Bits Blog: How Apple Can Keep Its Value
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With a market value of $162 billion, Apple is now the most valuable computer maker in the world, and it is the fourth most valuable technology company, after Microsoft, Google and Cisco. It will have to battle all of them to stay on top of the tech world.
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Value investors can scoff if they like, but those looking for growth know Apple's got it.
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Steve Jobs didnât introduce all that much innovation at Macworld. But Apple can package the available technology and sell it like no other company.
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Riding the tide of its popular iPhone and a new line of iPods, Apple shares hit the nice round number before dropping back a few cents. The Wall Street boys are bullish.
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(InfoWorld) - People have been arguing online about how much more expensive Macs are than PCs -- or not -- for more than a decade (and in print for years before that). These discussions usually involve some hard facts but also some persistent myths. As a longtime Windows guy who has recently migrated to the Mac, I think I'm in a pretty good position to try and sort out reality from fiction. Let's take a look at what you can really get for your money these days. But first, let me say to all those people who have ever bought a Packard Bell or eMachines PC and believe that great value in a computer means any model that sells for $600 or less: I agree -- Apple doesn't have an answer for you. In fact, I suggest that you skip this article entirely. You're not going to find anything of interest in it. It's the hardware For those of you who are left, what I have found in my research is that neither side has a lock on good value. If you start with Apple's relatively short list of SKUs (three or four model variations for each of its lines, such as MacBook Pro, MacBook, and iMac) and then look for comparable Windows machines, you'll find that Apple bests the competition in some ways and not in others, but the pricing, overall, is surprisingly on par. Only a few years ago, it seemed like a no-brainer that Windows hardware was much cheaper. But if you're talking name-brand hardware, that's just no longer the case. On the other hand, if you search the Windows side first, you'll quickly discover machines that -- in features and price -- fit in between the Mac SKUs. And in those niches, they represent very good values. So there's one answer to the question of whether Macs or Windows represent a better value: If one of those "in between" PCs suits your needs best, you'd be paying an unnecessary premium to get a Mac instead. Let's look at some hard numbers. I started my research with top-of-the-line notebooks -- I spent an hour on Dell's site trying to find the cheapest notebook that offered everything Apple's $2,799 MacBook Pro 17 provides. That includes: * Glossy 17-in. screen with 1,680-by-1,050-pixel resolution (optional 1,920-by-1,200 resolution for $100 more) * 2.4-GHz Core 2 Duo processor * 2GB of RAM (upgradeable to 4GB) * 256MB Nvidia GeForce 8600M GT video * 160GB 5,400-rpm SATA hard drive * 8x SuperDrive (DVD+R DL/DVDÂ±RW/CD-RW) * Gigabit Ethernet port * 54Mbps a/b/g/Draft n Wi-Fi * Bluetooth 2.0+EDR, ExpressCard/34 card slot * Three USB ports * One FireWire 800 port * One FireWire 400 port * DVI port * Built-in iSight video camera * One-year warranty (upgradeable to three years) (See Apple's site for the complete MacBook Pro technical specifications.) I was a little surprised to find that Dell's Inspiron line doesn't currently offer processing power equaling that of the MacBook Pro. To get a 2.33GHz Core 2 Duo processor (a 2.4GHz version isn't available yet), you have to move up to Dell's more expensive XPS M1710 with Vista Home Premium. Once I did that, though, and tricked out the M1710 with only those extras it had to have to compete with the MacBook Pro, I was surprised to see the Dell come in at a whopping $3,459, some $650 more than the Apple product. Now, it's true that the Dell has some additional ports features (higher-end video and six USB ports instead of three, for example), but it also weighs nearly two pounds more and is much chunkier (1.69 in. thick, compared with 1 in.). I continued my comparisons with a visit to Circuit City last weekend to take a look at high-end 17-in. notebook PCs. Like Dell, Sony has one with every conceivable bell and whistle selling for more than $3,000 -- the Vaio VGN-AR390E, which goes for $3,150. Like all the other Windows models available at Circuit City, the processor is a 2GHz Core 2 Duo, slower than the one in the MacBook Pro. On the other hand, the Vaio comes through with 1,920-by-1,200-pixel screen resolution, a 5,400 rpm 240GB hard drive, and a whopping 527MB of video memory. Like the Dell, though, at 8.4 lb., the Vaio makes the 6.8 lb. MacBook Pro look like a lightweight. Moving downscale a little, both Hewlett-Packard and Toshiba have models in the $2,000 range that approximate the MacBook Pro's equipment. The HP Pavilion DV9260US comes with the Intel Core 2 Duo 2-GHz processor, a 240GB 5,400 rpm drive, Windows Vista Ultimate, and a 17-in. screen whose maximum resolution is only 1,440 by 900 pixels (a major drawback). Circuit City's price is $2,000. Bottom line: Assuming that you want a high-end notebook PC designed to work, play, and be your everyday machine with style, the MacBook Pro is a surprisingly good value. The models that I compared it with, the Sony and the Dell, had some extras here and there, but they were also more expensive. The key to the perception that Macs are more expensive is that Apple offers very few in-between models. Moving to the midrange In the midrange, where lower-cost 13-in. LCD MacBook models occupy price ranges from about $1,100 to $1,500, you may be equally surprised. Apple's recently updated MacBooks more than hold their own on price/performance comparisons with other 12- and 13-in. LCD computers from Sony, Toshiba, and HP. The desktop landscape may also be an eye-opener. Even though the likes of Dell, HP, Sony, and so on have machines priced from about $500 and up, those prices don't include LCDs (in most cases), and they don't start to get hardware-competitive with the processors in Apple's iMac line until they hit about $1,000. Because of the iMac's built-in LCD, it's actually less expensive, though some of the details (such as hard-drive size and RAM amount) may be tilted in favor of the Windows desktops. If you know your way around PCs and want some extras, the Apple could in some instances be the clear value leader in this category. For comparison's sake, let's look at Sony's attempt to out-Apple Apple, the Vaio All-in-One Desktop PC VGC-LS25E. It comes with a 19-in. LCD, 2GB of RAM, a 7,200 rpm 250GB hard drive, and Vista Home Premium, but it has only a 1.83-GHz Core 2 Duo processor. The Circuit City price tag is $1,800. So, how does that compare to Apple's 20-in. LCD iMac, which sells for $1,500? The iMac comes with a 2.16-GHz Intel Core 2 Duo processor, a 7,200-rpm 250GB drive, and 1GB of RAM. You would need to upgrade the video memory and system RAM (bumping the price to about $1,750) to make the iMac comparable with the Sony in those areas. But the iMac has a bigger LCD and a better processor no matter what, and even with the RAM and video upgrade, it still costs less than the Sony. Plus, Apple's $175 RAM upgrade is costly. You can save money by buying the memory elsewhere and installing it yourself. Kingston memory is less expensive, offers excellent quality, and is fully compatible with Macs. I've also had great luck on my Macs with the bargain-basement-priced memory from Data Memory Systems in Salem, N.H. (I just wish DMS would take PayPal.) Bottom line: When you configure low-end and midrange notebooks and desktops, you'll find that except at the very bottom of the heap, Windows machines are roughly comparable in price to Macs. There are fewer Mac models, so if your needs vary from what Apple has decided on, you may find a Windows model that costs less for you. But Apple's choices make a lot of sense for most people, and when you do the point-by-point comparison, Apple is actually a better value for some needs. Reality check The comparisons I've drawn above are by no means exhaustive. For example, I didn't address computers at the level of the Mac Pro, Apple's stand-alone desktop workstation. Nor did I cover the Mac mini, a computer that I don't think is much of a bargain from a price/performance standpoint. I also didn't address the 15-in. MacBook Pro, and -- full disclosure -- I feel it's of dubious value. It's only $300 less than the 17-in. MacBook Pro but has lower resolution, a smaller hard drive (without an upgrade), a slightly lesser SuperDrive, fewer ports and so on. It's nowhere near as good a value as the 17-in. model. The only time I wish I was using one is when I'm flying coach. Anyone who performs a similar comparison will have to make his own subjective assessments about what's important and what's not. I happen to believe that many of the small details about Macs have a value that's hard to put a price tag on. How much is the very best trackpad in the business worth to you? To me it's worth a lot, but I know that some people couldn't care less. So I chose to focus on objective speeds and feeds, such as CPUs, RAM, video memory, and so forth as best I could. And then there's the software question, which comes up over and over again in any discussion of the cost of Macs. Long-term, entrenched Windows users (like me until last September) who are comparing prices tend to think in terms of the investment they have in software and peripherals. I can't factor in your particular context. If you need Microsoft Office for the Mac, you need it, and that will set you back a few hundred bucks. But you can amortize that cost over the lifetime of your computer use, and you're going to have to pay for your next Windows Office upgrade anyway, right? What's the difference? The more interesting question -- the question Mac people get really tired of -- is what to do about all the software you've been using forever to solve problems. Will the Mac world have those solutions? You like to do things your way; can you still do that on the Mac? The feedback I've gotten from Mac people on this point is that I should just do things the Mac way. I reject that piece of advice, even though I have come to understand it. I don't agree that there's just One True Mac Way of doing things. There's the way that people using a computer are comfortable with doing things -- and that's a subjective determination made by each individual. As Windows users consider what their costs might be in getting up to speed on the Mac, though, I would recommend this: Don't sweat the small stuff. As with Windows, there are solutions to esoteric Mac problems. Chances are, even if your favorite program doesn't exist for the Mac, something similar does. There are resources out there that will help you. There's a ton of free software. There's a ton of very low-cost software. In fact, there's plenty of Mac software out there -- much of it of surprisingly good quality. The release of OS X transformed the Mac marketplace. It's a vibrant, growing community. There's an excitement around Mac products, software, and hardware that you just don't feel in the Windows world any longer. I'd forgotten what that felt like. Get involved with the cost analysis I'm interested in what both Windows and Mac people have to say about comparing the value of these two types of computers. There are a lot of ways to look at this. I just want to ask the people who heavily disagree with me to do these two things: 1) Read what I've written carefully, and 2) do your own homework. Don't make assumptions about pricing without doing a tech spec comparison of directly comparable Apple and PC equipment.
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I had a great Skype talk with Paolo yesterday. He was driving his car, in Italy near his home in Trieste. The connection was great, it was like living in the future.  One of the things we talked about was the iPhone. At first I talked about it as if Paolo had had one from the outset. He feels that close, and he's the kind of person who would get the latest Mac toy on Day 1, just like me. Later, when he said he just got his iPod Touch, I realized of course, this is one of those things we got here in the U.S. that they haven't gotten yet in Europe. Don't worry, they have some something we don't, a strong currency. :-( So here's his first writeup of the iPod Touch.
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The iPod&#39;s importance to Apple, which has in the past been overshadowed by the likes of Microsoft and Dell in the desktop stakes, cannot be underestimated.
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Handset-to-handset fighting Whenever a single monolithic company has launched against the globe spanning iTunes, Apple has been able to move the goalposts and push further and further towards a monopolistic market share of online music, but this week a genuine challenge has emerged, one that we are certain will dent the success of Apple, and we suspect that it will be reflected in the companyâs share price before too long.â¦
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In 1980, I signed a deal with a company to market a product I was developing. The contract required me to turn over the source code, which I did. One day I went to a meeting at the office of the company, and there on the product manager's desk, right next to a door that opened to the outside, was a floppy labeled "Dave Winer's source code" in big letters.  If you own a Mac you may soon find out what that felt like. It's amazing to me that the tech blogosphere doesn't treat Apple's policy re broken hard disks as the huge gaping security hole that it is.  Think about it. We worry about bad people getting their hands on little pieces of data that, when added together, give them the power to be you in banking and credit transactions.  Think about what you would do if your laptop was stolen. Well, if you own a Mac and its hard disk goes bad, and you make the mistake of bringing it to Apple for service, you will turn over all that data to Apple. Not "may" or "might" but "will." What Apple in turn does with that data is none of your affair. They don't sign anything or offer any guarantees that they won't sell the disk to a data miner. Think it can't happen or that it's unlikely? I don't gain much comfort from your feeling of security. I've been writing about this issue since December 22. Usually when I write something critical of Apple, the results are mixed. Some people are supportive, but far more people attack. This time the ratio is very different. Almost everyone who has commented gets that there's a huge problem here. Can we solve this problem? Of course we can.  Some say that other vendors do this too. That gives me less comfort, not more. That means there's no escaping this crazy way of treating user's confidentiality. Ultimately it hurts the vendors because people can't use their computers for things the manufacturers say we can.  Further, it's got to be an issue for the banks, brokerage firms, credit agencies. If you are a newspaper and you employ reporters and they use a computer, how exactly are you guarding the confidentiality of your sources? If you're a confidential source, don't you have an interest when the reporter gives their computer manufacturer all their data to do with as they please? Imagine what you would do if it turned out there was a bug in a Netgear or Linksys router that allowed, under special circumstances, a mailicous person to gain access to the full content of your hard disk at any time. Would you have a problem with that? This is worse than Microsoft's neglect of malware that got me to stop using their computers. In that case it was Microsoft being neglegent. This time Apple itself is the cause of the problem. It's as if they planted a virus in their operating system that entitled them, under special circumstances, completely out of the user's control, to gain access to everything on your disk, with as much time as they want, with no way for you to prevent or even detect the intrusion.  See also: My letter to Steve Jobs.
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IT has never been able to prove it's true value to the business, and as such it is treated as a cost center, which is the first thing to get cut in poorly run companies. But with Web 2.0 booming, all the assumptions that you hold about IT should be put on notice: change is in the air. Web 2.0 companies have had to grow their own technology for economic functionality. Free means crap right? Wrong. How many of you keep Yahoo! Mail running on your BlackBerry's along with Exchange because you know Exchange will be down sooner or later?
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A site for cut-rate Apple products has amassed a loyal following by taking the unusual approach of relying on readers for bargain-hunting tips. By Leander Kahney.
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If Apple decides to sell movie downloads, what is the magic price?
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âIsnât it sweet to shop at a store where members of the sales staff not only know their stock inside and out, but donât hesitate to recommend a less expensive product when itâs appropriate?â Thatâs what Bob Levitus (Houston Chronicle) wonders in an article about the Apple Store and three new programs it recently introduced. âThe one I find most compelling is the new One to One personal training service. For a mere $99 a year you get unlimited access to expert trainers at the Apple Store.â Levitus considers that âquite an amazing deal.â
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InfoWorld - Apple may have a jones for secrecy, but that doesn&#39;t mean it can keep its partners quiet.
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&#147;It has been a good year for Apple,&#148; writes Wilson Rothman in naming the iMac G5 TIME Gadget of the Week. &#147;Since the beginning of 2004, I&#146;ve discussed GarageBand, AirPort Express and the latest iPod. If you go back 12 months, you can probably even throw in iTunes Music Store, the original G5 and the official release of iChat AV. This isn&#146;t favoritism, I&#146;m just impressed. Rather than spend money on its silly &#145;Switch&#146; ad campaign, the company has spent it inventing actual reasons for people to switch from Windows to Mac, not least of all personal style. The iMac G5 is super suave, but it&#146;s also a pretty good deal.&#148; [Sep 22]
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Apple and EMI's agreement to offer DRM-free music tracks is unlikely to be threatened by the record label's changing ownership. In fact, say some analysts, the choice may have been a demonstration to potential investors of the company's forward-thinking ways.
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Remember a couple of weeks ago when Steve Jobs took the stage and announced a $200 cheaper iPhone. That was pretty bad. And an iPhone that's just an iPod. Who needs that! The new Nano sure is cute, but cute insn't enough. I have a 1.5 year old 60GB video iPod that still works (sorry Steve) and I never use the video, so the $300 I have burning a hole in my pocket for my monthly Apple impulse buy (above and beyond the new Mini I bought last week) is going to (drum roll please) Nokia!  Yup, my next iPod/iPhone-alike thingy isn't even from Apple and it runs Linux, and comes highly recommended by geeks everywhere. I just put in the order on Amazon, I'll let you know how cool it is in a few days.  PS: This is my way of thanking Ben Bernanke for the huge windfall I got in the stock market yesterday and today. I think the 1/2 percent drop in interest rates is supposed to make us go out and buy stuff to stimulate the economy. Just doing my part Uncle Ben!