Path: utzoo!attcan!uunet!lll-winken!csd4.milw.wisc.edu!mailrus!tut.cis.ohio-state.edu!ucbvax!UCONNVM.BITNET!SEWALL From: SEWALL@UCONNVM.BITNET (Murph Sewall) Newsgroups: comp.sys.apple Subject: Re: Lasers cost cutting secret. Message-ID: <8903031424.aa02324@SMOKE.BRL.MIL> Date: 3 Mar 89 19:04:19 GMT References: Sender: daemon@ucbvax.BERKELEY.EDU Organization: The Internet Lines: 52 >In article <8902281447.aa18108@SMOKE.BRL.MIL>, SEWALL@UCONNVM.BITNET (Murph > Sewall) writes: >> R&D costs are SUNK (gone, kaput, spent years ago!). Development is ALREADY >> PAID FOR (whether or not in retrospect it was a good idea). Besides, the >> Apple 2 line already has profited Apple enough to make Midas jealous. > >Wait a minute... you mean that you want Apple to cease all current R&D on >products for the next ten years? I mean, who is going to develope the IIGS+ >or the Apple IInxt? Are you going to leave all R&D to Laser? Sure Apple has I didn't say, or even IMPLY that. IF (seems to be 'if' doesn't it) Apple invests in a IIgs+ it will be because the ANTICIPATE profit from doing so. In theory R&D is budgeted until the value of 'discounted FUTURE CASH FLOW' diminishes (at the margin) to the maginitude of the required investment (at the margin). In practice for numerous political and other reasons (not the least of which is one can't really measure the 'discounted value of future cash flows') investment budgets for any reasonable planning horizon (a year is popular) are finite. So, Apple's problem boils down to whether the (currently) available capital is better invested in the future of the Mac or the future of the IIgs (these days it looks like Apple figures the Mac is the better bet, and emotion aside that's not an unreasonable conclusion). All that has not one whit to do with how Apple might best use EXISTING technology and (present or potential) production capacity to compete with the Laser (or any others including Commodore 128's, etc.). My point was PAST money spent has zilch to do with what's economically sensible. The Apple II line (I suspect INCLUDING the IIgs, but perhaps not the IIgs+) is what is known as a "cash cow." The Boston Consulting Group wasn't being entirely whimsical when the coined the notion of a "cash cow" along with the (isn't it obvious) idea that the appropriate strategy is to "milk it!" I suspect that if you caught senior Apple executives in a really candid moment they'd say "milking" is PRECISELY what they are doing (or at least trying to do). Reasonable people can differ about the degree to which Apple is conceding more of the market to Laser (and others) than they reasonably have to. If you are among those arguing that Apple's prices are too high, then you have only to put your money into negotiable securities for awhile. We have recent and VERY CONCRETE evidence that Apple IS sensitive to sales responses. They charge as much as they do because you all keep buying (complaining yes, but SPENDING too). /s Murph I bought the latest computer; it came fully loaded. It was guaranteed for 90 days, but in 30 was outmoded! - The Wall Street Journal passed along by Big Red Computer's SCARLETT FAX it to me at: 1-203-486-5246