Linked by Thom Holwerda on Mon 19th Oct 2009 21:43 UTC
Apple It's getting a little bit predictable, but Apple has reported yet another stellar set of quarterly financial results. The company has sold more Macs and iPhones than the same quarter last year, but sales of the iPod were down compared to the same quarter last year. Profits and gross-margins were also up.
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RE[5]: Comment by Tony Swash
by puenktchen on Tue 20th Oct 2009 12:32 UTC in reply to "RE[4]: Comment by Tony Swash"
puenktchen
Member since:
2007-07-27

We don't know if this is the optimal price/profit ratio for Apple. For all we know they could drop 200 USD off the iMac and MacBook Pro 13", and for all we know they might sell 50% more Macs that way - decreasing margins, yes, but massively increasing profits.


well, let's do the math: let's say they sell their cheaper imacs and macbooks at an average price of $1000. their margin is 35% = $350 per unit. if they cut the price to $800, their profit per unit drops to $150 USD. if they sell 50% more macs, they now make $225 were they used to make $350 profit. in order to earn more money after cutting the price by 20%, they'd have to sell 134% more macs. that's not very likely, because even at that pricepoint there are still many cheaper alternatives on the market.

as much as it hurts my wallet, relativly high prices seems to be the right thing to do from apples perspective.

Edited 2009-10-20 12:34 UTC

Reply Parent Score: 3

RE[6]: Comment by Tony Swash
by Budd on Tue 20th Oct 2009 12:52 in reply to "RE[5]: Comment by Tony Swash"
Budd Member since:
2005-07-08

Well,it really depends how you count these percentages. One could say (to simplify the math here) company A sells 100 items for 1000 doing 350 profit,that is 35000 total.
Now,selling 50% more items will translate to 150 items sold instead of 100.
Selling 150 for 800 with a profit of 35% per piece is 280 profit per piece totaling 42000 profit. I think this is what the original poster wanted to say.

Reply Parent Score: 2

RE[7]: Comment by Tony Swash
by puenktchen on Tue 20th Oct 2009 17:08 in reply to "RE[6]: Comment by Tony Swash"
puenktchen Member since:
2007-07-27

Selling 150 for 800 with a profit of 35% per piece is 280 profit per piece ...


but why should the margin stay the same? if apple lowers the price, it margin will suffer. the oem's won't build the machine for less just because apple would like them to do so.

Reply Parent Score: 2