
Why Apple doesn’t care about its competition - alwillis
http://blogs.reuters.com/felix-salmon/2012/10/24/why-apple-doesnt-care-about-its-competition/
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jc4p
I would argue that the fact that Apple spent the vast majority of the iPad
Mini announcement with a giant picture of the Nexus 7 behind them and
comparing/contrasting features would make this article incorrect.

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fusiongyro
The announcement is for people in the press who want to hear how the product
compares (and will complain if it's not brought up), and secondarily people
who love Apple enough to take the time to watch the announcement. You will not
see a single mention of the competition on Apple's site or in any of their
promotional materials, because of exactly what this article explains:
aspirational brands do not compare themselves to those brands beneath them,
because it would tarnish the brand.

~~~
dannyr
So are you saying despite that, Apple doesn't care about its competition?

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fusiongyro
I'm saying you don't talk to your kids the way you talk to your friends.
Context matters. In a context where Apple must talk about the competitors,
they do. In contexts where they don't, they don't bring it up. In presenting
their lineup to consumers, they will absolutely never say "this is our answer
to the Google X" when they could instead say "this is a
bigger/smaller/'magical new' Apple Y."

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cryptoz
Their former CEO's thermonuclear war is solid evidence that they do indeed
care about their competition. You generally care about something before you
drop nuclear weapons on it.

~~~
jivatmanx
Actually, he pushed the red button accidentally while cooking souffle.

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diego_moita
Even the title of this post smells like "another one of those HN Apple fanboys
declaring his adoration". The article itself is even worse:

"The world divides into people who think of Apple as a company, and people who
think of Apple as a brand..."

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yalogin
Apple fanboy is an insult only in the tech world. Apple has cultivated a
certain image among regular people and that is what he was talking about. Also
not everything is about the Google-Apple war. Both of them can exist and be
discussed by themselves :)

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Yhippa
I would say this might be true when it comes to creating the initial version
of their products. I feel that the way you make an iPhone is not by saying
"let's see what our competitors are doing and do the opposite of what they're
doing bad". If you do that you ground yourself to at the time what was pretty
terrible HCI.

By separating the design of the iPhone from what your conventional competitors
are doing and re-imagining things they were able to create something that was
very usable. I felt that they did this again with the MacBook Air.

Like others have pointed out I feel that Apple definitely cares about it's
competition. That's why you're seeing aggressive lawsuits against it's
competitors, swapping out Google Maps, and restrictive App Store policies.

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programminggeek
Well, Apple cares about its competition, but I think it cares more about
making a profit and they do that by build great products that they can charge
a lot for.

Selling a product with a high margin is actually easier in some ways than with
a low margin because with a high margin you can afford to advertise, market,
and push harder to sell a product.

Amazon can sell the Kindle Fire at break even because it owns its own sales
and marketing channel at Amazon.com. Google sells the Nexus 7 with no margin
because that is the only way for them to gain a foothold against the Kindle
Fire.

A $329 iPad Mini with say a $129 margin means Apple can spend $129 per sale in
advertising and marketing and still be as profitable as the Kindle Fire or
Nexus 7. We all know it doesn't cost Apple $129 to make a sale, so there's a
nice profit left over.

Ultimately, Apple's goal is to be a profitable, sustainable company and they
do that by turning a profit on hardware sales. That's their model. Amazon and
Google have a different business model.

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bryanlarsen
The iPad mini margin is definitely more than $129.

~~~
tomkinstinch
Based on what information?

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bryanlarsen
We "know" that Nexus 7 / Kindle Fire has a cost of $200.

Subtract $? in assembly profit because Foxconn's role building iPad's is much
smaller than ASUS/Quanta's role building Nexus 7/Fire

Subtract $? because Apple receives better component prices than ASUS & Quanta
do.

Subtract $? because the iPad mini has a cheaper screen.

Subtract $? because the iPad mini has less RAM.

Subtract $? because the iPad mini has a cheaper CPU.

Add $? because the iPad mini has more flash.

Add $? because the iPad mini has a rear camera.

Add $? because the iPad mini uses Aluminum rather than plastic.

You have to guess which column is bigger, but in my estimation, the "subtract"
column is at least $20 larger than the "add" column.

~~~
tomkinstinch
Who's to say that the Nexus 7 and Kindle are not being sold at a loss to drive
sales of cloud content? Pulling $200 out of the air for their production costs
does not mean we "know" anything. Have you seen a component by component
breakdown with estimated extended pricing in line with their production scale?
I'm not saying you're wrong, but a citation or three would strengthen your
argument.

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RShiki
> it sells premium products at premium prices, and it never discounts.

I fail to see what's premium in a tablet that has an inferior screen compared
to the cheaper alternatives.

Apple won the 10" market by virtue of literally doing everything better than
the competition. Better screen, better battery life and so on. The iPad mini
isn't like that. The $200 Nexus 7 has a much higher pixel density which used
to be Apple's own obsession until the mini (retina iPad, iPod Touch, Macbook
Pro, iPhone) and they completely ignored the whole pixel density and screen
quality angle when comparing the mini to the N7, just stating the obvious
"ours is bigger!!!".

When you ask for premium prices, you should deliver premium quality. The iPad
mini is not premium enough to warrant premium prices. I would have seriously
considered buying one even at a higher price IF it was actually a premium
device, but it's not. The N7 is just the better device here, and if there was
no software issue with their shoddy fork of android, the Kindle Fire HD 8.9
would've also been interesting with its full hd screen. 1920x1200 8.9 display
for... $299, less than the crappy iPad Mini.

I've never felt so underwhelmed by an Apple product since a long time. The
iPad Mini feels Meh rather than making me drool at the thought of getting one.

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spinchange
A more apt headline assertion would be, "Why Apple doesn't care about _price_
competition."

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mickgardner
So thats why they spend their time suing the shit out of every company that
competes with them.

~~~
gm
Exactly. That's what makes this article DOA and not worth a read. Of course
Apple cares about their competition.

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bryanlarsen
By my back of the envelope calculation, Apple's profit margin is better for
the mini than it is for the larger models. This seems silly because the mini
is in a much more price sensitive market. But from Apple's perspective, a mini
sale quite likely cannibalized a full size sale, so profit per device matters
as much as margin.

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dmansen
I think this article is spot-on. You can call people who buy Apple products
"fanboys", you can insult them for buying a product you find inferior.
However, they're still buying the products. Why is that? Because they like
them. That's all.

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jarjoura
I dunno, the iPad Mini seems like more a reaction to the 7" tablet market than
Apple's commitment to remain laser focused on a few products. It's even a very
conservative product launch that stinks of wanting to check off a bullet point
for reasons why people weren't buying iPads.

It will do fine and definitely continue to increase iOS market share, but it's
not very interesting as a product. I personally would have liked them to make
something with a unique screen dimensions that apps could target. 4" apps, 7"
apps, and 10" apps :-).

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seacond
"... it sells premium products at premium prices, and it never discounts."

Yeah, but the prices of those "products" (=Asian factory-made electronics,
smaller form factor and reduced functionality) keep dropping. That is the
nature of the computer business. And there's nothing Apple can do to stop it.
Eventually we will reach "zero", or very close to it.

Maybe what this journalist is realising is that Apple the company may finally
be seeing real competition in the "sexy hardware" space. They have
historically been the only company to mass produce computers that "look cool"
sitting on a desktop, even when they're turned off. They have never had any
real competition in that space (=opinion). But now, as the price point and
form factor have been significantly reduced (the price to own an Apple
computer used to be a lot higher, I can recall it being over $1000 in the not-
so-distant past), other companies might finally also be able to mass produce
sexy-looking hardware that can compete.

Assuming that's true, and we're headed for "disposable" computers (i.e.
ridiculously cheap), then what's left of Apple's reality distortion field?
Maybe it's "Apple, the brand" that the journalist observes.

And what is that brand? Maybe it's partly "easy to use", as he suggests is a
known characteristic of Apple products.

So, who can possibly compete with Apple on ease-of-use in a handheld computer?
No one?

Hmmm, we'll see about that. Imagine a company that can offer the same
simplicity, without greedy control freak attitude and imposing incessant hoop-
jumping on its customers. And their computers look cool.

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omnisci
It is pretty clear that they care about their competitors, but they also don't
have to at the same time. People are so locked into the apple marketing that
they don't even want to know what else is out there. Uhh, I got to hear this
firsthand when looking at a Galaxy Note a few weeks ago. I was looking at the
Note to see if I can fit the damn thing in my pocket and two BestBuy employees
were BSing about "android people". "Yo, I don't even care what other features
android has, I'm apple fo life!" to which the other guy agreed.

This is sad for society and wonderful for Apple. Apple's marketing is so
strong/effective that at some level, they don't even have to pay attention to
the competition, particularly when their customers think that every smart
phone is an iPhone.

However, as said above, it is clear that they do care about their competition
and if aggressive marketing from other companies (Re: Samsung's commercials),
they may have a bigger battle to fight.

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ari_elle
The title of course is not really true. As a company of enormous proportions
you always care about your competition.

But i actually agree with some statements that are made in the article itself.

Though It actually doesn't explain reasonably why Apple doesn't care about
competition, _it explains more how many (especially die-hard apple fans) view
Apple and what their relationship toward the company actually is (and why
therefore this relationship is hard to break)_.

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mcantelon
Sure, people have been convinced not to look at alternatives because it's
convenient not to look at alternatives, but it seems that press on tech would
be pretty boring if the press didn't bother looking at alternatives
(especially when Apple products are created in response to these
alternatives).

