Mac mini shows Apple can be low cost -- it just doesn't often want to
The new M4 Mac mini is exceptional value, but the line holding firm on pricing is an outlier for the firm that's used to charging $700 for Mac Pro wheels on top of exorbitant RAM and SSD prices.
An M4 Mac mini in front of AirPods Max -- image credit: Apple
The New Mac mini starts at $599 and that's a full $500 cheaper than the next least expensive Mac, the M2 MacBook Air. It's about as low a price as Apple goes, but to use the Mac mini, you have to have accessories.
A display, keyboard, and mouse or trackpad are essential, and together, they can add up. Buying Apple's lowest-cost options for these comes to $178 for a keyboard and mouse, plus $1,599 for a Studio Display.
You can buy lower cost and sometimes better value options -- especially some of the best displays for Mac. And then, there are optional accessories for your Mac mini, or any Mac. There are optional accessories that mean you could choose between them, or buying another M4 Mac mini.
Apple's most infamous costly extras
While they are solely for one type of Mac, Apple's Mac Pro Wheels Kit is the flagship for accessories so expensive you think it's a joke. If you don't order wheels with your Mac Pro, buying them later will cost you $699.
Mac Pro Wheels (top) cost $499, but the feet (bottom) are a bargain $299-- image credit: Apple
That's the same as a base Mac mini upgraded to have 10 Gigabit Ethernet.
Or there's the Apple Pro Display XDR, which starts at $5,000 and raises the question of what an accessory is. Unless you plan to lean it up against a convenient wall, you have to have one of the optional accessory stands.
Just as infamously as the Mac Pro wheels, there's the $1000 Pro Stand. That's the price of an M4 Mac mini upgraded to 1TB SSD storage, or 32GB RAM.
Apple does also sell a VESA mount for the Studio Display. And, to be fair, that is a mere $200.
But then a Pro Display XDR plus that VESA mount is the equivalent of eight Mac minis.
Third-party accessories sold by Apple
Apple Stores, including the online one, stock many items that are not made by Apple. Of those meant for the Mac and the iPhone, there's an Apogee Duet 3 preamp that costs $650.
For that money, you could buy a base M4 Mac mini plus a $45 thumb drive like the 128GB SanDisk iXpand Flash Drive Luxe.
Or for $50 more, Apple sells an AmpliFi Alien Router and MeshPoint Range Extender. That would help you network all the Macs you could have otherwise bought.
The Apple Watch Hermes Satine Grand H costs $999, Apple Watch not included -- image credit: Apple
But Apple accessories are not all for the Mac. If you have an Apple Watch, for instance, you can buy an Apple Watch Hermes Satine Grand H strap for $1,000.
That's the cost of a base M4 Mac mini upgraded to both 24GB RAM, and 512GB SSD storage.
Left to its own devices
Sticking to just the cost of an M4 Mac mini or lower, Apple does obviously sell the iPhone SE for $429. But it also still stocks the 2022 iPhone 14.
In its base 128GB version, the iPhone 14 is the same price as a Mac mini.
But then this price range also includes that other Apple accessory where the price made people wince. Unlike all of the other accessories, though, this device has had opportunity for serious updates -- and it has only had a single minor one.
After almost four years, the AirPods Max still cost $549. Keep checking the AppleInsider Mac mini price guide and even the new M4 version will eventually dip below the price of AirPods Max.
But then if you take a base M4 Mac mini, upgrade it to 24GB RAM and 1TB SSD, and you could have bought a second Mac mini.
Someone or rather some team at Apple puts a lot of work into pricing. There will be an element of what's called cost-plus, where you start with how much it actually costs Apple to make something, and that's complicated enough.
But there's also got to be a calculation to do with finding the precise price point at which no-one will buy -- and then taking a dollar off it.
Read on AppleInsider
Comments
But it's got a narrow use case. Older parents, office workers, businesses, server farms, etc.
Most folks who want desktops are looking for more power (GPU/CPU/RAM/etc.) or easy customization.
It shows they can do it, but they just choose not to. Which is a shame, because more Mac marketshare gives a better experience for Mac users.
Apple has given up raw marketshare by protecting gross margins. This is not specific to Macs, they have done this with pretty much all product lines for the past 25+ years: iPod, Mac, iPhone, iPad, Apple Watch, Apple TV, whatever.
Apple doesn't want to erode gross margin by competing with bargain basement MP3 players, WiFi routers, ultrabooks, mini smartphones, smart watches, earbuds, whatever.
From an ROI perspective, duking it out on the low end is simply not cost effective for a company with a brand focused on premium categories. That just dilutes brand valuation. Apple's strategy is to let others grub for crumbs on the low end of the scale while taking the lion's share of the profits on the high end. This is nothing new, they have been doing this pretty much from the company's inception.
The M4 Mac mini competes with the M2 Mac mini. If you want a barebones Windows mini PC, you can have one around $150.
To me the solution is to discontinue both iMac and Mac Pro.
iMac was iconic to a generation like Volkswagen Beetle and Ford T before. Apple discontinued iconic products like iPod and we're still here.
Mac Pro is simply not a very good product. You can't replace CPU, GPU, or memory. Eithe create a Pro that makes sense or get rid of it.
As for "folks" who want desktops for more power, the new M4 series of Macs have plenty of power, in fact more power than all consumer PCs, which I assume you're talking about, and almost as much power as specialized PCs, which end up costing much more.
Even Apple's senior executives have periodically laughed at third-party BOM estimates.
Apple does provide gross margin numbers in their SEC filings. Some more shrewd analysts have picked apart the numbers and made ballpark guesses as to estimated GMs for the various hardware products Apple has sold over the years.
It's worth pointing out that advertising is not part of COGS. Those expenses would fall under SG&A in the financial statements.
No company will forward individual product gross margins. Not Apple, not General Motors, not the bakery at the corner. You are asking questions that no one will answer. Sure, there are people in corporate accounting department that know and most of the product managers also discuss such matter at regular business review meetings and budget planning sessions but Joe Public is not going to know the cost of a Honda Civic, iPhone 16 Pro, or a can of Coca-Cola.
But the point is most people don’t use those workstations, and price is a factor for most people, in fact just about all people, people like me are exceptions.
Apple had some of the most efficient supply chains in the market, makes high quality kit, and it definitely has the highest margins. That margin protection means smaller market share, and it is clear the c-suite accept that, and the balance overall is high revenue. In fact it is a bit of chicken and egg. Want high quality, it will be expensive and if you want margins that means less market share. Or, if you want market share, accept lower margins. Apple has gone for margins.
this doesn’t always work. The Mac Pro, HomePod, AirPods Max, rMB are examples of market failures as they were priced too high for what they were, or so overdesigned they lost functionality to sell in any volume.