Skip to main content

Apple Doesn't Feel The Need To Compete On Value Anymore

mbp-line up

Apple has never competed on price, that would be something that could stain its reputation as a premium label. That doesn't mean that it hasn't offered value for money though. The longevity of its machines, the high specification of its components and the quality of its backup services all went someway to offset the initial pain of the sticker price.

In the PC market I believe Apple has decided that it no longer needs to compete on value for money any more and I think I can explain why.

With the MacBook Air abandoned or discontinued Apple has two models of portable to sell: the lightweight MacBook and the unremarkable MacBook Pro. Here in New Zealand that's either a $2,199 or $2,499 entry point.

Neither is anything close to competitive. You can pick up a similarly light and powerful Asus Ultrabook for close to $1,000 less than the MacBook and similarly powerful HP Envy for over $500 less than the entry-level MacBook Pro. Both offer the same premium build and component quality.

In the past you’d expect that the overall Apple ownership experience would make up for some of those additional costs, but I don’t think it does today. Windows 10 has surpassed OS X in so many areas of capability and Microsoft is doing an amazing job of rolling out updates and new functionality, almost on a weekly basis.

The value proposition no longer holds up. And Apple doesn’t care. Why? For the same reason why Microsoft is concentrating on premium products for the Surface line. The PC has passed its peak and the market is shrinking. Trying to grow market share in a shrinking market by competing on price is madness. Much better to sell fewer machines at a greater profit.

If you want a cheaper Apple computer (and aren’t happy with the steam-powered MBA 13, which props up the OS X portable line) then Apple will point you in the direction of the iPad Pro. The premise being that the iPad Pro is all the computer you need. At that price point anyway.

Ultimately if you can’t run to an Apple portable and need more than an iPad Pro, Apple probably doesn’t care what you buy. It is really only interested in two numbers, the average selling price per unit and the average profit per unit. You’ll see the evidence for this in the way it reported iPad sales last quarter, Units down, but revenue and profits up.

Fewer units, higher prices. That’s where Apple is right now. Are you still willing to pay the entry fee?

Comments

Popular posts from this blog

F1: Robert Kubica Impresses In Renault Test Run

The car may be old but its the performance of the driver that's the story here. Robert Kubica returned to F1, after a fashion, earlier this week with an extensive test run in a 2012 Lotus Renault F1 car at Valencia.
The age of the car and the circuit were likely determined by F1's current rules which ban testing, but the reason for Kubica being in the car is far more interesting. Considered by many to be a potential World Champion and certainly one of the fastest drivers of his generation, Kubica's F1 career seemed to be over after a 2011 crash whilst driving in the Rally of Andora. His Skoda Fabia was penetrated by a guardrail in the high speed accident partially severing his right arm.
Up until last year Kubica has been competing in rallying, with the expectation that the limited movement in his repaired arm would prohibit a return to single seater racing.
So this week's test is both interesting and confusing. Interesting because Kubica completed 115 laps of the ret…

F1: Robert Kubica's Williams Test Asks More Questions Than It Answers

Comparing driver's times at a tyre evaluation test like last week's Abu Dhabi event is difficult at the best of times, but when trying to assess the performance of a driver who has been out of the sport for six years, that difficulty level is raised even higher.
On the face of it Robert Kubica's test for Williams was a success. Fastest of the three Williams drivers present the headlines look promising. However, taking into consideration the different tyres used to set those times muddies the water considerably.
Kubica ran a three lap qualifying simulation on the new 'hyper-soft' tyre - which should have given him a two-second advantage. Correcting for tyres it would appear that Kubica was significantly slower than Sergei Sorotkin - who was on the harder 'soft' tyre - and marginally quicker than Lance Stroll, the team's only contracted driver.

Stroll's family fortune currently funds Williams, so there' no chance that he will be anywhere but in a…

Panos Panay's Defence Of Microsoft Surface Hardware Sounds Eerily Familiar

This weekend I went out with my ten year old daughter to select a laptop for her school year beginning in January. The schools requirements are quite specific, requiring a Windows 10 device, with a preference for a touchscreen and a stylus. She chose a Surface Pro, after trying a large number of different options. Having seen the way I use my own Surface Pro - and tried it herself there was only ever going to be two options - and the other was a Surface Laptop.
I tell you this so that you understand I am a buyer of Microsoft's products through choice, not compulsion. I'm on my third Surface device now. 
So when Panos Panay dismissed reports of the death of the Surface hardware line, I was very interested to see exactly how strong these denials were. Especially how they reflect what has gone before. To whit: Windows 10 Mobile.
Panay claimed that Microsoft is in hardware for the long haul. Almost exactly mirroring the words of Terry Myerson, when he claimed Windows Mobile was g…