May 16, 2006 10:55 AM PDT
Researcher: Macs not as expensive as thought
- Related Stories
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Apple releases 13-inch MacBook
May 16, 2006 -
Dell whacks prices on select notebooks, desktops
May 1, 2006 -
Where Apple fails
March 31, 2006
Piper Jaffray analyst Gene Munster said that his research shows an average price difference of only 13 percent for desktops and 10 percent for laptops, once you factor in the same components that Apple uses.
"We believe both consumers and investors tend to believe that purchasing a Mac will cost 20 percent to 30 percent more than a PC," he said in a research note.
But IDC researcher Richard Shim noted that Apple competes only in part of the market.
"You can compare a Mercedes and a BMW and say that there isn't much price difference," Shim said. "But the point is you can't reach a mass audience with that kind of premium brand."
The Piper Jaffray report compares an $1,874 20-inch iMac with two Dell models and two Hewlett-Packard models ranging from $1,440 to $1,970. On the laptop side, the $2,699 17-inch MacBook Pro is compared with a $1,899 HP laptop and two machines from Dell, a $3,445 XPS M1710 and a $1,922 E1705.
But while HP and Dell offer machines at those lofty prices, they also have machines that cost far less. It is now common to see ads touting $300 desktops or laptops for $500.
And, to use the car metaphor, most people are buying Hondas, not BMWs or Mercedes.
"If you look at sales by price band, very few desktops are sold in that $1,500-and-above category," said Samir Bhavnani, a researcher at Current Analysis. "The sweet spot for desktops tends to fall around $600."
For notebooks, he said the sweet spot is around $1,000.
Last year, the average desktop with a display sold for $744 in the U.S., according to IDC, while the average laptop sold for $1,070. Those prices are forecasted to drop further this year, with the typical notebook selling for $981 and the average desktop fetching $711.
Apple basically starts at those levels with its cheapest models. The least expensive laptop, the new MacBook, starts at $1,099, while the desktop Mac Mini sells for $599, but doesn't include a display.
Dell, meanwhile, recently had a sale that saw a Core Duo laptop with 1GB of memory, an 80GB drive, a 15.4-inch screen and a DVD burner selling for $699, down from a usual price of $1,234.
Shim said the fact that Apple caters to the high-end of the market "isn't a bad thing."
He pointed to the 13-inch widescreen display in the just-introduced MacBook as an example of where Apple chose the feature it wanted over price considerations. Shim said that 12-inch and 14-inch widescreen displays are relatively standard and tend to be comparably cheaper because there are already 12-inch and 14-inch traditional flat panels that are used in laptops. The 13-inch display is more unusual, he said.
"They often lead in innovation, and you often have to pay for that benefit," Shim said.
An Apple representative declined to comment.
See more CNET content tagged:
Richard Shim,
Apple MacBook,
Mercedes-Benz,
Apple Computer,
BMW
rock-bottom pricing? How much do you think Dell makes on a
$399 computer? And who wants to buy a Dell for $2,000 when
they can buy a Dell for $399? After all, the brand name "Dell"
now stands for "cheap."
I think Apple is smart not to cheapen their brand by trolling for
bottom-feeders. If you make a premium product, stick with
premium pricing. It's not for everyone, but at least you can
make a profit that way.
Remember the entry level BMW and Mercedes hatchbacks?
Failures. Jaguar X-Type? Bad idea.
"Like XBox or PS3, the manufacturers know they have to take a
loss up front to get the user base built up... then profits will
come."
Ah, which is why MS is still losing money on XBox after all these
years, and Sony will certainly take it on the chin with the PS3. I
think taking a big loss on hardware to gain customers is a bad,
bad business model. Ask TiVo. Apple doesn't need to play that
foolish game.
on the hardware at all, and making ALL of the revenue on the
software - either publishing it yourself, or by charging third
parties licencing rights for your platform.
It's one reason why console games cost 30% more than PC
games.
I'd question as to whether the Mac actually needs 'more
software'. I don't find the platform to be lacking software - your
choice may be limited to 4 choices rather than 30, but that is not
necessarily a problem.
But overall, you're right - they should produce a bottom-end
Mac - skimp on the iSight, sacrifice a few internal components,
and put it in a bog-standard case. I don't see it cannibalising
existing sales so long as it was a worse specification / looked
worse.
Then again, there is the fact that not everyone is a tech spec
gearhead.
on the hardware at all, and making ALL of the revenue on the
software - either publishing it yourself, or by charging third
parties licencing rights for your platform.
It's one reason why console games cost 30% more than PC
games.
I'd question as to whether the Mac actually needs 'more
software'. I don't find the platform to be lacking software - your
choice may be limited to 4 choices rather than 30, but that is not
necessarily a problem.
But overall, you're right - they should produce a bottom-end
Mac - skimp on the iSight, sacrifice a few internal components,
and put it in a bog-standard case. I don't see it cannibalising
existing sales so long as it was a worse specification / looked
worse.
Then again, there is the fact that not everyone is a tech spec
gearhead.
market. There are no profits there. The cheap machines that
Dell or HP advertises are called "loss leaders" for a reason.
Apple is better off building marketshare gradually by continuing
its strategy of product differentiation with machines that have
slightly higher margins. There is a reason -- and it is not just
iPods -- that Apple is one of two computer manufacturers that
has been consistently profitable in recent years.
It's true that if someone cares *only* about the price, Apple is
not likely to win their business. For how many major purchases,
however, is the cheapest product the best product? Cheaper is
only better if all else is at least equal.
The XBox or PS3 analogy doesn't apply. In those cases, the
profit is all in the games. For Apple, software is still only a small
portion of overall sales.
Apple should not offer any super low prices systems. The Mac Mini is already a good low cost system. It might be nice if they offered a "sale" package that included a monitor/keyboard/mouse with the mini to promote moving to the Mac though.
on the hardware at all, and making ALL of the revenue on the
software - either publishing it yourself, or by charging third
parties licencing rights for your platform.
It's one reason why console games cost 30% more than PC
games.
I'd question as to whether the Mac actually needs 'more
software'. I don't find the platform to be lacking software - your
choice may be limited to 4 choices rather than 30, but that is not
necessarily a problem.
But overall, you're right - they should produce a bottom-end
Mac - skimp on the iSight, sacrifice a few internal components,
and put it in a bog-standard case. I don't see it cannibalising
existing sales so long as it was a worse specification / looked
worse.
Then again, there is the fact that not everyone is a tech spec
gearhead.
because they make it up on the games and accessories, which is
where the real profits are.
If Apple dropped the cost of the Mac by $100 or $200, I doubt it
would bring more buyers. You can save close to that on anti-
virus software alone.
People are lemings. They follow the leader. Today it is still
Microsoft, but tomorrow....who knows?
most expensive computer I've ever owned. My Dual 2 ghz G5 is far
less expensive.
I guess you just don't value your time, or maybe you think any
computer will be just as much trouble as a PC. Either way, you're
wrong.
rock-bottom pricing? How much do you think Dell makes on a
$399 computer? And who wants to buy a Dell for $2,000 when
they can buy a Dell for $399? After all, the brand name "Dell"
now stands for "cheap."
I think Apple is smart not to cheapen their brand by trolling for
bottom-feeders. If you make a premium product, stick with
premium pricing. It's not for everyone, but at least you can
make a profit that way.
Remember the entry level BMW and Mercedes hatchbacks?
Failures. Jaguar X-Type? Bad idea.
"Like XBox or PS3, the manufacturers know they have to take a
loss up front to get the user base built up... then profits will
come."
Ah, which is why MS is still losing money on XBox after all these
years, and Sony will certainly take it on the chin with the PS3. I
think taking a big loss on hardware to gain customers is a bad,
bad business model. Ask TiVo. Apple doesn't need to play that
foolish game.
on the hardware at all, and making ALL of the revenue on the
software - either publishing it yourself, or by charging third
parties licencing rights for your platform.
It's one reason why console games cost 30% more than PC
games.
I'd question as to whether the Mac actually needs 'more
software'. I don't find the platform to be lacking software - your
choice may be limited to 4 choices rather than 30, but that is not
necessarily a problem.
But overall, you're right - they should produce a bottom-end
Mac - skimp on the iSight, sacrifice a few internal components,
and put it in a bog-standard case. I don't see it cannibalising
existing sales so long as it was a worse specification / looked
worse.
Then again, there is the fact that not everyone is a tech spec
gearhead.
on the hardware at all, and making ALL of the revenue on the
software - either publishing it yourself, or by charging third
parties licencing rights for your platform.
It's one reason why console games cost 30% more than PC
games.
I'd question as to whether the Mac actually needs 'more
software'. I don't find the platform to be lacking software - your
choice may be limited to 4 choices rather than 30, but that is not
necessarily a problem.
But overall, you're right - they should produce a bottom-end
Mac - skimp on the iSight, sacrifice a few internal components,
and put it in a bog-standard case. I don't see it cannibalising
existing sales so long as it was a worse specification / looked
worse.
Then again, there is the fact that not everyone is a tech spec
gearhead.
market. There are no profits there. The cheap machines that
Dell or HP advertises are called "loss leaders" for a reason.
Apple is better off building marketshare gradually by continuing
its strategy of product differentiation with machines that have
slightly higher margins. There is a reason -- and it is not just
iPods -- that Apple is one of two computer manufacturers that
has been consistently profitable in recent years.
It's true that if someone cares *only* about the price, Apple is
not likely to win their business. For how many major purchases,
however, is the cheapest product the best product? Cheaper is
only better if all else is at least equal.
The XBox or PS3 analogy doesn't apply. In those cases, the
profit is all in the games. For Apple, software is still only a small
portion of overall sales.
Apple should not offer any super low prices systems. The Mac Mini is already a good low cost system. It might be nice if they offered a "sale" package that included a monitor/keyboard/mouse with the mini to promote moving to the Mac though.
on the hardware at all, and making ALL of the revenue on the
software - either publishing it yourself, or by charging third
parties licencing rights for your platform.
It's one reason why console games cost 30% more than PC
games.
I'd question as to whether the Mac actually needs 'more
software'. I don't find the platform to be lacking software - your
choice may be limited to 4 choices rather than 30, but that is not
necessarily a problem.
But overall, you're right - they should produce a bottom-end
Mac - skimp on the iSight, sacrifice a few internal components,
and put it in a bog-standard case. I don't see it cannibalising
existing sales so long as it was a worse specification / looked
worse.
Then again, there is the fact that not everyone is a tech spec
gearhead.
because they make it up on the games and accessories, which is
where the real profits are.
If Apple dropped the cost of the Mac by $100 or $200, I doubt it
would bring more buyers. You can save close to that on anti-
virus software alone.
People are lemings. They follow the leader. Today it is still
Microsoft, but tomorrow....who knows?
most expensive computer I've ever owned. My Dual 2 ghz G5 is far
less expensive.
I guess you just don't value your time, or maybe you think any
computer will be just as much trouble as a PC. Either way, you're
wrong.
aren't offered in these other models. The iSight camera would
make up the difference, not to mention the Front Row remote.
aren't offered in these other models. The iSight camera would
make up the difference, not to mention the Front Row remote.
I just bought the G5 2Ghz model and I love it, I would never trade it in for no PC. I must admit to liking Excel/Access and VBA programming that comes with it. But for pretty much all else, I now use a mac and never been happier.
So take dat!!!
Apple products are more expensive because you are paying for the design and the hype. It used to be when the mac was "the defacto design tool" but Adobe changed that with (inevitable) addition of Windows marketshare.
Head to head, some mac features are better for the user, but for the admin, windows still wins.
And with pricing on hardware, I can get a black laptop, with more features for less.
But, do I want that? Would I rather have a dual-booting, cool, hip, easy to use, MacBook or MacBookPro? Sure. Marketing sells...
margins demonstrate that) - but I would disagree that it's all
about Form. The Function is also good, which is why Macs are
increasingly popular with developers who aren't locked into the
MS world.
I can't quite work out exactly what Admin features you think are
better on Windows. If you mean, for MSCE admins, Windows
machines are what they know, then yep, of course that's true,
but to anyone with familiarity with Unix the reverse is way true -
especially once you start going beyond Unix and learning what
OS X offers on top.
It's taken me about a year of use to realise the true functional
differences - the problem is it's difficult to sell them in a
soundbite way. And of course most people aren't going to use
bash to script iTunes.
Examples : It's taken me less effort to configure a Citrix
connection to our corporate network than it has on a Windows
box. Equally, do a search on Ottomate - you need to buy an
independent test tool to do the same with IE. System level
dictionary shared across all apps (not just Office ones). Native
PDF. emacs key bindings. Really simple networking. That works
when you put a machine to sleep on one network and wake it up
on another.
quality components, whereas Mercedes has one of the worst
luxury car quality ratings in America, and sometimes, as well, in
hometown Deutschland. Better to compare Apple to Lexus,
which has the highest quality rating.
That said, your argument, IMHO, is inherently faulty because you
talk about "hype" and design, both subjective arguments. There
are several cars that are designed to look good, but still don't
sell (relatively speaking) because of the perception of "low
quality", i.e., the current Hyundai Tiburon, the Kia Sorrento SUV,
the Hyundai Sonata. Hyundai and Kia have been coming up fast
over the past 5 years, but people won't buy them because of
perception of cheap quality.
Apple uses better quality (and hence, more expensive) materials
and components in the manufacture of its products. Apple tends
to have better customer service than competitors--the training
for which costs more--thus adding to the costs. Apple markets
more then competitors, and spends more money (based on
percentages, not actual dollars) than competitors, so all these
costs trickle down to customers. But what customers get is an
earlier and greater return on their investment with Apple. They
get a better quality of life by being able to USE their computers
instead of having their computers often at the repair shop.
I don't buy my computers because they are "cool", I buy them
because I get to DO MY WORK, while my Windows using
colleagues get to cool their heels at the offices of Tech Support.
Oh, and I work in IT, so I'm not some Windows Geek with a Tech
Support agenda to push.
the design and the hype. It used to be when the mac was "the
defacto design tool" but Adobe changed that with (inevitable)
addition of Windows marketshare."
Personally, I think the two go hand in hand. At least they do on
my G5. Why settle for just one when you can have both.
And don't forget that for the last few years Apple has been
number one in Consumer Reports with the lowest number of
units shipped with problems out of the box and they have also
received the best scores in Tech Support. That should be worth
something when looking for a system.
production environment.
Mac's make production enginneers like me more cash -- they
don't cost MORE-- they cost less.
A similarly equipped Mac versus a similarly equipped Mac with
identical users is more productive due to these factors: 1)
Stability, 2) Unix Command Line Shell and Customization, 3)
More efficient, keystroke driven interface.
Done deal.
Don't believe me?
Fine with me.
An uninformed, untested user means less competition for me in
my line of work.
I'll keep kicking my PC brethern in the dirt, gettting better
clients and insuring my future.
Dante
Apple products are more expensive because you are paying for the design and the hype. It used to be when the mac was "the defacto design tool" but Adobe changed that with (inevitable) addition of Windows marketshare.
Head to head, some mac features are better for the user, but for the admin, windows still wins.
And with pricing on hardware, I can get a black laptop, with more features for less.
But, do I want that? Would I rather have a dual-booting, cool, hip, easy to use, MacBook or MacBookPro? Sure. Marketing sells...
margins demonstrate that) - but I would disagree that it's all
about Form. The Function is also good, which is why Macs are
increasingly popular with developers who aren't locked into the
MS world.
I can't quite work out exactly what Admin features you think are
better on Windows. If you mean, for MSCE admins, Windows
machines are what they know, then yep, of course that's true,
but to anyone with familiarity with Unix the reverse is way true -
especially once you start going beyond Unix and learning what
OS X offers on top.
It's taken me about a year of use to realise the true functional
differences - the problem is it's difficult to sell them in a
soundbite way. And of course most people aren't going to use
bash to script iTunes.
Examples : It's taken me less effort to configure a Citrix
connection to our corporate network than it has on a Windows
box. Equally, do a search on Ottomate - you need to buy an
independent test tool to do the same with IE. System level
dictionary shared across all apps (not just Office ones). Native
PDF. emacs key bindings. Really simple networking. That works
when you put a machine to sleep on one network and wake it up
on another.
quality components, whereas Mercedes has one of the worst
luxury car quality ratings in America, and sometimes, as well, in
hometown Deutschland. Better to compare Apple to Lexus,
which has the highest quality rating.
That said, your argument, IMHO, is inherently faulty because you
talk about "hype" and design, both subjective arguments. There
are several cars that are designed to look good, but still don't
sell (relatively speaking) because of the perception of "low
quality", i.e., the current Hyundai Tiburon, the Kia Sorrento SUV,
the Hyundai Sonata. Hyundai and Kia have been coming up fast
over the past 5 years, but people won't buy them because of
perception of cheap quality.
Apple uses better quality (and hence, more expensive) materials
and components in the manufacture of its products. Apple tends
to have better customer service than competitors--the training
for which costs more--thus adding to the costs. Apple markets
more then competitors, and spends more money (based on
percentages, not actual dollars) than competitors, so all these
costs trickle down to customers. But what customers get is an
earlier and greater return on their investment with Apple. They
get a better quality of life by being able to USE their computers
instead of having their computers often at the repair shop.
I don't buy my computers because they are "cool", I buy them
because I get to DO MY WORK, while my Windows using
colleagues get to cool their heels at the offices of Tech Support.
Oh, and I work in IT, so I'm not some Windows Geek with a Tech
Support agenda to push.
the design and the hype. It used to be when the mac was "the
defacto design tool" but Adobe changed that with (inevitable)
addition of Windows marketshare."
Personally, I think the two go hand in hand. At least they do on
my G5. Why settle for just one when you can have both.
And don't forget that for the last few years Apple has been
number one in Consumer Reports with the lowest number of
units shipped with problems out of the box and they have also
received the best scores in Tech Support. That should be worth
something when looking for a system.
production environment.
Mac's make production enginneers like me more cash -- they
don't cost MORE-- they cost less.
A similarly equipped Mac versus a similarly equipped Mac with
identical users is more productive due to these factors: 1)
Stability, 2) Unix Command Line Shell and Customization, 3)
More efficient, keystroke driven interface.
Done deal.
Don't believe me?
Fine with me.
An uninformed, untested user means less competition for me in
my line of work.
I'll keep kicking my PC brethern in the dirt, gettting better
clients and insuring my future.
Dante
In the end, I think Mac is like buying a Coach purse for my wife. Is the purse really better? Not really, but people look at you and ask questions about it. In the end, she still loses her keys and lipstick.
but I don't use them for personal, or opertional use at all. I
develop Windows software. But at the end of the day, I'm very
happy on my Mac.
I think consumers are looking at a lot more than getting the
cheapest PC. If that cheap PC results in tech-calls, and the
assorted on-going issues, they may well want to look at
something else that actually makes their life easier. That is the
point of owning a computer anyway, isn't it?
In the end, to each his own ..
but I don't use them for personal, or opertional use at all. I
develop Windows software. But at the end of the day, I'm very
happy on my Mac.
I think consumers are looking at a lot more than getting the
cheapest PC. If that cheap PC results in tech-calls, and the
assorted on-going issues, they may well want to look at
something else that actually makes their life easier. That is the
point of owning a computer anyway, isn't it?
In the end, to each his own ..
AOL, so what's the point of paying for something most people don't
use. the new ibooks/macbooks are too expensive for what they
offer, i would't want one even for free. a macbook pro is a
wonderful computer, thou too expensive for my budget (starting @
$2200 CDN).
The only thing I'd like to see happen is it support additional IM
protocols they way Trillian does.
Would not want one for free?! That, in itself, is a complete riot.
These computers don't START at 2200. You can spend that if you
want.
I kind of feel some anger coming from you.
WHAT?
Have you ever actually USED iChat or a Mac? Maybe when you
say "not compatible" you actually mean, "all the features of the
AOL Messenger client are not available in iChat". That I would
agree with, but then, are Mac users not using the AOL
Messenger client REALLY missing out on anything? No. Besides,
AOL does make their Messenger for the Mac, if you MUST go
down that road.
Oh, and the iSight is not ONLY for chat, it also shoots video and
still photos, and has an EXCELLENT microphone built-in. I've
used that mic to produce professional, static-free, noise-free
recordings for podcasts and video voice-overs. I think you need
to check your facts.
computer,thou too expensive for my budget" for free just shows
what kind of an idiot you are appearing to be. Make sure you
know what your talking about before you open your uneducated
mouth. Instead of sitting in the dark corners of your computer
world, maybe you should sneak into an Apple Store (maybe even
wear some sunglasses so none of your M$ friends will recognize
you) and see what OSX has been offering their users for the past
year. You may find its all the new "innovative features" Bill Gates
has been promising and promising and promising with Vista.
AOL, so what's the point of paying for something most people don't
use. the new ibooks/macbooks are too expensive for what they
offer, i would't want one even for free. a macbook pro is a
wonderful computer, thou too expensive for my budget (starting @
$2200 CDN).
The only thing I'd like to see happen is it support additional IM
protocols they way Trillian does.
Would not want one for free?! That, in itself, is a complete riot.
These computers don't START at 2200. You can spend that if you
want.
I kind of feel some anger coming from you.
WHAT?
Have you ever actually USED iChat or a Mac? Maybe when you
say "not compatible" you actually mean, "all the features of the
AOL Messenger client are not available in iChat". That I would
agree with, but then, are Mac users not using the AOL
Messenger client REALLY missing out on anything? No. Besides,
AOL does make their Messenger for the Mac, if you MUST go
down that road.
Oh, and the iSight is not ONLY for chat, it also shoots video and
still photos, and has an EXCELLENT microphone built-in. I've
used that mic to produce professional, static-free, noise-free
recordings for podcasts and video voice-overs. I think you need
to check your facts.
computer,thou too expensive for my budget" for free just shows
what kind of an idiot you are appearing to be. Make sure you
know what your talking about before you open your uneducated
mouth. Instead of sitting in the dark corners of your computer
world, maybe you should sneak into an Apple Store (maybe even
wear some sunglasses so none of your M$ friends will recognize
you) and see what OSX has been offering their users for the past
year. You may find its all the new "innovative features" Bill Gates
has been promising and promising and promising with Vista.
At this price it is a loss leader or is used in a bait and switch. It is not a sustainable price. To claim that it is anything else is misleading.
few times for the bait and switch.
Price competition leads to deals like this.
It is a completely fair comparison.
At this price it is a loss leader or is used in a bait and switch. It is not a sustainable price. To claim that it is anything else is misleading.
few times for the bait and switch.
Price competition leads to deals like this.
It is a completely fair comparison.
be factored in. I still have a 6 year old PowerMac G4 that runs
the majority of what I can throw at it, including the latest release
of Tiger, without any upgrades other than ram. Most PC's that
age can barely run XP. As far as price is concerned I like apple's
price points, and I am by no means rich. I just don't need to
replace then as much as when I had a PC.
Also, saying that a mac is like a BMW and a PC is like a honda is
a slap in the face to a honda. In reality, Macs are like a new
Toyota and PC's are like a Ford. They both generally run nice in
the beginning but the real test is how many repairs and how
lengthy it's life cycle is, without needing to completely over haul
it or replace it.
moderate-quality priced cars and trucks there. In the US they just
sell premium stuff. I remember when I was in Brazil I saw Mercedes
minivans (REALLY MINI, like an Mini Cooper SUV) for just over
$10,000 US. (~30,000 real)
be factored in. I still have a 6 year old PowerMac G4 that runs
the majority of what I can throw at it, including the latest release
of Tiger, without any upgrades other than ram. Most PC's that
age can barely run XP. As far as price is concerned I like apple's
price points, and I am by no means rich. I just don't need to
replace then as much as when I had a PC.
Also, saying that a mac is like a BMW and a PC is like a honda is
a slap in the face to a honda. In reality, Macs are like a new
Toyota and PC's are like a Ford. They both generally run nice in
the beginning but the real test is how many repairs and how
lengthy it's life cycle is, without needing to completely over haul
it or replace it.
moderate-quality priced cars and trucks there. In the US they