Path: utzoo!utgpu!water!watmath!clyde!att!rutgers!cs.utexas.edu!kelvin
From: kelvin@cs.utexas.edu (Kelvin Thompson)
Newsgroups: comp.sys.mac
Subject: Re: "We are not going to play that low end game."
Summary: minor quibble
Message-ID: <3443@cs.utexas.edu>
Date: 3 Oct 88 01:05:35 GMT
References: <14922@agate.BERKELEY.EDU>
Organization: U. Texas CS Dept., Austin, Texas
Lines: 76

In article <14922@agate.BERKELEY.EDU>, 128a-3aj@e260-3b.berkeley.edu 
(Jonathan Dubman) writes:
> 
> >Larry, No I long for the days when a state of the art Macintosh can be had
> >for under $3000.
> >	TeriAnn
> 
> So do I.
> [...]
> The industry is becoming more elitist, contrary to the hopes of those who
> started it around 1975, even before there were products.
> [...]
> Why doesn't Apple adopt a multi-tier pricing scheme like the airline industry
> has?  Short-term reservations, most commonly made by businesses, are hefty in
> price.  To a certain extent they subsidize the cheaper fares for the rest of
> us.  Business class tickets can cost four times as much, even for the same
> seats, even without first class.  We benefit.  The airlines benefit.
> The businesses can afford the higher fares and will pay anyway, and many
> people fly who otherwise would not. [...]
>
> Instead, what we have with Apple is a rather backwards system:  Business get
> a quantity discount, whereas end users pay a premium price! [...]

Actually, I think your example is an medium-good analogy of what Apple is
doing with their current pricing scheme.  You see, you can look at the
airline pricing structure another way and say that the cheap-fare tourist
passengers are subsidizing the business flyers.  The tourist fares go to
people that buy tickets several weeks ahead of time and and then
can't back out of their reservations.  The business fares go to
people who make reservations with short lead times or who may want to
cancel their reservations.  The tourists give the airlines guaranteed
seats weeks ahead of time, so the airlines can afford to gamble on
business flyers making and keeping reservations.  The tourists'
inconvenience subsidizes the fat cats' convenience.

With Apple's recent price hikes you get a similar situation:  Business-folk
who want to fly a Mac today -- or to fly first class -- pay extra.  The
Rest Of Us can make a (mental) reservation to fly at a later date, when
prices drop....or we can buy a tourist-class Plus now.

How would you feel about a time-dependent Mac pricing policy:  You get a
10% discount if you wait six weeks for delivery (and Apple keeps your
money in the meantime and you can't cancel your reservation).  Howsabout
a 40% discount and 6 months?

> [...] But increasing the price for the average user is certainly a step
> in the wrong direction.  Loss of sales hurts everyone (except the
> competition).  No company, not even IBM, is immune to erosion of market
> share.

Well, like you said:

       > Yes, they were selling all they could make,
       > and many of their products were back-ordered, 
       > and they do have supply problems, particularly
       > with memory[...]

I'm willing to give Apple the benefit of a doubt and assume their recent
move won't cost them market share.  I'm assuming their quantity of sales 
would be identical with or without the price hikes.  (Admittedly, the *kind*
of customers will be slightly different.)  Also, I'm willing to give
Apple points for keeping Plus prices stable.

I agree with most of your points about providing information-power
to the masses, but I'm willing to withhold judment on Apple for a
few months.  What will decide me is: (1) How fast and how far they 
drop prices when memory becomes cheaper and more plentiful; (2) How
long they keep producing Plusses.

> Keywords: Capitalism with a human face

Amen.

-- 
-- Kelvin Thompson, Lone Rider of the Apocalypse
   kelvin@cs.utexas.edu  {...,uunet}!cs.utexas.edu!kelvin