Why Apple doesn’t care about its competition • Hacker News Board

Re: Why Apple doesn’t care about its competition

#31

Post by bryanlarsen » Thu, Oct 25, 2012, 9:47 PM UTC

tomkinstinch wrote: post #16

bryanlarsen wrote: post #11

Earlier quoted context omitted.

The iPad mini margin is definitely more than $129.

Based on what information?

We "know" that Nexus 7 / Kindle Fire has a cost of $200.

Subtract $? in assembly profit because Foxconn's role building iPad's is much smaller than ASUS/Quanta's role building Nexus 7/Fire

Subtract $? because Apple receives better component prices than ASUS & Quanta do.

Subtract $? because the iPad mini has a cheaper screen.

Subtract $? because the iPad mini has less RAM.

Subtract $? because the iPad mini has a cheaper CPU.

Add $? because the iPad mini has more flash.

Add $? because the iPad mini has a rear camera.

Add $? because the iPad mini uses Aluminum rather than plastic.

You have to guess which column is bigger, but in my estimation, the "subtract" column is at least $20 larger than the "add" column.

Re: Why Apple doesn’t care about its competition

#32

Post by jerf » Thu, Oct 25, 2012, 9:48 PM UTC

objclxt wrote: post #25

Spooky23 wrote: post #20

Earlier quoted context omitted.

iSupply data estimated the low-end retina iPad margin at 37%, which is consistent with a $129 profit. Apple is of course a master at extracting more profit by market segmentation. Apple is basically the BMW of technology. The difference between a run of the mill 3-series BMW and a Honda to the average commuter is image + $10,000. The iPad yields a premium because its an iPad.

...this is exactly what people don't seem to understand. Lots of people buy Fords and Hondas, and not so many people buy BMWs and Mercedes Benzs, but there's still room in the market for both categories, and BMW and Ford both turn a profit. I don't know why it need to be a 'winner takes all' scenario when it comes to tablets.

Network effect. The more people on platform X, the more developers on platform X and the more attractive it is to users, and so on.

While this simplistic model suggests a full winner-take-all model, history strongly suggests one often ends up with two markets, the "high cost, lower penetration" & the "low cost, higher penetration". Most recently, Apple OSX vs. Microsoft Windows. But the resulting duopoly can be as impenetrable as the simplistic monopoly to an upstart.

Re: Why Apple doesn’t care about its competition

#33

Post by yalogin » Thu, Oct 25, 2012, 9:57 PM UTC

diego_moita wrote: post #6

Even the title of this post smells like "another one of those HN Apple fanboys declaring his adoration". The article itself is even worse: "The world divides into people who think of Apple as a company, and people who think of Apple as a brand..."

Apple fanboy is an insult only in the tech world. Apple has cultivated a certain image among regular people and that is what he was talking about. Also not everything is about the Google-Apple war. Both of them can exist and be discussed by themselves :)

Re: Why Apple doesn’t care about its competition

#34

Post by seacond » Thu, Oct 25, 2012, 10:02 PM UTC

"... it sells premium products at premium prices, and it never discounts."

Yeah, but the prices of those "products" (=Asian factory-made electronics, smaller form factor and reduced functionality) keep dropping. That is the nature of the computer business. And there's nothing Apple can do to stop it. Eventually we will reach "zero", or very close to it.

Maybe what this journalist is realising is that Apple the company may finally be seeing real competition in the "sexy hardware" space. They have historically been the only company to mass produce computers that "look cool" sitting on a desktop, even when they're turned off. They have never had any real competition in that space (=opinion). But now, as the price point and form factor have been significantly reduced (the price to own an Apple computer used to be a lot higher, I can recall it being over $1000 in the not-so-distant past), other companies might finally also be able to mass produce sexy-looking hardware that can compete.

Assuming that's true, and we're headed for "disposable" computers (i.e. ridiculously cheap), then what's left of Apple's reality distortion field? Maybe it's "Apple, the brand" that the journalist observes.

And what is that brand? Maybe it's partly "easy to use", as he suggests is a known characteristic of Apple products.

So, who can possibly compete with Apple on ease-of-use in a handheld computer? No one?

Hmmm, we'll see about that. Imagine a company that can offer the same simplicity, without greedy control freak attitude and imposing incessant hoop-jumping on its customers. And their computers look cool.

Re: Why Apple doesn’t care about its competition

#35

Post by phaus » Thu, Oct 25, 2012, 10:15 PM UTC

jc4p wrote: post #3

I would argue that the fact that Apple spent the vast majority of the iPad Mini announcement with a giant picture of the Nexus 7 behind them and comparing/contrasting features would make this article incorrect.

I would argue that the existence of the iPad mini itself proves the article false. Until the public proved that there was a widespread demand for a smaller, less expensive tablet, Apple ridiculed them.

Re: Why Apple doesn’t care about its competition

#36

Post by RShiki » Thu, Oct 25, 2012, 10:19 PM UTC

> it sells premium products at premium prices, and it never discounts.

I fail to see what's premium in a tablet that has an inferior screen compared to the cheaper alternatives.

Apple won the 10" market by virtue of literally doing everything better than the competition. Better screen, better battery life and so on. The iPad mini isn't like that. The $200 Nexus 7 has a much higher pixel density which used to be Apple's own obsession until the mini (retina iPad, iPod Touch, Macbook Pro, iPhone) and they completely ignored the whole pixel density and screen quality angle when comparing the mini to the N7, just stating the obvious "ours is bigger!!!".

When you ask for premium prices, you should deliver premium quality. The iPad mini is not premium enough to warrant premium prices. I would have seriously considered buying one even at a higher price IF it was actually a premium device, but it's not. The N7 is just the better device here, and if there was no software issue with their shoddy fork of android, the Kindle Fire HD 8.9 would've also been interesting with its full hd screen. 1920x1200 8.9 display for... $299, less than the crappy iPad Mini.

I've never felt so underwhelmed by an Apple product since a long time. The iPad Mini feels Meh rather than making me drool at the thought of getting one.

Re: Why Apple doesn’t care about its competition

#37

Post by siglesias » Thu, Oct 25, 2012, 10:38 PM UTC

ajross wrote: post #5

jc4p wrote: post #3

I would argue that the fact that Apple spent the vast majority of the iPad Mini announcement with a giant picture of the Nexus 7 behind them and comparing/contrasting features would make this article incorrect.

Exactly. Their last two big product reveals have been almost entirely defined by reference to Google/Android products: A 16:9 screen on the iPhone. A 7" tablet. Changing maps providers. And they're not even trying to hide this. (And, I should note, all of this is quite objectively a good thing for the market). The premise of the article is ridiculous. Sure, Apple has built a great brand that they can leverage into hu…

Proved it out? Do you have any data to back that up? Everything I've read says that the sales of 7" tablets by Apple's standards have been negligible.

Edit: And this is to say nothing of profits.

Re: Why Apple doesn’t care about its competition

#38

Post by tomkinstinch » Thu, Oct 25, 2012, 10:55 PM UTC

bryanlarsen wrote: post #31

tomkinstinch wrote: post #16

Earlier quoted context omitted.

Based on what information?

We "know" that Nexus 7 / Kindle Fire has a cost of $200. Subtract $? in assembly profit because Foxconn's role building iPad's is much smaller than ASUS/Quanta's role building Nexus 7/Fire Subtract $? because Apple receives better component prices than ASUS & Quanta do. Subtract $? because the iPad mini has a cheaper screen. Subtract $? because the iPad mini has less RAM. Subtract $? because the iPad mini has a cheap…

Who's to say that the Nexus 7 and Kindle are not being sold at a loss to drive sales of cloud content? Pulling $200 out of the air for their production costs does not mean we "know" anything. Have you seen a component by component breakdown with estimated extended pricing in line with their production scale? I'm not saying you're wrong, but a citation or three would strengthen your argument.

Re: Why Apple doesn’t care about its competition

#39

Post by panacea » Thu, Oct 25, 2012, 11:09 PM UTC

fusiongyro wrote: post #10

jc4p wrote: post #3

I would argue that the fact that Apple spent the vast majority of the iPad Mini announcement with a giant picture of the Nexus 7 behind them and comparing/contrasting features would make this article incorrect.

The announcement is for people in the press who want to hear how the product compares (and will complain if it's not brought up), and secondarily people who love Apple enough to take the time to watch the announcement. You will not see a single mention of the competition on Apple's site or in any of their promotional materials, because of exactly what this article explains: aspirational brands do not compare themselv…

>You will not see a single mention of the competition on Apple's site

It's not explicitly mentioning the Nexus 7, but this is at the top of the iPad Mini's 'design' page on Apple.com: http://i.imgur.com/7Mg92.png

Re: Why Apple doesn’t care about its competition

#40

Post by panacea » Thu, Oct 25, 2012, 11:11 PM UTC

phaus wrote: post #35

jc4p wrote: post #3

I would argue that the fact that Apple spent the vast majority of the iPad Mini announcement with a giant picture of the Nexus 7 behind them and comparing/contrasting features would make this article incorrect.

I would argue that the existence of the iPad mini itself proves the article false. Until the public proved that there was a widespread demand for a smaller, less expensive tablet, Apple ridiculed them.

Apple consistently ridicules form factors and products it doesn't have an offering for.

Steve Jobs famously ridiculed the idea of smartphones before they released the iPhone.