Apple Should Leave its Prices Alone

[Vincent Ferrari]

<div class='os_post_top_link'><a href='http://news.cnet.com/8301-13506_3-10118038-17.html' target='_blank'>http://news.cnet.com/8301-13506_3-10118038-17.html</a><br /><br /></div><p><em>"Apple has the luxury of being, well, a luxury brand. Most consumers don't look at Apple and put the company on the same level as a Dell or HP. For consumers who want to save money on a computer or don't want to worry about learning Mac OS X, Apple isn't a consideration anyway. But for those people who have some money to spend, they want the most value for their money. And although some would disagree with their sentiment, I think many believe they get more value from a Mac than any other company's products. People who buy Macs aren't looking to save money; they're looking to buy a premium brand because of the perceived value of the product. Apple understands that; we understand that; why don't analysts? Sure, the market is moving towards cheaper alternatives and some people want smaller laptops, but hasn't anyone noticed that over the past few years, Apple's market share has grown considerably in the face of "cheaper" computers?"</em></p><p><img src="http://images.thoughtsmedia.com/resizer/thumbs/size/600/at/auto/1229088550.usr18053.jpg" style="border: 1px solid #d2d2bb;" /></p><p>Don is so right on this one.&nbsp; Why <strong>should</strong> Apple lower its prices and compete in the low-end market?&nbsp; So they can flood the market with sub-par machines that people aren't happy with?&nbsp; Don hits the nail on the head when he points out that people are willing to pay more for Apple because they perceive Apple as a luxury brand that's "worth" more.&nbsp; He even correctly notes in the very next paragraph that, despite the fact that we're in a recession, that has no effect on perceived value.&nbsp; It's amazing how many people have opinions on how Apple should run its business.&nbsp; You would think, from all the unsolicited advice, that things were falling apart or something. &nbsp;</p><p><em></em></p>

[ptyork]

He's probably right, but the key words are "PERCEIVED" and "luxury BRAND". I find it amazing (to their credit) that Apple has been able to maintain this perception despite gaffe after gaffe. My, what, $2500 17" MacBook Pro is nice, but not any better really than Bob's $1000 17" HP. I paid $1500 for the priviledge of running OS X (and in my case for developing Mac and iPhone apps). As for flooding the market with sub-par machines that people aren't happy with, have you read the reviews on the new MacBooks? The only difference is that people are so gaga that they are willing to pay a major premium for the sub-par machines, bend over, and beg for more. :)

Apple has a monopoly on "cool" right now. Because of this, they won't flood the market and become "common." They're too smart for that (Steve is, anyway). Still, I'd expect a significant drop in sales of all things "luxury" in the coming months. Apple will suffer, but will come out stronger for maintaining their "luxury" brand appeal.

[ucfgrad93]

Until sales start to fall, there is no reason for Apple to lower their prices. They are selling tons of computers at the current prices so there really is no incentive for Apple to lower the price of their products.

[Vincent Ferrari]

Until sales start to fall, there is no reason for Apple to lower their prices. They are selling tons of computers at the current prices so there really is no incentive for Apple to lower the price of their products.

Not even counting the new unibody MacBooks, the black and white MacBooks were simply flying off the shelves up until they unveiled the new ones. As for the recession slowing things down, that hasn't really happened either and Apple is continuously talking about how well the sales are (and they are good; up over last year when the economy was arguably better).

Apple never got into the compete on price mentality, and in the end that's a smart thing because all that really becomes is a race to the bottom.

[Janak Parekh]

He's probably right, but the key words are "PERCEIVED" and "luxury BRAND". I find it amazing (to their credit) that Apple has been able to maintain this perception despite gaffe after gaffe. My, what, $2500 17" MacBook Pro is nice, but not any better really than Bob's $1000 17" HP. I disagree. The Powerbook G4, the Macbook Pro, and the iMac I all use are the nicest computers I've ever had, and I notice all sorts of really nice touches (the contours of the case, the lack of excessive lights, silent operation, keyboard, solid feel, etc.). Now when I pick up Windows laptops, they feel like cheap pieces of plastic (with only very few exceptions).

Not that there's anything wrong with cheap pieces of plastic--but Apples definitely convey more of a luxury aesthetic.

--janak

[ignar]

I think Apple can sell their products at premium to only so many people. It's like growth vs. value decision. Their strategy has been successful and Apple has made profit (generally), but unless they want to be a perennial second (which is not necessarily a bad thing), I believe they have to seriously consider reaching to more user base by introducing lower cost products.

[Janak Parekh]

I think Apple can sell their products at premium to only so many people. It's like growth vs. value decision. Their strategy has been successful and Apple has made profit (generally), but unless they want to be a perennial second (which is not necessarily a bad thing), I believe they have to seriously consider reaching to more user base by introducing lower cost products. Steve addressed in a PR segment after one of the recent iMac refreshes, and he basically all but said they weren't going after the cheap computer segment. Given Apple's decisions in this last decade, I'm pretty certain that they aren't gunning for first in the personal computer market.

It's like saying Mercedes should release a super-cheap car or Rolex a super-cheap watch. Why? I don't understand how people treat computers differently than other expensive lifestyle items. Don't get me wrong -- I would love to see more users in the Apple market -- but not at all costs. There are still plenty of people I'd never recommend Apples to -- it's simply not the right target platform for them.

--janak

[David Tucker]

Janak, its because when you buy a Rolex or a Mercedes it does everything you need it to do without further support. Computers are different. If there isn't enough marketshare for a company then there won't be enough support to make that platform viable.

[Janak Parekh]

Janak, its because when you buy a Rolex or a Mercedes it does everything you need it to do without further support. You're kidding, right? Okay, you might make that argument for a Rolex, but definitely not a Mercedes.

Computers are different. If there isn't enough marketshare for a company then there won't be enough support to make that platform viable. Perhaps (although many niche platforms refuse to die), but that's very different than being the top player in the market.

--janak

[Pony99CA]

Why <strong>should</strong> Apple lower its prices and compete in the low-end market?&nbsp; So they can flood the market with sub-par machines that people aren't happy with?

[...]

It's amazing how many people have opinions on how Apple should run its business.
The irony is killing me. ;)

Anyway, who says the machine would be sub-par? Are all low-price PCs "sub-par"? (And what is "par" for a PC?)

Why couldn't people perceive Apple as the "easier PC" instead of the "easier but more expensive PC"?

When Apple reduced the prices of the original iPhone by $200 within the first few months, did the product suddenly become sub-par? Now that the iPhone is selling at prices comparable to (or lower than) many Windows Mobile smartphones, is it suddenly sub-par?

If you answered "no" to either question, why couldn't they do it with the Mac?

Steve

[ptyork]

I disagree. The Powerbook G4, the Macbook Pro, and the iMac I all use are the nicest computers I've ever had, and I notice all sorts of really nice touches (the contours of the case, the lack of excessive lights, silent operation, keyboard, solid feel, etc.). Now when I pick up Windows laptops, they feel like cheap pieces of plastic (with only very few exceptions).
Note that I was more referring to the "sub par" part of the original post. I agree that the aesthetics are generally above the norm, but probably not $500-$1000 more, and like it or not, that is the premium. Especially for Mac Pro's and MacBook Pro's. And these days there are quite a few manufacturers that are producing some really nice looking PC's and laptops that don't command that kind of premium AND provide some flexibility and upgradability. If my employer hadn't bought this mac for me, I'd certainly not have been able to justify the cost differential. Just look at Best Buy. They now have a 17" Sony Vaio that looks pretty darned good (albeit in plastic). It lacks dedicated graphics (though has a "good" integrated chipset) but adds HDMI and Blue-ray. Processor speed is lower but bus speed is higher, so a push. I haven't seen the display, but Sony's are generally super, so likely a push there, as well. Cost: Vaio - $1199 -- MacBook Pro - $2799. Dude, that's a LOT for aesthetics when you get an arguably less capable machine (depending on your needs) that looks pretty darned good.

Look, I have a $4000 Breitling watch that keeps worse time than a $5 Timex and a Lexus that gets me from A to B in the same way a Hundai would and uses more gas doing so. Why? I guess I enjoy luxury items. I'm the type of guy that Apple sells to. But for me, a computer doesn't give me the same feeling of luxury that other items do, so I couldn't possibly justify paying (in the example above) a 60% premium for a Mac that'll last me two or three years. Luckily for Apple, there are some that can justify it.

[Pony99CA]

Look, I have a $4000 Breitling watch that keeps worse time than a $5 Timex and a Lexus that gets me from A to B in the same way a Hundai would and uses more gas doing so. Why? I guess I enjoy luxury items. I'm the type of guy that Apple sells to. But for me, a computer doesn't give me the same feeling of luxury that other items do, so I couldn't possibly justify paying (in the example above) a 60% premium for a Mac that'll last me two or three years.
I think paying for luxury items is less about "justification" and more about image. As you said, your watch and car achieve the same basic functions as the cheaper versions.

And, if you can afford paying a $3800 premium on a watch and probably a $20,000 or greater premium on a car, I think you can afford $1600 more on a computer. ;) Even if you only keep it 2 years, it would be over 4 years until it caught up to the watch premium and over 20 years before it caught up to the car premium. You may not buy a watch every 2-3 years, but will you keep that Lexus for 20 years?

Maybe the real issue is that people can't show off their PC as much as they can a watch or a car. Or maybe they just have software or hardware that won't work on a Mac. ;)

Steve

[Janak Parekh]

Note that I was more referring to the "sub par" part of the original post. I agree that the aesthetics are generally above the norm, but probably not $500-$1000 more, and like it or not, that is the premium. Well, as your post implies, this is subjective. I generally agree Apple's overpriced (and the lack of an expandable yet affordable desktop is rather egregious), but I'm willing to (over)pay the premium for what I get: both the hardware touches and the superior software experience. I don't criticize those that don't think it's for them -- in fact, I often don't recommend Macs for those looking for a budget computer -- but I do question those who keep on asserting that Apple must reduce their prices. They know they're going to move less units, but the increased margins make up for it. They're one of the tech companies doing exceedingly well in this market, unlike Sony, who just laid off 8,000 people. If anything, I sometimes wonder what the other companies are getting out of undercutting each other.

Dude, that's a LOT for aesthetics when you get an arguably less capable machine (depending on your needs) that looks pretty darned good....I'm the type of guy that Apple sells to. But for me, a computer doesn't give me the same feeling of luxury that other items do, so I couldn't possibly justify paying (in the example above) a 60% premium for a Mac that'll last me two or three years. Luckily for Apple, there are some that can justify it. Haven't you slightly undercut your own argument here? :) By all means, if it's not for you, then don't buy it. But if there's enough of a population that does, then Apple really has no incentive to lower their prices. And history has shown this market exists and is continuing to do well. Time will tell if this remains the case in Q4.

--janak

[Janak Parekh]

I think paying for luxury items is less about "justification" and more about image. That's not universally true. A Mercedes handles quite differently than a low-end Honda, it has nicer radio and GPS options, heated seats, etc. Given that I live in NYC and don't own a car, it's moot. But if I had the $ to choose the car and a place where I used it, I totally would not mind a luxury-brand car.

Similarly, quite a few Mac users buy the Mac because of its usability. I love the iMac's form factor and how it fits on my small apartment desk. Its responsiveness under OS X is superb. The screen is excellent with beautiful contrast. It is utterly silent all the time, even when fully saturating the CPU when I rip DVDs. It operates and suspends without any blinking lights whatsoever (in fact, it has no LEDs), which is useful as it's in my bedroom.

Maybe the real issue is that people can't show off their PC as much as they can a watch or a car. I don't show off my iMac. But people who do see it are duly impressed.

Or maybe they just have software or hardware that won't work on a Mac. ;) Which would be a perfectly fine justification (virtualization notwithstanding), as opposed to the demand that Apple must lower their prices.

--janak

[ptyork]

And, if you can afford paying a $3800 premium on a watch and probably a $20,000 or greater premium on a car, I think you can afford $1600 more on a computer. ;) Even if you only keep it 2 years, it would be over 4 years until it caught up to the watch premium and over 20 years before it caught up to the car premium. You may not buy a watch every 2-3 years, but will you keep that Lexus for 20 years?
Yeah, note I didn't say I was smart or anything. :) I got the watch well before the wife (thus I'm still alive) and the car I got used (benefit of this recessionary climate), though in the good-old-days (pre-wife/kid) I was pretty stupid with $40K+ cars as well. For me, though, it was never about image. It was about loving the nice thing that I had. The watch I regret at times, but I just love really fine craftsmanship. The cars, well, I just love luxury sports cars (got hooked on a '97 M3 and still can't quite bring myself to step too far down, so I sacrifice other things). I guess perhaps my problem with loving a computer is that for me it is a tool. I use it for work. For me, a mac is kind of like getting a $40,000 King Ranch F-150 to use as a work truck instead of the $13,000 base model. Yup. It's nicer, and yup, it'll turn a couple of heads. But it's my work truck. I don't know. Damn psychological crap...

Mostly my issue is that I just don't consider a mac to be vastly superior to other, far cheaper alternatives. Never have. Perhaps it is partially because I'm old enough to remember when they were overpriced and horribly underpowered--both because of sad hardware and a dearth of decent software--when compared to a PC. Obviously they've caught up in hardware, but I'm still not nearly as productive on a mac (not for lack of trying--used one exclusively for over a year). For me they're just a novelty (and a cross-platform development necessity, of course). Lower productivity + much higher cost + no psychological "love" = meh.

[ptyork]

Haven't you slightly undercut your own argument here? :) By all means, if it's not for you, then don't buy it. But if there's enough of a population that does, then Apple really has no incentive to lower their prices. And history has shown this market exists and is continuing to do well. Time will tell if this remains the case in Q4.
I wasn't arguing that Apple should change at all and certainly not that people who appreciate the mac don't exist. My point was that their superiority was largely a "perceived" and logically "irrational" one (similar to fine watches and to a lesser extent mid-luxury cars). However, as they've succeeded in creating such an image, they certainly don't need to change their tactics (except to reintroduce a midrange desktop offering between the pathetic (for my needs) mini and the eggregionsly priced pro). At least that was my original point...somewhere way back when...

That said, I do think that if they were consistently within 5-10% or so of their name brand PC counterparts (HP, Dell, Sony, etc.) on an apples to apples hardware comparison basis (pun only slightly intended), then they'd probably put a few of them out of business. We're seeing what aggressively pricing a desirable, well designed priduct (iPhone) is doing to Palm and Nokia and SonyEricsson and Motorola. Fewer competitors mean higher prices and margins. Plus, it would allow them to re-take the educational market and place them in a better position to enter the corporate market. I don't know if that would be the "right" strategy, but it is understandable for industry pundits to make such suggestions.

[Janak Parekh]

My point was that their superiority was largely a "perceived" and logically "irrational" one (similar to fine watches and to a lesser extent mid-luxury cars). I disagree with this one, quite a bit. I've used Windows for many years, and I consistently prefer (and am more productive) with OS X. I know you're not, and that's fine, but don't assume that's the case for everyone. ;)

That said, I do think that if they were consistently within 5-10% or so of their name brand PC counterparts (HP, Dell, Sony, etc.) on an apples to apples hardware comparison basis (pun only slightly intended), then they'd probably put a few of them out of business. Several of their products are, but generally in comparison to the higher-end (workstation-class) PC units, not the discount units.

I don't know if that would be the "right" strategy, but it is understandable for industry pundits to make such suggestions. That's not what they're saying, though. They're saying they have to reduce their prices "or else". Or else what? :rolleyes:

--janak

[ptyork]

I disagree with this one, quite a bit. I've used Windows for many years, and I consistently prefer (and am more productive) with OS X. I know you're not, and that's fine, but don't assume that's the case for everyone. ;)
Agreed, but I wasn't assuming anything. The superiority is perceived (i.e., subjective). There's little quantifiably superior about a mac (vs. a comparable and reputable competitor) that can be universally accepted. That's all I was saying. I guess adding my own "perceptions" was confusing the matter.

Several of their products are, but generally in comparison to the higher-end (workstation-class) PC units, not the discount units.
??? This is why I said apples to apples. The MacBook's hardware peers are $800-$1200 laptops (closest to competition--goes down hill from here). The MacBook Pro's peers are $1000-$1500 laptops. The iMac's peers are $900-$1500 all-in-one pc's. The Mac Pro's peers are $1200-$2500 workstations. The Mac Mini's peers are $350-$500 micro pc's. Admittedly it is hard in some cases to find direct peers in all aspects, but this is close. In every case, they are nowhere near 5-10% apart when comparing like hardware. Unless I'm missing something, the premium is more like 25%-100% across the board, generally depending on how "upgraded" the model is (Apple charges even more exorbitantly than most for upgrades) and how old it is in Apple's relatively slow product update lifecycle. That's a tough pill to swallow for Joe the plumber. ;) Some can and do and will continue to pay this premium. It will certainly be harder, though, as budgets constrict...

[Janak Parekh]

Agreed, but I wasn't assuming anything. The superiority is perceived (i.e., subjective). Perceived is not the same as subjective.

There's little quantifiably superior about a mac (vs. a comparable and reputable competitor) that can be universally accepted. That's all I was saying. I guess adding my own "perceptions" was confusing the matter. That's not true, either. It ultimately depends on your requirements. OS X has a native UNIX subsystem, which makes a huge difference to me, as I use UNIX-based tools on a daily basis. You can get them on Windows, but some of them don't run nearly as well without a lot of work. I find the UI on most Linux distributions maddeningly inconsistent (in addition to the many replacement window managers I've tried over the last 15 years).

Another example, although this has been mitigated somewhat with Vista: on all of the XP laptops I owned (3? 4?) I had a miserable time with power management. Sleep/resume cycles used to take a long time (resumes took anywhere from 10 seconds to 60 seconds(!) before it was responsive), and only functioned about 95% of the time. On my Macs, it works about 99.9% of the time, and resume occurs within about 1 second. This comes down to the complexity of ACPI and its inconsistent implementation on PCs.

For what it's worth, these were the two factors that first drove me to OS X a few years ago.

??? This is why I said apples to apples. The MacBook's hardware peers are $800-$1200 laptops (closest to competition--goes down hill from here). The MacBook Pro's peers are $1000-$1500 laptops. The iMac's peers are $900-$1500 all-in-one pc's. The Mac Pro's peers are $1200-$2500 workstations. The Mac Mini's peers are $350-$500 micro pc's. Admittedly it is hard in some cases to find direct peers in all aspects, but this is close. I really don't want to get into this part of the debate. There's been a million blog posts back and forth over the last two years, e.g. this one (http://technologizer.com/2008/08/14/are-macs-more-expensive-lets-do-the-math-once-and-for-all/). I'd be happy to drop this point and agree with you to avoid debating it, in fact. ;) I have certainly spent $$$ on my Macs.

That's a tough pill to swallow for Joe the plumber. ;) Please, not Joe the plumber, who's not really a plumber. Please. ;)

Some can and do and will continue to pay this premium. It will certainly be harder, though, as budgets constrict... Question: whose budgets will constrict first: the budget consumer who's worried about whether or not to buy a low-cost PC at all, or the consumer who's debating between a cheaper PC and a more expensive Mac? Let's find out the answers next year.

--janak

[Vincent Ferrari]

The irony is killing me. ;)

I don't get it.

[doogald]

When Apple reduced the prices of the original iPhone by $200 within the first few months, did the product suddenly become sub-par? Now that the iPhone is selling at prices comparable to (or lower than) many Windows Mobile smartphones, is it suddenly sub-par?

If you answered "no" to either question, why couldn't they do it with the Mac?

Of course they could. But, so far, they have not needed to. If they continue to maintain or increase revenues and profits at each quarter at a healthy rate, there is no reason to cut prices, right? if they have a few flat quarters, then they can start thinking about pricing.



The irony is killing me.
I don't get it.

You started a post with an opinion about how Apple should run its business and then ended it with a statement that you were amazed at how many people had an opinion about how Apple should run its business.

[Vincent Ferrari]

You started a post with an opinion about how Apple should run its business and then ended it with a statement that you were amazed at how many people had an opinion about how Apple should run its business.

I disagree. I'm not telling Apple how to run their business and I don't believe I even suggested anything. My first part of the post was "Don is so right on this one. Why should Apple lower its prices and compete in the low-end market?"

None of that was directed at Apple nor telling Apple how to run its business. In fact, the post was directed at those who said they should change things up from a perspective of "Why?"

[osssyvan]

I still feel Apple should release cheap small netbook. Netbooks are starting to sell really well and Apple can't pass that market.

They could do it like fiat does :D. Ferrari for the "better" people and fiat for the regular people. iSystem netbook for me.

[Vincent Ferrari]

I still feel Apple should release cheap small netbook. Netbooks are starting to sell really well and Apple can't pass that market.

They could do it like fiat does :D. Ferrari for the "better" people and fiat for the regular people. iSystem netbook for me.

Eh... Apple isn't one to jump into a market just because it's selling well, though, and they definitely aren't going to get into a race to the bottom in the netbook market. I'm not convinced it's a market they even need to be in and how long the netbook thing is going to last anyway. They are great and all, but it would be out of character for Apple to produce a low-end mini notebook.

I'm open to being surprised, but it seems like it would be a step in a weird direction for them.

[Pony99CA]

Of course they could. But, so far, they have not needed to. If they continue to maintain or increase revenues and profits at each quarter at a healthy rate, there is no reason to cut prices, right?
That depends. I'm certainly not aware of how Apple does its business forecasting, but if they could increase their marketshare to, say, 15-20% by cutting their profit margin by about 50%, they'd be making more money.

Plus, with a larger marketshare, I suspect more developers would write more software for Macs, thus helping to eliminate one of the biggest advantages PCs have -- the application inventory -- which might help further spur sales, which might convince even more developers to support the Mac, and so on.

I certainly have no idea whether that would work or not (maybe most people still wouldn't want Macs for some reason), and I expect that a public company (which is supposed to maximize shareholder profits) has already done that forecasting, but apparently some pundits don't think they have crunched the numbers (or maybe that Apple started with incorrect assumptions).

I know Apple will never share their internal business projections with us (most companies wouldn't), but it would be interesting to hear them say exactly why these arguments wouldn't work.

Steve

[Pony99CA]

I disagree. I'm not telling Apple how to run their business and I don't believe I even suggested anything. My first part of the post was "Don is so right on this one. Why should Apple lower its prices and compete in the low-end market?"

None of that was directed at Apple nor telling Apple how to run its business. In fact, the post was directed at those who said they should change things up from a perspective of "Why?"
Doogald correctly interpreted my irony comment. You said:

Why should Apple lower its prices and compete in the low-end market? So they can flood the market with sub-par machines that people aren't happy with?
That certainly sounds like you have an opinion on whether they should lower their prices.

You later said:

It's amazing how many people have opinions on how Apple should run its business.
Nowhere did you mention that those opinions had to be directed at Apple or tell them how to run their business. You simply said that it was amazing that people have those opinions. (To me, it's not amazing at all. We all have opinions on things we have no direct control over -- how Apple should price their goods, how the war in Iraq should be run, whether the auto companies should be bailed out, etc.)

As you seemed to have an opinion on how Apple should do their business (if you don't have an opinion on that, feel free to correct me) and then said it was amazing that people had those opinions, I found that ironic.

You ruin a nice one-liner by making somebody spell it out, you know? ;)

Steve

[Vincent Ferrari]

That certainly sounds like you have an opinion on whether they should lower their prices.

That's a lot to gleen from a question, isn't it? Particularly in light of my explanation.

Nowhere did you mention that those opinions had to be directed at Apple or tell them how to run their business. You simply said that it was amazing that people have those opinions.

You're right, I did. I said it's amazing how people are lining up to express opinions that don't make sense. That's still not telling Apple how to run their business.

As you seemed to have an opinion on how Apple should do their business (if you don't have an opinion on that, feel free to correct me) and then said it was amazing that people had those opinions, I found that ironic.

If I did have an opinion, I not only didn't express it, but I only asked questions of those who had.

You ruin a nice one-liner by making somebody spell it out, you know? ;)

Steve

Here's a piece of advice: When someone says something, explains themself, and tells you that you misunderstood, you should probably take them on their word. Even if I take full responsibility for said misunderstanding, the fact remains I further explained myself and that should suffice.

[doogald]

That depends. I'm certainly not aware of how Apple does its business forecasting, but if they could increase their marketshare to, say, 15-20% by cutting their profit margin by about 50%, they'd be making more money.

Plus, with a larger marketshare, I suspect more developers would write more software for Macs, thus helping to eliminate one of the biggest advantages PCs have -- the application inventory -- which might help further spur sales, which might convince even more developers to support the Mac, and so on.

I certainly have no idea whether that would work or not (maybe most people still wouldn't want Macs for some reason), and I expect that a public company (which is supposed to maximize shareholder profits) has already done that forecasting, but apparently some pundits don't think they have crunched the numbers (or maybe that Apple started with incorrect assumptions).

I know Apple will never share their internal business projections with us (most companies wouldn't), but it would be interesting to hear them say exactly why these arguments wouldn't work.

We all know companies that have grown so fast that they overspend to meet the demand that disappears sometimes as fast as it came. Crocs. Palm. GM, Ford and Chrysler. Why not applaud a company that decides to grow their business in a controlled way, rather than try to grow it so fast that it loses control? Earlier this year people were complaining that Apple's customer and technical support and quality control was starting to show signs of stress, and that's with their prices supposedly too high. Imagine how hard it might be for them if they cut prices 25%.

And, not to belabor a point, the title of this post is "Apple should leave its prices alone." That, to me, is an opinion on how Apple should run their business. Obviously you do not see this, but that's ok. Personally, I would love to see Apple cut their prices a bit - it would benefit me, as a consumer - but at the current prices I obviously still find their products valuable to me.

My opinion is that Apple's management knows a hell of a lot better how to run their business than I do, and as a stockholder I am glad that this management team is running the company - they seem to be more successful than anyone could have predicted.

[ptyork]

Here's a piece of advice: When someone says something, explains themself, and tells you that you misunderstood, you should probably take them on their word. Even if I take full responsibility for said misunderstanding, the fact remains I further explained myself and that should suffice.
Wow! Here's a piece of advice back at you. When you are so obviously incorrect about something (you DID state clearly an opinion by openly criticizing those with a contrary opinion) and someone in a joking manner calls you out on a funny bit of irony, smile and chuckle at your own expense. No reason to "take responsibility." Instead of over-defending yourself to the point of turning folks off, you'd have been able to shrug it off with dignity. It ain't like it was a bad opinion nor are you somehow in a position where opinions aren't welcomed (it's a BLOG). Roll with it, dude! Nobody's perfect. B)

FWIW, Apple's latest announcements regarding flat mac sales are likely to fuel this fire a bit. I'm looking forward to January. I really want to see a them come out with a decent mid-range offering. At least the $700 updated mini with discreet graphics that Wired is predicting, though an expandable, $1000-$1500 desktop would be preferrable (I don't need dual quad xeons for crying out loud). I'm currently being "forced" to use a MacBook as my primary machine at home since my old PC rolled over. I'm reluctantly starting to like it a bit. :( And yes, Janak, you are very right about the sleep-wake times being < 3 seconds or so which compares exceedingly well against Windows and Linux boxes. What's amazing is that the time is constantly good even when running VMWare Fusion and XP...how's that work?? Of course, I can contrast that with lots of other annoyances--like, for instance, I still can't get time machine to reliably leverage a network share for backups...anyone have any luck getting TM to work with WHS (mine keeps crashing a few gigs in)?

[Vincent Ferrari]

FWIW, Apple's latest announcements regarding flat mac sales are likely to fuel this fire a bit.

I would say so. Shame we didn't have the benefit of those at the beginning of this whole experiment, huh? :p Although, honestly, I don't think it would make a 1% difference in their sales, but every factor helps.

[Janak Parekh]

What's amazing is that the time is constantly good even when running VMWare Fusion and XP...how's that work?? I think the better question is why XP and ACPI work so poorly together. ;) When you control both the hardware and software, it's easier to make things like resume work properly. That said, I've heard from a few sources that Vista works a lot better with new hardware.

Of course, I can contrast that with lots of other annoyances--like, for instance, I still can't get time machine to reliably leverage a network share for backups...anyone have any luck getting TM to work with WHS (mine keeps crashing a few gigs in)? I don't think that's even a remotely supported configuration. :( Time Machine does some special stuff with links to make its versioning work, and I'm not sure that's supported on all filesystems. Your best bet may be trying Internet searches if you haven't already.

--janak

[ptyork]

I would say so. Shame we didn't have the benefit of those at the beginning of this whole experiment, huh? :p Although, honestly, I don't think it would make a 1% difference in their sales, but every factor helps.
Apple's in an insanely good position. They've got tons of cash, a relatively low overhead, massive margins, and an crazy loyal fan base. I've said all along that they likely won't change anything in response to a "slight" economic hiccup. I do think they "could" take the market by storm if desired and I'm surprised their board is allowing them to stay low volume, but aside from shareholder wealth potential, there's no compelling reason. As doogald pointed out, they could easily implode "MobileMe" style if they tried to ramp up to mass market volumes.

The downturn will probably make more than 1% difference in their sales, but the question is when will it cause them to blink? I don't think Steve'll blink any time soon. I think that netbooks probably won't happen (unless they simply become too much of a force to ignore--which at the moment they ain't and I predict won't).

I do think that a more competitive Mini is probable, though. The iMac is very cool and certainly has a place, but a comparable BYODKM makes too much sense and is too big of a gaping hole. It is far less expensive and far "greener" to toss out an old mini every couple of years (more likely recycle it into something fun like a media center) than it is to toss out an old iMac with DKM in tow. The lifespan of a good display is 10 years or more, far more than the 2-4 years I keep whatever is attached to it. I personally don't think they'll lower the prices, just raise the specs and toss in some coolness (like a new design or discreet graphics (please!!!)). I'll be pleasantly surprised (and clicking "Buy Now" that much quicker) if they do drop the $$$, though.

If they're really cool they'll give us a reasonably priced mini-tower (Shuttle'ish) based on the Core i7 with a single PCI-e slot (call it the Mini Pro or Pro Mini or Mini Plus or Son of a Pro or whatever), but I'm not holding my breath for that one.

[Pony99CA]

We all know companies that have grown so fast that they overspend to meet the demand that disappears sometimes as fast as it came. Crocs. Palm. GM, Ford and Chrysler. Why not applaud a company that decides to grow their business in a controlled way, rather than try to grow it so fast that it loses control? Earlier this year people were complaining that Apple's customer and technical support and quality control was starting to show signs of stress, and that's with their prices supposedly too high. Imagine how hard it might be for them if they cut prices 25%.
Yep, there's certainly that. Of course, if cutting prices actually increased revenue, maybe they could hire more Customer Service and Quality Assurance people. (I know it's not that simple -- you might then need more space, more office supplies, more managers, etc.)

However, Apple has had its share of mismanagement in the past. They've had layoffs, which usually indicate either growth that was too quick or a lessening in demand.

As I said, I don't know if cutting prices would work or not. (And what are the odds that anybody who has commented here knows, either? :)) I hope the analysts suggesting the price cuts have done their research and are making that suggestion based on good market research and analysis, not just seat-of-the-pants guessing like I'm doing. :)

And, not to belabor a point, the title of this post is "Apple should leave its prices alone." That, to me, is an opinion on how Apple should run their business. Obviously you do not see this, but that's ok.
I agree, but that probably should have been directed at somebody other than me. ;)

It also seems that if you get annoyed at people questioning Apple's pricing, you might not want to start a thread discussing Applie's pricing at all. ;)

My opinion is that Apple's management knows a hell of a lot better how to run their business than I do, and as a stockholder I am glad that this management team is running the company - they seem to be more successful than anyone could have predicted.
I think that is Vincent's point.

However, Apple doesn't have the market cornered on smarts, either, so there are other people probably qualified to make suggestions. And then there are the "rest of us" (sound familiar) who have opinions anyway. It can still be a fun discussion, can't it? :D

Steve

[Janak Parekh]

I hope the analysts suggesting the price cuts have done their research and are making that suggestion based on good market research and analysis, not just seat-of-the-pants guessing like I'm doing. :) That's a massive, and quite often incorrect, assumption. There's been cogent debunkings of analysts' arguments over and over in the blogosphere. Rob Enderle's "analyses" may be the worst of all.

--janak

[Pony99CA]

That's a massive, and quite often incorrect, assumption. There's been cogent debunkings of analysts' arguments over and over in the blogosphere. Rob Enderle's "analyses" may be the worst of all.
I didn't really "assume" that they did; I said that I "hope" they did. Any analyst worth the name should be able to do good market research and have decent analysis skills. Otherwise they should just call themselves "bloggers" and be done with it. :D

Seriously, I'd be interested in seeing some of the debunking. Assumptions can be argued with, methodologies can be questioned, and conclusions can turn out to be incorrect, but that doesn't necessarily mean the analyst did a bad job. (Well, poor methodology may mean that, but incorrect assumptions and conclusions don't.)

Steve

[Janak Parekh]

Seriously, I'd be interested in seeing some of the debunking. Assumptions can be argued with, methodologies can be questioned, and conclusions can turn out to be incorrect, but that doesn't necessarily mean the analyst did a bad job. (Well, poor methodology may mean that, but incorrect assumptions and conclusions don't.) They're of various shapes and sizes. This (http://www.macalope.com/2008/11/26/still-not-thankful-for-zdnet/) is the most recent one off the top of my head, although the Macalope tends to employ an... interesting... way of lambasting analysts.

--janak

[Pony99CA]

They're of various shapes and sizes. This (http://www.macalope.com/2008/11/26/still-not-thankful-for-zdnet/) is the most recent one off the top of my head, although the Macalope tends to employ an... interesting... way of lambasting analysts.
Hey, that's kind of my style (http://thoughts.svpocketpc.com#THOUGHT_IPAQ_WM2003SE_UPGRADE), too (I don't call people "stupid" as much, but I use the point-by-point system). ;)

Steve (the WinMoalope?)