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While Apple’s Mac mini has never compared favorably to low-end PCs on price, its value being in size, weight and quiet computing, a report from iSuppli shows the $599 retail cost in a more favorable light. According to the market research firm, an estimate of part […]

While Apple’s Mac mini has never compared favorably to low-end PCs on price, its value being in size, weight and quiet computing, a report from iSuppli shows the $599 retail cost in a more favorable light.

According to the market research firm, an estimate of part costs in the Mac mini comes to $376.20, with another $10.94 for manufacturing, bringing the total build cost to $387.14. At a retail price of $599, that would mean the build cost of the Mac mini is roughly two-thirds of its retail price. In comparison, iSuppli has asserted the build cost of the iPhone 3GS is $179, while the retail, or “no-commitment,” price of an iPhone from AT&T is $599. Further, the iSuppli report on the Mac mini doesn’t include ancillary costs like engineering, marketing and shipping, so Apple is not earning anywhere near $211.86 per Mac mini sold. What this means is that the Mac mini is quite possibly the least profitable product in Apple’s lineup.

Source: iSuppli

Source: iSuppli

As to why the Mac mini costs so much to make, according to iSuppli the answer comes down to size. “Unlike most desktop computers from other brands, the Mac Mini and, indeed, Apple’s entire Mac line make extensive use of components designed for notebook computers,” said Andrew Rassweiler, director and principal analyst for iSuppli.

While it is no doubt true that a smaller computer costs more to make, let’s not forget that Steve Jobs introduced the Mac mini in 2005 as the “most affordable Mac ever,” starting at $499. It wasn’t until the switch to Intel that the price of the Mac mini jumped to $599, admittedly along with a significant performance boost, but does anyone really believe a PowerPC G4 in 2005 costs $100 less than an Intel Core Solo in 2006? It seems unlikely. More likely, Apple was cutting into its profit margins by an even greater amount with the original Mac mini, and that means that those of us still pining for a $500 Mac may be a long time waiting.

  1. Or, another way to look at this is that you get the most for your money with a Mac Mini

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  2. “and that means that those of us still pining for a $500 Mac may be a long time waiting.”

    Or that the Hackintosh community will continue to thrive.

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  3. How is this news? The only people that care about the profit margins is the people selling the product. It’s proven that people who are willing to purchase an Apple product aren’t that concerned of the cost, when the product will last much longer than competing laptops.

    Surely TAB has some better articles it could write? The standard of late is dropping.

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    1. Adam, if you know of a way for us to only write articles that EVERY single person that reads this site would like…then please, let me know. Otherwise there’s simply no way on earth we’ll always write an article that you’ll care about. Simple as that.

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    2. As a Mac user I would love to see more articles on software and the uses for them. The nearest I would say would be the power user on iTunes article (I thought it wasn’t that in depth tbh). News about up-coming products, product reviews even. I just don’t see the need for why the profit margin of a product is news-worthy. My opinion before you shoot me down Josh.

      Of course i don’t think you’ll always write an article I care about, but don’t discredit feedback. The above is hopefully constructive enough to take on board, i’m not asking for major changes, just feedback on a site I read everyday.

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  4. I think the mini is the best value for a Mac, but I’m not as sure as I was prior to the price drop on the MacBook. Setting aside parts that spec a bit better, how much does that display cost?

    I don’t think a Mac by any other name is necessarily a Hackintosh. Small footprint PCs cost more. The Dell Studio Hybrid comes to mind. At $499, the DSH is easy on the eyes, not so much the ears. It’s not quiet, at least not like a mini.

    Finally, price matters, even for Apple. When the Mac mini was introduced, Steve Jobs made an issue of the $499 price. That price was supposed to be one of the reasons PC users would consider switching. It seems clear now that Apple sacrificed an even greater share of profit then than now. That’s news that matters, both in the present and for possible future products, like an Apple tablet or netbook.

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  5. The mini is a great value if you’ve got a good-enough display sitting around (not to mention a good-enough keyboard and mouse). Otherwise, not so much. I had a mini attached to an old (and high-quality) CRT– but when the CRT died, I went out and got an imac.

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    1. Agreed! The mini loses much of it’s initial value when you don’t already own an LCD, keyboard and mouse. Even a cheap LCD screen and halfway decent key/mouse combo puts it near the cost of a much more powerful iMac.

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    2. True, the mini is a “great” value if you already have existing components (monitor, keyboard). However, I would argue that the mini is still a “good” value even if you did not have said components laying around. The mini allows you to configure your setup to include whatever displays, speakers, peripherals that suits your needs. If we’re comparing the value of the mini to an iMac, that’s $600 left to spend on these items. This could allow you to go dual monitor, or get a nice 24in IPS/PVA monitor… whatever you need (I recommend Dell monitors). I guess the trade off is that you aren’t getting the computing power that you would from an iMac. But, sometimes pure processing power is not the most important part of a setup.

      The other item to consider is that when you buy an iMac, you pretty much have to get Applecare, which on the cheapest iMac is an additional $170. Because anytime you put all your eggs in one basket, you better make sure you have insurance.

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  6. Personally, I find the mini’s greatest value next to my television as a media center. While more expensive than an Apple TV, the mini has greater storage capacity, can play DVDs, and can record TV with the right equipment. The mini’s size and quiet operation are plusses in the living room, as well. A keyboard and mouse aren’t necessary for me, as I use Screen Sharing through my MacBook.

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  7. Nice story appleinsider.com… Um, I mean…

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  8. [...] Here is the original: Mac Mini Least Profitable Apple Product? [...]

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  9. I’m curious to hear about the profitability of the various models. For those that complain, they don’t have to read the article in the first place. The world revolving around them wouldn’t be enough for some of the whiners…

    I own 2 Mini’s, both a g4 and a core 2 duo. How about an article on using a mini as a media device, a dvr killer? I already use one mini as a media server for our music dist system. I’d love to use one to grab HD video like a DVR and have more flexibility than the current DVR systems…

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