“Owners of iPods are beginning to notice that Apple does more than sell music… Columns providing advice on buying a computer usually have a paragraph or two where the writer pauses and briefly genuflects at Apple. Great computer, they’ll say, but — there is always that but — they carry a premium of 20 percent to 30 percent over a similarly configured computer running Windows,” Damon Darlin reports for The New York Times.
“Here comes those paragraphs. However, that required ‘but’ may soon be retired. Gene Munster, a senior research analyst with Piper Jaffray in Minneapolis, compared Mac notebooks with similarly equipped notebook computers running Windows and discovered that the premium for a Mac is now only about 10 percent. ‘I don’t think consumers go through this exercise,’ he said. The premium shrank, not because Apple cut its prices, Mr. Munster said, but because Apple, in switching to an Intel processor, increased the performance of its Macs, and then didn’t raise prices,” Darlin reports.
“A few more consumers may notice. Apple’s market share, which climbed as high as 2.5 percent last year before the switch to Intel, has grown from 1.8 percent. Macs compete at the high end of the PC market, where the machines costing more than $1,500 are loaded with multimedia features like TV tuners and bigger hard drives to store photos, videos and music. Some have special chips designed to enhance the performance of video games. Price cuts have not been as deep up there, which is one reason Mr. Munster thinks the premium won’t go back to 30 percent,” Darlin reports. “He said that the media viewing and editing software that comes with the Mac compensates for much of the remaining premium. ‘Apple [Macs] are always going to be at a premium,’ he said.”
Full article here.
Chart comparing Apple MacBook Pro to Dell and HP 17-inch machines here.
[Thanks to MacDailyNews Reader “Jaribbs” for the heads up.]
MacDailyNews Take: A new Dell XPS M1710 (catchy name) upon which ugly, inappropriate, haphazard, and extraneous “design” elements are randomly glued – $3,445. Symantec’s Anti-Virus “Internet Protection” with flaw that could allow hackers to seize control of your Dell XPS M1710 without any interaction or awareness on your part – $100, every two years. Time wasted searching for DLLs, applying patches, trying to make everything just work, battling viruses, spyware, and assorted malware, performing annual hard drive wipe and reinstall, constantly fighting interface inconsistencies, struggling to duplicate iLife capabilities with freeware, and wishing you had a Mac – 23 days per year (plus frustration tax). Ability to run the safe, secure, powerful and fun Mac OS X, iLife and tens of thousands of Mac applications plus the odd Windows program at native speeds on elegant Apple Mac hardware – Priceless.
Macintosh. Because life’s too short.
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Related articles:
Dell burned by selling machines at bargain-basement prices last quarter, pain may not be over – May 09, 2006
Apple passes Dell in market value – May 02, 2006
InformationWeek: Apple Mac run Mac OS X, Windows, and Linux; Dell and HP should be concerned – May 01, 2006
Confused columnist on Apple’s 17″ MacBook Pro: ‘you can get a couple of decent Dells’ for that price – April 26, 2006 (Mac vs. Dell price comparison shows Apple offers better value)
Pre-Boot Camp report: Apple could double market share on Microsoft defections – April 13, 2006
Dude, you got a Dell? What are you, stupid? Only Apple Macs run both Mac OS X and Windows! – April 05, 2006
IDC: Apple Mac 2005 U.S. market share 4% on 32% growth year over year – January 20, 2006
Why buy a Dell when Apple’s Intel-based computers will run both Mac OS X and Windows? – June 08, 2005
How DARE they say there is a price premium. How DARE they say market share is only 2.5%. C’mon, MDN, if this were PCWorld or Thurrott, you’d incite the mob!
The new macbook pro and macbooks have caught the attention of people I talk to. I see more and more people switching, or seriously considering the Mac on a regular basis. The Macbook Pro has begun to make inroads into my workplace as well – much to the chagrin of the IT guys. I have been a Mac user since 1994 and have never seen this level of interest in people wanting Macs or at least considering them in their PC purchase decision. Hopefully Apple has FINALLY figured out that they not only need to make great products, but they need to TELL people about them and price them competitively.
I’ll be wearing my sunglasses more often now… the future looks very bright.
Freedom,
I think MDN made it quite clear that when you factor in software and user time needed by the Windows PC to function anywhere near as well as the Mac does, the costs are identical or higher for the PC.
As for market share, last quarter was anomalously low due to the Intel switch and no one disputes those last quarter numbers.
“Time wasted searching for DLLs, applying patches, trying to make everything just work, battling viruses, spyware, and assorted malware, performing annual hard drive wipe and reinstall,”
Own Macs and PCs – time spent per month/year doing the above on my PC – next to zero.
MDN you are scaring all the Apple owners, us PC (and Mac) owners know better.
And guess what you can now put Windows on your Apple! Have you tried it MDN – how much of your time have you spent on the FUD above running Windows on your Apple??? And Steve endorses running Windows on Macs.
Don’t get me wrong, I think that Macs are a great value for what you get…
However, Apple’s pricing problem is that there is an extremely large percentage of households who use their computers for nothing more than checking email, surfing the web and photos… It is tough for those people to justify spending $1299 for an iMac when they can buy a basic Dell for $399 which will handle their needs sufficiently..
I know that a $399 Dell can’t be compared to a $1299 iMac, but there are a lot of people who do not need all the iMac has to offer… Apple needs to offer lower cost solutions for those people, and the mini is not it.
On my pc, I do have to keep up with the antivirus software. The only time I use my Tohiba on the internet is to download AV updates. In the minutes I am online a week, I have gotten spyware. That’s ridiculous.
Just because you don’t spend time doing the things MDN writes of, doesn’t mean you shouldn’t be.
MDN’s take, in regard to searching for DLLs and all that other stuff – it’s actually spot-on, if you’re a computer user who doesn’t know what they’re doing.
people who know how to keep windows afloat obviously have less problems than people who don’t know a damn thing about DLLs or that they sometimes go in the /windows/system32 folder and they sometimes go in the /windows/system32/drivers folder and so on.
i’m a person who knows how to keep their copy of windows relatively bug-free. i don’t deal with the problems MDN stated very often. but the truth is, that people like me, and like “own mac and pc”, who DO know how to keep up with that OS, ARE A MINORITY compared to people who think the little blue “e” is THE internet, not just a browser that will take them there.
that’s why i switched – because i got sick of maintaining my OS, when all i really want to do is USE it. i keep a relatively decent PC around for gaming (1.8ghz socket 754, 64 bit sempron, 1gb ddr, radeon 9800 pro) but for everything else, i stick to my g3 900 ibook. =)
That is why you buy a Mac Mini for $599 and a 17 LCD monitor for $199. I bought a Sony LCD 17 includes rebate for $199 and a Core solo Mini refurb for $520 for my Dad who just surfs the internet.
Everyone who sells a complete PC for $399 is losing money on it. It is only good as a bait and switch item. In brick and mortar stores the sales weenies work on upgrading the unit sold to the customer. On line the same thing happens through tricky questions, byzantine websites and coupons that entice upgrading and sometimes don’t necessarily pay off.
Unsophisticated computer users buy a cheap Dell and if it doesn’t work, they just blame themselves, put it in the closet or call over a relative that can fix it. A $399 complete Mac would have to work because it’s a Mac. It couldn’t just be cheap junk.
Apple would lose money on a $399 Mac and Apple is not in the business of losing money.
Oh Apple charges a premium, it might not be as much on Mac’s, but everything else they sell.
iPod USB charger – $30 (should be $10)
iPod leather case – $99 (better ones for $25)
iPod HiFi – lousy sound for a whopping $349 (and yes I tested it) cheaper ones that sound better for $150
iPod Nano cases – 6 for $30 ($5 each for a piece of colored rubber that costs only 10¢ to make?)
and so on and so on.
“NY Times: Price difference between Apple Mac and PC notebooks has shrunk”
It’s called shrinkage. Our Macs have been in the pool. It happens.
Aaaargh…I am so sick of these “comparisons.” They are like statistics in that they say whatever the writer wants them to say. It’s like Consumer Reports that tries to be objective about decisions that are often subjective. People always buy things for their own reasons; whatever they might be (eg. I like the color, It looks cool, etc.)
Apples and PCs are different. They serve different needs. For me I prefer a Mac. But who are we going to convince with these arguments. Let them try the Mac. Let them see it and use it and people will switch. The more we try to convince people, the more people dig their feet in.
These reporters never factor in the true costs. Add in similar iLife type software, hardware add ons, and all of the anti-virus and anti-spyware software and the horrible UI of Windows and you’re gettting a complete bargain with a Mac. It’s annoying that they don’t tell the complete story ever!
Big Al,
I understand that Apple would lose money on a $399 machine.. However, that is a problem that they are up against..
Macs are a great deal (even better deal) for people who need a fully loaded computer, but for price conscious people who just need the basics (email and internet,) Apple can’t compete.. No matter how much better a Mac is, Dell will get the sale.
A Mac mini $599, a cheap monitor $120, cheap mouse $20, cheap keyboard $20, comes in at $760. A cheap Dell $399 with a $49 rebate comes in at $349.. That’s half the price.
Actually Ampar, it’s about coming across in the PC world where direct performance and price comparisons could be made.
Previously Apple customers claimed to have Big Swinging PowerPC Dicks down their trousers that could justify the price difference. Now even Steve admits that they were just stuffing socks down there and hoping nobody would look too closely.
I actually prefer being an apple elitest snob.
i don’t want redneck peecee users buying macs, because that would dilute the gene pool. lol.
Apple developing new low cost flat screen eMac!
http://www.appleinsider.com/article.php?id=1775
Windows PCs are not safe on the Internet. “Normal” users (90+% of Windows users) can’t protect themselves properly. Heck, Symantc can’t even do it.
How much is it worth to have a criminal install a keystroke logger on your $399 PC and steal your identity?
MDN MW: Just “making” a point, that’s all.
Maybe Apple just doesn’t want to make computers for the people who only need it for the Internet. They are simply not in the business of “Internet Appliances” (remember those?) on Steroids.
MW – Problem: The problem is that Apple is a fancy computer maker more like Alienware (but with better designs).
the mini core solo will fall into the category of the $399- mac soon. Especially as penetration of HD TV increases. I don’t think Apple is done with the notebook market either- Look for a core solo to appear in a sub-$999 notebook. Likely knock $100- off the base core dou just by dropping the DP, lop off another $100- in margin loss and you are at $899-. If market share is your goal, that might be a good vehicle. And the thing would probably be pretty nice for surfing, email and word processing. The thing is, for the things most people do, increasing processor speed is no longer making much difference. Even a core solo will do OK with jpegs in iphoto- probably at least as much as the typical “buget” shopper expects- maybe more.
Think about it- subtract the iSight, go to a core solo, and $899 is pretty easy to hit. $799- if you take a hit on the profit margin too. But I kind of think the iSight is a nice touch, even at the low end. We found a lot of use for it, more than anticipated, and nifty features like that could sell computers- more than processor at that price point I think.
This is the year for Apple to make the big grab for market- all the competition is relatively stalled thaks to microsoft & Vista. Hit em when they are down, Apple!!
A flat screen eMac with a 13 in screen, no iSight, 40G hard drive, Combo optical drive only, keyboard and mouse. Everything that is in the low end MacBook but as a desktop. Don’t really need iLife in schools but AppleWorks is still a great app for education. Generally kids in schools don’t need computing power, they need applications that support learning. They don’t need all the bells and whistles a high end computer usually has. DVD burning or large storage, all that can be done with shared external resources which makes the site implementation cheaper also. If they could do this for $899 per computer I think educational markets would love it. The current eMacs and also the bondi iMacs our schools still have take up a lot of space in science labs.
I know that a $399 Dell can’t be compared to a $1299 iMac, but there are a lot of people who do not need all the iMac has to offer…
Apple is not interested in that kind of consumer. I’ve heard that from a local Apple employee a few years ago. Guess that has not changed…
Apple needs to offer lower cost solutions for those people, and the mini is not it.
No, they don’t. They have tripled their business in the last 5 years without such a product. Why would they need one now?!?
Uh oh, look out… Own Mac and PC is back to defend the indefensible.
Whatever you say the PC does NOT JUST WORK in the way that Macs do.
Why, Own Mac and PC, have all the commentators acknowledged the truth that lies behind the Apple TV ads?? Yep, its because, compared to Macs, PC’s get viruses, crash, don’t talk easily to hardware or network etc. etc.
Your attempts at mitigating the damage being done to Windows in this process is a waste of your time because you don’t convince anyone.
In November of 2004 I purchased my first Mac. My small IT department of 6 laughed.
Fast forward to May 2006: Only 2 people in my IT department do NOT own Macs now.
No, they don’t. They have tripled their business in the last 5 years without such a product. Why would they need one now?!?
————————-
Let me correct my statement and say that Apple only needs to offer low cost solutions IF THEY INTEND TO DRAMATICALLY INCREASE THEIR MARKETSHARE AND COMPETE HEAD ON WITH THE LIKES OF DELL.. I don’t disagree that Apple can remain healthy and profitable as they are, however, THEY WILL remain a nitch computer manufacturer with a single digit marketshare unless they begin to compete in the low end.
And yes, Apple have tripled their business in the last 5 years, but that is mainly because of iPods, not Macs.
iPods are extremely successful and will remain a dominant force because Apple has covered all every consumer base from the budget conscious low end $69 Shuffle, all the way up to the high end $399 iPod video. Apple DOES NOT have all their bases covered with Mac offerings..