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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: PoorRich who wrote (21601)	1/3/1999 4:07:00 PM
From: Mark Palmberg	Respond to of 213177

There has been a lot of talk in the Windows world (see AMD thread) about an "iMac buster," a very inexpensive imitation made in a depressed Asian country (e.g., Korea). Why go all the way to Korea looking for a $500 PC? There are companies here in the good ol' U.S. of A. that're already making PC's much cheaper than the iMac. If you've been following iMac at all, you know that the issue here is turning out to be that people don't necessarily WANT a super-cheap PC. They want a COMPUTER that is easy to use, is made by a reliable name, and has some STYLE! Jobs has already made it very clear that he's not really interested in competing on price with makers of cheap Windows boxes (as has Michael Dell). Could Steve have offered iMac for less and taken a hit on margins? Eric could tell you for sure, but I bet the answer is "yes." I could go buy a Ford Festiva right now, but why? It's not what I WANT. Illogical? Perhaps. With all that Apple has been doing lately to set its consumer product line in stone, I really can't see Steve introducing a product solely in response to pricing pressures. He's taken the lion by the tail, don't you see? Watch these Yosemite machines take off in sales, and see how popular the revision C iMac is ("daddy's got to have an iMac too, sweetie!"). iMac is an instant classic, a collector's item. When you move out of your apartment in five years I bet you're more likely to leave your bowling ball behind than you are your iMac. If Steve lowers prices, it's because Steve WANTS to lower prices. No one knows better than he does what Apple hardware and software are worth. Research organizations (e.g, IDC) have announced the $500 home computer as the future of computing. Same organizations that "announced" the death(s) of Apple, no doubt. If you need a research organization to tell you that the future of computing will be characterized by lower hardware prices, maybe you ought to stick to commodities futures.... ;) In any case, you can bet Steve will have something interesting to say on Tuesday. I wonder what he'll wear.... Mark

To: PoorRich who wrote (21601)	1/3/1999 6:03:00 PM
From: Jonathan Bird	Read Replies (1) \| Respond to of 213177

There has been a lot of talk in the Windows world (see AMD thread) about an "iMac buster," a very inexpensive imitation made in a depressed Asian country (e.g., Korea). A preemptive strike to bust the iMac buster would be an inexpensive iMac laptop for Web use around the home. One of the cardinal rules of marketing is "Never compete on price unless you have a cost advantage." Although it is not as bad as it once was, Apple simply does not have a cost advantage. For the foreseeable future I am certain we will not see any computers from Apple that are priced less then their PC counterpart. "And that's, OK." There are much better competitive advantages to have besides price, because price is the easiest advantage to copy. All your competitors need do is change a few digits and BAM! your advantage is gone and you are both worse off. And they can respond immediately. On the other hand take the iMac. Running the Mac OS is a competitive advantage in its market, still not duplicated after 15 years. The iMac style is a great competitive advantage. Its been many months of happy margins and not yet imitated. The shape and color scheme are certainly trademarked so that it never can be truly copied as price can. Distribution channels are often the hardest competitive advantage to copy. Product image is another tuffy. These are all things that Jobs has been intensively focused on since he took over. Another cardinal rule, "in the absence of information consumers use price as a measure of quality." Whether it's true or not, the iMac's perceived quality is greater to inexperienced buyers because it is not the cheapest. This is certainly why the 500-1000 dollar PC has not caught on like many thought it would. The 500 dollar PC will only become the sweet spot when there are 300 dollar PCs for sale, IMHO. Jon Bird