“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
Don’t nitpick so much MDN.
If this is widely publicized, Dell is f#*ked. They will be pressured to reduce margins on their high-end systems, which currently subsidize their money-losing low-end sales.
GO APPLE!
news flash – if Apple can make money selling these boxes at these prices, so can Dell.
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.
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.
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.
me –
You should forget about factoring warranties into the price. With the Apple, a one year warranty will suffice. With the Dell you’re gonna need that three year deal (and more).
Analysts and IT people live for comparability. Even when they make some errors, it is an fscking great thing that they reach and publicize this conclusion.
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).
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.
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.
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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.
Some might disagree that Safari is best in it’s class. I’m sure a big portion of the Mac users use Fire Fox.
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?
Norm e, me, MDN – YES! The unlimited OS X licenses vs. 5 Windows licenses is HUGE, and too often overlooked. I could see a server argument on this alone (obviously), not just on the xServe’s lower price.
Anyone notice that in the HP advertisment next to the comment box on this page, their new slogan is “It just works.”
Can they get away with that?
I think so, Gregg. Steve has commented about Apple’s mistakes in the past, one of them being their failure to pursue market share. Apple is very profitable now, so this seems to be a push to raise numbers, temporarily sacrificing a few bucks.
Hope it works!
Unfortunately, I’m not sure lower prices for the new Apples means Dull is “f****d”. What it probably means is that most IT shops will not buy anything until Dull lowers prices to meet Apple.
Anyone know the difference in price in the GPU cards used between the two being compared?
MacPro = GeForce 7300GT
Dell = Quadro FX 3450
Posters mentioning the MS licensing issue raise a vital point. Apple’s going with multiple CPUs, not just multiple cores, is a clever move. If MS wants to hurt Apple’s sales of multiple CPU Macs, it will have to change its licensing policies and lose a lot of profit. I suspect that is why there are no low end Mac Pros with a Conroe CPU.
Apple is very profitable now, so this seems to be a push to raise numbers, temporarily sacrificing a few bucks.
——
Or maybe Intel is pissed at Dell because of their AMD deal and is offering these chips at a discount to Apple. Plus Apple doesn’t have to pay any licensing fees to MS.
coolfactor,
Computer hardware without software is a paperweight.
R: You are right about the “one more thing.” BF Skinner discovered the same thing in pigeons over 50 years ago.
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).
I have to strongly disagree with the above statement, especially when you are talking about servers. The OS can easily end up costing more than the server itself if you have to pay for a license per seat.
macnut manages to be right and a little wrong all at the same time.
MDN should nitpick, but not on dumb ass subjective crap that nobody really cares about – unless they’re unbelievably anal – but on real information that makes a difference.
The Dell server in this article is packaged with a copy of Microsoft Windows Server 2003. BFD. With Windows Server 2003, I can file documents, print documents and run a simple web server. With OS X Server – as it currently stands – I can file, print, run a mail server, run a webserver, run a blog server, deliver multicast streaming media and I get a semi-reasonable firewall as well.
Come Leopard Server, with built-in Wiki, Cyrus IMAP server and iCal server, the Xserve will be more like Small Business Server 2003, which costs a darn site more.
You don’t seem to be able to buy SBS 2003 as an OEM install option from Dell’s website, so let’s start with a raw system at $2,544.
Add in a copy of SBS 2003 with 5 CALs and that’s another $1,300.
So now we’re up to $3,844.
Now, let’s go back to the unlimited license advantage of Mac OS X Server.
The average business in the USA has about 27 employees, if memory serves. So that’ll be 30 CALs required. We already have 5 to begin with, so we need another five 5-user packs. That’ll be $2,250 thanks very much.
So, a 30-user system on the Dell side will cost you a minimum of $6,094 – let’s call it $6,000 for cash. And the Xserve will be $3,000.
Now admittedly, both machines will need more RAM and more disk space to cater for 30 users. But given that the Xserve is starting with a $3000 advantage, I’m thinking that’s not going to be much of an issue.