How to increase Mac sales? Give away iPods!

Should Apple give iPods away with every Mac purchase as a sales promotion?

  • Yes! I would finally ditch my Centris 650 with such a promotion!

  • No way! Even $400 freebees isn't enough for me to buy a new Mac!

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V

vitaboy

Registered
So we're seeing that the slow economy has a bigger effect than all the strong product line Apple has right now. Sales are down across the board. Well, here's a plan to ignite a sales frenzy:

<b>Apple, please give away a 5 GB iPod with the purchase of every Mac!</b>

I mean, what does it cost to manufacture a 5 GB unit these days? Probably less than $100 (real educated guesstimates would be appreciated).

Or if it costs too much, produce a special version of the iPod with only 1 GB of disk space that cost $50 per unit.

But the point is, if Apple is already rewarding Mac users by giving away the iApps for free, why not just give away iPods, too? What would be the price of iTunes, iMovie, iPhoto, and iDVD on the market if they were sold as retail products?

Probably more than the cost of making an iPod, I'd guess.

I mean, the iPod is just a hardware iTunes, is it not? The loss of iPod sales revenue would be more than offset by the revenue on sales of the main Macs. So Apple loses maybe $50 million in iPod revenues, but gains a $500 million in Mac sales.

Not to mention increasing market share when the chips are down for all the PC players, and giving a boost to MacOS software sales.

If Apple ran a promotion like that, I bet you would see a HUGE increase in sales, like Apple finally making $2+ billion per quarter again. That's a real promotion and like the current Real People campaign, Apple needs to breathe some life into offering an irresistable promotion that sparks spontaneous shopping.
 
Not really! :p

But that's the point, isn't it? The promotion would be such a good deal, that you'd have a rush on Macs. It would be a totally frenzy!

The iPod revenue is just a small fraction of overall sales, so Apple really isn't losing much in order to gain huge sales on everything else. I mean, the iPod isn't doing much to offset the soft sales, right? So why not give them away in order to boost everything else?

[added]

The only question is whether Apple can do this profitably. So maybe, Apple can run a limited-time promotion, say, 2 weeks and see what kind of effect it has on sales. If it's only a marginal bump in sales, Apple just eats a small loss on those free iPods. But if it causes a buying frenzy, then Apple knows it has a good thing going.

At that point, manufacture a new low-end iPod that can be produced very cheaply. Reduce the disk to 1 or 2 GB, re-engineer the product to make manufacturing quicker and cheaper, whatever. It would still be a desirable iPod with the appealing look and feel and usability, but an iPod that Apple can afford to bundle with every Mac over the long term.
 
I doubt that the iPod costs anything under $250 to make. Toshiba, the manufacturer of the iPod's drive, released their own mp3 player, and it costs $10 more than the iPod, even though the screen is smaller, it has less complex buttons, ect.

Not that I disagree with your idea, its just that the ipod is one of Apple's lower profit margin products. Now, lets say that Apple decides to bundle them with and computer $2000 and above, and it might work.;)
 
Originally posted by Matrix Agent
I doubt that the iPod costs anything under $250 to make. Toshiba, the manufacturer of the iPod's drive, released their own mp3 player, and it costs $10 more than the iPod, even though the screen is smaller, it has less complex buttons, ect.

Not that I disagree with your idea, its just that the ipod is one of Apple's lower profit margin products. Now, lets say that Apple decides to bundle them with and computer $2000 and above, and it might work.;)
Click to expand...

If Apple bundles the iPOD with ANY machine, I'll buy that machine :)

Andre
 
Well, it wouldn't work for me. While I've played with the iPod and I realize how cool it is I just don't see myself using it. Music isn't that big a part of my life and I rarely spend any time walking around or at a gym or anyplace really that an iPod would be handy.

On the other hand, a cheaper iMac with a larger screen would be hard to pass up. As much as everybody hates Dell around here, they make do with small margins and pass the savings on to their customers. Apple has huge margins that are not usually seen in the PC industry.

Let's lower the prices if you really want to gain marketshare.
 
I think everyone here has made valid points.

I think what I'm assuming though (and a big assumption at that) is that iPods don't cost that much for Apple to make. Forget the retail price, Apple is almost certainly marking the iPods up big time because up until now, they've had a seemingly exclusive lock on the supply of the tiny 1.8" drives.

It's also true that while the new Toshiba player is more expensive, it's just one version. Toshiba will also be produce a lower capacity version with a 2 GB disk that it will sell for less than $200, I believe.

Apple can also simply reduce prices of Macs by $400 but then they would be selling Macs at a loss. Again, my assumption is that the iPod doesn't cost that much to make so wouldn't make nearly a big a dent into profits as generally cutting prices. It all depends on what the manufacturing costs for the iPods are.

But bundling iPods is psychological. Consumers get something that's perceived to have a $399 value for free. Also, with an iPod in hand, the new Mac owners can quickly get excited about how smooth the Mac experience is by having an ultra chic device to play with. All those people will be carrying around and using their iPods and Apple will have a new crop of evangelizers to the platform, which will make it even easier for more Windows users to make the switch.

Of course, such a promotion would probably piss off everyone who actually bought an Apple, but maybe can offer another valuable promotion to those users. :p
 
Give away iPods....

hmm.

I think Ford should give away Focuses with the purchase of an Excursion.

:rolleyes:
 
Ford giving away Focuses with Excursions would be the equivalent of giving away iBooks with every dual processor G4 desktop.

Apple giving away iPods with every Mac purchase would be more like Volkswagon giving away $500 mountain bikes with every Jetta sports package - which was a promotion Volkswagon ran a few years ago.

Didn't Compaq do a promotion where they were bundling iPaq handhelds with certain desktop purchases a while ago?

So it's not such a ridiculous idea. But I bet a bundled iPod would be a lot more interesting to more people than a bundled PocketPC handheld.

Big difference because an iPod is designed to enhance the Macintosh experience and goes hand-in-hand with Macs (whereas a Focus doesn't exactly enhance an Excursion). Consumers are immediately rewarded - in a very material way - for taking the leap and switching to the Mac. Not only do they get a great computer with a great OS and great apps, but they also get the coolest music player around. It's an unbeatable combination, and not something that competitors can easily duplicate.

BTW, correction on the new Toshiba Gigabeat....seems like the device itself will sell for $405 but that Toshiba will sell 2 GB disks separately for $169. So it seems very possible that Apple could manufacture a 2 GB iPod that's low-cost enough to give away with every Mac. In fact, if a Apple bundles a 2 GB version, then it wouldn't upset current iPod owners as much while allowing Apple to continue to charge a price for the higher-end 5 and 10 GB versions. :p
 
So are you buying the Mac or the iPod? Most people buy a Mac because they want a Mac. iPod is just the extra joy when you own a Mac. Why would Apple bundling an iPod stimulate their sales big time?
 
Because it's an incentive? Because sometimes a promotion can go a long way for people to open up their wallets?

Please remember the reason for this thread - Mac sales are DOWN. Apple's market share is hovering around 3.5%. It's clear that while people are still buying Macs, Apple isn't selling enough of them. That's the reason why Apple's stock dived from $25/share a month or two ago to just $17/share today.

Regardless of whether OS X is great or the Mac experience is great, Apple is selling less Macs than they used to. Let's remember that. People - and this applies to almost every PC manufacturer, too - are simply not buying ANYTHING, so maybe it's time to take the big guns out and get really serious about selling without sparking a self-destructive price war.

I think the "Real People" campaign is long overdue, and should go a long way to getting some Windows fence-sitters to make the leap. But I suspect not enough will jump to offset the fact that existing Mac users are also not buying as many new Macs as they used to.

So bundling an iPod would be a very loud and clear way of telling people to go and buy a Mac today - not 3 months from now or 6 months from now. Half the reason for getting the iPod over competitor products is the level of integration Apple has achieved with it. So reward people for actually buying a Mac instead of simply thinking about it or wishfully thinking they had one.
 
to propose bundling of a piece of equipment that you admit you have no idea how much it costs to manufacture in such a point blank manner is ridiculous.

apple raised it price on iMacs for a reason... costs were up. by reducing margins further by bundling a device with systems they may gain a few users, but little to nothing would be added to their bottom line.
 
If they were to give an iPod to every person who bought a mac within the last year, now THAT would be great :D
 
Originally posted by rinse
to propose bundling of a piece of equipment that you admit you have no idea how much it costs to manufacture in such a point blank manner is ridiculous.

apple raised it price on iMacs for a reason... costs were up. by reducing margins further by bundling a device with systems they may gain a few users, but little to nothing would be added to their bottom line.
Click to expand...

Golly, what's with all the hostility? :confused:

I thought I made my qualifier pretty clear - it would be a great idea IF the cost of manufacturing iPods was low enough. I stated that I didn't know what that cost actually was, but I also stated that it's probably lower than most people think.

Apple raised the price on the LCD iMacs because the price of DRAM and color TFT displays went up. I don't see the iPod using any DRAM or 15" color LCDs. In fact, the cost of manufacturing iPods has probably fallen a lot since it's introduction last year.

The whole point of this is for Apple to increase market share when the PC makers are down and suffering. If this promo can be done without wiping out profits, then I think it would appeal to a lot of users. Who are these users?

1) Windows users who want an iPod but have been hesitant about making the jump to the Mac that buying an iPod requires. Getting a free iPod makes the decision less "risky."

2) Windows users who have been thinking about switching to the Mac but have not done so because they think the Mac is still overpriced for what you get. Adding a free iPod to the mix will greatlly increase the bang-for-the-buck factor on any Mac purchase.

3) Mac users who are still happily cruising along on their PPC 601, 603, and 604-based Macs running OS 8 or 9. These users may want to buy an iPod but haven't because their aging systems can't run iTunes and none of the new Macs are by themselves a compelling enough purchases.

4) Mac users who are in the market for a new Mac regardless, but have been holding off on making an actual purchase for whatever reasons. A limited-time offer on a free iPod would get these people moving.

Again, this is based on the assumption that the cost of producing iPods is actually not as expensive as it may seem.

I don't think there is anything "ridiculous" about this idea (if Apple's cost of producing iPods is cheap enough). At this point, Apple needs to show that Mac sales are increasing instead of being stagnant - that's as important as being profitable. For every tenth of a percentage that Apple loses, it makes it that much easier for department, groups, and organizations everywhere to dump their Mac systems and go Windows, whether or not the reasoning is valid. It's going to take a lot of work to climb back up to 5% again, and tons more work to 10%.

So the iPod idea is just that - an idea for Apple to try and get a dramatic increase in sales without sending the industry into a price war. If Apple does a limited time trial, it will be able to contain the costs of the promotion. But it's better than sticking to the status quo and simply hoping that the economy improves, IMO. I personally think a lot of people would upgrade their old Mac and Windows systems simply because the thought of getting a free iPod is too irresistable a bargain.
 
The iPod was the first part of me switching to macs.... (the second was the new iMac and the third was OS X). But I needed a good Mp3 player. I understand where Vanguard is coming from. A portable Mp3 player is a bit of a niche market. I rollerblade everyday and workout 5 days a week, so I need to have that music with me, but not everyone would use it.


Still I think the iPod as marketed now, is still helping to grow the mac market. Maybe if they gave them away it would speed that up, but the problem with just giving them away is that windows people (with a program I just saw on TV) could still use them. So unless they came with a mac that promotion might hurt Apple. I think the current promotion they are running where you can get $100 off if you buy a Mac and an iPod together is pretty good.


I think all in all the iPod is very helpful to building the Apple presence among none apple users.
 
I have to admit that one of the factors in my recent purchase of a DVI TiBook is the $100.00 rebate on an iPod purchase before 6/30/02. I bought my new iPod yesterday, and I love it!

Perhaps not giving the iPod away, but I'd love to see Apple give you an "instant" rebate with purchase. That would rock.
 
Apple and IBM are buddies....sortof...

Too bad IBM doesn't do HDs anymore, but what IF those nice little microdrives would make their way into the iPod. Or maybe a PCMCIA slot...Hmmm wishful thinking... Why not add an Organic screen and backlighting?

Hmmm, how about Ogg support, duh, hello Apple...?? (Yes I know Ogg is not finished, but the initial releases are comparible if not better than mp3 and not many things will change...)

Well, how about a "trimmed down" (as previously noted) and sell or offer a "special" with the purchase of a computer. I would pay $50 or even $75 (well maybe) for an mp3 player with my new mac.... Hell I would pay $150 for a GOOD mp3 player... (wait they DO have good mp3 players for $150 ;-)

College students are big musicphiles (big assumption, but for the most part true). I think a cheaper mp3 player from Apple would be an even bigger seller on many campuses.

Just a thought :-D

-macxonly
 
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