What does the iDisappoint (iPod) do for Apple financially?

L

Lazarus18

In debt medical student
I really hope these things cost Apple next to nothing to produce, and that they're just being stupid and marking them up for all they're worth. At $400 these things are going to do nothing but sit on store shelves. Maybe we'll see the price come down, but I sure hope that Apple doesn't have a huge investment in this product.

Since there's nothing breakthrough about it, I can assume that the R&D didn't cost too much. It's production ramp up that concerns me. They should just call it the iCube2 and be done with it. Same basic flaws... doesn't fulfill a need not met by another product, doesn't do much of anything to pull in non Mac people, potentially a big economic drain that will be blammed for reduced earnings in a quarter or two.

Oh well, maybe I can pick one up on the cheap when they start doing whatever they can to reduce massive inventory. Of course by then something better will have been made by someone else.

-Rob
 
Of course by then something better will have been made by someone else.

What's to say it hasn't already? At the very least, there's practically as good for half the price...
 
There is no other MP3 player you can get for a cheaper price that does everything the iPod does as quickly easily weally (I made that word up) and fastley (I made that up to).
 
But the price differential there makes it impractical, regardless of how cool it would be to fly to the moon.

"There is no other MP3 player you can get for a cheaper price that does everything the iPod does as quickly easily weally (I made that word up) and fastley (I made that up to)."

No argument really. But it's the age old cost benefit analysis. Do I need to spend (let alone have to spend in this economy) twice as much for the benefit of FW or a harddrive I can use to transport files? Let's see, a zip disk costs me how much? Worst comes to worst I can burn a CD for $0.50 (providing I burn it on my W2K box since OS X doesn't support my burner).

My point is not the coolness (do I get to join the make up words game?) of the iPod. I think it's incredibly neat. I would want one if it were cheaper. But who in their right mind is going to shell out $400 for a toy? Even if you're gadget minded you could for the same cost buy a comparable MP3 player and still have enough left over to buy a DVD player. This product is the best on the market, no doubt in my mind. But it is not the breakthrough Apple claimed, nor is it a useful product for Apple financially. Looks like I will be seeing my Apple stock fall yet more. Here's hoping the inevitable revision of the iMac generates big profits (I assume that has to happen soon, right? That thing is getting ancient. I hope we see this before the G5.)

-Rob
 
But the price differential there makes it impractical, regardless of how cool it would be to fly to the moon.

"There is no other MP3 player you can get for a cheaper price that does everything the iPod does as quickly easily weally (I made that word up) and fastley (I made that up to)."

No argument really. But it's the age old cost benefit analysis. Do I need to spend (let alone have to spend in this economy) twice as much for the benefit of FW or a harddrive I can use to transport files? Let's see, a zip disk costs me how much? Worst comes to worst I can burn a CD for $0.50 (providing I burn it on my W2K box since OS X doesn't support my burner).

My point is not the coolness (do I get to join the make up words game?) of the iPod. I think it's incredibly neat. I would want one if it were cheaper. But who in their right mind is going to shell out $400 for a toy? Even if you're gadget minded you could for the same cost buy a comparable MP3 player and still have enough left over to buy a DVD player. This product is the best on the market, no doubt in my mind. But it is not the breakthrough Apple claimed, nor is it a useful product for Apple financially. Looks like I will be seeing my Apple stock fall yet more. Here's hoping the inevitable revision of the iMac generates big profits (I assume that has to happen soon, right? That thing is getting ancient. I hope we see this before the G5.)

-Rob
 
Ya but if you think about it do you really need anything why bye a brand new mac when you can get an original iMac for almost nothing that iMac is able to do the same stuff as the new one but you pay more for the new one because it is faster burns cd's plays DVDand has a built in firewire port. You don't really need firewire the ability to play DVD's or burn Cd's and you can live with waiting 2 secoubds more for an aplication to open so why do most peopel get the new iMac because it is more fun to use.
 
Originally posted by Lazarus18
But who in their right mind is going to shell out $400 for a toy? Even if you're gadget minded you could for the same cost buy a comparable MP3 player and still have enough left over to buy a DVD player.

-Rob
Click to expand...

Hmm. Already got a DVD player. And a TiBook that can play DVDs, too. I am gadget minded and I will buy an iPod. You just gotta drink that, buddy, because if *I* will buy one, some more will.

Reality check: They made a breakthrough gadget. Because a) it's harddrive based but sized like a 32M or 64M no-use MP3-player, b) it's got support for the lists you arrange in iTunes, c) it can be used as a firewire drive albeit small, d) it drinks its MP3 songs via firewire (ever waited for a 6G harddisk to fill via USB? you bet you don't want to...).

Apple must invent cool stuff that is a *bit* overpriced. Ever learned something about luxury marketing? It's not luxury if it doesn't cost.
 
Certainly it's not NEEDED. We are way beyond need simply by virtue of wasting our time writing away on this board. But I buy new unnecessary gadgets out of a belief that they will make my life easier, or more enjoyable, or whatever.

I'm not saying the iPod doesn't fit that bill, it's just that it doesn't fit it for very many people.

Is it a luxury item? Sure looks like it at $400. Do I understand luxury marketing? I think so. My original point is about the financial success of Apple, and how this small niche item can help (or in my view harm) it. Does Mercedes make some awesome cars? Yup. Do they sell a lot of them? Not really. Does Ford make some awesome cars? Not really, they're all right. Which company makes more money in a year?

I'm not saying I want Apple to make middle of the road boring junk and sell a ton of them. But to price things so high that people look at it and say "that's really cool, I wish I could afford that... oh look here's a similar product from another company. I will buy it instead now that my desire is peaked by Apple" is not good for Apple. I think it would be OK for Apple to place a premium on the quality of its products. But pricing this thing at $400 is making it a strictly luxury item, not a higher end item MANY people would be willing to pay extra for. How many of us have a cinema display? The iPod strikes me as the cinema display of MP3 players. Good for you if you can justify spending that money, but 99% of people will buy something else.

I liked the idea of producing gadgets that will work better with a Mac than anything else. Those same items should work at some level with existing PCs. Apple's whole goal with the stores is to get people to see how cool their stuff is and at least consider buying Apple. The iPod does not advance these goals at all in my opinion.
 
I dont' see why everyone's whining. It's a capitalist system, the people who can afford the novelty of the iPod will buy it, the rest of us will have to wait a few more months for something a little bit cheaper to come out.

I don't know why everyone's whining though, Apple is known for innovation and original products, unfortunately that means that the end user has to pay.

To me the iPod is very significant. Apple is trying to integrate the Mac into more parts of our everyday lives. You cannot get ANYTHING that will interface directly and as efficiently with a Mac as the iPod. Come on, 5 gigs of storage is a lot, firewire is even better, a 10 hour rechargable battery!!! Sheesh, if I had 400 bucks I could have my cake and eat it too...

I say Bravo Apple!

P.S. My b-day is coming up on Nov 11th :D
 
Again, no one argues that the iPod is not very cool. And yes, the iPod will sell some units, Apple will see what the market will bear. The Cube was freaking awesome too. I loved it, and thought it was the best computer Apple had designed since the original iMac.

But it didn't sell. That's my point. Apple is setting themselves up for failure. If the thing's going to come down in price because it's not selling, start it at a lower price. I don't think you have to be a market guru to know that $400 is too much for this type of device.

I think Apple could get on a roll and get public perception back behind them and get the stock value and ledgers back up. But doing that will require constant refining of OS X, breakthrough applications, and hardware that people want to buy.

The iPod is not hardware a lot of people want to buy. It's hardware a lot of people want (myself included), but not that they're willing to shell out money for. If the price doesn't drop quickly I think this one is doomed. But hey, Handspring dropped the Visor Edge $100 within two months or so, so anything's possible.

-Rob
 
Saul,

I don't think most people on the board are upset because we think we won't be able to afford the device (there's some of that, too, but...), we're concerned because:

1) It's a product with distinct features that seperate it from the rest of the market, but not <b>that</b> far from the rest of the herd.
2) It's a device whose price pushes it into a small section of a mass-market but mostly commodity market
3) Limitations of the device (namely firewire-only) reduce its already small potential consumer-base dramatically.
4) Apple's tenuous past, limited market share, limited experience with consumer electronics, and general consumer ignorance outside the Mac market means that Apple does not have the product reputation or recognition to help sell the device at its premium price (as opposed to, say, Sony)
5) The immediate parallels you can draw to the Cube are uncanny.

All this adds up to:

6) I'd guess that nearly all of us on this board are investors in Apple and its products in some way - financially, emotionally, etc. Product failure impacts Apple as a company. Product failure impacts the other lines (the ones most of us care about).

We're understandably concerned. I'm trying, at least, to give the product as much chance as I can, but it's not easy.

Ian
 
Originally posted by Lazarus18
Is it a luxury item? Sure looks like it at $400. Do I understand luxury marketing? I think so. My original point is about the financial success of Apple, and how this small niche item can help (or in my view harm) it. Does Mercedes make some awesome cars? Yup. Do they sell a lot of them? Not really. Does Ford make some awesome cars? Not really, they're all right. Which company makes more money in a year?

I'm not saying I want Apple to make middle of the road boring junk and sell a ton of them. But to price things so high that people look at it and say "that's really cool, I wish I could afford that... oh look here's a similar product from another company.
Click to expand...

And that's where luxury marketing begins to work, if it does. As soon as everyone's drooling to get one of these - and after the christmas sales are through and some of them are sold - Apple can make the line sport two machines. A highend machine and one you can buy. As I've stated somewhere else: Apple did so with the TiBook and the iBook. People *want* the TiBook, but it's expensive. And they buy the iBook. That's how Apple's marketing works, and work it does.
 
Anyone notice that the "c cedil" for the french locale on it isnt actually a " C cedil" but a "c accent grave" he he ;)

Slightly off the topic, but anyhow, I am softening up to it, the initial shock has worn out. I was more amazed when I first saw the cube though.
 
Apple did so with the TiBook and the iBook. People *want* the TiBook, but it's expensive. And they buy the iBook. That's how Apple's marketing works, and work it does.
Click to expand...

A good point. But public perception is that Apple products are overpriced. When the iBook came out people said "finally! Apple has learned to release a product people can afford." Perhaps the subconsciously were drawn to the iBook because of the TiBook, but if the TiBook had never existed I'm convinced iBook sales would still be strong on the strength of the product itself. Why not change public perception and release good products at affordable prices from the get go?

Granted this lacks some of the luxury appeal. But I'm not sure that's the best place to be in over the next few years. The other option is what I think of as the Long's drugs philosophy. Long's is a pharmacy in California where I grew up. For years getting a prescription filled there was considerably cheaper than anywhere else. It got to be ingrained in the public mind that Long's was where you went to get prescriptions filled... it was cheapest there. Many people still think that, but if you look at it, they are no cheaper than anyone else now. But they still feed off of that public perception.

Apple is setting themselves up for the reverse. People will assume that an Apple product is a luxury item they can't afford. Apple fights the MHz myth, why continue to necessitate a similar campaign trying to show people you're not overpriced? Change the perception and people will look at Apple's innovations as something they can buy, not as something they have to wait for other companies to adopt.

-Rob
 
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