Path: utzoo!attcan!uunet!seismo!sundc!pitstop!sun!plaid!chuq
From: chuq@plaid.Sun.COM (Chuq Von Rospach)
Newsgroups: comp.sys.mac
Subject: Re: Apple Gets Greedier (Read it and Weep!)
Keywords: Apple, Mac, Prices, Rip-off
Message-ID: <68083@sun.uucp>
Date: 13 Sep 88 18:13:02 GMT
References: <1018@lakesys.UUCP> <68072@sun.uucp>
Sender: news@sun.uucp
Reply-To: chuq@sun.UUCP (Chuq Von Rospach)
Distribution: na
Organization: Fictional Reality
Lines: 47

>>Here we sit, many of us clamoring for a more reasonable pricing structure for
>>Macintosh products, and good old greedy Apple takes the opposite approach, and
>>_increases_ prices!

I was wondering how long it would take before people started screaming...

Did you read why?

1) Apple's been on long-term contracts for SIMMs. These contracts are
   starting to run out, so they're having to buy on the spot market,
   which makes their memory prices that much more.

2) Despite the claimed unreasonable pricing structure, Apple is selling
   every Macintosh they can make, and there's a very strong pent-up
   demand for even more machines that they can't make. They literally
   can't make them fast enough.

The first means their manufacturing costs are going up. It should be obvious
that a machine that costs more to make should cost more to buy. 

The second implies that YOU might think the pricing is unreasonable, but the
people who are buying Macintoshes don't. If anything, they consider them
good buys -- if they didn't, you wouldn't see people snatching the things up
as soon as they hit the stores. The demand for the machines implies,
instead, that they're underpriced -- it's a sellers market.

Apple could do three things. They could increase production. Unfortunately,
last I looked their plants were at capacity. Even if they weren't, the SIMM
problems preclude increases in production -- you can't build machines if you
can't get parts. The second thing is to increase prices -- this will
increase the profit on the machine. It will also reduce demand for the
machines, since marginal buyers will fall out of the market. 

The optimal price for a product in the free-market, last I looked was the
price where demand equals production. You may not like it, but don't yell at
Apple. Yell at those hundreds of thousands of people who ARE buying
Macintoshes at the current price each year and happy to have it -- if they
weren't buying them, Apple would be forced to lower prices. As long as the
market considers the Macintosh a good price, Apple would not only be stupid
to lower prices, but it would be a good way to get into a shareholder
lawsuit -- and Apple is in business for its shareholders, not for its
customers.



Chuq Von Rospach			chuq@sun.COM		Delphi: CHUQ
Editor/Publisher, OtherRealms