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Old 05-07-2010, 08:39 AM   #421
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A big problem for somebody in FUEGO's situation (Window's based) is that the iPad (or iPhone) is a slippery slope. They work with Windows products, but they work oh-so-much-better with Apple products that pretty soon you are contemplating an iBook Pro.
Yeah, I have a feeling that all these consumer electronics were originally the brilliant idea to get people to consider and then adopt the Apple computer platform. Little did they know these products would take on a life of their own and ultimately become the biggest part of the business!

They even had to change their name from "Apple Computer" to "Apple".

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Old 05-07-2010, 09:55 AM   #422
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Lot of the value comes from software. None of the big PC or electronics manufacturers have the software development capabilities of Apple.

Really Microsoft and Google are the only ones who could put together the software and the services. There was a study that showed 75% of iPhone users download content compared to the low teens for competing products.

So iPhone and iPad is more than just the sum of hardware components. Counting the pennies which go into the hardware BOM is missing the point.
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Old 05-07-2010, 10:04 AM   #423
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Really Microsoft and Google are the only ones who could put together the software and the services. There was a study that showed 75% of iPhone users download content compared to the low teens for competing products.
Microsoft has not been very successful with hardware products. The X-box has done reasonably well, but none of the other hardware products has gone anywhere.

Google - I am really interested to see how they manage, they have quite a learning curve to climb. It is so not easy to become a hardware company when your core competency is software only (most of which you make available for free). But, I never underestimate Google - they are also unbelievably innovative.

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Old 05-07-2010, 01:25 PM   #424
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When it comes to a computing device, I don't think the market in general is so uncompetitive as to allow manufacturers to mark up their products "way more than 2x" the cost of the major components.
Maybe an apt analogy is the iPad is a 7 series BMW and all I wanted is a lightly used certified pre-owned Honda Civic. Of course the new BMW will be sleeker and more stylish and have all kinds of convenience features. But will it have a USB port and an SD port?
Try this analogy with Intel vs AMD.

I think the designs of the iPads (and the iPhones and the iPods and the iMacs and...) include a tremendous amount of intellectual property and systems integration engineering.

Wozniak used to go on for pages & pages about the struggle to choose between a system using 20 chips for a wide number of applications (extended instruction sets) or to choose just four chips with a more limited instruction set. And once the product of that decision had shipped, the challenge became consolidating those four chips into one. Off-the-shelf chips or a custom fab?

Now mix in a new generation of engineers who consider Woz to be a dinosaur.

50% gross margins in the computer industry seems awful low. 75% seems satistfactory. Above 80%... now you're making money!
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Old 05-07-2010, 01:26 PM   #425
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Yeah, I have a feeling that all these consumer electronics were originally the brilliant idea to get people to consider and then adopt the Apple computer platform. Little did they know these products would take on a life of their own and ultimately become the biggest part of the business!
Anyone know what portion of Apple's profits come from revenue sharing on app sales? That seems like a huge profit maker potential as the markets for their tech goodies matures. More than selling tech gear. If they can maintain a significant market share that is, and don't get trust-busted.
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Old 05-07-2010, 01:31 PM   #426
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Since most apps are so cheap I suspect that revenue is very small compared to the rest of Apple's revenue.

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Old 05-07-2010, 01:31 PM   #427
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Yeah, I have a feeling that all these consumer electronics were originally the brilliant idea to get people to consider and then adopt the Apple computer platform. Little did they know these products would take on a life of their own and ultimately become the biggest part of the business!
I may be an app whore (I don't dare tallying how much I have spent on apps since I bought my first iPhone), but I have no desire to get an Apple computer. I am very happy with my PC. My wife and my sister were both Apple computer freaks for the longest time. Nowadays, they both have iPhones and love the iPad too, but they have given up on mac computers a few years ago and have no desire to go back. As long as PCs are the dominating computer platform we will stick to it.
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Old 05-07-2010, 01:38 PM   #428
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You are an exception to the general trend. It appears that over the last couple of years, Apple consumer electronics devices have driven a lot more of Mac sales than previously.

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Old 05-07-2010, 02:07 PM   #429
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... but they have given up on mac computers a few years ago and have no desire to go back. As long as PCs are the dominating computer platform we will stick to it.
Yeah, but who's doing the bug fixes, updates, reboots, and the "Honey, can you help me with this?" calls?
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Old 05-07-2010, 03:00 PM   #430
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I think the designs of the iPads (and the iPhones and the iPods and the iMacs and...) include a tremendous amount of intellectual property and systems integration engineering.
Exactly. It’s called packaging – not in the retail marketing but in the engineering sense. Combining the functionality, processing and design into something that does not melt, has the right look and feel and can be assembled in large volume. I would be surprised if the product component costs were more than 25%.

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Anyone know what portion of Apple's profits come from revenue sharing on app sales? That seems like a huge profit maker potential as the markets for their tech goodies matures. More than selling tech gear. If they can maintain a significant market share that is, and don't get trust-busted.
I bet they are trying hard to keep the prices down and the supply of new apps flow as high as possible. Applications open new markets with incredible upside potential.

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I may be an app whore (I don't dare tallying how much I have spent on apps since I bought my first iPhone), but I have no desire to get an Apple computer. I am very happy with my PC.
You don’t have to go to Apple. Slowly, but very surely, Apple is going towards you.

The convergence of computing and electronics devices, and business and retail consumer is still to be determined but Apple clearly is dominating in both share of heart and mind.
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Old 05-07-2010, 03:17 PM   #431
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Not sure of the revenue from Apps, but I think I heard somewhere Apple takes 30% of the revenue from each App sold.
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Old 05-07-2010, 03:25 PM   #432
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Yeah, but who's doing the bug fixes, updates, reboots, and the "Honey, can you help me with this?" calls?
Ah hum, that would be me... But I am the go-to guy for a lot of things...
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Old 05-07-2010, 03:36 PM   #433
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You don’t have to go to Apple. Slowly, but very surely, Apple is going towards you.

The convergence of computing and electronics devices, and business and retail consumer is still to be determined but Apple clearly is dominating in both share of heart and mind.
It sounds ominous....

I bought an iPhone (my first ever Apple product) because it was a revolutionary new product with no equivalent on the market. The first time I tried the iPhone, I knew I had to have it. I bought my iPAd and my 2 Apple TVs for the same reason. But unless Apple comes up with a revolutionary way to do personal computing (and they might), I'll pass. Their computers are pretty expensive (still not that different from the competition), they require pretty expensive OS upgrades, mac versions of popular software are usually neglected by developers, and there are compatibility issues since most people out there use PCs.

Come on Apple fans, I have the iPhone, iPad, Apple TV and Airport Extreme router, can I keep my PC or are you going to turn me in to the Apple police?
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Old 05-07-2010, 03:44 PM   #434
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Come on Apple fans, I have the iPhone, iPad, Apple TV and Airport Extreme router, can I keep my PC or are you going to turn me in to the Apple police?
This could be an example of mere lack of knowledge about their products. You do know that the Mac computers also come with the cool, stylish Apple logo on them too, right? And for only a 100% markup above what a similar PC computer would cost.
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Old 05-07-2010, 03:49 PM   #435
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You don't have to do anything.

But iTunes on Macs run much better and all your Apple devices interact with iTunes.

The industrial design and build quality tends to be better than the run of the mill PC though.
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Old 05-07-2010, 03:49 PM   #436
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Come on Apple fans, I have the iPhone, iPad, Apple TV and Airport Extreme router, can I keep my PC or are you going to turn me in to the Apple police?
That doesn't bother me! As an long time holder of AAPL stock, I'm just delighted you buy all the other toys. Beyond that - to each his own!

As for me - I have all my creative software tools that run seamlessly on my Apple platform, and have for years. Not interested in hassling with a PC. I had way too many years in developing software and hardware for PCs at w*rk!

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Old 05-07-2010, 04:35 PM   #437
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Ah hum, that would be me... But I am the go-to guy for a lot of things...
This "feature" didn't make itself apparent until our kid started using her Macbook.

She literally just started using her Macbook. Pulled it out of the box, ooohed & aaaahed over some of the parts, turned it on, and started using it.

No "Dad, can you help me configure the wireless access", or "Dad, can you help me configure the network printer", or "Dad, can you help me figure out what I need for updates and firewalls and anti-virus utilities and malware scanners", or "Dad, can you help me with..."

She just started using it and doing what she wanted to do. And it just works.

The one time in the last four months that I've had a help request was when she had a download window hiding behind another window of exactly the same size. That's the most difficult problem she's had to contend with.
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Old 05-07-2010, 05:00 PM   #438
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When DH got his MacBookPro last summer he wouldn't even take it out of the box until he could meet with someone at the Apple store. It took several trips to the Apple store for him to get up to speed with its settings (and he had worked with Macs most of his career, but there he had techies setting things up and solving problems). He popped for the three-year Apple extended care program ($350) and just re-enrolled in the one-on-one for a second year. And he had them teach him how to use his iPhone too

Just today he told me there's no way he can transfer just some photos from the photo card to his computer--it's all or none, he said, and he can't just copy them, he says, the computer has to delete them from the card to be able to transfer them (I know this cannot be true, hut I just smile).

Just thinking of him dealing with an iPad makes me laugh. Not everyone finds things intuitively easy, even if they are Apple products and even if they are very smart people in other ways, like my DH.
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Old 05-07-2010, 05:25 PM   #439
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This "feature" didn't make itself apparent until our kid started using her Macbook.

She literally just started using her Macbook. Pulled it out of the box, ooohed & aaaahed over some of the parts, turned it on, and started using it.

No "Dad, can you help me configure the wireless access", or "Dad, can you help me configure the network printer", or "Dad, can you help me figure out what I need for updates and firewalls and anti-virus utilities and malware scanners", or "Dad, can you help me with..."

She just started using it and doing what she wanted to do. And it just works.

The one time in the last four months that I've had a help request was when she had a download window hiding behind another window of exactly the same size. That's the most difficult problem she's had to contend with.
The kind of calls I receive usually go like that:

FIREdreamer's house, 9:30pm. FD is chilling out watching "24", his favorite TV series... The phone rings:

FD: What's up?
Nameless relative (NR): hey, you got a minute?
FD: Not really.
NR: well I am trying to print an email and nothing is coming out of the printer.
FD: umph... Is the printer on?
NR: how can I tell if it's on?
FD: Do you see any lights on the printer?
NR: no, no lights
FD: you have to turn on your printer.
NR: Do I have to open the printer program?
FD: no press the big round button on the front of the printer
NR: on the front?
FD: yes
NR: the big round button?
FD: yes
NR: woaa, everything's flashing, what did I do?
FD: it's just initializing. It's normal.
NR: OK thanks. It's working now.
FD: don't mention it. Click. Shoot, how did Jack Bauer end up in a Chinese Prison?

Soooo, somehow I don't think that slapping an Apple sticker on it is going to help any.

But somehow I am still grateful because at least it's not the dreaded midnight call about a toilet backing up... Oh life!
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Old 05-07-2010, 06:33 PM   #440
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Living in a small town my name gets given to anyone that has a computer problem. I get calls from friends of friends of friends. Most times it turns out to be a simple problem and I get lots of free drinks at the local bars. I don't have a Squadron Commander after me for solutions anymore so I don't mind.
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