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Why Does Apple Offer Free Engraving? (elidourado.com)
181 points by iuguy on Nov 27, 2010 | hide | past | web | favorite | 71 comments

I thought the main reason was obvious: it's only available if you buy from Apple directly, not from, say, Amazon. Apple makes more money when you buy from their store instead of a third party.

This makes far more sense. Second hand markets for computers aren't really that big anyway. Everyone wants the latest and greatest.

Apple products have very strong resale values. Check your local craigslist.

Disappointingly the monitors as well. It sucks to have to buy an old monitor for 200% more than something else that year for the colors to look good and not have to fuss with ICC calibration when working dual-monitor on a laptop.

Maybe this is why an Apple monitor costs more than something else? Because people will pay more to get good colors and not have to fuss with ICC calibration.

Second hand color calbration sensor is $100-$150, that's a professional quality one. And with the calibration taking 3 minutes every few weeks (if one is punctual) it seems that you want an Apple monitor because it's an Apple monitor and not because its color reproduction is good.

Is there a specific reason it has to be an Apple monitor? I have an HP IPS monitor with DisplayPort that I use calibrated with my MacBook Pro. What am I missing out on?

Not true. The second-hand market for Apple computers is HUGE.

I think another point is, that the most people wont buy a used engraved ipod. Maybe they prefer a new one instead a used one.

Did you read the article? That was the entire point.

Wouldn't the market adjust for this fact? There is less demand for engraved iPods, therefore the price for them would be lower. If I was in the market for a used iPod, I sure wouldn't mind buying an engraved one if it was $50 or $100 cheaper than the non-engraved kind.

If anything, Apple is encouraging a used market, by artificially creating a lower-end used market.

If Apple really wanted to prevent a second-hand market for iPods, they'd do something like permanently lock an iPod to a specific iTunes account.

I bought an engraved iPad yesterday via Apple... Your point?

This is exactly the reason.

There's another benefit to Apple as well: engraved products aren't returnable.

I've seen this stated a few times previously, but never seen any evidence to back it up. I'm pretty sure that'd be against the law in most countries; if a product's defective consumer laws (almost) everywhere mandate it be replaced

As for someone changing their mind, do you really think that's Apple's motivation behind offering engraving?. I'd guess less than 1% of iPods are sold engraved, and of these the unwanted rate would be in single digits, probably again close to 1%, so (with those assumptions) we're looking at about 1 in 10,000 units.

Instead, I'd put forward that Apple offer engraving for some other reason, and the anti-return policy is simply a byproduct of that, not the driving force; an engraved iPod can't be restocked and would be cost prohibitive to refurbish

In Germany, mail-order companies are required by law to offer 14 days money-back service. There are exceptions for among others, perishable goods and custom-made goods.

The mandatory six-month warranty for defects, however, is independent from the money-back guarantee.

Apple do a lot of refurbishing, and I can't imagine replacing a plastic case is going to set them back much.

Related : are they replaceable?

>Apple has a monopoly on iP*ds ... the durable-goods monopolist, Apple. ... durable goods monopolists

Further evidence that "monopoly" has no useful meaning. At best it allows a speaker to hang negative emotion onto a subject, and at worst, agitate for government coercion against the subject.

Apple does have a monopoly on devices that use the iPod connector. This monopoly is enforced by patent 7632114 B2.

That being said, the term monopoly doesn't mean much on its own. There is an alternative to everything.

The author's misuse is all the more painful for being an econ grad student at my alma mater, GMU. A former professor of mine, Russ Roberts (the man behind the Hayek vs. Keynes Rap video), even used a similar example ("Does Ford have a monopoly over the Taurus? Cars? Means of transportation?") to show how little objective utility the term “monopoly” holds. The more narrowly one defines the market, the more one is likely to “discover” monopolies.

Don't forget though, Russ Roberts has an ideological dog in this hunt, and he'd like to recruit more anti-regulation followers, so he'll bend the argument to suit his biases. There is a sorities paradox element to it, but that doesn't mean "pile" is undefined; Ford has a government-granted monopoly - a trademark - on Taurus.

That substitutability is defined in a distributed way isn't a well-formed argument against tying it down in any particular case. Legal courts make these determinations every day concerning the meanings of texts, whose intent can be similarly hard to divine.

We should all have a legal monopoly on who we are. Protection from others pretending to be us. That's all a trademark is. Its not at all like a government granted monopoly that enables a company to be the sole provider of phone or automobiles.

Which we generally call a patent - in my understaning the only real monopolies are government granted ones - i.e you must use ATT for phones, or no one else can manufacture widget X

Depends on the scope of patents and trademarks.

What I assume is the video ataggart referenced: Hayek vs. Keynes Rap video http://www.youtube.com/watch?v=d0nERTFo-Sk

That's the one.

Bit like how Hasbro has a monopoly on the sale of a certain board game.

Maybe this explanation will help you see how your response to the parent just goes to prove his point:

"Monopolies are thus characterised by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods." - via wikipedia, with book citation: http://en.wikipedia.org/wiki/Monopoly

Please don't forget about the last bit. There are a million (bad) substitutes for an iPod, regardless of how they end up connected to the computer. The word monopoly should be used with economic rigor or not at all - even economists tread lightly and discuss heavily before labeling any entity a monopoly.

I actually dislike the wikipedia definition. It suffers from the same general definitional problem: which market?

Setting aside the above, the definition suffers for ignoring the question of why there are no viable substitutes. It's a dangerous omission since the implication, at least with respect to legal policy, is that it is the "fault" of the firm.

The closest one could get to a useful definition of monopoly would be: a firm whose would-be competitors are coercively excluded from competing in the market. Of course even that still suffers from the subjectivity of defining the scope of "the market".

He uses the word perfectly correctly. Apple has a monopoly on iPods because only Apple is able (and allowed) to build iPods.

And it is not unethical either.

Cynicism aside, it also turns them into phenomenal, personalized gifts.

Yup, it makes a commodity unique and special.

Surely any engraving might detract from the Apple logo, thus reducing the phenominality, fabulosity, etc

By the way, I crave downvotes from humourless Apple devotees.

Normal people don't care about the Apple logo, and the vast majority of Apple's customers are normal people — not fanbois.

The engraving makes the gift special, intimate and remarkable.

Normal people crave logos. Not just fanbois. They also like to personalise their stuff though.

I think the downvotes are simply because you're being a dick, nothing at all to do with anyone's opinion about Apple

Could work both ways. If someone receives an iPod with personalized engraving they would possibly be more likely to hold onto the device longer since the object now has some sentimental value. For re-sale the engraved models sell at a lower price which makes the second hard market more attractive to thrifty buyers. I suspect xenophanes is right -- Apple wants people to buy iPods directly from them instead of other resellers who might put competing products side-by-side.

>>If someone receives an iPod with personalized engraving they would possibly be more likely to hold onto the device longer since the object now has some sentimental value.

You're right - I still hold on to my old engraved iPod because it was a gift. It's not something I'd want to dispose of, even though it looks terribly out of fashion now (what with new models of iPods releasing every year).

It has been noted that people are generally reluctant to re-sell diamond jewellery for much the same reasons, which has the effect of witholding a large quantity of inventory from the second hand market.

Does anyone have any sales statistics comparing volume of iPods purchased from apple.com to volume of iPods purchased at retail (including Apple retail stores since they don't offer engraving?)

Because even if what he is saying is true I doubt that the fraction of people that get engraved iPods and then resell can influence the secondary market filled with iPods from almost all technology retailers and Apple's retail stores themselves.

It's an interesting point that some personalized gifts are less resellable. Books with the owners name stamped in it have to be sold used with a note there is a marking and it is not "like new". But the same book as a first edition with a dedication signed by the long dead author and dedicated to a US president is worth a lot. So it depends.

This said, I object greatly to the article's outlandish posturing that he knows WHY Apple offers free engraving and it is for the cynical reason he stated - to subvert the customer's future gift giving activities. He knows no such thing and to claim he does know goes is simple BS. Article pointing out interesting effect of personalization, that's a great article. Article pulling out one of many effects of a business decision and claiming that was the primary, or even a considered reason for making the decision, that's totally bogus.

As many others have pointed out here and in that article's comments, there are many business reasons and advantages to offering free engraving. One good one is increasing its perception as a luxury good. Many high end jewelers offer free engraving with a Rolex purchase.

Or how about to help the customer protect his property from thieves? I could note that products that are engraved are probably less likely to be stolen, and then claim that that's the reason WHY Apple offers the service with the purchase - they want to help customers.

Or how about so many people buy iPods that its now a common occurrence for people to mix up their iPods with those of their friends. Engraving helps the customer avoid such mixups. I often get out the dremel tool and put my name on things so they don't get mixed up. Dremel scratches look terrible though and mars the finish. It would ruin the appearance of an iPod. Perhaps Apple noticed customers doing this, and to maintain artistic standards of appearance even after the sale, started throwing it in.

These reasons, as examples only, are not any less likely a sole explanation than the more cynical one, especially with Apple's history of focusing on customer total experience and reducing trouble and increasing happiness for the customers, with even details such as styrofoam packaging being carefully designed by specialized artists.

On the issue of engraving being free or no cost, that is not correct. Apple is not offering engraving service on things you have NOT bought from them, such as Zunes or watches. The cost of engraving is included with the purchase price, which is premium priced. Not everyone uses it though.

Now there's a thought. When you buy your iPod at WalMart or Target you don't get engraving do you, yet you pay the exact same price or maybe $5 less as you would from store.apple.com. WalMart and Target though take around 33% of the selling price as profit. So there's where the engraving can be paid from - every order from the Apple Store means more profit for Apple. Engraving is an incentive to buy direct from Apple at full list price rather than from a reseller.

On the theft topic - engraving makes it less likely to be resold, but not less likely to be stolen. Opportunistic theft with such a small time window doesn't lend itself to reviewing the item.

Are you sure about the supposition that retailers make 1/3 profit? I'm not so sure. Game consoles, for instance, are usually sold for only a few dollars of markup and the retailers depend on things like sales of games, controllers, and other accessories to make selling the actual console worthwhile.

I assume that an iPod is less this way, but still a 33% margin sounds a bit high for a consumer electronic device ... maybe it's different with Apple's philosophy, but in general I doubt there's that much profit to be found in MP3 players -- they may depend on the sales of headphones, cases, iTunes/Amazon gift cards or tracks, CDs to rip onto the device, etc. more than on the actual sale of the device.

When I worked for Radioshack a couple years ago, they only made a few dollars per iPod sold, it was all about the high margin accessories added on.

If engraved items are less likely to be stolen, does that mean criminals first check for engravings before taking an item?

It could also mean that, knowing that engraved products are harder to sell, and knowing that an iPod is likely to be engraved a criminal will be less likely to steal any iPod, as opposed to say a GPS that could be more easily sold.

> This said, I object greatly to the article's outlandish posturing that he knows WHY Apple offers free engraving and it is for the cynical reason he stated

Well, they obviously plan to make money off of it somehow, right? Do you object to that, or are you upset because you think that he thinks that?

Because it makes giving one as a gift even cooler.

I gave my sister her first iPod as a graduation gift when she got her masters in social work after surviving her first bout with breast cancer. Being able to put this quotation on the back of her gift meant a lot:

"Life is either a daring adventure or nothing."

I also think Apple does this to impress the shit out of you. I typed the quotation in on Monday afternoon and got a happy call from my sister on Thursday morning. All the way from China in less than 70 hours.

as anyone considered product personalization as a way to mitigate the durable goods problem? Are there other examples of firms doing this?

Scion pushes the idea of customizing a new car: spoilers, rims, paint jobs, removing the logo, whatever else.

That's because the market segment for that car is young people who will spend money on foolish stuff like that.

Aside from the expense, I don't think it's more foolish than e.g. styling your hair or wearing a tie: both completely useless except for their effect on your appearance. Older people would probably buy modifications to new cars if marketers invented a way for them to be classy.

It's probably because Apple sees itself as a luxury brand and thus its products are deserving of engraving. This is all about product positioning, even if you don't avail of the engraving, the fact that it is offered tells you something about it: that people love this brand/product so much that they choose engrave their names and messages on them.

That and Steve probably likes to give personalized gifts....

Is it just me or is there an unusually high amount of pointless/useless comments in this thread?

Is that what putting "Apple" in the headline does to a thread? It reminds of Digg...

Maybe not putting "Apple" in the headline, but simply blogging about something that's bloody obvious.

How about making customers happy? How about making a personal gift more personal?

I call this baseless speculation.

It's not like you are forced to have engraving. If you want to resell it, don't engrave it. If you want the person at the receiving end of a gift card to be able to reuse the card, don't sign on the card.

More like, they already laser etch the back of the iPod. Why, not take a small step further to differentiate your product and make customers feel even more attached to their purchase? And the reason they charged for it before was not to offset the cost of an extra step in production, but to monetize something that the customers want.

The whole Gruber-school of finding hidden meanings in whatever Apple does read like Talmudic Torah interpretations, pontificating on why a comma is in a certain place in a certain sentence.

If you want to resell your iPod, don't engrave it. Modern Apple products seem to be designed to expire after a few years anyway - see how Apple really doesn't want to let you replace the battery in said iPod, for example.

I don't think this is it. Here is why: Almost all Apple products have a "build in" expiration date. And that is the lifetime of the batteries. Maybe someone could proof me wrong and affirm if iPhone Gen 1 batteries are not good anymore. But it's true, Apple pushes generations fast out of the door, so the engraving is not useless.

Perhaps, but Apple has some extremely friendly replacement policies that I personally have used (busted iBook replaced with a black macbook!) and have heard of others running into. Just the other day there was a reddit thread about this, actually:


The points about directing people to their store over other stores and minimizing the secondary market are probably the main reasoning behind offering engraving.

Any idea why Dell/HP and others do not offer engraving for their products?

Was this not obvious from the start?

Caveat emptor. If you plan on reselling you should think twice about stuff like this.

I don't know about you, but I plan to resell something only long after I bought it.

I wrote about trying to get my Nexus One engraved, and how I was going to go about avoiding the depreciation in the secondary market. See the section "On Engraving One's Phone" at http://blog.yafla.com/Android_22_Engravings_and_the_Google_N...

I think it would be a clever solution for next year's YCers

Why doesn't Apple engrave Macbook Pros for free, too?

I would suspect that once you engrave your iDevice that it would be harder to resell, thus bumping up the market for new devices. Or, it could be that people are more likely to buy them as a gift if they can somehow personalize it.

I began to suspect the same after I read the article and it said that.

That's actually the claim made by the original article.

As a commenter there points out, though, if it's harder to resell your old machine you may be less likely to upgrade to a new one. So there is pressure in the other direction.

The real reason? Apple make more money if you buy from them direct.

I don't resell, just reuse. Reselling is stupid.

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