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From: kchang@ncsa.uiuc.edu (Kenneth Chang)
Subject: Re: A Classic Dead End?
Message-ID: <1991May22.065607.2602@ncsa.uiuc.edu>
Originator: kchang@pluto
Keywords: Classic,System 7.0
Sender: usenet@ux1.cso.uiuc.edu (News)
Organization: Nat'l Ctr for Supercomp App (NCSA) @ University of Illinois
References: <1991May20.154508.4325@midway.uchicago.edu> <1991May20.164257.1959@milton.u.washington.edu> <24576@oolong.la.locus.com>
Distribution: usa
Date: Wed, 22 May 1991 06:56:07 GMT
Lines: 68

In article <24576@oolong.la.locus.com> jfr@locus.com (Jon Rosen) writes:
>If the LC were
>in the $1500 price range (which would still allow for reasonable margins 
>to Apple) LCs would sell better than Classics.  
If you've been watching the financial markets the past couple of weeks,
Apple's stock has been pummeled because its profits aren't what people thought
they would be, because margins are now much lower. A group of stockholders
are suing Apple basically because they think the margins are too low and
Apple should be making more money. Now 1500 people at Apple are being laid
off, again because the company's profitability is off. 

>However, for the average
>person at home, the Classic makes economic sense.  This does NOT mean
>that the market doesn't agree with the original poster.  Rather it means
>that the market has, once again, been coerced by Apple into buying a
>lesser product in order to protect Apple's margins.  What is amazsing
>is that Apple, despite the hype, continues to ignore the obvious.  They
>could, on the basis of a superior product, OWN the personal computer
>marketplace at a price that would probably improve their profits by
>a factor of 2 or 3, if they were willing to sacrifice their margins
>in order to gain marketshare.  
Have you seriously looked into the math of this? Here's what's happened:
Mac shipments have nearly doubled since the LC and Classic were introduced.
Earnings per share are essentially unchanged.

>Today, the LC is closer to being
>a mainstream computer.  Last weekend, I went to a local computer show
>where mostly IBM clones were being sold and the prices were astounding.
>A 386SX (which by most ratings is about the same speed as a 68020) is
>selling for about $1100 WITH 2Meg, a 40Meg hard disk and VGA 256-color
>monitors at 1024x768.  
Two comments:
1) Cheap VGA monitors kill eyes. Looking a Sunday circular for
Best Buy, the VGA monitor they sell with a system similar to the one
you describe above has a dot size of .41 mm. By contrast, I found the NEC
MacSync, which has a dot size of .28 mm to be unacceptably blurry. The
Apple Color monitor I have now has a dot size of .25 mm. Super VGA
is acceptable, but I doubt that that's what was included with your
$1100 clone.
2) Do you really expect Apple to compete with the cheapest clones on
price? Any more than IBM does? If you believe Apple should license its
ROMS to clone makers, then that is another question. 

>What people say, when comparing a Classic to a 386SX clone, is "Why
>should I give up color, and some speed, and some expandability, in order
>to just have a Macintosh?"                                           
Because if you get more work done with it, then it is worth it. If you
don't, then buy the clone. 

Also, you know Apple will still be in business five years from now. 
For really cheap clone makers, you're not sure, even if the product 
is good, simply because their margins are so slim. (If you buy from
one of the larger clone makers, the prices aren't quite as good as the
one you cite above.)

>Do not attempt
>to tell anyone that Apple, with a little lead time, could not TRIPLE
>their production volume if they so desired, and if the market warranted
>it.  
In the first quarter of 1991, Apple was the number one producer of personal
computers. More than IBM. More than Compaq. More than a lot of people. If
you're saying that Apple could trivially TRIPLE their production, I say
you're mistaken.
-- 
  Kenneth Chang           | National Center for Supercomputing Applications
  kchang@ncsa.uiuc.edu    |                 Consulting Office/(217)244-1144
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  "Everything's entertainment in America eventually" -- Tracy Ullman
