‘$500 Headless Mac’ might lure Windows users to the superior Mac OS X

“[Will Apple] launch an entry-level PC that would sell for less than $500, about $300 less than its current cheapest model and $800 less than the flagship iMac? Analysts have been predicting that the iPod would generate a ‘halo effect’ in which consumers drawn to it would discover and start buying Apple PCs as well. With the Apple brand soaring, the moment to strike could be now,” Scott Morrison reports for The Financial Times.

“Some analysts argue that new customers who buy a ‘headless Mac’ would learn to appreciate Apple’s OS X operating system, which is widely considered superior to Windows, Microsoft’s operating system that has been battered by viruses and spyware. Those customers would be more inclined to stay with Apple PCs as they moved upmarket,” Morrison reports. “However, introducing a stripped-back Mac would carry significant risks. First, the company would enter a cut-throat market in which the competition is fierce, the margins razor-thin and where only Dell has shown itself capable of racking up consistent profits.”

“Apple would have to sell millions of machines, a potential problem for a company that has been unable to keep up with demand for its products. Also, new PCs might hit sales of Apple’s more expensive machines,” Morrison reports. “The mood is expected to remain upbeat on Wednesday with Apple’s earnings, which analysts expect will easily exceed expectations, largely as a result of brisk iPod sales. Laura Conigliaro, analyst at Goldman Sachs, estimated that iPod sales would account for about 33 percent of Apple’s $3.2 billion quarterly revenues, up from 23 percent in the previous period. The iPod also helped drive higher consumer traffic at the company’s 102 retail stores, prompting Goldman to forecast that the stores would account for 18 percent of overall sales, up from 16 percent three months earlier.”

Full article here.


  1. The stock will surge 10-17% by Thursday afternoon. Mark my words, it could break $80. I’m sure it will be close. After that, expect a big dip due to massive profit-taking, but it will rise again (and likely continue to roller-coaster.)

  2. However, introducing a stripped-back Mac would carry significant risks. First, the company would enter a cut-throat market in which the competition is fierce, the margins razor-thin and where only Dell has shown itself capable of racking up consistent profits.”

    Because of mid-level systems, not because of the $600 systems…

    Dell is smart to offer cheap, weak systems, because of course no one really wants a $500 computer that gets chunky when Unreal2004 is on.. the point is.. ppl want it to be offered..

    And switchers should be able to try a Mac out for cheap.

  3. “…enter a cut-throat market in which the competition is fierce, the margins razor-thin…”

    Uh, no. Apple would face no competition within the market for Mac OS X based machines. There would need to be a conscious decision by a Windows user to switch to the Mac platform (which still isn’t a completely trivial process), but once switched no-one would be able to undercut Apple’s prices within its own market.

    Also, I don’t believe margins are razor-thin: provided Apple can get the volume (and there’s little doubt that it can), putting together an ‘iMac mini’ based on commodity G4 parts into a simple case with no ‘value added’ design features should be a straightforward process for Apple’s SE Asian suppliers. The marginal cost for OS X is zero – since we’ve already paid for its development – and these new users will be a useful source of sales of iLife, iWork etc.

    It’s a no-brainer.

  4. Nice that we can still have some intellignt debate before the pc clones start to make their childish comments. Strikes me that such a machine would be capable of tapping a new and expanding market for Apple particularly if it tapped the home multi media capabilities provided by Tiger and the next version of Quicktime along with the existing capabilities of iPod/iTunes. Completing the link between iPod and iMac is in all seriousness a no-brainer. A seamles experience will benefit all aspects of the company and give massive potential (techically and marketing wise) for expansion while Microsoft wallows in the excrement of its own making.

  5. First off: Fuck you skyinthesky, you zealot.

    Second: If you lure PC users over to Mac to show them the style and ease of OSX, a slow G4 with meager RAM is not the way to do it.

  6. Is there a new entry level Mac?:

    Media Mac for $599


    xMac for $499 (smaller drives, no TV tuners)


    iPod Hub:

    Home on the iPod, OS X and your files and apps. $50 dock connector with ports for video and keyboard, (only for new iPods as they have better hard drives, or shock protection, or loads of cache) to handle the load.

    (Another model? $699, 60GB iPod, no mouse or keyboard. Centre of scroll wheel is trackpad (pointing device) for up/down and left/right.)

    Taking the Mac angle first people have suggested it would both bring in PC switchers but Mac users would just add one to their network. Now those two points to some extent are contradictory however one or two Mac users have suggested they’d buy several, as many as one for each room. I can’t see how a new xMac wouldn’t canibalise sales to some extent but maybe in the end not a significant amount. What could boost sales is clustering software, need more power just add another xMac, you could have your own miniature Virginia Tech system.

    Perhaps it’s not a computer replacement, it’s a peripheral for your iPod.

    Whether a mini Mac, Media Mac or iPod SuperDock the hardware is similar, the main differences being in the software and marketing. Apple could do all three!

    Of coure the sub $500 Mac could simply be an eMac, restyled maybe, updated somewhat (opaque white with inbuilt leds to colour to match your decor). There’s probably room for a price cut anyway, and Apple may even decide to subside it to reach the price point. As Robert Cringely points out a $100 loss per computer would take 10,000,000 sales to cost Apple one of the six billion dollars they have sitting in the bank. A couple of software upgrades and a few iTunes and the loss is covered, or perhaps phrased differently the advertising spend is recouped.

  7. Other MWSF ideas:

    Beatles on iTMS

    iPhone designed by Apple (with our partners Moto “cough”)

    iPod micro $149 start price

    Remote control for AirPort Express

    Tiger on target, shipping Q2

    5G iPod (WiFi?)

    HP partnering in distribution of new products?

    Old favourites:

    SUI – speech user interface, enables the introduction of iPocket, Apple’s PDA that data can be entered into easily because you speak to it.

    iMovie Store

  8. The miniMac, if it materialises, should come with migration software (PC to Mac) preinstalled. An iWorks suite with Office compatible file formats and the ability of Safari to import Bookmarks from other browsers should complete the switcher package. They could even offer a PC trade in rebate, rather than subsidising the price as has been suggested.

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