Microsoft is Right About the Cost of Macs
There are apologists galore on both sides of this argument. The problem with Microsoft vs. Apple arguments is that they are too often emotional. There is such a long history between the two companies that leaves much to be desired. And even though Bill Gates and Steve Jobs appeared to make up during their WSJ interview a year or so ago (a must see) us Mac users are still, well, pissed.
Mac users are pissed at their very core because the understand the one single truth PC users do not understand. And that is that Windows users are ostensibly using a Mac. That same feeling some of us had when we fell in love with the first Mac is felt, in a much watered down form, by those Windows users excited about the power of a GUI interface.
And after-all, this is what this is all about, really. It is about a mouse, a keyboard, and a screen that has the metaphor of What You See Is What You Get. It is what lit up Job's passion when he visited Xerox, it is what lit us up when we first used a Mac, and it is what Window's users get. The reaction to the GUI interface is almost instinctive.
Now, there are many different flavors of this interface and Apple Matters readers know that the Macintosh version of this interface is better. OS X is more stable, more powerful and more flexible than Vista (although Windows 7 is creeping up).
But the differences have become inherently subtle. The original Macintosh revolutionized many industries, but particularly graphic design. With a DOS prompt you couldn't design a book cover, with a Mac and PageMaker you could. But, and this is important, all the tasks that you can now do on a Mac you can do on Windows. Maybe not as elegantly, or as powerfully (although many would argue even that point) but you still can.
Which leads us to the question in front of us, why are Macs more expensive? If it isn't the operating system that is so different to Windows then maybe the hardware is a hint?
In the days of PowerPC, when Apple sold us the tired and incorrect story that the PowerPC processor was better we could have pointed towards the processor. But that is no longer the case. Same with SSCI, and firewire. If you look at a Dell today and a Macbook you will notice they have:
- the same processor
- the same ram
- the same hard drive
- the same video card
- the same screen
So what are we left with? Well, nothing.
This is where folks tend to get riled up. Build quality, and the genius bar (forget the fact that you shouldn't be there in the first place, it means something is wrong) are cited as reasons why the Mac is more expensive.
But I say BS. If all these different companies are able to make a laptop that sells for $500 then Apple should. To make this point unbelievable clear lets compare a Dell to a MacBook:
Dell Inspiron 15 ($554)
- Intel Core 2 Duo T6400 (2.00GHz/800Mhz FSB/2MB cache)
- 3 GB Ram
- 250GB SATA HD @5400 rpm
- 4 Cell Battery
- 15.6 inch screen 1366x768
MacBook (the white cheaper one, $999)
- Intel Core 2 Duo, 1066MHz frontside bus, 3MB shared L2 cache
- 2GB 667MHz DDR2 SDRAM - 2x1GB
- 120GB Serial ATA Drive @ 5400 rpm
- 13.3 inch screen 1280 x 800
Now apologists will get very detail-oriented. They will note that the Dell does not include Bluetooth, has a smaller battery, and that the processor has slightly more frontside power on the Macbook. Yes, but the Dell has 1GB more ram and a hard drive over twice the size and a bigger screen. Of course Windows users will have to buy an Anti-virus tool (around 30-40 bucks) and don't have iLife (iTunes is free, Picassa is as good as iPhoto and free, not sure about iMovie).
The point here is that for machines with remarkably similar specs the MacBook is almost double the price.
And there are countless other examples of this up and down the Apple product line, whether it is XServes, Macbook Pro's, Mini's, etc. The whole Apple computing line is over-priced by at least 33%.
Unlike Microsoft I am not trying to attack Apple, or drive people to buy more PCs. I love Apple products and it is because of this I want to drive home this point. As the recession increases, and Windows 7 comes out these differences are going to be more and more glaring. At some point the extra revenue Apple makes with higher margins will get lost in reduced sales.
I have no doubt that Apple is working very hard right now on a NetBook that they may think is a solution to this problem. But it isn't. As long as I can very easily find machines that cost far less across Apple's product line that have similar hardware Apple has a big problem. And relying on the allure of OS X isn't going to cut it much longer (and I won't even get into the Hackintosh phenomenon here).
Apple, take a long hard look at your product line, and tell me why a Macbook costs almost double the equivalent specced PC product?
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Well said, hadley.
Some would say it’s the design. But goes deeper than that. It’s the engineering required to execute the design. That bumps the price up.
But is it necessary? Would we still buy macs if they didn’t look as good or were as cleverly engineered? Would you buy a mac if it looked like a Dell or HP?
Of course we would. But then they might loose that elite look and status that allows Apple to charge a premium.
“If all these different companies are able to make a laptop that sells for $500 then Apple should”.
Depends what you mean by “should”. If you mean that it’s technically possible, then it very probably is. If you mean that because it’s technically possible, Apple should do it, then you’re barking mad. That’s the business model that puts so many PC makers out of business.
What I think they should be doing is matching specs. So RAM and hard drive should always match or lead the competition, so that at least there’s never a question of getting less computer for more bucks.
I always hear the same line from Mac fanboys. “It’s the integration of software and hardware.” What integration? People have shown that OS X runs great on other hardware. The problem is we are suckers. We love OS X so much that we are willing to pay a tax to use it. I’m dealing with this issue now. I need to replace my PowerMac G5 but with what? Spend $3000 - $4000 on a Mac Pro? Or get an iMac? Something that will cost me over $3000 if I want to run it with 8GB’s of memory. A machine that I can’t add a second drive to. Or build my own PC for around $1500 with an Intel i7 processor, the desktop version of the Nehalem processors. I could hack my version of OS X to work with this. I’m almost rooting for PyStar to win. Maybe it will get Apple to lower their prices.
I also think Apple undersells themselves. Typically, you look for the right balance for price and sales. At what price can you make the most profit? Sell 1000 units at $500 profit nets you $500K. Sell 500 units at $1000 profit gets you the same. I think Apple doesn’t believe they can really sell more units and would lose profit. But I talk to a lot of people that tell me they would switch to an Apple if they could get it near the same price as Dells.
Acquisition cost is a nit in the total life cycle cost of a computer. The amount of support time spent in Windows is significantly more than an equivalent OS X machine. It is not the hardware, but the OS that is the culprit. In my experience - and granted, it is mostly major corporations with 10s of thousands of desktops - tracking the costs of managing computers shows tangible measurable costs for a PC at 4-5 times the cost of managing an OS X machine. The more the back end infrastructure cost is proprietary Windows, the lower this disparity is, but that is mostly in getting things to interoperate in the highly proprietary environment of Windows (data formats, protocols, ActiveX, Active Directory, etc. etc., etc.). Once running, it takes a fraction of the manpower to support the OS X user, than it does a Windows user.
These lessons directly translate to personal relationships - my Windows running friends ask my help 10x more than the OS X folks, and their Windows requests take far more effort to resolve.
It is not the acquisition cost, it is the life cycle cost, and that includes support as well as productivity. With Windows viruses topping the 1 million mark in Dec 08, and the Mac having zero, just malware maintenance alone is sufficient justification to acquire a Mac.
If you compare feature to feature - IN A CORPORATE CLASS machine (Sony, Dell, Lenovo, etc. thin and light, corporate user targeted boxes) - those with consistent, quality, durable hardware, and not a consumer grade piece of cheap plastic, the price disparity leans strongly towards Apple as the low cost product, just in acquisition cost alone.
I’m not disputing the price differential, BTW, just saying that just because Apple could, doesn’t mean that they should.
“The whole Apple computing line is over-priced by at least 33%.”
Why do writers continually have to make up numbers in articles like this one based on nothing more than a feeling that supports their argument? Apple’s gross margins are published (5 yr avg of appox 32%). Dell’s gross margins are published (approx 18%).
Assuming all else is equal, Apple would have to sell a Mac for 20% more than an equivalent Dell to maintain their margin. Of course, all else isn’t equal, so whether or not Apple’s industrial design and operating system are worth an extra 20% is up to each consumer.
Another point that should be considered is that Macs are usually competitively priced when they are released. The problem is that 6 months or so later, the rest of the industry has come down in price while Macs remain the same price.
I said this in a comment on another thread, but price up dual 5500 series Xeon workstations from Dell and Boxx to match the base eight core Mac Pro. The Apple is cheaper.
Compared to other designer brands, Apple is cheap. Armani jeans are not 5 times better than Levi’s, but they cost that much more. Apart from the Mac Mini (where they sacrificed that original low price for specs), the Macs are competitive when MATCHED WITH SAME CLASS PRODUCTS.
You don’t compare a Taurus to an Audi A6 or 5-series BMW.
You don’t compare Pizza Hut to an Italian bistro.
You don’t compare coach in Delta to first class on Virgin Atlantic.
The fact is, Apple could lower its prices, but as long as there are thrusty wankers around who want designer consumer goods, and a nice base of professionals who get confused when they see the Start menu, why bother?
“Apple, take a long hard look at your product line, and tell me why a Macbook costs almost double the equivalent specced PC product?”
The obvious answer is that they are not equivalent. In addition to the advantages that you listed (bluetooth, battery life, frontside power), the MacBook is smaller, better screen, 802.11n, gigabit ethernet, and a better graphics card. And the Dell is running Vista Home Basic which lacks major features.
The only ways these two computers are equivalent is in processor speed and the fact that they are laptops.
Just to add, the impact of Vista Home Basic included on the Dell should not be ignored. You cannot even run Adobe CS4 apps on Home Basic regardless of hardware capabilities. No aero interface. No Windows Media Center. No Windows Mobility Center (on a laptop!) No secondary monitors. And many more…
That extra GB of RAM isn’t looking very useful.
Fellas
It was NEVER about the hardware. You don’t buy a platform based on hardware you buy it based on software. You compute on Macintosh because it runs Mac software and you prefer this Apple computing paradigm as opposed to Microsoft’s Windows.
The laptop comparison is broken. When doing a comparison the specs should be complete.
The Macbook enjoys standard 11n wireless to the Dell’s 11g
The Macbook enjoys a 3 advantage in bus speed
The Macbook enjoys powered 1394 Firewire
The Macbook enjoys Gigabit Ethernet
The Macbook enjoys a 1MB cache advantage
The Macbook enjoys standard Bluetooth
The Macbook enjoys Mini DisplayPort
And last but not least the Macbook runs OS X and 3rd party Mac apps which is why we compute on Macs. Do you pay a premium for Macs? Yes but you never pay twice as much for the same computer from a comparable vendor and product.
WTF is a 4-Cell Battery ? What does that mean ? Why is it in the list above ?
I don’t think the comparison is broken. It’s worth comparing using examples like the one above. It’s all very well getting bogged down in detail, but almost all laptops sold today will satisfy a lot of users. People who do a bit of surfing, a bit of email and write the occasional letter.
The limited range of Apple products is a strength and a weakness. It means the product range is clear and easy to understand. It’s not possible to get a 15” or 17” screen model with an integrated graphics card, for example, but plenty of people would want that. Apple differentiates price on form factor, but PC makers do not (13” PC laptops cost more than 15” PC laptops). The Air costs significantly more than the unibody MacBook, but is unlikely to cost any more to manufacture.
Why not compare a Hyundai Elantra with a BMW 330 then? We can question why Bavaria has the gall to charge $40k when the Hyundai has power windows, 4 wheels, 5 cup holders and a gasoline engine.
Specs the denote performance or lack thereof are paramount folks. If you want to compare be prepared to defend your opinion if your product does not match up 0.
A Chevy and BMW are the same! Duh. See! They both have four tires, an engine and a steering wheel, so they must be the same.
In fact, if they used the same major components on a checklist, then they must be identical. Right? Why then, should a BMW and a Chevy cost differently?
Could it be that there are issues which will never appear on your checklist, so they can be safely ignored? Could it be that there are major differences in quality, construction, panache, warranty, life expectancy and handling? That these differences cost money to add?
Could it be that each is manufactured for different markets? And that one is made for the ignorant, penny-pinching, mass consumer and the other is for the discriminating shopper? That one is barely good enough to use and the other is a joy to own? Perhaps, that is why BMW and Apple owners are fans and Chevy and PC owners are users. If a Chevy were designed to look like a BMW, it still wouldn’t be the same. A BMW owner could tell.
People like the author, who pretends to be a Macintosh owner, cannot tell the difference. That is just as well, because excellence is wasted on some people.
You get what you pay for in life; you pay now or pay later. PC users pay less now and pay more later, because their total cost of ownership over four years is twice that of a Mac. The PC users pay in the inconvenience of a ham fisted Operating System.
They pay in being forced to constantly fix their machines rather than being productive. Small business owners report that their employees are 20% more efficient on a Mac because they don’t need anti-virus software or have to constantly fiddle with their machines. Mac’s break less often and are more likely to be maintained by the owner rather than the IT department. That is why Apple has the highest consumer satisfaction ratings in the computer industry.
Of course, none of that is important to the ignorant, penny-pinching, mass consumer.
Why then, must you PC pundits constantly distort the facts to mislead the public into believing that there are no real differences to make up for the Mac’s higher initial price?
Do you understand that the words cheap and junk are often linked? That you must be an expert to know when they are not, so you can get a bargain? Of course, the time needed to become an expert in PC’s is never added into the cost of a computer purchase. But then, the PC experts must know that their time is worth nothing.
Well you can compare those cars. You can look at the buy-in cost, you can look at the TCO, you can look at the performance an you can look at your budget, your annual mileage and, crucially, the performance that you need.
And for a lot of people. Probably most people, the Hyundai makes more sense. Telling people to get BMWs because they’re better cars is nonsense. A Hyundai can do pretty much everything a BMW can do in the hands of an ordinary driver. As annual mileage increases and the TCOs converge, the BMW can start to make more sense. The additional cost may be worth it in terms of a nicer cabin and a less fatiguing drive.