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: Laser's cost-cutting secret
Message-ID: <8903070643.aa06215@SMOKE.BRL.MIL>
Date: 7 Mar 89 06:39:24 GMT
References: <davidbrierley@LYNX.NORTHEASTERN.EDU>
Sender: daemon@ucbvax.BERKELEY.EDU
Organization: The Internet
Lines: 44

>     Perhaps Laser is using a lower cost in order to profit by volume instead
>of profit margin on each model sold.  Now that Apple is pushing Macs on the

It is usual or a LATE ENTRY into a mature market to compete on price
(unless it has some really innovative feature(s) to offer).  Laser makes
a profit margin on each unit (smaller than Apple's but bigger than zero),
but they "profit on volume" only to the extent that a significant share of
a substantial market can be achieved.

>education market and because IBM is moving in on the education world as well
>it appears that Apple can't sell as many II models as before - so it must
>increase prices to maintain its profits in order to keep the II line

Fortunately, I think even Apple has figured out that is sales are declining
(especially when the decline is due to price competition :-) that raising
prices will only cause sales to fall faster.  The only occasion on
which raising prices for a mature product will sustain or increase profits
is one in which existing prices are too low to begin with, and Apple has
NEVER been accused of pricing too low!!!

>worthwhile.  Another factor could be that Laser is using the lower prices
>to introduce itself to the II realm so that it can take it over when (if?)
>it releases its (faster?) GS compatible.

I'll believe a IIgs compatible when I see one.  So far I haven't heard
a whisper of a credible rumor (some wishful thinking is about it).  IF
such a clone does appear, you can bet it'll have a price tag substantially
below Apple's.  Only Compaq has been able to sustain a strategy of
cloning at higher prices, and they've done it by offering SIGNIFICANTLY
greater functionality.  So far, I haven't heard that Western Design has
a version of the 65816 materially faster than a IIgs with a Transwarp-GS,
so I don't see Laser producing a clone which would warrant a premium
price (maybe a lap GS with MS-DOS compatibility?).

Murph Sewall                       Vaporware? ---> [Gary Larson returns 1/1/90]
Prof. of Marketing     Sewall@UConnVM.BITNET
Business School        sewall%uconnvm.bitnet@mitvma.mit.edu          [INTERNET]
U of Connecticut       {psuvax1 or mcvax }!UCONNVM.BITNET!SEWALL     [UUCP]

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