Apple needs to bring Mac prices down

Apple prices its Macs too high, according to Don Reisinger. But if it wants to truly gain market share, it should drop them as soon as possible.

eWeek has an interesting article up today detailing the difference in price currently being witnessed in the computing space, according to NPD. Based on the research firm's analysis, it estimates that the average Windows desktop is selling for about $550, compared to Apple's average desktop selling price of $1,543. The average Windows laptop in June was selling for $700, while Apple's laptops were going for a hefty $1,515.

After comparing comparably-equipped HP laptops with Mac notebooks, it became abundantly clear to me that Apple, although working hard to reduce prices on its computers, still has considerable work to do.

Right now, you can head over to HP's website and buy yourself a Pavilion dv7t sporting Windows Vista Home Premium, a 2.26Ghz Intel Core 2 Duo Processor, a 250GB hard drive, 2GB of RAM, and 256MB NVIDIA GeForce 9200M GS to display video on your 17-inch screen for just $1,217.99.

But if you chose the Mac, you'd be paying $2,799 for a MacBook Pro sporting a 2.5Ghz Intel Core 2 Duo processor, a 512MB NVIDIA GeForce 8600M GT graphics card, and a 250GB hard drive.

The list goes on. Mac Pros are substantially more expensive than comparably-equipped Dell machines, and aside from iMacs, which are far more competitively priced, you're not getting a bargain on any Apple product.

But then again, Apple gets a pass for charging more for less. After all, Macs aren't running Windows Vista (a definite plus) and the company's popularity in today's tech world makes anything it creates a premium product. Much like the shoe industry, the brand that most people covet will be able to charge more than a company you've never heard of.

And while I know this is a complaint that has been filed more times than any of us can count, I'm not saying that Apple should reduce its prices because they're too high. Instead, I think Apple should reduce Mac prices to gain market share on Microsoft and PC vendors.

There's no debating the fact that Apple has enjoyed considerable success over the past few years and has gained significant market share in the computing business. But it still has a ways to go.

According to the most recent figures for the second quarter, Apple is the third most popular computer vendor in the US, but has failed to crack the top five worldwide. The company enjoyed 38.1 percent year over year growth or 31.7 percent according to IDC's estimates. Apple sold 1.4 million units, according to Gartner and captured 8.5 percent market share.

Although some will say that that kind of growth speaks for itself and there's no need to reduce prices, I disagree. There are three major factors working against Apple that are ensuring that it doesn't gain too much market share in a short amount of time: Enterprise infiltration, application compatibility, and price.

And although many of the application compatibility problems have been solved over the past few years, it's difficult for the average PC owner to switch to a Mac when they're used to the Windows environment and an HP machine will cost half as much.

But if Apple can reduce its margins and start making its pricing more competitive, it'll no doubt enjoy even greater success.

Let's face it -- the average tech-savvy person is well aware of the benefits of owning a Mac and more often than not, they will run a Mac or Linux box before Windows even enters the home. But the mainstream doesn't necessarily possess that kind of knowledge and instead prefers to stick with what they know, regardless of its issues.

So if Apple is battling ignorance, why should it be pricing its computers at such a premium? It needs to capitalize on the fact that many people are worried about using Vista, bring the prices down to a far more competitive level, and watch as even more people move to the Mac thanks to lower pricing and their belief that they're buying a premium product at a bargain price.

Now is the perfect time for Apple to capitalize on its popularity and Microsoft's significant Vista problems. But the only way to do that is to get its PR machine working to allay common customer fears and let them know that Macs are now more affordable than ever. If it can do those two things, I think we'll see huge growth in Mac adoption and witness a real competition between both Windows and Mac OS X.

Even better, there are hints that Apple may be dropping the price of Macs soon. According to the company, it expects margins to fall significantly from 35 percent this year to 30 percent in 2009.

The time is now for Apple and with any luck at all, it'll seize this opportunity and give people what they want: a more affordable Mac.

Check out Don's Digital Home podcast, Twitter feed, and FriendFeed!

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About the author

Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.

 

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