Specifically regarding the iPad vie put several theories forward regarding the 7" vs 10" tablets:
1. Apple has tied up the world supply of 10" capacitative touch screens. That's not far-fetched;
2. Price: as per Gruber's argument;
3. Fear: no one wants to directly compete with the iPad so they're seeking some form of differentiation. Nikon did this with DSLRs and Canon. It wasn't necessarily fear but Nikon DSLRs weren't positioned directly against Canon equivalents: they were in between; or
4. Volume: to Apple's credit they bet big on a market with very little evidence. To the victor the spoils. The rest are much more sheepish hoping something sticks before going all in. This is much like the "shotgun marketing" vie mentioned previously.
I'm reminded of a scene from "How I Met Your Mother" several years ago. Barney made a video resume. His argument was that Corporate America wants someone who looks like a bold risk-taker but does risk anything because taking risks gets you fired.
There's a lot of true in that and the response to the iPad can be construed as a collective aversion to risk by all the people involved.
Once more all this highlights the importance and strategic advantage of having a committed product guy at the helm of a tech company.
In the PC world (and I think the old audio player world), any new Apple product was met a competitor with the similar specs (often better) at close to half the price (taking into account sales and such). Like the post concludes, if it was possible to make an android tablet (even a 7" one) that was a direct alternative to the ipad at $350 someone would be
http://www.archos.com/products/ta/archos_101it/specs.html?co...
I'm not saying it's the best tablet ever, though on a spec checklist it might actually win (camera, HDMI out, USB host, multimedia formats etc.). I'm more interested in the fact that the vast majority of Gruber-style pronouncements about how special Apple is require you to not have any knowledge of what's actually happening outside the Apple bubble.
It's also worth noting that the Samsung Galaxy Tab price has been on a constant downward trajectory. Last I saw the Carphone Warehouse in the UK was selling it for £489 for 32GB (compared with $599 for iPad 32GB) a £110 difference rather than the $30 dollar one Gruber quotes. Comparing list prices favours Apple since they, somewhat unusually, rarely if ever sell below that price.
http://articulo.mercadolibre.com.uy/MLU-20365527-tablet-pc-7...
Edit: here's an English post:
http://www.ubergizmo.com/15/archives/2010/04/the_apad_is_ano...
which says that it has a resistive touchscreen variety (instead of the capacitive multitouch like in the iPad) and thus much worse.
Except Apple ;)
This was especially true in the early days of the PC revolution. The Mac 128K sold for $2495 at the time, which is more than $5000 in today's dollars[1]. I can't find any good stats on what a typical PC cost at the time, but let's say it was half that. That's a HUGE difference; a mortgage payment (or more than one!) and not something many individuals or businesses are going to pay, even for substantially better quality.
Other factors:
* No amount of speed was enough. People bought computers to, well, compute things, and there were real limits users experienced because of slow processors. This is no longer true for most uses. Faster speeds are nice to have, but it's no longer true that 20% faster number crunching is a huge win for many people.
* With such expensive kit, businesses were understandably reluctant to commit to any platform that didn't let them multiple-source parts and perform repairs. Backups were expensive or non-existent. By contrast, a defective mobile device is simply exchanged or written off.
* In 1984, worldwide PC shipments totaled 6.3M units. Commodity parts were the only way to achieve any kind of economy of scale, not to mention the benefits of competition. 20 years later, it was 177M. [2] At that level, even a minority player can get the same economy of scale that the entire PC industry enjoyed a decade earlier.
Anyway. Nobody knows how this will all shake out. But the spectacular success of the modular PC market doesn't mean it's the inevitable outcome.
But the laptop and the phone, you touch and carry with you in public. It's a personal accessory.
People will pay more to have nicely made personal accessories -- for many reasons -- looks, durability, pleasant to use, feels well made, status signaling.
Though I might say the iPhone has turned the focus on usability much more than it was in the past - just because you can do so much with it so easily, so people now expect that from all phones.
What caught my eye in this article was: "Nobody knows what kind of CPU they have in their phones." That's a world that suits Apple. Interestingly, PCs are unique in that people take an interest in components. Do people know what kind of wood and textile is used in their couch (beyond the external, visible components.) The only products I can think of that compare are houses and cars at many times the cost.
Enthusiasts care, not everyone cares.
I think you'd find that most enthusiasts or hobbyists have in-depth knowledge of the components of their hobby and that "computer people" are no different.
Most people have no idea what is inside their computer - I think the majority of PC owners don't even know the size of their harddrive, for example, and that is something they might actually need to know, let alone RAM or CPU specs.
To this day, I believe I recieved the better gift, at the time. The original Mac, while "groundbreaking", was not only overpriced, but pretty useless.
The iPod touch, Apple TV, and iPad are all variously stripped, screenless, and scaled versions of the iPhone. They share the same processor and underlying OS. This allows Apple to not just sell a lot of stuff, but to sell a lot of the exact same stuff. So not only are their marginal costs lower from buying in bulk, their fixed costs of research and development are lower, too.
Could an iPad's cost $499 or an Apple TV $99 if they didn't sell the iPhone? Probably not, and definitely not if they wanted to keep the kind of margins they command right now.
Although that's true of many software companies, Apple is proving to be very adept at creating revenue streams across multiple, very different product categories from the same engineering investment.
Do they get better prices than Samsung? Because Samsung is who designs and makes the flash memory. (Also, Wikipedia seems to say that Sony buys more than Apple.)
The table on the Samsung page lists companies by fracton of Samsung's total sales, not just flash memory. Nor, for that matter, does Apple only buy flash memory from Samsung.
With the hardware volume purchasing advantage combined with the many-year head start they have on the OS, it will be surprising to me if any competitor obtains a 10% market share in the iPad or iPod Touch markets.
More Android devices are sold than iPhones, yes. Add the iPod Touch to that and I'm pretty sure Apple still has a substantial lead (and possibly growing).
Also, how many of those Android devices are being sold with 1.6 and aren't able to upgrade the 2.x series due to manufacturer laziness or hardware limitations? Is it really fair to compare an Android 1.6 device sold today to an iOS device sold today? The iOS device will, based on history to date, be eligible for OS upgrades for at least two years. The Android 1.6 device is already two years out of date and not getting any younger.
It may very well happen that Android tablets overtake iPads but Android vs iPhones market is an apples-to-oranges comparison.
In notebooks the price disparity is not quite as large, but it's still large. You'll get about the same notebook for $800 that you'd get for $1,200 from Apple. Also, stuff like RAM upgrades and SSDs cost far more for the same thing. Again though, you could find comparable Windows units for about the same prices, or at least close, if you went with higher end notebook brands.
Second, in phones the price disparity is still large because of Apple's deal with AT&T. They're getting not only the $600 unsubsidized prices, but some extra fee as well taken from the contract. You might argue that AT&T is paying that, not you, but your bill may be higher as a result, or you may be on AT&T rather than Verizon since VZW wouldn't agree to that, etc.
Even in tablets, competitors definitely can match the iPad's prices. The Nook is $250. I of more tablets costed below the iPad than above.
(Whether the average Mac Pro user gets any real benefit from these parts is another question)
If the Mac detects a bad DIMM it locks it out and informs you which one. You don't have to have do the RAM shuffle to find out which one is the bad DIMM. Your computer also doesn't crash because of it (it shouldn't but I've seen instances where even ECC couldn't recover).
Apple doesn't sell cheap laptops but when you compare a $800 machine to a $1200 Mac, I dare say that many of the components in the $800 PC will be inferior, CPU, screen, etc. Not even mentioning the chassis where nobody can touch the unibody design of the Macs.
Apple makes premium stuff that comes with premium components - high end PCs which also come with premium components usually cost just as much, or just a tad less.
For the Mac Pro, it's probably a similar situation - you can probably make a cheap junk PC with the same CPU and as much HD space for much less, but if you use high quality components you'll be right up there fairly quickly.
As for tablets - Gruber's argumentation is way more conclusive, sorry.
You're also somehow assuming that other phones are not subsidized??? This has been going on before the iPhone existed so don't be surprised if the Android is too. So no, what AT&T pays doesn't count.
One of the main things I've never heard enough about in comparing Macs and PCs is the service. The ease of service with defects and breakage with Apple is world class. That's surely something that Apple factors into the price and Apple thinks it's worth it. Software etc as well. So I don't know why Gruber thinks he can really compare those things.
So in terms of pricing (and probably only pricing) it's a fair comparison. It illustrates that vendors could compete with Apple on pricing if they wanted. I think they're quite wise not to, everyone saw the race to the bottom on PC margins that happened in the late 90s and decided they'd opt out this time around.
You're right about the phones, others are subsidized, though usually with an upfront fee rather than an ongoing. The rumors in the early days were that Apple's monthly fee is much more than most other phones get, and that's why AT&T got them over Verizon, but who knows.
Many PC vendors have service at least as good as Apple's. I've dealt with both HP and Apple, they're pretty comparable. And with HP you never have to hear the term "genius bar".
A Dell Inspiron 14" with the same specs clocks in at $665 at 4.9 lbs (which is still under the 5lb "ultraportable" mark). A Lenovo U350 with similar specs clocks in at $700 and 3.5 lbs.
The Apple tax is very definitely still in play.
With MacBook Pros you get:
- a backlit keyboard with ambient light sensor;
- a high quality display;
- significantly better battery life than any Windows lapt I've ever seen (due in part to software admittedly);
- the best trackpad I've seen on any laptop ever (seriously... Why do Windows laptop trackpads STILL suck??);
- better graphics than much of the laptops Macbooks are compared to;
- a pleasing industrial design.
3 years ago I would've agreed. Now? The "Apple Tax" is small to nonexistent.
Upgrades are often expensive. That's still true but ever big PC manufacturer does this. Dell is probably the worst offender, offering a really crappy spec for a low headline price and then offering, say, a CPU anyone can buy for $300 outright as a $400 upgrade from a $100 CPU. And that's with Dell's buying power.
And yes I know it isn't quite that simple: Dell may have a quota of CPUs they neex to move, etc but the assertion that they charge through the nose for upgrades is (IMHO) irrefutable.
I think it's fair to say that MBPs compete with all of the other brands "one step up" or business lines. MBP build quality alone lets it fight in that category.
Last, I got two PC laptops: both were broken beyond repair after 3 years, whereas my unibody mac book look almost new after 1.5 year, and my first, plastic macbook works perfectly (3 years old). The only PC laptop that were not crap in my experience were lenovo, but surprise, those were expensive as well.
If you want a midrange or high end laptop then Apple's don't look bad, most people don't though - but then they don't care about the OS either.
If you remove the market from the equation Apple's bottom line isn't as impressive, in fact the rise of Apple in recent years is coupled to the rise of their market place.
So strong is their domination over music distribution that I'm starting to think that when an investigation starts against Apple that the target should be to split Apple into two companies; one for hardware (and OS) and one for the markets. Only then will Apple operate on a level playing field with regards to other hardware manufacturers, as it is the advantage of the market that enables them to subsidise the price of hardware, and as they have grown dominant in hardware (especially in music players) they should be treated as a monopoly of that market and competition encouraged (by just levelling that playing field slightly).
I realise that these views aren't in line with the opinion of the vast majority of people I speak to, especially online and in circles who use Apple gear. But this is long term speculation stuff, the "What-if"... years ago I speculated how dominant itunes could be and it mostly has come to pass and is still increasing (25% of all US music, 69% of digital music as of mid-2009).
Even if Apple has achieved a near-monopoly over digital music or sales or portable music, it's not at all clear that they have had the opportunity to abuse that monopoly. There have been cases (Psystar, etc.) that have tried to get the bundling of Mac OS X and Apple computers ruled as illegal tying, and they have failed. For the foreseeable future, there will not be grounds for a federal antitrust case against Apple.
You should try to conceive of Apple as the poster child for a successful business strategy: vertical integration. A large part of the success of Apple's expansion beyond computers is due to the fact that they can and have ensured that the products work well together, and that most of the products they have introduced have been natural complements of their existing products.
You also seem to be somewhat ignorant of the timeline of Apple's rise over the past decade. The iPod was on the market and gaining traction for a year and a half before the iTunes Music Store opened. At the time the iTunes Store opened, DRM was mandated by pretty much all the content owners. If this contributed to Apple getting a monopoly on digital music sales, the blame should fall on the music studios for not insisting that the online stores they deal with use a single interoperable DRM system, and not on Apple, who had no incentive to promoting interoperability with other music stores and players.
The profits of the iPod+iTunes Store combo provided most of the funding for the Intel switch and the development of the iPhone. Like the iPod, the iPhone was on the market and gaining traction for about a year and a half before the App Store opened. It's hard to argue that Apple's computers have been helped much by the iPod and iPhone other than by generally strengthening the Apple brand.
Each step of the way to their current position, Apple has done it by introducing products that can be at least moderately successful on their own, without the hardware/software tying you are complaining about. None of those individual steps has been anywhere as close to monopoly abuse as, say, Microsoft's entry in to the video game console market, which faced no significant legal challenges. Nor has Apple clearly erected any artificial barriers to entry for competitors. Their agreements with content producers are not exclusive, and now that DRM is not applied to music sales, there's no significant barrier to using music purchased through iTunes on other music players. To the extent that Apple has created any barriers to competition, it has only been by raising the standards for usability and quality.
Only then will Apple operate on a level playing field
with regards to other hardware manufacturers, as it is
the advantage of the market that enables them to subsidise
the price of hardware
http://www.engadget.com/2010/08/31/archos-unleashes-five-fiv...
I would love to buy a $229 Android device that’s the
equivalent of the iPod Touch
Archos clearly intends the 4.3" device to compete in the ipod touch space. The fact that it lacks a capacitive screen means it really doesn't, and seems like a mistake. But given Archos' price points ($200 4.3" resistive and $275 7" capacitive) it's hard to believe that component and manufacturing prices would prevent them from shipping a closer mimic.
Other Android devices in the iPod touch class are out there (e.g. Samsung http://www.wired.com/gadgetlab/2010/10/samsung-galaxy-player...).
Interestingly enough, when I ordered mine, I got a $25 discount, for no particular reason I can discern. Brought the total cost to $256, delivered. We'll see how it measures up.
You can install the market easily; my understanding is there isn't the logic in the market (yet?) to handle a wider range of devices, (without 3g, gps, etc.). With android market advertised for google tv advertised for the spring, I'm wondering if they're prepping the market for a much wider range of devices...
Now, even putting quality aside, competitors can’t match Apple’s prices.
no one else can afford to match the iPad’s price with a comparably sized touchscreen display
iPods, iPhones, iPads. Across all of them, Apple’s prices are either comparable, or lower, than their competition.
Macbook Pro + Xcode + Mac OS X
vs
Lenovo or Dell upper end model + Visual Studio + Windows 7
Visual Studio adds a considerable amount to the final cost, but I'm also willing to put down a fair amount more for having Mac OS X.
It costs nothing to become an Apple Developer. It costs $100 to be an iPhone developer, or $100 for their Mac developer program. Both of which give you previews of OS updates and the ability to sell your software in their stores. Otherwise, you don't have to pay anything.
Does not jive with the prices mentioned later:
Apple Ipad - $599/$699 for the 16/32 GB models
Samsung Galaxy S - $594
HTC A8181 Desire - $527
I don't know what the author's definition of "match" is, but seems to me Android tablet makers have matched prices quite well. *Edit: fixed my formatting
In other words, he's claiming that Apple could undercut the A8181 Desire or the Galaxy S on price, but keeping the customer choose between "FREE* shiny new phone" or "$200* shiny new phone" reinforces the perception of Apple as a premium brand.
* with 2 year contract
Galaxy S $205 build cost - http://bit.ly/bocdoe
Apple Ipad $264.27 - http://bit.ly/aW8mvu
(bit.ly links cause the links are huge, goes to Isuppli)
But the iPod touch has some corners cut. No anti-oil coating on the screen, for one. It also retains the former body shape, not the flat-glass-on-both-sides iPhone 4 style.
Juxtaposing the iPad with a smartphone in an attempt to compare the prices doesn't seem right (you linked to an HTC A8181, but mentioned the Galaxy S). Did you mean to compare it to the Tab?
"These prices compare quite well to the competition. The Samsung Galaxy S — a decent choice for the current “Best Android Phone on the Market” title (check back next week, though) — costs about $600 unlocked from Amazon, and only has only 8 GB of built-in storage. The HTC Desire costs just under $600. Google’s Nexus One, while they were selling it, cost $529."
I think the Tab could have been priced lower but Samsung wanted to see if they could technically compete with the ipad at the same price point first. And if things don't go well, reduce the prices later. Why shoot yourself in the foot to begin with?
And additionally when Android lifts the hardware requirement to obtain the Android Market, you will definitely see much cheaper tablets such as Archos and even the Galaxy WiFi Tab.
www.apple.com/ipad
http://store.apple.com/us/browse/home/shop_ipad/family/ipad?...
http://en.wikipedia.org/wiki/List_of_largest_consumer_market...
Germany, the UK, France, Italy, Spain, the Netherlands, Poland, Belgium, Greece, Sweden, Austria, Denmark, Portugal, Finland, Ireland and Romania combined – all EU member nations – are about equal to the US. They have a larger combined population (about 460 million v. about 310 million) but the USA certainly don’t beat them by a factor of 5 even taking population into account, more like a factor of 1.5.
Oh, and 10 divided by 2.8 is 3.6, not 5.
Apple has dropped it's prices to compete before. It'll be really interesting if Apple drops the price of the iPhone below the top of the line Android phones.
Colour me unimpressed.
Why does an iPhone cost more than an iPod Touch, a standard 2G phone and a 3G USB dongle? That's all the hardware is.
Why does an iPad with a 10 inch screen cost twice as much as a netbook with a 10 inch screen and a keyboard?
Apple may have found some good niches to milk for cash with some attractively designed products, but cheap they most definitely ain't.
Currently, that's not true. The iPhone 4 has a much better camera than the current iPod Touch. Not sure if there are any other differences.
I suspect the real reason is that Apple keeps the iPod Touch cheap to sell to people who can't get an iPhone for some reason (they're too young, they can't afford the data plan, their employer insists on BlackBerries). When they have a chance to buy a smartphone of their own, it'll probably be an iPhone, so they won't have to learn a new UI, or walk away from the apps they've bought.
Apple tax today is control!
While mobiles are moving farther from the locked-in model (i get my phones unlocked for some 5 yrs, and before that, used to unlock them) apple is moving computers to it.
An apple store on the desktop, with DRMed software, is a full circle to mainframe in computer history.
Heck! the iphone, with subsided price along with mandatory monthly bills and approved catalog of software and only one choice of network is already as close the main frame as you can get!
It would be interesting to compare the at&t iphone contract with a 70's IBM mainframe lease one. anybody has one around? :)
The above comment is an example of why you frequently shouldn't trust the "tl;dr version:" those versions are frequently wrong, or they sheer away a sufficient amount of detail as to become wrong.