Why you didn’t see an $800 MacBook: The Dell Comparison

Discussion in 'MacBook' started by riz78612, Oct 16, 2008.

  1. riz78612 macrumors regular

    Joined:
    Dec 29, 2007
    #1
    http://www.applematters.com/article/why-you-didnt-see-an-800-macbook1/


    With that in mind, let us take a look at whether or not Apple could meet the company's desired profit margins with an $800 machine. Apple's rule of thumb for gross margins is 25%. Assume that the $599 Dell is sold at cost. Assume the purchaser is Apple. What price tag does Apple have to slap on the Dell to get the margins Cupertino desires? $798.65. Bam, there's your $800 MacBook!

    The majority of people will opt for a Windows based machine over a Mac with the same specs (and price) every time. To a true Mac user that doesn't make any sense. Why would you pick a Dell over a Mac? Macs can run Windows! Macs make people happier! Macs cost less to own! People write great books about Macs! Resale value, TCO, coolness, they're green, etc! The logic is impeccable if you're a Mac user but put that logic up against: I already know Windows, I've already got Windows software I stole from work, etc. Now is the time to wrap your brain around an uncomfortable truth. Most people don't avoid Macs because they cost more, most people don't by Macs because they prefer PCs...............


    Full details on the link
     
  2. Tosser macrumors 68030

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    Jan 15, 2008
  3. riz78612 thread starter macrumors regular

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    Dec 29, 2007
    #3
    It isnt ignorant, its true, thats one reason i havnt switced to Mac yet.

    I can buy the product. But its coz i know windows etc.

    Write something sensible instead.

    Does the truth HURT?

    You got nothing else to say?
     
  4. djellison macrumors 68020

    Joined:
    Feb 2, 2007
    Location:
    Pasadena CA
    #4
    Why?

    People avoid Macs because

    1) They're different.

    Once they see the differences and see that actually, they might like OSX, they discover that

    2) They don't like the price.

    Every time I show someone my old MB or my MBP - they go "Wow - that's awesome" - then I tell them the MBP was £1600, the MB £800+ - and they go "WHAT!" - and forget any intention of buying a Mac, when they can go and get a basic PC laptop for £300.

    Doug
     
  5. belvdr macrumors 603

    Joined:
    Aug 15, 2005
    #5
    Regarding TCO... If both machines run Windows, then we can eliminate software, so now it's down to hardware. Frankly, I don't see a lot of hardware issues in laptops versus the Apple equivalents. Yes, we have more failures in our PCs, however that's because we are 99% PC and 1% Mac. We just don't have equal numbers to do a true comparison.

    For resale value, I couldn't care less. I buy equipment to use for the life (cars, comptuers, whatever). Resale value is useless to me.

    I'd prefer to run OS X, but the premium isn't justifiable for me.
     
  6. Solema macrumors newbie

    Joined:
    Oct 15, 2008
    #6
    I agree that is fanboyish junk. The root of the problem is Apple's insistence on the 25% margin. Why should "true mac fans" have to be happy or satisfied paying that kind of price premium?

    If Apple really cared about getting more Macs in peoples' hands, then they'd screw the margin and destroy the Dells with Macs at or near the same price points but with FAR superior build and OS quality. Then, Mac users wouldn't be looked at as eliteist, but rather intelligent price-conscious consumers who recognize quality.

    I'm convinced that if Apple were to cut their profit margins and compete at costs closer to Dell that they would SIGNIFICANTLY increase their market share. I actually believe that their MacBooks could become the iPods of the laptop space, dominating the market. You can't tell me that the VAST increase in laptop sales wouldn't make up for the lower profit margin.

    Instead, Steve Jobs continues to market products to "Regular Joes" but at luxury prices, so Apple's market share will always be less than Windows PC's.

    Case in point: A $900 24" LCD? Seriously? I don't know a single person, even among my Mac-Heads, that didn't laugh when they read about that release.

    The fact is, for the VAST MAJORITY of consumers, PRICE TRUMPS ALL. Especially right now with the US economy in shambles. Apple should absolutely consider every $800 Dell purchase as a lost Mac sale, because if Apple had a comparable Mac even close to that price, 9 times out of 10 the buyer will go for the Mac.

    Apple has the quality argument on its side, and has for a long time now. The only thing holding them back from Mac dominance (at least in the laptop segment) is price. It doesn't take a rocket scientist to see that.
     
  7. KamiNoYadoru macrumors member

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    Jun 20, 2006
    #7
    There's a lot of truth to this article, it's not a fanboy thing. He's particularly on point about the fact that most people are comfortable with windows.
     
  8. LDB macrumors member

    LDB

    Joined:
    Oct 13, 2008
    Location:
    Houston area
    #8
    I think the problem is they don't compare prices apples to apples. The new Macbook is a P8600 at 2.4 with 1066 DDR3 memory. Using the HP website and their 13.3" model it comes to about $1250 as similarly equipped as possible. It does include a 512k video card but it has shower DDR2 memory. I'm sure there are some other differences but I didn't microscope it. Compared to the 2.4 Macbook it's 15% or so cheaper but not that far off. Yes, the windows people can go buy one for half the Macbook but it's going to be far apart in specs.
     
  9. riz78612 thread starter macrumors regular

    Joined:
    Dec 29, 2007
    #9

    your the MAC FANBOISH.

    Just re-read your comments IF APPLE laptop wanted to get market share..

    yeah they want to take over, but they cant. Just check out the SHARE prices since Oct 14th when the prices were released of the Mac, APPLE is going DOWN.

    WIth their expensive LAPTOPS.
     
  10. Tosser macrumors 68030

    Joined:
    Jan 15, 2008
    #10
    It's not your link that is ignorant, but your first post.

    [Edit: I realised you copy pasted, but nonetheless]
    I never questioned your ability to buy any product.

    I did. Your post smacks of unsubstantiated fanboyish nonsense regurgitated from ten years ago.


    Ah, yes. The true cop-out. People cannot disagree with you, unless what you say is true. I guess that makes any conspiracy theorist a "truthteller" too. :rolleyes:


    Oh, I have plenty to say, I'm just hesitant to spend too much time countering nonsense spewed from fanboys.
     
  11. LDB macrumors member

    LDB

    Joined:
    Oct 13, 2008
    Location:
    Houston area
    #11
    So what do you think the impact would be if the last gen white Macbook was priced at $799? I agree. I think their sales would be exponentially higher and they'd make more net profit at a 12% margin than at a 25% margin. Why does it matter if the number is 25% or 12% if the bottom line is better?
     
  12. riz78612 thread starter macrumors regular

    Joined:
    Dec 29, 2007
    #12
    Two cents on the latest and greatest from Cupertino

    so why dont they do it, they SHARE prices are tumbling down...lol


    Two cents on the latest and greatest from Cupertino

    This week, Apple made a great industrial design statement while going somewhat off-track into a recessionary economy. Let me clarify. The high margin MacBook Pro computers are great. Super industrial design and superior graphics capabilities make these machines a home run. If you dwell among the higher echelons of mobile users, this was nothing but good news. The glass screen and glass clickable trackpad are wonder designs. Unibody is just too cool. For the price, this may be the best mobile Mac since the TiBook.

    Now, if you are just a regular old MacBook person or a student with little prospect of a job at graduation, this is more of a mixed bag. Ante up a bit more cash and an all aluminum MacBook with much of the panache of the Pro machine’s is yours. I think the new MacBooks may be the best deal around. BUT, the problem is this. We are in a serious economic situation which will probably lead people to buy the most horrendous US$500 laptop imaginable, simply because it costs US$500, period, end of story.

    Apple has pretty much dedicated one legacy machine to this exploding market. Leftover white, plastic MacBooks can be purchased for US$999 for the low end. An orphan for just under a thousand. I see a big divide between a loss leader based on old technology and an upgraded, up-priced machine that is wonderful, but just too expensive for this distressed market. This is what happens when the folks in charge just don’t get it.

    There is a nightmare scenario brewing with a mix of credit distress and retail plunge. The next shoe is about to drop in the world of banking catastrophes. The banks left standing are now the consumer debt powerhouses in the wake of the real estate meltdown. Look at the banks of record on your credit card stash. These are the next to fall.

    I agree with Bob that Apple is completely ignoring the current economic strife. The problem is that notebooks like the new MacBook are designed years in advance. There’s almost no chance that Apple could have predicted our current economic meltdown, but they could have planned a little better.

    I was overjoyed at the prospect of a US$800 MacBook when that rumor surfaced and it would have been exactly what the market needed – and it would have sold by the bushel. Instead Apple (once again) ignored the low-end and released a premium-priced notebook, when an economy-priced notebook is needed. Sure, some people will buck up for the shiny, new MacBooks but I have a feeling like most people will pass.

    http://blogs.zdnet.com/Apple/?p=2396
     
  13. Solema macrumors newbie

    Joined:
    Oct 15, 2008
    #13
    Exactly LDB!

    And I'd hardly consider myself a Mac "fanboy" as I've never BOUGHT a Mac, and the only ones we own are a school-issued POS iBook G4 and a mother-in-law bought aluminum MB. If my wife wasn't a teacher we would own ZERO Macs, and precisely for the price reason. We just can't afford to spend $1100 or $1300 on a laptop.

    Ever since the Intel switch, I've lusted over a MacBook Pro (I like to game in my spare time so the old MB was not acceptable) but I sure as hell can't spend $2000 on a laptop to have the ability to play some older 3D games.

    For $800 I have a choice between several well-equipped laptops that would suit a wide variety of purposes, including light gaming. Sure, the build quality and "look and feel" won't be as good as a Mac, but I'd definitely get more value out of it in the variety of tasks it can perform.

    It's the same on the desktop end. I'd love to have a Mac desktop and I know that I wouldn't be able to just go and buy any hardware out there to use with it, but the lack of a mid-range Mac tower just kills me.

    Just open any Best Buy or Circuit City ad, and look at the specs of virtually every desktop PC in there, and compare them to the iMac. Most of the desktop PC's come with LCD monitors, Quad-Core CPU's, 4-6GB of RAM, and some even have discrete graphics cards. Yet the iMac continues to piddle around with mobile dual-core chips, limited RAM capacity, and pathetic (and non-upgradeable) graphics cards (except in the top-end iMac).

    Has anyone noticed that Apple doesn't have a single Mac with a DESKTOP Quad-Core chip? That can't bother just me. I built my own PC with a Quad-Core and 8GB of RAM, and I love to build PC's, but I'd absolutely spend a moderate percentage more to purchase a Mac tower with a Quad if one were available. Hell, I'd even pay the price premium for the "Apple-compatible" 8800GT graphics card. And I'd be absolutely thrilled with my Mac that didn't cost more than the down payment on my car but that can do everything an iMac can plus play games and use my existing LCD. I know I'm not the only one begging for a Mac tower.


    Speaking of LCD's, I have a 24" Dell 2407WFP that works beautifully. Why am I forced to get ANOTHER LCD (iMac) or spend $3000+ to get a Mac tower that can work with $500 LCD I've already invested in? Yeah, I know the response is "you don't have to buy a Mac," but what about the very LARGE AMOUNT of us who actually WANT to buy a Mac but don't have an acceptable product from them to buy?
     
  14. Solema macrumors newbie

    Joined:
    Oct 15, 2008
    #14
    I have so many friends and relatives who would LOVE to own a Mac, but either have investments in PC hardware already (LCD monitor, etc), or just can't afford a $1200 iMac. So what do they do? They ask me to build them a lower-cost PC, just the box, to use with their LCD and peripherals.

    I would LOVE to be able to save myself the hassle of building a PC and recommend a reasonably-priced Mac tower with room for future expansion/upgrades, but Apple won't let me.

    If Apple had a mid-range "Mac Standard" for around $600-$800 I could guarantee 7 sales immediately, just among my friends (and including myself).
     
  15. Drumjim85 macrumors 68030

    Drumjim85

    Joined:
    Oct 7, 2007
    Location:
    DFW, TX
    #15
    apple's net worth is 3x that of Dell's. I don't think apple thinks they're doing anything wrong.
     
  16. Davidkoh macrumors 65816

    Joined:
    Aug 2, 2008
    #16
    Well, im only happy that people find em too expensive. Then less people will have em, meaning mine will be more unique :)
     
  17. aristobrat macrumors G5

    Joined:
    Oct 14, 2005
    #17
    Virtually every stock traded in the US has been tumbling down. :rolleyes:

    Here's Apple's share prices compared to Dell/HP over the last 5 days. Notice any trend regarding the tumbling down part? Notice how after 5 days of tumbling, Apple is the only one that ended higher?
     

    Attached Files:

  18. Halon X macrumors regular

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    Sep 22, 2005
    Location:
    Malibu, CA
    #18
    If I was Apple I would dramatically reduce the profit margin on an entry level Macbook (0 - 5% maybe) to bring people in the door and increase market share.

    Those who need it will still purchase the higher end products. Those who are introduced to Apple through an entry level Macbook are likely to stick with Apple for future purchases, likely moving into a higher end, more profitable for Apple product. The results with market share would be quickly visible with increased profits to follow.

    A $699 laptop would sell like mad. That's the price point I would shoot for on an entry level laptop!
     
  19. smiddlehurst macrumors 65816

    Joined:
    Jun 5, 2007
    #19
    *sigh*

    Why the heck do people think Apple WANT to achieve a huge jump in their market share at the expense of profit margin? What would be the point exactly? As soon as they do that, as soon as they drop the prices on their equipment, they're playing the same game as a hundred other manufacturers of PC's have done over the last few years - turning the computer into a commodity - and there's no easy way to reverse that decision. Oh, and it's a game that worked out so WELL for those PC makers didn't it? :rolleyes: Plus of course Apple has FAR more overheads than the likes of Dell with a genuine retail presence, software development costs, a range of accessories such as Time Machine, Keyboards and Mice to develop and support etc etc.

    There's other reasons too - it's not a simple matter of flipping a switch and producing three times the number of machines that you did before. You have to factor in increased production facilities, increased costs of maintenace and support issues, increased throughput in the Apple store genius bars and so on. Produce a low cost machine by cutting a few corners and see how well it handles OS X 10.7 when it's launched in a few years time. Remember all the complaining over Vista's requirements killing low cost notebooks bought even a year earlier? Wonder why Apple don't have the same problem even with 10.5 running on PPC machines? Because, by and large, the machines are pretty well specified to work for a number of years and OS revisions.

    Then there's image. Apple have a well-deserved reputation for delivering beautiful machines that stand apart from virtually anything else on the market. That may seem like a silly point to those focusing on price but it's a huge part of Apple's brand appeal. Take that away with something with the build quality and flair of, well, a Dell and it's very hard to get that rep back.

    Fact is Apple has done very well for itself recently and has carved out a significant market share by offering something different. It doesn't need to go after the cheap, low profit market and by avoiding it it has the cash reserves to take the occasional risk. Put it this way - that profit margin is responsible for the iPhone which in turn is responsible for bringing multi-touch to Apple laptops. It allows Apple the freedom to take chances by introducing products such as the Air which we now know is the starting point for Apple's new manufacturing process. Besides which, what's wrong with being the makers of high-end equipment? It's working pretty well for other companies, take Porsche for instance. Make very high cost sportscars and yet are in a position to take over the VW group...

    Share price means bugger all and is purely an indication of how the latest guessing game on Wall Street is going, the proof of the pudding is in those lovely market share graphs presented earlier this week and right now all trends seem to be heading upwards. If that share drops significantly (year on year, next quarter will be less more than likely as this was the back-to-school quarter) THEN you may see Apple introduce lower cost machines. But to do so now, when they're just bringing more and more people into OS X with the current product range and prices, would be crazy.
     
  20. aleksandra. macrumors 6502a

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    Sep 13, 2008
    Location:
    Warsaw, Poland
    #20
    It reminds me of what some company said about having it Linux netbooks returned four time more often than Windows ones. They've explained it by saying many people just chose the cheapest option and afterwards realized it's not what they're used to. The fact is, most people dislike changes. If what they know is Windows, they want it because it's "safe" - not in terms of security, but because they can deal with it. They'd be lost with something new, even if it's easy to learn. Very often they convince themselves they're unable to deal with it. I've seen it a few time. This is the part I agree with.

    I wouldn't disregard the impact of prices altogether. There're many people who love new technology to the point of always having the best specs they can get (let's not get into discussion whether they actually use them or not). As long as Apple has higher margins, they won't be able to offer full-featured computers cheaper than other companies. Also they don't really make "full-featured", and I think it isn't necessarily bad. Then there are people who would get a Mac, but can't afford it. Prices surely impact Apple's market share.

    Another thing is, does Apple want bigger market share? Of course they're trying to sell as much of their computers as they can, but do they want to dominate the market? Price increase on the new MacBooks makes me doubt it. They're profit-taking in my opinion. They already get every third dollar spend on notebooks in US. Why would they want to sell every third notebook and still get every third dollar?

    EDIT: smiddlehurst beat me to it... that's what happens when you get some tea in the meantime :p.
     
  21. smiddlehurst macrumors 65816

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    Jun 5, 2007
    #21
    Heh, well allow me to return the favour as I realised when reading this that I missed something - you're right about people disliking change and the Linux v Windows netbook return example is a good one. But this is a case where Apple's higher cost actually works FOR them. Anyone deciding to invest the money and switch is going to have put some serious thought into the decision and is far more likely to stick with it. If you make 'em cheap as chips then you'll get people trying one almost on a whim, going "where the hell is my start button and why isn't there an anti-virus!" followed by a rapid expansion of the refurb store....
     
  22. Sdashiki macrumors 68040

    Sdashiki

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    Aug 11, 2005
    Location:
    Behind the lens
    #22
    its been awhile since Ive had a hardy laugh from banter like this.

    reminds of the 1990s...

    THANKS!
     
  23. mojohanna macrumors 6502a

    mojohanna

    Joined:
    Jul 7, 2004
    Location:
    Cleveland
    #23
    The point you seem to be missing here is that Apple HAS significantly increased their market share while still maintaining higher than industry norm margins. What does that mean? It means huge value for shareholders!! If Apple were to cut their margins to below 25% the stock would tank. look what it did after they said it would drop to 31% from 34%. The market battered them.

    Price absolutely does not trump all. Value for money spent is what trumps all. The challenge with this is that your definition of value is vastly different than mine (as demonstrated above).
    One more thing to point out. The build quality will most definitely suffer if Apple were to drop their price. They would have to make up for that margin loss somewhere, so they would be forced to cut corners, therefore, they would just be selling another Dell or Gateway. Apple is definitely NOT a me too company.

    Let's face it. If you want to be an Apple user, join the club, buy a machine and enjoy it for what it is, a freaking computer. Stop bitching that it doesn't have this or that compared to a PC or that it costs more than a PC. If that is what truly motivates your purchase, just buy the damn PC and be happy with your purchse. The bottom line is both with get the job done. In my opinion, one is just more of a PITA to work with (cough cough, windows)

    I swear, I think people get all in a yank because they are more concerned about what their computer looks like than what it does for them.
     
  24. Dybbuk macrumors 6502a

    Joined:
    Aug 8, 2006
    #24
    i stopped reading this when he started talking about paying people to remove stickers from dell laptops and resell them from apple

    judging from the responses to this thread i'm not missing much
     
  25. Tingaling macrumors newbie

    Joined:
    Sep 23, 2008
    #25
    The stocks cannot be compared because Apple makes more than just computers (and don't pull a BS Dell digital DJ argument) The only real argument in this thread is that Mac's cost a lot of money, and they do. So get over it, and please don't say that $999 is cheap, because it's not.
     

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