Apple's Mac Surge: 4 Observations - InformationWeek

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Apple's Mac Surge: 4 Observations
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Michael Endler
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Michael Endler,
User Rank: Author
10/23/2014 | 11:48:00 AM
Re: Apple's Mac Surge
@zerox,

Thanks for the comments.

Good point.  It's likely some new Mac owners, especially consumers, made their purchases as much due to Windows 8's poor reputation as to Apple's lower prices-- definitely true, and something I could have discussed more explicitly in the article.  

I don't think it's disingenuous to say Apple is dominating the high-end market, though. Apple's PCs sell for hundreds of dollars more than Windows models do and Apple generates much more profit from computers than any competitor. Apple also gets virtually all of its market share from "the high end," even with the price discounts. Expensive Windows models such as new 2-in-1s account for a relatively tiny portion of recent Windows sales, based on survey data.  There are many more Windows options below $1000 than there are Apple options under $1000, but I wouldn't say Apple "doesn't have any competition in this niche." Perhaps I don't understand which niche you're referring to-- but there are plenty of $1000+ Windows PC configurations available, so in that sense, Apple does have direct competition within its chosen markets. Apple just happens to have more momentum than the rest of the field, the presence of cost-comparable alternatives notwithstanding.
zerox203
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zerox203,
User Rank: Ninja
10/23/2014 | 11:30:07 AM
Re: Apple's Mac Surge
I don't know, a lot of this seems like quite a stretch. The numbers don't lie, but don't you think we're reading a little too much into a $50 price drop (as well as some of these other details)? Indeed, to say that change itself payed off with 'absolute dominance' of that niche is a little disengious, isn't it? After all, Apple doesn't really have any competition in that niche... and they didn't last year, either. Comparing it to similar PCs in price or in hardware spec is apples to oranges. The back-to-school boost is real, but it's not like that's a new phenomenon.

I'm with Shane - distaste for Windows 8 actually seems like a likely culprit here. The gap in low-end PC sales versus high gives it away. People who were thinking of coming in at a low price point didn't bother. The market for home PCs is shrinking, where Apple users see their devices as indispensible. The next generation leaves a lot to speculate about, but even if Windows 10 is great, I think it's lost too much of it's 'cool' factor among those coveted college-aged buyers. I'm not sure anything on earth can reverse that trend.
moonwatcher
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moonwatcher,
User Rank: Ninja
10/23/2014 | 11:11:04 AM
Re: Smart tactic
Yes. Among my friends, neighbors, and business associates I can verify that due to the Windows XP end of life and the Windows 8 debacle, at least 10 of them said to heck with it and bought a Mac, while two others decided they could get by with an iPAD.  I'm sure many others, who were not tied to running software that only runs on Windows, did the same, thus helping sales. It isn't that Macs are any better than PCs, especially at similar price points, but that since Apple controls EVERYTHING they can make sure the average clueless consumer doesn't run into any perceived issues. People pay a premium for that and at least for 6% of the market, it works well for Apple.
Michael Endler
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Michael Endler,
User Rank: Author
10/23/2014 | 9:28:59 AM
Re: Smart tactic
@Shane,


Actually, the math is sort of interesting. On average, Apple lowered prices by much more than $50. The fact that average sales price only dropped $50 suggests that Apple's sales mix actually shifted upward, toward more expensive models. Perhaps the new, lower base prices encouraged more buyers who would have bought base models to go with the mid-tier options instead. Or perhaps people who would have bought mid-tier models decided to splurge on the high-end models. Apple is playing with vaguely similar strategies with its iOS devices-- e.g. using storage configurations to encourage more people to buy at least middle-tier iPhones.
Susan Fourtané
IW Pick
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Susan Fourtané,
User Rank: Author
10/23/2014 | 1:50:22 AM
Re: Smart tactic
Shane, 

"I'm surprised dropping the prices of Macs by $50 would be such a successful tactic."

It's not just about the price. Don't forget that Macs are the best computers on the market. They simply are. They always work. Macs cost more that Windows PCs because they are better products, higher quality in both hardware and OS. 

With all the latest updates plus the price reduction Apple have made them even more attrative, easier to upgrade to those who are already Mac users, and more affordable to those who always wanted a Mac but the price was holding them back. 

-Susan 

 
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
10/22/2014 | 5:12:09 PM
Smart tactic
I'm surprised dropping the prices of Macs by $50 would be such a successful tactic. But it worked in the end -- 25% increase in quarter-over-quarter sales is impressive. People probably felt like they were getting a deal, that they were joining the Apple VIP club, even though they were still paying hundreds more than they would for a Windows PC. The continued dismissal of Windows 8 I'm sure helped Mac sales as well.
Michael Endler
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Michael Endler,
User Rank: Author
10/22/2014 | 1:47:45 PM
New iMac is evidently a beast
The first benchmark results for the 5K iMac are coming in, and they're pretty impressive.

I'd been a bit worried about how well the CPU-GPU combo Apple chose would handle all those pixels, though the Apple-designed controller made me optimistic that they'd engineered their way around potential problems. That seems to be the case. In some measures, the i7-based version of the new iMac beats the low-end Mac Pro with its Xeon chip, and the GPU seems to be pulling its weight, based on early reviews. I'll be curious to see how the iMac's internals handle heat dissipation over time-- but so far, not bad, all in all.

$2500 isn't a mass market price point, as I said in the article, but this will be a popular item for its class-- and when Retina Displays trickle down to the smaller iMacs and the MacBook Air, I expect healthy consumer adoption.

Premium Windows 2-in-1s and notebooks will also have very nice screens and ultra-slim designs throughout 2015, so there will be some competition. But it remains to be seen how Windows 10 ultimately compared to OS X, whether Windows OEMs can match Apple on build quality, and whether users decide that touchscreens are worthwhile on PCs. It also remains to be seen if gargantuan iPhone 6 sales lead to increased interest in Macs-- a trend that I think is clearly already at play to some extent, and that could become stronger thanks to new features such as Continuity.

If Apple decides to be really agressive, it will leave the current MacBook Airs on the market at even lower prices when it introduces the new Retina MacBook Air. That would let them push the 11-inch to something like $699 while they burn through remaining inventory. Then again, Apple didn't cut iMac prices when it introduced the new 5K iMac (though it did make iMacs more affordable earlier this year).

Anyhow, Apple wanted to make a statement with the 5K iMac, and it seems to have done so. For every review I've seen today that says "iPads are great but unexciting," I've seen another that says, "The new iMac is amazing."
Laurianne
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Laurianne,
User Rank: Author
10/22/2014 | 1:18:44 PM
Touch
Do people see much consumer demand for touch capabilities?
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