Path: utzoo!censor!geac!torsqnt!news-server.csri.toronto.edu!cs.utexas.edu!usc!apple!das
From: das@Apple.COM (David Shayer)
Newsgroups: comp.sys.mac.misc
Subject: Re: The New Macs: Greedy Compromises?
Message-ID: <47107@apple.Apple.COM>
Date: 5 Dec 90 02:53:25 GMT
References: <90{^6B_@rpi.edu> <1990Dec2.081412.25053@world.std.com>
Organization: The Trolll Den
Lines: 36

In article <1990Dec2.081412.25053@world.std.com> boris@world.std.com (Boris Levitin) writes:
>For some reason, all the "Apple is in business to make money" defenders
>of capitalism show an incomplete understanding of its realities.
>
>Apple's margin on the new machines is adequate.  The machines can easily be
>assembled at automated plants (the IIsi in Fremont, the Classic and LC in
>Singapore).  All that is required to meet higher demand is to rent a factory,
>rent robots, connect them to computers running the same program as the existing
>plants, and start churning out more low-cost Macs, all of which will also bear
>an adequate profit margin.  If the Classic were to be brought out as a
>faster machine, it would still have a pretty high profit margin and Apple
>could have opened another plant (possibly with leased equipment to minimize
>risk) and make many more Macs, much more money, and really threaten DOS.

I'm sorry, but I don't think you have the slightest understanding of
what it takes to set up a factory.  It costs a *LOT* of money, and takes
a lot of time.  Deciding to make a new factory, and then actually making
it, is a big decision, even for a $5B company like Apple.  There aren't
computer factories sitting around waiting to be rented by companies
like Apple whenever they need a little more production capacity.

>The market is not static.  Manufacturing capacity is not static.  For an
>example of how markets can be expanded, look at the NeXT machine.  Did you
>see all this I'm-defecting-to-NeXT material on the comp.sys.mac groups
>when NeXT first came out with its way-overpriced, way-underpowered cube?
>Its new line, by being cheaper and faster, means that the company will
>survive.  Now THIS is capitalism at work.

What have you been smoking?  Next may have a technically nice machine,
but InfoWorld reports that they sell around 800 units a month.  They 
have a factory with a capacity to procude 800 a day.  They are not making
money, and are not even close.  The only reason they are still in business
is that Jobs and Perot have deep pockets.  BTW, Apple sells 80,000
Macs a month.

David