The Mac Will Thrive in The Post-PC Era

A friend of mine a few days ago was convinced that PC manufacturers were all making an absolute killing with fat margins on their Ultrabooks. The sad reality is, they would be lucky for single digit margins (, IF they even make a profit at all (compared to the ~30% margins on Macbooks). Why? For an idea of how economies of scale work to assist large scale manufacturing, see here –

Back to the Ultrabooks – It’s called the race to the bottom, and it’s where OEMs continually compete against each other purely on price, treating the items as entirely a sum of their parts – spec-driven commodities that are the same as each other. In this scenario, which is currently playing out in the Ultrabook market (see the recently released Vaio T range), it’s a battle down to the last dollar and nobody wins (except Intel).

When was the last time an Ultrabook manufacturer had an original value proposition that differentiated it from the rest?   

Manufacturers make a pittance, if anything, then they load bloatware onto machines and have laughably short support cycles. Resellers are unable to assist consumers to make sense of the deluge of options as more models flood the market. Consumers lose out as corners are cut on machines to bring prices down, with little regard to the user experience, resulting in sub-par assemblies and components (see the shockingly bad screens/trackpads/keyboards on some models), but which still look fine on spec sheets. Many consumers are discouraged from the market altogether, resulting in poor sales.

In short, the bargain basement strategy does not work well, when applied to the premium-end of the market. It’s clear that when people are willing to pay more for a laptop, they are unanimously opting for the Macbook Air models (which start at just over $1,000). PC Ultrabook sales have been completely dismal to date –

And this is even before the atrocity that is Windows 8 hits the market. 

“Circling back to #8, trying to emulate Apple’s MacBook Air with Ultrabooks assumes that people see, in Windows 7 (and 8) and the infrastructure of Microsoft, what they need in an ultra lightweight notebook. In fact, customers are willing to pay more for the MacBook Air because they know they can take it into an Apple retail store, of which there are hundreds, and get a boatload of help. As a result, lowering the price of an Ultrabook, as a lure, doesn’t help. Style? check. Customer warm fuzzies? Nope. Apple continues to dominate in that ultra-thin notebook market.”

The Mac Will Thrive in The Post-PC Era | Hidden Dimensions | The Mac Observer


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