Here’s why Apples $700 Wheels are NOT Crazy

[mr moose]

23 minutes ago, hishnash said:

You don't need to re-invent the wheel to have a high fixed cost of starting production. A normal company that `makes wheels` will have the same upfront costs the difference is they plan on building millions of them not 1000s so that fixed cost is spread out over a much much large number of units. 

I don't think that they think they made a mistake it was 100% intentional.

 

They absolutely knew from day one that the upfront costs of the wheel would mean it would cost a massive amount, apple have some very skilled finance teams they will have done the numbers on everything.

What i'm saying is I don't think these wheels are a massive profit for apple, they will be taking their normal hardware 30% markup, and if they find a way to sell them for 10 years aka sell many more units than they expected then it will be a high profit item, but today with the low volume unit sales I recon most other parts of the macPro have a higher markup than the wheels.

 

in-fact across the macPro the feet (not the wheels) are going to have the larger markup. 1) they are much simpler to design 2) tooling costs are much lower since they can re-use most of the tooling for the case. 3) the number of units they will ship is much much higher so the fixed costs can be spread over a much larger number of units. And yet apple charge $300 for them.

From what apple have said publicly they basically told the engining team go play, we don't care how much this thing will cost we just want you to have fun, that is how you end up with products with extremely high fix costs.

Do you honestly think it's only 30%?  Really?

 

 

No mate, not even remotely.

[xnamkcor]

8 minutes ago, mr moose said:

Do you honestly think it's only 30%?  Really?

 

 

No mate, not even remotely.

Maybe he made a typo and he meant 3000%.

[Kisai]

3 hours ago, hishnash said:

in the end the summary is apple should have found some existing good quality wheels and put a 100% markup on them that would both be cheaper to the consumer and apple would make LOST more money from selling them.

 

 

Wanna know something? The office I work at has some metal "server wheels" that I think were an aftermarket accessory since the previous Precisions they had were too heavy for one person to lift (even to remove one, I had to get a cart)

 

But aftermarket tower wheels exist, even for smaller machines:

Take note, those are the EXACT same wheels on your office chair.

This item on Aliexpress is 18$ USD https://www.aliexpress.com/item/32967272264.html

 

Now look at Apple's wheels:

Whoops, did nobody think of putting a brake on one of the wheels. Better throw down a ream of paper to act as wheel chocks.

 

https://www.uline.ca/Product/Detail/H-3334/Clothing-Racks-and-Accessories/Set-of-4-Casters-for-Clothes-Racks-and-Gridwall-Gondola-Base

 

$9 for lockable casters, bought in bulk. Now again, plastic casters might be too weak to actually use for a heavy desktop. The wheel casters on my office chair I've replaced once, and they do wear out (mostly from hair getting stuck and gumming up the wheel and then breaking the wheel off.)

 

 

 

 

[hishnash]

12 minutes ago, mr moose said:

Do you honestly think it's only 30%?  Really?

Well apple is a publicly traded company so we get the breakdown and if you exclude money made on AppStore app sales, appTV+, AppleArchive, ApplePay etc profit margins are 30% they cant hide this its public info.

Sure that is averaged over all their products but I don't expect apple is selling anything at a loss somehow so I expect them to go with a uniform rate across the board.

 

9 minutes ago, xnamkcor said:

Maybe he made a typo and he meant 3000%.

you think that including all the upfront costs, design, tooling etc (for the low number of units they will sell) that a set of 4 wheels costs apple $23. That would be about the right price if apple had done the right thing and just purchased existing wheels

[mr moose]

7 minutes ago, hishnash said:

Well apple is a publicly traded company so we get the breakdown and if you exclude money made on AppStore app sales, appTV+, AppleArchive, ApplePay etc profit margins are 30% they cant hide this its public info.

Sure that is averaged over all their products but I don't expect apple is selling anything at a loss somehow so I expect them to go with a uniform rate across the board.

 

you think that including all the upfront costs, design, tooling etc (for the low number of units they will sell) that a set of 4 wheels costs apple $23. That would be about the right price if apple had done the right thing and just purchased existing wheels

 

Yes, it very likely only cost about $20 each to make.  Even with all their shiny chrome bearing race.  Seriously have a look at ceramic mixer taps.  Highly polished chrome, significantly more detailed high precision parts to cast and machine and they can be sold in retail for $30 still making profit for everyone.  Today's manufacturing isn't the costly thing it used to be. 

[hishnash]

1 minute ago, mr moose said:

 

Yes, it very likely only cost about $20 each to make.  Even with all their shiny chrome bearing race.  Seriously have a look at ceramic mixer taps.  Highly polished chrome, significantly more detailed high precision parts to cast and machine and they can be sold in retail for $30 still making profit for everyone.  Today's manufacturing isn't the costly thing it used to be. 

I agree the per unit cost (not including the upfront costs) will be well under $30 a set. And that is why apple should have just purchased some and put a high markup on them. But that does not change what they did.

[JoostinOnline]

The irony of the clickbait (or "clicky", as Linus would insist it's called) is amusing. He's doing the exact same thing by making a misleading title in order to get people talking about it.

[Lord Vile]

6 hours ago, mr moose said:

Maybe, but they didn't, in the end they tried to reinvent the wheel and put an incredibly stupid markup on it very very intentionally.   Even pretending they made a mistake does not justify the cost.

It’s what Apple does though, can’t remember anything they’ve sold aside from the Hermes watches that they haven’t designed themselves. Anyway it’s a $10,000+ PC I don’t think 400 for wheels will break the bank. 

[mr moose]

4 minutes ago, Lord Vile said:

It’s what Apple does though, can’t remember anything they’ve sold aside from the Hermes watches that they haven’t designed themselves. Anyway it’s a $10,000+ PC I don’t think 400 for wheels will break the bank. 

 

As I said before, I've seen industrial castors on equipment that makes the Mac look like a child's toy, they weren't $700 and will never cost $700.  Next time you are walking past the dialysis wing in a hospital check out what holds those machines up. I don't care what the mac cost, it's value does not justify the cost of the wheels.   Just like the cost of a red camera does not justify the cost of the handle.  PERIOD.

 

You really can't handle the fact this is a stupid mark up for a stupid reason and only the vane (and arguable moronic) will pay for them.

[Lord Vile]

56 minutes ago, mr moose said:

 

As I said before, I've seen industrial castors on equipment that makes the Mac look like a child's toy, they weren't $700 and will never cost $700.  Next time you are walking past the dialysis wing in a hospital check out what holds those machines up. I don't care what the mac cost, it's value does not justify the cost of the wheels.   Just like the cost of a red camera does not justify the cost of the handle.  PERIOD.

 

You really can't handle the fact this is a stupid mark up for a stupid reason and only the vane (and arguable moronic) will pay for them.

Key word is “industrial”. Industrial grade add ons aren’t as expensive as professional grade

[mr moose]

3 hours ago, Lord Vile said:

Key word is “industrial”. Industrial grade add ons aren’t as expensive as professional grade

there is no key word,  you've now tried to separate industrial from professional as if there is some sort of product line difference when it comes to quality and cost.  Why are you so invested in defending this ridiculous products undefendable price tag?

[Blademaster91]

4 hours ago, Lord Vile said:

Key word is “industrial”. Industrial grade add ons aren’t as expensive as professional grade

What even makes the wheels "professional" grade? Have a look at some off the shelf caster wheels,these wheels don't even have a brake to stop a $10,000 mac pro from rolling across the floor.

[Lord Vile]

30 minutes ago, mr moose said:

there is no key word,  you've now tried to separate industrial from professional as if there is some sort of product line difference when it comes to quality and cost.  Why are you so invested in defending this ridiculous products undefendable price tag?

Industrial products are normally bulk bought in hundreds or thousands of units. Tend to think about industrial as a data centre where they buy so much product that they’re not overcharged because of the price of the purchase, if a massive studio went to Apple and ordered say 100 Mac Pro’s they’d probably get the wheels for free, I mean they’d be losing £40,000 in wheels but when you’re selling £3,000,000+ worth of hardware I wouldn’t complain. Professional is a smaller scale where the equipment you’re buying is expensive but not data centre expensive. It’s also in fewer units so the manufacturer isn’t fussed about losing say the sale of one customer or several baulking at a stand for £999 whereas at an industrial level charging £5 a cabinet for a power cord could cost you a 7 figure contract. 
 

I’m not defending it for fucks sake. It’s standard for more expensive equipment to have more expensive accessories and add ons that are excessively expensive. If you’re complaining about £400 or £700 wheels on a professional grade product then you should be shouting at the whole industry. Red, Apple, Nvidia, AMD, Sony, Fuji etc etc. They all overcharge for stuff on the high end of their product line. And if you think that’s bad look at cars where makers are charging thousands for stripes of paint and over a hundred grand for an analogue dashboard clock. There are cars that, because they’re more expensive, have interior add ons that cost more than a normal car fitted with those exact extras as standard. 

[Lord Vile]

12 minutes ago, Blademaster91 said:

What even makes the wheels "professional" grade? Have a look at some off the shelf caster wheels,these wheels don't even have a brake to stop a $10,000 mac pro from rolling across the floor.

They’re for a professional grade item. 
 

Wheels for a Mac Pro in general are stupid it you want it to be on wheels you get the rack mount version and put it in a rack. Or I mean just lift it to where you want it... it’s only 20Kg you don’t exactly need to be a power lifter to carry it

[mr moose]

8 hours ago, Lord Vile said:

Industrial products are normally bulk bought in hundreds or thousands of units. Tend to think about industrial as a data centre where they buy so much product that they’re not overcharged because of the price of the purchase, if a massive studio went to Apple and ordered say 100 Mac Pro’s they’d probably get the wheels for free, I mean they’d be losing £40,000 in wheels but when you’re selling £3,000,000+ worth of hardware I wouldn’t complain. Professional is a smaller scale where the equipment you’re buying is expensive but not data centre expensive. It’s also in fewer units so the manufacturer isn’t fussed about losing say the sale of one customer or several baulking at a stand for £999 whereas at an industrial level charging £5 a cabinet for a power cord could cost you a 7 figure contract. 
 

There is no difference between professional and industrial, you made that difference up in your head.  You can buy one xeon for your home server or you can buy 100K for your data centre, it's exactly the same product.

 

 

8 hours ago, Lord Vile said:

I’m not defending it for fucks sake. It’s standard for more expensive equipment to have more expensive accessories and add ons that are excessively expensive. If you’re complaining about £400 or £700 wheels on a professional grade product then you should be shouting at the whole industry. Red, Apple, Nvidia, AMD, Sony, Fuji etc etc. They all overcharge for stuff on the high end of their product line. And if you think that’s bad look at cars where makers are charging thousands for stripes of paint and over a hundred grand for an analogue dashboard clock. There are cars that, because they’re more expensive, have interior add ons that cost more than a normal car fitted with those exact extras as standard. 

You are defending it, you are doing your damnedest to try and normalize a moronic price.   Now you are even trying to compare them to exotic cars.  Hell if you can't see the obvious issue with that then there is no hope for this discussion.

 

 

[Curious Pineapple]

I could buy a car, buy new wheels and suspension, put the wheels and suspension on the Mac, give the car away and still save money.

 

Or to put it in "professional" terms:

 

I could buy a van, buy new wheels and suspension, put the wheels and suspension on the Mac, give the van away and still save money.

[molszanski]

On 5/5/2020 at 4:58 PM, Commodus said:

Well it is in the luxury game... just not for pro workstations.  After all, Apple Watch pricing is dictated primarily by case and strap materials.

No. Apple is not in a luxury game. Apple is not watches, watches is not Apple. 

 

Apple 250+b revenue breakdown

 

* phones - 50% - not a luxury

* App Store and services - 20% - not a luxury

* mac computers - 10% - not a luxury

* iPads - 10% - not a luxury

* airpods - 8% - not a luxury

* Wearables, accessories and other shit <-- 2%. You may find some luxury stuff there

 

 

[molszanski]

16 hours ago, Lord Vile said:

I don’t think 400 for wheels will break the bank. 

It will tear some outraged throats though  ¯\_(ツ)_/¯

[molszanski]

11 hours ago, mr moose said:

You are defending it, you are doing your damnedest to try and normalize a moronic price. 

Can you point to exact words where he is defending the moronic price? And if not, why do you attribute him words and ideas he neither said or expressed?

 

[mr moose]

44 minutes ago, molszanski said:

Can you point to exact words where he is defending the moronic price? And if not, why do you attribute him words and ideas he neither said or expressed?

 

Read his posts.

 

Changing the value to deflect form the price, adding personal opinion as if that dismisses the facts.

 

17 hours ago, Lord Vile said:

Anyway it’s a $10,000+ PC I don’t think 400 for wheels will break the bank. 

 

16 hours ago, Lord Vile said:

Key word is “industrial”. Industrial grade add ons aren’t as expensive as professional grade

Pretending that there is a difference in quality and cost to manufacture between two terms that in this context arbitrary tot he point.

12 hours ago, Lord Vile said:

 

 It’s standard for more expensive equipment to have more expensive accessories and add ons that are excessively expensive.

 

 

Claiming the price is standard practice when we all know it is most definitely not.  Standard price for high quality wheels for any professional application is $30 each.  PERIOD.   Of course vile is defending the price.

[molszanski]

6 hours ago, mr moose said:

Read his posts.

So you can't. Ok. 

[mr moose]

1 minute ago, molszanski said:

So you can't. Ok. 

 I mean seriously, you asked me to quote specific bits and I did, then you make that stupid posts as if I didn't.  What are you hoping to achieve here?

[molszanski]

42 minutes ago, mr moose said:

 I mean seriously, you asked me to quote specific bits and I did, then you make that stupid posts as if I didn't.  What are you hoping to achieve here?

(sigh) Because you didn't. And I don't mean it in "bad" way. It is opinions vs observation all over again. 

 

Look, let's find some common ground. To make this discussion go somewhere. Looks kinda stuck.

 

I think we can all agree that:

* such items ARE expensive

* the price DOES NOT reflect the relative value of the product

* it IS the fact of life that many accessories, especially low volume, especially targeted at a professional market have this quad-damage price tag

* Everyone feels that the price for $1K IS unjust and unfair. Whatever those words mean

 

 

I think there are much more interesting questions to ponder:

- Why is anyone buying $1K handles? Supply demand price curve and low Q, high P? No alternative?

- Who is buying that stuff? Industries, demographic etc.

- How many handles do those companies sell? Are they profit bringers or they mean literally nothing in the big picture.

- Why competition doesn't work? Handle patents? Small market?

[Curious Pineapple]

I think someone has inserted the Apple too far into one cavity that it is affecting the brain. The argument seems to be that if the customer can afford it, then it's not over-priced. I smell bovine excrement.

[mr moose]

2 minutes ago, molszanski said:

(sigh) Because you didn't.

 

It's right there for everyone to see. Editing the quote and pretending half my post doesn't exist doesn't change that fact.

 

2 minutes ago, molszanski said:

And I don't mean it in "bad" way. It is opinions vs observation all over again. 

 

Look, let's find some common ground. To make this discussion go somewhere. Looks kinda stuck.

 

I think we can all agree that:

* such items ARE expensive

* the price DOES NOT reflect the relative value of the product

* it IS the fact of life that many accessories, especially low volume, especially targeted at a professional market have this quad-damage price tag

* Everyone feels that the price for $1K IS unjust and unfair. Whatever those words mean

 

 

I think there are much more interesting questions to ponder:

- Why is anyone buying $1K handles? Supply demand price curve and low Q, high P? No alternative?

- Who is buying that stuff? Industries, demographic etc.

- How many handles do those companies sell? Are they profit bringers or they mean literally nothing in the big picture.

- Why competition doesn't work? Handle patents? Small market?

Industry standard pricing for professional/industrial castors (for this particular use case) is between A$20 each and A$40 each .  That is the industry standard price for the end consumer be they a small business or large corporate industry.  Therefore arguing it is standard practice to charge $700 for said castors quoting "industry standard" is just made up BS.    This is not an opinion.

 

The only people who will buy these castors are those with vanity issues.  I don't know a single professional (and I have worked with we fucking truck ton of them over the last 30 years) who would look at that price and just suck it up.  I know no one who buy red handles at that price.  In fact I have seen big wigs in the music industry buy behringer gear before paying vanity taxes (and these are people for whom money is not a hurdle).