Re: PsyStar experiences?

In article <g1h7d20213r@xxxxxxxxxxxxxxxxx>,
J.J. O'Shea <try.not.to@xxxxxxxxxxx> wrote:

On Tue, 27 May 2008 09:57:12 -0400, The NewGuy wrote
(in article <noemailhere-7F4657.08571227052008@xxxxxxxxxxxx>):

In article <1ihjxrg.1czkp1t1pqu1edN%mikePOST@xxxxxxxxxxxxxxxxxxxxx>,
mikePOST@xxxxxxxxxxxxxxxxxxxxx (Mike Rosenberg) wrote:

The NewGuy <noemailhere@xxxxxxxxxxx> wrote:

But the profit is from paying pennies to produce the DVD and taking in
hundreds of times that when selling it.

Um, no. If you think R&D costs aren't relevant, you have no concept of
economics. Let's put it in terms you might understand. Say you run a
company that creates and sells products on DVD. You pay rent on the
building, you pay people's salaries to create those products (that
includes the actual products, the documentation, the packaging, etc.),
you pay for whatever equipment they need, and once a week you buy them a
box of donuts because you're a good guy.

Now, when you sell the DVDs, do _you_ sell them for just the actual cost
of manufacturing them?

If it costs $1,000,000 to create a program, and you sell 1 million DVD's
at $2 each ($2,000,000 gross) with a production cost of each DVD at $1
each, you'll profit $1,000,000. If you sell 2 million DVD's ($4,000,000
gross) your profit will be $3,000,000. The point is once the R&D is
done, its done. Of course there are going to be updates and such but
that is minor after most of design work has been done. Now if they sell
DVD's at $129 and their cost is a dollar giving $128 profit......well
now you see how Bill Gates and Microsoft became so wealthy. You can
just never make any huge money like MS without selling such high profit
items as software discs. The hardware is actually Apple's barrier to
really huge money. More than 90% of computer users never use Apple.
That's billions of people. Billions at $128 profit each. Its utterly
staggering (once the R & D has been paid for.) 10.5's R & D costs have
probably been paid for long ago with current Leopard sales.

So, once you're done with a project, say... OS X 10.5.0, you fire all the
people who worked on it, right?
Hmmm... problem. Who do you get to work on
10.5.1 and following?
Not to mention any _other_ projects which might be
going on... You know, 10.6, QuickTime, iLife, iWork, iPhone, iPod, etc? Guess
you gotta hire 'em back. And they'll need a place to work, so that's another.
And they'll need equipment to work with, so that's yet one more.

No. You put them to work on the next project. Like 10.6.

Hmmm. Gee,
it almost looks as though you're going to have _at least_ the same level of
costs going forwards _after_ 10.5.0 was released as you did _before_ it was
done.

Perhaps. And those costs will be paid for by the sale of 10.6 and the
other programs when they are available. How simple is that? Its like
some of you have had brain damage in economics.

Unless, of course, you're simply going to freeze in place. Remember,
all 10.5.x updates are free, and work on 'em has to be charged _somewhere_.
All updates to QuickTime are free. All updates to iTunes, iWork, iLife
(until, of course, the next released version upgrade) are free. Someone's
gotta pay for all that.

Bringing out an update is a fraction of the cost of bringing out a new
OS. Duh... So you keep a skeleton staff on to do the updates. Simple.

Then there's advertising; do you think that those who
act in, direct, and produce those "I'm a Mac/I'm a PC" ads work for free? Do
you think that placing those ads on major networks, in prime time, is free?

Paid for by sales of the product. We're talking 100's of millions I
would imagine. Advertising is a sliver of those gross numbers.

Then there's the Apple Stores, and Apple's tech support people, and all that
disk space for Apple's various websites... who do you suppose is _paying_ for
all that? Have you got any idea just how much disk space Apple's _public_
sites eat up, and what bandwidth serving all of that requires?

Obviously Apple stores are self sufficient. They are not a drain. They
uplift the image of the company by their attractive design and sell lots
of product. The OS is only a sliver of their sales. I would venture
most of their sales are portable in nature. The OS would be at the
bottom, far lower than people buying Macs themselves.

Are you insane, or stupid, or both?

Both. I guess. Since most people don't seem to understand simple
economics here.

Obviously you take people that worked on 10.0 and put them to work on
other projects. But the point is there was a cost to getting 10.5.0 to
the market. That will be much more than the cost of getting the 10.5.1
update to market. So it all boils down to "what is the R & D cost for
10.4 Tiger and how many copies did they sell individually? That would
be interesting to know.
.

Relevant Pages

  • Re: Article about eBay
    ... and the only time you need to use it is when you sell to ... >> It's all in the cost of doing business and nothing new. ... If I buy at yard sales, which I hardly do anymore, I keep a list of costs ... I have a business license and a Va State sales tax ID, ...
    (sci.med.transcription)
  • Re: When is the last time you got money back from Microsoft?
    ... If you've got an item that you can make for $1 and sell for $10 you ... If your cost drops to $.50 but you can still get $10 ... I don't disagree that Microsoft CAN charge what they have been -- I ... You're assuming that costs and prices have anything to do with one ...
    (comp.sys.mac.advocacy)
  • Re: SF rocket propulsion?
    ... sell to Earthpeople at a profit if you have to get it in space. ... he won't destroy his own market. ... make economic sense. ... We have lots of relatively low cost land. ...
    (rec.arts.sf.science)
  • Re: 3E - Economics of Long Downtimes - Long
    ... characters who are not good at maths). ... 1/2 cost for materials and sell for full cost. ... price or almost full price. ...
    (rec.games.frp.dnd)
  • Re: NAPPA=Lower parts prices??
    ... I'd be happy to buy parts for close to what WMS sold them for in the day. ... Some parts may sell for close to what WMS sold ... > an upfront cost that needs to be passed on to the consumers. ... > production and those development costs were already passed to consumers ...
    (rec.games.pinball)