“Current speculation among the Mac-obsessed is that Apple Computer will unveil a new, inexpensive Macintosh computer for $499 at its annual trade show. The new computer, described as a compact box as slender as 1.73 inches high, would ship without a monitor, according to the buzz,” Dawn C. Chmielewski reports for The Mercury News.
“By Thursday, Piper Jaffray analyst Gene Munster lent credibility to the speculation, saying Apple might unveil a $500 iMac at Macworld. He wrote that it would appeal to consumers who are considering a switch from Windows PCs to the Mac platform — but not for a comparatively pricey investment of $1,299, the cost of the least expensive iMac desktop computer,” Chmielewski reports. “Shaw Wu of America Technology Research agreed that a low-cost Mac is likely under development. An econo-Mac would be marketed to Windows users who are looking for an inexpensive second computer that they could use with an existing monitor and other peripherals, such as printers or digital cameras. It would likely ship with Apple’s iLife suite of software for managing digital photos, music collections and movies. ‘We believe a low-cost Mac makes great sense for Apple as price appears to be the key reason why more users have not migrated to the Mac platform,’ wrote Wu. ‘Lower price points could create more ‘switchers.””
Chmielewski reports, “Other analysts say a budget Mac is too radical a departure for Apple. Apple, after all, is the computer industry’s version of BMW — a luxury brand for consumers who’ll pay more for sleek design and performance. ‘I’m not convinced that they could do an entry-level product, at that kind of entry-level price, very well,’ said Stephen Baker, director of industry analysis for the researcher NPD Group. ‘They’d have to take too much out of it, and make it not very worthwhile. I’m not sure how they’d market it. It’s not the kind of thing this company does. Does anyone tell BMW they need to have a $14,000 car?'”
Full article here.
Mini Cooper, anyone?
This brought to you by the magic word, “chance”…read into it what you will…
There’s no correlation at all with the Mini Cooper. It is a full featured automobile. It comes with all the usual bells and whistles. It’s just very small.
The point DakRoland was making is that BMW didn’t have a low-end luxury vehicle until they started selling Coopers (which sell quite well, actually). They are low-end BMW cars that are dirt cheap, much like the new headless iMac.
This dose of truth is brought to you be the word “each”.
Well, the entire software package for it, including the OS and a 30 day free trial of Word or Office would be zero cost to Apple. They have already paid the development costs on that. The parts, if they are the same ones that are in the iBooks, Powerbooks or iMacs, have economies of scale going for them. If they could be made on one of the iMac production lines that would help. If they can minimize the RAM and the VRAM they should still be able to make a 20% profit at a $600 price point.
The trick is to pull a Dell and get most buyers to pay $700 to $800 for a decent machine with an upgraded graphics card, more RAM and a good sized hard drive. You never have enough RAM and hard drive space.
actaully, it sounds alot like the BMW 1 series. and, the same ‘market dilution’ discussion went on for it as well. yet….there it is.
Wow, Stephen Baker is tremendously well informed (not!!).
As stated in an earlier contribution, the problem here is not leveraging the lateral view of the Macintosh customer in this equation. Add in the iPod, the iTMS purchases, the OS and iLife upgrades and the Airport Express and eventually you land up generating more money per customer than Dell ever would or could from their bland, vulnerable, poorly-designed boxes.
And of course, once hooked, the budgetMac neophyte will ultimately become part of the Borg-like collective of Mac evangelising – worth a couple of hundred dollars every three years – and repeat purchasing with the potential for upgrades.
I would have dismissed this rumour as yet another wet dream were it not for Piper Jaffray’s quasi-endorsement and their earlier upgrade on AAPL’s prospects for 2005 – so even if it doesn’t appear at Macworld, I’m willing to believe its not so far away.
Any price cut is good.
There are literally millions of monitors out there sitting around.
Apple could say “we’ll make your old monitor look better than you’ve ever seen”.
Or with a nod towards all of those iPodden they’ve sold, perhaps “Sync Different”
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hehehe, how about taking everything out of it and making it an option like Dell does? They could advertise it as a 500 dollar Mac that you end up paying 800 for after you add in all the options.
BMW had that low end 318i for a while. You know those sales went nowhere for them. it was just a cheap car and the people who bought it were looked at the wannabe’s that just wanted to have the BMW label, without appreciating the vehicle for what it was.
The arguement is really sort of silly, since I think Apple is more concerned with quality than just making a sale. Low end computers could have been built before, but notice they didn’t do it? It would give them a bad rep. They stand for innovation, quality, style, and of course COOL!!! Tell me one DELL, COMPAQ, etc. that can be considered any of these, esp. COOL.
If you want to use the Mini Cooper analogy, you have to compare it to the iPod.
No, no..Macs are supposed to be for everybody. That was the whole point. Apple is not supposed to be a luxury retailer they were forced into that role by Microsoft’s domination of the PC world. If Apple does release a sub $500 macintosh they will simply be returning to their roots, and, not inconsequently, their position in the PC space prior to Windows. It would be a masterstroke on the part of Apple. The only way to market OSX against Longhorn when it (eventually) comes out will be to have a larger installed base of users. In 3-4 years Apple will have enough market share to force people to compare the platforms.
By the way, this thing should have a G5 in it. I doubt the cost is any different to Apple. Though I wouldn’t hold my breath on that one.
Ya, ya,
Ve du haf a cheep kar. Ve sell dem in Sud Amerika!
Du hat nicht all taschen im schrank!
Right on the mini, I didn’t read the last line of the article posted. Take everything any analyst says with a grain, a large kosher grain, of salt. They all predicted doom for the iPod and then mini. Several years ago I seem to remember that Apple was working to design “a computer on a chip” to lower the cost. I wonder if that has something to do with the possible new iMac. Everything is speculation, of course, but it makes this slow period interesting. This could be one of the most interesting MacWorlds in memory. If SJ starts off the keynote by saying “we’ve got a lot of stuff to show you”, watch out!
What I would like to see is a consumer Mac that uses standard video and sound cards but is otherwise similar in concept to the eMac/iMac lines. There is a market below the PowerMac G5 that would like to be able to upgrade video cards/sound cards. It doesn’t have to be bargain basement- just a good value. A headless Mac with standard video/sound card slots could easily be priced in the eMac’s price range.
I’m bothered by it being called the iMac.
The idea of an iMac is that it has all of the parts in it, including the monitor. A headless iMac is an oxymoron.
Not to mention, the “i” originally stood for “internet,” now the letter is merely a marketing thing.
(magic word is later, as in, we may not see this product now, but I am certain it will appear later.)
DanK
Why be bothered when we don’t know what it will be called or if it even exists?
It’s a great idea in theory but will Apple be too worried about cannibalising the sales of their more expensive (and higher profit) models as happened with the Mac Clones of old? But, positioned as a low cost (and therefore low risk) second computer to an existing (and virus ridden) Windows PC maybe it would work as intended, who knows?
it’ll probably be a part of the emac line where e stands for economy instead of education.
Rhomboid:
You need to be aware that here in Europe, where we kind of care about the environment, the 1.8 litre BMW powerplant was/is a big seller initially in the the last version of 318i coup� and saloon and also in the 318ti Compact.
It’s only with the most recent version of the 3 Series that the 2.0 litre plant has become the value for money version.
BMW bought Rover (later dumped it except for the SUVs) so they could have a leg in the low-end market. They also have the miniCooper.
Plus BMW does market a “low-end” BMW – the 1er:
http://www.bmw.de/de/produkte/automobiles/1er/index.html
————
To MCCFR
The BMW520d and BMW730D puts out about the same amount of CO2 emissions as the BMW318t.
And Europeans kind of care about the environment? That�s a laugh. Looking at all the big polluting spewing Mercedes, BMWs, Audis, Porsches and trucks clogging the autobahn one would wonder. Oh yeah, don�t eat the fish in the Rhein river.
————–
Apple will not bring out this computer.
The Apple MacWorld in SanFran will disappoint…unless you are an iPod freak.
FYI – CNN is now reporting the rumor of the $500-$600 budget mac.
If Apple does this budget mac, it cannot be a lemon. If it is they will never hear the end of it. I really don’t see them doing this just for this reason because it may not be a very good computer. It could be like the performa’s from a few years ago. Alot of them sucked (mine was great though), which probally drove a few folks from the mac platform. For alot of people the performa was their first (and last) mac. So Apple has to be very careful if they do this. They have a good opporunity this time though to get new mac users so they need to look at a product like this.
AppleInsider states:
“The unit will easily plug into any display or television, sources said.”
– a media center/computer priced around $500 to $600 seems like a reasonable price and something that could be done fairly easily with the right interface (Tiger?)
“According to sources, the headless iMac was to include a built in iPod dock, though sources say this feature was scrapped and may reappear in future versions of the headless iMac.”
– this integrated iPod dock has lots of potential, not only for transfering songs, but perhaps a new iPod that has a version of Mac OSX and can be used as a portable computer
“The computer, which is reportedly code-named Q88, is currently under production in Asia by manufacturing contractor HonHai, otherwise known as Foxconn. HonHai currently produces Apple’s Power Mac and AirPort Express products.”
– is there any information on this contractor than can be used to verify any of these rumors?
It’s interesting that AppleInsider has different information than Think Secret about the same product. Is this from two different sources? Does that make it more legitimate?
Yeah, BMW’s are a lot cheaper in Europe.
Alway listen to those analysts, they are SSSOOOOOO good at predicting Apple and know what best for the company. PPAAALLLEASE. SinceThey cant even predict a close number for the sales of the already hot iPod, how could they even IMAGINE they would have a chance at Steve’s brain
King_alverez-
“is there any information on this contractor than can be used to verify any of these rumors?”
If you mean Foxconn, the only thing i know is that they’ve built motherboards for apple for years.
I don’t know if thats enough connection…?
Foxconn a//k/a Han Ho is under NDA so they cannot discuss what they’re working on. If they did, they’d lose Apple and that wouldn’t be in their best interests, of course. We have to wait until Apple introduces the product, just as we waited for confirmation of the iPod mini after the rumor sites “revealed” it. Also remember that TS said the mini would be $199. They were right on the product but wrong on the price. They also sometimes get some of the details incorrect as well. So, think $599 for the rumored new iMac so there won’t be any disappointment at the price. There was an avalanche of negative comments after the price of the mini was unveiled… usual for Apple “fans”.
I love the idea of an inexpensive headless iMac but the thought of seeing OS X on a Compaq, Dell or Gateway monitor just gives me the willies…
“[…] the thought of seeing OS X on a Compaq, Dell or Gateway monitor just gives me the willies…”
Actually, at work, I run Mac OS X on a 21″ Dell CRT and it looks as good as the old Apple 21″ CRTs. At home I run it on a Sony 21″ LCD–but it’s not as nice as the Apple LCDs (in it’s defense, it’s much older).
But the monitors that come with the el-cheapo machines are crap, I agree. I’ve run Mac OS X on the cheap Viewsonic displays. Yu-uck.
doesn’t Ford own land rover?
There WILL NOT be a sub $600 headless Mac. Apple will NOT squander its resources on such a misguided product. Also, there WILL NOT be an announcement about Apple buying into a cellular carrier.
The cheap Mac would require a manufacturing prowess of Dell proportions, support structure of Dell proportions, and a cost structure of Dell proportions. Apple’s cost structure … their entire corporate culture … runs counter to such a misbegotten move.
Hasn’t history taught the rumor-mongers ANYTHING. Go read Clayton Chrsitensen’s ‘The Innovators Dilemma’ and learn.
No! Ford owns Jaguar. Chysler/Daimler own Mercedes (& Plymouth) and Lamborghini.
YES! Ford owns Land Rover… The Rover Group was bought by BMW some years back because they wanted and inroad to an SUV. Mini was part of Rover at that time. Later they dumped Land Rover and kept Mini. They did the same thing with Bentley / Rolls. They kept Rolls and VW got Bentley. Mini is still made in England but overseen and designed by BMW with some BMW engineering.
A matter of days ago we added a Mini to our family. It was for my mother who is an art professor. I have been a BMW owner for years and encouraged her to look more into the Mini when she expressed interest in the convertible. I would have preferred that she had gone BMW because for the same price as the Mini convertible with options she could have bought a 3 series used. She WANTED the Mini. She didn’t care about the higher build quality of the BMW or the performance or the rear wheel drive or the 6 vs. 4-cylinder engine etc. She WANTED the Mini. She loved the design, she loved the personality and she doesn’t care about speed or handling as much as I do. She wants to get from A to B with the top down and have a personal relationship to the car.
The iPod has been this inroad for us to break down the fear of the Mac for the Masses. Kids are influencing their parents that Apple is cool and with the money that they throw down for it and Apple is becoming more of a lifestyle brand. I would bet that most of us on this board are computer savvy and are using our Macs for more than word processing and the Internet. The masses don’t. The last issue that kept the masses from the Apple brand has been price. The $500 Mac can work… People will WANT the $500 Mac. Belive it! Just keep your fingers crossed that it has a cool deisgn and a builds on the lifestyle image the iPod has fostered!
It all started in the late spring when Apple cancelled the ‘desklamp’ iMac. The last iMac order was for completion in May, 120,000 units, higher than the monthly norm to slightly increase stocks for the back to school season. Just before the order was confirmed Apple cancelled, word from IBM was that they had tracked down the source of the yield problem with G5 chip production. Apple asked HonHai to hold for ten days while IBM made sure they had correctly fixed the problem, as it turned out they hadn’t so Apple reversed their cancellation.
Just as well for HonHai, having parts on the shelves and production lines silent they had continued to manufacture the bases, they were able to advise Apple that production schedules could still be met. That was until they reordered the LCDs. Samsung had sold all but 15,000 of them and had retooled the production line for the next generation screens. They could revert given time and tooling costs, time was the main problem for Apple but costs was a major factor too, especially given the extra for air freight to rush the finished goods to market. So Apple ended up with 105,000 headless iMacs.
What to do with them? The iMac G4 had been EOLed and the spare part requirements were in stock, they could break the units down but even then they were looking at a stock write-off of between $25M and $30M. Selling them as a ‘Yikes’ type stand in goes against the grain for Apple but eventually the advocates won the argument. The persistence of some elements of the Apple advocate web sites demanding a low cost Mac was instrumental in the decision to go ahead, marketing costs to sell a mere 105,000 units would be near zero and Apple couldn’t turn down the opportunity to test out the market.
Pricing was the most difficult decision opinions varying between $249 and $649. $649 may well have been the fair value of an iMac sans cost of screen but would subject Apple to ridicule in many quarters and raise awkward questions in the media. If the Japanese market had been stronger a release only in Japan would probably have got the go ahead thefore avoiding the attention of the more vocal US media as happened when Apple produced other Japan only products in the mid 1990s. The $249 advocates were of the opinion that Apple should be grateful to get most of it’s money back after such a debacle. The price point settled at $399, determined because at that price point, by far the cheapest Mac ever, any bad press would surely be overwhelmed by the good.
Steve has even been persuaded to include it in the keynote albeit little more than as an aside. It is after all a limited edition and has been released due to customer feedback, the price point makes a third good bullet point for the presentation.
Oh shit it’s January 1st not April 1st, oh well, Happy New Year
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Here is what makes sense…
1) Create some sort of headless G5 computer that sells less than a powermac, is much smaller, and has at least a removable video card. Even if this was priced at $799 this would fill a huge gap that exists. I don’t believe there is any question that they can do this and still make a profit and I am sure move hardware will sell in the process. And it doesn’t need to be the size of an iPod. Cut the powermac in half and call it a day.
2) At 17″ LCD screen of higher quality than the iMac. Assuming that the low end should be a $1299 20″ screen makes it appear that all Mac users have cash to burn. Put out a decent 17″ please.
These two things would help the platform out dramatically!
Happy New Ear:
You have to be kidding surely!
There are two points here: emissions and fuel consumption. And let’s be frank here, the vast majority of cars in Europe, whether European, Japanese or whatever, have a displacement of less than 2500cc. Whilst North America no longer indulges itself in engines of 6000cc and over as a matter of course, the lack of investment in truly efficient engines (expressed in BHP/tonne or BHP/litre or whatever measure you care to use) still means that a huge number of powerplants in use in the USA are probably between 20% and 40% larger than their European equivalents.
Emissions control in Europe are as stringent as they are in California (as my annual test on my Fiat Coupe proves), but our problem is that Europe likes diesel (for economy) and diesels require regular maintenance to keep particulate emissions under control. That said, the new common rail diesels flogged by people like Honda, Jaguar, BMW et al are every bit as sophisticated as their petrol equivalents.
Your continents problem is the whole 4×4/SUV obsession – which the UK appears to have sadly imported. An unnecessary status symbol for some people (God knows, most of them never see any mud), most of these vehicles are inefficient in terms of fuel consumption, unsophisticated in terms of engineering, and disasterous when put through any kind of crash test.
Off topic but…
Giofoto: don’t say things about cars when you don’t know what you’re saying…
Yes, Ford does own Land Rover and no, Daimler-Chrysler doesn’t own Lamborghini… The bull is the property of Volkswagen.
Sorry!