Apple due for ‘Reverse Osborne Effect’ as users stock up on PowerPC Macs ahead of Intel switch?

“Apple’s latest G5 workstation offers two dual core G5 processors at a price point no different from the older units – so low that it says something interesting abut Apple’s announced plan to go x86 in the future,” Paul Murphy blogs for ZDNet.

Murphy, like InfoWorld’s Tom Yager did yesterday, looks at various options and can’t find anything that even remotely compares to Apple’s Power Mac G5 Quad’s price/performance value.

Murphy continues, “The Opteron workstation market is extremely competitive – if either company could see a way to knock a few dollars off their pricing, they’d do it – so why does the cheaper of the two still cost more than twice as much as the PowerMac? The answer, I think, is that the PowerPC line is the world’s highest volume line overall and correspondingly dirt cheap – that’s why Microsoft expects to sell their 360 games machines, complete with case, software. memory, and a custom three core PowerG5 derivative running at 3.2Ghz, for less than the wholesale price of a mid range Xeon.”

Murphy, “There’s a simple bottom line: barring a miracle, Apple will be no more able to hit this price point with an x86 machine than Sun or IBM can -meaning that their customers will be in for a rude price shock if, or when, Apple does make this change. And that has a corollary: since buyers are pretty good at doing arithmetic it seems reasonable to assume that Apple’s sales will increase as people stock up on PowerPC products, and then fall through the floor when the x86 boxes hit the shelves. (I know, I know, everybody knows PCs are cheaper – but of course it’s not true. Take a good look at any high performance system available from Apple’s on-line store and then price out a Dell with a similar configuration. I promise you’ll be surprised: apples to apples, Apples are cheaper.)”

Full article here.

Advertisement: Order the new Power Mac G5 from the Apple Store now. Dual-core PowerPC processors, a modern PCI Express architecture, and wicked-fast workstation graphics. From $1999. Free shipping.

MacDailyNews Take: The Osborne Effect is a myth. Do you think the “Reverse Osborne Effect” will prove to be a myth, too?

Related MacDailyNews articles:
InfoWorld: Nothing can compare to Apple’s new Power Mac G5 Quad – true workstation at desktop price – October 24, 2005
NVIDIA brings workstation graphics to Apple Power Mac G5 – October 24, 2005
Apple’s new Power Mac G5 Quad supercharges rendering – October 22, 2005
AnandTech: Apple new Power Mac G5’s biggest improvement is the move to PCI Express – October 21, 2005
Photos of new dual core Apple Power Mac G5 interior, ports, and more – October 19, 2005
First benchmark tests of Apple’s new Power Mac G5 dual-core machines – October 19, 2005
Apple introduces Power Mac G5 Quad and Power Mac G5 Dual – October 19, 2005

39 Comments

  1. What a load of bollocks. Of course there’s not going to be a massive price-hike when top-of-the-range MacIntels come out; that would be commercial suicide! There may well be a price-hike for a far more powerful product – but remember that we’re talking about a release date about a year away! Intel-based Powermacs aren’t due until autumn 2006, and remember that Jobs said the whole transition wouldn’t be complete until June *2007*. That’s a long long way away. Basically, there is no rush, because the G5 will continue to be developed by IBM, and with applications being produced in the new universal binary format, apps will run just as well on a 2006 PowerMac as a 2007 MacIntel. I don’t get why people are so caught up in this discussion; the processor is irrelevant now. Universal binaries have seen to that. If a new intel-based Powermac isn’t as good price/performance-wise as the previous model PowerPC Powermac, people simply won’t buy the new model. Can you see Apple (or any sensible company) doing anything so stupid?

    Please repeat after me: “Another Stupid Media Pundit.”

  2. Tommo_UK is spot on, Universal Binaries put this argument to bed even before it began.

    I know I’ll be buying an Intel powered PowerBook when they come out, can’t be bothered replacing my Logic Board every 6 months like I currently do with my G4 PB.

  3. Not that I am some prognosticator, but I predicted this based on anecdotal evidence from Apple users Ive spoken to. There is going to be a gap as people buy Intel machines and upgrade their software to the UB versions. There is some concern among users that Rosetta will not work as well as advertised. This has lead to people thinking they want to buy PPC systems in advance so as to leapfrog this transition. People know that a Mac system will last years and Id be surprised if Apple dropped support for PPC systems anytime before they are obsolete.

    Yeah, the moron (Enderle) that predicted The Osborne Effect for Apple didn’t think it through, which is pretty par for the course for him.

  4. With his amazing insight and vision, obviously Paul Murphy has missed his true calling: replace SJ and run AAPL instead of writing blogs for ZDNet.

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  5. The Osborne myth may be myth, but there is truth the the effect. People do hold off purchases when they know newer faster and better products are around the corner. I among many are holding off purchasing new Macs until the intel models come out (Admittedly my current mac is only 6 months old so it is easy for me to make this decision). However I know of many that are living with 3 year old macs for another year waiting for the intel models.

    So if Apple’s sales are increasing ahead of the change, how much MORE will the demand increase when the new ones come out. We may see Apple’s market share double overnight.

    I remember reading about my dream airplane (still a dream, sadly) and the reviewer indicated that it maintained a positive rate of climb while in a stall. Similarly Apple’s sales should be slumping so the pressure to increase must be enormous, so much that the stall in sales that should be happening is completely outweighed by the upward pressure.

    Now may be a good time to buy Apple stock – it may be skyrocketing (even more) soon!

  6. Well, speaking only for myself, the fact that the Intel Macs won’t be able to run classic applications was one factor in my deciding to get a PowerMac now (dual 2.7). Although it doesn’t happen that often, sometimes I want to run an old App and getting this now assures I will be able to continue to do so for at least the next 5 years or so.

    I AM waiting for an Intel Mac Powerbook though- so I guess the Osborne and Anti-Osborne effects cancel out for me.

  7. I got to play with Front Row last night on the new G5 and I have to say it is even better than I expected. The genius of using just six buttons is crystal clear as soon as you try to use the remote in a darkened room.

    With the only ambient light coming from the screen, you can maneuver easily without having to look at anything. I can’t imagine trying to do that with 40 buttons.

    The only thing that might improve the experience is if the remote had a click wheel. (Then it could double as a jog/shuttle wheel.)

    And the graphics are top notch, too.

    As an aside, I like the Mighty Mouse (especially being able to right-click on a word to look it up), but it seems to squeak. Anyone else noticing this?

    ~M

  8. The processor may be “irrellevant”, but software is NOT!

    I just bought a new 15″ PowerBook, currently winging it’s way from China, which I’ll hang onto until Rev. B or C of MacTel PowerBooks.

    I’ve lived through too many of Apple’s promised “smooth transitions” to know better than to trust the hype.
    How smooth was the Mac OS X transition? Which applications took several YEARS to make the jump? Which disappeared? I rarely ran Classic and doubt that Rosetta will be any better or faster.

    Once the hardware issues have been settled… and we all KNOW that there WILL be issues with such a drastic shift in system architecture…
    AND when the software issues have been settled, and my main applications and utilities have been released as universal binaries and and proved to actually WORK reliably…
    THEN, I’ll get a MacTel PowerBook.

    Don’t believe Apple’s transition hype.

    MDN Secret Word: BORN… as in, I wasn’t born yesterday and know better.

  9. I suggest you go and read the whole article, those that are interested. Murphy’s logic is off a little on several points and his use of IBM / Sun workstations is a poor choice to cross compare. My comparison last week showed a slightly different story.

    Base specs for my comparison:
    Two dual core CPUs
    4 Gig’s of ECC ram (4x 1 GB)
    nVidia Quadro FX 4500
    1TB SATA HD storage (raid capable) (2x 500 GB)
    Dual layer Burner

    Dell Total: $8,634.00 Dell does not offer a Dual Layer Burner for this machine (Dell Precision Workstation 670) 2x Dual core 2.8 GHz Xeon

    No-name AMD vendor found through Google: $7,062.00 Did not offer the FX 4500 video card. 2x Dual core 2.2 Ghz Opterons, they did not offer the 2.4’s

    NewEgg price for hardware to build the system yourself:…$6,945.47 No software or OS, no thermal paste. Built with 2x Dual core 2.4 GHz Opterons.

    Apple Total: $7,573.00

  10. Checking out these new Dual Dual-core G5’s, you can’t help but be impressed at what they can do. If it weren’t for the announcement about Intel Macs, we’d all be crowing about these bad boys – they have most of the things we’ve been dreaming about for years.

    If I wasn’t sitting pretty on a dual 2.5 G5 I’d be buying one of these to wait out the production delays, ramp ups, and growing pains (and potentially even a performance drop) in the switch to Intel.

    MDN Word “Doubt” – I honestly doubt that there will be a comparable Intel Powermac within two years.

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