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  • The Illusion of the Cheap Mac

    May 20th, 2008

    It’s very clear that the words Mac and cheap don’t align very well. Although you can buy a fair number of note-books for hundreds less, the cheapest MacBook remains $1,099. A refurbished model, or one bought through Apple’s educational channels, can save you a modest sum, but that’s the best you can do if you prefer a Mac.

    The same holds true for desktops. The Mac mini, at $599 and $799, is a forgotten stepchild that seldom receives updates, and never gets any real promotion. The symbol of the Apple computer in the Mac versus PC ad is the iMac, which starts at $1,199.

    In contrast, there are entry-level PC desktops that sell for less than $200, as I’ll explain in more detail later in this article.

    When you combine these factors, you can well believe the long-standing claim by some ill-informed tech and business pundits that Macs are overpriced compared to the competition, but that’s because they’re too lazy to look below the surface and do a modicum of research.

    As I’ve long maintained, consumer Macs are priced very close to PCs that are similarly equipped — and the latter is the key. In some cases, the Mac may cost more, and in other cases it’s somewhat cheaper. As you move up the product line the Mac advantage grows larger. I still see Dell workstations selling for a grand more than Mac Pros with the same basic features. Since the Mac Pro can run Windows as well or better than any dedicated PC workstation, Apple’s value equation is enhanced.

    Not playing in the low-profit segment of the PC market has its benefits. Everything Apple builds is profitable, and its real market share, if you compare the Mac to PCs above $1,000, is reportedly in the higher double digits. Overall, in April, Apple’s U.S. retail sales, as reported by the NPD Group, increased 50% over last year’s, compared to a 17% average for the rest of the PC market. This is a trend that just won’t stop.

    Even more interesting, industry analysts now suggest that even iPod sales have seen an unexpected boost this quarter, after a period of flattening sales.

    So the larger question is whether there’s any upside to building cheap Macs, using yesterday’s parts and perhaps eliminating such features as built-in Web cams, AirPort and Bluetooth to keep costs down. That, and providing the cheapest version of Windows, or omitting Windows altogether, explains why a PC can sell for much less, but you still aren’t getting a better buy for your money.

    Now in all fairness, it may well be that Apple is giving you some features you don’t need. Not everyone requires a Web cam, for example. I know I rarely use the one in my MacBook Pro. In fact, the few times I have used it were to communicate via video with my son. Otherwise, it sits there and does nothing, but the purchase price was the same. I can also see where businesses don’t see a need for that extravagance, since it may only encourage employees to goof off on the company’s time. But Apple won’t build bare bones Macs for anyone.

    Indeed, I expect that you could probably buy one of those Everex Gbook note-books from Wal-Mart at $379 and get a perfectly respectable computer for your money.

    So what does it offer?

    According to the specs at Wal-Mart’s site, this particular note-book has a 15.4-inch screen, a 1.5GHz VIA processor, 512MB of RAM, a 60GB hard drive, a CD/DVD combo drive and built-in Wi-Fi.

    But this isn’t a Window’s computer. It actually runs the gOS version 2 operating system, which is a Linux derivative. Yes, a consumer-level PC running Linux, and it also includes the OpenOffice software suite, which is a pretty capable free Office alternative. You can, by the way, get OpenOffice for your Mac if you strive for a Microsoft-free environment.

    Combine OpenOffice with the fact that the Everex note-book likely includes Firefox as the bundled browser and you have a computer that may indeed be a reasonably usable product that will serve nicely for basic Internet, email and office tasks. In fact, if you stay within its limitations, you may never have to learn Linux or be forced to confront any of its well known user-hostile aspects.

    Now I know nothing of how Everex stands when it comes to product reliability, nor much about its performance on the long haul, though it seems to offer quite a bit for the money. It’s also possible that it’ll self-destruct in a few months, and repairs, despite the one-year warranty, may not be worth the bother.

    By the way, if you prefer a desktop, Everex offers a $199 model with similar specs, except that the hard drive expands to 80GB and there’s no installed Wi-Fi option.

    As to VIA: That Taiwan-based chip maker is reportedly trying to move its processors into the mainstream, the better to compete with AMD and Intel. I suppose we’ll have to wait and see how their plans work out.

    Again, I’m not pushing these computers as a superior choice to a genuine Mac, or even as serviceable computers in the overall marketplace. The specs sound decent, period. But no mainstream manufacturer could deliver a credible competitor and making a profit on such products can be extremely difficult. It may well be that Wal-Mart is offering those deals strictly as loss-leaders to get you into the store, hoping you’ll stock up on clothing and groceries and other items to make up for the missing profits.

    As far as I’m concerned, I still think there are things Apple can do to better compete in the low-cost segment of the PC market. But you’ll never see a $399 Mac, at least not in the foreseeable future.



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