Jobs: imagining the iPod as a $400 PC significantly changes the view of Apple’s overall business

“Apple’s share in the United States market for personal computers declined slightly to 3.2 percent from 3.5 percent, according to a survey released Wednesday by the International Data Corporation, a market research firm in Framingham, Mass.,” John Markoff reports for The New York Times.

“‘There were real upsides and a couple of downsides,’ Charles R. Wolf, a financial analyst at Needham & Company, said. ‘The most egregious negative was the iMac. It’s clear that Apple needs to put a high priority on bringing its price down.’ [Steve Jobs, Apple’s CEO], however, pointed to the company’s combined unit volume, including Macintoshes and iPods,” Markoff reports.

“If the iPod were considered the equivalent of a $400 personal computer, he said, the view of Apple’s overall business would change significantly,” Markoff reports. ‘I find that intellectually interesting,’ [Jobs] said.”

Full article here.

33 Comments

  1. I don’t really see why these anal-ists always have a problem with the iMac. The iMac/eMac line is the top selling line for Apple. Let’s face reality, the eMac is the successor to the original iMac, not the new iMac.

  2. A Bomb, That’s right, and I’ll take my 800 mhz eMac over M$ anything any day of the week. My original iMac successor still has more class than anything from Dull, et al. Not quite up with other Mac products, but for the price, I don’t expect it to be.

  3. Just try pricing out a Dell that is comparable in overall features (both hardware and software) to the $799 eMac and you quickly see that they aren’t so overpriced afterall. The eMac is within $100 of the comparably equipped Dell so I don’t know what all of the fuss is about when it comes to price.

    All I know is Apple had their best quarter in 4 years and they have $4.8 Billion in the bank, that speaks for itself. Aside from Dell and HP, who on the PC side is making any money at all muchless as much as Apple??? I wish the ANALysts would answer that one for us…

  4. I agree with the statement regarding the iMac that “It’s clear that Apple needs to put a high priority on bringing its price down.” The machine is beautiful but really is too pricey for the average consumer. The eMac is a much better value. Now that the G5 is selling briskly (and includes a nice profit margin), perhaps Apple can beef up iMac specs and lower prices in order to increase sales. I, for one, remain skeptical regarding the premise that increased iPod sales will ultimately spur Mac sales. Maybe a slight uptick, but nothing too great. I am pleased that Apple has dominated the market with iPod, and the G5 is nothing short of amazing, but Apple is not well positioned in important segments, i.e., the mid-range segment targeted by iMac. If I had a small amount of cash for a new machine, I would purchase an eMac; more cash and I would buy a G5. But the iMac is too expensive for the current specs. Just my opinion . . .

  5. RJL, here is how I see iPod sales getting more Mac users:

    1) Consumer buys iPod
    2) Consumer downloads iTunes to use with iPod
    3) Consumer sees what great software iTunes is
    4) Consumer gets ad about iLife by Apple & sees other apps
    5) Consumer checks out Macs to see what other apps do
    6) Consumer buys Mac due to iLife
    7) Consumer lives happily ever after!

  6. Apple has a glaring hole in the product matrix – a consumer desktop that is not integrated with a monitor. Call it what you want. I would buy a single processor G5 consumer desktop with no monitor attached.

  7. iMac G5 with removable display (on the high end price wise) that would satisfy the tablet junkies and would put a much needed G5 in the iMac. After that just put a G5 in the rest at the same price point and watch sales skyrocket. Same goes for PowerBook 17inch.

  8. I agree with AL. As soon as it is feasible, put a G5 in the iMac, maybe add a couple easily accessible ports on the front like the towers, and I will happily shell out the $2199 for the 20″.

    Until that happens, I’ll be waiting on the sidelines. But it’s a pleasant wait with my 15″ Albook.

  9. “…tablet junkies…” – Jay

    Is there such a thing? I have yet to see one tablet PC in use in person. I only see them in television ads for WebMD. That’s it.

    And if everything is built into the display that is needed to make it a tablet when it is disconnected from the iMac, then what is the use in the rest of the iMac? It’s just an empty base with a keyboard attached at that point. Pointless.

  10. If Apple could create an iLife for Windows and sell it for $299 Apple could then promote the Mac as having iLife included. This would make Apple’s computer instantly seem to be $299 less than a comparible PC.

  11. Anybody out there have the current CONSUMER market share of Apple? A ton of Wintel boxes are nobrand generics sold for use as terminals with Office software. Discount these and what is the market share? If you know, please post a link.

  12. Dell = 30%
    HP = 22%

    Us shipments of PCs (inc. desktops and laptops). No way to know the consumer/bus split but this is a fair comparison to Apple. Dell and HP don’t do white boxes yet.

  13. What sort of specs do you envision this consumer-level Mac having?

    To me, a consumer-level G5 does exist…in the single processor G5 Power Mac. By the time you cripple the G5 with a smaller hard drive, slower system bus, less physical memory, and a smaller cache, wouldn’t it be more practical to just stick with the processor that is no longer bleeding edge? Then you’d have a better system/processor match and a much better price point for a consumer-level Mac.

    To me, it sounds as though you really need a G4 iMac without the monitor. The only real savings that I can see a consumer-level G5 machine offering (without crippling a G5 chip) is a smaller, less-expandable case and less connectivity in terms of ports. But Apple has been down that road before. And decided that a product mix where consumer systems with attached monitors and pro systems without them do better than a product mix that also includes consumer systems without attached monitors.

    I think that the headless iMac would likely not be a truly portable tablet. More likely the screen would simply be a remote display that would maintain a wireless connection to the actual computer.

  14. iMac G5 Specs

    – Smaller Case – Anodized Aluminum (colors)
    – Single Processor Only
    – 40 GB Hard Drive and up
    – Combo Drive or Superdrive
    – NVIDIA GeForce4 MX and up
    – No PCI
    – No FireWire 800
    – No Gigbit Ethernet
    – New line of displays to match (sold separately)

    I would buy this computer now.

  15. Some good ideas Jas, but 40 GB? That’s just plain tiny at this point.

    And Ralph, no iLife for windows. Something must remain sacred. After that, maybe port Panther to i86?

    New iMac will be G5. Jobs made it clear in his Keynote, G4 is dead, G5 will save Apple. I think between G4 chips and the price of flat screens, it’s obvious why iMac hasn’t sold better than it has. We’ll see that turn around in a year or so.

  16. Apple has to overcome the COGNITIVE barriers of potential switchers. That means, it’s not enough to price the eMac/iMac competitively.
    What they need is a “cheap” Cube (i.e. an eMac without CRT)! One should have the possibilty to use the old “Wintel”-Monitor, but with a new Mac-Box. Then the potential switchers don’t have to invest that much money to do the switch. Remember: They don’t know that an eMac/iMac is worth every dime, it’s a BIG uncertainty for them to switch!!
    Believe me – so many of my friends stick to Windows because of that.

  17. Some suggestions for consumer-level Macs (assumes production of new versions of G5):

    eMac: G5 1.8 GHz, 256 MB RAM, 40 GB HD, 64 MB Video, Combo Drive, $799
    eMac: G5 2.0 GHz, 256 MB RAM, 60 GB HD, 128 MB Video, SuperDrive, $999

    iMac Cube: G5 2.2 GHz, 256 MB RAM, 60 GB HD, 64 MB Video, SuperDrive, $1,199
    iMac Cube: G5 2.4 GHz, 512 MB RAM, 80 GB HD, 128 MB Video, SuperDrive, $1,399

    iMac 17″ LCD: G5 2.2 GHz, 256 MB RAM, 60 GB HD, 64 MB Video, SuperDrive, $1,499
    iMac 17″ LCD: G5 2.2 GHz, 512 MB RAM, 80 GB HD, 128 MB Video, SuperDrive, $1,699
    iMac 20″ LCD: G5 2.4 GHz, 512 MB RAM, 80 GB HD, 128 MB Video, SuperDrive, $1,899

    Am I dreaming?

  18. If Apple would build a consumer line of PC’s that are headless but expandable and run a G5 and sell it for around $1000, it would be a huge hit. Yes, the iMac is a very nicely designed computer, but it costs too much to manufacture which prevents it from being a real competitor in the home market. And yes, I talked my mother into getting one last year.

  19. All the Apple has to do is over the 15″ iMac (G4) with a combo drive for $999. This solves all the problems with pricing and increasing demand. The consumers that are concerned about low-end iMac pricing don’t need or want a G5. What they want is an inexpensive Mac to run Appleworks, Quicken, Safari, Mail, and iLife.

  20. “If the iPod were considered the equivalent of a $400 personal computer, he said, the view of Apple’s overall business would change significantly,” Markoff reports. ‘I find that intellectually interesting,’ [Jobs] said.”

    [wild speculation] Is Jobs trying to tell us something here? Is he giving hints that iPod will morph to have PC capability? [/wild speculation] ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

    Or maybe Jobs just trying to point out Apple’s mindshare…

  21. My ideal computer would be essentially iPod size, which works as a MP3 player, phone, and PDA. But when you put it in it’s dock, it turns into a fully functional computer.

    This way I can buy a dock, screen, keyboard for home and work and essentially keep my computer with me. This adds security and I do not ever have to worry about synchronizing anything. It would just work.

    The handheld would have either a CPU which operates at two speeds, depending on if it is in the dock or not. OR, a separate 2nd CPU in the dock itself.

    Maybe that is what Jobs has in store for us in a few years…

    (I can hope…” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

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