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.

[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.

[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.

[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 .

[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.

[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.

[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.

[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.

[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.

[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'

[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.

[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.

[scweezil]

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

[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.

[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...