Pachter: Apple 2013 Console

[Scott_Arm]

iTunes Store is apparently about 6% of Apple's revenue ($1.5 billion), but that's including apps, books etc, not just movies.

http://www.macrumors.com/2011/10/18...ue-tops-100-billion-in-sales-for-fiscal-2011/

 

[joker454]

Excellent post. I agree 100%.
I don't think Apple will make a "traditional" gaming console. It's just not their style.
Just like when they entered the phone market, they made something that was so much more than the "traditional" cell phone.
I expect the rumored iTV to do just that to TVs, STBs, DVRs and gaming consoles.

Yeah I think this is where some get confused. They will in my mind certainly make a play for the tv room, but not with just a typical gaming console. They already have people consuming all sorts of media thru Apple, be it apps, books, music, tv shows, movies, kids games, you name it. They also have people using their laptops and tablets, and they have it all connected via cloud. Finally they have a hugely successful app store/ecosystem that makes them a small fortune. It's inevitable that they will make a play for the tv space, the tv space after all is yet another space where people can pay to consume media. I don't count Pippen or Apple Tv because those weren't serious attempts, they were far too hobbled/primitive. They will try it differently and I'm curious to see how. I'm most curious how they will handle the lack of direct touch in the tv space, they need a Kinect like solution there so I wonder if they would license something like that.

EDIT: I googled a bit and saw that the build cost of an iPhone 4s is just $188. Remove the screen, camera, wifi and battery from it and the idea of tv's with a 4s spec Apple built into them seems totally doable. That would be the ultimate bait for those that have no existing Apple products. Buy a new tv with a 4s spec Apple ecosystem built in, people will check out this app store they have been hearing all about, buy a kids picture book app for little Suzie, little Suzie loves it, bam a new customer hooked. It just seems like the natural progression of things to me and another obvious way to make a pile of money.

 

[RudeCurve]

unlocked iphone 4s' retail for $649 for the 16GB, $749 for the 32GB and $849 for the 64GB.

And I've seen the atrix for $325 unlocked.

Do you even know the point you're trying to argue? Your post is obviously a knee jerk reaction with no thought behind it. A 8GB iPhone 4 without contract goes for around $425, these are the ones being sold for $99 with contract at AT&T. Apple does not even make the 16GB and 32GB iPhone 4 anymore. Those capacities are reserved for the high end 4S with high end prices. The Atrix 2 was chosen for comparison due to the fact it's sold for the same $99 with contract at AT&T. Just because you found one seller selling the Atrix "1" for $325 means absolutely squat given that AT&T sells the Atrix "2" for $450. Also there's this thing called dealer markup..maybe you've heard of it. Something that is in high demand like iPhones don't need to be sold at lower prices...like the Atrix...and so I'll leave it to you to connect the dots...

 

[AlphaWolf]

Do you even know the point you're trying to argue? Your post is obviously a knee jerk reaction with no thought behind it. A 8GB iPhone 4 without contract goes for around $425, these are the ones being sold for $99 with contract at AT&T. Apple does not even make the 16GB and 32GB iPhone 4 anymore. Those capacities are reserved for the high end 4S with high end prices. The Atrix 2 was chosen for comparison due to the fact it's sold for the same $99 with contract at AT&T. Just because you found one seller selling the Atrix "1" for $325 means absolutely squat given that AT&T sells the Atrix "2" for $450. Also there's this thing called dealer markup..maybe you've heard of it. Something that is in high demand like iPhones don't need to be sold at lower prices...like the Atrix...and so I'll leave it to you to connect the dots...

The whole point of this argument is that Apple commands a premium for their products. The phones that aren't unlocked (ie tied to a carrier) are subsidized. You can buy one without a contract, but you still need to pay AT&T or whoever if you want to use it. It's not the same as unlocked, because an unlocked phone can be used with the carrier of your choice (provided they use the right protocol (gsm/cdma)). The iphone 4s sells for $649 unlocked.

And here's an unlocked atrix2 for $389 perhaps the one I saw yesterday was an auction or refurb or something but it was an Atrix2. Regardless even if it's $450 for an unlocked (as I have no idea on the MSRP) it's still $200 cheaper than an iphone.

 

[Shifty Geezer]

Would entering this market really be as huge an expenditure as it was for Sony, MS? Apple already has the content distribution and a lot of the software (iOS + Apps) and services (GameCenter, iTunes, AppStore etc) ready. They aren't jumping in from scratch. There's the cost of new hardware. I'm with Shifty in believing this won't happen, but I don't think Apple has the same hurdles as MS and Sony had at the start of last gen. MS and Sony had to invent huge online networks for content distribution that Apple already has in place, for the most part.

To compete with MS, Sony and Nintendo, I see that they'd need:

1) AAA titles, some sweetening exclusives, and all the major publishers on board.
2) A working network infrastructure with gamer ids of some form that doesn't allow people to post their own scores onto the leadboards...
3) Distribution, unless they go DD only, which cuts out half the gaming market.
4) All the security that goes with that. Apple security so far has been utter poop.

I just don't see the point. Let MS and Sony and Nintendo fight over the small takings from gamers buying and playing games. Media and the hardware it plays on can be Apple's for much cheaper. Joker's post on the cost is very telling, and what I said Sony should have done with Vita with its price - make a convenient little media box that can be carried around and connected to any screen or hifi without needing docking stations and the like. Apple could create an iBox that is an iPhone in a box without a screen, that runs all your same content. Of course iGames are pretty pointless without the touch screen, but anyone wanting to play those sorts of games has their portable device anyway. The media aspect is cheap and easy for Apple to expand without going up against proper consoles. They can sidestep them.

 

[Scott_Arm]

To compete with MS, Sony and Nintendo, I see that they'd need:

1) AAA titles, some sweetening exclusives, and all the major publishers on board.
2) A working network infrastructure with gamer ids of some form that doesn't allow people to post their own scores onto the leadboards...
3) Distribution, unless they go DD only, which cuts out half the gaming market.
4) All the security that goes with that. Apple security so far has been utter poop.

I just don't see the point. Let MS and Sony and Nintendo fight over the small takings from gamers buying and playing games. Media and the hardware it plays on can be Apple's for much cheaper. Joker's post on the cost is very telling, and what I said Sony should have done with Vita with its price - make a convenient little media box that can be carried around and connected to any screen or hifi without needing docking stations and the like. Apple could create an iBox that is an iPhone in a box without a screen, that runs all your same content. Of course iGames are pretty pointless without the touch screen, but anyone wanting to play those sorts of games has their portable device anyway. The media aspect is cheap and easy for Apple to expand without going up against proper consoles. They can sidestep them.

1) I think exclusives are less important than ever, but getting all of the major publishers on board would be key
2) I haven't used GameCenter, but it is a working network world-wide for them to build on. They are not starting from scratch. They can also leverage their worldwide infrastructure for iTunes and other online services
3) This is probably the biggest barrier to entry, beyond lack of financial incentive. Average game next-gen is probably going to be 15-30 gigs? How would that fit with DD? Apple obviously is trying to get out of the disc-distributed model already. One strength would be allowing more flexible pricing, sales to publishers/devs.
4)Not familiar enough with Apple security to comment

I don't see this would be as risky for Apple to undertake as it would be for pretty much any other company. It would definitely cost a lot of money, but I think they have a solid foundation to build on that mitigates the risk considerably. The question is whether there is a strong financial incentive to do it, and I don't think there is.

 

[Entropy]

Over 200million of them ... so far.

That's more than ipad.

That's more than iphone.

FYI

Actually, no. As I remarked earlier, Apple has sold over 200 million iOS devices the last fiscal year alone, matching (or even slightly exceeding) the total number of shipped Wiis, XBOX360s, and PS3s shipped during their total lifecycle up until now. And incredibly, they are still growing exponentially.

And as has been said countless times in this thread, they will for all intents and purposes, be producing a console+ experience... just like MS and Sony have been doing for the past 5+ years ...

And here you say again that they will go up against the MS and Sony console+ experience. You're free to believe that, of course, but it would be more convincing if you could come up with a coherent argument as to why targeting this particular group would make good business sense. Less than two years after introduction Apple is already shipping more iPads for crissakes than Sony and MS ship consoles put together. Their devices are already in sofas around the world, only in the lap rather than on the wall. If they produce a stationary device meant to be connected to a TV, why would they choose the same target demographic as Sony and MS does with theirs? We know the size of that demographic, and in the greater scheme of things, it is small, and already accessible to them via existing iDevices.

Apple has bigger fish to fry. If they make a go for such a device, and are successful, it may well affect the stationary console business, but my contention is that existing console customers will not be the target demographic. If they design a-better-set-top-box, it will be because they can appeal to a wider audience.

 

[tongue_of_colicab]

Isnt the gaming industry larger than the movie/music industry these days? And there is still plenty of growth left in the games market.

I don't see something like a iBox working. Whats the point? The majority of people will have a console, laptop/pc or mediaplayer hooked up to their tv not to mention that a lot of tv's these days are perfectly capable of playing most content straight from a hdd/usb drive. So why spend 500+ euro's on a iBox thats not going to offer more functionality but will still require you to take a hdmi with too expensive apple only adapter with it along with probably a charger as well as I doubt your going to get 6+ hours of 1080p playback from a phone sized box (any larger and you might as wel toss a 100 euro mediaplayer in your bag).

There are plenty of options already if you want media playback and I don't see what apple could offer to warrent their probably much higher price.

There are enough phones already that you can hook up to your tv but I think most people just don't care. They'd rather have a stand alone device because it's cheaper, works better and isn't a hassle to set up every time you want to use it.

 

[joker454]

Joker's post on the cost is very telling, and what I said Sony should have done with Vita with its price - make a convenient little media box that can be carried around and connected to any screen or hifi without needing docking stations and the like. Apple could create an iBox that is an iPhone in a box without a screen, that runs all your same content. Of course iGames are pretty pointless without the touch screen, but anyone wanting to play those sorts of games has their portable device anyway. The media aspect is cheap and easy for Apple to expand without going up against proper consoles. They can sidestep them.

Fyi I don't think Apple will be the only one. I expect to see Apple enabled tv's in the future but I also expect to see Microsoft enabled tv's as well. Take the 360, remove the case, hdd, power supply, and optical drive. Once they system on a chip that then putting them built into tv's is also inevitable because it's cost is probably similar to the iPhone 4s's. They have already simplified the 360's interface to work with Kinect, which means it can now work fine with a standard tv remote as well. Working off the same tv remote is critcal for Waf, as once you get into multiple remotes Waf plummets 4000%. I'm guessing one brand of tv's will ally themselves with Apple, other brands with Microsoft. Personally I wouldn't be shocked if Microsoft started bundling 360's into tv's in late 2012, with Apple I don't know when it will happen.

 

[RudeCurve]

The whole point of this argument is that Apple commands a premium for their products. The phones that aren't unlocked (ie tied to a carrier) are subsidized. You can buy one without a contract, but you still need to pay AT&T or whoever if you want to use it. It's not the same as unlocked, because an unlocked phone can be used with the carrier of your choice (provided they use the right protocol (gsm/cdma)). The iphone 4s sells for $649 unlocked.

I understand this, that's why I listed the no-contract pricing for the phones. A brand new 8GB iPhone 4 without contract sells for around $425 from various dealers, that is not the wholesale price that is the retail price with whatever dealer added markup. ATT does not sell the iPhone 4 without contract but other dealers do. ATT does sell the Atrix 2 without contract for $450 maybe that's on the higher side but that's not the point. The point is you cannot take the lowest price found on a product and deduce that the profit margin is X percent. You don't know what the profit margin is because the dealer can add whatever markup they want which distorts the actual wholesale price.

Now just because you can find a Atrix 2 for $389 actually doesn't have much relevance as you do not know the dealer added markup. For example lets say the wholesale price of a Atrix 2 is $360 and the wholesale price of a iPhone 4 is $370 but the dealer knows they could markup the retail price of the iPhone much higher than the Atrix due to the fact it is way more desirable and so they sell the Atrix for $389 and the iPhone for $425....doesn't mean Apple's profit margins are much higher than Motorolas...

And here's an unlocked atrix2 for $389 perhaps the one I saw yesterday was an auction or refurb or something but it was an Atrix2. Regardless even if it's $450 for an unlocked (as I have no idea on the MSRP) it's still $200 cheaper than an iphone.

First of all it's not that much cheaper...do the math...$425 vs $389. Second is it cheaper because the seller thinks they can't sell it for a higher price or is it because the wholesale price is much cheaper? There's no way to know. For whatever reason I think a lot of people have this misconception that since some of Apple products are overpriced compared to the competiton "all of their products must always have large profit margins" compared to the competiton.

 

[AlphaWolf]

I understand this, that's why I listed the no-contract pricing for the phones. A brand new 8GB iPhone 4 without contract sells for around $425 from various dealers, that is not the wholesale price that is the retail price with whatever dealer added markup. ATT does not sell the iPhone 4 without contract but other dealers do. ATT does sell the Atrix 2 without contract for $450 maybe that's on the higher side but that's not the point. The point is you cannot take the lowest price found on a product and deduce that the profit margin is X percent. You don't know what the profit margin is because the dealer can add whatever markup they want which distorts the actual wholesale price.

You clearly do not understand the difference between unlocked and no contract. This would be a lot easier if you did, but I'm done wasting my time on you. Good day.

 

[RudeCurve]

You clearly do not understand the difference between unlocked and no contract. This would be a lot easier if you did, but I'm done wasting my time on you. Good day.

Dude I've unlocked phones myself lol...don't tell me I don't know what a locked or unlocked phone is....sometimes it's free to do myself sometimes it cost a couple dollars to do by a specialist. Now if your argument made any sense it wouldn't depend on $0-$2 chump change (cost to unlock) as critical support...therefore your argument is bunk and has no merit...I was finished with you before you even started...good day to you too!

 

[wco81]

A 8GB iPhone 4 without contract goes for around $425

Where do you see this? The factory unlocked price is $549.

Of course 8 GB is useless in this day and age.

 

[AlphaWolf]

Where do you see this? The factory unlocked price is $549.

Of course 8 GB is useless in this day and age.

He does not understand that 'without a contract' is still carrier subsidized and not the same as unlocked.

 

[RudeCurve]

Where do you see this? The factory unlocked price is $549.

Of course 8 GB is useless in this day and age.

Of course the factory unlocked price is going to be higher. Anyway there are plenty of locked iPhones on ebay selling for around $425. Here's one...as I said if you know how you can unlock it yourself or have it unlocked for a few dollars.

http://www.ebay.com/itm/Brand-New-i...S%2BUFI%2BIIUM&otn=21&pmod=270897639268&ps=54

As for 8GB that's actually plenty for many people who don't store a bunch of music on their phones. It's enough for small apps, pictures and temporary videos. You could always delete and redownload stuff from the Appstore as Apple keeps a history of your purchases.

 

[RudeCurve]

He does not understand that 'without a contract' is still carrier subsidized and not the same as unlocked.

Actually you are the one who does not understand. You could buy a locked ATT phone, have it unlocked for free or for a small charge and be able to use the phone on other carriers. I've done it have you? That's the whole point of unlocking...duh. You telling me I had to pay extra to use my unlocked phone with other carriers?

 

[Scott_Arm]

Actually you are the one who does not understand. You could buy a locked ATT phone, have it unlocked for free or for a small charge and be able to use the phone on other carriers. I've done it have you? That's the whole point of unlocking...duh. You telling me I had to pay extra to use my unlocked phone with other carriers?

I think his point is that Apple still charges quite a bit for their phones, even if you can buy a carrier subsidized phone and unlock it yourself for cheaper.

 

[RudeCurve]

I think his point is that Apple still charges quite a bit for their phones, even if you can buy a carrier subsidized phone and unlock it yourself for cheaper.

Yes that is his point but he has failed to prove that they charge much more than their competitors...he doesn't know what the wholesale price is...he's basing his whole argument on retail prices which is dubious...

If you know the wholesale prices for these phones feel free to chip in...

 

[-tkf-]

For whatever reason I think a lot of people have this misconception that since some of Apple products are overpriced compared to the competiton "all of their products must always have large profit margins" compared to the competiton.

Uhmm, they do, that is the Apple strategy, since when did that change?

 

[RudeCurve]

Uhmm, they do, that is the Apple strategy, since when did that change?

The iPods are not overpriced compared to the competition.