New Mac mini could cause Apple ‘some short-term pain, but the long-term gain could be spectacular’

“Apple Computer reinvented itself Tuesday, transforming its image as the exclusive BMW of home computers into more of a mass-market Honda. The new Mac mini at $499, unveiled at the Macworld show in San Francisco, is the most important product from Apple in nearly a decade, since co-founder Steve Jobs revived the Cupertino company with the original iMac in 1998,” Mike Langberg write for The Mercury News.

Langberg thinks that the “iPod Halo Effect” is a hunch that, “was dead wrong. I believe iPod owners may have swooned over the sleek lines of the new iMac G5 this holiday season, but swooned again when they saw the sticker price and headed over to the Windows aisle. We’ll know for sure this afternoon when Apple releases its earnings for the final quarter of 2004.”

“The unquestioned star of the show is the Mac mini, due in stores Jan. 22, a fully functional Macintosh computer that’s no bigger than a cigar box and weighs only 2.9 pounds. It runs the latest version of Mac OS X, known as Panther, and has enough computing power for almost any home computing task, including Web browsing, e-mail, editing digital photographs and home video, downloading and playing digital music, and writing school reports,” Langberg writes. “You need to supply a monitor, keyboard and mouse, but these can cost as little as $150. Or you can use an old computer monitor taking up space in the closet; I’ve got several in my house.”

Langberg, “By sliding under the $500 mark, Apple has blown open the castle doors and made the Mac’s excellent software truly affordable to Windows users. I don’t expect Microsoft’s choke hold on PCs to relax overnight, but I do think Apple for the first time in a generation has a fighting chance to climb out of the low single digits in market share for home computers. Not that Apple’s strategy is risk-free. The company is likely to cannibalize existing iMac sales — and there’s a lot more profit for Apple in selling an iMac G5 at $1,299 than a Mac mini at $499. At several crucial moments in its 30-year history, Apple has blinked and pulled back when it was on the verge of switching to a high-volume, low-margin strategy. This time, I suspect, there is no turning back. There may be some short-term pain, but the long-term gain could be spectacular.”

A great read, highly recommended, read the full article here.

MacDailyNews Take: The Mac mini is a more important product for Apple Computer than even the original iMac.

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Apple finally stops overreaching for ‘switchers’ and goes for ‘adders’ instead – January 12, 2005

24 Comments

  1. Wow, that’s what I just wrote in another post! The mini will take some off the iMac and PowerMac, but users will want more once they are hooked and see the true value in Apple’s whole product.

  2. Honestly, Im not sure there will be as much cannablism as some think. The Price/Feature gap between the iMac and Mac mini is monumentus, that anyone looking at them and with a general idea of what they are willing to spend vs what they want will pick the right one for them. eMac sales on the otherhand, because the only difference is really the BYOMKM of the mini

  3. I agree that even though this may canabalize a few sales of the higher units in the short run, once they have tried out OS X they will be hooked and want to upgrade to higher end units. I think that for current Mac users, unless you are on a really tight budget then you will probably buy the Mac as a second (or third or 4th) machine rather than as your main unit. Also Mac Users that have been on a really tight budget were often probably buying used machines and thus not getting on Apple’s bottom line. Now they can buy a new machine instead.

  4. I own a PowerMac G4/400 that is nearly 5 years old. I have put off any hopes of upgrading to a new machine because of the prices. (I don’t want an Emac because it’s too heavay and bulky). But the Mac Mini is really within my reach because I no longer need a professional machine and I already have an Apple flat panel display. I wonder how many other people are in a similar situation? Because these people might make a purchase this year that might not otherwise have happened.

  5. Beryllium you might as well wait a year for the G5 mini to be released.

    I on the other hand have a G4/400 TiBook that is 3 1/2 years old, I need the professional machine, and I’m getting tires of waiting to upgrade. They day Apple announces a 17″ G5 PowerBook I’m on the pre-order list.

  6. Now that the “cat’s out of the bag” so to speak…
    Apple will just have to sit back and see how the
    market reacts. It was a move, I’d say, by Apple
    to strengthen thier existing customer base and at
    the same time grab some more Windows holdouts.

    One thing’s for sure…an inventory backlog does
    not seem to be in Apples future…shortages only!

    If Apple can gauge the effect of the Mac mini on
    the rest of thier line and produce the right amount
    of computers from Power to mini…they will at least
    know where thier profits are headed with this new
    addition. I really don’t have a clue, long term :/

    CT

  7. The Mac mini is a more important product for Apple Computer than even the original iMac.

    Like I said.. This, to paraphrase Gates.. is ‘hit number four’..

    Once people believe the idea of a dell mon hooked up to a mac.. things will really explode.

  8. The entrenched Wintel crowd will look at the mini and say, “Where’s the computer?” Just like the already do with the iMac and eMac (I’ve heard it more than once when showing off my eMac).

  9. I don’t believe that cannibalization is going to be a problem in the way that Langberg predicts.

    For the most part, the Mac mini will only ever cannibalize sales from the eMac – anyone who was considering the iMac was looking for performance in a different class and/or the wide screen display.

    Well, you could still get the display (up to 23″) if that’s your bag. However, Apple would still have you by the short and curlies because you’ll go and buy a Cinema Display and land up giving Apple more cash.

    In reality, this is the return of the Cube, but without the strange eccentricities of design (cables emerging from the base) or the walloping price tag. As a result, the Mac mini will find a home in any number of roles, including that of VNC-controlled home media server.

    The only downside (as far as I can tell) is the lack of an optical out – but Airport Express or that strange little USB peripheral from the company whose name I can never remember takes care of that shortcoming.

    I’ll stick my neck out now and predict that Apple will sell 2.5 million Mac mini units during calendar 2005, bringing in over $1.3 billion in direct revenue in the process, and around $275 million in ancilliaries (iPod, iTMS, etc.).

  10. One very nice aspect of the price that I haven’t seen is that it nearly fits into the range of an impulse buy for people who’ve been looking at Macs but not buying. People can put this on a credit card without much difficulty and pay it off in a month or two. Hey, I could do it, and I’m way below the “average” Mac user in terms of income. The other thing is that people can buy this and an iBook for the price of a PowerMac. In that sense, it may eat into other lines, but in a way that will improve the “market share” end of things.

  11. It’s a wonderful thing when Apple has this huge pile of cash sitting in it’s bank account. It allows Steve Jobs to take big chances. The mini mac could hurt Apple, gaining a few points of market share and gutting a large fraction of the profitable pro macs revenue. I’m thinking right now that the car makers should consider putting a mini mac in cars instead of an ipod. A mini mac variant with a much sturdier hard disk drive. Auto GPS/voice recognition with reduced audio interface that would not tempt drivers to take their hands off the wheel/itunes and a option to have the mac automatically read emails as they are received would REALLY tempt road warriors. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

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