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0 pointsIBM9y ago0 comments

If this were true Apple shouldn't be able to sell computers for a premium, and yet they do. 40 years should have been enough for commodification to take effect.

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8 comments · 2 top-level

Tepix9y ago· 3 in thread

What if they are merely still selling computers at a premium because they merely used to be better and are slowly falling behind?

Jtsummers9y ago

For me, I want the OS. I grew tired of maintaining my Linux install (and the various hardware issues), and grew tired of Windows (especially as a non-gamer). I wanted a unix-environment, OS X was the easiest way to get that in a reliable, portable system.

And then, through the network effect, my family followed suit because I'm their IT guy (actually, one of the reasons I quit Windows too, but they just keep dragging me back).

But the premium isn't too bad, IMO. I've had my current laptop (MBP, retina display) since 2012 and it's still going strong, even the original battery. I recognize that this is partially because we seem to have plateaued a bit on desktop/laptop capabilities, but I have no major issue running anything I want to run on it (modulo games, whicH I don't play so is a non-issue for me). I've also been able to reliably sell their laptops for a decent amount (could probably get more, but always sell to friends) and end up with a discounted new laptop as a result.

EDIT: Further, my experience with non-tech owners of Apple laptops versus PC laptops has been interesting. I don't know if the PC laptops are just more fragile, or if the Apple owners are more conscientious. But Apple laptops seem to last much longer and end up in much better shape (less the power cords) with "average" users. But this is purely anecdotal. A large part of that difference is probably just that a $1000-2000 PC laptop would last just as well as the same price Apple, but more PC laptop owners get the $300-500 sale price machines from Best Buy.

MaysonL9y ago

So who's making better mobile chips than their A series of processors? Or even chips as good?

Tepix9y ago

Their mobile chips aren't in their computers (i.e. laptops or desktops) ... yet.

_wp3r9y ago· 3 in thread

Apple in the PC market is a single digit percentage point(7.2) participant. Premium niche is a functional business model, but broad market speaking, commodification has taken place, in that 25% of the PC market is Other in most reports. That number is important because it implies that 25% of the entire market is "small" actors that have been able to leverage commodification. If you also consider Dell as a commodity vendor then that group jumps to 40%.

IBMOP9y ago

The parent implies that it will eventually drive the margins down. If you're saying that commodification has already taken place then it's even more impressive that Apple's line of computers can still command a premium and indicates that they have some kind of durable competitive advantage.

zekevermillion9y ago

It's almost like Apple has uncovered a new kind of product microeconomics -- luxury commodity, a commodity product where luxury pricing increases demand. It's a cheap way for consumers to signal upscale fashion.

(This is me appreciating the enemy's skill from afar. I do not personally like Apple products. Just as I prefer wearing paint-stained sweatpants and 10-year-old extra-large t-shirts, as well as running linux on 8-year-old workstation. My favorite "smart"phone is a blackberry classic.)

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_wp3r9y ago

I agree. Premium niche is a very effective business model, and Apple does apply that strategy very well. I was only suggesting that supply chain optimization is more a function of profitability for Apple and less of a market advantage due to total market commodification.

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