5 ms·

It shows that margin on Apple products is too high. This leaves plenty of room for some company to come into the market and steal their customers. That it hasn'

by pdknsk 12y ago

It shows that margin on Apple products is too high. This leaves plenty of room for some company to come into the market and steal their customers. That it hasn't happened shows the strength of Apple. They make products people will pay premium for.

k-mcgrady 12y ago
>> "It shows that margin on Apple products is too high." How does this show that in any way whatsoever? If their margins were too high they'd be leaving money on the table. Short term they probably are but lowering prices would also dilute the brand.
archagon 12y ago
It would be hard for another company to imitate Apple's hardware/software integration. One of the reasons I've bought Macbooks for my last two laptops was that I knew that the OS and most of its software was designed with my hardware in mind.
- pluma 12y ago
  That's precisely what stopped me from buying into the Apple cosmos. If I want an Apple Watch, I need to buy an iPhone. If I buy an iPhone, I should use iTunes. In order to get a version of iTunes that isn't atrocious, I need to use OSX. In order to use OSX I need to buy an iMac or MBP. Want to use an iPod? Same thing, just skip the first step. Want to develop apps for (or port apps to) iOS? Again, same thing. I'm using Linux. I occasionally use Windows for testing in IE or playing games. There's just no way I can adopt any Apple device as an addition to that without getting an experience that is significantly lacking in comparison to what I would get by switching everything over. As I speak I'm using a Dell laptop, a Samsung smartphone and an Asus tablet. I'm actually in the process of replacing the Dell laptop with a smaller brand laptop custom-built for Linux support. There's just no way I could justify moving any single device over to an Apple equivalent without moving everything else. You could call it "synergy" or "network effects". Before Apple (when Microsoft did it) we used to call it vendor lock-in and monoculture. The funny part is that I'm pretty sure that if you ignore the lower end market most of the criticism I've heard about each brand is perfectly interchangeable at this point. "My smartphone bends / overheats", "I installed an update and now something is misbehaving, but it's not big enough of a deal that I can be bothered to figure out how to fix it", "my laptop was faulty and I had to get it replaced/repaired two weeks after I bought it", "the OS does something incredibly annoying and there apparently isn't any way to change that so I rely on clunky workarounds" and so on. I swear I've heard some variation of each for Linux, Microsoft and Apple devices alike. This isn't really a complaint, more of an observation. Buying Apple is perfectly reasonable, especially if all your other devices are already Apple. But after having seen people be ridiculously productive on all kinds of devices (e.g. a sensible PHP dev using Windows Surface as a laptop -- that one caught me off guard) and likewise also seeing every single variation fail at other times, I would recommend not to give your favourite vendor too much credit. In all likelihood the "perfect" experience you're having with your platform of choice is not unique to you or that platform -- it just happens to be something that works really great for you right now. It might not work as well for someone else, or even for yourself at a different time in a different situation. tl;dr: everybody poop. All systems fail.
  - pluma 12y ago
    *everybody poops, I mean. That wasn't an intended to sound like an order.
    - 72deluxe 12y ago
      Too late! What a mess.
umsm 12y ago
Their costs are controlled at the scale at which they operate at. A competitor may be able to offer something similar, but without the scale, their prices will likely be equal to or greater than apple's.
- MBCook 12y ago
  That's been kicking people for years. Only Apple could make the iPod Mini because they bought the entire production of the little CF sized hard-drives. A few years ago Apple bought a huge chunk of the available Flash production capacity. Then you get the crazy things where Apple can afford to make special machines to blend the glass and aluminum on their devices or laser-cut holes in the laptops because they're operating at a scale where they can make that work out. No upstart brand could EVER do that.
okibeogezi 12y ago
Apple makes luxury products. People like luxury products. Luxury products have strong brand appeal so they can comfortably ask people to pay more for products. Any other company that sells like phones at Apple's price range will FAIL. You either make something extremely better for the same price or just as good at a lower price. Neither is a guaranty for success though.
- hyperbovine 12y ago
  They make luxury products and yet everyone owns one. That is the real genius.
  - dingaling 12y ago
    > Any other company that sells like phones at Apple's price range will FAIL. Vivo and Oppo ( subsidiaries of the same parent ) dominate the high-end on China and maintain their image by selling at ' Apple Prices'. Their Western models are often more expensive...
    - seanmcdirmid 12y ago
      No they don't. The apple of china is of course...apple. Vivo and oppo don't come close to iPhone market share in the high end PRC market.
      - dingaling 12y ago
        November 2014 China smartphone marketshares: Vivo 6%, Apple 5% Vivo don't do low-end models either.
        seanmcdirmid 12y ago
        I've never seen a vivo in Beijing before. iPhones...plenty, but vivo? Also, there phones look mighty affordable (none above 3K RMB): http://search.jd.com/Search?keyword=vivo&enc=utf-8 http://search.jd.com/Search?keyword=vivo&enc=utf-8 Compare to iphones (all new models > 4K RMB): http://search.jd.com/Search?keyword=iphone&enc=utf-8 http://search.jd.com/Search?keyword=iphone&enc=utf-8
redler 12y ago
"High" is a relative measure, and "too high" would indicate a problem. Margin is certainly high compared to the various cohorts against which Apple is measured -- that's obviously not a problem. It would only become a problem if competitors can somehow negatively affect Apple by delivering market-equivalent or better products and services while foregoing margin by living in that profit "shadow". Plenty of companies are doing the latter, but not while doing the former. Edit: As usms implies elsewhere in this thread, competitors can't simply decide to do both simultaneously, since Apple has an optimally efficient supply chain and massive economies of scale.
xj9 12y ago
In other words, Apple is a successful business. People have been making that same statement for a long time and nobody has been able to do what you are suggesting.

by pdknsk 12y ago

k-mcgrady 12y ago

>> "It shows that margin on Apple products is too high." How does this show that in any way whatsoever? If their margins were too high they'd be leaving money on the table. Short term they probably are but lowering prices would also dilute the brand.

archagon 12y ago

It would be hard for another company to imitate Apple's hardware/software integration. One of the reasons I've bought Macbooks for my last two laptops was that I knew that the OS and most of its software was designed with my hardware in mind.

pluma 12y ago
That's precisely what stopped me from buying into the Apple cosmos. If I want an Apple Watch, I need to buy an iPhone. If I buy an iPhone, I should use iTunes. In order to get a version of iTunes that isn't atrocious, I need to use OSX. In order to use OSX I need to buy an iMac or MBP. Want to use an iPod? Same thing, just skip the first step. Want to develop apps for (or port apps to) iOS? Again, same thing. I'm using Linux. I occasionally use Windows for testing in IE or playing games. There's just no way I can adopt any Apple device as an addition to that without getting an experience that is significantly lacking in comparison to what I would get by switching everything over. As I speak I'm using a Dell laptop, a Samsung smartphone and an Asus tablet. I'm actually in the process of replacing the Dell laptop with a smaller brand laptop custom-built for Linux support. There's just no way I could justify moving any single device over to an Apple equivalent without moving everything else. You could call it "synergy" or "network effects". Before Apple (when Microsoft did it) we used to call it vendor lock-in and monoculture. The funny part is that I'm pretty sure that if you ignore the lower end market most of the criticism I've heard about each brand is perfectly interchangeable at this point. "My smartphone bends / overheats", "I installed an update and now something is misbehaving, but it's not big enough of a deal that I can be bothered to figure out how to fix it", "my laptop was faulty and I had to get it replaced/repaired two weeks after I bought it", "the OS does something incredibly annoying and there apparently isn't any way to change that so I rely on clunky workarounds" and so on. I swear I've heard some variation of each for Linux, Microsoft and Apple devices alike. This isn't really a complaint, more of an observation. Buying Apple is perfectly reasonable, especially if all your other devices are already Apple. But after having seen people be ridiculously productive on all kinds of devices (e.g. a sensible PHP dev using Windows Surface as a laptop -- that one caught me off guard) and likewise also seeing every single variation fail at other times, I would recommend not to give your favourite vendor too much credit. In all likelihood the "perfect" experience you're having with your platform of choice is not unique to you or that platform -- it just happens to be something that works really great for you right now. It might not work as well for someone else, or even for yourself at a different time in a different situation. tl;dr: everybody poop. All systems fail.
- pluma 12y ago
  *everybody poops, I mean. That wasn't an intended to sound like an order.
  - 72deluxe 12y ago
    Too late! What a mess.

umsm 12y ago

Their costs are controlled at the scale at which they operate at. A competitor may be able to offer something similar, but without the scale, their prices will likely be equal to or greater than apple's.

MBCook 12y ago
That's been kicking people for years. Only Apple could make the iPod Mini because they bought the entire production of the little CF sized hard-drives. A few years ago Apple bought a huge chunk of the available Flash production capacity. Then you get the crazy things where Apple can afford to make special machines to blend the glass and aluminum on their devices or laser-cut holes in the laptops because they're operating at a scale where they can make that work out. No upstart brand could EVER do that.

okibeogezi 12y ago

Apple makes luxury products. People like luxury products. Luxury products have strong brand appeal so they can comfortably ask people to pay more for products. Any other company that sells like phones at Apple's price range will FAIL. You either make something extremely better for the same price or just as good at a lower price. Neither is a guaranty for success though.

hyperbovine 12y ago
They make luxury products and yet everyone owns one. That is the real genius.
- dingaling 12y ago
  > Any other company that sells like phones at Apple's price range will FAIL. Vivo and Oppo ( subsidiaries of the same parent ) dominate the high-end on China and maintain their image by selling at ' Apple Prices'. Their Western models are often more expensive...
  - seanmcdirmid 12y ago
    No they don't. The apple of china is of course...apple. Vivo and oppo don't come close to iPhone market share in the high end PRC market.
    - dingaling 12y ago
      November 2014 China smartphone marketshares: Vivo 6%, Apple 5% Vivo don't do low-end models either.
      - seanmcdirmid 12y ago
        I've never seen a vivo in Beijing before. iPhones...plenty, but vivo? Also, there phones look mighty affordable (none above 3K RMB): http://search.jd.com/Search?keyword=vivo&enc=utf-8 http://search.jd.com/Search?keyword=vivo&enc=utf-8 Compare to iphones (all new models > 4K RMB): http://search.jd.com/Search?keyword=iphone&enc=utf-8 http://search.jd.com/Search?keyword=iphone&enc=utf-8

redler 12y ago

"High" is a relative measure, and "too high" would indicate a problem. Margin is certainly high compared to the various cohorts against which Apple is measured -- that's obviously not a problem. It would only become a problem if competitors can somehow negatively affect Apple by delivering market-equivalent or better products and services while foregoing margin by living in that profit "shadow". Plenty of companies are doing the latter, but not while doing the former. Edit: As usms implies elsewhere in this thread, competitors can't simply decide to do both simultaneously, since Apple has an optimally efficient supply chain and massive economies of scale.

xj9 12y ago

In other words, Apple is a successful business. People have been making that same statement for a long time and nobody has been able to do what you are suggesting.