dorner@uxc.cso.uiuc.edu (08/19/87)
Why is Apple charging the $50 in the first place? I can't imagine they
are going to make lots of money from it. It's far more than distribution
cost. Is it to give dealerships a profit on the thing? Or is it to give
an incentive to people to buy macs (they're getting something for free)?
It sure isn't good PR--rightly or wrongly, most of us have come to expect
to get operating system upgrades from Apple for free, and having to pay
for this one hurts a little.
And will these things be posted on the BBS? If not, what happens when
Multifinder 1.1 comes out? Another $50?
----
Steve Dorner, U of Illinois Computing Services Office
Internet: dorner@uxc.cso.uiuc.edu UUCP: {ihnp4,seismo}!uiucuxc!dorner
IfUMust: (217) 333-3339wetter@tybalt.caltech.edu (Pierce T. Wetter) (08/21/87)
In article <174400045@uxc.cso.uiuc.edu> dorner@uxc.cso.uiuc.edu writes: > >Why is Apple charging the $50 in the first place? I can't imagine they >are going to make lots of money from it. It's far more than distribution >cost. Is it to give dealerships a profit on the thing? Or is it to give >an incentive to people to buy macs (they're getting something for free)? >It sure isn't good PR--rightly or wrongly, most of us have come to expect >to get operating system upgrades from Apple for free, and having to pay >for this one hurts a little. > >And will these things be posted on the BBS? If not, what happens when >Multifinder 1.1 comes out? Another $50? >---- Dealers HATE free upgrades. While often if the dealer knows you he will give you the upgrade for free, having random people walk in and demand a new whatever is severly annoying. As for getting upgrades for free, the only difference between now and then is dealers won't have to provide it. If you think about it, Switcher has never been provided 'Free' rather you could get it from CompuServer or a user group or you could buy the switcher construction kit from apple for 25$. I expect the 50$ includes the price of the manual and the disks. If you don't want to pay the 50$ you will probably be able to get it from a user group or compuserver. Maybe, even UseNet. Pierce Wetter :x Information Center, n.: A room staffed by professional computer people whose job it is to tell you why you cannot have the information you require. -------------------------------------------- wetter@tybalt.caltech.edu --------------------------------------------
chuq%plaid@Sun.COM (Chuq Von Rospach) (08/21/87)
>Why is Apple charging the $50 in the first place? I can't imagine they >are going to make lots of money from it. It's far more than distribution >cost. Are you so sure? Subtract, off the top, 40% ($20) for distributor and dealer profits. Subtract from that the cost of the disks (4 @ say, $1.00 each), labels, the manual (figure, raw cost from the printer about $3 or so), the box it is sold in, the shrinkwrap, etc. etc. etc. Lets use a raw material cost of $10.00, which seems like a nice round number. so, we've already found 60% of that $50, and we haven't: o paid for the equiptment used to duplicate the floppies. o paid for the person who runs the equiptment who duplicates the floppies. o paid for the people who box, shrinkwrap, inventory or ship the thing. o paid for shipping. o paid for the people who wrote the software and manuals in the first place. Apple will probably make money on the thing. Not much, and probably much less per copy than the dealer does. However, and I see this as a BIG however, the programs will be available at the distributors -- remember all the fun folks have every time one of Apple's free upgrades goes out to dealers and we all go looking for one that will admit to having it? And for folks who don't want pretty manuals and want to download it or get it from a user group, they're welcome to it. Personally, I think it's a steal. chuq Chuq Von Rospach chuq@sun.COM Delphi: CHUQ We live and learn, but not the wiser grow -- John Pomfret (1667-1703)
klein%gravity@Sun.COM (Mike Klein) (08/21/87)
In article <174400045@uxc.cso.uiuc.edu> dorner@uxc.cso.uiuc.edu writes: > Why is Apple charging the $50 in the first place? I can't imagine they > are going to make lots of money from it. It's far more than distribution > cost. Is it to give dealerships a profit on the thing? Or is it to give > an incentive to people to buy macs (they're getting something for free)? > It sure isn't good PR--rightly or wrongly, most of us have come to expect > to get operating system upgrades from Apple for free, and having to pay > for this one hurts a little. Think about Apple's costs. First, 4 disks, maybe $4.00. A manual, which as I've heard sounds like about 200 pages, nicely printed (as it should be), maybe $10.00. A box, packing, shrinkwrap, labor to put it all together, maybe $2.00. Now, overhead costs: inventory, shipping, allowance for defective (or returned) merchandise, $3.00. That adds up to $19.00. A very reasonable dealer markup so that they are motivated to carry it (and take up shelf space, add to their overhead, etc.) brings it up to maybe $40.00 for the suggested retail price; discounters can offer it for less. Now all these numbers are approximate, of course, but the point is that the price is eminently reasonable and the above numbers *do not* include any profit for Apple, or a charge for support. An unidentified Apple executive was quoted in a newspaper article I read as saying that Apple's price (to dealers) does not cover their costs. Dealers *must* make a profit, or they simply won't carry it. The dealers, unlike Apple, have no long term advantage in foregoing the profit on this product. Apple's reasoning is that it will sell a lot more Macs and offering it at the lowest reasonable cost will sell the most Macs. I am personally applauding Apple's move on providing HyperCard and MultiFinder for $49 each. Great work! -- Mike Klein klein@Sun.COM Sun Microsystems, Inc. {ucbvax,hplabs,ihnp4,seismo}!sun!klein Mountain View, CA
woody@tybalt.caltech.edu (William Edward Woody) (08/21/87)
Er, uh, wasn't the $50 to cover "cost?" and that HyperCard was going
to be available on all the better BBS? Or is it that I'm just
dense?
- William Edward Woody Mac >> IBM && /|\ && ][n
_____UNTIL 1 SEPTEMBER 1987_____ ______AFTER 1 SEPTEMBER 1987_____
woody@tybalt.caltech.edu Net Address Unknown
woody@juliet.caltech.edu (I hope I get net access!)
1-54 Lloyd House 8038 N. Mariposa
Pasadena, CA 93710 Fresno, CA 93710
____________________________________________________________________________jww@sdcsvax.UCSD.EDU (Joel West) (08/21/87)
In article <174400045@uxc.cso.uiuc.edu> dorner@uxc.cso.uiuc.edu writes: >are going to make lots of money from it. Having researched these issues in setting the price for Colorizer (whcih also happens to be $50 :-)), I'd like to point out a few things that you might have missed: 1. Suppose you are willing to donate R&D, marketing, etc. for the product. Apple can't afford to do this very often, but let's assume they decide to do so for a strategic product (not necessarily a good assumption, but...) 2. A bound manual, printed will run roughly $2-$5, depending on the quality, quantity printed, etc. If it's a very thick manual (like the HyperCard manual) you might add another $2. 3. Disks in massive quantities are no less than $1. Four disks is $4. Labelling and duplication is another 25 cents, say, so call it $5. 4. Box? You want a box? Another 50 cents or so. Shrink wrap? A dime, maybe? (I don't do Apple's quantities so my estimates are better for thousands than 100's of thousands). We're up to $10 -- without returning a penny for the effort it cost to develop, test or document it. 5. Oh yeah, I forgot. Suppose you write a check for $49.95 to your local dealer. Does Apple see $49.95? No. Do they see $29.95? No. It depends somewhat on the distribution channel, but generally the publisher sees less than half of the end cost. At the same time, if the cost is too low, the profit for the dealer is too low, and it's not worth their labor to sell it. In article <3699@cit-vax.Caltech.Edu>, wetter@tybalt.caltech.edu (Pierce T. Wetter) writes: > Dealers HATE free upgrades. While often if the dealer knows you he will > give you the upgrade for free, having random people walk in and demand a new > whatever is severly annoying. As for getting upgrades for free, the only > difference between now and then is dealers won't have to provide it. Actually, this is one reason why Finder 6.0 is available free on CompuServe and User Group disks, AND you can buy it from your local dealer. Dealers don't want to provide it free, and having worked for a big company, I know they'd just rather pay the $50, get the new documents and the software without a hassle, rather than wait to get it through less formal channels. Also, with dealers now selling the new upgrades, maybe corporate users will get them promptly. As it is, if you weren't tapped into the magazines, or BBS's or user groups, you might not even know there was a new system. (One place I know is still using Finder 1.1g).
kleef@cs.vu.nl (Patrick van Kleef) (08/21/87)
In article <174400045@uxc.cso.uiuc.edu> dorner@uxc.cso.uiuc.edu writes: > >Why is Apple charging the $50 in the first place? I can't imagine they >are going to make lots of money from it. It's far more than distribution >cost. Is it to give dealerships a profit on the thing? Or is it to give >an incentive to people to buy macs (they're getting something for free)? >It sure isn't good PR--rightly or wrongly, most of us have come to expect >to get operating system upgrades from Apple for free, and having to pay >for this one hurts a little. > >And will these things be posted on the BBS? If not, what happens when >Multifinder 1.1 comes out? Another $50? You obviouxly know what the distribution costs are, for a package like HyperCard... C'mon grow up. The $49 barely covers the expenses of disk- and bookreproduction. Never mind 2 or 3 years labour to make HyperCard. And may I call it silly that you describe HyperCard as an OS? "Just checking the walls...." - Basil Fawlty
daveb@geac.UUCP (Brown) (08/21/87)
In article <174400045@uxc.cso.uiuc.edu> dorner@uxc.cso.uiuc.edu writes: >Why is Apple charging the $50 in the first place? I can't imagine they >are going to make lots of money from it. It's far more than distribution >cost. Well, when I was on the Ability(tm) project, several people asked the same question. Often with a scornful tone of voice. The answer was "overhead". A back-of-the-envelope calculation showed that sending out an upgrade was 1/3 as expensive as sending out the whole package originally, mostly due to burning up the secretarys' and shippers' time validating, finding, packing and mailing quantity-one packages. Seems we had quite a good efficiency-of-scale when sending large shipments to distributors/dealers. -- David Collier-Brown. {mnetor|yetti|utgpu}!geac!daveb Geac Computers International Inc., | Computer Science loses its 350 Steelcase Road,Markham, Ontario, | memory (if not its mind) CANADA, L3R 1B3 (416) 475-0525 x3279 | every 6 months.
sysop@stech.UUCP (Jan Harrington) (08/21/87)
in article <174400045@uxc.cso.uiuc.edu>, dorner@uxc.cso.uiuc.edu says: > Nf-ID: #R:mtunj.ATT.COM:36:uxc.cso.uiuc.edu:174400045:000:736 > Nf-From: uxc.cso.uiuc.edu!dorner Aug 19 09:05:00 1987 > > > Why is Apple charging the $50 in the first place? I can't imagine they > are going to make lots of money from it. It's far more than distribution > cost. Is it to give dealerships a profit on the thing? Or is it to give > an incentive to people to buy macs (they're getting something for free)? > It sure isn't good PR--rightly or wrongly, most of us have come to expect > to get operating system upgrades from Apple for free, and having to pay > for this one hurts a little. > > And will these things be posted on the BBS? If not, what happens when > Multifinder 1.1 comes out? Another $50? > ---- The $50 is closer to costs than you might think. Hypercard comes on 4 - 800K disks and includes a manual. And I do think dealers ought to get a small cut. As for on line services - would you really want to spend the time and money to download over 3 Meg of stuff? The same is true for MultiFinder. It consumes more than a single 800K disk and includes a manual. That's why it's going to cost another $50. C'mon folks. We get MacWrite, MacPaint, MacDraw, etc. upgrades for free, endlessly. I'm a Mac owner from the first 90 days; I paid $900 to go from 128K to 512K. I paid $495 for a 400K external drive. I figure that I had a legitimate grip then, but grumbling over $50 for a four disk plus manual set seems a bit much. Jan Harrington, sysop Scholastech Telecommunications seismo!husc6!amcad!stech!sysop
bc@apple.UUCP (bill coderre) (08/21/87)
Sorry to flame, but please, folks! Why $50? You say, "It's far more than distribution costs?" Oh, how do you know? What do you think they are? Let's talk several hundred pages of manual, in typical Apple style. Four disks (over 2 Megabytes of data), nice high quality disks. Good looking box. Shipping and sales support. Shrink wrap! A new icon of Bill Atkinson! (grin) Seriously: Dealers cannot afford to sell anything that they don't make money on. Computer retail doesn't work on the "supermarket" margin. Every item has to pay for itself. The volume isn't big enough. Yet. Consider: How much will it cost you to download 2 Megabytes from your favorite BBS? (That does not include electronic copies of the paper manual.) Answer: You're right! Apple is not going to make much money on this. Except in new Macintosh sales. And for those lucky people, they get it free. I intend to buy a copy of Hypercard just so I can have the nice manuals. I hate the xerox pre-drafts I've been wading through. (No, even the real employees don't get it free.) Please, let's not argue "just how much is Apple ripping off the poor, underprivileged User?" again. We went through ages of that about Inside Mac. Let's talk "product value versus product cost". Have you ever seen any product from any company that gave you so much power for so little money? (Okay, there are one or two.) Note: Microsoft/IBM Presentation Manager/OS-2 developer's kit is $3000. Apple will be mad at me for flaming you, but please. Consider the value, not the cost. Software doesn't cost anything. It provides value..........................................................bc
sbb@esquire.UUCP (Stephen B. Baumgarten) (08/21/87)
In article <26161@sun.uucp> chuq@sun.UUCP (Chuq Von Rospach) writes: >Apple will probably make money on the thing. Not much, and probably much >less per copy than the dealer does. However, and I see this as a BIG >however, the programs will be available at the distributors -- remember all >the fun folks have every time one of Apple's free upgrades goes out to >dealers and we all go looking for one that will admit to having it? > >And for folks who don't want pretty manuals and want to download it or get >it from a user group, they're welcome to it. Personally, I think it's a >steal. Maybe we should be able to order from MacConnection, just like for every other piece of Mac software. :-) I live in NYC, which means that I'm forced to deal with Computer Factory (the dealership from hell) whenever new system software comes out. These guys are lucky if they know which end of the disk to stick in the machine, let alone what the most current System/Finder is... This way I can get Multifinder and Hypercard for $32 each... :-) - Steve
dorner@uxc.cso.uiuc.edu (08/24/87)
Since I started this thing, I'd like to finish it.
1. I was not apple-bashing. Knowing only what I hear on the net, I was
sincerely interested in hearing why Apple was charging for this.
2. I was not aware that Hypercard was 4 disks with a manual. As many of you
pointed out, cost for that has to be about $25 to apple. I assumed Hypercard
was only going to be a single program. I'm glad to be corrected.
3. I did not know that it was going to be posted. (Downloading
it from Compuserve may not be economical at $12/hr, but downloading from
GEnie at $5/hr definitely is, even if the distribution is 3MB. (Of
course, I wouldn't get the printed manual.) My local dealers are so bad
(I once waited at a cash register for fifteen minutes with employees
wandering about the store, not bothereing to wait on me) that I grudge
them the $20 they'd make, so I'll probably download it.
4. My point was more, "why bother to charge for the thing if you're only
going to charge $50?", not, "why charge for it at all?". The consensus
seems to be for the manual and for the dealers, which is reasonable to
me.
I'm sorry if people took my message as a flame. It was not. I
appreciate the way apple has treated its customers.
----
Steve Dorner, U of Illinois Computing Services Office
Internet: dorner@uxc.cso.uiuc.edu UUCP: {ihnp4,seismo}!uiucuxc!dorner
IfUMust: (217) 333-3339