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From the headline I thought this was going to be about them having too many SKUs, but after reading I see it’s just the standard techie tropes about overpriced

by orev 7y ago

From the headline I thought this was going to be about them having too many SKUs, but after reading I see it’s just the standard techie tropes about overpriced and closed systems. The thing is that consumers (clearly) don’t care about that stuff. There is no such thing as “overpriced” as long as the item is selling. Consumers determine the price of something based on the single factor of “what they are willing to pay”. If Apple can sell devices at that price, and consumers are willing to pay it, then it is by definition not overpriced. Opennes is also overvalued for techies. While I am on the side of openness myself, the vast majority of consumers don’t care about it. They only care about the value they are getting from the product. There might be a few people who really want to crack open the case, but they do not have any significant presence in the market. What consumers do care about is feeling good about their purchase, and the Apple of the 1990s had so many products and was so unfocused that none of the products were good, and consumers felt bad when they bought them. The SKU problem is the same as today. Now you have half a dozen iPads to choose from, and a number of laptops that all seem to be the same except for half an inch between models. No matter what you pick, you leave the store with a sense of FOMO, not knowing if you really picked the right model. That is really what Steve did — you went in and bought the only option they gave you, and you felt confident you got the right one.

headsoup 7y ago
If only consumers wore a badge stating "what they are willing to pay" then it would be so much simpler! It is not a magic number, it is all the work of the company creating the desire, brand and product to create demand for the price they want to charge.
- orev 7y ago
  I don’t see how that’s relevant to the post or my reply. I did not mention anything about how you find the price, only that the common complaint about Apple being overpriced isn’t really valid based on standard market theory.
  - headsoup 7y ago
    I'm probably missing something, but other than retrospectively observing that people are paying a price, how does market theory comes up with the price without the 'how?'
barce 7y ago
You addressed the overpriced issue, which I agree with, but what about how closed systems ultimately caused the self-combusting laptops of 1990s prior to Jobs' return?
bb88 7y ago
> Consumers determine the price of something based on the single factor of “what they are willing to pay”. If Apple can sell devices at that price, and consumers are willing to pay it, then it is by definition not overpriced. Luxury brands are either one of two things, they're either a superior quality product over engineered for the consumer's use case, or they're a $40 chinese made t-shirt with a logo on it. When people learn about the problems with the butterfly keyboard, and the display connectors shorting out -- The luxury good becomes more like an overpriced t-shirt. Companies don't typically buy $40 abercrombie t-shirts for their employees. Nor will they buy $2000 laptops with a 10% failure rate over 2 years or ownership.
- lonelappde 7y ago
  Cheap t-shirts are from Bangladesh. China does skilled manufacturing.
  - llampx 7y ago
    How is this relevant?
JDiculous 7y ago
I don't think it's a fair assessment to say that consumers don't care about price. It might not matter as much as other factors, but it definitely still matters to a lot of people. Price was a major factor in why I sold my Macbook Pro. Why am I going to pay $1,000 more for an inferior laptop (I can afford it, it just doesn't make any logical sense)? A young art student friend of mine wants an iPad, but after I told her you can get a Samsung for only $180 (vs. $400+) she's looking at Samsung, especially since the iPad is known to have heating problems. I will say that quality is the biggest factor though. Apple sabotaged its Macbook Pro with that stupid touchbar and terrible keyboard. My (female) friend who's only ever owned iPhones is going to switch to Samsung next time unless Apple makes a small iPhone because she said the next design is really ugly. Apple deserves their current troubles because they destroyed their formerly top of the line products. Closed systems might not matter to the average consumer, but it's one of the main reasons I've never owned an iPhone and refused to buy a Mac until I had to for work. Perhaps I'm in an even smaller minority there, but it's certainly false to say that all customers don't care about that.
- blub 7y ago
  You're really doing her a disservice by recommending an Android tablet. The iPad has excellent, pro-level graphics apps (and a pretty nifty pen from what I've heard). It's an excellent media creation device.
  - anbop 7y ago
    Yeah, a young artist would be so much better served by getting even a used iPad. It will make her familiar with the tools that the pros use, and is massively better than its competitors. I hope she consults another person.
  - orev 7y ago
    Cant agree with this more. The whole idea of techies recommending “some cheap android thing” to their non-tech savvy friends and family is mind boggling. The entire point of Apple devices is because they just work for those kinds of people.
  - 7y ago
euske 7y ago
Re: Openness. I think what ultimately matters to most consumers (including techies) is stability. This includes a) continuous accessibility over time (say, for 30 years) and b) consistent usability / compatibility / affordability etc. This can be achieved by closed technology and openness does not guarantee that. Excitement or feel-goodness is another factor as you mentioned, but I don't think it's not a universal issue as some (most) people don't have to be excited about the tech.
- orev 7y ago
  I really don’t think anyone, including tech people, expects devices to last 30 years. Maybe hardcore collectors do for their media, but not for devices. Though I will say my 14 year old Palm TX is still alive and kicking...
moksly 7y ago
I think you’re right about the feeling. I know I fit the bill rather perfectly at least. I’ve had an/off preference for Apple products for about 30 years and it’s mainly been driven by branding. I don’t think price has ever been a serious stopping point for me personally. Not because I blindly throw my money away, but because it’s usually felt worth it. My old iBook g4 was expensive, but it still works, sure it runs Linux now, and it’s too slow for 2019, but it works perfectly fine. So does my original iPod, that now lives it’s life as a hopelessly ineffective external HDD for third-backups. Recently though, Apple has lost the ability to make me feel good about their products (again I might add). It’s gotten so bad that I sold my MacBook Pro 13” i5 2018 edition and replaced it with a Surface Pro 6 also i5. The MPB never felt right, while the surface feels like something that was designed by Apple. This is completely anecdotal of course, but I find that I’m often not very unique. I mean, I’ve mainly bought Apple products because they “felt right”, so I’m fairly mainstream that way. If I’m not the only one who’s fallen off the bandwagon like this, then Apple might be headed for another no-jobs slump on the computer front. You’re probably also right about the closed eco-system. I mean, I’ve personally been looking for an alternative because iOS is too closed for me, but I do agree that most people probably don’t care. It’s not like there is an alternative anyway, at least not if you want security, privacy or the ability to install your banking app.
onlyrealcuzzo 7y ago
Apple could sell the iPhone for a million dollars, and I'm sure at least one person would buy it. Similarly, they could sell the iPhone for $10k and maybe sell a million of them. I guess "overpriced" is a subjective term. But if Apple sold the iPhone at cost, Apple could certainly sell a lot more of them. If Apple sold it for a margin more in line with other manufacturers, Apple could still probably sell a lot more... Apple doesn't care that much about total shipments, though. They care more about total revenue & profits. I think it's fair for people to call something overpriced even if tons of people are buying it -- especially if there's an argument to be made that a substantial portion of consumers are buying an alternative based mostly on price, and that the comparison product has a much higher margin than the alternative. Again, this doesn't make it a bad business decision. If there's one thing I guarantee Apple knows more than anyone on Hacker News, it's what the optimal price is for their product to meet their business objectives.
- bradknowles 7y ago
  Apple could not sell the phone at a price more in line with other manufacturers, because they spend a shit ton of money on R&D and other costs that the other manufacturers don’t bother to do — because they know Apple will do it, and they can leach off the work Apple has done. There will always be lower priced competitors who are happy to be in a race to the bottom. Apple is smart to recognize that they cannot do this, for it would spell the doom of the company. Luxury brands don’t do races to the bottom. To do so would violate their entire reason for existence. Sure, you might want that Ferrari or Lamborghini to be given to you on a silver platter, or sold to you for just $10.00 each, but do you really honestly expect them to be that stupid?
  - calciphus 7y ago
    A minor point, Apple's R&D spend is significantly lower as a percent of budget compared to most of the market. I found this article really interesting: https://www.ped30.com/2019/03/10/defense-apples-14-billion-rd-budget/ https://www.ped30.com/2019/03/10/defense-apples-14-billion-r... Edit for context: in 2018, 11.6bn or 5.1% of revenue. Compare to Amazon it's half as many dollars and 1/3 the percent.
ksec 7y ago
Yes and No. I do agree Openness is overrated. Who cares if Mac are using Metal or proprietary Secure Chips if every thing is working well, and all software had its support. The last part needs working on.... >The thing is that consumers (clearly).... But Consumers don't buy Mac any more. Most of them don't. It is either business, Software development, aka Professionals / Prosumers and Students. Most of the Consumers went or are going to iPad or Smartphones. And this obviously screws the Sales Data a lot, Business like Fortune 500 doesn't care about the price tag much, they care about TCO / Total Cost of Ownership, and whether their employees are happy or more productive with their equipment. So business will continue to replace them every few years. And that is why these Enterprise business are so lucrative, they stick to the ecosystem for a long time and don't change very often. There is also a huge hallow effect from iPhone. I have seen some of these argument all around, it is selling, and therefore it is good. Windows is still the number one selling OS on the planet, do you agree Windows's experience is any good or worth the price?
- scarface74 7y ago
  The last time that Apple reported volume sales, Macs were at their highest volume ever. The revenue from Macs still is holding steady. Seeing that Windows is still the mainstream OS, the market must think it’s good...
scarface74 7y ago
How is it too many SKUs for the iPad? I think the iPad lineup is the most sensible it has been in years. - iPad Mini (compact) - iPad 9.7 (cheap, mainstream) - iPad Air (Larger screen still affordable) - iPad 11 (edge to edge display, more expensive features. Not everyone wants a larger/ more expensive iPad) - iPad 12 (if you really want a large screen) The laptop line is also simpler since they killed off the 12 inch MacBook, and got rid of the no Touch Bar 13”.
- jiveturkey 7y ago
  Can't tell if you're being facetious or not.
  - scarface74 7y ago
    Why would I be? What’s wrong with having choices of the size/price you want in iPads? Which ones would you propose they get rid of? Have you looked at the product line up of other computer and phone manufacturers? If you want a choice of Android phones, laptops or Windows PCs you have dozens of choices. Apple has to cater to all of the market segments that it cares about.
    - theonemind 7y ago
      Well, I'm not one of those "not if Steve Jobs was alive" guys, but reportedly, for instance, when Steve Jobs came back to Apple, they had a lot of products with poor differentiation, and he did this: http://www.howtoanalyst.com/wp-content/uploads/2016/01/Steve-Jobs-product-strategy-matrix.png http://www.howtoanalyst.com/wp-content/uploads/2016/01/Steve... They create one option in each category. That's all. 5 is really kind of pushing for one consumer focused product if you don't want your buyers to feel like they could've made a better choice, or at least feel like they've missed out on something: https://en.wikipedia.org/wiki/The_Paradox_of_Choice https://en.wikipedia.org/wiki/The_Paradox_of_Choice In general, people like a few good options. Given a lot of good options, they can get an equally good outcome, and feel less good about it at the end. I think Apple has banked on that in the past, but not so much with 5 active models of iPad, in my opinion.

by orev 7y ago

headsoup 7y ago

If only consumers wore a badge stating "what they are willing to pay" then it would be so much simpler! It is not a magic number, it is all the work of the company creating the desire, brand and product to create demand for the price they want to charge.

orev 7y ago
I don’t see how that’s relevant to the post or my reply. I did not mention anything about how you find the price, only that the common complaint about Apple being overpriced isn’t really valid based on standard market theory.
- headsoup 7y ago
  I'm probably missing something, but other than retrospectively observing that people are paying a price, how does market theory comes up with the price without the 'how?'

barce 7y ago

You addressed the overpriced issue, which I agree with, but what about how closed systems ultimately caused the self-combusting laptops of 1990s prior to Jobs' return?

bb88 7y ago

> Consumers determine the price of something based on the single factor of “what they are willing to pay”. If Apple can sell devices at that price, and consumers are willing to pay it, then it is by definition not overpriced. Luxury brands are either one of two things, they're either a superior quality product over engineered for the consumer's use case, or they're a $40 chinese made t-shirt with a logo on it. When people learn about the problems with the butterfly keyboard, and the display connectors shorting out -- The luxury good becomes more like an overpriced t-shirt. Companies don't typically buy $40 abercrombie t-shirts for their employees. Nor will they buy $2000 laptops with a 10% failure rate over 2 years or ownership.

lonelappde 7y ago
Cheap t-shirts are from Bangladesh. China does skilled manufacturing.
- llampx 7y ago
  How is this relevant?

JDiculous 7y ago

I don't think it's a fair assessment to say that consumers don't care about price. It might not matter as much as other factors, but it definitely still matters to a lot of people. Price was a major factor in why I sold my Macbook Pro. Why am I going to pay $1,000 more for an inferior laptop (I can afford it, it just doesn't make any logical sense)? A young art student friend of mine wants an iPad, but after I told her you can get a Samsung for only $180 (vs. $400+) she's looking at Samsung, especially since the iPad is known to have heating problems. I will say that quality is the biggest factor though. Apple sabotaged its Macbook Pro with that stupid touchbar and terrible keyboard. My (female) friend who's only ever owned iPhones is going to switch to Samsung next time unless Apple makes a small iPhone because she said the next design is really ugly. Apple deserves their current troubles because they destroyed their formerly top of the line products. Closed systems might not matter to the average consumer, but it's one of the main reasons I've never owned an iPhone and refused to buy a Mac until I had to for work. Perhaps I'm in an even smaller minority there, but it's certainly false to say that all customers don't care about that.

blub 7y ago
You're really doing her a disservice by recommending an Android tablet. The iPad has excellent, pro-level graphics apps (and a pretty nifty pen from what I've heard). It's an excellent media creation device.
- anbop 7y ago
  Yeah, a young artist would be so much better served by getting even a used iPad. It will make her familiar with the tools that the pros use, and is massively better than its competitors. I hope she consults another person.
- orev 7y ago
  Cant agree with this more. The whole idea of techies recommending “some cheap android thing” to their non-tech savvy friends and family is mind boggling. The entire point of Apple devices is because they just work for those kinds of people.
- 7y ago

euske 7y ago

Re: Openness. I think what ultimately matters to most consumers (including techies) is stability. This includes a) continuous accessibility over time (say, for 30 years) and b) consistent usability / compatibility / affordability etc. This can be achieved by closed technology and openness does not guarantee that. Excitement or feel-goodness is another factor as you mentioned, but I don't think it's not a universal issue as some (most) people don't have to be excited about the tech.

orev 7y ago
I really don’t think anyone, including tech people, expects devices to last 30 years. Maybe hardcore collectors do for their media, but not for devices. Though I will say my 14 year old Palm TX is still alive and kicking...

moksly 7y ago

I think you’re right about the feeling. I know I fit the bill rather perfectly at least. I’ve had an/off preference for Apple products for about 30 years and it’s mainly been driven by branding. I don’t think price has ever been a serious stopping point for me personally. Not because I blindly throw my money away, but because it’s usually felt worth it. My old iBook g4 was expensive, but it still works, sure it runs Linux now, and it’s too slow for 2019, but it works perfectly fine. So does my original iPod, that now lives it’s life as a hopelessly ineffective external HDD for third-backups. Recently though, Apple has lost the ability to make me feel good about their products (again I might add). It’s gotten so bad that I sold my MacBook Pro 13” i5 2018 edition and replaced it with a Surface Pro 6 also i5. The MPB never felt right, while the surface feels like something that was designed by Apple. This is completely anecdotal of course, but I find that I’m often not very unique. I mean, I’ve mainly bought Apple products because they “felt right”, so I’m fairly mainstream that way. If I’m not the only one who’s fallen off the bandwagon like this, then Apple might be headed for another no-jobs slump on the computer front. You’re probably also right about the closed eco-system. I mean, I’ve personally been looking for an alternative because iOS is too closed for me, but I do agree that most people probably don’t care. It’s not like there is an alternative anyway, at least not if you want security, privacy or the ability to install your banking app.

onlyrealcuzzo 7y ago

Apple could sell the iPhone for a million dollars, and I'm sure at least one person would buy it. Similarly, they could sell the iPhone for $10k and maybe sell a million of them. I guess "overpriced" is a subjective term. But if Apple sold the iPhone at cost, Apple could certainly sell a lot more of them. If Apple sold it for a margin more in line with other manufacturers, Apple could still probably sell a lot more... Apple doesn't care that much about total shipments, though. They care more about total revenue & profits. I think it's fair for people to call something overpriced even if tons of people are buying it -- especially if there's an argument to be made that a substantial portion of consumers are buying an alternative based mostly on price, and that the comparison product has a much higher margin than the alternative. Again, this doesn't make it a bad business decision. If there's one thing I guarantee Apple knows more than anyone on Hacker News, it's what the optimal price is for their product to meet their business objectives.

bradknowles 7y ago
Apple could not sell the phone at a price more in line with other manufacturers, because they spend a shit ton of money on R&D and other costs that the other manufacturers don’t bother to do — because they know Apple will do it, and they can leach off the work Apple has done. There will always be lower priced competitors who are happy to be in a race to the bottom. Apple is smart to recognize that they cannot do this, for it would spell the doom of the company. Luxury brands don’t do races to the bottom. To do so would violate their entire reason for existence. Sure, you might want that Ferrari or Lamborghini to be given to you on a silver platter, or sold to you for just $10.00 each, but do you really honestly expect them to be that stupid?
- calciphus 7y ago
  A minor point, Apple's R&D spend is significantly lower as a percent of budget compared to most of the market. I found this article really interesting: https://www.ped30.com/2019/03/10/defense-apples-14-billion-rd-budget/ https://www.ped30.com/2019/03/10/defense-apples-14-billion-r... Edit for context: in 2018, 11.6bn or 5.1% of revenue. Compare to Amazon it's half as many dollars and 1/3 the percent.

ksec 7y ago

Yes and No. I do agree Openness is overrated. Who cares if Mac are using Metal or proprietary Secure Chips if every thing is working well, and all software had its support. The last part needs working on.... >The thing is that consumers (clearly).... But Consumers don't buy Mac any more. Most of them don't. It is either business, Software development, aka Professionals / Prosumers and Students. Most of the Consumers went or are going to iPad or Smartphones. And this obviously screws the Sales Data a lot, Business like Fortune 500 doesn't care about the price tag much, they care about TCO / Total Cost of Ownership, and whether their employees are happy or more productive with their equipment. So business will continue to replace them every few years. And that is why these Enterprise business are so lucrative, they stick to the ecosystem for a long time and don't change very often. There is also a huge hallow effect from iPhone. I have seen some of these argument all around, it is selling, and therefore it is good. Windows is still the number one selling OS on the planet, do you agree Windows's experience is any good or worth the price?

scarface74 7y ago
The last time that Apple reported volume sales, Macs were at their highest volume ever. The revenue from Macs still is holding steady. Seeing that Windows is still the mainstream OS, the market must think it’s good...

scarface74 7y ago

How is it too many SKUs for the iPad? I think the iPad lineup is the most sensible it has been in years. - iPad Mini (compact) - iPad 9.7 (cheap, mainstream) - iPad Air (Larger screen still affordable) - iPad 11 (edge to edge display, more expensive features. Not everyone wants a larger/ more expensive iPad) - iPad 12 (if you really want a large screen) The laptop line is also simpler since they killed off the 12 inch MacBook, and got rid of the no Touch Bar 13”.

jiveturkey 7y ago
Can't tell if you're being facetious or not.
- scarface74 7y ago
  Why would I be? What’s wrong with having choices of the size/price you want in iPads? Which ones would you propose they get rid of? Have you looked at the product line up of other computer and phone manufacturers? If you want a choice of Android phones, laptops or Windows PCs you have dozens of choices. Apple has to cater to all of the market segments that it cares about.
  - theonemind 7y ago
    Well, I'm not one of those "not if Steve Jobs was alive" guys, but reportedly, for instance, when Steve Jobs came back to Apple, they had a lot of products with poor differentiation, and he did this: http://www.howtoanalyst.com/wp-content/uploads/2016/01/Steve-Jobs-product-strategy-matrix.png http://www.howtoanalyst.com/wp-content/uploads/2016/01/Steve... They create one option in each category. That's all. 5 is really kind of pushing for one consumer focused product if you don't want your buyers to feel like they could've made a better choice, or at least feel like they've missed out on something: https://en.wikipedia.org/wiki/The_Paradox_of_Choice https://en.wikipedia.org/wiki/The_Paradox_of_Choice In general, people like a few good options. Given a lot of good options, they can get an equally good outcome, and feel less good about it at the end. I think Apple has banked on that in the past, but not so much with 5 active models of iPad, in my opinion.