It would run OS X, most of games, ProjectBuilder, office apps just fine.</strong><hr></blockquote>
I think costique gets the features of a Low Cost Mac just about right. If Apple can build a $999 iBook, there's no reason they can't drop the LCD and make a $699 Low Cost Mac. To save costs, they could just re-use the iBook MoBo, but use a 3.5" HDD and full-size optical drive to lower costs.
As for licencing a MoBo design, I think Apple would be better off selling the Low Cost Mac in their own lineup. I really think that direct control over both the OS and hardware is essential to the Mac's quality user experience.
I think costique gets the features of a Low Cost Mac just about right. If Apple can build a $999 iBook, there's no reason they can't drop the LCD and make a $699 Low Cost Mac. To save costs, they could just re-use the iBook MoBo, but use a 3.5" HDD and full-size optical drive to lower costs.</strong><hr></blockquote>
That's pretty much precisely the stats for the CRT iMac -> and it is NOT selling at $799 w/monitor. I think they could safely make a $699 version without a monitor... but it wouldn't sell either.
That's pretty much precisely the stats for the CRT iMac -> and it is NOT selling at $799 w/monitor. I think they could safely make a $699 version without a monitor... but it wouldn't sell either.
</strong><hr></blockquote>
I agree. Maybe $599 at the most. It should not have much in the way of performance and features, since this market doesn't need it, and having it would hurt sales of better Macs. A low cost Mac like this may hurt sales of used Macs by the way.
Those who do not need the performance and features of present Macs have three choices -- pay the price anyway, buy a use Mac or buy a Windows PC. Unfortunately, many or most are choosing to dump the Mac and get a PC. For schools, a used Mac is simply not an option, and others simply hesitate buying a used computer.
What do people think the minimum spec for a Mac OS X capable machine should be?
</strong><hr></blockquote>
I know this is a much discussed topic -- what should a low cost Mac be? I'm going to put it in a little lower category than most who respond to such a question. Schools, general business offices and those I personally know who have switched to the PC, none of these need much in the way of performance and features. Trade-offs can be made in favor of lower manufacturing cost.
For performance, a very inexpensive G3, a lower speed system bus, video chips installed on the motherboard and no AGP slot would be adequate in these low-end markets, and would keep costs down. For features, it should have three PCI slots, for two reasons.
First, several features might be eliminated from the basic product, such as the modem, FireWire ports and Ethernet. Eliminating these keeps the base price lower, and most applications do not require all three, and sometimes none at all. Users can add just what they need very cheaply. Apple could offer an I/O card that has all of these ports, for those who want all the standard Mac I/O.
The second reason for PCI slots is to expand the market for a low cost Mac. There are many industrial, commercial, educational and personal applications that need PCI slots for specialty cards, to make measurements and control equipment. Usually, computing needs are minimal, and the cheapest Windows PC available is usually purchased to do the job. There is no Mac that can compete here. Yet a very low cost Mac as described above could compete very well. The Mac would have a big advantage, worth a slightly higher price than the PC. OS X offers better stability, and for many applications this feature would be a big plus.
I know this is a much discussed topic -- what should a low cost Mac be? I'm going to put it in a little lower category than most who respond to such a question. Schools, general business offices and those I personally know who have switched to the PC, none of these need much in the way of performance and features. Trade-offs can be made in favor of lower manufacturing cost.
For performance, a very inexpensive G3, a lower speed system bus, video chips installed on the motherboard and no AGP slot would be adequate in these low-end markets, and would keep costs down. For features, it should have three PCI slots, for two reasons.
First, several features might be eliminated from the basic product, such as the modem, FireWire ports and Ethernet. Eliminating these keeps the base price lower, and most applications do not require all three, and sometimes none at all. Users can add just what they need very cheaply. Apple could offer an I/O card that has all of these ports, for those who want all the standard Mac I/O.
The second reason for PCI slots is to expand the market for a low cost Mac. There are many industrial, commercial, educational and personal applications that need PCI slots for specialty cards, to make measurements and control equipment. Usually, computing needs are minimal, and the cheapest Windows PC available is usually purchased to do the job. There is no Mac that can compete here. Yet a very low cost Mac as described above could compete very well. The Mac would have a big advantage, worth a slightly higher price than the PC. OS X offers better stability, and for many applications this feature would be a big plus.</strong><hr></blockquote>
Are you kidding me? You're discussing a business PC and have it not include network by default?
Apple has and will continue to do the opposite. NO or just one PCI slot, include an AGP (a feature that can fluctuate) slot, and include firewire, ethernet. Modem is something we can do with out but they have a dedicated modem slot for that and can continue to be an option. Look at the cube feature set for an idea of what a business computer needs. Just chop off several hundred dollars.
This is off topic people. A kit computer, as a way to achieve a low-cost Mac for a target market, has a future.
A G3 tower doesn't. Macs sell not because of direct price comparison, but because you can do so much more with them. A G3 isn't good enough in a new Mac.
Well, a G4 Logic Board (Gigabit Ethernet, AGP) on eBay is about 130 to 150 Bucks. And they are 199 At <a href="http://www.MacResQ.com."; target="_blank">www.MacResQ.com.</a> You can get a 800Mhz G4 Processor From Giga Designs - <a href="http://www.gigadesigns.com/"; target="_blank">http://www.gigadesigns.com/</a>; for $299. And Ive Seen Power Supplies on eBay from anywhere to 20 bucks to 70. Now that is about under 500 bucks if you buy smart. Thats the board, powersupply, and cpu. Everything else you can pick up for about another 200. And If you are a computer geek like I am you have crap laying around that you could use. Like Ram, Case, and CD. So You could make your self a Nice 800Mhz G4 for about 550 - 600 Bucks. Just something to think about.
Are you kidding me? You're discussing a business PC and have it not include network by default? . .
</strong><hr></blockquote>
It is not just a business computer, and a lot of potential markets don't need a network card. If business buys them, it can be with a network card installed, either GHz or just 10/100. You are likely correct that Apple will never do it, unfortunately.
. . . Macs sell not because of direct price comparison, but because you can do so much more with them. A G3 isn't good enough in a new Mac.
</strong><hr></blockquote>
True, the Macs today do not sell because of direct price comparison. They cost more. People who buy them may do so because they can do more with them. Again true. But there are a lot of long time Mac customers who simply don't want to do so much more. The Mac has outrun them in what it can do, so they buy a cheap PC today. Need I mention schools? There are many more such examples. Apple can be thankful they are picking up Windows users who want to do all that a Mac does.
So it is just a question whether Apple should ignore the simple needs and concentrate on being insanely great? Doing so limits their market, and keeps them from providing a total Mac solution anywhere. The graphics departments will forever be fighting to keep their Macs, because the rest of the enterprise uses Windows PCs. School labs will fight to get Macs for video or graphics, but will probably lose because all classrooms use Windows PCs. Apple simply must serve the humble needs to do well. Otherwise, they will remain an inventive company with a tiny market share.
<strong>A low cost Mac like this may hurt sales of used Macs by the way.</strong><hr></blockquote>
That is probably true. But Apple makes money by selling new Macs. Used Mac sales don't contribute (directly) to Apple's bottom line, except maybe with sales of a new OS. Therefore, any way for Apple to sell more new Macs is a good thing.
That is probably true. But Apple makes money by selling new Macs.</strong><hr></blockquote>
I'd like to know how many are financed in part by the sale of used Macs. (Paging murbot!). After all, the high resale value that Macs have probably encourages upgrading - you can get a good start on the price of a new Mac by selling your old one.
One reason Apple will never offer a crippled, cut-rate entry Mac is the reaction it would create among non-Macophiles who try it. Any Mac on sale today will give you a good computing experience, from the lowest-end eMac and iBook to the dual G4s. If you then sell a bundle of cut-rate lcMacs which have shared video, 64MB RAM, no ethernet (?!), no firewire, etc, for $599, plenty of folks will buy them, hate them, and then never buy a Mac again because "Macs suck". I mean, shared video on a Mac? Are you serious? Can you imagine what OSX/Aqua would be like? And that would be the lasting impression on anyone who used it - they'd never even try a "real" Mac, and would be converted from reasonably-open-minded folk to Mac-haters.
As an aside, my neighbors had a similarly transient Mac experience as the ones mentioned by Snoopy. They too had a Performa 63xx. Coincidence? Build a computer that's as crippled as a low-end PC, and you get the same loyalty as buyers of any other low-end PC. Apple has done a tremendous job the last few years rebuilding itself into a marquee brand. Second-best move ever, after basing OSX on BSD. Which major computer maker has seen consistent profits this past year? Apple. Which major car-maker has seen consistent profits this past year? Porsche.
<strong>One reason Apple will never offer a crippled, cut-rate entry Mac is the reaction it would create among non-Macophiles who try it. Any Mac on sale today will give you a good computing experience, from the lowest-end eMac and iBook to the dual G4s. If you then sell a bundle of cut-rate lcMacs which have shared video, 64MB RAM, no ethernet (?!), no firewire, etc, for $599, plenty of folks will buy them, hate them, and then never buy a Mac again because "Macs suck". I mean, shared video on a Mac? Are you serious? Can you imagine what OSX/Aqua would be like? And that would be the lasting impression on anyone who used it - they'd never even try a "real" Mac, and would be converted from reasonably-open-minded folk to Mac-haters.
As an aside, my neighbors had a similarly transient Mac experience as the ones mentioned by Snoopy. They too had a Performa 63xx. Coincidence? Build a computer that's as crippled as a low-end PC, and you get the same loyalty as buyers of any other low-end PC. Apple has done a tremendous job the last few years rebuilding itself into a marquee brand. Second-best move ever, after basing OSX on BSD. Which major computer maker has seen consistent profits this past year? Apple. Which major car-maker has seen consistent profits this past year? Porsche.</strong><hr></blockquote>
Okay first off... look at the nForce and nForce2 motherboards. Prices come in around $150 or so. All the expandability in the world, and they have Firewire, Ethernet, Modem, 5.1 digital sound w/ EAX, as good of quality graphics as the current imacs (but also with AGP on board for those that want to upgrade), Honestly, cutting ethernet, modem, firewire, usb, etc, would be a real mistake. And they support DDR Ram! All these features barely cost a thing when the motherboard is designed properly. Besides we want people to be using ethernet with broadband so they will use Quicktime more often. We want users to have the ability to buy an iPod and have it work on their Mac. We want users to be able to buy external Firewire harddrives and Zip drives if need be. Limiting those features would create Mac Haters and for like $15 more, why would Apple do that?
Then its just a matter of throwing a 30 GB hard drive on there ($50 bucks tops wholesale), a DVD Drive ($40 tops wholesale) and/or a CD-RW Drive ($45 tops wholesale. don't believe me? check shopper.com). Ram - $30... And Lastly our processor & case (I have no idea what those cost, but I hope they're close to the costs of PC parts). Let's say a 1 GHz G3 GOBI costs $100 and the case + power supply and fans costs $100. Now we're at like $480. Apple charges $30 for the OS (consider the small profit on the OS as a marketing cost because as market share goes up, word of mouth advertising and free PR increases as well).
Gross margin will at 17.5% when Apple sells it for $500 and everyone should be happy. After all the added volume of the machine to edu and business should easily great operating profits (as opposed to Apple's current Net Interest Income ONLY profits, in other words TOWEL, Apple is NOT profitable... it does not invest in positive NPV investments, and it is destroying shareholder wealth but it shows a little black ink from all of its cash it has in marketable securities). Considering also as volume and profits go up Apple's fixed costs as well as some variable costs are reduced therefore yielding a higher Net Profit Margin. The only real profit margin that counts in the end.
This is cheap for Apple. Not to mention it saves them from losing potential switchers and upgraders that just need their computer for Safari, Office, Mail, and iChat/AIM. Most likely these users will never need iMovie, iPhoto or iDVD at least for a couple more years. Remember, in order to use these progams they also need to be at home (not work or school) and have other expensive gadgets in order to work with them. Those who can afford all the other gadgets and use iLife will still buy higher end Macs; even if someone does buy one of these gadgets, a processor like the GOBI could easily handle at least iPhoto and still work okay with iMovie.
To add to your Porsche analogy: a Porsche (substitute PowerMac) is great when you have the ability to exploit its performance and features, but when just need a car (computer) to drive the kids a couple blocks to school (check email, iChat), drive a few miles to work (go on the Internet), and get groceries (use Office & iTunes), why pay for a Porsche when you can buy a Dodge Stratus(substitute Dell/Windows) for 1/3 the price?
Apple needs a "Stratus" desktop so one day, when the user feels their able to exploit a more powerful feature rich computer, Apple can sell them on their "Viper" (PowerMacs).
First, several features might be eliminated from the basic product, such as the modem, FireWire ports and Ethernet. Eliminating these keeps the base price lower, and most applications do not require all three, and sometimes none at all. Users can add just what they need very cheaply. Apple could offer an I/O card that has all of these ports, for those who want all the standard Mac I/O.
</strong><hr></blockquote>
Due to the high integration levels of the Apple chipsets there isn't much point in taking these features out. Its not worth designing a new chipset for a low cost machine, it is better to use an existing design and avoid additional R&D costs. Using older/slower buses and memory doesn't make sense either because memory prices are low due to volume and older types of memory get expensive as the bulk of the PC market marches on. Even processor speeds stay relatively current because that is what is being manufactured in volume already -- they'll be the slowest of the available processors, but (for example) a 500 MHz G4 isn't likely to be any cheaper than an 800 MHz G4 (they're probably the same chip with a different clock chip). The same applies to graphics chips... it doesn't make sense to go much lower end than the current low end (and with Aqua the experience is quite poor).
Market positioning, component quality, and margins are the main reasons for Apple's prices. To build a low end machine they need to differentiate it from their existing lineup, it cannot replace their existing lineup because there is no money to be made on low end hardware, and like the eMac problems are likely to crop up with the build quality. When Apple has more processor choices & speeds available to it, then having a low cost machine will be an option. Whether they try and sell such a thing depends on whether they feel that such a low margin product is worth the risks.
If you then sell a bundle of cut-rate lcMacs which have shared video, 64MB RAM, no ethernet (?!), no firewire, etc, for $599, plenty of folks will buy them, hate them, and then never buy a Mac again because "Macs suck". I mean, shared video on a Mac? Are you serious? . . .
</strong><hr></blockquote>
Maybe I didn't use the correct technical terms, but let me explain what I meant about video. I have a Beige G3 and it has what I called on-board video. It is on the motherboard and has its own 6 MB or video RAM. I have no AGP slot, so the best upgrade I can make is a PCI video card. The graphics on even a low cost Mac should be very good for typical light duty work in a business office, school class rooms and homes that don't play action games or do other such demanding graphics applications. So the graphics system must meet a minimum standard, and certainly should be much better than my Beige G3.
The biggest challenge in building a low cost Mac would be to make it plenty good, yet keep it from taking too many sales from the higher end Macs. Without an AGP slot, a low cost Mac could not be upgraded with the best video cards. It is one step toward the goal of keeping sales of a low cost Mac confined to the intended markets.
Due to the high integration levels of the Apple chipsets there isn't much point in taking these features out. Its not worth designing a new chipset for a low cost machine, it is better to use an existing design and avoid additional R&D costs. Using older/slower buses and memory doesn't make sense either because memory prices are low due to volume and older types of memory get expensive as the bulk of the PC market marches on.
</strong><hr></blockquote>
Good reply. I appreciate the technical insight. As you say, it make no sense to leave out features if it does not cut manufacturing cost, and may raise it in fact. I didn't have the facts, and I was wrong.
Regarding the bus, my intent in saying slower bus was to keep bus speed down to cheapest PC bus speed, where memory prices are the lowest. We mean the same thing, but I should have used different words. Now that I think about it, I was likely incorrect in assuming that the 'cheapest' bus speed is slower than the bus in some present Macs.
I intended the same approach for processors and video chips. The performance should go down to the minimum cost point, but no lower. If the minimum cost component cannot give a good user experience in the very low end market, than it should be a little better, even at a slightly higher price. I think that situation is unlikely however.
[quote]<strong>
Market positioning, component quality, and margins are the main reasons for Apple's prices. To build a low end machine they need to differentiate it from their existing lineup, it cannot replace their existing lineup because there is no money to be made on low end hardware, and like the eMac problems are likely to crop up with the build quality.
</strong><hr></blockquote>
That indeed is the challenge -- to build a low cost Mac that would not take too many sales from the higher end Macs. I believe the risks of building it are fewer than the risks of ignoring the market.
"ATTENTION BUYERS: The MacPC is intended to give a good user experience for general office applications, most school classroom use, the internet and email. The MacPC is not intended for a Digital Hub lifestyle, and does not meet those performance standards buyers have come to expect from Macintosh. MacPC performance is more than adequate for the stated uses. The MacPC also makes an excellent choice for young children."
If Apple ever does address the low end market, I wonder whether Steve and company would have the guts to call it a MacPC? Such a name might be considered a supreme insult to the 'other' platform. I wonder whether it might raise some legal issues too. In any case, a low end Mac would need some kind of name to distinguish it from the rest of the product line.
A notice, such as the one above, would need to be on every box, on the Apple web site and on any promotional material. So many concerns were raised about people's expectations for a Mac, and I realize they are right. A clear distinction must be made.
[quote]look at the nForce and nForce2 motherboards<hr></blockquote>
I hate to be Captain Obvious, but these aren't PPC motherboards. You seem to think that Apple can buy a bunch of budget off-the-shelf PC equipment, slap the MacOS on it, and make a low-cost Mac. Sure, a CD-RW is a CD-RW, but as Programmer pointed out, Apple has its own customized chipsets, and these are presumably not cheap to design and don't enjoy the massive economies of scale nVidia's chipsets do. Granted, that's a bit of a chicken-and-egg argument, but if you're going to have a major loss-leading product in order to acquire those economies of scale, you need a cash cow to support it. nVidia had graphics cards, Microsoft had DOS/Windows and now Office, Apple has...computers. They also have a huge software division to support that makes next-to-no money, and can't rely on investment income to cover ALL their expenses. If you aren't willing to massively skmip on features (and we all seem agreed on this), then Apple cannot make its computers much cheaper without their becoming X-boxes, and Apple can't afford to support an X-box.
As for the Porsche anaology, you don't "need" a Porsche for anything. A Yugo will get you to the grocery store and (usually) back. But having the Porsche will make you a lot happier doing it. Premium brand that guarantees a better experience. Take away that "aura" and you're just another nameplate. Apple shouldn't repeat the mistakes that almost got it killed.
Comments
2) Users want customizability.
3) Macs need to "just work".
4) Apple and resellers need good margins.
A kit with a G4 and Main Logic Board, power supply, graphics card, RAM and Mac OS X for $999 would satisfy all those requirements.
1) It's in kit form.
2) Add RAM and PCI cards, choose the drives and case you want.
3) Most Power Macs have upgraded RAM, PCI cards and drives, so it's relativly standard.
4) It's $999, the same as an eMac (which most of the geek market buys currently).
It would attract the "Mac OS X is beautiful but I want to build a computer, not buy one" crowd.
If you want a beautiful Power Mac G4 for $999, IT AIN'T GONNA HAPPEN just because you put it together yourself.
Barto
<strong>Based on my long OS X experience, I'd say that a sufficiently powered consumer Mac is:
G3 @ 600 MHz, minimum 256 MB RAM, CD-RW, 40GB HB @ 7200 RPM, GeForce 4 w/32 MB, Ethernet, FW, 2 USB ports, keyboard, 2-button mouse.
It would run OS X, most of games, ProjectBuilder, office apps just fine.</strong><hr></blockquote>
I think costique gets the features of a Low Cost Mac just about right. If Apple can build a $999 iBook, there's no reason they can't drop the LCD and make a $699 Low Cost Mac. To save costs, they could just re-use the iBook MoBo, but use a 3.5" HDD and full-size optical drive to lower costs.
As for licencing a MoBo design, I think Apple would be better off selling the Low Cost Mac in their own lineup. I really think that direct control over both the OS and hardware is essential to the Mac's quality user experience.
Escher
[ 01-22-2003: Message edited by: Escher ]</p>
<strong>
I think costique gets the features of a Low Cost Mac just about right. If Apple can build a $999 iBook, there's no reason they can't drop the LCD and make a $699 Low Cost Mac. To save costs, they could just re-use the iBook MoBo, but use a 3.5" HDD and full-size optical drive to lower costs.</strong><hr></blockquote>
That's pretty much precisely the stats for the CRT iMac -> and it is NOT selling at $799 w/monitor. I think they could safely make a $699 version without a monitor... but it wouldn't sell either.
<strong>
That's pretty much precisely the stats for the CRT iMac -> and it is NOT selling at $799 w/monitor. I think they could safely make a $699 version without a monitor... but it wouldn't sell either.
</strong><hr></blockquote>
I agree. Maybe $599 at the most. It should not have much in the way of performance and features, since this market doesn't need it, and having it would hurt sales of better Macs. A low cost Mac like this may hurt sales of used Macs by the way.
Those who do not need the performance and features of present Macs have three choices -- pay the price anyway, buy a use Mac or buy a Windows PC. Unfortunately, many or most are choosing to dump the Mac and get a PC. For schools, a used Mac is simply not an option, and others simply hesitate buying a used computer.
<strong>
What do people think the minimum spec for a Mac OS X capable machine should be?
</strong><hr></blockquote>
I know this is a much discussed topic -- what should a low cost Mac be? I'm going to put it in a little lower category than most who respond to such a question. Schools, general business offices and those I personally know who have switched to the PC, none of these need much in the way of performance and features. Trade-offs can be made in favor of lower manufacturing cost.
For performance, a very inexpensive G3, a lower speed system bus, video chips installed on the motherboard and no AGP slot would be adequate in these low-end markets, and would keep costs down. For features, it should have three PCI slots, for two reasons.
First, several features might be eliminated from the basic product, such as the modem, FireWire ports and Ethernet. Eliminating these keeps the base price lower, and most applications do not require all three, and sometimes none at all. Users can add just what they need very cheaply. Apple could offer an I/O card that has all of these ports, for those who want all the standard Mac I/O.
The second reason for PCI slots is to expand the market for a low cost Mac. There are many industrial, commercial, educational and personal applications that need PCI slots for specialty cards, to make measurements and control equipment. Usually, computing needs are minimal, and the cheapest Windows PC available is usually purchased to do the job. There is no Mac that can compete here. Yet a very low cost Mac as described above could compete very well. The Mac would have a big advantage, worth a slightly higher price than the PC. OS X offers better stability, and for many applications this feature would be a big plus.
<strong>
I know this is a much discussed topic -- what should a low cost Mac be? I'm going to put it in a little lower category than most who respond to such a question. Schools, general business offices and those I personally know who have switched to the PC, none of these need much in the way of performance and features. Trade-offs can be made in favor of lower manufacturing cost.
For performance, a very inexpensive G3, a lower speed system bus, video chips installed on the motherboard and no AGP slot would be adequate in these low-end markets, and would keep costs down. For features, it should have three PCI slots, for two reasons.
First, several features might be eliminated from the basic product, such as the modem, FireWire ports and Ethernet. Eliminating these keeps the base price lower, and most applications do not require all three, and sometimes none at all. Users can add just what they need very cheaply. Apple could offer an I/O card that has all of these ports, for those who want all the standard Mac I/O.
The second reason for PCI slots is to expand the market for a low cost Mac. There are many industrial, commercial, educational and personal applications that need PCI slots for specialty cards, to make measurements and control equipment. Usually, computing needs are minimal, and the cheapest Windows PC available is usually purchased to do the job. There is no Mac that can compete here. Yet a very low cost Mac as described above could compete very well. The Mac would have a big advantage, worth a slightly higher price than the PC. OS X offers better stability, and for many applications this feature would be a big plus.</strong><hr></blockquote>
Are you kidding me? You're discussing a business PC and have it not include network by default?
Apple has and will continue to do the opposite. NO or just one PCI slot, include an AGP (a feature that can fluctuate) slot, and include firewire, ethernet. Modem is something we can do with out but they have a dedicated modem slot for that and can continue to be an option. Look at the cube feature set for an idea of what a business computer needs. Just chop off several hundred dollars.
A G3 tower doesn't. Macs sell not because of direct price comparison, but because you can do so much more with them. A G3 isn't good enough in a new Mac.
Barto
<strong>
Are you kidding me? You're discussing a business PC and have it not include network by default? . .
</strong><hr></blockquote>
It is not just a business computer, and a lot of potential markets don't need a network card. If business buys them, it can be with a network card installed, either GHz or just 10/100. You are likely correct that Apple will never do it, unfortunately.
<strong>
. . . Macs sell not because of direct price comparison, but because you can do so much more with them. A G3 isn't good enough in a new Mac.
</strong><hr></blockquote>
True, the Macs today do not sell because of direct price comparison. They cost more. People who buy them may do so because they can do more with them. Again true. But there are a lot of long time Mac customers who simply don't want to do so much more. The Mac has outrun them in what it can do, so they buy a cheap PC today. Need I mention schools? There are many more such examples. Apple can be thankful they are picking up Windows users who want to do all that a Mac does.
So it is just a question whether Apple should ignore the simple needs and concentrate on being insanely great? Doing so limits their market, and keeps them from providing a total Mac solution anywhere. The graphics departments will forever be fighting to keep their Macs, because the rest of the enterprise uses Windows PCs. School labs will fight to get Macs for video or graphics, but will probably lose because all classrooms use Windows PCs. Apple simply must serve the humble needs to do well. Otherwise, they will remain an inventive company with a tiny market share.
<strong>A low cost Mac like this may hurt sales of used Macs by the way.</strong><hr></blockquote>
That is probably true. But Apple makes money by selling new Macs. Used Mac sales don't contribute (directly) to Apple's bottom line, except maybe with sales of a new OS. Therefore, any way for Apple to sell more new Macs is a good thing.
Escher
<strong>
That is probably true. But Apple makes money by selling new Macs.</strong><hr></blockquote>
I'd like to know how many are financed in part by the sale of used Macs. (Paging murbot!). After all, the high resale value that Macs have probably encourages upgrading - you can get a good start on the price of a new Mac by selling your old one.
As an aside, my neighbors had a similarly transient Mac experience as the ones mentioned by Snoopy. They too had a Performa 63xx. Coincidence? Build a computer that's as crippled as a low-end PC, and you get the same loyalty as buyers of any other low-end PC. Apple has done a tremendous job the last few years rebuilding itself into a marquee brand. Second-best move ever, after basing OSX on BSD. Which major computer maker has seen consistent profits this past year? Apple. Which major car-maker has seen consistent profits this past year? Porsche.
<strong>One reason Apple will never offer a crippled, cut-rate entry Mac is the reaction it would create among non-Macophiles who try it. Any Mac on sale today will give you a good computing experience, from the lowest-end eMac and iBook to the dual G4s. If you then sell a bundle of cut-rate lcMacs which have shared video, 64MB RAM, no ethernet (?!), no firewire, etc, for $599, plenty of folks will buy them, hate them, and then never buy a Mac again because "Macs suck". I mean, shared video on a Mac? Are you serious? Can you imagine what OSX/Aqua would be like? And that would be the lasting impression on anyone who used it - they'd never even try a "real" Mac, and would be converted from reasonably-open-minded folk to Mac-haters.
As an aside, my neighbors had a similarly transient Mac experience as the ones mentioned by Snoopy. They too had a Performa 63xx. Coincidence? Build a computer that's as crippled as a low-end PC, and you get the same loyalty as buyers of any other low-end PC. Apple has done a tremendous job the last few years rebuilding itself into a marquee brand. Second-best move ever, after basing OSX on BSD. Which major computer maker has seen consistent profits this past year? Apple. Which major car-maker has seen consistent profits this past year? Porsche.</strong><hr></blockquote>
Okay first off... look at the nForce and nForce2 motherboards. Prices come in around $150 or so. All the expandability in the world, and they have Firewire, Ethernet, Modem, 5.1 digital sound w/ EAX, as good of quality graphics as the current imacs (but also with AGP on board for those that want to upgrade), Honestly, cutting ethernet, modem, firewire, usb, etc, would be a real mistake. And they support DDR Ram! All these features barely cost a thing when the motherboard is designed properly. Besides we want people to be using ethernet with broadband so they will use Quicktime more often. We want users to have the ability to buy an iPod and have it work on their Mac. We want users to be able to buy external Firewire harddrives and Zip drives if need be. Limiting those features would create Mac Haters and for like $15 more, why would Apple do that?
Then its just a matter of throwing a 30 GB hard drive on there ($50 bucks tops wholesale), a DVD Drive ($40 tops wholesale) and/or a CD-RW Drive ($45 tops wholesale. don't believe me? check shopper.com). Ram - $30... And Lastly our processor & case (I have no idea what those cost, but I hope they're close to the costs of PC parts). Let's say a 1 GHz G3 GOBI costs $100 and the case + power supply and fans costs $100. Now we're at like $480. Apple charges $30 for the OS (consider the small profit on the OS as a marketing cost because as market share goes up, word of mouth advertising and free PR increases as well).
Gross margin will at 17.5% when Apple sells it for $500 and everyone should be happy.
This is cheap for Apple. Not to mention it saves them from losing potential switchers and upgraders that just need their computer for Safari, Office, Mail, and iChat/AIM. Most likely these users will never need iMovie, iPhoto or iDVD at least for a couple more years. Remember, in order to use these progams they also need to be at home (not work or school) and have other expensive gadgets in order to work with them. Those who can afford all the other gadgets and use iLife will still buy higher end Macs; even if someone does buy one of these gadgets, a processor like the GOBI could easily handle at least iPhoto and still work okay with iMovie.
To add to your Porsche analogy: a Porsche (substitute PowerMac) is great when you have the ability to exploit its performance and features, but when just need a car (computer) to drive the kids a couple blocks to school (check email, iChat), drive a few miles to work (go on the Internet), and get groceries (use Office & iTunes), why pay for a Porsche when you can buy a Dodge Stratus(substitute Dell/Windows) for 1/3 the price?
Apple needs a "Stratus" desktop so one day, when the user feels their able to exploit a more powerful feature rich computer, Apple can sell them on their "Viper" (PowerMacs).
[ 01-25-2003: Message edited by: long AAPL ]</p>
<strong>
First, several features might be eliminated from the basic product, such as the modem, FireWire ports and Ethernet. Eliminating these keeps the base price lower, and most applications do not require all three, and sometimes none at all. Users can add just what they need very cheaply. Apple could offer an I/O card that has all of these ports, for those who want all the standard Mac I/O.
</strong><hr></blockquote>
Due to the high integration levels of the Apple chipsets there isn't much point in taking these features out. Its not worth designing a new chipset for a low cost machine, it is better to use an existing design and avoid additional R&D costs. Using older/slower buses and memory doesn't make sense either because memory prices are low due to volume and older types of memory get expensive as the bulk of the PC market marches on. Even processor speeds stay relatively current because that is what is being manufactured in volume already -- they'll be the slowest of the available processors, but (for example) a 500 MHz G4 isn't likely to be any cheaper than an 800 MHz G4 (they're probably the same chip with a different clock chip). The same applies to graphics chips... it doesn't make sense to go much lower end than the current low end (and with Aqua the experience is quite poor).
Market positioning, component quality, and margins are the main reasons for Apple's prices. To build a low end machine they need to differentiate it from their existing lineup, it cannot replace their existing lineup because there is no money to be made on low end hardware, and like the eMac problems are likely to crop up with the build quality. When Apple has more processor choices & speeds available to it, then having a low cost machine will be an option. Whether they try and sell such a thing depends on whether they feel that such a low margin product is worth the risks.
<strong>
If you then sell a bundle of cut-rate lcMacs which have shared video, 64MB RAM, no ethernet (?!), no firewire, etc, for $599, plenty of folks will buy them, hate them, and then never buy a Mac again because "Macs suck". I mean, shared video on a Mac? Are you serious? . . .
</strong><hr></blockquote>
Maybe I didn't use the correct technical terms, but let me explain what I meant about video. I have a Beige G3 and it has what I called on-board video. It is on the motherboard and has its own 6 MB or video RAM. I have no AGP slot, so the best upgrade I can make is a PCI video card. The graphics on even a low cost Mac should be very good for typical light duty work in a business office, school class rooms and homes that don't play action games or do other such demanding graphics applications. So the graphics system must meet a minimum standard, and certainly should be much better than my Beige G3.
The biggest challenge in building a low cost Mac would be to make it plenty good, yet keep it from taking too many sales from the higher end Macs. Without an AGP slot, a low cost Mac could not be upgraded with the best video cards. It is one step toward the goal of keeping sales of a low cost Mac confined to the intended markets.
<strong>
Due to the high integration levels of the Apple chipsets there isn't much point in taking these features out. Its not worth designing a new chipset for a low cost machine, it is better to use an existing design and avoid additional R&D costs. Using older/slower buses and memory doesn't make sense either because memory prices are low due to volume and older types of memory get expensive as the bulk of the PC market marches on.
</strong><hr></blockquote>
Good reply. I appreciate the technical insight. As you say, it make no sense to leave out features if it does not cut manufacturing cost, and may raise it in fact. I didn't have the facts, and I was wrong.
Regarding the bus, my intent in saying slower bus was to keep bus speed down to cheapest PC bus speed, where memory prices are the lowest. We mean the same thing, but I should have used different words. Now that I think about it, I was likely incorrect in assuming that the 'cheapest' bus speed is slower than the bus in some present Macs.
I intended the same approach for processors and video chips. The performance should go down to the minimum cost point, but no lower. If the minimum cost component cannot give a good user experience in the very low end market, than it should be a little better, even at a slightly higher price. I think that situation is unlikely however.
[quote]<strong>
Market positioning, component quality, and margins are the main reasons for Apple's prices. To build a low end machine they need to differentiate it from their existing lineup, it cannot replace their existing lineup because there is no money to be made on low end hardware, and like the eMac problems are likely to crop up with the build quality.
</strong><hr></blockquote>
That indeed is the challenge -- to build a low cost Mac that would not take too many sales from the higher end Macs. I believe the risks of building it are fewer than the risks of ignoring the market.
If Apple ever does address the low end market, I wonder whether Steve and company would have the guts to call it a MacPC? Such a name might be considered a supreme insult to the 'other' platform. I wonder whether it might raise some legal issues too. In any case, a low end Mac would need some kind of name to distinguish it from the rest of the product line.
A notice, such as the one above, would need to be on every box, on the Apple web site and on any promotional material. So many concerns were raised about people's expectations for a Mac, and I realize they are right. A clear distinction must be made.
[ 01-25-2003: Message edited by: snoopy ]</p>
[quote]look at the nForce and nForce2 motherboards<hr></blockquote>
I hate to be Captain Obvious, but these aren't PPC motherboards. You seem to think that Apple can buy a bunch of budget off-the-shelf PC equipment, slap the MacOS on it, and make a low-cost Mac. Sure, a CD-RW is a CD-RW, but as Programmer pointed out, Apple has its own customized chipsets, and these are presumably not cheap to design and don't enjoy the massive economies of scale nVidia's chipsets do. Granted, that's a bit of a chicken-and-egg argument, but if you're going to have a major loss-leading product in order to acquire those economies of scale, you need a cash cow to support it. nVidia had graphics cards, Microsoft had DOS/Windows and now Office, Apple has...computers. They also have a huge software division to support that makes next-to-no money, and can't rely on investment income to cover ALL their expenses. If you aren't willing to massively skmip on features (and we all seem agreed on this), then Apple cannot make its computers much cheaper without their becoming X-boxes, and Apple can't afford to support an X-box.
As for the Porsche anaology, you don't "need" a Porsche for anything. A Yugo will get you to the grocery store and (usually) back. But having the Porsche will make you a lot happier doing it. Premium brand that guarantees a better experience. Take away that "aura" and you're just another nameplate. Apple shouldn't repeat the mistakes that almost got it killed.