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  • The Educational iMac: A First Step or a Trend?

    July 6th, 2006

    After I suggested that Apple ought to consider providing cheaper Macs with fewer options, up comes a version of the iMac earmarked for students and teachers. At $899, it replaces the eMac, the final true descendant of the original iMac and the last CRT-based product in Apple’s lineup.

    It didn’t take a lot of design savvy to shave the cost of the entry-level iMac. First ditch the SuperDrive in favor of a 24X combo drive. Cut the hard drive’s capacity in half, to 80GB, and bounce the Front Row remote, since it is apt to be lost or stolen in a classroom environment. Since you don’t expect students to sit there playing 3D games when they are supposed to be learning about reading, writing, and arithmetic, use Intel’s integrated graphics instead of a dedicated or discrete chip. Yes, the iSight camera remains, but when you factor in a standard educational discount, the price is reduced by some $300.

    No big deal, you might suggest. In fact, the rumor sites sort of had it right this time, with suggestions that a special educational model would debut in time for school systems to place their orders. However, it wasn’t a new form factor, such as a 15-inch display to keep the price down. Remember, the eMac was also 17 inches.

    This, however, is just the starting point, and Apple would do well to provide cheaper versions of the Mac mini and MacBook as well. Sure, there’s already a small discount if you buy from Apple’s educational store, and school systems will get much better pricing when they buy several thousand units at a time. But little things count as well. Of course, there isn’t so much to discard from these two models. They already have combo drives and integrated graphics and shaving space from the hard drives may not be so good an idea, unless they will rely largely on network booting in classrooms. In that case, going to 40GB drives and dispensing with the remote might bring prices down another $75 to $100.

    I gather Apple must regard iSight as a potential educational appliance, so it isn’t messing with that, although I can see where its elimination might be required as a further cost-cutting maneuver. If Intel continues to drop prices on its Core Single and Core Duo chipsets as production expands on the Core 2 Duo line, there may be another source of price reductions.

    At the same time, there is no advantage to removing bundled software. Production costs don’t change, except for possible licensing fees for third party companies, which are not all that high, since most of the stuff comes from Apple.

    Shaving features, of course, is a common technique in the PC industry that accompanies aggressive price-cutting. That’s how Dell manages to construct those special configurations to hawk on their TV and print ads, but when you click Customize, you’re in dangerous territory there. Suddenly, you realize that even a decent warranty may come at a price, and a short session of checking boxes inflates the totals considerably. At this point, I suppose, Dell figures the customer completely believes the illusion that money is being saved, so it doesn’t matter. Besides, those options are critical to the company’s bottom line. Profits from the bare bones PC are minimal or non-existent. They are just loss-leaders to entice you to buy more stuff.

    Unfortunately, that also contributes to the illusion that Macs are more expensive than comparably equipped PCs. There are credible arguments about allowing you to eliminate certain features to save a few dollars, but in the end, it’s the perception, and not the reality. Beyond cutting a few frills here and there, all Apple could do to really keep the prices down is to reduce profit margins, and the stockholders won’t sit still for that.

    In addition, I doubt those softball “Get a Mac” ads are going to change the perception that Macs are expensive. Here Apple might do well to consider some print ads with direct comparisons between a Mac and a PC from Dell, HP or Gateway, for example, with the same options. Show what the prices really are when you match things up as closely as possible. It won’t help for broadcast, but it might alter a few perceptions.

    The other factor is total cost of ownership, which includes support and expected downtime over the life of the system. Here Macs traditionally have a major advantage, but this concept is doubly difficult to convey in 30 seconds or less, or in a paragraph or two. That’s too bad, but that’s how it is.



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