If Apple Was All About Profit the iMac Pro and Mac Pro Wouldn’t Both Exist
The creative class of Mac users no longer has any reason to throw stones at Apple. In the span of only a few weeks they’ve ascended from lonely orphans to most-favored status.
For a few years now, the creative power users who purchase Macs have watched Apple lavish the iPhone and iPad side of the business with plenty of time and attention. Meanwhile, their Macs sat largely unchanged and macOS received incremental improvements…which made it more iOS-like. It looked like the iPhone and iPad were the golden wunderkinds who could do no wrong.
But everything changed in April of this year when Apple revealed at their journalist round table that they were working on a totally redesigned Mac Pro. Then in June they took the cover of the hottest desktop computer ever, the iMac Pro.
All at a time when the market for desktop computers is shrinking. You could even make a credible argument that the future of the laptop is in doubt. And yet, Apple is forging ahead with some incredible sounding hardware for this small market.
But it’s likely that the price on both the iMac Pro and new Mac Pro will shrink what was already a small market and make it even smaller. Further, these devices will segment this small pie into those who want future upgradability and those who don’t. This means each model will have less buyers than they would have had otherwise if the other model didn’t exist. The net result is smaller profit for Apple.
If Apple was only about the bottom line, both of these models wouldn’t exist simultaneously. They’ve doubled their development costs and cut the units that will carry their fixed costs in half. But in this case, I think Apple is OK with that. It’s hard to put a value on customer goodwill and positive press but Apple seems to be reaping both in spades.
So which market is really getting special treatment from Apple? Sure iOS gets a lot of investment but the financial models all point in that direction. Apple has to do this. The desktop monsters that Apple is about to deliver seem to be getting lots of investment in the absence of a concrete financial reward. Apple doesn't have to do that.
Like a parent reassuring his adopted child with the words “I had to have them, but I chose you”. The same dynamic is at work here.
But everything changed in April of this year when Apple revealed at their journalist round table that they were working on a totally redesigned Mac Pro. Then in June they took the cover of the hottest desktop computer ever, the iMac Pro.
All at a time when the market for desktop computers is shrinking. You could even make a credible argument that the future of the laptop is in doubt. And yet, Apple is forging ahead with some incredible sounding hardware for this small market.
But it’s likely that the price on both the iMac Pro and new Mac Pro will shrink what was already a small market and make it even smaller. Further, these devices will segment this small pie into those who want future upgradability and those who don’t. This means each model will have less buyers than they would have had otherwise if the other model didn’t exist. The net result is smaller profit for Apple.
If Apple was only about the bottom line, both of these models wouldn’t exist simultaneously. They’ve doubled their development costs and cut the units that will carry their fixed costs in half. But in this case, I think Apple is OK with that. It’s hard to put a value on customer goodwill and positive press but Apple seems to be reaping both in spades.
So which market is really getting special treatment from Apple? Sure iOS gets a lot of investment but the financial models all point in that direction. Apple has to do this. The desktop monsters that Apple is about to deliver seem to be getting lots of investment in the absence of a concrete financial reward. Apple doesn't have to do that.
Like a parent reassuring his adopted child with the words “I had to have them, but I chose you”. The same dynamic is at work here.
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