iMac Puts on Its Back-to-School Uniform
News Analysis. Even without ThinkSecret, those pesky Apple rumors are more frequent and more often accurate: New iMacs landed this morning. |
They're fresh from manufacture in Asia but assembled in California. Apple pumped up graphics memory and processing power just in time for back-to-school buying season; not that any of the kids want more than MacBook Air. :)
The base model, still $1,199, comes with built-in 20-inch display (supporting up to 1680 by 1050 pixels), Intel 2.4GHz Core 2 Duo processor, 1GB 800MHz DDR2 SDRAM, 250GB Serial ATA Drive (7200 rpm), 128MB ATI Radeon HD 2400 XT graphics, 8X SuperDrive, iSight WebCam, Bluetooth 2.1 and 802.11n. A second 20-inch model, at $1,499, bumps the processor to 2.66GHz, memory to 2GB, storage to 320GB and graphics to 256MB. For $1,799, processor increases to 2.8GHz and display to 24 inches, with 1920 by 1200 resolution.
The big brawn, and hefty price of $2,199, is a 24-inch iMac with 3.06GHz Core 2 Duo processor, 2GB of SDRAM, 500GB hard drive, 512MB nVidia GeForce 8800 GS and the standard features found on the other models.
The changes are subtle, but not insignificant. The low-end Mac moves up from a 2GHz processor and high-end model from 2.8GHz. The new models use the latest generation of Intel "Penryn" processors, with L2 caches of 6MB, up from 4MB in older iMacs. Apple also upped the frontside bus to 1066MHz. Can you say Mac gaming?
Apple certainly is thinking that way. After posting the blog, I spoke with Tom Boger, senior director for Apple worldwide desktop product marketing and David Moody, vice president for worldwide hardware product marketing about the new iMacs. Boger specifically called out improved graphics performance for gaming. "We think this is going to make the iMac more appealing to more people," he said, first referring to gamers and then going on to people using professional applications, such as video editing.
Microsoft's Windows Vista problems may be helping along iMac and other Apple products. During the fiscal second quarter, "50 percent of people who bought a Mac in an Apple Store said they were new to the Mac," Moody said.
Pricing is somewhat surprising. Apple chose to hold fast even as the U.S. economy slows. Apple also refrained from passing lower component pricing onto customers. During last week's fiscal 2008 second quarter conference call, financial analysts repeatedly asked about falling component pricing with respect to margins. At least for iMac, Apple is taking margin-boosting strategy rather than passing savings onto consumers.
The approach looks risky and yet from another perspective isn't. Apple sold a record number of Mac desktops (2.289 million) during fiscal second quarter, even as the ratio pushed further to portables. That's in what NPD classifies a "premium" category, or computers selling for more than $1,000. Apple has chosen not to compete in the sub-$500 PC market. If the economy softens enough to slow down PC buying, Apple can reduce pricing later, gaining margin benefit now and even lower component costs in the future.
"We offer a ton of value at those price points," Boger said. "Obviously those price points are working for us."
But lower prices are working outside North America. Presumably because of the weak dollar, the new iMac costs less in some markets. The two 20-inch iMacs are now €999 and €1,299 direct from Apple. The two 24-inch models are €1,599 and €1,919 direct from Apple. The entry-level model is about €100 less than the shipping price and what various resellers now offer in France and Germany. The entry-level 24-inch model also costs less than its predecessor. Buyers in Japan also benefit from lower prices.
Recent, new Dell and Gateway all-in-ones makes easier Windows PC-to-iMac comparisons. The iMac will never compete with sub-$1,000 PCs, nor is it intended to. So what have Dell and Gateway got over Apple? Not much.
For $100 more than the entry iMac, the starter Dell XPS One comes with a built-in 20-inch display, 2.2GHz Core 2 Duo processor, 2GB SDRAM (twice the iMac), same size hard drive, integrated graphics (rather than discreet) and otherwise comparable components, except: The Dell One also includes TV Tuner and wireless mouse and keyboard. Mac OS X 10.5 is ready for business or consumer use. The Dell comes with consumer-featured Windows Vista Home Premium. The only really comparable models are entry-level. At $1,799, iMac hardware pushes past the One, particularly the 24-inch display (Dell offers 20 inch).
Gateway's all-in-one starts at the same price as the $1,499 iMac, although there is a $150-off promotion running right now. The Gateway One ZX190 comes with a slightly smaller 19-inch display with lower resolution (1440 x 900), 1.5GHz Intel Core 2 Duo graphics, comparable graphics, 400GB hard drive and otherwise fairly comparable features.
The point: Apple has aggressively configured and priced iMac compared to Windows all-in-ones. Apple's desktops do lack TV tuners, which is more about strategy than technology.
I asked Boger how much competing products affect iMac configuration choices. "We certainly know where we stand in relation to them," he responded. "We look at the iMac as the signature all-in-one desktop."
The new iMac is ready for back-to-school buying season, and there's plenty of power. My question: How many schools still want desktops, given how great are portable benefits? MacBook and MacBook Air may lack the sheer oomph of iMac, but they also would be good enough for most student-use scenarios. So, while iMac's new school uniform is smart, I'm watching for MacBook's new wear. May I suggest aluminum, as so many rumor sites suggest will be the new school outfit?
