Since Apple introduced the iPhone 11 years ago, smartphones have become ubiquitous, and the market for them is saturated. To maintain growth, Apple has employed a shrewd strategy: Charge more for the devices.
Journalists and analysts have explained how Apple is doing that by dividing the number of iPhones sold in a given quarter into the revenue Apple earns from them to calculate the average selling price.
That’s not going to be so easy anymore.
[…]
But after those figures were reported, Luca Maestri, Apple’s chief financial officer, said in a conference call that the company would no longer disclose how many iPhones, iPads or Mac computers it sold. As a result, journalists and analysts will no longer be able to track how Apple’s swelling prices are improving its profits.
Here’s the problem for Apple: iPhone sales have flatlined, and Mac and iPad sales have consistently been going down for a while now. Since Tim Cook’s Apple has been unable to find the next big thing (after the iPod and iPhone), the only way to maintain growth is to increase the average selling price. Sell less units, but charge more for each unit sold.
This strategy is working – for now. This gravy train ain’t infinite, though, and there’s only so many price hikes you can pull off before you reach a ceiling.
It was pretty obvious when they relased the new macbook air this week, it’s not for the masses anymore.
There used to be a low cost option, made in plastic and not as nice to look at. Now it’s thin and glossy all the way, and crappy internals unless you pay through the nose.
They should bring back the ibook. Steve used to make sure students could afford an apple computer, since they would then come back when they start working and can pay more.
The new MacBook Air starts at $1,299. The iBook was introduced at $1,599 in 1999; adjusted for inflation, that’s more than $2,400 today.
Maybe the “masses” need to stop whining and be in awe of being able to get a computer like the MacBook for only $1,299. Pick up a copy of Byte magazine from the early 1980s and take a look at what us pre-millenials paid vs. what we got.
Haha! Brutal but true!
I paid 3 grand for a 40 megabyte hard disc. My first PC was £1000 in 1990 and I still had to buy additional components over the next year or 2. My first actual computer was a 1984 Sinclair QL that cost my parents 400 quid. That’s about 1200 quid now. I learnt a lot but it was not a great machine.
Like cars “the masses” simply don’t need to upgrade every year. The MacBook I’m using now will still work in 4 or 5 years time (at least). My car is a 13 year old Skoda Fabia. I have to fix things occasionally – it still works after nearly 100K miles. Will I buy a new one? Well, not any time soon.
My mrs is using a cast off MacBook Air that’s 6 years old – It works perfectly (it’s not even “slow”). My boy is using a 2009 polycarbonate MacBook – now, that is getting a bit long in the tooth but still does the job for him.
Could Apple make a “cheap” machine? Yes. Will they be able to get into the “cheap as chips/computer for the masses” territory (around 200 to 350 quid). No, very unlikely. I don’t know if they’d even want to. ASP of a PC is about 630 dollars.
For anyone that’s interested here are sales figures. https://www.statista.com/statistics/263444/sales-of-apple-mac-comput…
Could Apple increase their market share? Possibly. The sales of nearly all computers has flatlined so Apple could eat some PC laptop share. Do they want to? I don’t know. I doubt it if it means reducing their ASP.
Final sum. My MacBook from 2009 cost 899 pounds. Inflation adjusted that ~1150 pounds. The entry level Air is 1199 pounds. Now, the pound lost 20% of it’s value after the Brexit referendum so that needs factoring in too. Basically – it’s about the same price.
Edited 2018-11-02 05:34 UTC
I agree with you, also about the car part. Although I do want to add that buying a car isn’t the same as buying a new computer. I mean: have you looked at the price of a new Skoda Fabia? Compared to a new laptop or even MacBook, that’s hella expansive. Buying a new computer, even if you buy a new one every year, is a lot cheaper than buying a new car every (other) year.
Yes I have seen their prices! Skoda (under VAG) are playing the same game as Apple. They’re slowly raising the price of their new vehicles.
However, me? I’d never buy a new car. I like to buy a car that has at least 20K on the clock. Why? Like computers, if they’re going to go wrong they’ll do so very rapidly or last years. I like someone else to do the debugging for me then buy it at 1/3rd the price!
Apple doesn’t want to sell cheap computers. They want to continue to be viewed as a premium brand. I have a friend with a Mac Mini that’s at least five years old. He recently had a problem with it, took it into the Apple store, and they spent about 45 minutes resolving it and didn’t charge him a dime. When you’re selling a bargain price computer, you can’t do that.
Apple doesn’t want to tell people “you bought from our Value Line, so you have to pay to attend the in-store classes, pay for macOS upgrades, and ship your computer to one of our Value Line repair facilities if it breaks. You can’t have your computer serviced in an Apple store and you can’t get support at our Genius Bar.”
Any marketing person would tell you that would be a disaster.
I don’t think it is the “masses” whining. The masses just don’t care.
Anyhow…
Apple used to be a slight(ish) premium for a premium product.
Now it’s a large premium for a crap product. I could find a decent laptop for hald the price apple are offering that both looks better and is better.
The past prices (infation adjusted or not) are irrelevant. Prices come down for many reasons. The biggest being that computers are not a niche market anymore.
I used to buy apple products. I loved them (though like a normal person you freaks 😉 ). However OS X has gone to sucksville and with what you get I would not use them if you paid me. (Let’s not even mention the abomination that is ios).
Edited 2018-11-02 09:29 UTC
But in 1999, when the iBook he referred to came out, computers were a “niche market” — but the iBook appealed to “the masses”? Come on.
Apple’s prices are a joke. They are the masters of make believe.
Just go to Dell and see what you can get for 1350€. A friend of mine bought an Inspiron 7000 with this configuration:
* i7 8550
* 16GB RAM
* 512GB Flash drive
* 4K 15″ full touch screen
* 1*USB-C w/Thunderbolt + 3*USB 3.1, HDMI, card reader
* Dedicated graphics chip with dedicated 4GB RAM
That is twice the processor, twice the RAM, four times the flash, much better graphics, much better IO. With the Mac, you do get a great trackpad, that has to be said.
To pump the Air’s specs into the world of usable and perdurable by simply adding 8GB more RAM and 512GB flash hikes the price by a whopping 740€ up to 2089€. That is, conceding that the inferior graphics, processing power and IO are OK for the intended market.
The chasm between 1350€ and 2089€ is not bridged by supposed advantages of macOS, which I use every day and find not better than W10 in anything other than the included email client, GarageBand and Photos.
Apple are predators of the wealthy gullible.
Lobotomik, people with a brain will do the math and choose the best alternative to a mac, even so emulate it on their over performing Dell PC. Seriously, what are those specs for anyway ? Taking notes at school ? EeePC should be enough for that shit, you don’t need to get you $1300 toy around to show how hyped you are. Get the job done with the most purposed hardware, period.
Now if people got lobotomized with hype and need their dope, I can’t blame them. Yet, I’m still using a Dell Vostro 3555 with AMD A8 APU from 2011 for $500 (yeah, $250 + $250), still working great and I’m doing everything I need on it, even some video editing, so there’s no better proof that those specs are far enough for everyday use.
Edited 2018-11-02 13:20 UTC
People with brains consider the TCO, not just the initial hardware purchase price. They consider whether the OS upgrades cost money, whether there is over-the-counter service available when they are on business trips, and the quality of the tech support available. They consider the keyboard and trackpad feel. If they are photographers, videographers, or graphics professionals, they consider not just how many pixels are on the screen, but the color gamut and color accuracy. And, if they are private owners, they consider the resale value at the time they plan to upgrade.
IBM has deployed about 100K Macs in the past few years. They reported that PC users had twice the rate of support calls versus Mac users. Of those tickets opened, only 5% of Mac users required an in-person visit, versus PCs with 27% of tickets requiring IT visits. Additionally, IBM requires only a fraction of IT staff to manage Macs compared to the number required to manage Windows. IBM found they saved between $273 – $513 per Mac they deployed compared to PCs.
IBM is not “the mass” and I don’t think they get top of the line Macbooks just to look fancy. Looking at gamut on a crystal screen during a plane or train trip, or in your starbuck, is not what I call a valid argument. PC computers do it as well for half the price.
You can buy good branded computers that are of enough quality to avoid the need of a “street corner repair facility” during a business trip. If you expect your computer to fail that easily, there’s an engineering problem in the first place.
https://www.youtube.com/watch?v=AUaJ8pDlxi8
There are good USA brands (like Dell) that do good laptop PC that don’t need a repairman attached to it.
Edited 2018-11-02 15:52 UTC
Kochise,
Even the Linus Tech Tips had problems getting apple products repaired.
https://www.youtube.com/watch?v=LwEInwvFbwk
Apparently apple has strict rules for prohibiting service centers from reuse components even if they worked fine (ram/cpu/fans). Apple will fine the service center if they do not install new parts and fail to ship your working parts back to apple. They don’t want any reusable parts making their way back to the market.
This is such a scam. If was any justice, apple would be fined every single dollar that they scammed owners by way of unnecessary replacements, plus damages.
Edited 2018-11-02 19:34 UTC
You named a brand that is far less reliable than Apple or even the industry average. See:
https://cdn3.geckoandfly.com/wp-content/uploads/2018/05/laptop-relia…
The MBP’s thin form factor is problematic not only for the keyboard, but also the other hardware trade-offs that engineers end up facing. We end up with less thermal mass and higher temperatures.
More/faster RAM = more heat
More/faster CPU = more heat
More/faster GPU = more heat
I had a project where I was running a computationally intensive real time workload on a top of the line MBP. The results were extremely disappointing. While the MBP’s specs were much better than the acer I had, the acer computer was able to sustain a higher load simply because it ran cooler and wasn’t constantly throttling.
A linus tech tips video shows just how quickly the MBP’s thermal constraints becomes a bottleneck. (The video is very long winded, go to 20:25)
https://www.youtube.com/watch?v=jtHhvcdjNWw
In artificial benchmarks, the CPU throttles within seconds!! In a real workload it happens within a minute. Even the idle temps at 56C are high.
What’s the conclusion here? Well, for those who value form over function, not much changes; they still look sleek, have a higher social status and better resale value. But IMHO for the professionals that expect high performance and will be pushing the hardware to the limit (not to mention more ports/fewer dongles/etc), apple’s laptops fall short because they were built by designers to look good rather than by engineers to run well.
To be honest, I don’t think the two crowds will ever see eye to eye.
Edited 2018-11-03 21:51 UTC
I think custom PC or any decent laptop beats macs in every possible aspect, probably except the battery life and power management – if you don’t buy the cheapest hardware of course. Recently I got fed up with crapple bullshit of pathetic 16GB RAM limitation, failing keyboards, third rate GPUs, substandard processors, lack of headphone connector, introducing wireless charning 5 years after cheapest crap phones made in fake market in China, not bundling fast charge together with 1000$ phones, USB-C fiasco, etc. and changed macbook pro/mac mini to a custom PC and gaming laptop which beat every single crapple laptop and crapple PC (yes, they are nothing more than custom PCs) in terms of CPU and GPU performance (crapple’s garbage can’t even handle any modern game at 1080p, let alone 4k), especially taking price+upgradeability into account.
Edited 2018-11-03 07:05 UTC
fmaxwell,
You are right that technology prices were dropping like crazy back then. However I think putting it the way you did by comparing todays prices directly with 1980-1999 prices is misleading because the geometric rate of price change has not been consistent. In fact I’d say for the computers I’ve been buying I was able to pay less and less every generation until around 2008, after that the prices stopped dropping and have turned around and gone up.
With this in mind, I think it would be fair to say we’ve seen inflation for computers in the last few years.
Remembering the cost per MB of memory sticks, hard drives, usb sticks, …
I’m not the one who made the comparison.
I answered iampivot, who cited Apple’s iBook as an example of an affordable Mac laptop and that people can no longer afford Mac laptops because of their supposedly soaring prices. I simply pointed out that the iBook actually cost more than the new MacBook both in terms of absolute dollars and inflation adjusted dollars.
fmaxwell,
I’m just saying most of the momentum towards lower prices is over. Back then, we’d get huge bumps in specs every generation while prices were falling. Now prices are on the rise with much less improvement in specs and even loosing features/build quality in some cases.
Edited 2018-11-02 15:40 UTC
Okay, I’m not taking a position on that as I’m at the limits of my argument capacity time-wise.
What bothered me was bemoaning the price of a MacBook while citing the iBook as an example of an affordable computer for students. If a $1599 (>$2400 in 2018 dollars) iBook was an affordable computer about 20 years ago, it’s silly to claim that a $1299 MacBook is out of the reach of all but the wealthy in 2018.
Dunno. Back in the day higher education was free for us in the UK. Now annual fees are several thousand pounds. Other costs such as rent and transport have shot up way past inflation. Students today don’t necessarily have the disposable income they may have had a decade ago.
More to the point, iBooks compared reasonably well with budget PC laptops. Not so much these days. Even the price of the base Mac Mini has all but doubled from four years ago.
fmaxwell,
Personally, I bemoan the price of both, haha
It’s all relative though, some people have a lot more disposable income. They weren’t my first choice anyways. A decade ago I thought they had good keyboards, but we can’t really say that any longer.
The low cost option is now 2012 and on refurbished ones selling for $500.
One thing I really didn’t see with all the back and forth Mac and iPhone “value”, did anyone consider planned obsolescence in the equation? If so I missed it.
I simply cannot justify spending $1,200+ for meh-spec Apple hardware when you know (or should know) that Apple has already planned to only support the OS for less time than the hardware lasts. I am perfectly OK with buying a $600 Dell with equivalent hardware specs and living with half the investment considering, yes, planned obsolescence. This isn’y a question of perceived value, it’s actual, tangible currency and product.
A previous comment about still using a 2009-vintage poloycarb Mac indicates you can still use it, but it can no longer receive the latest OS updates due to, oh no, planned obsolescence. This puts the user at risk using unpatched software.
I guess you could go ahead and install Ubuntu on your old unsupported Apple hardware, but then it wouldn’t be a Mac anymore would it?
It’s only just reached “obsolescence”. I don’t think Mojave supports it due to graphics drivers. OOD graphics is becoming a real thing these days.
OS 10.13 will receive “extended support” until 2020 – which means security updates will still be provided.
At which point it will be very 11 years old and have cost me the princely sum of £82 pounds a year. I’d call that reasonable.
I very much doubt it will still be in use by then.
Do we need to change the name of this site to “Computer Specs News”?
People buy Macs for the OS …. and the glossy curves … and to look unimaginative in coffee chains.
And if you want a fast Laptop …. go the the gym …. buy a Razor … and get your caffeine in a place where humans make the coffee.
Edited 2018-11-04 15:56 UTC
Here’s an easy way for Apple to sell more iPhones: Be the only one to offer a good small phone. Doesn’t have to be cheap. Just convenient to use one handed and carry in any pocket, while having enough screen to check mail and do some browsing.
Geeks, with moderate to low disposable incomes, feel ignored by luxury lifestyle company with a business model based on ultra high margins. News at 11.