Bear Stearns: Apple’s new Mac Pro, Xserve pricing well below comparable Dell systems

“Bear Stearns analysts Andy Neff, Bill Hand and Ted Chung sent a note to clients on Apple Computer’s (AAPL) new product announcements yesterday,” Seeking Alpha reports.

Key points from the note:
• Some investors came away disappointed given the lack of any surprises (i.e., “one more thing”), we believe that the compelling pricing of AAPL’s new Mac Pro and Xserve was overlooked. Contrary to the popular belief that AAPL’s Macs are premium priced and above its major Wintel competitors, our analysis indicates that AAPL’s pricing of its new professional systems are well below comparable systems from DELL.
• Priced at $2,499, AAPL’s Mac Pro is 28% less than the comparable system from DELL (Precision Workstation 690) which is priced at $3,471 (see detailed comparison in full article).
• Priced at $2,999 for the base model, AAPL’s Xserve is 10% less than the comparable system from DELL (PowerEdge 1950) which is priced at $3,333… AAPL’s Xserve comes with an unlimited client edition of its [Mac OS X Tiger] operating system, while DELL’s MSFT Server 2003 edition is limited to 5 client seats. (see detailed comparison in full article).

Full article here.

[Thanks to MacDailyNews Reader “LinuxGuy and Mac Prodigal Son” for the heads up.]

MacDailyNews Take: Comparable Dell? Fact: There is no such thing as a comparable Dell box to any Apple Macintosh. Dell PCs are OS-limited and cannot run Mac OS X and best-in-class Mac-only applications like iMovie HD, iDVD, GarageBand, iPhoto, iChat, Safari, iWeb, and so much more. Why would anyone settle for only being able to run some programs when Apple Macs can run them all?

Related MacDailyNews article:
Dude, you got a Dell? What are you, stupid? Only Apple Macs run both Mac OS X and Windows! – April 05, 2006


  1. It’s nice to see this reported. About the missing “one more thing” thing… it’s behavioral conditioning. If you reward behavior (like paying attention to an Apple event) every time with a “one more thing,” you’ll increase the frequency of people paying close attention to an Apple event. But if you reward people every once in a while with a “one more thing,” they’re even <u>more<> likely to pay attention to an Apple event.

    It’s like gambling. Slot machines only pay out every so often– that’s why people will sit there forever, waiting for a pay-off.

    Apple is not filled with dummies. They’re as deliberate as you can be, even if it’s just acting on intuition.

  2. TWO errors in the compare article:

    – the Mac Pro ships with a Superdrive which is a DVD-RW, not just DVD-R. The Dell is configued with a DVD-R.

    – the XServe comes with a 1 year warrantee and the Dell with a 3 year. He needed to add the cost of upgrading to a 3 year to the Xserve, which will pump it past teh Dell’s price.

  3. MDN, most of your Takes are good, but this is just another one for the wastebin. This article is clearly about the “hardware”. The OS is secondary and not the focus of the value calculation. The OS only becomes important when the hardware is in the hands of the end-user, at which point another level of value is realized (for Mac users).

  4. Bear Stearns forgot one big big difference between Dell and Apple.
    Look at the inside of any Dell, if you can see past all the wire that is going from point A to point B. You will really see that no pride is taken, just put together like anyother box. Now look at the inside of a Mac, no wire clean, sharp and quality, makes you want to show off the inside to everyone.

  5. To “Me”.
    About the Xserve. Yes you are right but you forgot the number of licenses. If you are running a server and need 20 licenses Dell has you by the short hairs. \

    Apple – unlimited number
    Dell 5 licenses.

    The truth, THE WHOLE truth and nothing but the truth. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

  6. The big thing that people miss when pricing these servers (And it doesn’t matter where you get it from) is the OS X server Unlimited vs Windows Server 5 client license. To upgraded to a 25 client license will cost you another $2496.

  7. Dell makes it’s money off these high priced products, not the cheapo boxes. Apple’s strategy seems to be to strangle their cash cow.

    Well over a year ago I speculated that Apple could compete on price if they wanted to. Apple’s gross margins are in the 28.5% range, while Dell struggles to get 19%.

    But these price reductions surprised even me for they represent much more than a 10% cut in margin. They represent an elimination of margin. Is Apple going after the power users they lost eleven years ago to Win 95 and cheap boxes?

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