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Summary:

Chalk it up the the amplification powers of the blogosphere. Earlier this morning, Think Secret broke the news of a sub-$500 iMac: With iPod-savvy Windows users clearly in its sights, Apple is expected to announce a bare bones, G4-based iMac without a display at Macworld Expo […]

Chalk it up the the amplification powers of the blogosphere. Earlier this morning, Think Secret broke the news of a sub-$500 iMac:

With iPod-savvy Windows users clearly in its sights, Apple is expected to announce a bare bones, G4-based iMac without a display at Macworld Expo on January 11 that will retail for $499, highly reliable sources have confirmed to Think Secret.

I’m all for blind sourcing, and I understand its necessity, but there are degrees, and this is the worst. They won’t even go as far as “sources inside the company,” or “senior marketing aides,” or something that would give us some indication of who is giving them this information. This makes me intensely skeptical of their claim, as does most of the information that has been released. We’ll get to that below.

Of course, immediately, this was picked up by a lot of other blogs. After all, this would be quite a story if it were true. Mac Rumors picked it up:

Based on “highly reliable sources”, Think Secret reports that Apple is expected to announce a $499 G4 iMac at Macworld Expo, probably 1.25GHz, with 256MB of RAM, a 40GB to 80GB hard drive, a Combo optical drive, USB 2.0, Firewire 400, 10/100Base-T Ethernet, a modem, and support for Airport Extreme, VGA, and DVI, packaged with Appleworks and a special version of iLife without iDVD.

So did we, and Slashdot too. Now, fanboy enthusiasm has begun labeling it “confirmed,” even though there is no more information than contained in the original Think Secret article. AppleInsider posted its own version of the story, changing basically nothing from Think Secret, but citing their own “reliable sources.”

So basically, by this afternoon, a rampaging blogosphere has given a blind-sourced Think Secret article “conventional wisdom” status and everyone is beginning to sell their possessions to purchase this new $499 iMac. Allow me to throw some much-needed water on this party: it’s never going to happen.

First. $499? And it’s got an 80GB hard drive, 256MB of RAM, iLife, MacOS, Airport Extreme, Firewire, etc? Adding up the costs for those individual components alone gets you above $499. I have this funny feeling Apple isn’t going to sell their hardware at a loss. They’re not a videogame console manufacturer. The iPod Photo starts at $499. If you really think Apple is going to start selling an entire computer for less than the cost of their best iPod, then I guess you should be writing articles for Think Secret.

Second. This would gut sales of their entire desktop line. No one would buy an eMac at $799 when they could just get this and a CRT for less. I mean, for $300, you could get a pretty nice monitor. But I think this would also start to gut sales of the other iMacs as people began to wonder what they were getting for the extra $700 they were paying. This would be terrible for Apple, as they need sales of their desktop Mac line to remain strong in order to stay afloat.

Third. This blurs the iMac product identity beyond definition. We mentioned this in our writeup of this event below, but it’s important to remember that the iMac has always been about integration. A single device which contains the entire computer. With each iteration of the iMac, this has become more and more true, until the newest one, which brings everything into a single form factor. “Where’d the computer go?” apparently now has the answer of “Oh, there it is, on the floor, tethered to a bunch of other cheap-ass components.”

Fourth. Some of the details given here are just outlandish. TV hookup? Right. Not only is this the cheapest iMac ever, but it also doubles as a set-top box! Wait, wait, breaking news. The Apple Blog sources are now reporting that the headless iMac will include a miniature cell phone tower as well as enabling iPod video playback, and will be introduced right after Apple’s brand new Newton PDA! Amazing!

The bottom line is that if one thing defines Apple’s brand identity, it’s high-quality computers at premium prices; this machine seems neither. If one thing defines the iMac line, it’s integration; this machine is not. And if there’s one thing that defines the two-week run-up to the Expo, it’s baseless rumors embraced all too quickly by the enthusiast press.

  1. Good article and I couldn’t agree more. I think the rumor sites are either getting fed a lot of misinformation. I could see a newly remodeled eMac (with screen), or a media server, or both. But not a cheap, headless Mac.

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  2. Very good points.
    I obviously got caught up in the news when I posted it. Didn’t think logistics, but you’re totally right.

    Your write-up got me thinking, “maybe they’ll discontinue the eMac to make way for this new one” but that would just piss folks off about not having a low-ish end Apple with a monitor.

    Dang. Now I gotta wait for the next insame rumor to get excited again…
    :)

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  3. I would agree due to past market dynamics but I think we are at a critical point in consumer electronics. Apple understands that it needs to be an innovator in the digital hub, and the future of consumer electronics may not be as much of just selling hardware, but also content. The first shot fired in the battle was the iPod/iTunes music store this may be the next move into the living room. This may be a preemptive strike on the xBox 2, if anyone noticed the xBox’s were flying off the shelf this xmas. Microsoft wants to be able to sell cheap boxes and make money off content, software sales and the like. This could make sense with a new vison of consumer market.

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  4. Anybody that knows _anything_ about mac rumors knows that Think Secret has arguably the best track record. If it was Powerpage or Macosrumors, I’d laugh. But I (and a great deal of online mac enthusiasts) know that Think Secret is spot on with calls like this. Time will tell.

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  5. Of course you think they’re spot on. It’s a story that is deeply appealing to beileve. But getting it right most of the time means being wrong a lot of other times, and this is one of those times.

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  6. What if it were $600?

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  7. You’re right, it’s not a headless iMac like everyone wants. It’s a headless eMac based on the specs and deserves the $499 price-tag.

    I wonder if selling more computers at less profit margin will make more money in the long run selling more peripherals and software like iLife, iPods, Keynote and the other myriad of software (Garageband jam packs, etc., etc.). This approach would also move marketshare up and help Apple in Quicktime mindshare and consumers as developers (software/hardware) would “OF Course” include Macintosh as opposed to now where “There’s not enough marketshare to warrant development” !!!!

    If Apple truly wants to increase marketshare … a headless iMac (NOT eMac) for $599 would be a welcome start. In Keeping costs low, put in a slower graphics card, but ALLOW CONSUMERS TO DO WHAT CONSUMERS WANT and upgrade it if they choose!!!!!

    Sum day, Apple may understand consumers.

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  8. Charles Jenkins Thursday, December 30, 2004

    Gosh, I hope it is true. I can imagine buying one for my TV (so I can write programs for OS X from the comfort of my easy chair), and a second one to loan to friends. “Oh, your Windows computer got hosed by spyware and viruses again? Let me set you up an account on this little iMac box, and you can try it for a couple of weeks. It is immune to all that crap.”

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  9. IF the article has any truth in it, my first reaction was that the eMac line will be retired. Costs aside, I suspect nearly 2/3 of the cost of the current G5 iMac is the screen. And I’m not sure how arguing the fact the iPod Photo is also $499 has much to do with anything. I spend much more for digital cameras that do even less. Everyone knows size matters and smaller equals more expensive when it comes to electronics.

    Certainly a lot of rumors are fueled by too much wishful thinking. However, an eMac without a flat screen CRT and 30lbs lighter would probably be $500. The curren low-end eMac is arguably 10-20 percent over-priced and sales are starting to show.

    Remember, too, that Apple isn’t wanting to only sell one premium computer to each family when they could sell two or three systems, along with portability in their ibook line. Our family of 5 now has 4 Shuttle PCs, 1 PowerBook, 3 iBooks, and soon a G5 iMac and G5 desktop. We also have an older iMac serving as a music and photo server for the entire family. I’d like to replace the older iMac, but not with a bulkier eMac. A less expensive Mac system would be nice for families buying a second or third Mac.

    I wouldn’t be surprised if this was simply rumor, but I wouldn’t be surprised if there was some substance to it after all. We won’t know until Jan 11.

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  10. This may be my favorite quote of yours
    “First. $499? And it’s got an 80GB hard drive, 256MB of RAM, iLife, MacOS, Airport Extreme, Firewire, etc? Adding up the costs for those individual components alone gets you above $499.”
    Did you actually read what they said as Think Secret? They actually said between 40 and 80 gigs, not 80 in a 499 machine. You may have noticed that Apple often has multiple version of the same system with different specs and different pricepoints. Also, if you read the Think Secret post you will notice the words, “AirPort Support”. This is a bit different than your version of what they said. If you think the price point is not practical, that is fine, but don’t misrepresent what others say to make it sound like you have a point.

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