According to Robert Cringely, anyway. In typically controversial fashion he argues:
Apple will take a big risk in 2005. This could be in the form of a major acquisition. With almost $6 billion in cash, Steve Jobs hinted to a group of employees not long ago that he might want to buy something big, though I am at a loss right now for what that might be. Or Apple might decide to throw some of that cash into the box along with new computers by deliberately losing some money on each unit in order to buy market share.
We might see that as early as next week with the rumored introduction of an el-cheapo Mac without a display. The price for that box is supposed to be $499, which would give customers a box with processor, disk, memory, and OS into which you plug your current display, keyboard, and mouse. Given that this sounds a lot like AMD’s new Personal Internet Communicator, which will sell for $185, there is probably plenty of profit left for Apple in a $499 price. But what if they priced it at $399 or even $349? Now make it $249, where I calculate they’d be losing $100 per unit. At $100 per unit, how many little Macs could they sell if Jobs is willing to spend $1 billion? TEN MILLION and Apple suddenly becomes the world’s number one PC company. Think of it as a non-mobile iPod with computing capability. Think of the music sales it could spawn. Think of the iPod sales it would hurt (zero, because of the lack of mobility). Think of the more expensive Mac sales it would hurt (zero, because a Mac loyalist would only be interested in using this box as an EXTRA computer they would otherwise not have bought). Think of the extra application sales it would generate and especially the OS upgrade sales, which alone could pay back that $100. Think of the impact it would have on Windows sales (minus 10 million units). And if it doesn’t work, Steve will still have $5 billion in cash with no measurable negative impact on the company. I think he’ll do it.
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0 responses to “The headless Mac should cost $249”
…after doing to math myself, if Apple does have some novel media distribution scheme in the works, they COULD give them away and still make a fortune…are they they only company that is really operating in the future?
Realistically it isn’t all that different from what Microsoft tried to do with the xbox – so mibbe it isn’t unrealistic.
The Xbox comparison is a good one – I didn’t think twice about buying one at £99, and essentially I got a mini-PC for my money. And it’s similar with mobile phones: OK, the subsidy in that case comes from the networks, but it’s still pretty much the same thing; you get a £500 mini-computer for £150, or for nothing if you sign up for a particular contract.
The more I think about this the more I reckon Cringely’s absolutely, 100% right. It’s “think different” to the extreme, but to my mind it’d be a $1 billion gamble that couldn’t fail. Sell something that looks like a bigger iPod, pitch it as something for music, movies, photos and net access (maybe call it the myPod to make it less computer-y sounding), get the Apple marketing machine (and fanboys) into gear and voila! Apple dominates the living room in the same way it currently dominates digital music, without any detrimental effect on sales of iBooks, PowerBooks, iMacs etc.
I’ll be amazed if Apple does it, but I can’t think of any reasons why it shouldn’t do it.