After forming a comparison of Apple Computer's new iMac and MacBook Pro computers against several PCs from Dell and HP, analysts for PiperJaffray found that the average difference in price for comparable components on a desktop is only 13 percent lower for a Windows PC, while for notebooks the price difference is a mere 10 percent.
"We believe both consumers and investors tend to believe that purchasing a Mac will cost 20 percent to 30 percent more than a PC," analyst Gene Munster explained to clients in a research note issued early Tuesday morning.
The analyst also took a look at the cost of an iMac and MacBook Pro running both the Windows and Mac OS operating systems via Apple's Boot Camp software. He found that, on average, an iMac running Boot Camp with both operating systems is 22 percent more expensive than a comparable PC running only Windows. Meanwhile, PC notebooks cost, on average, 16 percent less than a dual operating system MacBook Pro.
However, Munster notes that the cost of running dual operating systems on Apple's new Macs may be negligible for most PC users.
"While many Mac buyers will go out and buy Windows Home Editionfor $199 [in order to run Windows on their Mac], those who have recently purchased a PC, or will be buying a PC in the near term, should be able to take advantage of the fact that PC manufacturers, such as Dell and HP, will provide customers with Windows re-install discs for free or for a $10 fee," he wrote. "We believe this will make the move to a Boot Camp-enabled Mac more feasible for many potential buyers."
(PC vs Mac desktop price comparison performed by PiperJaffray)
For users who don't need to drop the added $199 for a copy of Windows, the price premium required to purchase a Mac over a PC is less considerable, the analyst indicated.
While PiperJaffray sees Apple's domination in digital music as a critical piece to the its story, it does not believe the iPod is the only growth avenue for the company.
(PC vs Mac notebook price comparison performed by PiperJaffray)
"Indirectly, we expect the iPod to continue to be a foundation for growth in other parts of Apple's business, and we expect that by the end of CY06 more than 85m iPods will have shipped, providing Apple with a greater scope of awareness for various products," the firm said.
PiperJaffray maintains an Outperform rating on shares of Apple with a price target of $99.
That would be pretty hard to do, seeing as they have, what, 7 billion USD in the bank, hard cash?
Easily if they begin drawing down margins.
Quote:
Originally posted by Gene Clean
No, they're not. They lost a lot of their marketshare in the last 5 years, and they continue to struggle within the 2-3% margin.
Sorry, you are incorrect about this. Apple's market share in 2005 was 4%, which was a 32% growth. In fact they we growing faster than their competitors. And I wouldn't say that Apple is "struggling" either. They are quite profitable (even if you exclude the iPod division which gets a lot of the attention these days). (Yes, I know iPod is growing faster than Mac...but it doesn't mean Mac isn't growing at all.)
Quote:
Originally posted by Gene Clean
A lot of people think that $1,099 for a laptop is too high. Some will gladly pay $800, some will even pay $900. But a person that buys a laptop to basically surf the web at home and watch some movies on it will not pay $1099 for it.
This is a highly subjective evaluation. Hard to really argue anything here. Some will. Some won't. You still have to have a firm grasp of things like the price-elasticity-of-demand in these cases in order to make price adjustments that don't bankrupt the company.
Let's say (for sake of argument) the numbers looks something like this:
MacBook:
retail price: $1099
cost: $799
unit profit: $300
unit sales: 1,000,000
Let's say Apple drops the price $100 (which comes straight out of profit). In order to make the same amount of profit, they need to sell 50% more units. The question is whether a $100 price drop will spur sales that much? This is a vitally important question (which Apple is likely always asking themselves) to answer.
Apple's marketshare in 2005 was 4%? Not that I don't believe you, but I remember reading in early 2006 (somewhere around February, IIRC) that it was around 2.28% or so because of sluggish sales due to consumer concerns over the Intel transition.
Do you have any source on the 4% thingy? Gartner and IDC put the OS X marketshare in 2005 at 2,2% and 2,3%, respectively.
Let's say Apple drops the price $100 (which comes straight out of profit). In order to make the same amount of profit, they need to sell 50% more units. The question is whether a $100 price drop will spur sales that much? This is a vitally important question (which Apple is likely always asking themselves) to answer.
This demonstrates that you have missed a key point. No one is saying the current MacBook should be cheaper than it is. It is competitively priced. What people are saying, is that there should be a MacBook with lower specs and a correspondingly lower price. Such a machine would have the same margins as the current MacBook.
Even if such a laptop would just cannibalise more expensive machines, it would not bankrupt Apple, it would just lower their profits.
And yes, we are talking global market share, because that's what matters. Apple's international sales have been truly dismal (apart from the U.K. and select other places in Europe) for the last several years.
Apple's marketshare in 2005 was 4%? Not that I don't believe you, but I remember reading in early 2006 (somewhere around February, IIRC) that it was around 2.28% or so because of sluggish sales due to consumer concerns over the Intel transition.
Do you have any source on the 4% thingy? Gartner and IDC put the OS X marketshare in 2005 at 2,2% and 2,3%, respectively.
Apple is a Fortune 500 company (nothing to sneeze at), who has been at the following positions:
1999: 285
2000: 236
2001: ?
2002: 325
2003: 300
2004: 301
2005: 263
2006: 159
Another (semi-anecdotal) "statistic" that has been mentioned is that something like 1/2 the people that are buying Macs at the Apple stores are not Mac owners.
The bottom line in all of this is that Apple is managing their business well.
This demonstrates that you have missed a key point. No one is saying the current MacBook should be cheaper than it is. It is competitively priced. What people are saying, is that there should be a MacBook with lower specs and a correspondingly lower price. Such a machine would have the same margins as the current MacBook.
OK, lower spec machine. What is the target (retail) price and how do they get there? Keep in mind their will be technical matters such as how well OS X will run (e.g., will a Celeron actually work decently for example?) What is the minimum expected feature set for a computer? Etc.
NOTE: This also makes the profit equation that they must do even more complicated. Certainly this lower cost machine will cannibalize some of the sales of the next higher cost machine. It will also add some new sales that would have otherwise been lost. Second, typically, as you go down the cost curve, the margins go down as well. So this lower cost machine would likely be a lower margin product as well.
Quote:
Originally posted by Mr. H
Even if such a laptop would just cannibalise more expensive machines, it would not bankrupt Apple, it would just lower their profits.
Which would be a bad thing.
P.S. I'd be very curious to see statistics from a place like Dell as to what people actually purchase? In other words, perhaps they are hooked by the $399 "gotcha" price, but as they go through and add/upgrade this feature and the other...what is the actual "out the door" price paid? This would give us a clue into what customers actually want.
$399 in the desktop space and $699 in the laptop space are not the lowest of the low-end. Dell and others offer plenty of models below these price points
Hmmm...I'd like to see some actual examples of "plenty".
Quote:
Originally posted by Mr. H
replace the Core Duo with a Celeron-M 420 (which is pin-compatible with the Core Duo and therefore does not require a motherboard re-design),
OK. No MB re-design.
Quote:
Originally posted by Mr. H
replace the HD with a 40 gig one, take out iSight, Front Row,
OK.
Quote:
Originally posted by Mr. H
Optical audio I/O, replace DVI out with VGA out,
Hmmm...are we into MB re-design territory now?
Quote:
Originally posted by Mr. H
and replace the battery with a smaller one, and you have a $699 laptop with the same margins as the $1099 MacBook.
Do you have cost figures to support this hypothesis?
$399 in the desktop space and $699 in the laptop space are not the lowest of the low-end. Dell and others offer plenty of models below these price points
Hmmm...I'd like to see some actual examples of "plenty".
The Dell Dimension B110 (desktop) starts at $272, the Inspiron B120 (laptop) starts at $499 and the Inspiron B130 starts at $506.
The HP Pavilion a1200 series of desktops start at $204.99, the pavilion ze2000z laptop series starts at $599.99, the compaq presario V2000 laptop range starts at $469.99, the V5000 laptop range starts at $499.99, and the V4000T range starts at $599.99.
At NewEgg.com, there are three Acer desktops below $399, the cheapest of which is $349.99, and nine Acer laptops under $699, the cheapest being $495.99.
Quote:
Originally posted by Chris Cuilla
Hmmm...are we into MB re-design territory now?[in response to my suggestion of removing optical audio I/O and replacing DVI out with VGA out]
In the case of optical Audio I/O, no. You just use different connectors (same physical size, they just don't have the optical bit at the back), and you don't place the chips that do electrical/optical conversion and visa-versa.
On the VGA out front, I wouldn't call it a motherboard re-design, but more of a "tweak". It's certainly nowhere near as drastic as using a CPU with different pin-out or a different chip-set. So, the development cost would be negligible, but it may not be worth the hassle of having two different motherboards.
Quote:
Originally posted by Chris Cuilla
Do you have cost figures to support this hypothesis?
Here goes:
Apple's margins are 27 - 28 %, on average. The iPod margins are closer to 20%. I'm going to assume the margin on the MacBook is 26%.
A retail price $1099 and margin of 26% implies that actual production + shipping cost is $813.26.
From Intel's price list: 1.83 GHz Core Duo is $294, the Celeron-M 420 is $107.
I'm now down to a production cost of $626.26
The HD saves me $30, the iSight and Front Row $25, the battery $20, and the optical I/O $5.
Now I'm down to $546.26
Selling that at $699 would be a margin of 21.85%, so I suppose I didn't quite match my target of "the same margins".
You could sell it at $749 for around 27% margin, though.
Simply put, while the $1299 iMac is cool, only like 10% of the market will even consider that price range.
You may have yourself answered the reasoning behind Apple's strategy. As Jobs' mentioned in the CNBC interview, simply adding another 5% marketshare doubles Apple's to 10%.
Naturally more is even better, but I'd be surprised if Apple would even be ready for this kind of rapid growth. They have enough problems getting supplies of MBP's out fast enough (granted, their getting better).
The Dell Dimension B110 (desktop) starts at $272, the Inspiron B120 (laptop) starts at $499 and the Inspiron B130 starts at $506.
The HP Pavilion a1200 series of desktops start at $204.99, the pavilion ze2000z laptop series starts at $599.99, the compaq presario V2000 laptop range starts at $469.99, the V5000 laptop range starts at $499.99, and the V4000T range starts at $599.99.
At NewEgg.com, there are three Acer desktops below $399, the cheapest of which is $349.99, and nine Acer laptops under $699, the cheapest being $495.99.
In the case of optical Audio I/O, no. You just use different connectors (same physical size, they just don't have the optical bit at the back), and you don't place the chips that do electrical/optical conversion and visa-versa.
On the VGA out front, I wouldn't call it a motherboard re-design, but more of a "tweak". It's certainly nowhere near as drastic as using a CPU with different pin-out or a different chip-set. So, the development cost would be negligible, but it may not be worth the hassle of having two different motherboards.
Here goes:
Apple's margins are 27 - 28 %, on average. The iPod margins are closer to 20%. I'm going to assume the margin on the MacBook is 26%.
A retail price $1099 and margin of 26% implies that actual production + shipping cost is $813.26.
From Intel's price list: 1.83 GHz Core Duo is $294, the Celeron-M 420 is $107.
I'm now down to a production cost of $626.26
The HD saves me $30, the iSight and Front Row $25, the battery $20, and the optical I/O $5.
Now I'm down to $546.26
Selling that at $699 would be a margin of 21.85%, so I suppose I didn't quite match my target of "the same margins".
You could sell it at $749 for around 27% margin, though.
OK. Fair enough.
Couple of points that might diminish some of the price differentials:
- maybe Apple has got a better deal on Core Duos because they are buying so many of the same product (regardless of speed).
- Same might go for HDs...buying skid-fuls of 60GB and 80GB HDs and not carrying/buying a 3rd part.
- I'd say there is no way Apple would not ship with iSight...as this appears to be part of a larger strategy.
One remaining question would be performance of OS X (Intel) on the Celeron.
I have to believe that Apple wants to sell less expensive machines (profitably), but they also want to sell usable machines too.
Couple of points that might diminish some of the price differentials:
- maybe Apple has got a better deal on Core Duos because they are buying so many of the same product (regardless of speed).
- Same might go for HDs...buying skid-fuls of 60GB and 80GB HDs and not carrying/buying a 3rd part.
- I'd say there is no way Apple would not ship with iSight...as this appears to be part of a larger strategy.
One remaining question would be performance of OS X (Intel) on the Celeron.
I have to believe that Apple wants to sell less expensive machines (profitably), but they also want to sell usable machines too.
Still, you've made a fair point.
I don't think Apple could see cheaper computers and still keep their brand identity. If Apple wants to expand into the consumer and business arenas, they need another brand with its own identity.
They just start using the brand Apple less, and Macintosh more. A lot of people know Apple, but not so many know Mac. And a very small number of people that know Apple and may know Mac, know Macintosh.
Simply put, while the $1299 iMac is cool, only like 10% of the market will even consider that price range.
And of those, how many going are to pick the iMac over a higher end full ATX PC? Apple works for the same reason Alienware does, they have a specific market who they cater to exclusively.
They just start using the brand Apple less, and Macintosh more. A lot of people know Apple, but not so many know Mac. And a very small number of people that know Apple and may know Mac, know Macintosh.
They know the Mac, they're interested in the OSX, they just don't want the same type of computers that you guys want.
It's very possible to cater to that market + other markets. That's the way companies that want to outgrow the market they have do it. They don't abandon their original market - they just create a new (for them) market.
It's very possible to cater to that market + other markets. That's the way companies that want to outgrow the market they have do it. They don't abandon their original market - they just create a new (for them) market.
I don't think Apple can. Steve Jobs won't let anything out the door that isn't innovative and flashy. People would rather have something that does what they need to do. 90% want the ATX boxes and Apple proper can't do that without losing what makes them different.
One remaining question would be performance of OS X (Intel) on the Celeron.
The Celeron is nowhere near as castrated a chip as it used to be. The Celeron 4xx series is exactly the same as Core Solo (Yonah), except for these differences:
1.) 1 MB cache instead of 2. (you will note this is still twice the G4's 512 k cache)
2.) 533 MHz front side bus, instead of 667 (still, much higher than the G4's 167)
3.) Marginally less sophisticated power management.
A Celeron 4xx based MacBook would still outperform the G4 iBook that it has replaced.
Comments
Originally posted by AppleInsider
After forming a comparison of Apple Computer's new iMac and MacBook Pro computers against several PCs from Dell and HP, analysts for PiperJaffray found that the average difference in price for comparable components on a desktop is only 13 percent lower for a Windows PC, while for notebooks the price difference is a mere 10 percent.
"We believe both consumers and investors tend to believe that purchasing a Mac will cost 20 percent to 30 percent more than a PC," analyst Gene Munster explained to clients in a research note issued early Tuesday morning.
The analyst also took a look at the cost of an iMac and MacBook Pro running both the Windows and Mac OS operating systems via Apple's Boot Camp software. He found that, on average, an iMac running Boot Camp with both operating systems is 22 percent more expensive than a comparable PC running only Windows. Meanwhile, PC notebooks cost, on average, 16 percent less than a dual operating system MacBook Pro.
However, Munster notes that the cost of running dual operating systems on Apple's new Macs may be negligible for most PC users.
"While many Mac buyers will go out and buy Windows Home Editionfor $199 [in order to run Windows on their Mac], those who have recently purchased a PC, or will be buying a PC in the near term, should be able to take advantage of the fact that PC manufacturers, such as Dell and HP, will provide customers with Windows re-install discs for free or for a $10 fee," he wrote. "We believe this will make the move to a Boot Camp-enabled Mac more feasible for many potential buyers."
(PC vs Mac desktop price comparison performed by PiperJaffray)
For users who don't need to drop the added $199 for a copy of Windows, the price premium required to purchase a Mac over a PC is less considerable, the analyst indicated.
While PiperJaffray sees Apple's domination in digital music as a critical piece to the its story, it does not believe the iPod is the only growth avenue for the company.
(PC vs Mac notebook price comparison performed by PiperJaffray)
"Indirectly, we expect the iPod to continue to be a foundation for growth in other parts of Apple's business, and we expect that by the end of CY06 more than 85m iPods will have shipped, providing Apple with a greater scope of awareness for various products," the firm said.
PiperJaffray maintains an Outperform rating on shares of Apple with a price target of $99.
Originally posted by Gene Clean
That would be pretty hard to do, seeing as they have, what, 7 billion USD in the bank, hard cash?
Easily if they begin drawing down margins.
Originally posted by Gene Clean
No, they're not. They lost a lot of their marketshare in the last 5 years, and they continue to struggle within the 2-3% margin.
Sorry, you are incorrect about this. Apple's market share in 2005 was 4%, which was a 32% growth. In fact they we growing faster than their competitors. And I wouldn't say that Apple is "struggling" either. They are quite profitable (even if you exclude the iPod division which gets a lot of the attention these days). (Yes, I know iPod is growing faster than Mac...but it doesn't mean Mac isn't growing at all.)
Originally posted by Gene Clean
A lot of people think that $1,099 for a laptop is too high. Some will gladly pay $800, some will even pay $900. But a person that buys a laptop to basically surf the web at home and watch some movies on it will not pay $1099 for it.
This is a highly subjective evaluation. Hard to really argue anything here. Some will. Some won't. You still have to have a firm grasp of things like the price-elasticity-of-demand in these cases in order to make price adjustments that don't bankrupt the company.
Let's say (for sake of argument) the numbers looks something like this:
MacBook:
retail price: $1099
cost: $799
unit profit: $300
unit sales: 1,000,000
Let's say Apple drops the price $100 (which comes straight out of profit). In order to make the same amount of profit, they need to sell 50% more units. The question is whether a $100 price drop will spur sales that much? This is a vitally important question (which Apple is likely always asking themselves) to answer.
But in regards to the MacBook, it turns out that Apple is pretty darn competitive on price.
Originally posted by Gene Clean
Yes, and they need to change their image of a boutique shop that sells laptops to rich, spoiled brats and start creating a fresh new image for itself.
Well, that is a marketing issue more than a (strict) pricing issue.
Do you have any source on the 4% thingy? Gartner and IDC put the OS X marketshare in 2005 at 2,2% and 2,3%, respectively.
Originally posted by Chris Cuilla
MacBook:
retail price: $1099
cost: $799
unit profit: $300
unit sales: 1,000,000
Let's say Apple drops the price $100 (which comes straight out of profit). In order to make the same amount of profit, they need to sell 50% more units. The question is whether a $100 price drop will spur sales that much? This is a vitally important question (which Apple is likely always asking themselves) to answer.
This demonstrates that you have missed a key point. No one is saying the current MacBook should be cheaper than it is. It is competitively priced. What people are saying, is that there should be a MacBook with lower specs and a correspondingly lower price. Such a machine would have the same margins as the current MacBook.
Even if such a laptop would just cannibalise more expensive machines, it would not bankrupt Apple, it would just lower their profits.
And yes, we are talking global market share, because that's what matters. Apple's international sales have been truly dismal (apart from the U.K. and select other places in Europe) for the last several years.
Originally posted by Gene Clean
Apple's marketshare in 2005 was 4%? Not that I don't believe you, but I remember reading in early 2006 (somewhere around February, IIRC) that it was around 2.28% or so because of sluggish sales due to consumer concerns over the Intel transition.
Do you have any source on the 4% thingy? Gartner and IDC put the OS X marketshare in 2005 at 2,2% and 2,3%, respectively.
http://www.macdailynews.com/index.ph...comments/8291/
I was looking at (and talking about) U.S. share.
Worldwide is more in the 2.5% range.
Apple is a Fortune 500 company (nothing to sneeze at), who has been at the following positions:
1999: 285
2000: 236
2001: ?
2002: 325
2003: 300
2004: 301
2005: 263
2006: 159
Another (semi-anecdotal) "statistic" that has been mentioned is that something like 1/2 the people that are buying Macs at the Apple stores are not Mac owners.
The bottom line in all of this is that Apple is managing their business well.
Originally posted by Mr. H
This demonstrates that you have missed a key point. No one is saying the current MacBook should be cheaper than it is. It is competitively priced. What people are saying, is that there should be a MacBook with lower specs and a correspondingly lower price. Such a machine would have the same margins as the current MacBook.
OK, lower spec machine. What is the target (retail) price and how do they get there? Keep in mind their will be technical matters such as how well OS X will run (e.g., will a Celeron actually work decently for example?) What is the minimum expected feature set for a computer? Etc.
NOTE: This also makes the profit equation that they must do even more complicated. Certainly this lower cost machine will cannibalize some of the sales of the next higher cost machine. It will also add some new sales that would have otherwise been lost. Second, typically, as you go down the cost curve, the margins go down as well. So this lower cost machine would likely be a lower margin product as well.
Originally posted by Mr. H
Even if such a laptop would just cannibalise more expensive machines, it would not bankrupt Apple, it would just lower their profits.
Which would be a bad thing.
P.S. I'd be very curious to see statistics from a place like Dell as to what people actually purchase? In other words, perhaps they are hooked by the $399 "gotcha" price, but as they go through and add/upgrade this feature and the other...what is the actual "out the door" price paid? This would give us a clue into what customers actually want.
Originally posted by Chris Cuilla
OK, lower spec machine. What is the target (retail) price and how do they get there?
Please refer to my earlier post
Originally posted by Chris Cuilla
Which would be a bad thing.
Sure, that's true. But a key part of business is taking calculated risks.
Originally posted by Mr. H
$399 in the desktop space and $699 in the laptop space are not the lowest of the low-end. Dell and others offer plenty of models below these price points
Hmmm...I'd like to see some actual examples of "plenty".
Originally posted by Mr. H
replace the Core Duo with a Celeron-M 420 (which is pin-compatible with the Core Duo and therefore does not require a motherboard re-design),
OK. No MB re-design.
Originally posted by Mr. H
replace the HD with a 40 gig one, take out iSight, Front Row,
OK.
Originally posted by Mr. H
Optical audio I/O, replace DVI out with VGA out,
Hmmm...are we into MB re-design territory now?
Originally posted by Mr. H
and replace the battery with a smaller one, and you have a $699 laptop with the same margins as the $1099 MacBook.
Do you have cost figures to support this hypothesis?
Originally posted by Chris Cuilla
quote:
Originally posted by Mr. H
$399 in the desktop space and $699 in the laptop space are not the lowest of the low-end. Dell and others offer plenty of models below these price points
Hmmm...I'd like to see some actual examples of "plenty".
The Dell Dimension B110 (desktop) starts at $272, the Inspiron B120 (laptop) starts at $499 and the Inspiron B130 starts at $506.
The HP Pavilion a1200 series of desktops start at $204.99, the pavilion ze2000z laptop series starts at $599.99, the compaq presario V2000 laptop range starts at $469.99, the V5000 laptop range starts at $499.99, and the V4000T range starts at $599.99.
At NewEgg.com, there are three Acer desktops below $399, the cheapest of which is $349.99, and nine Acer laptops under $699, the cheapest being $495.99.
Originally posted by Chris Cuilla
Hmmm...are we into MB re-design territory now? [in response to my suggestion of removing optical audio I/O and replacing DVI out with VGA out]
In the case of optical Audio I/O, no. You just use different connectors (same physical size, they just don't have the optical bit at the back), and you don't place the chips that do electrical/optical conversion and visa-versa.
On the VGA out front, I wouldn't call it a motherboard re-design, but more of a "tweak". It's certainly nowhere near as drastic as using a CPU with different pin-out or a different chip-set. So, the development cost would be negligible, but it may not be worth the hassle of having two different motherboards.
Originally posted by Chris Cuilla
Do you have cost figures to support this hypothesis?
Here goes:
Apple's margins are 27 - 28 %, on average. The iPod margins are closer to 20%. I'm going to assume the margin on the MacBook is 26%.
A retail price $1099 and margin of 26% implies that actual production + shipping cost is $813.26.
From Intel's price list: 1.83 GHz Core Duo is $294, the Celeron-M 420 is $107.
I'm now down to a production cost of $626.26
The HD saves me $30, the iSight and Front Row $25, the battery $20, and the optical I/O $5.
Now I'm down to $546.26
Selling that at $699 would be a margin of 21.85%, so I suppose I didn't quite match my target of "the same margins".
You could sell it at $749 for around 27% margin, though.
Originally posted by spindler
Simply put, while the $1299 iMac is cool, only like 10% of the market will even consider that price range.
You may have yourself answered the reasoning behind Apple's strategy. As Jobs' mentioned in the CNBC interview, simply adding another 5% marketshare doubles Apple's to 10%.
Naturally more is even better, but I'd be surprised if Apple would even be ready for this kind of rapid growth. They have enough problems getting supplies of MBP's out fast enough (granted, their getting better).
Originally posted by Mr. H
The Dell Dimension B110 (desktop) starts at $272, the Inspiron B120 (laptop) starts at $499 and the Inspiron B130 starts at $506.
The HP Pavilion a1200 series of desktops start at $204.99, the pavilion ze2000z laptop series starts at $599.99, the compaq presario V2000 laptop range starts at $469.99, the V5000 laptop range starts at $499.99, and the V4000T range starts at $599.99.
At NewEgg.com, there are three Acer desktops below $399, the cheapest of which is $349.99, and nine Acer laptops under $699, the cheapest being $495.99.
In the case of optical Audio I/O, no. You just use different connectors (same physical size, they just don't have the optical bit at the back), and you don't place the chips that do electrical/optical conversion and visa-versa.
On the VGA out front, I wouldn't call it a motherboard re-design, but more of a "tweak". It's certainly nowhere near as drastic as using a CPU with different pin-out or a different chip-set. So, the development cost would be negligible, but it may not be worth the hassle of having two different motherboards.
Here goes:
Apple's margins are 27 - 28 %, on average. The iPod margins are closer to 20%. I'm going to assume the margin on the MacBook is 26%.
A retail price $1099 and margin of 26% implies that actual production + shipping cost is $813.26.
From Intel's price list: 1.83 GHz Core Duo is $294, the Celeron-M 420 is $107.
I'm now down to a production cost of $626.26
The HD saves me $30, the iSight and Front Row $25, the battery $20, and the optical I/O $5.
Now I'm down to $546.26
Selling that at $699 would be a margin of 21.85%, so I suppose I didn't quite match my target of "the same margins".
You could sell it at $749 for around 27% margin, though.
OK. Fair enough.
Couple of points that might diminish some of the price differentials:
- maybe Apple has got a better deal on Core Duos because they are buying so many of the same product (regardless of speed).
- Same might go for HDs...buying skid-fuls of 60GB and 80GB HDs and not carrying/buying a 3rd part.
- I'd say there is no way Apple would not ship with iSight...as this appears to be part of a larger strategy.
One remaining question would be performance of OS X (Intel) on the Celeron.
I have to believe that Apple wants to sell less expensive machines (profitably), but they also want to sell usable machines too.
Still, you've made a fair point.
Originally posted by Chris Cuilla
OK. Fair enough.
Couple of points that might diminish some of the price differentials:
- maybe Apple has got a better deal on Core Duos because they are buying so many of the same product (regardless of speed).
- Same might go for HDs...buying skid-fuls of 60GB and 80GB HDs and not carrying/buying a 3rd part.
- I'd say there is no way Apple would not ship with iSight...as this appears to be part of a larger strategy.
One remaining question would be performance of OS X (Intel) on the Celeron.
I have to believe that Apple wants to sell less expensive machines (profitably), but they also want to sell usable machines too.
Still, you've made a fair point.
I don't think Apple could see cheaper computers and still keep their brand identity. If Apple wants to expand into the consumer and business arenas, they need another brand with its own identity.
Originally posted by spindler
Simply put, while the $1299 iMac is cool, only like 10% of the market will even consider that price range.
And of those, how many going are to pick the iMac over a higher end full ATX PC? Apple works for the same reason Alienware does, they have a specific market who they cater to exclusively.
Originally posted by Gene Clean
They just start using the brand Apple less, and Macintosh more. A lot of people know Apple, but not so many know Mac. And a very small number of people that know Apple and may know Mac, know Macintosh.
They know the Mac, they're interested in the OSX, they just don't want the same type of computers that you guys want.
Originally posted by Gene Clean
It's very possible to cater to that market + other markets. That's the way companies that want to outgrow the market they have do it. They don't abandon their original market - they just create a new (for them) market.
I don't think Apple can. Steve Jobs won't let anything out the door that isn't innovative and flashy. People would rather have something that does what they need to do. 90% want the ATX boxes and Apple proper can't do that without losing what makes them different.
Originally posted by Chris Cuilla
One remaining question would be performance of OS X (Intel) on the Celeron.
The Celeron is nowhere near as castrated a chip as it used to be. The Celeron 4xx series is exactly the same as Core Solo (Yonah), except for these differences:
1.) 1 MB cache instead of 2. (you will note this is still twice the G4's 512 k cache)
2.) 533 MHz front side bus, instead of 667 (still, much higher than the G4's 167)
3.) Marginally less sophisticated power management.
A Celeron 4xx based MacBook would still outperform the G4 iBook that it has replaced.