Comment by Towaway69
2 days ago
Undercut the competition until there is no competition, then raise prices or have I missed something?
Ah, yes - cross finance your loses by selling compute in your own data centres / hosting service because you can.
2 days ago
Undercut the competition until there is no competition, then raise prices or have I missed something?
Ah, yes - cross finance your loses by selling compute in your own data centres / hosting service because you can.
I would assume it's because younger generations of creatives are using their software less and less, increasing the risk of losing the market completely on the software side. At this pricing, more of them will turn to paying Apple rather than paying for multiple services, keeping them tied into the ecosystem.
Also so many people are paying for Canva, Capcut etc that taking a piece of that cake is quite a low hanging fruit if you have a distribution platform.
The acquisition of the Affinity software by Canva I imagine motivated this.
It’s even a similar pricing model, though technically with Pages / Numbers / Keynote covers a little more ground but I think the main intent is to get creatives using Apple’s creative software again
Pixelmator being the only 3rd party software because Apple never made a competitor to Photoshop
Though since Canva went full on toward more robust tools I imagine they have started capturing the entire editing chain more than they did 2-3 years ago, hence the Affinity acquisition
> Pixelmator being the only 3rd party software because Apple never made a competitor to Photoshop
Pixelmator isn’t third party. https://www.pixelmator.com/blog/2024/11/01/a-new-home-for-pi...:
“November 1, 2024
A new home for Pixelmator
Today we have some important news to share: the Pixelmator Team plans to join Apple”
That deal completed almost a year ago.
Most of the comments here demonstrates the lack of abstraction abilities here at HN.
My comments weren’t related to whether apple has data centres or not (afaik they don’t and actually use google hardware).
My comments were related to a business model used by amazon to destroy local shops in our neighbourhoods: offer products at vastly reduced prices, making a loss but covering those losses by profiting on aws. Once there is no competition left, prices rise and shareholder profits are made.
Hence my conjecture that apple was doing the same and hence they were offering this product at undercut price. As was the OP was wondering about.
I was actually criticising the business model increasingly used by big tech. Which has the consequences that are neighbourhoods are emptied out and left with stores that act as amazon package pickup stores or stores where packages are returned to be sent back to amazon.
Apple doesn't ever need to make much money on this software, when they make money on hardware needed to use it.
Apple hardware has "only" a 36% margin, while their software and services have a 75% margin. They definitely want to make more money on software with absurd margins.
A huge portion of that margin is from the 33% App Store cut which is infinite margin for them, effectively.
"software and services" really should be broken out from the App Store cut.
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Not an Apple fan at all, but damn, in the views of some of the HN community, one can only do wrong. Pathetic.
Pretty spot on. I think what's new is that Apple is employing this tactic, before they always went with "Our stuff is more expensive because it's better", but as they seem to slightly pivot into other directions now, this choice also seems to align with the new direction.
Somehow I don't think Apple is going to put Adobe out of business.
They don't need to, but they do lose a bunch more of the 'feeder' market. If need to edit video to a semi professional standard I'd pick this bundle at 12.99/month (and get extra tools i might need) vs adobe premiere for 22.99/month.
As someone who came up along side adobe, the only reason photoshop is as entrenched as it is is simply because of piracy. Ditto for premiere. It created the market that they then locked down with subscriptions.
I think you are going to see shops that are smaller, doing their own design stuff internally, increasingly moving away from adobe subscriptions.
They don't need to.
They want marketshare to enhance their other market positions and give them optionality for future strategy.
They'd love the whole market, but they don't need it and they won't employ too many resources chasing that.
They're a powerful giant with hands in so many places. Each enforcing other endeavors.
This encourages people to stay in the Apple hardware ecosystem, for instance. It dog foods their silicon. It keeps people thinking of Apple as the creative brand and operating system. More creatives buying Apple -> more being produced and consumed for and on Apple.
Also the strategy of getting kids young has always been genius. They started that in the eighties, I think.
Well put.
Best framing I’ve seen of the answer to, “Why is Apple in the streaming service business?”
What data centers? Does Apple even have data centers? Can people purchase compute on Apple's data centers?
> What data centers? Does Apple even have data centers?
Apple absolutely has data centres. Where do you think Apple TV, Apple Music, iCloud, Maps, etc compute happens?
Here's a press release straight from the horse's mouth about one in Denmark, in late 2020: https://www.apple.com/uk/newsroom/2020/09/apple-expands-rene...
> Can people purchase compute on Apple's data centers?
Not to my knowledge, but that's not saying much.
> Not to my knowledge, but that's not saying much.
But that's the entire crux of their comment: undercut the competition, and make them pay for compute on Apple's data centers.