Newsletter Issue #990
April 27th, 2020ARE CHEAPER APPLE GADGETS COMING?
For years, Apple gear has been regarded as expensive, sometimes in the luxury class. Thus owners of such products were regarded as well-off, elites, or people who just didn’t understand the value of a dollar; well, make that whatever currency you use in your country.
I know that when I first brought a Mac into my home, in 1989, I did price shop, not that there were many dealers who managed the full product line. In the end, I chose the shop from which my employer bought their Apple gear after having been assured I’d pay the same price they did.
Now it was a different world, and you couldn’t buy cheap PCs for a few hundred dollars at the neighborhood supermarket. It was a serious purchase even though Apple’s pricing lay at the high-end of the market. While Macs were offered fully assembled, you could — and still could — assemble a PC from the parts. Sometimes you’d save a good deal of money, at the expense of having to assemble everything, configure device drivers and so on and so forth.
Of course you usually had to do the same with a fully-assembled PC too.
Macs were even then designed to mostly just work for most normal functions.
In the “dark days,” Apple’s foray into cheap stuff resulted in the Performa, basically a Mac with low-end parts sold at the cheapest price possible. Similar to mainstream consumer electronics makers, there were even special models for specific stores, though it was mostly the labeling rather than the hardware specs.
At one time, there were so many different Performa variations, it was near impossible to tell which model was which. That was true then — and now — for PC makers.
After he took over as interim CEO — well iCEO — in 1997, Steve Jobs ditched products that weren’t paying off, and slimmed the Mac lineup to basically desktops and notebooks in both the mainstream consumer space and the so-called professional space.
Sure, Macs were still regarded as expensive on price, but not always when you actually compared the hardware specs to the PC. Apple didn’t play in the low-end of the market; not then, not now, although their stuff is now more affordable.
When Macs began to appear with Intel CPUs beginning in 2006, it was easier to compare Apples and PCs since the basic hardware was very similar. Remember this was before Apple began to outfit some of its Macs with ARM-based system-on-a-chip silicon for low-end functionality.
So you couldn’t buy a $500 Mac notebook, but the cheapest model had midrange specs that were priced in the same range as a similarly-equipped PC. At the high end, the Mac Pro offered performance equal to or better than the top-of-the-line PC workstations. But it was a hard argument to make when people would get pretty much what they needed out of the cheap PC, assuming basic business tasks such as word processing and spreadsheets, email and Internet browsing.
But the ability to run Windows on a Mac with decent performance — with a Boot Camp partition or via a virtual machine — made the Mac a far more flexible device.
Let’s look at the other end of the equation.
In 2001, the first iPod, at $399, may have seemed like an expensive indulgence compared to other digital musical players, which used tiny amounts of flash storage rather than a hard drive. Sure they were cheaper, but they couldn’t store as many tracks, uploading to them was slow, and the interfaces were uniformly terrible.
The iPod at first stuck with its original form factor, with the tiny hard drive that grew larger year by year. But with the iPod nano and, later, the iPod shuffle, Apple went to flash storage and much lower prices. You could guy one for $49. As electronics gadgets go, that’s as casual a purchase as you can make.
With the iPhone, Apple sold loads of them despite the price. From the beginning the average sale price of a new iPhone was hundreds more than competing gear. Nowadays, a typical Android device may sell for $200-300, whereas it is close to $800 for an iPhone. So even though total sales of Android smartphones are far larger, Apple grabs most of the profits. Even top-seller Samsung can’t manage to move huge quantities of its most expensive Galaxy handsets.
More curious, Samsung actually has smartphones that cost more than the most expensive iPhones. So a Samsung Galaxy Fold is close to $2,000. And this is for a form factor that has yet to demonstrate its usefulness in any logical respect; it’s just a mostly failed experiment, though I suppose it has something the company can boast about. Apple, of course, focuses on proven form factors at fair prices.
But perceptions about iPhone pricing really changed with the release of the 2020 iPhone SE.
Now I haven’t used one, though my wife has an iPhone 6s, which is a similar form factor. At $399, the SE offers most of the guts of the iPhone 11, including the A13 Bionic CPU in an iPhone 8 case. In fact, some of the key components can be swapped with the iPhone 8, and its repairability rating is quite good for such a gadget.
More to the point, the SE rates really high against Android gear selfing in the $400 range. It’s faster than all of them, even the high-end Samsungs, and offers a competitive camera and a solid display.
Indeed, unless someone prefers Android or just doesn’t want to bother switching platforms, the iPhone SE is just about the perfect mainstream smartphone. Coming during a global financial meltdown due to the coronavirus, it may well become the most popular iPhone, or close to it, especially for people upgrading from older models or other platforms.
At the same time, Apple has brought back the $999 MacBook Air. Sure, it may seem costly compared to an entry-level PC notebook, but it is well worth the price. It can even drive a 6K display, which I suppose is a useful feature in a pinch. It may not perform in the range of a Mac Pro, but I can see where it would be useful to view video footage and do simple edits that won’t challenge its modest CPU.
The future looks more interesting, and portends even cheaper Macs.
As you move up the Mac product line, the most expensive component is the CPU. That 28-core Intel Xeon processor in a Mac Pro will retail in the $10,000 range if you bought one for a do-it-yourself PC workstation. That explains why Apple’s workstation can be outfitted with components that will raise its price to well within the range of a top-of-the-line midsized sedan.
There are more and more rumors that Apple is prepping a new Mac equipped with one of its ARM processors. Such a decision would come at a time where Intel has more or less hit the wall with slower improvements in CPU horsepower and power efficiency. Indeed, benchmarks of the latest iPad Pro, with an older A12Z design, performs in the range of the MacBook Air, although its graphics capability is much faster than the Mac.
Now remember the A-series CPUs are run in a severely constrained resource limited environment to work properly in an iPhone or an iPad. Now I don’t pretend to know the potential of these chips, but imagine how they’d scale up with more cores running full bore. Would they possibly meet or exceed the silicon installed in a top-of-the-line MacBook Pro.
ARM’s own multicore processors have even found homes in datacenters, the same places where Intel Xeon operate. That would indicate an amazing potential for a future ARM-based Mac Pro.
Now we get to the good part: It’s not just equaling or exceeding the performance of Intel hardware, it’s a matter of dollars and cents. Appel’s A-series chips cost a fraction of what an Intel CPU costs. While Apple isn’t paying $10,000 for the Xeon that is installed in a Mac Pro, it would surely save thousands of dollars if the CPU was replaced with a super-powered A-series CPU. Now imagine passing on those savings to the customer, while still allowing for a great profit.
How cheaply could Apple market an ARM-based MacBook Air? Maybe $100 less? And thousands lower for the high-end gear.
I have little doubt that the new economy will, if anything, hasten the move to more powerful Apple gear at lower prices. It won’t force Apple to sacrifice profits, but it will mean far greater value for Apple’s customers.
It’s a future that, if it happens the way I expect, will be truly fascinating.
THE FINAL WORD
The Tech Night Owl Newsletter is a weekly information service of Making The Impossible.
Publisher/Editor: Gene Steinberg
Managing Editor: Grayson Steinberg
Marketing and Public Relations: Barbara Kaplan
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