Here’s why Apples $700 Wheels are NOT Crazy

[nicklmg]

 

Buy an RTX Titan (somehow not the craziest thing to buy in this video)

On Amazon (PAID LINK): https://geni.us/SyqQfN

On Newegg: https://geni.us/wweRDn

On B&H (PAID LINK): https://geni.us/9iBn

 

[Mayo.]

uwu (continue the chain)

[Letgomyleghoe.]

uwu

[BobVonBob]

Huh, genuinely didn't know Apple's markups were only 38%. I mean it's way higher than other brands in the consumer electronics space (disregarding Intel like you mentioned, but I kinda get that one given the apparently monumental task of designing 10nm chips ), but lower than I thought it would be.

[RollinLower]

1 minute ago, BobVonBob said:

Huh, genuinely didn't know Apple's markups were only 38%. I mean it's way higher than other brands in the consumer electronics space, but lower than I thought it would be.

they use prety premium materials usually, but yeah 38 is pretty decent tbh.

[Guest]

You guys uploaded the wrong caption file

It was the one for this video: 

 

[GDRRiley]

This just proves apple is going to loose the education market for creative work. None of their machines make sense given that AIO have such a high risk of overheating after a few years and good luck getting IT to replace dead parts.

Apple needs a mac pro mini

[JonoT]

22 minutes ago, itswillum said:

You guys uploaded the wrong caption file

It was the one for this video: 

 

Whoops sorry, looks like we used the wrong file. Thanks for pointing that out!

[Senzelian]

For Apple, these wheels add free publicity.
For the media, these wheels add clicks to their site.
For the consumer, these wheels add entertainment in the form of these articles, discussions, and this video.

This is exactly what everyone wants. No one wants Apple to go away and die. It would be super boring without the iOS vs. Android wars and all the overpriced products. What are you going to write about or do videos about if not about overpriced Apple products and who would Apple be without all that weird nonsense?

[derr12]

I gotta say, that is turning into a pretty stylish beard.  

[FezBoy]

LiNuS yOu'Re SuCh An ApPlE ShiLl

[Commodus]

1 hour ago, BobVonBob said:

Huh, genuinely didn't know Apple's markups were only 38%. I mean it's way higher than other brands in the consumer electronics space (disregarding Intel like you mentioned, but I kinda get that one given the apparently monumental task of designing 10nm chips ), but lower than I thought it would be.

That's one of the things that's frustrating.  You'll see someone spout claims that Apple is charging double or triple what it costs to make a phone (usually based on a wildly inaccurate bill-of-materials cost breakdown), yet Apple's actual, much lower profit is hiding in plain sight -- it reports gross margins every quarter.

 

I also don't think Apple's profits are necessarily out of whack.  Not to excuse them exactly as they are, but it is ironic that people gripe about Apple's pricing in one breath and then wonder in the next why their favorite Android/Windows vendor struggles if it so much as sneezes.  Apple's profit gives it a cushion where it doesn't bleed cash if the market is anything less than favorable.  For that matter, it reduces the temptation to use some of the more awful practices of the industry (like truly poor customer service, cheap construction, bundled junkware) to wring higher margins out of a product.

[hishnash]

2 hours ago, BobVonBob said:

Huh, genuinely didn't know Apple's markups were only 38%. I mean it's way higher than other brands in the consumer electronics space (disregarding Intel like you mentioned, but I kinda get that one given the apparently monumental task of designing 10nm chips ), but lower than I thought it would be.

Also remember that includes all the raw profit that apple make on app sales, they take 30% of all app sales in the app store, subscriptions to icloud, appleTV, appleArcade etc. dd

When you just consider hardware sales (and costs) apple make only 30% profit margin.

apple put a ton of R&D effort into thier products and the software development costs are also massive, unlike intel or Nvidia.

Compare this to Microsoft who operate at over 69% profit margin apple are under-charging.

[hishnash]

2 hours ago, Senzelian said:

without the iOS vs. Android wars and all the overpriced products.

Without apple the progress of phones would be much much slower, apples competition has pushed phones, in the android space to developer a lot faster than without apple. 

also in the PC laptop space do you think MS would have bothered to make ok (ish) touchpads if apples were not outstanding.

Apple continues to ensure there is push to improve products not at a spec sheet but at a user experience level and that lifts all boats even if you are not using an apple product.

[sub68]

uwu

I love the new intro

[molszanski]

Dear LTT,

 

in a recent video (Apple's $700 Wheels are NOT Crazy...) you’ve talked about Apple motivations and I think a couple of things are missing from the big picture.

 

First of all, I don’t think they price wheels for publicity or position it as a luxury product. Apple knows that it is not a luxury brand. Apple products align in a basic stack:

 

Desktop computer -> iMac -> Macbook Pro -> Air -> iPad Pro -> iPad -> iPhone -> Apple Watch 

 

Look closer at what they do. They move “features” or “abilities” down the line and expand “the realm of possible” with their desktops.  10 years ago it was possible to edit videos only Macbook Pro or higher. 5 years ago it was possible to do on an iPad. Now iPhone SE (2nd gen) is capable video editing device. Previously it was possible to download and install apps only on computers. Then an App Store came to Apple Watch without the need of even having an iPhone. Yes a trash can was a disaster, but at the same time it could do what no other Apple computer could do before it. The same goes with the new cheese grater. 

 

Why is that important? Next to no one needs this Mac Pro. 99% of “use cases” or covered by an macbook or an iMac. Only professional sound, 3d and video editors need that cheese grater hardware power. Hence the Pro Res. Today, a computer “in your home”, mac or pc is a laptop and we all know it. And Apple wants to move it to an iPad. And they will succeed. 

 

And I think I don’t need to labour the point that in a professional world every high quality, low volume accessory has an outrageous price tag. 

 

So Mac Pro is not an “unnecessary luxury” or only a halo product. It grabs an important niche in their lineup. 

 

Second, the pricing and the gross margins. 

 

As pointed out, Apple gross margins are high but not crazy. They don’t focus on that, their goals are all related to revenue growth . This is their goal and they hit the mark. One look on stacked area of revenue chart tells the picture. That is why AirPods is probably a fortune 100 business on their own.

 

Apple has 1 bln users. And they want to get to 2 bln. That is why they release a $400 iPhone with the fastest mobile CPU on the planet. And they will support it for at least next 6 years. Which probably makes it their cheapest “cost of ownership per month per supported period” on the market.  

 

So this is what strategize about. Not just simply “get back to selling AirPods” or squeeze more dosh from wheels, stands and dongles, but getting next billion of users.

 

And I have to say, all those new 2020 products do just that. 
 

[mr moose]

A feeble attempt to excuse the sale of $90 wheels for $700 using the the fact that all technology evolves from the top down.   Unfortunate news for you, the wheel was invented a very long time ago and better quality wheels were developed long before apple tried to cash in.

 

No reasoning can explain this product pricing beyond cashing in on the desire of a few to own one of everything and to boast about their wealth/taste.

 

 

[TempestCatto]

[Tamesh16]

9 minutes ago, molszanski said:

Mac Pro is not an “unnecessary luxury”

he clearly said that the wheels where the unnecessary luxury not the Mac Pro, the Mac pro he mentioned was purchased by only a small distinct market segment

[xnamkcor]

Am I to believe that in Canada, it's ok to walk around a high school?

[The_russian]

1 hour ago, molszanski said:

First of all, I don’t think they price wheels for publicity or position it as a luxury product. Apple knows that it is not a luxury brand. Apple products align in a basic stack:

 

Desktop computer -> iMac -> Macbook Pro -> Air -> iPad Pro -> iPad -> iPhone -> Apple Watch 

 

Look closer at what they do. They move “features” or “abilities” down the line and expand “the realm of possible” with their desktops.  10 years ago it was possible to edit videos only Macbook Pro or higher. 5 years ago it was possible to do on an iPad. Now iPhone SE (2nd gen) is capable video editing device. Previously it was possible to download and install apps only on computers. Then an App Store came to Apple Watch without the need of even having an iPhone. Yes a trash can was a disaster, but at the same time it could do what no other Apple computer could do before it. The same goes with the new cheese grater. 

 

Am I missing the point of this section? You say that Apple moves features down the product line, which is questionable, and give 2 examples. What does that have to do with selling wheels for $700? I don't see Apple moving the "feature" of wheels to a MacBook or an iPhone.

 

I also don't see your overall point, you think Apple priced the wheels at $700 to get another billion users? And how exactly do you think that's going to get a billion people to buy Apple products? Unless you think it is to create brand awareness by creating conversations about it, which was the whole point the video was trying to make. 

[Egg-Roll]

Am I the only one who got the reference in the opening credit?

2000, damn I'm old

 

Also can someone tell me why is the white cane called a "probing stick" in the forums smilies?

 

  

1 hour ago, xnamkcor said:

Am I to believe that in Canada, it's ok to walk around a high school?

Personally I'm more worried about the false claim that every kid will not only be on their phone in schools (in Ontario it's banned), but also only own Apple products. Where's the proof Linus?

[LinusTech]

27 minutes ago, Egg-Roll said:

Am I the only one who got the reference in the opening credit?

2000, damn I'm old

 

Also can someone tell me why is the white cane called a "probing stick" in the forums smilies?

 

  

Personally I'm more worried about the false claim that every kid will not only be on their phone in schools (in Ontario it's banned), but also only own Apple products. Where's the proof Linus?

Have never actually seen the music video for this song.

 

What's with the blurred logo on his shirt? They have the budget for a rooftop concert including helicopter footage, but they can't get him to wear a shirt without a brand logo on it?

 

[WkdPaul]

@molszanski

 

Your thread was merged with the official thread, make sure to post this type of reaction in the appropriate thread.

[Spotty]

29 minutes ago, LinusTech said:

Have never actually seen the music video for this song.

 

What's with the blurred logo on his shirt? They have the budget for a rooftop concert including helicopter footage, but they can't get him to wear a shirt without a brand logo on it?

 

I only just noticed the Ben Stiller cameo at the start.

 

If you think blurring the shirt in that video is bad check out this music video.

 

There seems to be a void in branded clothing that can be worn in music videos. Maybe you should fill that void with LTT merch. Imagine the exposure you'd get if he wore LTT underwear in that video.