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senttoschool

macrumors 68030
Nov 2, 2017
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Well, here is the thing about storage. Right now almost all Macs have SSDs as main drives. SSDs depend on the variability of the NAND chip market. Also, SSD capacity depends on the densities currently made which incur higher costs, more so with current inflation problems.

For base capacity to come down, manufacturers of SSD need to either increase densities in an economical manner or find a cheaper way of making them.
I don't think it has a lot to do with the cost of the drive. The cost is quite minimal from 256GB to 512GB even at retail prices.

I think it has more to do with the fact that most people do not need more than 512GB which means giving people 512GB as the base would lead to fewer storage upsells.

When most people need more than 512GB, then Apple will set the base to 512GB. Then Apple could reap the benefits of people upgrading to 1TB.

As a professional software developer, I don't use more than 512GB. This is because a lot of my stuff is now just stored in the cloud and movie streaming means you no longer need 8GB for each movie stored.
 

jakey rolling

macrumors 6502a
Mar 8, 2022
685
1,421
Your hypothetical consumer found an equivalent product for half the price, I'm not sure what the problem is. Buy the equivalent product. If your hypothetical consumer doesn't want to buy the half price product then it is not equivalent.
My "hypothetical" consumer would love to buy the product. The problem is my "hypothetical" consumer can't buy the product because they can't install it. Apple has artificially locked out the ability to use the equivalent aftermarket product on Apple laptops.

The aftermarket product is equivalent in every way to what Apple provides - the limitation is with Apple's hardware, not the aftermarket product.

If your hypothetical consumer wants the product they value more for half the price it is sold at, then they are asking for something in exchange for nothing.
No. People aren't asking for anything for free. People are just asking to not feel like they are being fleeced for buying what is supposed to be a "premium" product. Again - people calling this "consumer greed" in light of all the progressive consumer-adverse design choices Apple has made in the past decade is just so incredibly sad.
 
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jav6454

macrumors Core
Nov 14, 2007
22,303
6,264
1 Geostationary Tower Plaza
I don't think it has a lot to do with the cost of the drive. The cost is quite minimal from 256GB to 512GB even at retail prices.

I think it has more to do with the fact that most people do not need more than 512GB which means giving people 512GB as the base would lead to fewer storage upsells.

When most people need more than 512GB, then Apple will set the base to 512GB. Then Apple could reap the benefits of people upgrading to 1TB.

As a professional software developer, I don't use more than 512GB. This is because a lot of my stuff is now just stored in the cloud and movie streaming means you no longer need 8GB for each movie stored.
Agreed. I missed those points.
 

johannnn

macrumors 68020
Nov 20, 2009
2,315
2,602
Sweden
I hope they start with 16GB RAM before increasing the storage. With cloud mail, cloud music, cloud TV, cloud photos and so on I don’t even use 100GB. But whenever I launch Outlook+MS Teams+1Password all my 8GB RAM is consumed.
 
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phoenix-mac-user

macrumors regular
Sep 21, 2016
130
100
I don't think it has a lot to do with the cost of the drive. The cost is quite minimal from 256GB to 512GB even at retail prices.

I think it has more to do with the fact that most people do not need more than 512GB which means giving people 512GB as the base would lead to fewer storage upsells.

When most people need more than 512GB, then Apple will set the base to 512GB. Then Apple could reap the benefits of people upgrading to 1TB.

As a professional software developer, I don't use more than 512GB. This is because a lot of my stuff is now just stored in the cloud and movie streaming means you no longer need 8GB for each movie stored.

This. I get the 256 in every one of my Macs and never notice because I have iCloud turned on so almost all of my files are in the cloud and Apple is very good at managing the storage space. Same reason I get the 128GB iPhone.

Apple knows it's user base, if a majority needed 512 they would make that the base.

Same with memory. I have the 8GB Macbook Air m1 that I use mostly for browsing and office, maybe a little video editing and I rarely have any performance issues and most of the time it is very fast.

If I go into my performance monitor it might be using a ton of swap, but very few people are looking at that. The people that need the extra memory are people who do a lot of rendering and see performance improvements. Most users don't.
 

Analog Kid

macrumors G3
Mar 4, 2003
9,360
12,603
Interestingly, when looking for numbers to use below, I figured the 14” MBP would be a good middle-of-the-road example. Turns out the “base storage” for the 14” is 512GB making the OP even more risible.

My "hypothetical" consumer would love to buy the product. The problem is my "hypothetical" consumer can't buy the product because they can't install it. Apple has artificially locked out the ability to use the equivalent aftermarket product on Apple laptops.

The aftermarket product is equivalent in every way to what Apple provides - the limitation is with Apple's hardware, not the aftermarket product.


No. People aren't asking for anything for free. People are just asking to not feel like they are being fleeced for buying what is supposed to be a "premium" product. Again - people calling this "consumer greed" in light of all the progressive consumer-adverse design choices Apple has made in the past decade is just so incredibly sad.

Just pulling some numbers from the web:

14” MBP w/ 512GB: $2000
14” MBP w/ 8TB: $4400
Difference: $2200

Corsair 512GB: $100
Corsair 8TB: $1200
Difference: $1100

You seem to be suggesting that the higher end Mac should cost $3100 rather than that the the lower end Mac is a relative bargain because it should cost $3300. Neither of these things are completely true, though the latter is closer to the truth. The truth is that the target customer for each puts a different value on their Macs and Apple differentiates these customers by storage (among a few other things). If Apple charged for storage upgrades at cost, the price of the bottom end Macs would go up.


You’re confusing commodity component pricing with system pricing. A Mac isn’t a collection of components and a little ingot of gold that all sum up to a selling price. It is a collection of components, a cost of engineering and operations, and a profit that rewards investment in past development and fuels future development.

Because I’m sure people are going to cry about the fact that I’m defending profits, let me make this clear: profit is a measure of the value added by the company. A product costs a certain amount to make, and a customer is willing to pay a certain amount for it. The difference in those two numbers is the value a customer sees in the product above and beyond the value of a paper bag full of the same components. A customer willing to pay more for a Mac than a Dell indicates that Apple has added more value to that bag of components than Dell has. If you think Apple should cut their profits below the value they add to the product then you’re asking for something for free.

Look at a Mac. Do you sell just one variant for everyone? That probably isn’t the right approach because you will have mismatched people’s needs and their willingness to pay. You could only sell the low end model, but the power users will be disappointed by the lack of capability. You could only sell the high end model but that would price out the casual user. So you provide a range of products to choose from.

The engineering and operations costs are shared across that product range, so to minimize the cost of the range it’s best to maintain as much commonality between products in the range as possible. You could make specialized designs for granny, schoolkid, author, coder, data scientist, nuclear simulation, but then the cost of every one of those machines goes up substantially. Better to make a common design and differentiate in ways that minimize impact on the overall system.

Now, think of the product as Mac+storage. Apple differentiates their products in a few ways (processor, RAM, storage, mostly) but let’s simplify the discussion to just storage the way the early iPhones were differentiated. Looking at the numbers above, let’s look at the customer cost of the Mac part:

512GB Mac+storage: $2000 - $100 (storage)= $1900 Mac cost
8TB Mac+storage: $4400 - $1200 (storage) = $3200 Mac cost

The question then is “Is the Mac worth $1900 to the customer, or is it worth $3200 to the customer?” and the answer is “Yes”. They are different customers and no customer will pay more for something than it is worth to them. The customer buying the 8TB Mac values it more than the customer buying the 512GB Mac (or the second customer is getting an extraordinary deal).

Looking at the other half of the transaction: what’s it worth to Apple? Apple doesn’t just make a product and hope to earn money, they decide whether a product is worth making based on what they believe they can sell it for. I have no idea what that number is, but let’s say it’s $2550. If Apple refused to sell a Mac for less than $2550, what we get is this:

512GB Mac: $2550 + $100 (storage) = $2650 Mac+storage
8TB Mac: $2550 + $1200 (storage) = $3750 Mac+storage

Based on this Apple could make the high end Mac cheaper if they look at it in isolation, but it would force them to raise the price of the low end Mac above some budget customers’ willingness to pay meaning less sales for Apple and customers who would like a Mac but can’t afford one. That’s probably the wrong choice because the current pricing proves that high end customers are willing to pay more because they value it more.

So the solution is for Apple to look at the average selling price of a product range in aggregate. If they assume they have equal numbers of budget customers and power users they’ll sell equal numbers of 512GB Macs and 8TB Macs. If they sell one Mac for $1900+storage and one for $3200+storage, then on average they sold two Macs for $2550. Everyone is satisfied. Apple is selling at a price they can justify, Budget-guy was willing to sacrifice storage for price and Power-guy was willing to sacrifice price for storage.

So while “happy” might not be the way to describe everyone in these two transactions, they’re all satisfied and we know that because the transactions cleared.
 
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JouniS

macrumors 6502a
Nov 22, 2020
638
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So while “happy” might not be the way to describe everyone, they’re all satisfied and we know that because the transactions cleared.
Not everyone was satisfied. Some potential customers didn't buy a Mac at all, because they couldn't get a good enough computer for a low enough price. Apple was able to make large profits due to the scarcity of Macs, while customers lost because the prices were higher than they would have been in a more competitive market.
 

Analog Kid

macrumors G3
Mar 4, 2003
9,360
12,603
Not everyone was satisfied. Some potential customers didn't buy a Mac at all, because they couldn't get a good enough computer for a low enough price. Apple was able to make large profits due to the scarcity of Macs, while customers lost because the prices were higher than they would have been in a more competitive market.
Everyone in the two transactions were satisfied, and someone who wouldn’t otherwise be able to afford a Mac now can. Scarcity isn’t the path to profits…
 
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jav6454

macrumors Core
Nov 14, 2007
22,303
6,264
1 Geostationary Tower Plaza
Not everyone was satisfied. Some potential customers didn't buy a Mac at all, because they couldn't get a good enough computer for a low enough price. Apple was able to make large profits due to the scarcity of Macs, while customers lost because the prices were higher than they would have been in a more competitive market.
The scarcity of Macs isn't the driver of the price. Scarcity is due to another completely different reason. Price is due to inflation.
 

JouniS

macrumors 6502a
Nov 22, 2020
638
399
Everyone in the two transactions were satisfied, and someone who wouldn’t otherwise be able to afford a Mac now can. Scarcity isn’t the path to profits…

The scarcity of Macs isn't the driver of the price. Scarcity is due to another completely different reason. Price is due to inflation.
Scarcity is the only reason you can make profit by selling something. If Apple made 100x more Macs, or if Lenovo, HP, and Dell would also be able to make and sell them, the market prices for Macs would be much lower than today.
 

jav6454

macrumors Core
Nov 14, 2007
22,303
6,264
1 Geostationary Tower Plaza
Scarcity is the only reason you can make profit by selling something. If Apple made 100x more Macs, or if Lenovo, HP, and Dell would also be able to make and sell them, the market prices for Macs would be much lower than today.
Again no. The scarcity right now is due to lockdowns in China, this scarcity is not affecting prices in the least. Prices are due to inflation and component price increase. Apple simply responded by maintaining their margins.
 

Analog Kid

macrumors G3
Mar 4, 2003
9,360
12,603
Scarcity is the only reason you can make profit by selling something. If Apple made 100x more Macs, or if Lenovo, HP, and Dell would also be able to make and sell them, the market prices for Macs would be much lower than today.

No, and that doesn’t even make sense. They only way you can make a profit is by selling less units? The reason you make a profit is because your customer values the item you are selling more than it costs you to produce it.
 

JouniS

macrumors 6502a
Nov 22, 2020
638
399
Again no. The scarcity right now is due to lockdowns in China, this scarcity is not affecting prices in the least. Prices are due to inflation and component price increase. Apple simply responded by maintaining their margins.
Scarcity is more general than that. If you can't buy something for a price approaching the marginal production costs, the reason is scarcity. The scarcity can be caused by real physical constraints, such as supply chain disruptions or the time needed for increasing production. It can also be artificial. For example, if Apple chooses to sell fewer products than it physically could because it calculated that it makes more profit with higher prices, that's artificial scarcity. If other TSMC customers can't tell TSMC to produce M1 chips for them, if they believe that those would be in higher demand than their own chips, that's also artificial scarcity. And if Dell isn't allowed to install macOS on the laptops it sells, that's also artificial scarcity.
 

Analog Kid

macrumors G3
Mar 4, 2003
9,360
12,603
Scarcity is more general than that. If you can't buy something for a price approaching the marginal production costs, the reason is scarcity. The scarcity can be caused by real physical constraints, such as supply chain disruptions or the time needed for increasing production. It can also be artificial. For example, if Apple chooses to sell fewer products than it physically could because it calculated that it makes more profit with higher prices, that's artificial scarcity. If other TSMC customers can't tell TSMC to produce M1 chips for them, if they believe that those would be in higher demand than their own chips, that's also artificial scarcity. And if Dell isn't allowed to install macOS on the laptops it sells, that's also artificial scarcity.

I'm still trying to picture Tim Cook on an investor call saying "And if you think we're profitable now, wait until we sell less Macs next year!"

When you start talking about "artificial scarcity" you're starting to describe Apple's sub 10% market share as a source of monopoly power. That's a long, long stretch.

Saying Apple should accept a lower price just to sell more units is the same as saying people should pay a higher price so more units are sold. Both would lead to market distortions.
 
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JouniS

macrumors 6502a
Nov 22, 2020
638
399
Saying Apple should accept a lower price just to sell more units is the same as saying people should pay a higher price so more units are sold. Both would lead to market distortions.
I'm not saying anything about what anyone should do. I'm just saying that what's good for Apple is not necessarily good for their customers. That the prices would be different in a more competitive market fewer distortions such as laws, contracts, and IP rights.
 

jakey rolling

macrumors 6502a
Mar 8, 2022
685
1,421
You’re confusing commodity component pricing with system pricing. A Mac isn’t a collection of components and a little ingot of gold that all sum up to a selling price. It is a collection of components, a cost of engineering and operations, and a profit that rewards investment in past development and fuels future development.
Sigh. No. No I'm not. Apple offers Build-to-order options with a specific cost for that specific component where everything else on the computer is kept constant.

Options for SSD upgrades on a 14" Macbook Pro (in CAD because, that's where I am) compared to the equivalent retail price of an SSD with similar performance similar size, better warranty (in most cases) - and this is comparing to Apple's upgrade price of those SSDs to a brand new SSD:

Apple's BTO upgrade options:
1654910019847.png


FireCuda 530, retail, in stock at one local retail store 500GB to 4TB (again, prices in CAD):
1654910237332.png


Samsung 980 PRO 2TB:
1654910339604.png


Now, I'll concede - I couldn't find a comparative 8TB drive to compare to Apple. There was one drive from a brand I've never heard of that is, no doubt, not as good as whatever Apple are doing to offer 8TB. So if you're looking for to compare the absolute most tricked-out machine possible, then sure, I'm sure Apple's offering a competitive price. Although again, the one difference between buying Apple and buying, say, most other business-class laptops is that if you don't shell out the $3k for the 8TB upgrade at the time you buy it, you will never be able to move up to it later on in your lifecycle when the price of that SSD becomes attainable for us plebs.

For every other size drive, however, it doesn't matter what kind of comparative measure you use, Apple customers are getting hosed.
 

jav6454

macrumors Core
Nov 14, 2007
22,303
6,264
1 Geostationary Tower Plaza
Scarcity is more general than that. If you can't buy something for a price approaching the marginal production costs, the reason is scarcity. The scarcity can be caused by real physical constraints, such as supply chain disruptions or the time needed for increasing production. It can also be artificial. For example, if Apple chooses to sell fewer products than it physically could because it calculated that it makes more profit with higher prices, that's artificial scarcity. If other TSMC customers can't tell TSMC to produce M1 chips for them, if they believe that those would be in higher demand than their own chips, that's also artificial scarcity. And if Dell isn't allowed to install macOS on the laptops it sells, that's also artificial scarcity.
Wrong, again. I have explained this too many times. Components are not scare for Apple. They tied the production capacities with contracts long ago. What is causing the scarce amount of Macs is the fact that the actual manufacturing assembly lines are offline due to lockdowns in China. This is the reason why MacBook Pros with M1 Pro/Max aren't increasing in price.

In other words, Apple has to machinery, components, and raw material. Just not the people to make it. Right now, Apple is facing component price increases for their new products as those were outside the scope of the manufacturing demands of their previous generation, so obviously prices went up.
 

JouniS

macrumors 6502a
Nov 22, 2020
638
399
Wrong, again. I have explained this too many times. Components are not scare for Apple. They tied the production capacities with contracts long ago. What is causing the scarce amount of Macs is the fact that the actual manufacturing assembly lines are offline due to lockdowns in China.
I don't think you understand the word "scarcity" in the ways it's used in economics. There are many similar but subtly different definitions, and one of the more extreme is based on the idea that only scarce goods have any economic value.
 

Analog Kid

macrumors G3
Mar 4, 2003
9,360
12,603
I'm not saying anything about what anyone should do. I'm just saying that what's good for Apple is not necessarily good for their customers. That the prices would be different in a more competitive market fewer distortions such as laws, contracts, and IP rights.
Things would be better for customers without laws, contracts or IP rights?!

I mean sure, there’d be a brief time when you could get a Lenovo Macintosh cheaper by stealing it from the Best Buy down the street that decided to void its lease, but I’m not sure customers would be better off after a year or two.
 

Analog Kid

macrumors G3
Mar 4, 2003
9,360
12,603
Sigh. No. No I'm not. Apple offers Build-to-order options with a specific cost for that specific component where everything else on the computer is kept constant.

Options for SSD upgrades on a 14" Macbook Pro (in CAD because, that's where I am) compared to the equivalent retail price of an SSD with similar performance similar size, better warranty (in most cases) - and this is comparing to Apple's upgrade price of those SSDs to a brand new SSD:

Apple's BTO upgrade options:
View attachment 2017467

FireCuda 530, retail, in stock at one local retail store 500GB to 4TB (again, prices in CAD):
View attachment 2017468

Samsung 980 PRO 2TB:
View attachment 2017470

Now, I'll concede - I couldn't find a comparative 8TB drive to compare to Apple. There was one drive from a brand I've never heard of that is, no doubt, not as good as whatever Apple are doing to offer 8TB. So if you're looking for to compare the absolute most tricked-out machine possible, then sure, I'm sure Apple's offering a competitive price. Although again, the one difference between buying Apple and buying, say, most other business-class laptops is that if you don't shell out the $3k for the 8TB upgrade at the time you buy it, you will never be able to move up to it later on in your lifecycle when the price of that SSD becomes attainable for us plebs.

For every other size drive, however, it doesn't matter what kind of comparative measure you use, Apple customers are getting hosed.
Ok, you’re definitely confusing component pricing with system pricing.
 

JouniS

macrumors 6502a
Nov 22, 2020
638
399
Things would be better for customers without laws, contracts or IP rights?!

I mean sure, there’d be a brief time when you could get a Lenovo Macintosh cheaper by stealing it from the Best Buy down the street that decided to void its lease, but I’m not sure customers would be better off after a year or two.
You were using market distortions as an argument against something. I just mentioned some other market distortions, in case you think that distorting the market makes something bad.

The market does not care about anything or anyone. It just allocates resources. Apple prices its products higher than the prices would be in a free market. That makes sense for them, but that's not a justification anyone else should care about. Customers may think Apple overcharges for its products, because they can clearly see that the prices would be lower without an artificially constrained supply.
 

altaic

macrumors 6502a
Jan 26, 2004
713
484
Scarcity is the only reason you can make profit by selling something. If Apple made 100x more Macs, or if Lenovo, HP, and Dell would also be able to make and sell them, the market prices for Macs would be much lower than today.
I get that hyperbole is a thing on the internet, but if Apple made 100x more Macs, we’d all have Macs coming out of our wazoos.

Apple shipped 29 million Macs in 2021, and the entire PC market (Macs included) shipped 341 million units. So, yeah, 2.9 BILLION Macs per year… kids in the poorest nations would only be able to upgrade every other year.
 
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Analog Kid

macrumors G3
Mar 4, 2003
9,360
12,603
You were using market distortions as an argument against something. I just mentioned some other market distortions, in case you think that distorting the market makes something bad.

The market does not care about anything or anyone. It just allocates resources. Apple prices its products higher than the prices would be in a free market. That makes sense for them, but that's not a justification anyone else should care about. Customers may think Apple overcharges for its products, because they can clearly see that the prices would be lower without an artificially constrained supply.
Can we rewind a bit— what point are you trying to make? Some people can’t afford a new computer?
 

JouniS

macrumors 6502a
Nov 22, 2020
638
399
Can we rewind a bit— what point are you trying to make? Some people can’t afford a new computer?
That (some) Macs and (some of) their upgrades are overpriced, because Apple is able to set the prices to maximize their profits as the only supplier.
 
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