Cringely predicts $249 Macintosh, would make Apple the world’s number one PC company

“Apple will take a big risk in 2005. This could be in the form of a major acquisition. With almost $6 billion in cash, Steve Jobs hinted to a group of employees not long ago that he might want to buy something big, though I am at a loss right now for what that might be. Or Apple might decide to throw some of that cash into the box along with new computers by deliberately losing some money on each unit in order to buy market share,” Robert X. Cringely predicts in his latest articel for PBS.

“We might see that as early as next week with the rumored introduction of an el-cheapo Mac without a display. The price for that box is supposed to be $499, which would give customers a box with processor, disk, memory, and OS into which you plug your current display, keyboard, and mouse. Given that this sounds a lot like AMD’s new Personal Internet Communicator, which will sell for $185, there is probably plenty of profit left for Apple in a $499 price,” Cringely writes. “But what if they priced it at $399 or even $349? Now make it $249, where I calculate they’d be losing $100 per unit. At $100 per unit, how many little Macs could they sell if Jobs is willing to spend $1 billion? TEN MILLION and Apple suddenly becomes the world’s number one PC company. Think of it as a non-mobile iPod with computing capability. Think of the music sales it could spawn. Think of the iPod sales it would hurt (zero, because of the lack of mobility). Think of the more expensive Mac sales it would hurt (zero, because a Mac loyalist would only be interested in using this box as an EXTRA computer they would otherwise not have bought). Think of the extra application sales it would generate and especially the OS upgrade sales, which alone could pay back that $100. Think of the impact it would have on Windows sales (minus 10 million units). And if it doesn’t work, Steve will still have $5 billion in cash with no measurable negative impact on the company. I think he’ll do it.”

Full article here.

MacDailyNews Take: Forget “Mac OS X for Intel” if Cringely’s right, this would rock the personal computer marketplace and create changes in the market’s dynamics that nobody could imagine. Imagine the results if Mr. Jobs actually did do something this bold. Would he?

Related MacDailyNews articles:
Apple vs. Microsoft rivalry heats up again – January 10, 2005
Apple Computer will own the living room, not Microsoft – January 10, 2005
Cringely: is this the beginning of the end for Macintosh hardware? – May 21, 2004
Robert X. Cringely: Steve Jobs ‘is proud of being an a**hole’ – April 30, 2004

41 Comments

  1. its a risk worth taking as theres a high chance it would pay off.

    i dont think it would hit the sales of apples high end machines at all – like it says – they’d get this as a ‘second machine’.

  2. What if Apple isn’t the first to do it?

    In any case, I’d love to see this happen for nothing more than selfish reasons. I’d buy a couple and give them out as gifts:

    – One to mom and dad.
    – One to mom and dad in the spare bedroom.
    – One to each of my brothers and sisters
    – Two for me (living room, bedroom)
    – Oh… and that damn PB update I’ve been waiting on.

    Yay! It’s Jan. 11 here, glad MWSF is about to open there.

  3. What if Apple isn’t the first to do it?

    In any case, I’d love to see this happen for nothing more than selfish reasons. I’d buy a couple and give them out as gifts:

    – One to mom and dad.
    – One to mom and dad in the spare bedroom.
    – One to each of my brothers and sisters
    – Two for me (living room, bedroom)
    – Oh… and that damn PB update I’ve been waiting on.

    Yay! It’s Jan. 11 here, glad MWSF is about to open there.

  4. Part of the reason for being in business is to take risks and sometimes shake (hmmm Shake… uhumm) things up. Apple is the company that was created to do this ( its in their DNA). Come on Apple do something bold… the world is watching.

  5. Do you guys really think Apple’s intention is market saturation. Once Apple openes the floodgates with a product like this, the demand for it would entirely compromise their quality control, and we have come to expect shabby quality from other vendors, but Apple will not go that route.

    my take is the Steve known what he is doing, he knew it when he declined the opportunity to license the OS, and I do not think that he will compromise on quality. The only way an idea like this could come into fruition, is if the beancounters and investeros called the shots at Apple, somthing that has not happened there yet (again). The ledger larrys almost ruined Apple in the late 90’s and it took a creative force like Steve to get Apple on the right track again.

    So, in conclusion, this will happen when the magic word freezes over, and in my current case it is “hell”

  6. Could happen. A lot of Apple’s consumer software follows this principle – the iLife package, for example, clearly cost the company a lot to develop yet they sell it cheaply as an incitement to the platform. Why not do the same with consumer hardware?

    Also, the eMacs are now a bit of a dead end street. To big and ‘old’ tech for Wintel users to commit to as an entry machine or as a choice of second computer for existing Mac users.

  7. Interesting theory with some very valid points.

    Apple does have a large bank of cash available… they can definitely do something out of the ordinary like this with no negative effect.

    Will they do it? That’s another matter.

    But it IS interesting how Jobs has been seemingly so uninterested in the growth of the Mac market while concentrating on the iPod. Could his plan have been to make iPod the huge success it is, make people give Apple a second look, and now, hit them over the head with such a low-cost model people can’t ignore it?

    You know, with Jobs, nothing is out of the question.

  8. Why spend a billion on advertising the OS when you can simply lose a billion on hardware costs and get far more in free publicity and customers. Makes sense to me. They’ll have a similar affect with a $500 machine and make a slight profit – much more likely.

    [brought to you by the magic word “want” which makes sense – people ‘want’ to be at the keynote, people ‘want’ and ipod, etc…]

  9. I wonder how long this would last if it became obvious they were going to sell (over the course of, say, two years) a LOT more than 10 million computers.

    Could Apple “handle” an increase from 2% marketshare (by quarterly volume) to…10%, 20% or more? As long as they don’t end up becoming some sort of monolithic, plodding behemoth, too large to be flexible or innovative…oops, I guess that would be 90% marketshare…nevermind.

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