Re: Total cost of ownership

[Mitch Stone <mstone@vc.net>]

  In reply to cswiger's message sent 12/21/97 10:50 AM:
  
  >Bottom line: Macs cost more, people stayed away in droves.
  >
  >Just another observation: The rocket fuel that powered this
  >industry the last 24 years has been lowering costs - what
  >used to cost $300,000 and was made of transistors could
  >suddenly be had for $5000 and was made of IC's. Intel et al
  >have been pushing forward with more and more performance/price.
  >Don't underestimate the power of price tag competition in 
  >this land of WalMarts! Many, many domestic and foreign PC
  >manufacturers were stumbling over themselves to produce a
  >cheaper product and undercut the competition. All the while
  >Apple choose to be the sole source of a higher price box,
  >go for an upscale market, and lost. They even did that at
  >a product strategy meeting - someone help up a cheap, plastic
  >low quality flashlight and said "This is your typical PC",
  >we're going to be better than that. They're free do that.
  >And shoppers are free to take it or leave it.
  
  To suggest that Apple "chose" to be the sole source of Macs assumes that 
  they could have actually done otherwise and made a profit. I have _yet_ 
  to see anyone demonstrate how they could have at any time licensed clones 
  widely without competing with themselves, or can even show any instance 
  where clone licensing has been successful in the computer marketplace. 
  IBM accidentally donated their hardware architecture to the public 
  domain, and did not recognize a penny for it (and in fact lost billions 
  as a result), and Microsoft just happened to be standing in the right 
  place when this manna fell from heaven.
  
  >The rest of your reply goes into the TOTAL cost of ownership
  >issue, the agressively, competitively priced PC 'trojan horse'
  >with all it's hidden support and maintenance costs, which
  >Apple could capitalize on to fight back, IF they can get the
  >word out on the street and convince people that the higher
  >up front cost is worth it in the long run, but it's a risky
  >strategy that's bucking the above mentioned trend of getting
  >more bang for your buck, warts and all.
  >
  >Returning to the cost ignorant benchmark chart: a java app
  >running on system8 running on a PowerPC 604 may outperform
  >a java app running on Win9X running on a pentiumII - but
  >boy is it going to cost ya, dollars. If you can just work
  >out the price tag issue, you gotta business deal! If all
  >the hidden maintenance costs were as bad as your insults
  >make it out to be, you'd think people would learn and 
  >make different purchasing decisions, and 'tip' the market
  >to a different, more reliable standard platform, IF indeed
  >it really is and not just someone's personal prejudices
  >that they feel needs to be forced upon a public unable to
  >make rational buying decisions.
  
  Again, a myth to dispel. I think if you actually look at the _price_ of 
  Pentium II vs. PowerPC G3 systems, you'll find them to be virtually the 
  same. The PPC 604e is cheaper.
  
  Please, let's not perpetuate threadbare myths. To employ wrong-headed 
  conventional wisdoms in the cause of attacking Microsoft's few, 
  straggling competitors only serves Microsoft's cause. When I suggested 
  that we need to develop factual talking points, this is precisely what I 
  mean.