Rumored $500 ‘Headless Mac’ could double Mac market share, boost share price

“I don’t publish rumors but I do sometimes comment on them or the concepts that they represent. The $500 Mac rumor has really fired up the Mac community because it could possibly double the iMac market share and push the share price way up. This demands comment,” Kevin Ledgister writes for OSViews.com.

“One of the biggest objections to PC iPod users switching is price. The iMac was introduced as the perfect partner to the iPod and no doubt, Apple intended it as the crossover product for iPod users who have PC’s. However, purchasing an iMac and all the software to make the switch is equivalent to purchasing two PC’s in many buyers’ minds. While many Mac users are sophisticated enough to realize the hardware and software differences that add up in the value equation, it is rare that a purchasing decision will account for all of those factors. It is doubtful that many PC buyers would even understand what these factors mean,” Ledgister writes. “Another consideration is the psychology of most PC buyers. They like safety in numbers and ubiquity even if it means a terrible product. Many people would switch if switching was popular or perceived as a growing movement. Even fewer people consider the Mac because they are not visible in the stores where they shop. The iPod and PC is visible, but the Mac is not. A $500 Mac could be sold along iPods in stores that would not carry any other Mac product.”

“I don’t know if Apple will release the rumored product or not but here is my vote that they do so, and soon. If they do so at Macworld in January, 2005 will most certainly be be the year of the Mac,” Legister conlcudes.

There are many other interesting points in Legister’s full article here.

27 Comments

  1. Granted, there seems to be no margin on a $500-Mac.

    But there may be reasons to built them anyway:
    1. The production of a headless iMac may be cheaper, because it’s less complicated than one with built-in monitor!
    2. The shipping is less expensive, as they can be packed in smaller packages (think “Ikea”!).
    3. A headless iMac may be easier to maitain by the consumer (same concept as with iMac G5): less costs for customer care.
    4. A special percentage of Mac-Users become “.Mac”-Subscribers. Consider .Mac as an yearly fee to use your mac. Apple knows the percentage and the renew-rate of subscriptions and can therefore calculate the “hidden” earnings of an headless-mac-sale.
    5. Same (but one-time) effect with Software: OSX Tiger, GarageBand-JamPacks, Keynote 2.0, you name them…
    6. The typical windows user is used to regularly add new gadgets to his system. Apple may sell them additonal devices (wireless mouse, keyboard, bluetooth, Airport, …)

    It could make sense…

  2. A headless mac is exactly what apples needs, not a new “flashy” iPod.
    I will buy two immediately, as a less complicated mac I can customize at an affordable price is my dream machine!

    I am finally excited about macworld.

    GO STEVE GO!

  3. Never gonna happen. There will be a new design for the eMac and a lower price but no headless Mac. Don’t need the hassle of the bargain basement Windows shopper as they won’t spend any more money. Need people with buying power ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

  4. I think this headless iMac could be used as a loss leader. The Mac Faithful User base is probably not going to buy this machine as their main machine (maybe as a second machine though) so I don’t think it will canabalize sales of the higher end models that much. I know I am always wanting to get a BETTER Mac, not a lower end one. Sooooo as this writer suggests I think it would mainly serve to get PC users to switch or Add a Mac. And we all know, once you have drunk the kool aid you are probably gonna want to get a better machine in the future.

    I was also very very impressed with Kevin Ledgisters grasp of the fine points of the situation. This is unfortunately rare to see in a lot of journalists nowadays. I guess since he does write for OSviews this might be expected though.

  5. “Jim, you are so right. Last I heard, Dell doesn’t make any money at all. Why should Apple even bother competing with a company that doesn’t make any money.”

    Gspank I hope you didn’t “hear” this from someone you depend on for advice. Dell has twice the profit margin of Apple and 5 times the return on assets. If you have a computer you can look it up.

    Of course it is all apples and oranges since Apple gave up on computers and became an overpriced Walkman distributor.

  6. “Of course it is all apples and oranges since Apple gave up on computers and became an overpriced Walkman distributor.”

    Hey Joe, been a while. Why the flamebait posts? You bored or something?

  7. Jack A
    I think this headless iMac could be used as a loss leader.

    I generally agree with your post, but Apple is not going to sell this machine at a loss. At worst it will be razor thin profit margin. The components are already there to be sold at a very low price point, and no monitor means it’s easier to design and manufacture and cheaper to ship. There is no need for Apple to lose money off the sale of this hardware. And Apple could make money if people also buy other Apple software or acessory products along with it.

  8. Joe McConnel
    Gspank I hope you didn’t “hear” this from someone you depend on for advice. Dell has twice the profit margin of Apple and 5 times the return on assets. If you have a computer you can look it up.

    Sorry, but Gspank is right, Dell makes little or no profit off their very low end (VLE) computers, they make profits there only by massive volume. Most profits are found on higher end products, servers, and services. Stuff like more expensive computers, things like that. Dell’s 499 computers are not huge contributers to their bottom line. If you know otherwise, demonstrate with a link instead of a snide comment.

    Of course it is all apples and oranges since Apple gave up on computers and became an overpriced Walkman distributor.

    Joe, I think Enderle or Thurrot could use you as a shill for their site. You love trolling here so much, why not see if your hobby can turn into cold hard cash.

  9. You want Apple to sell the entry level Mac at cost and give away all the usual included software for free, just to increase market share? This is my stock you are screwing with.

    Have you swallowed all that market share BS?

    A 30 million user base is big enough to keep Mac software flowing.

    If the potential buyers can’t afford more than $500 they can’t afford a computer.

    Instead they should use one of the free computers at the library. An IT weenie to keep it running for them and the walk there will give them exercise.

    I just saved them all the price of broadband, computer, doctors fees and a health club membership. In a year they will have saved enough for a real Mac.

  10. I think a headless Mac would be a huge success.

    Will it eat into eMac sales? Yes in consumer market, no in educational becuase of the all in one factor and durability of CRT. I personally would never consider an eMac becuase it’s butt ugly, but it’s great for kids!

    Will you pick up a bunch of tight-wad Dell customers as someone suggested? Not likely, as $500 for a monitorless computer is still expensive compared to the low end Dell’s and eMachines. You will most likely dig into those PC customers who are willing to spend a little more to get something that a little better.

    Will it eat into Powermac sales? No way. Take me as an average switcher from PC. My first Mac was the cheapest Mac (not including eMac for previously stated reasons) I could find. It was the 700mhz G3 iBook which I am using to right this. My next was a single processor PowerMac G4 with dual 20″ cinema displays, and my next Mac will be a dual G5 PowerMac in February. I had never used a Mac before I bought my iBook, but I loved it so much I spent a small fortune on Macs since then. I am a perfect example of how offering a cheap model will get Apple dedicated customers who will spend big money later.

    This post was brought to you by the word “youre”.

  11. I don’t know how anyone on here thinks Apple is gonna Demo a Dell Monitor.. Yikes..

    It would be sweet if they actually came out with low end displays.. one that was break-even at 15, and with margins at 17, 20, 23 etc

    With no Apple monitor possible.. I have NO IDEA how Apple is gonna advertise this thing..

  12. The monitor factor could suggest this has been planned a long time. If they iintroduce this legendary fictional headless mac, they will certainly be able to introduce a monitor to go with it. 17″ perhaps They do have a remarkable gap in the monitor product line starting at 20″. Daring and very Apple to start at 20″ of course, but it could just as well be that they’ve been saving the 17″ product for the introduction of a headless mac?

  13. So when you factor in the cost of a keyboard and mouse ($100) are the headless iMac fanboys saying Applke will seriously sell a computer for $400? That would just about cover the cost of 1 gig of RAM for my powerbook! LOL. Delusional or what.

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