Greg's Bite: Apple's hardware prices matter
TweetFollow Us on Twitter

Greg's Bite: Apple's hardware prices matter

By Greg Mills

I was idly wandered through the brand new Sam's Club here in Kansas City, Kansas, Friday afternoon. The store is just around the corner from my home. A neighbor, living just a few doors down the street, is the proud manager of the giant new store.

I was there at the grand opening a couple of weeks ago and actually ate the first "tomane torpedo" sold at the food court. Where else can you get a large Nathan's hot dog and giant soft drink for $1.50? 

As I was sampling the free bites of food they give away, I stumbled into the electronics department. The products on sale were all the Apple tablets, iPhones and iPods, as well as the brands X, Y and Z semi-equivalents. Features and prices varied wildly. 

The electronics guy reads my Greg's Bite articles. He commented as soon as he saw me, that as far as he was concerned, I had hit the nail right on the head in my recent article regarding Microsoft's constant marketing gaffs.  I like it when even the die-hard PCs out there have to agree with my sarcastic, and somewhat critical, view of Microsoft and the "great tongue" himself, Steve Ballmer.  

I have found that while many Apple faithful really like the company and care about Apple, a lot of PC users actually deeply distain Microsoft but stick with that platform for reasons imagined or real only in a past lifetime. The day when you simply couldn't get by with just a Mac due to certain PC-specific software titles or features has pretty much been over for a while now. Ever since you could run (shudder, gag, wince) Windows on modern Macs, that argument has been slowly fading away.  Another myth that is also dying out is that Apple products are super expensive. While still a bit higher priced than PCs, the Apple "premium" has largely been eliminated.

My son Isaak hates it when I tease him that running Windows on his MacBook Pro is like keeping pigs in the back seat of a brand new BMW. He is much more "cross platform" than I am. Partitioning your hard drive and running two operating systems seems to lead to headaches he constantly deals with that I can do without.  

I was discussing with the Sam's Electronics guy the cracked keyboard issue that might cause a complete recall of all Surface tablet cover/keyboards sold so far.  It seems, according to Steve Ballmer, that users are "holding them the wrong way" and curling them under, in such a way that the plastic hinge that connects the tablet to the keyboard breaks and exposes wires. This issue really makes the Surface computer keypad unusable in salt water.

The public relations department at Microsoft released a statement on the cracked keyboard issue: "Microsoft makes every effort to ensure our customers receive a high quality product. We are in active contact with our Customer Support operations and are aware of a small number of instances of material separation,"  

A "small number" of keyboard defects was not quantified by Microsoft's pubic relations spin department. Since the Surface has only been on the market two weeks, one wonders how long until all such keyboards break. Ironically, another issue has been that the Microsoft logo printed on the Surface computer is rubbing off. Some enterprising person will no doubt be selling Apple logos to slap on over the smudged Microsoft logos. That ought to enhance Surface tablet resale values dramatically, but might be an illegal deception amounting to criminal fraud. There are stupid people out there.  

Did you hear about the woman who bought a mirror with one of those Apple logo decals stuck to it as an iPad from a huckster selling implied "stolen goods" for cheap? Before she figured out she had been hoodwinked, the salesman and her $200 were long gone.  I had a guy try to sell me concrete blocks sealed up in cardboard boxes as high quality stereo speakers. He refused to open the boxes to allow me to see the speaker before I paid him since they were "factory sealed" ... yeah, right. A deal that is too good to be true normally is.   

Sounds like Microsoft is facing "recall city" just in time for Christmas.  Fortunately, with actual worldwide sales of the Surface Computer and Keyboard accessory to date, according to my best estimate, at less than a thousand, it shouldn't hit Microsoft's bottom line too hard. (I am not counting internal sales to Microsoft staff, samples to tech writers or Surface tablets that have been returned by angry consumers)  This explains the divergence of my estimate and Microsoft's recently published sales numbers.

As we were discussing Microsoft latest gaffs a lady walked up and picked up a demo iPad 3. My electronics friend gave her his attention, and I stepped back to allow him to talk with her. She noted out loud the price for the Apple tablet and put it back like it cost money to even touch it.  After she was out of ear shot, we discussed the prices Apple had put on its current offerings.  

Keep in mind that when Steve Jobs launched the iPad, the air in the room was sucked out as the $500 base price was hundreds of dollars lower than industry expected. Everyone inhaled at once. Since Amazon launched its cheapo loss leader tablets, Apple iPads only seem expensive to those who really don't understand the difference. As I pointed out to my daughter's teacher, if you buy an iPad the Kindle app is free. You buy a Kindle and that is all you have.

Price comparison alone is sort of like comparing a baloney sandwich on Wonder Bread with a steak sandwich on a freshly toasted croissant by price alone. Both sandwiches are theoretically eatable, but the steak sandwich costs more. Quality counts. people. I suppose if you have never had a steak sandwich, baloney sandwiches are better than going hungry, but just barely.

Comparing the Apple tablets with Amazon tablets strictly on what they cost consumers out of pocket is really deceptive for fundamental reasons. Apple makes its money on hardware sales and some money down line on apps and accessories.  Amazon just breaks even or loses a bit on each cheap tablet they sell.  The difference between Apple and Amazon is in the marking plan after the consumer plunks down their tablet money.  

Amazon figures the closely linked loss leader tablets they sell will pay off in the long run through sales at Amazon.com. Apple actually has it both ways. The margins for an iPad run around 40%, and Apple still sells apps and accessories down line. The new iPad mini has a slightly lower net margin than previous iPads, but even at the lower price point, Apple makes money on each tablet they sell. I recently bought my iPhone 5 with my iPad through the Apple on-line store app. 

It has been speculated that once the tablet market becomes saturated with iPads of both sizes Apple will cut prices to continue to keep pressure on the competition.  As I have noted previously, since Apple knows they will be stretched to keep up with demand at higher price points, why cut prices to the bone until supply catches up with the runaway demand? Apple makes money by being smart about its prices.  Cook isn't going to leave money on the table.

Apple products tend to be the gold standard for electronics. Microsoft launched its Surface tablet at exactly the same entry point as Apple's iPad. This tends to set expectations at an equal level and likely sets up consumers to be very disappointed and angry. When you realize the steak sandwich you bought from Microsoft tastes a lot like baloney, product returns and crappy product reviews are sure to hurt their market share. That is already happening.  

Dire predictions that the glory days at Apple are over are really off base. As long as the tradition of quality and elegance continues at Apple, continued growth is assured. While some people shop based purely on price, the rest of us would rather buy the BMW than the crappy Ugo car. Quality costs something. Personally, I am willing to pay a few buck more and have a better experience over the lifetime of my electronic devices. (I have an iPad mini coming Monday).

I will be posting an article next week on the HTC/Apple patent cross licensing deal and the ramifications for Android. I am also watching to see if Cook offers Ron Johnson his old job back since the "new JCPenny" is about to fire him before he bankrupts them.  

That is Greg's Bite.

 

Community Search:
MacTech Search:

Software Updates via MacUpdate

TechTool Pro 9.5.1 - Hard drive and syst...
TechTool Pro has long been one of the foremost utilities for keeping your Mac running smoothly and efficiently. With the release of version 9, it has become more proficient than ever. TechTool... Read more
Jamf Pro 9.99.0 - Powerful sysadmin/ente...
Jamf Pro (formerly Casper Suite) is the EMM tool that delights IT pros and the users they support by delivering on the promise of unified endpoint management for Apple devices. At Jamf, connecting... Read more
VueScan 9.5.78 - Scanner software with a...
VueScan is a scanning program that works with most high-quality flatbed and film scanners to produce scans that have excellent color fidelity and color balance. VueScan is easy to use, and has... Read more
Adobe Lightroom 6.10.1 - Import, develop...
Adobe Lightroom is available as part of Adobe Creative Cloud for as little as $9.99/month bundled with Photoshop CC as part of the photography package. Lightroom 6 is also available for purchase as a... Read more
iPhoto Library Manager 4.2.7 - Manage mu...
iPhoto Library Manager allows you to organize your photos among multiple iPhoto libraries, rather than having to store all of your photos in one giant library. You can browse the photos in all your... Read more
Smultron 9.4 - Easy-to-use, powerful tex...
Smultron 9 is an elegant and powerful text editor that is easy to use. Use it to create or edit any text document. Everything from a web page, a note or a script to any single piece of text or code.... Read more
TextSoap 8.4 - Automate tedious text doc...
TextSoap can automatically remove unwanted characters, fix up messed up carriage returns, and do pretty much anything else that we can think of to text. Save time and effort. Be more productive. Stop... Read more
Merlin Project 4.2.3 - $349.00
Merlin Project is the leading professional project management software for OS X. If you plan complex projects on your Mac, you won’t get far with a simple list of tasks. Good planning raises... Read more
QuarkXPress 13.0.0.0 - Desktop publishin...
QuarkXPress 2017 is the new version that raises the bar for design and productivity. With non-destructive graphics and image editing directly within your layout, you no longer have to choose between... Read more
Path Finder 7.5 - Powerful, award-winnin...
Path Finder makes you a master of file management. Take full control over your file system. Save your time: compare and synchronize folders, view hidden files, use Dual Pane and full keyboard... Read more

Latest Forum Discussions

See All

Zombie Gunship Survival Beginner's...
The much anticipated Zombie Gunship Survival is here. In this latest entry in the Zombie Gunship franchise, you're tasked with supporting ground troops and protecting your base from the zombie horde. There's a lot of rich base building fun, and... | Read more »
Mordheim: Warband Skirmish (Games)
Mordheim: Warband Skirmish 1.2.2 Device: iOS Universal Category: Games Price: $3.99, Version: 1.2.2 (iTunes) Description: Explore the ruins of the City of Mordheim, clash with other scavenging warbands and collect Wyrdstone -... | Read more »
Mordheim: Warband Skirmish brings tablet...
Legendary Games has just launched Mordheim: Warband Skirmish, a new turn-based action game for iOS and Android. | Read more »
Magikarp Jump splashes onto Android worl...
If you're tired ofPokémon GObut still want something to satisfy your mobilePokémon fix,Magikarp Jumpmay just do the trick. It's out now on Android devices the world over. While it looks like a simple arcade jumper, there's quite a bit more to it... | Read more »
Purrfectly charming open-world RPG Cat Q...
Cat Quest, an expansive open-world RPG from former Koei-Tecmo developers, got a new gameplay trailer today. The video showcases the combat and exploration features of this feline-themed RPG. Cat puns abound as you travel across a large map in a... | Read more »
Jaipur: A Card Game of Duels (Games)
Jaipur: A Card Game of Duels 1.0 Device: iOS Universal Category: Games Price: $1.99, Version: 1.0 (iTunes) Description: ** WARNING: iPad 2, iPad Mini 1 & iPhone 4S are NOT compatible. ** *** Special Launch Price for a limited... | Read more »
Subdivision Infinity (Games)
Subdivision Infinity 1.03 Device: iOS Universal Category: Games Price: $2.99, Version: 1.03 (iTunes) Description: Launch sale! 40% Off! Subdivision Infinity is an immersive and pulse pounding sci-fi 3D space shooter. https://www.... | Read more »
Clash of Clans' gets a huge new upd...
Clash of Clans just got a massive new update, and that's not hyperbole. The update easily tacks on a whole new game's worth of content to the hit base building game. In the update, that mysterious boat on the edge of the map has been repaired and... | Read more »
Thimbleweed Park officially headed to iO...
Welp, it's official. Thimbleweed Park will be getting a mobile version. After lots of wondering and speculation, the developers confirmed it today. Thimbleweed Park will be available on both iOS and Android sometime in the near future. There's no... | Read more »
Pokémon GO might be getting legendaries...
The long-awaited legendary Pokémon may soon be coming to Pokémon GO at long last. Data miners have already discovered that the legendary birds, Articuno, Moltres, and Zapdos are already in the game, it’s just a matter of time. [Read more] | Read more »

Price Scanner via MacPrices.net

Huawei Unveils New ‘Business-Styled’ MateBook...
Huawei has introduced a trio of new MateBook laptops, expanding its mobile portfolio and building on its success in delivering attractive and powerful high-end devices. The company claims the HUAWEI... Read more
Deal! Gold 12-inch 1.2GHz Retina MacBook for...
Amazon has the 2016 Gold 12″ 1.2GHz Retina MacBook (MLHF2LL/A) on sale for $350 off MSRP for a limited time. Shipping is free: - 12″ 1.2GHz Gold Retina MacBook: $1249.99 $350 off MSRP We expect this... Read more
13-inch 2.0GHz MacBook Pros on sale for $100...
B&H has the non-Touch Bar 13″ 2.0GHz MacBook Pros in stock today and on sale for $100 off MSRP. Shipping is free, and B&H charges NY & NJ sales tax only: - 13″ 2.0GHz MacBook Pro Space... Read more
15-inch 2.2GHz Retina MacBook Pro, Apple refu...
Apple has Certified Refurbished 2015 15″ 2.2GHz Retina MacBook Pros available for $1699. That’s $300 off MSRP, and it’s the lowest price available for a 15″ MacBook Pro. An Apple one-year warranty is... Read more
Apple refurbished 9-inch and 12-inch iPad Pro...
Apple has Certified Refurbished 9″ and 12″ Apple iPad Pros available for up to $160 off the cost of new iPads. An Apple one-year warranty is included with each model, and shipping is free: - 32GB 9″... Read more
Apple Certified Refurbished iMacs available f...
Apple has Certified Refurbished 2015 21″ & 27″ iMacs available for up to $350 off MSRP. Apple’s one-year warranty is standard, and shipping is free. The following models are available: - 21″ 3.... Read more
Sale! 15-inch 2.6GHz Silver Touch Bar MacBook...
DataVision has the 15″ 2.6GHz Silver Touch Bar MacBook Pro (MLW72LL/A) on sale for $2199 including free shipping. Their price is $200 off MSRP, and it’s the lowest price available for this model (... Read more
A Kaby Lake Processor Upgrade For The MacBook...
Now they tell me! Well, actually Apple hasn’t said anything official on the subject, but last week Bloomberg News’s Mark Gurman and Alex Webb cited unnamed “people familiar with the matter”... Read more
Kodak’s Camera-First Smartphone EKTRA Launche...
The Eastman Kodak Company and Bullitt Group have announced the availability of a U.S. GSM version of the KODAK EKTRA Smartphone. The U.S. launch coincides with a software update addressing requests... Read more
Apple Launches App Development Curriculum for...
Apple today launched a new app development curriculum designed for students who want to pursue careers in the fast-growing app economy. The curriculum is available as a free download today from Apple... Read more

Jobs Board

*Apple* Retail - Multiple Positions - Apple,...
Job Description: Sales Specialist - Retail Customer Service and Sales Transform Apple Store visitors into loyal Apple customers. When customers enter the store, Read more
*Apple* Retail - Multiple Positions - Apple,...
Job Description:SalesSpecialist - Retail Customer Service and SalesTransform Apple Store visitors into loyal Apple customers. When customers enter the store, Read more
*Apple* Systems Engineer - California Polyte...
Cal Poly, San Luis Obispo Apple Systems Engineer Department: ITS - Customer & Tech Support (134900) College/Division: Academic Affairs Salary Range: Position Read more
Best Buy *Apple* Computing Master - Best Bu...
**508718BR** **Job Title:** Best Buy Apple Computing Master **Location Number:** 001526-Odessa-Store **Job Description:** **What does a Best Buy Apple Computing Read more
Data Engineer - *Apple* Media Products - Ap...
Changing the world is all in a day's work at Apple . If you love innovation, here's your chance to make a career of it. You'll work hard. But the job comes with more Read more
All contents are Copyright 1984-2011 by Xplain Corporation. All rights reserved. Theme designed by Icreon.