Re: Another Reason the Apple I was Priced at $666.66

[Rubywand <rubywand@swbell.net>]

SirThomas writes ...
> 
> >> From the book "Apple Confidential" by Linzmayer, Page 4:
> >> "Jobs set the list price of the original 4K Apple I at $666.66 by doubling
> >> the cost of manufacturing, allowing dealers a 33.3 percent markup on the
> >> wholesale price of $500.
 ....

> > The concocted story is the bit about 2 x cost =500 + 33.3% to get the
> > price.
> 
> Actually, doubling the price of the cost of materials it takes to make a
> product to get a wholesale price for a computer isn't that radical of an idea.
> It's a good estimator of actual costs.
> 
 ....

> Way back in 1990, I was still able to sell desktop computers at 33% up.  When I
> gave it up in 1995, the markup was down to 25% and darn difficult to sell at
> that price!
>

     No disagreement about your points. The disagreement is with the rationalization
presented from "Apple Confidential" by Linzmayer. It reads like typical historical
revisionism.

 
> > In this culture, nobody ends up with a goofy price like $666.66
> > without planning to.
> 
> Maybe he just wanted a nice, unusual number for advertising purposes? Think
> about it.  Unusual sales numbers ARE marketing tools.  For example, McDonalds
> has an 88 cent value menus while most others have 99 cent value menus.
>

     That seems to be about what happened; except, that Woz was the one who set the
$666 price. Here is a snip from Dr. Tom ...

>>
Re: Free Apple I's - Why was Initial Price set at $666.66 ? 
retail sales price for the Apple 1 of $666.66 - he didn't even realize that 
the 666 number was in any way related to Satan and it had nothing to do at 
all with the '666' number of the beast or anything pertaining to satanic 
stuff.  He said: "I simply like triple digit numbers with all the things I'm 
involved with, the cost of making the Apple 1 was around $540 or there a 
bouts and we agreed on the best markup, retail price above the cost of 
building it, which worked out to $666.

Jobs then tacked on the 66 cents to make it an eye-catcher price for the ads 
with the sale and promotion publications of it to the public.
<<


> >(And, $500 x 1.333 is not $666.66; it's $666.50 .)
> 
> So Jobs couldn't multiply it all out correctly...  Should we hold that against
> him as well?  ;)

     Sure. Why not? However, the whole thing about getting the price from cost and
profit calculations sounds like an after-the-fact BS rationalization. Whoever came up
with the story probably figured most readers wouldn't take the time to check the
multiplication.

     Basically, Jobs never did any calculation to get $666.66. Woz set the price at
the first 'high enough' triple-digit value and Jobs just tacked on the 66 cents.



> No offense to the rebuttal poster because people are entitled to their opinions
> (including me;) but considering 102 actual Apple sources were consultated for
> this book, I still  tend to believe the story as printed in the book rather
> than the usual hearsay I read on the net that is devoid of solid references.
> ;)

     Since Dr. Tom has published at least one Woz interview (II Alive, Summer 1996
issue), he is a very good source. 

     Consulting 102 "actual Apple sources" falls short of being especially
impressive. Besides, the triple-digit story has the ring of truth; and, again, the
math to get a calculated $666.66 price doesn't work.

     One more observation: $666.66 is _not_ a particularly good price from an ad
value standpoint. Computer buyers zero in on features and 'How much will the thing
cost me?', not cute digit strings.

     A price like $666.xx emphasizes specific cost-- the shopper 'sees' each dollar.
And, there is the '666' Biblical reference which is going to be a turn-off for some
shoppers. A better price would have been something like $679.95.

     Actually, any price in the $600 range is a bad idea. "6" is a 'fat' number--
$600 looks like a lot of money. $719.95 is more than $50 higher than $666.66; but, it
feels like less. (Part of the trick is that $600 prices are seen as '_more_ than
$500'; whereas $700 prices are seen as 'a lot _less_ than $1000'.)

     All of which supports the conclusion that picking the $666.xx price was a 'good
luck' triple-digit thing just roughly related to manufacturing cost and vendor
profits.



> 
> My passing interest in providing a solution to this mystery for me is over.  I
> just wanted to share what I found.  (Which is one of the points of posting to
> the newsgroups.)
>

     True enough.

 
> Again, the name of the book, "Apple Confidential," and it's a quick interesting
> read even if it is mostly Mac stuff.  Check it out at a public library near
> you.

     Maybe I shall.  Thanks for posting the quote.




Rubywand