Path: utzoo!attcan!uunet!tektronix!reed!wab
From: wab@reed.UUCP (Bill Baker)
Newsgroups: comp.sys.mac
Subject: Mac pricing and the future of the Mac
Keywords: Obscene profits, planned obsolescence, lengthy diatribe
Message-ID: <12101@reed.UUCP>
Date: 17 Mar 89 16:56:18 GMT
Organization: Reed College, Portland OR
Lines: 104


In article <919@fornax.UUCP> mcdonald@fornax.UUCP (Ken Mcdonald) writes:
>Sigh.  I just don't understand why Apple does this. . .

Why?  Scully's profit sharing and stock option package, that's why.

>but the logic board upgrade alone from a Mac II to a Mac IIx is more
>than $2,000!  Come on now, Apple, what's going on!?  You made your profit
>off of me when I bought the II, and I wouldn't mind paying you a reasonable
>profit on the board either, but $2000+ isn't just profit, it is an
>indication to customers that Apple doesn't care a sou for its customers
>after the sale is made.  I mean, what am I supposed to think about buying
>Apple machines in the future when I say to myself, "If I buy this machine right
>now, I can have full confidence that Apple will try to price any future
>upgrades completely out of my price range."  Not very confidence-inspiring.

Oh no.  Apple does care very much about its customers.  When Scully looks
out over the multitudes at MacExpo I'm sure it's with affection...the
same affection a rancher feels as he looks out over his herd and
thinks about the rising price of beef.  Let's face it, campers:
they've got us.  As the Mac line is constantly upgraded, we time and
again face the choice of paying outrageous prices for new machines and
upgrades or junking our Macs (the value of which decrease
precipitously with every upgrade) and buying into another
graphic-interface system, most of which are also proprietary and
therefore overpriced.

Most Macs are obscenely overpriced.  I recall the cover article
(MacWorld, Macuser?) on the real price of a Mac, where they showed
that the wholesale price of parts accounted for 1/4 of the list price
of an SE.  The ratio for the Plus must be even lower.  Can you say
excessive profits, John Scully?  C'mon, you covered the development
costs of those machines years ago and you've got plenty of capital to
cover the costs of developing new machines.  Admit it: the closed box
Macs are cash cows you are milking for all the market will bear, both
to protect the new machines and just for the dough.

"What is excessive profit?" Scully says as he washes his hands.

Apple's policy on upgrades is also obscene, especially with regard to
the II line.  An upgrade board shoudln't cost $2000, so why does it?
Because Apple wants to sell lots of IIx's.  If they charge a lot for a
new machine then they have to charge a lot for the upgrade or else
people will just buy the old machine and upgrade it.  And all you
folks who bought II's are screwed.  I'm in the market for a IIcx, but
I may just bag it now that I see that it's going to cost me 2 grand or
more a pop just to keep up with the Jones's.  I'm a professional in
the industry and I'll pay top dollar for a state of the art machine,
and thereby cover Apple's development costs and provide a hefty profit
to Big Red.  But if Apple is going to keep reaming me for each logic
board swap, forget it.  $2000 for essentially a 68030 and a PMMU?  If
Motorola is charging you that much for chips, then I'm putting the
money I would have spent on a Mac into Motorola stock.  But I know
that Apple is getting the bucks and instead I suppose I should put the
money into Apple stock...which thereby makes Apple stock more valuable
and increases the value of Scully's stock options.  You can't win.

The most disturbing trend I've seen in the Mac line is planned
obselesence.  Why no PMMU in the MacII?  Why code a 4meg memory
limitation in the SE ROM's?  Apple must have been working on the IIx
at the same time as the II and seen the value of virtual memory.  For
that matter, why limit the II to 8 meg?  The memory fiasco with the
IBM PC line should have shown to everybody the stupidity of memory
limitations.  How much memory can a 68000 address?  A 68020?  A 68030?
Why design in limitations...unless you want to later remove those
limitations for a hefty price.

What about the warranty?  Apple, a 90 day warranty on a machine that
costs more than a new car?  Chrysler offers a seven year warranty and
you won't guarantee your machines past 12 weeks?  I know the answer:
buy AppleCare for the machine.  So I should pay for coverage you should be
providing?  These days, the Mac line is pretty healthy, but after the
infamous video board scam no one trusts Apple and smart buyers just
figure the cost of AppleCare into the price of the machine.  Talk
about a protection racket!  Sure the machine is healthy, but on the
off chance that something happens you'd better be covered because a
repair board swap costs an arm and a leg.

The Mac is now a business machine (which was Scully's stated goal) and
the pricing of the line reflects that.  Apple didn't cut its prices
because home users stopped buying.  No, it was when the big buyers
balked that Apple backed down...cutting prices on machines that they
knew were going to be obselete when they announced the SEx and IIcx.
In short, Apple doesn't care what we think; they care what
MegaMultinational thinks when it goes to buy machines.

So, Apple jams us both on the cost of new machines and upgrades.  In
doing this, though, I think they are killing the goose that is laying
the golden eggs.  The bloom is hardly off the II and it is going to
cost 2 grand to upgrade it.  I think some major buyers are going to
look askance at the turmoil in the Mac line, which means sales volume
will go down and Apple will probably raise prices to keep up profits.

Remember the Model T, John?  Henry Ford only made a few bucks on each
T, but he sold millions of them.  VW turned out cheap Bugs like
hotcakes and made a mint.  The Mac was supposed to be the same kind of
deal.  The Beast Jobs wanted to put a Mac in every home...and he was
right, John.  Control the market and the profits will come, billions
more.  Look at Bill Gates and DOS.  Put a Plus with a SuperDrive on
the market for under $500 and they'll sell like Hula Hoops.  Charge a
reasonable price for upgrades so that a user can buy into the Mac line
for a fair price and stay current with new development at a bearable
cost.  In short, stop trying to screw every possible dollar out of the
Mac market and you'll eventually make a lot more money.