Apple's new Macs better be cheap
Opinion: It's no surprise that Apple will be unveiling new iMacs and MacBooks soon. Rumors have been floating for weeks and now retailers are running out of stock of existing units and being told, in effect, to wait for the new ones. Last time Apple updated its consumer line of personal computers it cut prices, but buyers continued to pay a premium for the Apple logo.
Since then, unemployment across the globe has risen. Consumers in the US who still have jobs are hoarding cash, will be stashing away an unprecedented eight percent of their incomes, according to Pacific Investment Management. And when they do part with their hard-earned dollars, it's more likely being done at places like Wal-Mart, where PCs are sold, not Apple Stores.
That's not good news for Apple, long used to its free-spending users. In Q3 Apple's SEC filings showed that its desktop shipments dropped 10 percent to 849,000. However, its portables jumped 13 percent to 1.75 million. To drum up interest in its desktop iMacs and to sustain growth with its laptops the company will have to cut prices. Dramatically. And especially with their line of portables.
This week Computerworld.com has favorably reviewed three 17-inch laptops for as little as $700 and no more than $829. Apple's one 17-inch portable weighs in at a hefty $2,499 to start. Granted, its specs are somewhat better, but not 3x better. At the low end you can get its 13-inch MacBook for $999. On the Best Buy website I couldn't find a Windows 13-inch portable. But 15-inch units start at $349.
Granted, Mac users have always paid more for their hardware than Windows users. Historically, those reasons have made sense. But history is changing. The economy is down and, despite some politically-motivated happy talk, it's going to stay down for consumers for a long, long time. Bloomberg says only eight percent of Americans plan to increase their spending in the coming months, one-third plan to cut spending, and 58 percent will "stay the course." If they are even in the market for a new computer, they will be very price sensitive.
Add to this that Microsoft will generate a lot of interest among buyers with the impending release of Windows 7. I'm not going to argue whether it's better or worse than Snow Leopard, but Windows 7 will ship on systems that will be much, much cheaper than Macs, unless Apple does something sensational with its pricing strategy.
History puts the odds against Apple making substantial cuts to its Mac line. But given the company's increasing dependence on the iPhone for its growth, Apple may well decide to become more price competitive with the PC. If it doesn't, expect future Mac market share numbers to continue to decline.