Apple decides what to do with $100 billion

[Block]

SJ was one of those few people who knew the customer's needs and wants better than the customer did themselves - and proceeded to craft his products around it. I have occasionally heard that Apple had only one customer - Steve Jobs - and they were fortunate that he had really, really good taste.

Thus, when his products came to market, well, they met consumer needs and wants excellently (for well-informed and naive consumers alike).

Fair enough, although I think some of this wasn't meeting customer needs as much as it was his uncanny ability to build a cult of personality, which I think is a skill some people just have. In the Bay area especially, there's a number of people who'd buy something that was a step or two steps back technologically because it's hip to own things with an Apple label.

[Stark]

Are you seriously saying the Steve Jobs cult is responsible for Apple's success?

PS brand loyalty (and brand value) are the result of successful marketing. :V

[Vyraeth]

Yes Apple computers are underpowered in terms of CPU etc for their price. But the average person doesn't care and they have no reason to care. For 90% of users, 2GB is more RAM than they need, and a dual-core processor is actually overpowered. There actually aren't that many uses for really powerful computers: programming shit, HARDCORE gaming, video editing - even then, the iMacs with 3GB of RAM and a single-core processor are surprisingly good at handling video editing. Probably because the OS is optimised for a known set of hardware.

The idea that Apple computers are underpowered spec-wise for their price is a myth, and an irritating one at that. Yes, I'm sure if you custom build your own tower, you can beat an iMac's specifications for price. But if you compare what Apple offers compared to other leading manufacturer's, the price differences are about even. I'm tired of people claiming this as true without backing it up. Compare two evenly priced computers from Apple and another manufacturer, and there is not a huge disparity in specifications. And this evenness of price is without factoring in harder to really quantify things like ease of use, solid design, and industry leading customer support.

You even called it 'perceived'! How can you not acknowledge that its just people taking advantage of subjective bullshit for personal gain at the expense of others?

Do you really think you're the consumer's savior? That you, some pretentious fuckwit of no repute are the ultimate arbiter of what consumer products are actually worth? I have news for you, people comparison shop all the time. And they still decide to purchase Apple computers. While Apple's marketing certainly aids in the adoption of the iPod, iPhone, iPad and Mac - it is not powerful enough to blindly convince people to buy the products regardless of cost. Many intelligent professionals buy Apple computers - doctors, academics, researchers, business professionals. And they do not do so because they were duped by admen. No, they, unlike you - understand precisely what they're getting. And there are many tangible things that are harder to quantify but just as important as specifications: 1) ease of use 2) a robust support system (retail stores that do repairs, top rated phone support) 3) a product eco system with applications that talk between the computer and the mobile devices).

In addition, your assertion that spec wise, Apple's computers are overpriced is laughable and one I'm certain (because I've looked into the subject heavily) you cannot back up. I demand you back your claim about Apple, and show me two similarly priced computers from another manufacturer and Apple, and I guarantee there won't be a massive disparity that would lead any credence to the idea that Apple is wildly overpriced.

Indeed, the least expensive computer makes is $999. And you can certainly get a computer for $400, but Apple doesn't care about the low end market and never has. This doesn't mean that their offerings are overpriced though, people are willing to pay for a quality product. That's also why the Mac sector of Apple has seen growth for the last 20 quarters.

I would disagree with this, mostly because Jobs himself repeatedly was quoted as saying something to the effect of "People want what I tell them to want" and it seeming to work for Apple. I wouldn't call this well informed.

There's a difference between marketing and directly calling your customers morons who do whatever you say, which is what he did, but thanks for playing.

You've completely butchered what Jobs said, so let me clarify. Jobs was asked what kind of market research Apple does. Jobs said that Apple doesn't rely on market research because people don't know what they want until they're shown it. Jobs developed the original Mac, the iPod, the iPhone, and the iPad. Each time he helped create a market that didn't exist. Before the iPad in 2010, tablet computers certainly existed, but there was not nearly the market that existed after their inception. Now, manufacturers are still scrambling to capitalize on the market that has developed as a result (and as of yet are still unsuccessful, since the iPad 2 had 90% of the market share right before new iPad's launch).

The point being is that Jobs wasn't saying that his customers are morons, but rather that designing a product is not to be done by committee. Rather, it requires some sort of connecting vision. I would say that he was quite successful in this regard.

[Block]

Are you seriously saying the Steve Jobs cult is responsible for Apple's success?

PS brand loyalty (and brand value) are the result of successful marketing. :V

I think it played a large part in it, yes. PS Brand loyalty can be a result of successful marketing, it isn't always.

[Phantasee]

People don't easily stay loyal to a product or brand when there are significantly better options available for the price. Again, there are certain 'intangible' benefits that consumers see in Apple products. If Samsung or Nokia or HP had products actually better than Apple's for less money, they would be a lot more dominant than they are today.

[Stark]

For most people Steve Jobs is 'the Apple guy who died'. Maybe you just hate him so much you feel everyone e somehow loved him?

[Ryan Thunder]

Do you really think you're the consumer's savior? That you, some pretentious fuckwit of no repute are the ultimate arbiter of what consumer products are actually worth?

Yep.

I have news for you, people comparison shop all the time. And they still decide to purchase Apple computers.

Because they either don't understand what they're looking at, or they're idiots. You seem to fall under the latter category.

While Apple's marketing certainly aids in the adoption of the iPod, iPhone, iPad and Mac - it is not powerful enough to blindly convince people to buy the products regardless of cost. Many intelligent professionals buy Apple computers - doctors, academics, researchers, business professionals.

Oh, yes. Yes! Perfectly intelligent people who are so ignorant of anything to do with computers that they actually think that Apple's computers aren't PCs.

And they do not do so because they were duped by admen. No, they, unlike you - understand precisely what they're getting.

Look, if you're butthurt because you made a stupid choice, spent a pile of money, and now you feel a need to justify it to yourself, that's okay. You'll feel better when you admit you made the mistake in the first place. Then, you can start spending less for the same capabilities, and more on... whatever else it is you spend money on.

And there are many tangible things that are harder to quantify but just as important as specifications: 1) ease of use 2) a robust support system (retail stores that do repairs, top rated phone support) 3) a product eco system with applications that talk between the computer and the mobile devices).

All available on other platforms that get you better bang for your buck.

In addition, your assertion that spec wise, Apple's computers are overpriced is laughable and one I'm certain (because I've looked into the subject heavily) you cannot back up. I demand you back your claim about Apple, and show me two similarly priced computers from another manufacturer and Apple, and I guarantee there won't be a massive disparity that would lead any credence to the idea that Apple is wildly overpriced.

All too easy.
MacBook Pro: $1200.
Acer Aspire: $450.
Now, what do you get for shelling out an additional $750? Well... -2 GB RAM, -1.3" screen size, 2.4 GHz processors instead of 2.3 GHz, a FireWire port (does anybody even use FireWire any more?) replaces a perfectly good USB 2.0 port, a proprietary graphics port that comes complete with an extra fiddly bit you can lose, and you get up to an additional 2.5 hours battery life. You also get a multi-touch trackpad, which is neat once you get used to it, but the keyboard is missing a pile of handy shortcut keys.

So a bigger battery, a smaller screen (possibly higher resolution but the spec doesn't say), less RAM (bad for movies and home video stuff), a useless port replacing a useful one, a marginally faster processor, an interesting touchpad, a crummier keyboard, and a proprietary port you could've just used a VGA cable or HDMI for. They figure this makes it worth an additional $750.

They're out of their fucking minds.

Indeed, the least expensive computer makes is $999. And you can certainly get a computer for $400, but Apple doesn't care about the low end market and never has. This doesn't mean that their offerings are overpriced though, people are willing to pay for a quality product. That's also why the Mac sector of Apple has seen growth for the last 20 quarters.

Let me get this straight. You just asked me to prove that Apple products are overpriced. Then, in the same fucking post, you declare that they can't be overpriced because people are willing to pay for them.

How the fuck can you not see what's wrong with that logic?

You've completely butchered what Jobs said, so let me clarify. Jobs was asked what kind of market research Apple does. Jobs said that Apple doesn't rely on market research because people don't know what they want until they're shown it. Jobs developed the original Mac, the iPod, the iPhone, and the iPad. Each time he helped create a market that didn't exist. Before the iPad in 2010, tablet computers certainly existed, but there was not nearly the market that existed after their inception. Now, manufacturers are still scrambling to capitalize on the market that has developed as a result (and as of yet are still unsuccessful, since the iPad 2 had 90% of the market share right before new iPad's launch).

Holy shit, I just poked around the BestBuy website and they don't even have proper tablets or smartphones any more. No hardware keyboards, no styluses... well, except for that Galaxy Note or whatever it's called, but still... everybody's just loosely aping the iPad and iPhone. It's horrific. What a goddamned mess you made.

[Stark]

I hope this guy never stops. Anyone who buys an Apple product either doesn't understand what they're looking at or is an idiot! It's brilliant - this way you can't prove him wrong! :V

[Ryan Thunder]

I hope this guy never stops. Anyone who buys an Apple product either doesn't understand what they're looking at or is an idiot! It's brilliant - this way you can't prove him wrong! :V

And yet you'd snicker at somebody who bought a plate of shit for $5 and then called it gold.

[JointStrikeFighter]

Does anyone else get the impression Ryan Chunder is just jealous he can't afford to buy premium products and thus has to devalue them to make himself feel better?

[JointStrikeFighter]

The best part is his laughable specs comparison where he either completely ignores the comparative advantages or the MacBook (like the rugged one piece brushed alluminium case) or makes them out as negatives (like the island keyboard, which is OVERWHELMINGLY more ergonomic to use)


Being smaller = OMG BAD

Protip; 13.3 inch became popular for a reason retard.


2 hours more battery life? WHY WOULD YOU WANT THAT OMG SHEEPLE



Chunder doesn't realise that people buy Mac because they offer a level of performance in areas that Chunder does not value in excess of other products on the market.

If you want a combination of build quality, ease of use, ergonomics, after market warranty and technical support NO OTHER ALTERNATIVE EXISTS.

[Stark]

But OBJECTIVELY INFERIOR! If you buy less pixels YOU ARE TRICKED BY CULTS!

I mean it's a shame these guys killed the thread but they sure are funny. Phone with industry defining UI, huge support and flexibility and stability and frequent updates = A PLATE OF SHIT. Why? Becuse he hates Apple.

[Phantasee]

Do you really think you're the consumer's savior? That you, some pretentious fuckwit of no repute are the ultimate arbiter of what consumer products are actually worth?

Yep.

Fuck your life.


The MacBook you compared to the Aspire? Light years better. The Aspire's keyboard is the biggest pile of shit I've ever had the misfortune to type on. The MacBook screen is much better to look at, seriously, go look at two side by side. The Aspire looks, feels, and is, cheaply constructed. An aluminum case is a huge benefit.

Compare a MacBook with a similarly specced Lenovo and tell me the Lenovo is over priced compared to the Aspire. Please.

And FYI 2 hours of battery life is a huge factor for most people that aren't too fat to actually use mobile computers while…mobile. Thats an extra 2 lectures for a student, or 2 more hours of productivity for just about anyone. That's an extra 14 hours per week, Ryan, an extra 52 hours a month. More than an entire work week.

[Ryan Thunder]

Fuck your life.

Yeah, something like that. I gotta hand it to the industry marketers, though. They do an amazing job of convincing you guys that buying their stuff is actually a good idea.

The Aspire's keyboard is the biggest pile of shit I've ever had the misfortune to type on.

By far the worst keyboard I've ever had to type on was on an HP pseudo-tablet... thing. It was awful in every way, and it cost like a thousand dollars. Worst buy ever.

The island keyboard ranks about one above that for me.

I love the Aspire keyboard. My Timeline's is the same style. The action takes a little getting used to at first, but you can pop the keys off to clean it and then they snap back into place after.

What is it exactly that you like so much about that keyboard?

The MacBook screen is much better to look at, seriously, go look at two side by side.

It wouldn't surprise me if it were. I'll take your word for it.

The Aspire looks, feels, and is, cheaply constructed. An aluminum case is a huge benefit.

Because it is cheaply constructed. Are you planning on using it as a bludgeon or something?

And FYI 2 hours of battery life is a huge factor for most people that aren't too fat to actually use mobile computers while…mobile. Thats an extra 2 lectures for a student, or 2 more hours of productivity for just about anyone. That's an extra 14 hours per week, Ryan, an extra 52 hours a month. More than an entire work week.

Well, fuck, if its battery life you want, get a TimelineX or something, like I did. Mine's a bit slower and has less RAM, but it still runs AutoCAD, games, and music software excellently, and the battery lasts a good 7 hours. I got it shortly after it came out and it was still just a bit over $900 after tax, IIRC.

But OBJECTIVELY INFERIOR! If you buy less pixels YOU ARE TRICKED BY CULTS!

Well there's pretty obviously more to it than pixels but yeah, pretty much.

Phone with industry defining UI, huge support and flexibility and stability and frequent updates = A PLATE OF SHIT. Why? Becuse he hates Apple.

Oh, whoa there, that was hyperbole for example's sake. It's not nearly so dysfunctional as that. They aren't bad. There are just better alternatives.

And there's no goddam reason for there not to be a market for devices with styluses. What the hell, guys?

Does anyone else get the impression Ryan Chunder is just jealous he can't afford to buy premium products and thus has to devalue them to make himself feel better?

You'd like to think that, wouldn't you? I could easily afford this shit. I see no reason to waste my money when I could get a cheaper computer that I'll like better anyway.

[Ryan Thunder]

Actually, sorry Phant, I forgot that the TimelineX had some issues with drivers that you wouldn't want to deal with. It was a simple fix, and it'd probably be resolved out of the box by now, but rather than chance it, I'll just get back to you with a better solution later.

[phongn]

People don't easily stay loyal to a product or brand when there are significantly better options available for the price. Again, there are certain 'intangible' benefits that consumers see in Apple products. If Samsung or Nokia or HP had products actually better than Apple's for less money, they would be a lot more dominant than they are today.

Well, Apple is this weird exception that proved the rule: they had a core of fanatic users in the 1990s that somehow kept Apple afloat*. This despite the Wintel side being superior in every way save usability. Performance, stability, price, application base, scalability: Windows won in every way.

* At least long enough for Steve Jobs to come back in and for Microsoft to buy some stock to get Wall Street off their back.

The island keyboard ranks about one above that for me.

I love the Aspire keyboard. My Timeline's is the same style. The action takes a little getting used to at first, but you can pop the keys off to clean it and then they snap back into place after.

Are you specifically referring to Apple's island keyboards (which, for me, rank up there with the ThinkPad's keyboard) or some general one? PC laptops are notorious for shipping the crappiest trackpads and keyboards they can get away with (no surprise, as these machines are built for price or margin targets, not quality targets).

The Apple and ThinkPad keyboards tend to have actual tactile response and action depth compared to most of their competitors.

Because it is cheaply constructed. Are you planning on using it as a bludgeon or something?

Most consumer laptops use the plastic shell as the primary load-bearing frame, and a weak one at that. The shell can warp relatively easily and transfer said forces right to the more delicate electronics inside. This is not good for a mobile device. Better-built machines like Lenovo's ThinkPads and HP's EliteBooks usually have an internal load-bearing structure that resists twisting and absorbs most of the everyday shocks a laptop experiences. Apple's choice is to use their "unibody" aluminum case to provide much the same benefit at relatively low weight.

These better features - which cost more money - extend the life of a laptop.

Oh, whoa there, that was hyperbole for example's sake. It's not nearly so dysfunctional as that. They aren't bad. There are just better alternatives.

And there's no goddam reason for there not to be a market for devices with styluses. What the hell, guys?

Because Windows Mobile was crushed in the market by phones that didn't have one and Microsoft is not about to retread that path. iOS and Android do fantastically well without it. Most phone use-cases don't need the precision of a stylus! (Now, for a tablet, you certainly have choice there).

[JointStrikeFighter]

The funniest part is you can use a fuckig stylus with an iPhone anyway

[phongn]

The funniest part is you can use a fuckig stylus with an iPhone anyway

In prior threads Ryan has complained about the difficulties of using a capacitive-touchscreen phone in the midst of the Canadian winter. I think that's a reasonable criticism of the present model of "capacitive touchscreens everywhere"; I wonder if that's the problem he's really getting at here.

Unfortunately, most capacitive styluses won't work with gloves (since they are essentially are wire between your hand and the screen).

[Stark]

He's probably just projecting his wants and needs (ie winter use lol, ability to remove keys lol, etc) onto everyone else. No wonder he hates a market that doesn't reflect his 'correct' attitudes and by extension millions of consumers who don't value his 'essential' 'features'.

TBH I don't know how Apple survived the 90s. They were ABSURDLY overpriced and much more limited in utility and accessibility than they are now. Surely haters should be congratulating Jobs for making Apple laptops etc even remotely realistic? :v

[Starglider]

In prior threads Ryan has complained about the difficulties of using a capacitive-touchscreen phone in the midst of the Canadian winter. I think that's a reasonable criticism of the present model of "capacitive touchscreens everywhere"; I wonder if that's the problem he's really getting at here. Unfortunately, most capacitive styluses won't work with gloves (since they are essentially are wire between your hand and the screen).

You can purchase touchscreen-compatible gloves for less than 10 USD and I expect they work with styluses as well.

[Skgoa]

TBH I don't know how Apple survived the 90s. They were ABSURDLY overpriced and much more limited in utility and accessibility than they are now.

They were great for professionals like grafics artists. You have to remember that - in contrast to their competitors - Apple never differentiated themselves via price. Their top sales manager (one of the business-types that ruined Apple) insisted on 50% or higher profit margins. In the 90's computer market this meant they focused almost exclusively on the high end professionals working in media. Most programs these people used were not available on Windows, many of them still aren't. It was only when Windows was so undeniably ubiquous that many key third party developers went over to Microsoft's camp that Apple ran into serious trouble. Well, that and gross missmanagement, especiall regarding technology and product R&D.

[J]

I tend to agree, skimming through their latest quarterly report reveals they only have $10.3 billion in cash & cash equivalents, with most of their $97 billion tied up in corporate securities and US agency securities, and mostly long term at that.

That's completely standard cash management practice for large corporations, money market rates are so low at the moment that you don't want to keep anything more than necessary in ultra-liquid form, also given current banking system stresses high quality bonds are probably safer.

There isn't anything as far as I can see that says "we're in trouble" but I think they're taking too much risk with the way their cash is distributed.

Disagree, they aren't really taking any more risk than other large US companies. If fixed income collapses enough that Apple faces a significant loss on its bond portfolio the cash loss will be a minor factor in its valuation compared to the cratering market sentiment, massive liquidations of its stock (by desperate funds and banks), consumer credit lock-up, supply chain problems and general doom and gloom.

It is standard practice for many corporations, but my line of thinking is that Apple being in the segment it is can have its fortunes turn on a dime at which point they'll have a liquidity crunch. With a larger liquid cash buffer they're better positioned to buy time & ride it out while doing what they can to turn things around, they can still make the capital investments to say...move production to the US if there's a trade war with China, hypothetically speaking. Or deal with one of the 1001 other misfortunes which may befall a tech company. With much of their "cash" tied up in long term instruments and possibly questionable ones at that, they lose a lot of flexibility in dealing with shorter term cash flow issues.

[Irbis]

However, the best arguments I can make are that OS X allows previewing of a lot of audio-visual file types in the GUI without having to open a third-party app (something that was actually in Win2k, but didn't make the transition to XP for some odd reason), better usage of screen real-estate.

Out of curiosity, like what? I'm genuinely curious.

The idea that Apple computers are underpowered spec-wise for their price is a myth, and an irritating one at that. Yes, I'm sure if you custom build your own tower, you can beat an iMac's specifications for price. But if you compare what Apple offers compared to other leading manufacturer's, the price differences are about even.

*yawn* Yeah, even if we count 20 to 80% price difference as 'even'. Or if we compare them to vanity Sony laptops, which are equally overpriced. But, you know, one example from a few years back. In real life, friend using Macbook asked me to change his RAM to 4 GB. You know what Apple offers when you want that? Some sort of brand-less (seriously, I looked at it for 5 min and couldn't find producer) crappy RAM for full 20% more than PC store next door demanded for very fast, tested, matched gaming RAM chips with error correction. Wunderbar!

Oh, and you know why I was asked for that? Because Apple store demanded 100$ for RAM change, a task that took me 6 minutes, trying to scare my friend into paying by claiming me changing would void her warranty (but it was already void, so...). Yeah, that's truly wonderful customer support, especially compared to what high-end PC users get (door to door pickup with NBD repair, replacement laptop handed in meantime...). Seriously? Having to carry laptop to shop is somehow 'good' when we discuss that price level laptops?

In the end, what is deal killer for me for Mac isn't being overpriced, crappy, locked-in computers. I could live with these. It's their 'one size fits all' policy. On PC market, there is competition, you can pick something tailored to your demands. Processors, ram, battery, graphic card, someone makes the combination that fits you. With Apple? You better hope that shiny white soapbox skin is worth all shortcomings. I'm literally having flashbacks to soviet-era brandless 'we produce only one variety and what you will do about it?' products we had to buy before '89 when I look at Apple offerings sometimes. Their logo-less minimalist boxes even resemble these sold in Apple stores

[Stark]

Are you aware you can configure the specs on your Mac right on the store website? The only stuff with iced specs are appliances where peer stuff didn't either (although it's probably harder to change an AppleTVs HDD than a WD).

[Starglider]

With much of their "cash" tied up in long term instruments and possibly questionable ones at that, they lose a lot of flexibility in dealing with shorter term cash flow issues.

The duration of the instrument isn't an issue as such, the relevant factor is their liquidity and absolute liquidity of high-quality corporate bonds has remained excellent all through the credit crunch and previous five decades. Of course the spreads and yields can and do blow out, but (within the first few sigma) that's just a write-down as noted above. As I said, if we get to the point that you can't unload a few billion investment-grade bonds without taking crippling losses, the liquidity issue would be irrelevant compared to the total revenue collapse from the burning ruins of the economy. Apple would actually be one of the last to be hit in a total market lock-up, not just because it has massive cashflow and access to back-up credit sources, but because it is regarded as Too Big To Fail by the Federal Reserve and probably several other sovereigns (Taiwan, Israel). Aside from the disclosed sovereign holdings there is good evidence that Apple is already benefiting from extensive open market operations (by CBs trying to prolong the general risk rally). In the case of a total fixed income lockup there would be massive amounts of freshly printed dollars spraying all over the place, and if it showed the slightest sign of trouble Apple would be a major recipient.