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  • Does Apple Build the Gear You Want?

    November 30th, 2009

    A big part of the recent debate over Apple pricing and that alleged Apple Tax is whether Apple is forcing you to pay for loads of options that you don’t want. This is certainly the most significant argument about the whole issue, because even if a comparably equipped Mac and PC are similar in price, it doesn’t matter if Apple isn’t building the computer that best suits your personal requirements.

    This is one of the reasons why I suggested a possible business configuration. Now it’s clear to me that it’s far cheaper for Apple to supply Bluetooth and Wi-Fi preinstalled on the logic boards, and the extra money you pay is probably not a large figure. If you had to buy specialty daughter cards to get these features, Apple would have to design and test separate components along with an interface that allowed them to connect properly. It would mean that the majority of people who want one or both would end up paying more for their new Macs.

    That’s a critical point. Despite the erroneous claims in a recent issue of Consumer Reports that Apple’s new iMacs delivered more without a “hefty” price increase, Apple generally keeps the price the same or delivers higher-end configurations for less when they upgrade products. Bundling everything as standard equipment reduces their production costs, and thus the retail price if Apple chooses to pass on those savings to you.

    So in constructing that business-oriented Mac, I’d leave in the wireless networking. Then again, if you include the MacBook, MacBook Pro and iMac, all of which have built-in Web cams as well, eliminating all three might indeed produce a slight savings, which I estimate to be $50 to $75 per unit. That may mean very little if you’re buying just one, but when you order up hundreds or thousands of Macs similarly configured, pretty soon it adds up.

    However, I think most of you realize that Apple has not invested much time or energy devising an enterprise strategy. Instead, they expect businesses to simply use the same Macs that are sold to consumers. In large part, they’ve been successful, because more and more businesses have at least some Macs around the office. Indeed, there appears to be less resistance on the part of IT people who traditionally favored Windows. But I suspect part of that is due to the fact that corporate executives end up buying new Macs and then telling the systems people that they just have to accept the situation and deal with it. It’s also true that Apple has made it easier and easier to integrate Macs into Windows networks with each Mac OS X upgrade.

    The other question is more serious in its implications. Does Apple provide the products you, as a consumer, want to buy, or are you compromising big time to go Mac? This is the real issue raised by that Apple Tax claim, because Apple sells fully loaded personal computers, brimming with the latest and greatest technology. The average sales price is way above that of the average PC. Indeed, roughly 50% of the money spent on personal computers in the U.S. retail market goes to Apple. But their actual market share is still between eight and nine percent overall in this country.

    This doesn’t mean Apple is building overpriced gear. They have opted to pick and choose the market segments in which they operate, avoiding the cheap PC playground, where bottom feeders fight relentlessly for higher and higher sales, profit margins be damned! There’s no way Apple expects to be successful playing that game, anymore than they will build a standard wireless handset. When it comes to mobile phones, the big money is in the smartphone segment.

    After all the bad moves Apple made in the 1990s, their present strategy is a good thing. Sales are high, profits are high, and most customers love their iPhones, iPods and Macs. Why should it be otherwise?

    This doesn’t mean that Apple will never produce the exact computer you want, if you can’t find it in their current lineup. It’s still all about sales and customer demand. At the end of the day, if Apple sees sales tanking in a particular market, they’ll do something about it.

    Consider, if you will, Mac desktops. Sales are down industry-wide, not just with Apple. Some three quarters of all Macs sold these days are note-books, at least according to the most recent quarterly financials. So in creating a new iMac lineup, Apple gave you larger screens and also a special quad-core configuration that, for now at least, trumps the Mac Pro in many performance benchmarks. Indeed, I expect many content creators who found the Mac Pro too rich for their blood are opting to select quad-core iMacs instead. This is a move, by the way, that I’ve seriously considered, and I’ll let you know my decision soon.

    Meantime, if you still want Apple to make a computer that’s not in their current lineup, such as that mythical midrange Mac minitower — basically an iMac without the integrated display and extra expansion capabilities — some of us have written about, the best you can do is tell them what you want. If they get enough requests, they might consider it, but if desktop sales don’t improve, don’t bet on it now or ever.



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