Keep in mind that direct margin per item is not always the top of the business plan. I recall reading a few years ago about Ford making a profit of about $50 on average on the cars they sell. Most of the money they made as a business came from financing.
Alexey 2001 Honda CBR600F4i (CCS) 1992 Kawasaki EX500 http://azinger.blogspot.com http://bsheet.sourceforge.net http://wcollage.sourceforge.net --- On Tue, 9/2/08, Joshua Marinacci <[EMAIL PROTECTED]> wrote: > From: Joshua Marinacci <[EMAIL PROTECTED]> > Subject: [The Java Posse] Re: Mac vs PC - $1075 premium for a comparable Mac > To: [email protected] > Date: Tuesday, September 2, 2008, 3:35 PM > No. The question is why do HP and Dell only make low margin > (often > crappy) computers, and struggle to turn a profit, when > Apple is able > to make 20->30% margins on products that are > functionally equivalent > (desktop and laptop PCs that do the same basic things from > a consumer > perspective). This is a very interesting economics > question that, I > think, reveals a great deal about how computers are > manufactured and > sold, and suggests new opportunities for the existing > hardware makers > (or opportunities for new upstarts). Or it could reveal > barriers to > fixing the problem, such as certain features of the MS > Windows > monopoly that discourage creating Mac like computers. > > I find it an interesting topic. :) > > - Josh > > On Sep 2, 2008, at 12:28 PM, Alexey Zinger wrote: > > > > > But what is the question that answer is for? Is it > that there > > aren't enough easy ways to get a high-end laptop? > Or that there > > aren't enough choices in the high-end laptop > market? > > > > Alexey > > 2001 Honda CBR600F4i (CCS) > > 1992 Kawasaki EX500 > > http://azinger.blogspot.com > > http://bsheet.sourceforge.net > > http://wcollage.sourceforge.net > > > > > > > > --- On Tue, 9/2/08, Joshua Marinacci > <[EMAIL PROTECTED]> wrote: > > > >> From: Joshua Marinacci <[EMAIL PROTECTED]> > >> Subject: [The Java Posse] Re: Mac vs PC - $1075 > premium for a > >> comparable Mac > >> To: [email protected] > >> Date: Tuesday, September 2, 2008, 2:59 PM > >> So then it seems the answer is to turn computers > into a more > >> consumer > >> friendly buying market. ie: reduce the number of > available > >> models, > >> give them better names, maximize compatibility > with the > >> most common > >> hardware/software/network-infrastructure/devices, > then > >> focus on > >> advertising a few core features that are > differentiators. > >> This makes > >> the choice an easier one for consumers by > effectively > >> making the > >> computer a simpler choice (at least in terms of > buying > >> one). > >> > >> Clearly Apple has done this, so the question is > why > >> hasn't anyone > >> else. It doesn't seem like it would be that > difficult. > >> > >> - J > >> > >> On Sep 2, 2008, at 11:40 AM, Alexey Zinger wrote: > >> > >>> > >>> Coke and Pepsi have spent untold amounts of > money on > >> advertising and > >>> continue to be at each other's throats, > both with > >> their flagship > >>> brands and new ones (Gatorade vs Powerade). > But soft > >> drinks are a > >>> lot simpler for the consumer to think about > than > >> computers. For > >>> one, computers encompass software, hardware, > and > >> surrounding > >>> infrastructure (network connections, devices > they > >> integrate with, > >>> etc.). And those things can change > independently from > >> model to > >>> model, from year to year, from place to place. > >> It's tough to nail > >>> down what features you can push on the > consumer as THE > >> answer to why > >>> they should pay extra, when the consumer may > not > >> understand it, may > >>> not care, or may be using your product or some > of your > >> products in a > >>> totally unexpected way. Just think of iTunes > running > >> on Windows. > >>> Is it good for Apple because it brings iTunes > Store > >> revenue, or is > >>> it bad for them because it reduces the need > for some > >> people to > >>> switch brands. Is it good for Apple > >>> because it shows Windows users how different > Apple > >> software can be > >>> or does it detract people from Apple's > products > >> for the same > >>> reason? I think the fact that Apple has to > some > >> extent infiltrated > >>> the hipster generation and made it a bit of a > status > >> symbol is quite > >>> remarkable. > >>> > >>> Alexey > >>> 2001 Honda CBR600F4i (CCS) > >>> 1992 Kawasaki EX500 > >>> http://azinger.blogspot.com > >>> http://bsheet.sourceforge.net > >>> http://wcollage.sourceforge.net > >>> > >>> > >>> > >>> --- On Tue, 9/2/08, Joshua Marinacci > >> <[EMAIL PROTECTED]> wrote: > >>> > >>>> From: Joshua Marinacci > <[EMAIL PROTECTED]> > >>>> Subject: [The Java Posse] Re: Mac vs PC - > $1075 > >> premium for a > >>>> comparable Mac > >>>> To: [email protected] > >>>> Date: Tuesday, September 2, 2008, 1:37 PM > >>>> But why is this the case? There are > plenty of > >> essentially > >>>> 'commodity' > >>>> products that have monopolistic > competition and > >> don't > >>>> eventually > >>>> collapse to 0% margin. Coke and Pepsi > sell for > >> many many > >>>> times the > >>>> price that pure costs would suggest. > Automobiles > >> are > >>>> functionally > >>>> equivalent in that any given category has > the same > >> basic > >>>> features (all > >>>> 4 door sedans will carry 4 or 5 people, > all pickup > >> trucks > >>>> will carry > >>>> furniture and dirt, etc.). And yet BMW > has > >> clearly figured > >>>> out what > >>>> things to improve in their cars that will > convince > >> someone > >>>> to spend > >>>> twice as much or more for a 4 door sedan, > even > >> though it > >>>> doesn't cost > >>>> them twice as much to produce (thus > raising their > >> profit > >>>> margin). So > >>>> what have car and sugar water makers > figured out > >> that > >>>> computer makers > >>>> haven't? Is there something intrinsic > to > >> computers that > >>>> resist product > >>>> differentiation? Clearly Apple (and to > some > >> extent Sony) > >>>> have proven > >>>> that it's not completely impossible. > >>>> > >>>> - Josh > >>>> > >>>> > >>>> > >>>> > >>>>>> > >>>>> My take on this is that most people > don't > >> care > >>>> about those certain > >>>>> ethereal features, such as > "overall > >>>> experience". Maybe it makes > >>>>> sense to care about that, or maybe it > >> doesn't, but > >>>> just like > >>>>> airlines are starting to feel a new > hurt of > >> competing > >>>> on price and > >>>>> specific features alone because of the > >> internet and > >>>> product search > >>>>> engines like Google Products/Shopping, > >> it's harder > >>>> and harder for > >>>>> anyone to demand a higher price > without an > >> extra > >>>> number of checkmark > >>>>> to justify it. The only other thing > that > >> people seem > >>>> to be willing > >>>>> to pay for is brand name. Besides, no > one is > >>>> impressed with a fancy > >>>>> laptop anymore. Long live fancy > phones! (for > >> now) > >>>>> > >>>>> > >>>>> > >>>>> > >>>>>> > >>>> > >>>> > >>>> > >>> > >>> > >>> > >>>> > >> > >> > >> > > > > > > > > > > > > --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "The Java Posse" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/javaposse?hl=en -~----------~----~----~----~------~----~------~--~---
