Apple’s Budget Macs: Real Possibility or Wishful Thinking?


Apple (s aapl) computers are expensive. Whether or not you think that price is justified, you can’t deny that even machines on the lower end of the scale will cost you a decent amount of coin.

The Mac Mini is the cheapest machine in the bunch, and you don’t get any crucial peripheral gear like a monitor, keyboard or mouse without paying extra. Putting aside for a second our dear devotion to the Cupertino brand, if you know absolutely nothing about computers, and you’re presented with two all-in-ones side by side, and the price tag on the Dell (s dell) is a lot cheaper, you’re probably going to get the Dell. You’d be wrong, but that doesn’t change the fact that that means a sale for Dell, and nothing for Apple.

Why It Sounds Reasonable

Given that chilling scenario, recent rumors that Apple is prepping some lower-cost hardware to bring to market makes sense. They showed recently that they were relatively resilient, even in tough economic times, by posting record gains yet again for the second quarter of 2009, but Mac sales actually slowed during the same period, meaning that Apple is likely looking for a way to improve those sagging numbers.

AppleInsider cites “people familiar with the matter” as the source of the pleasant prospect of cheaper machines coming out of Cupertino. Their source maintains that the cheaper hardware to be introduced is designed as a stop-gap solution to counter the runaway success of netbooks until Apple is ready to release its own Newton-esque tablet-style device, which is taking longer to develop than anticipated. Apple’s new, lower-cost menu is said to include cheaper versions of both the 13-inch MacBook and a new entry-level iMac, possibly priced in line with its education-only predecessor.

Why It Doesn’t Make Sense

Sounds like a good idea, and there’s no doubt consumers would appreciate it, but does it make sense from Apple’s perspective? I think not, for a couple of reasons. First, they would be coming pretty close to interfering with their own clear price level demarcations. Apple is very good at pricing their products in such a way that each fits into its own clearly demarcated space, but that you also see the obvious value of going up to the next level. To start introducing products that clear the next level up by only a hundred dollars (and ones that probably offer significantly downgraded specs) would throw this delicate balance out of whack.

Second, as I’ve just mentioned, the new machines would probably have to offer big concessions in terms of hardware (they’d never sacrifice build quality) in order to provide profit margins acceptable to Apple. Crippled specs would just have people complaining that they could get a Dell with 10 times better internals for the same price, which would put us exactly where we are now: Apple fans saying the product is better overall, even if on paper it doesn’t look it, and PC faithful clamoring about the Apple Tax.

So no, I don’t think Apple will introduce new, cheaper machines to bolster Mac sales. They have to do something, though, if the dip repeats itself for a second quarter in a row. No doubt their solution will be much more interesting than just a price/quality cut, which is exactly the kind of uninspired move a PC manufacturer would make.

Another Option

If Apple really wanted to cause people to sit up and take notice, and sell computers to customers like me who already own multiple Mac desktops and laptops and to people looking for their first Mac, they’d give us a reason to look at a Mac Pro. Or not the Mac Pro exactly, but something like it. Give us a tower with accessible internals, with minimal specs but lots of potential for self-installed upgrades down the road. Then sell us those upgrade parts through the Apple Store with official Apple branding. It’s almost a cheap razor/expensive blades sales model, but I admit it involves a lot of risk, since you might get undercut by third-party providers on the upgrade components. Still, it would be unexpected coming from Apple, and that is sort of their thing.