Originally Posted by snoopy
We can all make up numbers that suit our opinions.
We obviously can cut to suit our opinions as well as the first half of that sentence alludes to a $1200 cube.
Let's be realistic, though, and have our examples closer to good business practice. To begin with, very few here would suggest Apple sell a $700 Mac tower.
Mr. H speaks of a base $999 xMac with $399/$499 versions.
jwssmiths bounds the xMac between $599 and $999.
Aurora talks about a $850 retail xMac (using his $700 Dell + $150 vidcard as baseline).
YOU state that you believe Apple can be profitable in the sub-$500 tower market and about lowering the price of the Mini further to $399 with a Conroe.
And that's just in the last 4 pages (I aint paging through the entire thread).
People talk about higher priced xMacs but seem to feel that a $1700 Mac pro (or a $1200+ cube) doesn't fit the bill so given the talk of $399 as a price point $699 as the absolute bottom is being generous. If you want to refactor using $999 as the desired price point go for it. Its not rocket science. Even using this number it is still a loss of $280 per 24" cannibilization ($560-$280), $139 per 20" and $55 per 17".
Note that on Amazon the 20" outsells the $1199 17" and the 24" outsells the $999 17".
At best...assuming that the average is $1200 which given the Amazon numbers seems generous...you need to increase sales by 20% just to break even.
Most seem to argue for a tower being similar in value and performance to the iMac, so it might start at about the $1000 mark and go up from there, with higher performance and better features.
And yet it needs to stay below the Mac Pro enough not to canniblize its sales or you need to figure in converting $2200 sales into $1500 sales or even $999 sales.
Since Apple owns the Mac OS X market, the profit on a tower can be just as high as on an iMac. Apple can make it anything they want to achieve their profit goal. We assume Apple will use good business sense to maximum overall sales and market share.
Well that sure didn't work for the Cube now did it? At $999 you're trashing the iMac market. At $1499 you're in danger of doing the same to the Mac Pro market. At $1699 and a significant downgrade (2 core vs 4 core) you have a prosumer tower with expansion that doesn't imact either as much.
One more thing to think about. Several people have stated their displeasure with Apple's decision to use the Meron in the iMac, rather than the Conroe. Apple's choice means higher CPU price and lower clock rates. I understand why they did it, to have a quieter cooling fan. Possibly a redesign of the iMac is coming that will use the Conroe, and run quiet enough. In that case, the iMac could be more competitive against a mini tower and lose fewer sales.
Or perhaps Apple's choice is both stylistic and strategic. Since the iMacs use pretty much mobile parts except for the drive Apple appears to mobile parts suppliers to be 50% more sales volume than they would be with a Conroe desktop lineup. 1.5M unit sales (less Mac Pros and XServes) vs 900K.
Some here seem to argue against having two product in the lineup that compete. It is not necessarily bad, however. It means that customers have a choice. Those who want a tower buy a tower. Those who want an AIO buy an iMac. What is wrong with the consumer getting what he or she want, rather than putting up with whatever is available? It is money in Apple's pocket either way.
The sample math shows that it can be significantly LESS money in Apple's pockets. That's ignoring the synergy of using their desktop sales to make their laptop sales more profitable.
The best part is that it will pick up more sales overall, because there are those of us who will not buy an AIO, but go to eBay instead for our towers. There are also the potential switches, who just want a tower because that is all they have ever purchased in the past.
The first group keeps the installed mac base higher and there is resell in the PC market as well (not as much on a percentage basis but there are PCs on ebay). No one has anything but ancedotal evidence that there is a significant number of the second to justify the risks to the Apple product line.
And you keep ignoring that a large part of the value of the branding is that Apple is different. Its really danged hard to make that case when you're just another tower builder. A cube fits with the image and provides a bit of expansion. Its pricing that is going to be hard for Apple to get right. Perhaps $1199 is too low and $1499 is the right price.
I'd probably buy a cube for $1499 but I'd have to think a little about it over an iMac. For my dad a $600 GMA X3000 based mini would be just fine I think.
But a Conroe tower ain't likely at any price point IMHO. The $1699 (or perhaps even $1599) Mac Pro will likely be a bottom end Woodcrest with the rest of the Mac Pro lineup going Kentsfield. I doubt Woodcrest pricing will drop enough for Apple to offer a $1499 model.