market either is saturated or the market decides the price is no longer worth the perceived value.
 
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