- I read an article on Forbes the other day
that kind of ground my gears,
but I wasn't going to make a video about it,
at least not until several more just like it
popped up in my newsfeed.
The author wrote an opinion piece
mocking the $700 wheels that Apple recently
put up for sale for their Mac Pro workstation
as tone-deaf, a bad product for consumers
and as an expensive fail.
The author contrast the price tag
with both the MSRP of the Mac Pro itself
and an assortment of other Apple products
that you could buy for such a princely sum,
finding it outrageous that something as simple as
wheels to help your Mac roll away from you
could cost so much.
I agree with all of that,
none of that is what ruffled my feathers.
Mr. Spence is right, it's outrageous,
but I think he's also playing
right into Apple's hand by complaining about it.
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(energetic electronic music)
This isn't a one-off,
the cycle has been going on forever.
Apple does something outrageous,
the community reacts with adoration or condemnation,
depending which sticker's adorning their bumper,
then Apple takes all of that feedback
and changes absolutely nothing.
In the last five years alone,
we've been treated to the following,
the solid gold edition first generation Apple Watch,
that was $10 to $17,000 for a product
that turned into a paperweight a mere three years later
when they dropped software support.
There was the PictureBook that took eight years to create,
cost two to $300 dollars
and served no purpose other than to market Apple's products
to visitors in your home.
Even we got in on the mockery that time around
and let us not forget the $1,000 monitor stand.
- 999 and like the Mac Pro,
they'll all be available in the fall.
- It's like other monitor stands
except that it traded basic features,
like swivel and height adjust, for more
magic. (harp crescendo)
All of these products were created to serve
a number of purposes,
the first and most obvious of which
is to exchange them for money from people who want them,
so for profit, but the thing is,
with how few of them Apple would expect to sell,
that wouldn't be enough to justify their existence.
To get to the root of why they are so expensive,
we need to go one layer deeper.
Something every single one of the products I listed
has in common is that it's the very definition
of a luxury item.
Quite literally nobody on Earth actually needs any of them.
Computer wheels, for instance,
the Mac Pro cannot operate
unless it is plugged into the wall.
So even if you wanted to move it around
while you were using it, you actually couldn't.
Okay, so Mr. Spence actually
touched on this one in his article.
Reason number two is that products
that are as unnecessary as they are expensive
serve to create a perception of scarcity and prestige
that is incredibly valuable to consumer brands
'cause the cold hard truth is that Apple products
at face value are neither scarce, nor prestigious.
Walk around a high school
and okay, it's empty right now because of COVID,
but if it wasn't, everyone and their little sister
would be blue bubble texting away on an iPhone.
Apple makes consumer electronics.
And yes, they are pricey, but between the second-hand market
and carrier subsidies, even kids can afford one
if they go without food or, let's say,
a kidney for a little while.
Although I'm not saying I recommend either of those.
And here's the deal, if you want to stay cool
as a status symbol brand,
it's important to have products in your portfolio
that most people really will only ever get to see
in the studio's of influencers,
or in a product placement on TV,
or by getting up off their butt and going to your store.
These are called
halo products. (angelic choir singing)
Let's use Nvidia's Titan line
of graphics cards as an example.
An RTX Titan costs twice as much as a 2080 TI
while performing nearly identically.
And why not, I guess?
If someone is enough of a fanboy,
or is ignorant enough to give you more money
than other people can reasonably afford,
why not let them do it,
but you're also not gonna spend three billion dollars
creating a product that will sell so few.
You'd have to sell it for two or three times as much
in order to justify that.
Exhibit A, here, would be enterprise GPU pricing,
so that's why the Titan graphics card
uses exactly the same GPU,
but just has a golden shroud.
The third and the least obvious reason that they do this
is to make even the people who aren't impressed by it,
talk about Apple.
We all know the expression,
there's no such thing as bad publicity.
That's because even a negative article
about their overpriced wheels serves
to add to the allure of the logo
while, even more importantly,
providing Apple with free brand exposure
that they would've otherwise had to pay for.
Not only would that add space in my Google News feed
have cost Apple money,
but it actually would have been far less valuable.
A properly constructed opinion piece
contains both a thesis and balanced background information
in order to support it.
And since Mr. Spence is a professional writer,
he provided me with some negative commentary sure,
but also some positive points,
referring to the Mac Pro as a beast,
highlighting the comparatively more reasonable price of $400
if you bought the wheels in the first place
and pointing out what a great value
some of the Apple's other products might be
if you had $700 to blow on shiny gadgets.
I mean, good luck getting all of that information across
in one of your slick TV advertisements, Apple.
Or wait, that wouldn't be necessary,
Forbes and everyone else already
did it for ya', ya' sly fox.
And anyway, the more interesting question, for me,
isn't why Apple did this
'cause, like I said earlier,
this isn't a one off. (popping)
But rather why they chose a status symbol Mac accessory
rather than a golden iPhone or something.
(water sloshing) After thinking about it
in the bath for a while, the best bet
that I could come up with
was that they just weren't as worried
about angering the Mac community as the iPhone one.
It's smaller for one thing
and it's already taken such a beating
over the last 10 years
that what's one or two more insults?
And this would be completely consistent
with their attitude towards the Mac Pro so far.
After the trash can, Apple obviously thought
that mobile was going to completely take over
and they would never need to create another Mac Pro,
until mobile didn't take over
and people do still need desktops
and they finally caved to the pressure,
but they did it on their terms.
As we discussed in our review,
they made no effort whatsoever
to make the new cheese grater
the Mac that you would have in your home,
like the G5 was before it.
It's just there as a, "There, okay, we made it for you.
"Oh, I'm glad that's over, God."
"Now, we can go back to selling Air Pods type of product."
Outside of a very small subset of loyal users
with big-time Hollywood budgets
bankrolling there near expenses,
Apple, rightly, seems to view the Mac Pro 2019
as an unnecessary luxury
that they can sacrifice sales volume on
in order to maintain the illusion
that they are a luxury brand
when they are in fact a consumer electronics brand
because that's what they are.
Again, I know their stuff is expensive,
but by contrast, the pricing for the things
that anybody actually needs,
like some way to listen to music on their iPhone
now that it doesn't have a freaking headphone jack,
isn't that detached from reality.
Yes, they target the premium end of the market
and there is an Apple tax,
but their gross margins are public information
and they're only making around 38%.
They aren't marking their products up
nearly as much as actual luxury brands are,
or even other tech hardware companies
and they're nowhere near the profit margins
of software giants, like Oracle or Facebook.
Anyway, the point of all of us
wasn't to slam Mr. Spence, Forbes,
or any of the other people
whose job it is to cover the consumer electronics industry,
or even Apple, it just was to help people understand
why this keeps happening
so that they can make an educated decision for themselves
about whether they want to send out
that angry tweet about expensive wheels,
or maybe just do what is actually
the most destructive thing they can possibly do
to Apple's business and completely pretend
that they don't exist.
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So thanks for watching guys,
if you enjoyed this video,
maybe check out one where we totally participated
in all of this and made a video about there,
what was it called, TableBook, oi,
it was a fun video to make actually though.
We threw that together in, like, an afternoon.
Hi, my kids, what can
I do for you? - Recess is over.
- Recess is over?
All right. - If you want,
you can take a little longer.
- All right, I gotta go home school my kids, see ya'.