Path: utzoo!attcan!uunet!lll-winken!lll-tis!helios.ee.lbl.gov!pasteur!ames!oliveb!3comvax!bridge2!ngg
From: ngg@bridge2.3Com.Com (Norman Goodger)
Newsgroups: comp.sys.mac
Subject: Re: The Death of Apple Computer (Was: Apple Gets Greedier)
Summary: Apple Lives
Keywords: Apple, Mac, Prices, Rip-off
Message-ID: <78@bridge2.3Com.Com>
Date: 15 Sep 88 22:36:57 GMT
References: <70@bridge2.3Com.Com> and others <1356@sunny3.che.clarkson.edu>
Distribution: na
Organization: 3Com Corp., Mt. View, CA
Lines: 110

In article <1356@sunny3.che.clarkson.edu>, kweeder@sunny3.che.clarkson.edu (Jim Kweeder) writes:
> 
> 
> While I can't disagree with the facts, I think Apple's thinking is strictly
> short sighted.  Apple is in the position of having made two mistakes:  
> (1) Going with an outside supplier for their memory  (2) Having
> underestimated the market demand for their product.  I won't say they
> should have avoided the first one (since Apple isn't alone in making
> this mistake), but they seem to have missed the mark on the second one
> pretty badly.
> 
> Now that we HAVE the situation, the question is who should pay for it?
> Answer:  all of us.  However, that's not the view Apple has taken.  Yes,
> the shortage of Mac II's does dictate a price increase and again yes
> Apple is going to need some cash to get those two memory plants on-line,
> but why dump the whole bill on the customer?  A $1,000 increase on Mac II
> CPU's?  Come on, I can BUY a PC SYSTEM (albeit a cheap 8088 machine) for
> that amount of money.  In view of the two strategic blunders, Apple should
> bite the bullet and go into the red a little bit (or at least take a drastic
> reduction in profit).  No company should expect a rosey profit picture in
> a year they need to build three major production facilities to continue
> their business.  However, if you're an Apple stockholder, I wouldn't
> worry about that, yet.  Apple's raising prices pretty much across the line
> indicates what they're trying to accomplish.
> 
> Can they get away with it?  Well yes and no.  Yes in that people are
> perfectly right in that Apple is free to charge whatever they like and
> we're free to take our business elsewhere.  I can't argue with that, but
> that's short sighted thinking.  The "phrase of the day" is:  pay me now
> or pay me later.  Apple (wittingly or not) has choosen to pay later and
> pay they will.  It's no mystery why more Macs don't adorn the desks of
> corporate America.  With their current move, they're insuring that more
> of these desks will get IBM/Compaq/Tandy machines.  Worse, more Macs won't
> be adorning the desks at home and people will then want an IBM machine
> at work.  And look at Apple's position:  for the first time, they're making
> signigicant inroads into the business market.  The reason is the unique
> advantage the Mac Interface offers for graphics and desk top publishing.
> But, the IBM machines are getting this ability.  Right now, it isn't as
> good as the Mac system, but Apple is handing them the time to get it
> right.
> So, should Apple increase it's prices?  Well, yes.  Demand is up, the
> whole industry is experiencing upward price pressure, etc.  However, now
> isn't the time for *safe* thinking.  Apple has the opportunity they've
> always wanted and they should strike while the iron is hot.  If Apple
> wants to expand and succeed, they need to speculate with more plants and
> products.  This means producing Macs 140 hours a week, savagely buying
> all the memory they can lay their hands on, taking a plunge into the
> bank for the capital to build those plants, and grimly holding the line
> on prices, yielding increases only when necessary.  Increasing the price
> to what the market can bear will produce the advertised result: demand
> will go down.  However, this demand may go away and never return.  What
> I'm advocating certainly isn't safe or appealing, but no one is going to
> topple the MS-DOS world by wielding a pillow and Apple's chances will
> probably never be this good again. 
> That's my two cents,
> Jim Kweeder
> kweeder@sun.soe.clarkson.edu

Jim's arguement is so full of holes, its no wonder we have a drought.
He starts off with a real lame arguement that everyone that needs DRAM
should be making their own, without even considering the MAJOR expense
of such a move. Making chips is no easy task, it can cost millions. The
largest chip makers in the world right now are having problems with effectively
making 1 meg chips, and he expects Apple to jump right in and make their own.
Lets be realistic, it could take months or years before production could ramp
up enough to meet current demand, only to have it wash down the drain and
spent millions for nothing....not what I would call a bright idea.

The idea that any company can accurately predict the market demand is real
funny. Apple to me is doing pretty good to keep up as they have, let alone
worry about underestimating the market...This goes right into the next
statements Jim makes about buying an 8088 PC based system for the amount
of the price increase, that makes no sense, if you can get comparable
computing power, then it would make sense, but comparing the Mac II, to
an ancient machine like that is pretty ludicrious. Also the statement
that Apple and its stockholders should not make a "rosy profit picture"
while building new facilities makes no sense, proper planning indicates
the opposite, Apple should be able to do just that, while expanding, it
is just good business sense and logical...

He also makes the statement that " no wonder more Mac's are not adorning
the desktops of corporate Amercica" where you been Jim? Mac's have been
crusing thru the front doors of corporate America for more than a year
now. Granted the numbers do not match IBM, but its growing real fast.
Also the idea of raising prices causing people to buy other equipment,
is a fair one, but usually companies are going to buy the equipment
that gets the job done, and keeps their training costs down. Price is
NOT always the deciding factor in which computer to purchase.

Lastly, Apple is not sitting on its hands, I am sure this was well thought
out. Wall St. likes it too. And that can't be all bad. But some of the
arguements were pretty lame. I think Apple will come thru this just fine.
but only time will tell. It usually does..

Norm Goodger
3Com
Sysop - MacInfo BBS @415-795-8862









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