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_Apple Computers G4 Snafu _
By: Mike Ditka
In fulfillment of the periodical paper assignment, I have chosen a recent
story concerning Apple Computer Inc. as the topic for the first paper. Summary
of Situation: After setting off a storm of consumer complaints earlier this
week, Apple Computer Inc tried to make amends Friday by reversing a
retroactive price increase for a small number of customers who had pre-ordered
its new top-of-the-line G4 PowerMacs. Earlier this week, Apple said it was
unable to offer the G4 PowerMac model equipped with a 500-megahertz processor
until early next year because of supply constraints at its main chipmaker,
Motorola Inc. Apple then ratcheted up the price on the 350, 400, and 450 MHz
models that it could supply, trying to offset the lost potential revenues that
the 500 MHz G4 would provide. Ethical Implications: I believe that Apple might
have broke even concerning this ordeal; however, let's examine the specifics
of both sides of what transpired here: When the company determined that the
supply of 500 MHz chips was not going to meet the demand requested, they
reconfigured its G4 family of desktop computers, offering systems with
processors running at 350, 400 or 450 MHz -- but at higher prices -- instead
of the original 400, 450 or 500 MHz machinesAfter the company received
numerous complaints from customers, both loyal Apple supporters, and potential
new customers, the company retracted its new restructuring, allowing the
original pricing and megahertz versions to stay. Apple may have lost the faith
of even some extreme supporters. Bill Bryant, who runs a health-care
consulting business in Dallas, said he has been a Macintosh loyalist for 20
years. "...I'm thinking of buying a Dell or something. Some people are saying
it's time to go to the dark side," he added, referring to PCs running on
Microsoft's Windows operating system and processors. On the other hand, at
least this was nothing close to the Intel fiasco of the early Nineties. I feel
Apple handled this situation much more smoothly; it decided much faster that
it could not incur a loss back onto customers. How the Situation Should Have
Been Handled: I feel the company made the right ethical decision, despite the
fact that this situation should not have happened at all. I think the decision
to restructure the G4 line around the lack of the 500 MHz chip, and the
corresponding price increase of available models was a very bad business
decision, and possibly unethical. The reversal, and reinstatement of original
pricing schemes was the ethical decision to make. After realizing the shortage
of the 500 MHz chip, keeping everything intact as far as pricing goes would
have been the best decision for Apple. Of course, it would have to announce
the shortage of 500 MHz model G4, but jacking up the price for the other lines
does not make much ethical or business sense at all. In fact, maybe Apple
could drop the price on the 500 MHz G4, as a courtesy for the delay in the
product. Perhaps this type of strategy wouldn't be best for the bottom dollar
at the company, but the publicity and word-of-mouth support for the company
would foster trust, confidence, and growth, which, by their very definition,
will lead to increased revenues.
Word Count: 542
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