• The Apple/Intel Report: Fair Pricing?

    January 14th, 2006

    Now that Apple has begun to put Macs on an equal footing with standard PC hardware, at least in terms of the basic internal parts, pricing comparisons will become more common. In the past, it was easy to favor Apple in such a comparison, by pointing out that Macs had more standard features and superior bundled software. Of course, you could always find a benchmark in which the PowerPC trounced the Pentium, so all things being equal, you could still say Apple gave you more for your money.

    But this has become more difficult in the laptop arena, where Apple went for a professional Intel-based portable and left the consumer price line intact. It’s not that the $1,999 base price for the MacBook Pro is particularly high for a professional laptop with desktop replacement pretensions. In fact, if you compare it to a Dell with similar specifications, Apple does indeed offer a far better value. You’d be amazed how easy it is to pad the price of a Dell with just a few options. This is particularly true because Dell is still pushing products with the older Pentium M processor rather than the Core Duo that Apple is using.

    I did a quick run through Gateway’s site and came away with the same results. As PC makers roll out their own portables with the Core Duo, however, this is apt to change the equation.

    For example , when you start comparing the MacBook Pro with a second-tier note-book, such as an Acer, Apple doesn’t come out so well. According to a story at MacNexus, you can outfit an Acer TravelMate 8200 to match the MacBook Pro’s price and come out with more standard equipment in some significant respects. The Acer, for example, seems closer in configuration to the high-end Pro, which retails for $2,499. Both have 1GB of memory. The Acer gets a 2GHz Core Duo, same as the 20-inch iMac, while the Pro tops out at 1.83GHz. The performance difference, all things being equal, wouldn’t seem significant without a stopwatch, but the Acer gets superior bragging rights.

    Going down the spec sheet, without repeating the numbers completely, you see that the Acer has an ATI X1600 graphics processor to match the MacBook Pro with twice the video memory, a slightly bigger hard drive, plus built-in VoIP, 5-in-1 card reader, swivel screen and a modem. The Pro only has a single-layer DVD burner, compared to the Acer’s dual-layer configuration. On the other hand, Apple adds the iLife ’06 suite, remote control, ExpressCard slot, backlit keyboard and FireWire. In the real world, Mac OS X Tiger is closer to Windows XP Professional than the Home version of Microsoft’s OS, so that also favors Apple.

    Without attaching a dollar value to Apple’s advantages, let’s say they do match the Acer in most respects. However, with a faster processor, larger drive, more graphics memory and a swivel screen, you can see where the PC seems to offer more bang for the buck. I am, of course, ignoring issues of weight and looks for now.

    In fairness, of course, this is Apple’s first venture into the Intel world, and it no doubt has lots of development dollars to recover before the new models are really profitable. One could always hope that future Pro note-books will be competitive in all respects and there’s where all eyes begin to focus on the future of the iBook.

    In terms of Apple’s bottom line, I can understand why a professional note-book and the iMac moved to Intel first. They have higher retail prices, greater profit margins and, assuming they are as successful as analysts expect, will keep stockholders happy. At the same time, the Mac mini and the iBook are really long in the tooth now as personal computers go. In comparison to the Intel-based models, they appear to be left in the horse-and-buggy arena. Now you can’t really say the Mac mini is overpriced as entry-level desktops go, but the iBook is another story.

    Of course, on the surface, the traditional comparisons are the same. Take an entry-level Dell note-book, such as the Inspiron B130, pack in the extra memory, Windows XP Professional, a basic office suite (to match AppleWorks), and a digital lifestyle suite, and suddenly a $549 computer costs over $1,000. But this is the sort of spec shopping that is seldom done in the real world, where the initial purchase price and a few other basics are all that typical buyers examine.

    So when the iBook undergoes its Intel metamorphosis, Apple may indeed want to find a way to offer a $799 or $899 model with the same level of standard equipment. Apple, you see, can’t get away with stripped-down configurations. If the iLife suite becomes optional, for example, Apple’s whole argument of digital lifestyle superiority goes out the window.

    No, I don’t expect to see the iBooks successor any cheaper than that. In the end, it may come out at the same price as the current model, $999, with Apple pointing to the expected built-in iSight camera and remote as evidence that it offers superior value for the money. Let’s just hope the customers are listening.

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