Stephen Baker: Drop the MacBook below $800
Posted Mar 11th 2009 12:00PM by Megan Lavey
Stephen Baker, Vice President of Industry Analysis for The NPD Group, released his analysis of Apple's sales trends following the recent release of January sales figures. In his opinion? If Apple keeps up its current pricing strategy, it's going to flounder in today's economy. The solution? If Apple can't produce a netbook, then slash the price of the MacBook down to $799 in order to bring a mainstream price to a high-end product.How low can you go? Discussion on this article behind the scenes here at TUAW resulted in the observation that if you drop the price too much, you'll wind up diluting the brand itself. Apple commands higher prices, but it also has the product to back it up -- and it has made some price concessions. You can pay $999 now for a better MacBook than I paid $1399 for just 15 months ago, and one that will last much longer than most PC notebooks on the market. Drop the price too much and not only will the brand get diluted, it'll spark even more fears that something is wrong with the company. There's a fine line between premium and cheap, and a lot of that is psychological.
Personally, I would also think less of Apple if it jumped on the netbook bandwagon just because everyone else did. It didn't even venture into the smartphone market until it could develop a device that not only blew away the competition, but changed the cell phone industry itself. If Apple is going to produce a netbook, then let it produce one that'll stand out and won't get lost among the Acers, Dells and eeePCs out there. But, don't slash MacBook prices to compensate for the lack of one either.
What are your thoughts on Baker's observations? Let us know in the comments.
Reader Comments (Page 3 of 5)
loup407 said 12:41PM on 3-11-2009
You'll note these analysts aren't running businesses, just Monday-morning quarterbacking. I think Apple has done pretty well by ignoring suggestions like this. As a long-time PC fan and recent Apple convert (and business owner); I bought the cheaper-is-better argument for a long time, especially with a vendor discount from a major PC brand. We went 100% Apple two years ago. We have zero issues with file compatibility with clients (who are almost 100% PC), and my IT support costs have dropped from $40,000/year to the cost of a couple of ProCare cards. I learned the hard way, you get what you pay for.
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mi_sat said 12:56PM on 3-11-2009
Absolutely agree. My four year old ThinkPad is built like a tank, but I got tired of "msconfig"ing, "ipconfig"ing, looking deep into the bowels of the operating system to see why a new software program broke some other part of my computer, etc.
My last two purchases were a MacBook and MacBookPro -- bought on the same day (one for the Mrs.). The best part is when I plugged in my Airport Extreme and it immediately found my new hardware. It was pure magic.
Joe said 12:41PM on 3-11-2009
Apple has a netbook: the Air. If anything should have the price dropped its that. When it came out it was all the latest tech Apple was going to be putting in their products. Now All the products are carrying the same tech, so there doesn't appear to be any good reason other than squeezing out those boutique bucks for leaving the price so high.
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Brian said 2:16PM on 3-11-2009
I wouldn't go so far as to call the Air a "netbook". It's an ultraportable laptop, but netbooks traditionally make use of much less powerful (and power-intensive) processors than traditional notebooks.
teiresias said 12:43PM on 3-11-2009
Seriously, the whole "Why should Apple drop their prices for the peasants?" gig displayed in this article merely brings out the worst in both Apple fans and naysayers. It's an extremely condescending notion and fails to recognize the Netbook market as a LEGITIMATE market that has a very large target demographic with specific use cases.
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CoreyJF said 12:55PM on 3-11-2009
I would rather see a netbook then a pricedrop. I was ready to jump on a Dell Mini 9 and hackintosh it, but given the recent rumors I just might hold off.
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xeph said 12:58PM on 3-11-2009
I don't really mind that Apple charges a premium for their products; that's just something I've come to accept over the years. When I can afford it, I buy one. When I can't, I don't.
What I WOULD desperately like to see Apple do, however, is create a desktop computer that is middle of the road specs-wise. Almost universally, their product line is the low end or ridiculously high end. Where's the product that sits in the middle that would actually be attractive to the person who can't deal with the limitations of the lowest of the low, but has no need for the 12 core quad processor with 10 graphics cards?
If they want to make money, that is a market that is begging for some solutions - even at Apple's premium pricing.
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Jeff said 3:01PM on 3-11-2009
I hear you. My PowerMac G5 is almost 5 years old. It needs to be replaced. But I don't have $4000 to spend on a Mac Pro and the iMac is not my cup of tea. I don't want an integrated machine. I've got two Dell 24" monitors and am looking at some external eSATA cases to run ZFS on. An iMac won't cut it.
William Hook said 1:00PM on 3-11-2009
First and formost, it would be nice if Apple could match the UK price to the US price - it's probably a bit closer now due to the economy, but last year, iirc, it was roughly £100 more for my MacBook in the UK then it was in the US.
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TK101 said 1:09PM on 3-11-2009
If Apple made a 9" or 10" Air, THAT would be a cool netbook. Even better: a large iPhone-like notebook.
I'm tempted to buy the Dell Mini 10, just to have a new notebook in the house (we need one). I don't need a killer machine, just something for email, web, etc. I'm a long-time Mac user, and I have other machines for work/freelance. But for the wife/kids, a Mac netbook would fit the bill.
TK
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miike said 1:36PM on 3-11-2009
I agree with TK101.
Instead of a netbook, make a larger iPhone or iPod Touch.
Maybe the size of a paperback, or a kindle.
In regards to price, I would always *like* a cheaper Mac... but then I can't even afford anything right now, so for me, the point is moot. Instead of lowering the price, add more features and include iWork or something. I have been hearing how much Macs are so much more expensive than a pc since 1985. But when you add up all the "stuff" you get with a Mac, it's actually about the same price or cheaper than a comparatively equipped pc.
Before, laptops, when computers were big boxes, I used to be kidded about how much I paid for my Mac... until they (whoever "they" are) tried to match my system.
Pc owners used to have to buy add-ons like... umm.. a soundcard, or ethernet, or graphics card... even a mouse!
So this argument of Apple should lower prices has been floating around for 24 years(!!!!). Probably longer than the person making the argument could read!
Bob Badminton said 1:18PM on 3-11-2009
Apple's netbook is "plastic" MacBook and it is as far as Apple will go. There is no need for Apple to introduce something that is slower than they currently offer or cheaper fot that matter. If you want something light - there's Air for you, if you want something small to browse web: iPhone/iPod Touch, if you want something light, small and cheap well you'd better wake your hacking skills because Apple just won't do it.
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Eric Warnke said 3:34PM on 3-11-2009
Actually, that's as far as they will go in retail. They may very well offer a stripped down version of the white MB in the bulk education channels that you can't buy at retail for an additional $50-$100 discount on top of the $50 educational discount on the white MB retail model.
avantgarde said 1:23PM on 3-11-2009
Bringing the MacBook down won't really do much, they're not selling product, it's half design, style and buying the exclusivity of using OSX on their hardware. Dropping $800 or trying to market for value buys, they're moving away from what Apple stands for. If the userbase grows too large, the scope of what OSX was made for is lost, and they can't provide the highest quality product and service as they could before.
Or, more money which means more company improvement. Oh well. I don't see them doing $800 MacBook from a business standpoint.
http://pixolia.net
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ramen said 1:23PM on 3-11-2009
People need to stop comparing Apple to the Dells and HPs out there. They don't compete on the same level. Apple is perceived as a PREMIUM (lifestyle) electronics brand much like BMW and Lexus are luxury car brands...Rolexes vs Casios, etc... Apart from Sony, I don't think Apple has any direct competitors and they can charge premiums because they know they can.
Frankly I think for the prices Apple charge, most of their products are priced reasonably considering you're getting a lot in the form of hardware and software design, engineering (unibody manufacturing), materials (glass and aluminum), and an overall sense of satisfaction and quality that comes from Mac ownership. It's the whole package that has led me to become a repeat customer 6 years and on. Plus it's an image thing as well.
Just look at all the attention, coverage, and allure they attract. If you can afford a Mac, you can afford it. If you can't, that's why there exists the Dells and HPs in the world. Get something cheaper then. It already bugs me seeing kids walking around with iPhones next to working professionals. Plus, do you really want everyone - rich and poor - to be carrying around MacBooks? That will just dilute Apple's image and status.
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mi_sat said 1:33PM on 3-11-2009
"If you can afford a Mac, you can afford it. If you can't, that's why there exists..."
...credit.
Leaf said 1:51PM on 3-11-2009
People absolutely should compare Apple's to Dell's and HP's. They are Apple's competition. Apple's perception as a premium brand is irrelevant. People do need to stop comparing computers to cars, because thats a comparison that never works. Luxury cars are packed with features and technology that cheaper cars are devoid of. Apple, on the other hand, consistently builds underperforming PC's compared to other manufacturers.
Sure, you're getting unibody manufacturing and better materials. You should. You're paying a LOT more. The problem is what you aren't getting... Firewire, larger hard drives and more RAM, how about more than two measly USB ports? Have you ever seen the array of ports you get on a PC notebook? 3-4 USBs, HDMI, Firewire, E-SATA... And Mac fans are eating up this "DisplayPort" BS like its good for them. I need DisplayPort like I need another f-ing adaptor in my bag.
The attention and coverage is as a result of the hype they have made for themselves by building a feature-rich product. Wait until the competition catches up and starts combining feature-rich with performance specs.
Doesn't anybody remember products like the Pismo Powerbook? Remember how expansive that thing was? THAT was a combination of elegant design and performance. The original B&W G3... $1599 or so got you a kick-ass super-expansive worksation. But then, Apple was the underdog. Now they're on top of the world, peeing on their customers, who seem to think it's raining golden sunshine and giving them a sense of "style and status".
Jeff said 3:07PM on 3-11-2009
What an elitist. I don't use Apple products because they make me feel like I'm better than everyone else. I use them because they work.
Mike Eggleston said 3:13PM on 3-11-2009
That actually annoys me further. The biggest problem Apple faces right now is this "elitist" attitude that many users portray, yourself included. Their brand should have value that is associated with them, and the higher pricepoint does show that. However, the more people who are using them will no dilute their brand, it will just strengthen what Apple has been saying for years: Quality over Quantity.
Just because some kid has an iPhone doesn't mean that the image is being diluted, it just means that kid has parents who want/willing to give the very best to their kid.
Leaf said 7:03PM on 3-11-2009
Apple has always charged a premium for it's products, but let's not kid ourselves... the iPod and iPhone have inflated their egos. Mac's are becoming more expensive and more feature-rich- but LESS capable from a hardware standpoint. Don't believe me? Check out a few $1300 notebooks on Newegg and compare for yourself.
The MacBook need not be dropped in price, but boosted in power and functionality. Mac users have always been willing to pay more to get a better product- but as it stands, that currently means a shiny case, a few gimmicks and an Apple logo.
I won't even bother discussing the sad, sorry situation of Mac desktops. It's no wonder the OSX86 community is flourishing.
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