A few new Apple products coming up, namely the Mac Pro and new iPhones.1 Mac Pros are generally expected to be expensive while the rumored iPhone 5C is expected to be nebulously priced lower than current models. Basically headliners for the old and new primary product lines at opposite ends of the pricing spectrum.
While I expect the Mac Pro to be expensive, I’m optimistic that it’ll start out at a relatively reasonable price. As for the 5C, all I can think about is the run up to the iPad mini where everyone expected $249 before Apple came out at $329. I’ve had $349 in my head for a while, so I’m half expecting $429.2 Significantly less than the $649+ iPhones but still a premium over competing low priced models.
While the 5C is expected to primarily address prepaid and lower end markets, the Mac Pro is still a bit of a mystery. The stated high end specs address higher end needs (up to a point), while the low end is a complete unknown at this point. Whatever the case it’ll probably be at least $2,000, if not the $2,500 it is now, or perhaps $3,000 or more. Going by some nerdy discussion at Ars, many assume it’ll be meant for high end pros.
I have a few issues with that line of thinking, mostly that it doesn’t fit with Apple’s M.O. these days. The high end pro market is small and the customers are a pain in the ass. I believe that they’re willing to address the market, but not address it exclusively, it just wouldn’t be worth it to make it appealing only to a tiny niche.
The old one did.
Price was an issue to wider adoption (particularly since it wasn’t competitive within its niche), but even a lower price would have only helped so much.
A few months back John Siracusa compared the Mac Pro to a “halo car”. I agree with him in the general ideology and purpose of such a thing, but the Mac Pro hasn’t been a halo car in years. The main issue, and the reason why I don’t think it’d sell much better at a lower price, is that it lacks the desirability of a halo car in the current environment.
In general big desktop workstations aren’t as appealing these days, the Retina MacBook Pro is probably more equivalent to a halo car for the company. Image wise the Mac Pro is more comparable to a big ass commercial vehicle.3 Expensive and worth it for what they do, but not appealing to most normal people.4
Plus as far as they know they’re all pretty similar. The Mac Pro is basically like any other workstation, enough so that people even do hackintoshes as alternatives regularly these days, or just make the switch to Windows or Linux (since much of the software is cross platform). The novelty of the design has worn off after 10 years.5 For a company whose perceived strengths include differentiation and forward thinking, the big Mac Pro is like a remnant of the past at this point.
Which brings us back to the new one.
Conceptually it’s still a desktop done Apple’s way, just brought up to date with today’s values (if not a bit ahead). A lot of people are used to sealed boxes now and the new box takes advantage of that. And as far as desktops go the design is pretty wild, enough to have a teaser ad for it:
Which on a side note, is reminiscent of…
Anyway the changes should make it more appealing to normals these days. It’s a compact (less) unobtrusive little desk machine with massive power, and looks pretty cool. It’s only at this point the price becomes a factor, it doesn’t matter until they actually want the thing.
So what’s the possible pricing logic to take into account here? This involves some random business theory first: basically something can be priced up to what the customer values it at, and a price below that gives them buyer surplus (extra value for the price point). Of course that involves the economy and disposable incomes too, just because the value and price is right doesn’t mean everyone will be able to afford them.
Anyway with that out of the way, a little current Mac data from Apple’s SEC filings:6
Mac prices organized by lowest price per model line…and man, Numbers has some horrible looking font rendering sometimes.
The average selling price of a Mac is currently around $1,300, while the Mac lineup ranges from $599 to $3,799 for default configurations. My questionable quick analysis of this says most desktops are around the low end iMac range with higher end sales being balanced by the lower end, and really high end outliers, the $2,000+ machines, aren’t too significant…but ASP did spike in the Winter and Spring quarters with new machines (approaching $1,400) so there’s likely still a decent market in the upper range.
I single out $2,000 because that’s the highest end iMac configuration. Apple has been fairly good product positioning wise about the simple concept of paying more to get more, whether it be better specs and/or bigger screens. There’s some tiny overlap here and there but not much. So basically I don’t expect the Mac Pro to go below that $1,999 mark (or if they do not by much), and by the same token I’d expect a clear spec boost over the iMacs (i.e. six core versus four core CPU).
Beyond that little logic for the lower bound, who knows. The separation between the various Mac mini and iMac desktops is $200-300, until you get to the Mac Pro where it’s a $500 jump. If they maintain a difference, hopefully they’d at least reduce it to be in line, like $2,299 rather than $2,499.
So basically my point is that people have money, but regardless of price they have to want what you’re selling in the first place. The new Mac Pro appears to be aiming for wider appeal, if it succeeds in that aspect it should sell better even at the same price, and if they lower the price on top of that it opens up the accessibility further. It’ll go from a high end niche product to just a high end product that happens to also address the niche. Essentially a machine equivalent of the Final Cut Pro to Final Cut X change. Just because something is “pro” friendly doesn’t mean it can’t be accessible to anyone else.
…I’d write about the iPhone here too but this ended up pretty damn long as is, maybe next time.
- And iPads. And MacBook Pros. And iMacs. And Mac minis.
- Or just $449 to slot right into the existing iPhone 4 price.
- Or simply a truck as in Steve Jobs’ analogy about the PC market in general.
- Having driven a few scissor lifts and fork lifts, I will say heavy machinery is pretty cool though. Not that the Mac Pro is like that, it’s more Dodge Sprinter than Caterpillar.
- Insides have been modified of course, but the exterior is largely the same as well as the general concept of the interior.
- 4Q 2013 estimated as an average of the rest of 2013, not accurate but ok for a rough estimate.
- Darius source image from “Socks make people Sexy“