HP Needs To Sell Seven PCs To Make As Much As One Mac’s Profit To Apple

HP Needs To Sell Seven PCs To Make As Much As One Mac’s Profit To Apple

Let’s put Apple’s golden touch in perspective, because it’s a super power eerie and miraculous enough that it makes competitors puke in mortal terror (hey, it happens!). Consider this: Apple makes more from selling one Mac than HP does from selling seven PCs.

Matt Richman breaks down the math:

The average selling price of a Mac increased 5.71% over the last two quarters. If we apply that growth rate to NPD’s data that says the ASP of a PC was $615 in November, then the ASP of a PC today is $650.12. Multiply that number by an 8% profit margin and HP makes $52.00 for every PC they sell.

Apple makes more money from the sale of one Mac than HP does from selling seven PCs

Unbelievable. The thing is, even though all of these companies are now the underdogs, so was Apple a mere fifteen years ago. It’s possible to go from the most laughed at computer company out there to one of the most profitable and valuable companies on Earth: Apple did it! All you’ve got to have is the will, the daring and the smarts. Somehow, though, I doubt a company like HP has either right now in its current incarnation.

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  • Guest

    okay…..?

    this good or not?  All this says is that apple has huge profit margins on their devices.That’s good for Apple, but I won’t say thats good for the consumer.

  • drowsyfantasy

    I love my Mac and wouldn’t trade away my iPhone and iPad for their non-i-counterparts, but doesn’t making that much profit off of one item mean that the markup is really really high (i.e. the item has a low base price and the rest is profit)? This would mean we’re being gouged!

  • Martin Buckler

    No, it says Apple don’t have to split costs with other companies. When HP sell a computer a portion of that ‘profit’ is split and essentially given to Microsoft if it runs Windows. Plus they are in different sectors of the same market, most HP computers being part of the ‘race to the bottom’ style of cheaply made, low spec designs.

    Their products that do compete with Apple directly make the value of an Apple machine stand out as being better.

  • asatyabhaas

    (please give a comment, everybody) So, would you say that: “Apple is overpriced?” 

  • asatyabhaas

    what do you think about my query?

  • Clark Olson

    Apple – you are a Thief! STOP bilking your customers – you are as bad as the gas companies! Oh, and I just purchased an iPad 2…. I hate having to put it down only to load up my PC so I can play my games in facebook – most of which use Flash! Thanks for blank screen though! (insert sarcasm here) 
    Yes I do own an iPhone, iPad 2 and a piece of crap white Macbook that died after 15 months, had the rubber bottom fall off, overheated like crazy and I paid twice as much for it as a comparable PC Laptop. (won’t do that again!)

  • Barton Lynch

    I wish Apple would pass some of those profits on to consumers…
    The #1 BY FAR thing that people hate Apple for is price.

  • drowsyfantasy

    Profits to the company and shareholders, savings to the consumers…

  • Rebelord

    Really, I’ve never considered buying a quality product for a higher price being ripped off! Plus I don’t think you can classify giving someone your money for a product you decided to buy as being robbed. If anything you should do more research before you buy.
    And why are you even bothering with crappy flash based games on facebook when you have a freaking iPad 2 right in front of you. The only facebook game I even bothered with was Farmville, and that has a native app for the iOS already.

    And if you were having problems with your white Macbook shouldn’t you have been a little less of cheap ace, and bought AppleCare that’s well worth it. Even without the extra coverage they have a standard 1 year warranty.

    As I write to you on my 4 year old Macbook Pro which was given a nice revamp of parts before my 3 year AppleCare warranty expired, I wonder who’s the real problem in the situation.

  • Rebelord

    iCloud, coming in the Fall, being a free product for all users sounds like they did.

  • Barton Lynch

    Probably right

  • Clark Olson

    When you pay twice as much for a comparable product you shouldn’t have to buy extra ‘apple care’ – this idea of having to have extra warranty has served apple well  (on their bottom line) I wasn’t a cheap ace – so I thought – buying the apple product , thinking I would get years of use out of it without the need for the extra warranty. The rubber bottom was a piece of crap! I have (am using right now) a three year old Toshiba – paid $399 for it and it’s still working great! (No extra warranty required)

    My point regarding the iPad 2 – it won’t play the games I want to play, which makes it useless to me. You can say the flash based games aren’t an interest to you, but you can’t (shouldn’t) fault others for liking the games they like. (I hate Halo and games like that, but others can play them all the like). 

    Happy you have a mac that works – it should for the price you paid. Yes I handed my money over willingly – so Thief may be an inappropriate description, but I was making a point – over priced, undelivered in my book. 

  • Rebelord

    I keep this simple because I don’t feel like keeping up a conversation that seems trollish to me when it’s on CultofMac.com.

    1. Mac Pricing – Dirt old debate and majority of Mac users are satisfied for making an investment into not only their hardware but their software. Complete control over hardware and software makes a better product.

    1. iPad 2 Gaming – If you wanted a device for specifically playing Facebook games then why did you buy an iPad 2 when your Toshiba seems to be working fine for you? You knew flash didn’t work on it before you bought it so quit whining.

    3. Thanks for the Halo comment about my avatar, it reminded me to update it, and no my tastes aren’t limited to “Halo and games like that”.

    4. My only concern is if you keep having so many problems with Apple products then why do you keep buying them? It seems like the rest of us on a majority basis don’t share that same experience. Of course this is website with a target audience of Apple Fanboys.

  • Martin Buckler

    Why on earth did you buy an iPad 2 if all you wanted to do was play flash games?

    Secondly, did that ‘equivalent’ toshiba laptop come with ‘equivalent’ software as iLife. 

    Also assuming that a piece of technology from ANY company, even Apple, will inexplicably never break and every one of the millions sold will be perfect is ludicrous! Apple have an excellent customer service record and not buying into it because of a misguided concept is crazy.

    It sounds like you’re putting zero thought into what you’re buying, you need to wake up and smell the coffee, mate. If you’re going to buy something like an iPad on a whim with no prior concept of WHY you want it, HOW you’re going to use it and not read around such a purchase then you have more money they sense.

    Your issues were entirely avoidable if you’d used a bit more common sense.

  • Emmanuel Restakis

    Unless you have Apple stock, why exactly do you feel proud about this? I have several Apple products and I am happy with them – but they ARE overpriced! Good for them, but not so much fun for us consumers…

  • Martin Buckler

    I must admit, my reply to Clark makes me seem trollish.

    Apple products are usually expensive, but they price them correctly. They can produce a high end computer cheaper than other companies can, but market them at the price the other companies charge, usually marginally less (if you go spec for spec). It’s good business sense for a company that doesn’t sell at the volume of other companies.

    But Apple, more so now then ever, is about more than the hardware and even operating system, but about the experience as a whole.

    Sure, Toshiba can bolt a few components together, install Windows onto it and bung it out to consumers. But that is not what Apple sell.

  • Cesar Ramirez

    this is dumb… they are selling way more than 7 for every 1 apple PC. big picture time: HP outselling APPLE in PC’s!!!

  • Martin Buckler

    Ok, sure…show is your analysis then.

  • Rebelord

    @MartinBuckler I wasn’t referring to you when I said trollish. My comment was meant for Clark Olson. My comment just happened to get posted I guess slightly after yours, lol. If anything it sounds like were on the same  page.

  • Rann Xeroxx

    Kinda thought the same thing. I have a company issued Mac. Love it but I would never pay $2,500 for a computer. Don’t get me wrong, beautiful machine, the Lexus of computers.

    The iPad seems much closer to the real “worth” (always subjective) of the device. Compared to the competition the prices are close (size, features) yet the iPad still seems to deliver quality compared to the other tabets out there. 

  • koopapoopas

    I guess if the Macs were subsidized with advertisements in the form of stickers on the computer and annoying trial software, they would be cheaper.  Also, if they stopped using premium materials and used painted plastic, they could save us some expense.

    Maybe they could price things like Commodore with bare-bones systems, etc?

    In any case OS X and iOS makes the Apple Tax negligible to me.

  • iHate_Is_Back

    People are entitled to their own opinions but whether they want to admit it or not Mac’s are ridiculously overpriced and it’s the huge reason why Macs only make up 10% of users in the worldwide scheme of things. Personally I’ll keep my 200, 300, 500 bucks in my pocket and just take the time to throw a custom PC together exactly the way I want it that will smoke most stock Mac’s. Someone wanna pit their Mac against what I got under the hood of my PC, fine grab your mouse and lets race.  My dual quad Xeon’s and the way I can overclock those puppies at will own most Macs. I won’t even talk what I got going on with my graphics card.

    (evil grin)

    :)

  • booree

    It is like when you buy Mercedes or Ferrari I doubt you complain they are overpriced and you could buy 10 or more other cars which does the same thing .. right? You pay for brand, quality, service and design .. all of these things are worth more than the parts all together.

  • iHate_Is_Back

    Whats to analyze? Mac’s make up 10% or less of the computers out in the wild. Apple computers are a very small poultry number of the big picture and the PC makers can afford to make less per unit because they sell massive amounts more compared to Mac’s. Wake up and take a deep sniff of reality fella.

  • Emmanuel Restakis

    So you think there is no plan that will make them a profit?

  • Emmanuel Restakis

    Don’t be naive! Their markup is SEVEN times more, it has nothing to do with how well they are made. Nobody has a problem with Apple products being more expensive. We are questioning if a price difference of 50-100% can be justified…And the materials alone can’t.

  • Emmanuel Restakis

    I agree 100% about the iPad – compared to other tablets its a steal! This might be one of the reasons it has 97% of the market. Well, its also a great product.

  • iHate_Is_Back

    Ferrari????? It’s a freaking over priced PC done up to look pretty there’s nothing special about it under the hood. It’s overpriced pretty and people who are hipster idiots are stupid enough to buy it because they think they look like big shots. Ferrari my hairy ass

  • Martin Buckler

    You missed the point there, fella. HP aren’t the other 90% of the market, they aren’t even 70% of the market. So they AREN’T selling 7 computers for every 1 Apple sells. What with Dell, Samsung, Toshiba all taking substantial cuts of that 90% too.

    The other companies sell the very cheap computers because they are low spec machines. Apples lowest spec machine doesn’t compete in that low end part of the market, its so saturated with the other manufacturers that the prices have been driven down well below market value.

  • iHate_Is_Back

    I think Ramirez was referring to the PC market as a combined whole. Since were discussing it though let’s do some quick simple math using just HP. Last time I checked HP was the largest at just over 60 million while Apple was somewhere in the low teens. For the sake of argument we’ll say 15 million on the high side. 15 divided into 60 and we get a nice round number of 4 HP PC’s sold for every Mac. If we go with a slightly low ball number of say 10 million well simple math gives us 6 PC units per 1 Mac unit. Considering Mac sales have slowly been climbing over the last few years six units seems a little high therefore I think its safe to assume, depending on the exact Mac and HP numbers, that HP sells on average between 4 to 5 HP PC’s for every Mac which is still pretty great numbers for just one producer.

  • iHate_Is_Back

    I think Ramirez was referring to the PC market as a combined whole. Since were discussing it though let’s do some quick simple math using just HP. Last time I checked HP was the largest at just over 60 million while Apple was somewhere in the low teens. For the sake of argument we’ll say 15 million on the high side. 15 divided into 60 and we get a nice round number of 4 HP PC’s sold for every Mac. If we go with a slightly low ball number of say 10 million well simple math gives us 6 PC units per 1 Mac unit. Considering Mac sales have slowly been climbing over the last few years six units seems a little high therefore I think its safe to assume, depending on the exact Mac and HP numbers, that HP sells on average between 4 to 5 HP PC’s for every Mac which is still pretty great numbers for just one producer.

  • Johnson Philip

    The article is referring to PROFITABILITY not how many PCs are actually sold by HP! He’s saying HP has to sell 7 PCs to achieve the same profit 1 Mac delivers to Apple!

    As for people suggesting Mac users are paying through the nose for quality and design … let me give you my experience of a mac … Bought a Macbook for £1100 and sold it for £550 after 3 years! And during those 3 years, I had no issues whatsoever … Give me a single Wintel-PC that you can sell for half its price 3 years down the line … you’d be lucky to achieve £200!

    The NET premium of £200 (over a top of the line WINTEL machine that depreciates faster than you could blink …) that I paid is well worth it considering the build quality, design, and most importantly Mac OS X!

  • Johnson Philip

    Ahhh … just shut up! you troll!

  • koopapoopas

    Apple also makes the software like iLife, iWork, OS X.  HP also has to give Microsoft a cut for the OS.  Do you get iLife and iWork equivalents  on an HP these days?  

    Apple also has their own online and retail stores. HP has an online store , but for retail, maybe the Best Buys and Walmarts of the world get a little cut too.

     Maybe HP sucks at making money, when it doesn’t involve inkjet cartridges.

  • Jeff Feller

    As a former Apple Authorized Reseller, I can also tell you the markup for a reseller wasn’t very high either — The $1,199 iMac had a higher reseller cost than a student could buy it for.  AND!  We couldn’t even compete with the Apple Education price that ANYBODY can get by even pretending to be a college student.  Resellers didn’t get an extra EDU discount.  In fact, we weren’t ALLOWED to sell to schools.

About the author

John BrownleeJohn Brownlee is a Contributing Editor. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his girlfriend and two parakeets. You can follow him here on Twitter.

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