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From: klein%gravity@Sun.COM (Mike Klein)
Newsgroups: comp.sys.mac
Subject: Re: Hypercard - How About New Mac Owner
Message-ID: <26171@sun.uucp>
Date: Thu, 20-Aug-87 20:12:07 EDT
Article-I.D.: sun.26171
Posted: Thu Aug 20 20:12:07 1987
Date-Received: Sat, 22-Aug-87 14:41:44 EDT
References: <36@mtunj.ATT.COM> <174400045@uxc.cso.uiuc.edu>
Sender: news@sun.uucp
Reply-To: klein@sun.UUCP (Mike Klein)
Organization: Sun Microsystems, Mountain View, CA
Lines: 34

In article <174400045@uxc.cso.uiuc.edu> dorner@uxc.cso.uiuc.edu writes:
> Why is Apple charging the $50 in the first place?  I can't imagine they
> are going to make lots of money from it.  It's far more than distribution
> cost.  Is it to give dealerships a profit on the thing?  Or is it to give
> an incentive to people to buy macs (they're getting something for free)?
> It sure isn't good PR--rightly or wrongly, most of us have come to expect
> to get operating system upgrades from Apple for free, and having to pay
> for this one hurts a little.

Think about Apple's costs.  First, 4 disks, maybe $4.00.  A manual, which as
I've heard sounds like about 200 pages, nicely printed (as it should be),
maybe $10.00.  A box, packing, shrinkwrap, labor to put it all together,
maybe $2.00.  Now, overhead costs: inventory, shipping, allowance for
defective (or returned) merchandise, $3.00.  That adds up to $19.00.  A very
reasonable dealer markup so that they are motivated to carry it (and take up
shelf space, add to their overhead, etc.) brings it up to maybe $40.00 for
the suggested retail price; discounters can offer it for less.  Now all these
numbers are approximate, of course, but the point is that the price is
eminently reasonable and the above numbers *do not* include any profit for
Apple, or a charge for support.  An unidentified Apple executive was
quoted in a newspaper article I read as saying that Apple's price (to
dealers) does not cover their costs.

Dealers *must* make a profit, or they simply won't carry it.  The dealers,
unlike Apple, have no long term advantage in foregoing the profit on this
product.  Apple's reasoning is that it will sell a lot more Macs and offering
it at the lowest reasonable cost will sell the most Macs.

I am personally applauding Apple's move on providing HyperCard and
MultiFinder for $49 each.  Great work!
--
Mike Klein		klein@Sun.COM
Sun Microsystems, Inc.	{ucbvax,hplabs,ihnp4,seismo}!sun!klein
Mountain View, CA