Apple is brilliant at zigging when everyone else zags. Nobody cares about an MP3 player -- Apple does the iPod. Smart phones are dead, just look at Palm -- Apple does the iPhone. Tablets are a joke, even Microsoft gave up -- Apple does the iPad. Want to beat Apple? Just do something that nobody else cares about anymore. You can build a better PC. You can reinvent MySpace. You could even reinvent old Apple products like HyperCard or printers.
Here's the disruption I'd like to see for printers - forget all that driver nonsense; network printers should have a webpage where you upload a PDF which (after proofing, if needed) it then prints.
Postscript would partially complement PDF support, but Postscript still needs the help of a driver to talk to the printer. (Where does /dev/lp0 itself come from? The port driver.)
Sure, but we're talking "open a TCP connection to a port, send Postscript" and some slight variations on that theme (HTTP POST, USB, ...). Nothing like the jungle of printer drivers we have now.
I really like this idea, but it doesn't seem like quite a full solution. I wouldn't want to convert <i>everything</i> I want to print to PDF and then upload it to a web form.
Given the ubiquity of print-to-PDF on OS X, where there's literally a PDF button on every print dialog; this doesn't seem like an onerous requirement. XPS support might be more appropriate for the mass market, now that all editions of Windows 7 include the XPS printer.
Honestly, I don't print often enough for that step to be annoying, but how about if the printer exports a network share with a watch folder that prints PDF files that get put there. The workflow then is print-to-PDF, but save it to the bookmarked watch folder, and... printing happens!
I love Bonjour for this simple reason. Throw a Bonjour enabled printer on the network, and every mac in the joint will find it, set the drivers and you off. Window can do, if Bonjour is installed.
But I think Win 7 does a fairly decent job of doing this (without Bonjour) too. I don't know about network printers too. I don't use Windows much on the network.
To underscore the point, I've found Windows drivers come in two flavors. Either OS-specific - meaning Windows XP, Vista 32-bit, Vista 64-bit, and Windows 7 (both 32 and 64 bit as well), along with OS X and Linux (cough they're both CUPS), which means I have to download the drivers 4 or 5 times; or a massive 300 megabyte (bandwith is cheap, but that's just a bit big) download, and OS X/Linux is usually a separate download anyway. I don't even remember what hacks I had to do to get the drivers for all the flavors of Windows drivers to so other people could use my print server.
It's so much nonsense that if someone needs to print something, most people find it easier to copy the file to my computer and print it from there, rather than setup my (networked, auto-driver installing) printer on their computer.
There's IPP, there's the printing part of CIFS, even plain old JetDirect (raw print data over a socket).
What's nonstandard is the ways of telling the hundreds of ink nozzles of various colors to produce a particular picture. There's of course PostScript, but it is only implemented in expensive printers.
Not so much that, but better integration with other devices and services.
Printer integration to automatically wake up and print documents when I need them, not when I remember to print. (boarding passes, etc).
Printers that can take half-size paper, and potentially auto-scale down documents to work with that half-size paper. I hate printing because 70% of the time I need about 5 things on the page, but they're all spread out, and an entire sheet of paper is a waste. Email/web/bookmarks helps out, but we could get by with smaller paper most of the time, except all printers expect larger size paper.
Better auto-discovery of local printers around me, and cloud integration to print things wherever I'm at.
Easier ways to print remotely. If I'm onsite at a client, I can't print something I need until I get home, but I may forget then. Letting me print remotely so it's ready when I get home would help, and/or the scheduling for future printing, either at a set time or set context (IE - at home).
"3D printing" that would allow me to use those awesome red/blue glasses to get the full 3D effect from my documents.
Relatedly, I'm not sure why companies aren't giving schools free paper with ads on the back. This would help school budgets, and give advertisers a captive audience.
Printer hardware and usability need some help, too. In my office, the printers (and fax machines and copiers) are always jamming or difficult to replace the ink or paper without referring to the manual.
The office printer room actually has a huge poster: "How to fax in 12 easy steps". Ironically, the process is so "easy" that the poster lists more than 12 steps.
Create a printer protocol that basically multicasts for a certain address, and it automatically prints to the closest address. That printer would respond back with it's name and location plus map, and you wouldn't have to play the 'find the closest printer' game. You could combine this with the generic SMB/NFS/HTTP file drop idea, and simplify the printing process.
The catch would be you would no longer choose a printer, but that can be looked at 2 ways. You can simply offer the option to choose through legacy methods, or you can make the assumption that it's easier to physically find the closest printer than it is to find the physically closest printer through logical means.
It would be disruptive enough if someone made a printer that just fucking worked. My parents have been through a series of all-in-ones over the past decade or so, all of which have crapped out and shipped with terrible driver software that causes kernel panics. I've been told you can't even buy a consumer printer with metal gears anymore, just cheap plastic gears that are liable to break in a paper jam.
The printer landscape out there is so dismal, I still haven't replaced my HP printer from the late 1990's. Even though it only prints black and magenta anymore, at least it still prints at all despite being more than a decade old. I won't be able to say that about any printer I buy today.
perhaps a flexible subscription I.E. I agree to buy 12 cartridges ... within 2 years; but can request up to that time when I need them.
- Although I think you need a price on the printer to weed out those who will default on the ink. Much like the square cost $10 at the Apple store; but is free online.
I second that. Scanners and faxes too. There has to be a better way then a box sitting in the corner of the office. Costing more keep it supplied with toner cartridges.
I'd love to see cheaper printers that can do page collating and binding. I want to hand my printer the ebook I just bought or a collection of papers I've downloaded and get back a properly bound book. I know such printers exist, but they're hardly priced for the home market.
Your comment is making clear Apple does a great job letting you believe this. Your statement about Smart phones is just plain false. Samsung alone is outnumbering iPhones. Apple is zigging best with the iPad.
But then again other tablets are not a joke. There are some really good ones on the market and a lot of people are happy using them. And Microsoft did not gave up, they just did not believe in tablets. They believe in smartphones and released WM7.
MP3 players.. well ofcourse they sell a lot of them, but Creative and other brands still sells a lot of them too.
It's very simple: people who are having a nice bank account buy Apple, all the others buy something else.
Apple is a great brand, but it's stupid to say nobody cares about something other than Apple.
Apple's iPhone sales alone just surpassed Nokia's -- http://www.9computerstore.com/2011/04/22/apple-tops-in-hands... -- and that's only talking about the phone part. It's not taking into the (in my opinion) the much more important iPod Touch through iPad market, which the Android has no answer to at all on the low end and no really contenders on the upper end.
If smart-phones was actually the market that we were talking about, the fact that my iPhone sucks balls for making actual phone calls would matter.
iPhone passed Nokia in terms of smartphone sales in dollar terms. Apple does not ship more units than Nokia.
It's quite amazing really, that Apple comes in as a late entrant and shaves all the massive profits off the top, leaving the rest of the market to fight over less profitable items.
Is there a single Android handset that competes with the iPhone in terms of units, or is it "Android collectively beats iPad and iPhone collectively?"
I think Kottke was referring to specific one off products like the iphone itself. Google and the rest of the handset world collectively has surpassed iOS usage, but we know that the iOS pie slice consists of just 3 broad models -- iPhone, iPad, iPod Touch -- while Android slice consists of seemingly every other phone under the sun. How does the landscape look if you stop looking at it by collective mobile OS and start looking by handset model line?
I'm asking out of genuine curiosity, not to try and prove a point, so if this post sounds smarmy or anything its not deliberate. Culturally, collectively, "Android" seems like it is going toe to toe with iOS, but when you get down to single models, everyone talks about the iPhone and iPad, but not much about specific Android-sporting handsets. Android, in those conversation, always gets abstracted back down (incorrectly) to a nebulous brand/make, or (correctly) a platform.
The statement iPhone and iPad competitors are never going to beat Apple at their own game seems wrong (note the "never going to"), since I'd say that Android collectively may well beat iPad and iPhone collectively. To say that iPhone is number 1 at present is plausible, to say that there is no threat to that is not plausible.
Android handset makers aren't competing with each other? Even if they aren't right now, or if Android is the one thing they don't publicly compete over, that will change. If the iOS slice of the pie shrinks enough at the expense of the Android slice, don't be surprised if unifying "Android" branding starts disappearing from all handset advertising. They'll all want to talk about how they're unique and better an not the other guys, not about how they're holding hands.
Android handset makers aren't competing with each other?
Yes they are. In terms of "beating apple at their own game", is that even relevant?
They'll all want to talk about how they're unique and better
so far the vendor-UIs on top of android have been unique, but better? Not usually. If one finally is, I'd welcome it, but there hasn't been a stand-out that I know of.
not about how they're holding hands.
As a coder I'm interested in targeting all of them, which I can, and they'll want to talk about "comes with a store full of bajillions of apps" so in that sense they will make the co-operative nature a feature.
Why a single android handset is important?
It's like asking if there is a single computer maker that is more popular than Apple computers.
It doesn't matter, what matter is Android vs iOS devices.
Only Google has the capability to "beat Apple" in the OS/platform game in the context of Android as a platform. Any handset maker has the potential to "beat Apple" by making a handset that outsells the iPhone. You can beat the iPhone without beating the entirety of the iOS platform, for instance. As the below comment points out, that already happened in some places. I don't think Kottke meant his comments as platform war commentary (I think he was talking about products) but not surprisingly HN fully interpreted them that way.
I'm pretty sure in the handset division, Motorola is making good revenues with the Droid family. They are still some of the most popular handsets, certainly on Verizon.
What impact the failed Xoom has taken on their bottom line, I don't know however.
Fair enough, if so then compare Android with iOS and the Android userbase with the iOS userbase, i.e. the iPad, iPod Touch.
The fandroids in topics like this one are delusional and seemingly motivated by anti-Apple hatred. Reminds me of all the Linux advocates who 5 or so years ago insisted that Linux and OpenOffice were going to take over the desktop from Windows and Office.
Market share means nothing when the adopters are freetards, you may have some numbers, you will not have quality of revenue. And anyway, what is the return rate like on Android handsets?
I agree, and furthermore, based on my own observations, it seems like a lot of Android users don't even know that their phone is running Android, much less have ever heard of anything called "the Android marketplace". Those users don't count towards the size of the platform, by any useful metric.
And I am not sure if Social is the key to making apple more successful or whether its their inherent weakness. All I see today are solutions where social seems to be tacked on as an afterthought regardless of whether it makes sense or not.
And I cant speak for others, but I am not excited about a Facebook phone. A hardware device does not seem to be a natural progression for a company like Facebook. And allowing Facebook, an entity that has now taken dimensions beyond a simple social network in to a Central identity provider, to track every single aspect of my life (location, calls, contacts, browsing habits, etc..) is simply a non-starter.
But maybe an FB phone will appeal to the 18-24 crowd for whom privacy is not as important as the desire to be social.
My first thought on this was the Microsoft phone platform (Windows Phone 7, or whatever it's called this week). I haven't played with it but it looks like they might have had a chance at hooking up with Facebook/Twitter/etc. and splashing their app on the WP7 dashboard. However, it's probably too late for that as the Windows phone platform seems to be heading down (again)...
They have done this with Facebook, after setting up your People hub becomes a merged list of both your contacts and facebook friends. Status updates from both etc.
I believe similar Twitter integration is in the works.
> iTunes is showing its age and over the years has become a bloated collection of functionalities ...
iTunes 'bloat' is a huge competitive advantage. Apple can make changes to their digital stores and instantly release to tens of millions of customers, including Windows users who aren't going to install a half-dozen discrete applications if Apple chose to split up iTunes.
Honestly, years of using iTunes daily on Windows completely turned me off of the idea of switching to a Mac or an iPhone. Without exaggeration, it is one of the worst pieces of software I've used. It's bad enough that my next MP3 player probably won't be an iPod, despite generally being happy with the one I have.
Edit: and so this isn't just me ranting about iTunes (yet again, sorry), I think iTunes can actually harm Apple's image. It's tolerable if that's all you've used, but when compared to pretty much any other music player, it has glaring flaws (at least on Windows). To make a terrible continuation of the analogy, a Trojan Horse doesn't work if the Trojans hate your crappy horse and decide to never speak to you again.
Interestingly, when it first came on the scene as SoundJam, and in its earlier incarnations at Apple after it was bought, iTunes was by far the best music player out there[1]. The overwhelming favorite MP3 player on Windows at the time was WinAmp, whose UI was a ghastly collection of inscrutable, tiny fonted palettes. Compared to that, having your entire collection of music in a smart, scriptable database with a slick interface was a dream.
Performance problems on Windows and tacking on one new non-music playing feature after another seems to have doomed the experience and reputation.
Considering iTunes is the desktop companion for iOS it should be a showcase of excellent UI and efficiency. I use it all the time and while it (eventually) gets the job done it's a pretty average experience.
People keep complaining about it on Windows, and on the Mac it is one of Apple's last Carbon apps that can't run in 64 bit. Just inspect it in Activity Monitor and see all the Carbon library goodness loaded into memory.
The only thing that makes sense with iTunes in its current state is that Apple are going to reduce the emphasis on iTunes and sync via the cloud, hopefully with a Dropbox-like LAN sync.
I commented a couple of weeks ago on a thread where I talked about brand equity, and iTunes is a perfect example of this -- it hasn't been solely about music in years, it has a half dozen bolted-on functionalities and it's in desperate need of a refresh. And yet the iTunes brand is so strong that none of that matters.
It's only strong for distributors. Have you ever met an end user who said, "Gee, I love iTunes! So fast, so responsive, so awesome!"
The only reason I still use it, really, is because the last time I tried using something besides iTunes to sync my music to my iPod, it nuked the whole library. As far as I know, it's the only fool-proof way of synching my iPhone with my iTunes library (which actually lives on my iPod, because its audio jack died.)
I love iTunes, both on Windows and on the Mac. It's reasonably fast on Windows (and very fast on Mac), it does a great job organizing my collection, it makes sharing and streaming between devices extremely easy (Mac, PC, Apple TV, iPhones etc.). It let's me easily subscribe to podcasts, shop for music, and sync with iOS.
I'm not aware of another media program that does half these things half as well. But feel free to enlighten me.
I wouldn't say the iTunes brand is so strong - I think the iPad and iPhone brands are strong, and Apple forces you to use iTunes to use those products. I've never heard anyone say they love iTunes, either. I'm surprised Android and Microsoft haven't exploited this weakness more - I don't have faith in Motorola or Nokia to create good desktop integrations, but a software company could do it.
It's software, and a music store and an app store. (Plus podcasts and TV shows.) Having a strong brand doesn't mean everyone loves it. It means everyone knows it.
Microsoft became successful primarily by IT department mandate in the 80's and 90's. Apple has been successful due to its focus on user/consumer experience. We now live in an era where consumers have a larger voice in technology selection and the Microsoft/Corporate IT department mandate is becoming less significant. You can beat Apple only by delivering the best consumer experience possible.
From what I read, I think there were not that much IT departments in the 80's outside technical companies, I think Microsoft got its position because of a series of factors, one of them was the presence of Visicalc-like programs (specially Lotus 1+2+3), in the 80s Apple was already offering an absurdly good user experience compared with Microsoft, yet it failed in the first time.
I remember that people got pretty excited with Windows 95, I don't think that this excitement was a enterprise mandate at all.
The points in the article are as myopic as Apple's competitors. You aren't going to beat Apple by reacting to what Apple does poorly today. Instead, ask "Where is technology going in one, two, and five years?" Then get the people that can do something about it and do it.
Maybe you will see a future that includes things Apple doesn't do. But maybe you will see a future with things Apple already does and you had better get on board or face extinction.
"...the Apple products & services that Apple does well are the ones that Steve Jobs uses (or cares about) and the ones he doesn't use/care about are less good (or just plain bad)..."
"but I'm pretty sure Jobs never has had to schedule his own appointments with iCal so that program is less good"
Speaking of, one thing I know for sure Steve Jobs doesn't do is getting directions to his meetings from iCal on his iPhone: the appointment's location can't be tapped to open Google Maps. This is driving me crazy. Not only because I want to use it, but because it's so simple and has been begging for it since the iPhone came out.
Jobs does use Mail (on both the iPhone and the Mac – as can be seen from examining the headers of his widely publicized emails)... and plenty of people aren't exactly fans of that application.
This is also a reason why founders/CEO's of companies should use their own products. In many cases it doesn't seem like they do. If you wouldn't buy or use your own product, then something is wrong with it.
MobileMe was never really successful because it costs. I would have tried it the first time I heard about it if only it would have been free. Indeed, I found it quite interesting. Dropbox didn't cost anything for the basic usage so nothing stops you to just try it out. And then word of mouth does the rest.
I'd say that this article is spot on except for weak spot #2. Mobile Me integrates very well with iOS devices (AppleTV incl.) right out of the box. And then there's that huge datacenter they're building...
BTW, how is Dropbox more compelling than Mobile Me? Sure it's cheaper, but that doesn't mean it's better.
I'm just saying I wouldn't dive headfirst into competition with them in the cloud space just yet. The tethered syncing issue is a valid point, but don't Microsoft and Google already have solutions for that?
Dropbox is way, way more compelling than iDisk, the equivalent bit of MobileMe. Why? Because it just works: your files are always available on whichever computer you're on, so long as it has been recently connected to the net. With iDisk, that's almost never true, and you have to either put up with a WebDAV implementation that's slower than making your own floppies and posting them or a weird hybrid local sync that always breaks. It Never Works, basically, and even if it did wouldn't have the great social and versions features of DropBox.
As for the rest of MobileMe, the sync is OK, except when it gets confused. The whole setup is definitely a weakness, it's just one to be exploited in pieces, as DropBox has.
It's not hard: build a better product. Talking computers, why the hell doesn't Dell hire a few great industrial designers? Dells' best notebooks (which all cost over 2k) look just like their $300 notebooks; fat, covered in black hard plastic, stickers stuck on the palm rests - and not to mention loaded with bloatware.
If Dell (and HP and all the rest) built compelling looking (and performing of course) higher end notebooks then folk might not keep looking to Apple as the standard "best". All these companies (except Apple, since they enjoy such high profit margins on everything) fight over scraps at the low end. Even in their business lines (not talking servers here just notebooks).
I just couldn't read the first point without cringing. Looking to Facebook to socialise gaming? Christ. Games on Facebook might be popular (actually, I don't know, are they still popular? I ditched Facebook a year ago), but they sure as hell aren't good, and interaction with other people (ie the social part) certainly seems to be restricted to blatantly pimping your game.
I'd be looking more to Steam for doing a decent job of mixing social with gaming, where you have recommendations, inbuilt groups to join for people who play the same games, etc. That way you're connecting with people you know share an interest, not inflicting your latest 'social' game status updates on your friends who are most likely not interested.
Personally what I find deficient in iOS devices is real time communication (I know I know, they're called phone calls) and the single foreground task nature of the device. With web based games or Steam there's always a real time method of communicating with your friends no matter what you're doing, you can see who's online and so on.
On the other hand, due to the casual nature of specifically gaming on phones and tablets, I don't think the desktop paradigm really works anyway.
From a non-gaming perspective, what I'd like to see most on iOS is a better way to manage files, rather than sending copies to any app which I would like to use them with. I don't really want to access a file I've stored in DropBox, then send it to GoodReader or Keynote or whatever. I don't want to load a picture from Photos into $editingApp then save a copy into Photos then load the new photo into something else. It seems a terribly wasteful way of handling things (and very much a 'tacked on' approach while people figured out what to do with a tablet).
FTA: "Someone should figure out how to leverage Facebook's social graph to make the phone/app/gaming/music/video experience significantly better than on the iPhone/iPad and then partner exclusively with Facebook to make it happen."
New title suggestion: How to Beat Apple and Drop Your Work into Facebook's Lap.
I fail to see how this competitor might be more benevolent than the other.
"If they feel the need to compete with anyone on price in order to protect their business interests, they can do so with price cuts deep enough and long enough to drive most potential competitors out of business."
If they try to drive competitors out of business by pricing below cost, this is illegal. Apple is already getting looked at by regulators, and I doubt they want to invite more investigation, which slows a company down and may prove really harmful to the culture (see: Microsoft).
If this just means Apple might be willing to cut their margins, then yes, I agree. So the key is to make something with a lower cost structure than Apple has. Not going to happen for iPads in the near-term, but this industry changes pretty quickly...
Apple doesn't have to go below cost to outprice its competitors, just as Wal-Mart doesn't have to. Apple has huge profit margins and huge economies of scale that would enable it to, in some cases, sell products for less than another vendor could build a comparable substitute for.
Care about your business. Care about your people. Care about your people. Care about your company. I mean really care. Obsess. That is what gives you the best possible chance at building something great.
> Competitors should take a page from Apple's playbook here and be open about stuff that will give you a competitive advantage and shut the hell up about everything else. Open is not always better.
That's pretty horrible. Life isn't all about profit, you know?
In his previous sentence, Jason uses the phrase "competitors" and talks about "competitive advantage". So when he says, "open is not always better" - he is saying that being more open isn't always better for your competitive advantage.
That is definitely a true statement. Life isn't all about profit, but staying competitive is a huge contributor to maintaining any profit at all.
One of the reasons Apple fails at social is it's fanboys/gals. If you're walking around telling people to "Get a Mac" when your friends run into minor issues, chances are your social recommendations are not going down well either.
One thing I find hard to beat when it comes to Apple: the image.
Apple is the hip and cool thing that your artistic cousin uses, whereas Microsoft is the lame and boring thing that the enterprise uses.
Between these two stereotypes, what would be the image you would market to in order to turn huge profits like Apple is doing? I have no idea, and I think it would be unwise to just imitate Apple, they have more experience being Apple than anybody.
The full lyrics diss-out the iPhone because to them it's all about Blackberry - you wanna tell them they're wrong? ;)
I think as technologists we can pontificate that Apple (usually) imperically has the best hardware and software, but that's not how image and culture decide what is best.
You have no idea how many artists use shitty Windows XP laptops. As a computer guy in my school, I had to root out a ton of viruses and other crap. Even my painting professor, a renown watercolor and oil painter, had a 9 year old Taiwanese micro laptop that chugged on IrfanView. Minus the rich kids, designers and myself, I knew only about 10 other students with a Mac in the art department.
Windows is cheap, which is good for an artist. Cultural cache can only go so far when one's judged on their work.
Image is not so much about who you are, but about how you would like to appear.
It'd be pretty funny if Apple's success rested merely on people's desire to be perceived as creative and aesthetically discerning rather than on people who are creative and aesthetically discerning finding it to be the better product.
I don't think that's accurate, but it does probably make up some measurable amount of their sales.
I think this is changing as art/design schools are starting to require laptops to be in the program, usually strongly 'recommending' mac laptops. Students are using their student loan money to buy them now.
At least this is what was happening at my alma mater as I was graduating.
It will be interesting to see if this trend reverses. Of course we've all seen the photos of students sitting in classes and only one guy has a Windows laptop and everyone else has a Mac...
... but that was back when Vista was at its prime level of stinkiness. General feedback on Windows 7 (even if it is just a glorified Vista service-pack as some claim) is that it is a lot better.
I've had a couple of opportunities this year to use Windows 7 desktops set up by different organizations. And I noticed an improvement over Vista. I wouldn't say it was completely pain free, but it is comparatively closer to an OS X level of experience than Windows XP was back in the day (whereas Vista was a decrease in that regard).
The question is, would you pay 70% of the price (keeping in mind student discounts on Macs) to get 75 or 80% of the quality? To a lot of people that will seem like an acceptable trade-off, and so we might see a resurgence in Windows laptops on the campus.
Agreed, though this is going to vary by country and region.
The parent displays the standard classic misunderstanding of Apple. The vast majority of people who buy Apple products don't buy Apple because they "want to be hip" or for reasons of image. Most of us left that kind of juvenile peer pressure behind in high school.
The problem is the pundits are simply unable to look beyond the surface details. It would kill them to admit that there are actual reasons to use Apple that go beyond the superficial "skin deep" shininess. But because the pundits bang that drum so often and so loudly (any that don't are dismissed out of hand as "cool-aid drinking fanboys"), other people (e.g. the parent poster) think it must be true. That (for instance) OS X is "just the same as Windows only prettier".
It almost becomes a grunge aesthetic. They reason that the non-Apple and Apple products are functionally the same (or turing equivalent, or use the same hardware (intel chips, A5) as their competitors), so that the only difference is prettiness and price tag, and on that basis they reject Apple. They're trying to show how manly they are by not being swayed by 'base emotions' and superficiality.
Personally, I think the burden of proof should be on the other side. Given that Microsoft has spent the last 15-20 years dishing out shit-soup and their marketing mostly consists of "stick with us because the next bowl won't be so bad", how in blue blazes are they still so popular?
The burden of proof shouldn't be on the Mac-heads to prove that they're not superficial and shallow, the burden of proof should be on anyone that supports the Windows eco-system to prove that they're not clinically insane! ;-)
People who aspire to an image of an artist might use Apple. Actual artists don't usually have enough money for new computers, much less new Apple machines.
Think about that for a minute. They made a really good operating system which I would use if I could. However not many could afford it. Usually its... buy 2x computers, or one Apple. Thus only the few "elites" have it (or those willing to sacrifice to get it)
Which is an absolutely perfect way to go for a luxury company, just think Porsche, Lamborghini, Aston Martin, Rolex,Breitling etc. here. Apple never really compromised on price and image and they try very hard to keep a great overall product quality, if you ask me.
Apple competes on price in ways that preserves their brand- offering more for the same price, clearance/refurb section, previous model at a discounted price.
I agree with Kottke, Apple has a huge ability to compete on price if needed, and I think they are more than ever. Discounted previous models used to be limited to clearance/refurb. But now you'll find the iPhone 3GS and the MacBook prominently displayed as a part of the lineup. The iPhone is available via the online store "from $49", not "from $199".
"Apple is absurdly profitable and cash-rich; if they feel the need to compete with anyone on price in order to protect their business interests, they can do so with price cuts deep enough and long enough to drive most potential competitors out of business."
Talk about 'not in their DNA', Apple will never compete on price. They never have and they never will. A brief look back at the history of the PC clearly shows this. They could have owned the PC market, they were first and best. But just too expensive.
That simply isn't true. The iPad clearly competes on price, it could have been priced at $800 but they went for the aggressive $500 mark and began eating up the netbook market.
Look at the iPhone it started out at $800, unsubsidized, and when that didn't take off they quickly got it subsidized and down to $200, and then have kept the 3GS around to sell at $99 and $49 price points... Clearly they are competing on price.
People seem to underestimate what a unique product the iPad is: a consumer product that has been build to the highest standards of engineering and design, and would have been totally credible as a high end luxury product at three times the price.
I think that's probably why it worked. It's a category of device that hasn't previously really worked, so it had to be priced for people to risk buying it. If it were priced as a luxury item, you'd have the Apple fanbase buying it, but it probably wouldn't reach wide adoption.
Yeah, it's probably more accurate to say that they're competitive while preserving their margins.
Apple will never sell a device for which they can't keep a healthy margin. They've optimized their supply chain and component procurement in such a way that they can make absurd margins on an iPad 2 and competitors still have a hard time beating them on price. They have to compromise with smaller screens and pretend that's part of the design strategy.
When I say Apple doesn't compete on price, I'm talking about pricing aggressively as the OP suggested: "they can do so with price cuts deep enough and long enough to drive most potential competitors out of business."
When a company has profit margins of 24.27%, as Apple does for the last quarter, they are not competing on price. Companies that compete on price typically have profit margins down around 5% (see Dell, Walmart).
Apple will not cut into those margins to make market share. They never have. That's not to say they won't do whatever they can to gain market share. But deep price cuts is not one of those things.
BTW the iPhone is subsidized by the carrier, not by Apple.
Also, this is the first time I've heard that the iPhone "didn't take off" until the price came down. I kind of remember people lining up overnight to buy it when it came out -- no price drop necessary.
> When a company has profit margins of 24.27%, as Apple does for the last quarter, they are not competing on price. Companies that compete on price typically have profit margins down around 5% (see Dell, Walmart).
The iPad is seriously competing on price. This both elated and worried AAPL investors, who are worried about gross margin as well as sales.
So, Apple can and will compete on price in one market (iPad) while being nosebleed premium in other markets (Mac Pro).
Regarding iPhone, there are no BOGO (buy-one, get-one offers) while every other manufacturer offers those, and the Average Selling Price (ASP) is a nosebleed $600+ and hasn't come down over 3+ years... this is money that Apple makes per unit.
Apple is both luxury AND competes on price - they're incredibly flexible for such a large company.
"Regarding iPhone, there are no BOGO (buy-one, get-one offers) while every other manufacturer offers those, and the Average Selling Price (ASP) is a nosebleed $600+ and hasn't come down over 3+ years... this is money that Apple makes per unit."
|Apple will not cut into those margins to make market share. They never have. That's not to say they won't do whatever they can to gain market share. But deep price cuts is not one of those things.
Then where are all the $200-$400 tablets that should be killing Apple like in your reference previously: A brief look back at the history of the PC clearly shows this.
So why isn't this happening now then? Also yes, AT&T or whoever the carrier is subsidizes the price, I thought this was obvious and didn't need clarifying.
"Then where are all the $200-$400 tablets that should be killing Apple like in your reference previously: A brief look back at the history of the PC clearly shows this."
My reference to the history of the PC was to point out that even when Apple had only 4% or 5% of the PC market, and was all but irrelevant, they still did not choose to compete on price.
I never said anything about "$200-$400 tablets that should be killing Apple", but since you bring it up, I would be surprised if they don't come eventually. And when they do, you won't see Apple matching those prices, let alone beating them.
"Also yes, AT&T or whoever the carrier is subsidizes the price, I thought this was obvious and didn't need clarifying."
If you know this, then why do you bring it up as an example of how Apple has dropped their prices?
I think you are both talking past each other. If I understand dean correctly, he isn't saying that Apple can't price a device aggressively, but rather that when faced with a choice of cutting corners to make a cheap device, or adding value to the product whilst maintaining price, they opt for the second choice.
To make things more concrete, where Dell might look at a Macbook Pro, and then figure that they can compete by using a plastic casing instead of unibody aluminium, thereby making their product $50 cheaper to make, so they can sell it for $50 less, Apple is more likely to try to compete by adding a thunderbolt interface, or introducing better screens that guarantee colour fidelity, or making a better OS, or whatever. That don't lower the price - have a look at the MacBook line, the prices have barely changed over 5 years, but the value of the models offered has increased massively.
