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by avidphantasm 89 days ago
I think the major reason for the aggressive price point of the Neo, and for not raising RAM and SSD upgrade prices in the MBP much, is that Apple is willing to give up some hardware margin to have more devices to sell services to. Unless I am mistaken, services have been key to Apple’s recent revenue growth. This isn’t a bad thing at this point, but could auger poorly if they foolishly chase recurring revenue at the expense of hardware quality (their software quality has already slipped in recent years).
3 comments
GeekyBear 89 days ago
> Apple is willing to give up some hardware margin

Did they give up a large chunk of margin, or have they been able to offset some of the higher costs of commodity chips by replacing high margin components with their own in house designs?

Designing and manufacturing your own components (CPU/GPU, Cellular modem, WiFi/Bluetooth, etc.) isn't free, but it's cheaper than paying someone else a markup at Apple's scale.

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alsetmusic 88 days ago
> and for not raising RAM and SSD upgrade prices

I expect a price increase. They had a bunch of hardware releases planned far in advance of the supply chain disruption. It'd be a bad look for their new products if they raised the prices on all these new devices at the same time; that'd be the primary discussion everywhere.

The smart move would be to release all your cool new toys at the traditional price points (or very nearly the same) and then raise prices a bit down the road. This way your reviews are strictly about the hardware / products rather than the prices. Bump them in two months. It'll be a big story, but it didn't prevent all the glowing reviews that were already published.

I think the Neo, possibly the 'e' phone, might be the only device(s) that doesn't increase. Taking a hit on 8GB of RAM might be tolerable for market gains when they're charging a kidney and a lung for higher-end devices.

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koakuma-chan 89 days ago
Services? I am not paying for any Apple services.
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philistine 89 days ago
Most of the services revenue is stuff you don’t have a choice not paying.

The Google default deal? That’s a massive chunk of services. App Store junk fees? The other massive part of it. The rest of their services are a much smaller part.

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koakuma-chan 89 days ago
Interesting. I didn't know that what the default search engine is on iOS is part of "services."
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keiferski 89 days ago
Services make up about 24% of apple’s revenue.
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