Quote:
Originally Posted by jasonkalman
This has been discussed in a Gearslutz thread: https://www.gearslutz.com/board/elec...-so-cheap.html
Yes, Apple undercuts the competition by selling Logic Pro X at a loss. This loss is minuscule compared to the profit margins Apple makes by selling Macs. Avid needs to actually make money off of Pro Tools. The problem is, their subscription model offers zero benefit to the consumer and there in-lies the problem. If Avid went back to the old model of selling new versions of Pro Tools when they actually had updates to offer, while offering free updates (including OS compatibility) in between new releases, their customers would be much happier.
Once another company offers the same low latency as Avid, I think Avid will quickly either change direction or go bankrupt. |
Thanks for the reply but a Gearslutz thread is hardly real inside knowledge of the business
Anyway, I don’t want to go any further than this as my post is way off topic but in that thread, that I didn’t read the full 4 pages, it didn’t take long that it was mostly posts by Apple haters and the question isn’t really answered in the end. How many copies does Apple need to sell before they’re break even with R&D? All copies sold after that number is 100% profit so I’m not so sure Logic is a “loss leader”.
Like a lot people here I’m sure, I know people who bought Logic but are not that much in Audio production, but because it’s 200$ they bought it because they needed to work on audio and didn’t want to bother with GarageBand. If you lower the price of your product so much that you sell a crazy number of copies, you’ll end up making a good profit, if we’re talking software and not hardware goods.
The one sure thing in the advantage of Apple is they have the funds upfront to finance the R&D so if profit comes later on during the product’s life, they can live with it without loosing sleep. Which could be different when talking about a company whose main revenue is the lowered priced product.
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