Apple needs to bring Mac prices down

eWeek has an interesting article up today detailing the difference in price currently being witnessed in the computing space, according to NPD. Based on the research firm's analysis, it estimates that the average Windows desktop is selling for about $550, compared to Apple's average desktop selling price of $1,543. The average Windows laptop in June was selling for $700, while Apple's laptops were going for a hefty $1,515.

After comparing comparably-equipped HP laptops with Mac notebooks, it became abundantly clear to me that Apple, although working hard to reduce prices on its computers, still has considerable work to do.

Right now, you can head over to HP's website and buy yourself a Pavilion dv7t sporting Windows Vista Home Premium, a 2.26Ghz Intel Core 2 Duo Processor, a 250GB hard drive, 2GB of RAM, and 256MB NVIDIA GeForce 9200M GS to display video on your 17-inch screen for just $1,217.99.

But if you chose the Mac, you'd be paying $2,799 for a MacBook Pro sporting a 2.5Ghz Intel Core 2 Duo processor, a 512MB NVIDIA GeForce 8600M GT graphics card, and a 250GB hard drive.

The list goes on. Mac Pros are substantially more expensive than comparably-equipped Dell machines, and aside from iMacs, which are far more competitively priced, you're not getting a bargain on any Apple product.

But then again, Apple gets a pass for charging more for less. After all, Macs aren't running Windows Vista (a definite plus) and the company's popularity in today's tech world makes anything it creates a premium product. Much like the shoe industry, the brand that most people covet will be able to charge more than a company you've never heard of.

And while I know this is a complaint that has been filed more times than any of us can count, I'm not saying that Apple should reduce its prices because they're too high. Instead, I think Apple should reduce Mac prices to gain market share on Microsoft and PC vendors.

There's no debating the fact that Apple has enjoyed considerable success over the past few years and has gained significant market share in the computing business. But it still has a ways to go.

According to the most recent figures for the second quarter, Apple is the third most popular computer vendor in the US, but has failed to crack the top five worldwide. The company enjoyed 38.1 percent year over year growth or 31.7 percent according to IDC's estimates. Apple sold 1.4 million units, according to Gartner and captured 8.5 percent market share.

Although some will say that that kind of growth speaks for itself and there's no need to reduce prices, I disagree. There are three major factors working against Apple that are ensuring that it doesn't gain too much market share in a short amount of time: Enterprise infiltration, application compatibility, and price.

And although many of the application compatibility problems have been solved over the past few years, it's difficult for the average PC owner to switch to a Mac when they're used to the Windows environment and an HP machine will cost half as much.

But if Apple can reduce its margins and start making its pricing more competitive, it'll no doubt enjoy even greater success.

Let's face it -- the average tech-savvy person is well aware of the benefits of owning a Mac and more often than not, they will run a Mac or Linux box before Windows even enters the home. But the mainstream doesn't necessarily possess that kind of knowledge and instead prefers to stick with what they know, regardless of its issues.

So if Apple is battling ignorance, why should it be pricing its computers at such a premium? It needs to capitalize on the fact that many people are worried about using Vista, bring the prices down to a far more competitive level, and watch as even more people move to the Mac thanks to lower pricing and their belief that they're buying a premium product at a bargain price.

Now is the perfect time for Apple to capitalize on its popularity and Microsoft's significant Vista problems. But the only way to do that is to get its PR machine working to allay common customer fears and let them know that Macs are now more affordable than ever. If it can do those two things, I think we'll see huge growth in Mac adoption and witness a real competition between both Windows and Mac OS X.

Even better, there are hints that Apple may be dropping the price of Macs soon. According to the company, it expects margins to fall significantly from 35 percent this year to 30 percent in 2009.

The time is now for Apple and with any luck at all, it'll seize this opportunity and give people what they want: a more affordable Mac.

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[Wisnaeme]

As a PC user from day one, I hate Vista. I can use OS9/X perfectly fine, but I choose not to.

Recently I have been closer to getting a Mac (to replace by test system G3!) but I keep stepping back. If I decided to try and move my life over to the Mac, the one thing that really annoys me is their forceful way of moving me on in software. I bought an Ipod recently, it works fine on XP, Vista. It refuses to work on my G3, simply because it is not using the most recent OS. It seems to me that they are making it difficult (for no good reason) for users to buy a platform stay with it for a couple of years and upgrade at their leisure.

This one issue is enough for me to not trust Apple. Similarly, I would never buy a car with an Ipod feature as a charged for option. Cars recently manufactured are not compatible with recent Ipods/Iphones etc as Apple decided to change their connection. This fails me entirely. Why would they do this? I will stick to using a 3.5mm socket to feed my car audio as this is much more trusting. I'd love to have a control platform for the Ipod, but I will not buy something to find it not working in a year.

Apple can get lost as far as my money is concerned. They do not support backwards compatability well enough and are only after money.

[Gimpymw]

A G3 Wisnaeme!

It refuses to work on my G3, simply because it is not using the most recent OS.

***!

That's a ten year old computer! Of course it's not going to work. That would be like trying to run it on a 1st gen Pentium 233mmx running windows 95.

Holy Crap! Get out of the frickin Stone Ages moron!

[grpaul349]

So you're whining because they don't support an antiquated system? Try running Vista on anything other than a 1 year old computer! Seriously - Apple is far better than Windows at supporting old systems.

[jerrymacGP]

I don't think this complaint is justified. A G3 is a very old Mac, designed and built to run Classic Mac OS, not one of the newer OS X versions. Our family computer is a 2004 eMac with a 1.25 GHz G4 processor, nowhere near as powerful as what is available now, and runs OS X Tiger just fine. I'm sure it would probably run Leopard just as well, although with the PowerPC chip instead of the newer Intel, we could not take advantage of Boot Camp to run Windows software (not that we would want to anyway).

Bottom line: computers become functionally obsolete in a matter of just a few years; that has always been the case. But the Mac OS is much more friendly to somewhat older machines than the recent versions of Windows.

[ReVeLaTeD]

I said this nearly half a decade ago. People are now starting to see what other people have been saying. Apples are overpriced - and the argument "you're getting a better machine" doesn't fly. They'll never get in with the right market if they keep positioning themselves as the Maserati of the computing world. Time to settle for being a Ford Five Hundred.

[technewsjunkie]

No.
You say you told us this five years ago, "half a decade"? Wrong! Re-read the article!
It wasn' t the same then (that's waht he states in the article but couldn't miss an opportunity to start the "Apples" are overpriced rant, could you?

"Time to settle"? Can they lower the price? Yes, they can. But they'll never be bargain basement commodities.
Steve Jobs has also prevoiuosly stated they are not "interested" in the Business market. They're interested in consumers. Average people without IT staffs to wait on them hand and foot.

You missed the point of the article.

[b_baggins]

Right. That's why Apple's Mac sales are enjoying double-digit growth and they are breaking records each quarter.

Apple computers are not over-priced compared to "comparable" PC laptops. First of all, it ain't comparable unless it's running Vista Ultimate. Second, the Macbook Pro have features not found on any PC laptop. Like, oh, backlit keyboards and powered firewire ports. They also aren't made from cheap polycarbonate plastics.

Style, folks, is a feature, too. Something tech journalists fail to comprehend, but consumers are well aware of.

[grpaul349]

Some of us don't want to settle for a Ford Five Hundred and are happy being the minority. I'd argue I pay less over the long term for my mac than a PC - antivirus software annually anyone?

[pmbx]

I have to say for our medical practice, we bought our first 10 iBooks which ran FileMaker Pro client connected to our server between two offices in 2001. We see 30,000 patient visits a year in our three Pediatric offices now. Those 10 iBooks were STILL workhorses when we replaced them in 2007. Overpriced? No, I think not. How many PCs would we have gone through in that same time? I have heard it said that most people replace their Windows PC every 2 to 3 years? So how would 30 PCs be cheaper than 10 iBooks over the long haul? Incredibly cheaper. Factor in IT costs (heck I have NONE since I created and managed all our software and hardware), and there is not any way ever PCs are even CLOSE to the total investment cost of Macs! Why did we replace those 10 original machines? To squeeze every drop of CPU horsepower out of the newer Intel chips both on the server and the clients.

[tommyboytg]

Any tech-savvy person sees the benefits of running Macs? Really?

I am very tech-savvy and I disagree completely. At my work, we run about 15 Windows machines and about 10 Macs. Over the past 2 years (all the computers were purchased at the same time), the Macs have had far more problems than the PCs. And your Windows Vista bashing? Have you even used it?

I've been using Vista for over a year now and have had 0 issues with it. It's terrible journalists like you who go around spreading fear that Vista has all of these issues when it really does not. When it first came out, of course its easy to say it has problems. Now, my Vista computer has much greater stability than my Leopard Mac, which crashes frequently.

Keep praying to your God Steve, maybe someday you can have a world filled with Macs. For now, I am sticking with my PC and enjoying the hell out of it.

[SebDavies]

i use vista too and have no problems but many people do, because they dont have good enough computers. but it you read all of dons stuff he aint actaully biased its just his view!

[darcydj]

I have been using PCs for the last 25 years, been servicing PC based networks for the last 20 or so. Recently I purchased a Macbook and a Dell XPS 420 Quad. Do not get me wrong. I love the speed of the Dell but this Vista is the worst, not only did they (MS) move everything so now I am forced to search for the most mundane of settings but this OS is unstable.

I also have about 20 clients totaling about 1300 machines, 100 of which are Vista. So far I have had stability issues, I have been faced with the option of rewriting login scripts or disabling various security features in Vista.

[spattabi]

Mr.Bum. You must be kidding that you are tech savvy endorsing Vista. You work in a company with Just 15 PCs and few MACs. Usually tech savvy work with top notch with 1000s.

[jahcriado]

Mr spattabi, what does the # of computers worked on have to do with tech savvy? Or that you can't be tech savvy & endorse Vista? Most small start up tech firms who are amazingly tech savvy have but a handful of PC's. You are either ignorant or arrogant. Or both. I am somewhat tech savy & much prefer PC's because I can do whatever I want to them. Need a nex vid card? Pop one it. Want to use it as a DVR? Get a tuner card & put it in.

[pdskep]

"Let's face it -- the average tech-savvy person is well aware of the benefits of owning a Mac and more often than not, they will run a Mac or Linux box before Windows even enters the home."

You've got to be kidding me. I know dozens of people including myself who are plenty tech-savy, who are either system builders, IT peopleor work for computer tech companies who wouldn't touch a Mac. Maybe in your bizarro world this is true, but in reality it isn't the case. That Mac has such a low market share only proves my point and please don't tell me all those idiots with iMacs in Starbucks are tech-savy. It's nothing more than a status symbol to those clowns.

The reason people are worried about Vista is because of spreaders of FUD and misinformation such as yourself .

[AmrcnHstryX]

I very much agree with you, my friends and I are very into the computers and
I also know a good amount of IT people and the last thing that would come
out of their mouth is anything about a Mac.

[kockgunner]

"You've got to be kidding me. I know dozens of people including myself who are plenty tech-savy, who are either system builders, IT peopleor work for computer tech companies who wouldn't touch a Mac."

You don't say why they wouldn't touch a Mac. Is it because they're ignorant? Worried about job security?

"Maybe in your bizarro world this is true, but in reality it isn't the case. That Mac has such a low market share only proves my point and please don't tell me all those idiots with iMacs in Starbucks are tech-savy. It's nothing more than a status symbol to those clowns."

You aren't very smart are you? Since when did we start comparing Apple to the dozens of other computer manufacturers to determine it's success? How do you know Mac users aren't tech-savvy? Many OS X users are switchers from the Windows world and therefore know about both OSs. Apple offers many developer tools in OS X and Terminal allows users to use Unix command lines in OS X so don't say all Mac users are not tech-savvy just because you've never touched a Mac before.

"The reason people are worried about Vista is because of spreaders of FUD and misinformation such as yourself ."

And people like you spread FUD and misinformation and generalisations about OS X so now we're even.

[pdskep]

Kock,

Your reading comprehension isn't very good is it? I was only referring to the preening idiots in Starbucks and said nothing bad about OSX itself or that ALL Mac users aren't tech-savy. I have nothing bad at all to say about Macs other than their high cost. I simply see no need to switch to a Mac because Vista offers me the computer experience I want, need and expect and a much lower cost point with many, many more options in hardware.

BTW, my friends wouldn't touch a Mac because, like myself, it offers them nothing to warrant a switch. Maybe it is for some people, but the original comment that ALL tech-savvy people are more likely to own a Mac is ludicrous.

[grpaul349]

Well my status symbol doesn't need antivirus software and never crashes... call it what you want - I call it a superior computer.

[dt.baker]

Anyone who is bothered by this article needs to get a life!!

Why can't people just use what they want to? If you love ur mac great!, if you love your PC then thats great too.

Discussion Over.

[cporpheus]

I think Apple needs to license OSX. Then Apple will be in direct competition with Microsoft, rather than the current situation of Apple vs Microsoft and Sony, HP, Dell, Asus, etc. After that, the hardware prices will take care of themselves as they have for the PC industry.

[Gimpymw]

Sure Pal!
When your company make a billion dollars worth of profit in a quarter I'll be taking your advive.

For now, you should just shut it.

[jahcriado]

True, but to keep up profit margins they'd have to have a high license fee. They make a killing off of hardware.

[john55440]

With Windows and Windows applications, you can choose personal computers from HP, Dell, Toshiba and other companies, in addition to local builders and self-building.

With Mac OSX, your only personal computer hardware choices are Apple, Apple, and Apple. I have no interest in being a part of the locked down, closed, proprietary, world of Apple.

[Gimpymw]

Then you choose to be part of the closed proprietary worl of Microsoft instead.

[NateBiggity]

Oh yes, becaus it's SO proprietary.

[devonh01]

Hard to say whether they should lower their price without knowing their profit margin. They may not have room to lower it for one reason or another. Perhaps HP and Dell get volume pricing on their components. Until Apple gets to that volume level, they don't have room to lower the price. A chicken and egg scenario.

[devonh01]

Hard to say whether they should lower their price without knowing their profit margin. They may not have room to lower it for one reason or another. Perhaps HP and Dell get volume pricing on their components. Until Apple gets to that volume level, they don't have room to lower the price. A chicken and egg scenario.

[jahcriado]

Are you kidding? They have the clout to get Intel to redesign a processor for the Air, they can pretty much get the pricing they want.

[Jonthin]

Macs are selling at 4 TIMES the rate of the rest of the market's growth rates - can you imagine what would happen if its prices were cheaper!?!

What this goes to show is that Windows is a BIG liability to the likes of HP, Dell and Lenovo.

[rdwalton]

Jonthin, what the hell have you been drinking?

[nickj1088]

So you are saying what... that they should sell OS X on their computers? The day Jobs allows that is the day I cut off his skin and wear it around. Linux? No one outside of the engineering community knows what to do or how to use it. It isn't simple. It's not easy.

No buddy, Apple's stranglehold on it's vendors and hardware components is a liability. They may be making a charge, but that's all it is. It isn't a coup.

[mcooper13]

I agree with pdskep. The author makes it sound like the only reason Windows is chosen is ignorance and/or stupidity. It's that kind of assumption that is ignorant and stupid.

The only reason Apple has such gaudy growth statistics is because they are so small. When you are starting from such a low percentage of use it is easy to have high growth.

I believe they will keep the prices high. It gives Apple products the illusion of quality. As though they are somehow separate from PC's (despite their use of the exact same components) and not a commodity. Of course anyone who does their homework realizes that it is all marketing hype.

[b_baggins]

Another myth bubbles up from the cesspool. Apple does not use the exact same components. Components are rated at different qualities depending at how they did during the QA process. Just like not all coffees are the same (even though they all use coffee beans) not all computer components are the same, even when offered by the same vendor. You have A-list parts that test wayyy under spec, then b-list parts that are closer to the edge of acceptable performance, etc. A-list components cost more than b-list components, etc.

There's a reason people have 8 year old Macs lying around still doing work (I'm one of them).

[dt.baker]

Windows is possibly the most propriety operating system ever designed. It even gives preference to RSS feeds from Internet Explorer rather than any other browser!!!!!

I use Vista and i'm getting a mac ASAP. Vista is slow, it crashes, it cant handle having more than one app open at a time. it constantly nags me to confirm whenever i do anything.

Frankly its a joke that people would actually pay money for it.

We all know that Intel won't, what was it they said... 'we can see no good reason to upgrade to vista'

[pdskep]

Either you are lying and don't have Vista or there's something wrong with your hardware or drivers. No one I know has any problem with Vista. The vast majority say it's a more pleasant experience than XP. Your first sentence implies you are a MS FUD spreader.

[Gimpymw]

Yes I agree with pdskep that many windows users say that vista runs well on their machines. The one complaint I've heard is that the only unpleasantness in their experience comes from the fact that they have to drop another $1000-$2000 to buy a computer that can properly run Vista.

[restoration85]

"Vista is slow, it crashes, it cant handle having more than one app open at a time"

Not sure what you are talking about. Unless you decided to try running Vista Ultimate on a four-year old computer.

[manwalklikebear]

My BLAZING FAST Vista machine with Home Premium Media center was less than $300 shipped! True it's refurbished, however refurb. means that whatever was going to fail has already been corrected! Side note: the discount that Apple gives for it's refurbished products is a freaking joke! If they knocked more than a couple hundred off the price maybe, but $2,100 compared to $2,400 just isn't enough for me.

[technewsjunkie]

There should really be an age limit on the posters here.
It seems some are very inexperienced and no nothing of Macs though they SAY they do.

[jahcriado]

Or they are like me, 30, who have been working with Macs for a few years & still see no real benefit in switching - except that in the EMP world everyone drinks the Apple kool-aid, unless you are brave & go for Linux. Seriously, price point & the attitude of Apple, BIG turn offs.

[optionshiftk]

Yes, on a spec-to spec comparison Apple notebooks and desktops are more money, but if you compare the quality of workmanship Apple wins hands down.

[mcooper13]

That is subjective. I returned two MacBooks because of faulty screens. I returned another because the track pad became unstuck and actually peeled back.

The quality myth is what Apple wants people to believe. It's absolutely wrong.

[lavern]

really please be specific about where the quality diffrences lie because I always hear this and I would like to understand for my personal knowledge

[somone_else]

well I have to disagree with you there. yes, if you go for the cheapest non-apple desktop/laptop for the comparison, there is going to be a difference in quality.

The point is that you can buy or build a windows machine with comparable quality for a lot less money.

Not to mention the PC I built 5-6 yrs ago is still running very well, despite my cheaping out on some components when I built it.

[scweezil]

The "average price" analysis is misleading. Apple does not sell low end PC's.

[jahcriado]

What do you call the Macbook? High end? For the $1100 you spend on the lowest Macbook you can get a pretty tricked out HP laptop with 2x the HD space, 3x the ram & good deal higher clock speed not too mention a much bigger screen. The real problem is is that Apples low end PCs are more expensive than most companies mid to upper end laptops.

[scweezil]

The author is wrong...
http://www.systemshootouts.org/shootouts/desktop/2007/0417_dt2800.html

http://www.systemshootouts.org/shootouts/desktop/2007/0807_dt0700.html

http://www.systemshootouts.org/shootouts/desktop/2007/0927_dt1300.html

http://www.systemshootouts.org/shootouts/desktop/2007/0807_dt1800.html

http://www.systemshootouts.org/shootouts/desktop/2007/0927_dt1300.html

http://www.systemshootouts.org/shootouts/laptop/2007/0605_lt2000.html

Check for yourself

Apple's prices are competitive.

[Zarfus]

http://www.bestbuy.com/site/olspage.jsp?skuId=999994600050012&type=product&id=pcmprd94700050012
http://www.bestbuy.com/site/olspage.jsp?skuId=8844557&type=product&id=1208562365362

Take a look at TODAY's price scweezil. The dell has more RAM, bigger HDD, better CPU, etc. The only thing the apple has is the graphics card, maybe the display will provide a higher resolution too. The PC is obviously expandable in those categories, though. Apple? No, you're stuck for a couple years >>

[ripragged]

Don. Good for you. It's good to see that the blogosphere doesn't discriminate against those who are perceptually challenged. If it wasn't for clueless clowns getting paid to say stupid things I'd have to make up stuff to snicker at.

Thanks.

[rdwalton]

Macs are low-end PC's - they are just over priced.

[AppleSuxLeo]

Just say no to Apple...Just say no to Mr Whipple.

[Zarfus]

This article is ridiculous. My views:
1. Why would you pay so much for for the same hardware, when you can install the same OSX on both machines?

2. What is so good about OSX? It's basically a weak XP/Vista and an Ubuntu for people that don't know what a command line is.

3. This is more of an editorial because he has no credibility that vista sucks--in this case, I could care less about this guy's OPINION.

And if I'm not tech-savvy, I don't know who is...

[kockgunner]

1. You can't install Macs on other machines legally.
2. There is command line in OS X called Terminal. Linux and OS X both have UNIX roots so it looks like Windows is the odd OS out.
3. Don't read his articles than. It's the author's opinions -- NOT YOURS. Why would he need further proof that Vista sucks anyway. That's not the point of this article.

If you are tech-savvy, then no one cares.

[inter_loper]

What exactly is "weak" about OSX? Although the vast majority of users do not want or know what a command line is, OSX does have one for power users. If you're so tech-savvy you should know that. Also, this is not a NEWS ARTICLE, it is an EDITORIAL COLUMN and therefore the whole point is for the author to express his OPINION. If you don't care about his opinion then don't read it.