Wintel box assemblers simply cannot compete with Apple’s new Mac mini

“The mainstream press is raving about this $500 computer that doesn’t actually cost $500. Meanwhile, some market-watchers are rumbling about the cost that this budget machine might bring to bear on Apple. Once again, I find those concerns flawed. First of all, I think margins on the Mini are not so bad. Here’s why: Dell can sell a similar-level computer for $50 less in addition to giving you the speakers, monitor, mouse, keyboard, and a bowl of soup. If Dell can do that, Apple can do fine on the Mac Mini alone,” Seth Jayson writes for The Motley Fool. “So, the Mac Mini comes with nothing. No keyboard, no mouse, no speakers, no screen. The theory out there, promulgated by Mr. Jobs himself, is that PC users will buy this as a second computer and hook it up to the old spare parts they’ve got kicking around.”

Jayson writes, “I don’t believe that for a moment. First of all, PC users don’t have old USB mice and keyboards hanging around because, until recently, the vast majority of PCs took serial input devices. They may have monitors stuffed away, but I doubt that many people want to put a giant, ugly, old, dusty CRT next to their stylish little mini-Macs. Some will. Most won’t. And I’ll bet you your Apple shares that Steve and Co. know this too.”

“What does this mean? Buyers interested in the Mini are likely to spend much more than just $500 for the bare-bones box. As I have mentioned, the cheapest minikit you can put together at Apple’s online store costs $800, and it features a big, ugly CRT display. Add improved memory, an airport, and other features, and you’re very quickly pushing $1,000. At this point, I’m betting that the margins are very, very good. Also at that point, anyone who balks at dropping that much for the Mini will probably be thinking, “Hmmm. That iMac over there is only $1,200,” and the buying up begins. That’s where margins are even better,” Jayson writes. “If the Mini’s $500 promise can just get people in the door at the Apple store, they’ll probably walk out with something pricier. To be clear, I don’t see this machine converting the price-conscious PC consumer, because anyone can do the math to figure out that the Mini doesn’t actually compete. If it’s not a $450 Dell, it could be a $600 system from Hewlett-Packard shoveled out by the pallet-full at my local Sam’s club.”

Jayson writes, “But the Mini might take a few of those skeptical consumers who are straddling the fence and push them into Apple’s side of the pasture. It might just persuade Mac users who still slave over aging G3s to get themselves to the store. And, given Apple’s tiny market share, nominal increases can have heavy fallout — of the good kind — on the bottom line.”

Full article here.

MacDailyNews Take: The Mac mini actually competes very well with any Dell, HP or any other Wintel box on the market. In fact, it competes so well, it wins every time. Anyone can do the math, but, you still have to do your math correctly and not forget to factor in a very impressive software bundle and Apple’s Mac OS X which the Wintel box assemblers simply cannot match for any price. Again, it’s the OS, stupid. Or to be more precise – it’s the software plus the hardware, not just the hardware, stupid. As always, you get what you pay for. Perhaps Jayson would like to do the math that calculates the cost of Windows virus attacks, Windows crashes, and constant Windows adware, spyware, and malware clean up and removal – not to mention Windows’ unintuitive user interface’s negative impact on productivity? It’s not as simplistic as looking at hardware specs and doing sticker price comparisons. You can only get Mac OS X and the iApps with the Mac mini and you’re stuck with Windows and a bunch of cobbled-together, nonintegrated pieces of software on a Wintel box. And we do mean “pieces.” Clearly, one cannot just decide to ignore the software’s value if you want to do an honest comparison.

Again, to really understand the Mac mini, think of it as an amazing $499 software bundle and OS package which is unrivaled in personal computing history that includes a free Apple Macintosh computer. Imagine all of the Windows users hooking up their new Mac minis and finding out that their monitors actually display more than just the solid color blue.

Check out Charles Gaba’s “Apple Mac mini vs. Dell Dimension 2400” system shootout here.

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39 Comments

  1. Cool. Maybe this will shut Dell’s mouth for a while. I can’t wait to see one of thse. Just got a G5 iMac so not in the market, but have a few Windows friends……..

  2. Apple should throw in a free KVM switch so these journalists don’t miss the point.

    People aren’t going to be hooking up dusty monitors from their closets. They’re going to be hooking up the ones they have now showing them Windows problems.

    Also, Apple should get credit for being environmental here, encouraging people to use their current parts.

  3. On the Apple Store, I’m able to configure a Mac mini for $499, plus $58 for wired keyboard and mouse, plus $189 for a display (“Mitsubishi Diamond Plus 74 (17″ CRT) – Black”). With the old-fashioned pre-Internet-bubble math I still use, that comes out to only $746, not $800.

    If I go to, say, ClubMac, I can get a Mac mini for $494, which includes a keyboard and mouse (and free shipping), and add either a $175 GEM 17″ LCD display or a $135 ViewSonic 17″ CRT, for a total package price of $669 or $629, respectively. Either of which is less than $800.

  4. The Mac mini is aimed to sell to people with a fairly new PC. This computer is not meant to be hooked up to aging keyboards and mice. Most people with a 3 yr or newer PC will be able to use the Mac mini as a way to try out a Mac without having to spend a lot.

    For the price of a higher-end iPod, they can get a Mac and put it on their desk right next to their Dell. They don’t have to move their PC off the desk, only change a few connections. Painless and simple.

    Once they try the Mac for a few weeks, Apple is figuring they will ditch the PC, maybe buy a few more accessories to match, then down the road when they are ready for another computer, they will chose an one of the other offerings from Apple.

    The iMac mini will be even more of a trojan horse than the iPod for bringing in more Switchers into the Mac family.

    With the high demand Apple always has for its products, I hope they have anticipated for this demand this time.

  5. Xcode, Apache, PHP – add MySQL (foc) and you have a developer platform ‘par excellence’. Now, can someone remind me of the cost of Visual Studio and a SQL Server licence? [I’m a VB developer, so I know those are NOT cheap]

    The Mac mini – its a win-win-win-win-win-win [that’s enough wins] solution. The only downside I see is no microphone input – Griffin iMic!!

    Correction – there ARE no downsides ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

  6. Flawed. Every PC Keyboard and Mouse I have bought since about 1998 has had either a USB/Serial adapter/converter. If you wanted to use the Serial, you unplug the USB adapter/converter.

    How can these guys write with “authority” when they don’t know what the heck they are talking about. And if you wanted to get a PC mouse and keyboard, you can get both at OfficeDepot for like $20.

  7. Actually Jay, I agree with MDN on the software bundle. It isthe OS and software that makes the Mac mini so attractive in my estimation. Analysts keep harping on price and not on value. Those of us who appreciate OS X software are aware of the distinction (let me hasten to add that I’m not saying that you don’t).

  8. I have to admit, I did a double-take whenever people talked about buying CRTs “At the Apple Store.” Since when did Apple sell CRTs?!

    Sure enough, you were right.

    I looked over the specs–that’s a nice 17″ monitor. One of the chuckles that I always have is the 17″ monitors that will only support 1024 x 768. Those are the cheapo ones that come included with your average PC. The Mitsubishi monitor (and the eMac monitor) both support 1280 x 1024.

    I wonder if Apple will drop the price of the eMac to $749…

  9. My friend went to Best Buy to buy a cheap computer. Ended up getting an eMachines for very little, but when all the necessary extras were added on, the virus protection contract, and whatnot she spent over $1400. So a Mac Mini with extras costing 800-1000 is still a superb deal.

    Its like these PC users don’t get that Apple is playing now by the same rules that the wintel box makers have been playing, and they’re all stunned or something. come on people

  10. The theory out there, promulgated by Mr. Jobs himself, is that PC users will buy this as a second computer and hook it up to the old spare parts they’ve got kicking around.”

    BZZZZZZZT NO! It would be a FIRST computer. Take the accessories you use now and kick Windows to the curb, yo.

    “Jayson writes, “I don’t believe that for a moment. First of all, PC users don’t have old USB mice and keyboards hanging around because, until recently, the vast majority of PCs took serial input devices. They may have monitors stuffed away, but I doubt that many people want to put a giant, ugly, old, dusty CRT next to their stylish little mini-Macs. Some will. Most won’t. And I’ll bet you your Apple shares that Steve and Co. know this too.”

    Well, he may have a point.. but come on.. SERIAL PORTS!!!? can anyone back this up.. how freakin’ old-tech are these pieces of junk?

    It’s called USB for a reason.. UNIVERSAL

  11. Another thing people don’t usually consider is that all of these cheapo PCs you get for under $1000 (in fact, even the ones OVER $1000) come with Windows XP Home Edition. They don’t even get the full OS. To get Professional, they have to dish out another $299. Furthermore, a lot (I don’t know if it’s this way with Dell or not) of the $400 PCs you get are actually in the ballpark of $800-$1000 with a mail-in rebate. You have to cough up the dough up front and hang tight for 3-6 months before you see your money again.

  12. Mike:

    Have you even looked at PCs recently? They all still ship with PS/2 mice and keyboards. Go buy a Dell. PS/2 peripherals. It’s really, really dumb. What Apple should have done is included two PS/2 -> USB adapters with the mini.

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