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From: jan@bagend.uucp (Jan Isley)
Newsgroups: comp.sys.mac.misc
Subject: Re: Mac IIsi for sale...
Message-ID: <1990Dec17.064020.27189@bagend.uucp>
Date: 17 Dec 90 06:40:20 GMT
References: <36714@cup.portal.com> <5350@crystal9.UUCP> <1990Dec13.035030.27241@bagend.uucp> <17358@natinst.natinst.com>
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davoli@natinst.com (Russell Davoli) writes:

>In article <1990Dec13.035030.27241@bagend.uucp>, jan@bagend.uucp (Jan Isley) writes:
>> Now, before you go jumping on me for putting apple down, take a deep
>> breath for each percent of the cost of macs that is pure profit.  By the
>> time you finish, you will have forgotten why you were upset at me.

>We keep hearing this kind of stuff on the net every time someone mentions
>any other computing platform, usually in relation to something people are
>religious about, like the NeXT.  Does anybody know or has heard rumors
>(like for MacWeek) about what Apple's profit margin really is?  If I
>remember what little economics I've had, you've got to expect a company to
>make something like at least 15-20% or else the owners could just as well
>put their money into investments earning 10-12%.

Okay, I can clarify my comments a little more.  And no, I am not religious
about any computer.

I have to agree, that if a company is not making at least 20% margins, they
should get out of the business.  I do not know specific margins for any of
these companies, but our developer's discount with hp and sun are 40%, next
is 30%.  Next's university discount is also 30% +/- a point or two depending
on where you get it.  One can only speculate how these prices compare to the
actual profit margins.

Hopefully, someone out there will help me out with more specifics, I have
recycled about 2 tons of old magazines this year.  When the SE first came
out, several of the engineering trade magazines did case studies on the
mac manufacturing process.  The bottom line was that, even when it first
came out, the cost to manufacture, package, and deliver to dealer cost of
an SE was less than $300.  This was when the SE was retailing for about
$3,000.  The Plus, estimated to cost just over $400 to manufacture, was
selling for about $2,000.  Now, the marketing alter ego in me would say
that Apple should have discontinued the Plus, sold the SE for $995 retail,
and developed a *huge* market share, but Apple did not ask me.  They sold
both models for years at about a 1,000% markup.

And don't even suggest to me that it took that kind of markup to pay the
non-recurring engineering costs for the Plus and the SE.  Rubbish.

-- 
Jan Isley  jan@bagend  {known universe}!gatech!bagend!jan  (404)434-1335