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Summary:

Apple’s advertising is clever, visually attractive, hip, and funny. It does a great job of showing off what its products can do, and how your life could change as a result. What Apple ads don’t talk about is money. As someone who’s already more than willing […]

apple_priceApple’s advertising is clever, visually attractive, hip, and funny. It does a great job of showing off what its products can do, and how your life could change as a result. What Apple ads don’t talk about is money. As someone who’s already more than willing to part with my little disposable income in order to nab Apple gear, I’m fine with that. But what about everyone else?

There are no doubt reasons Apple doesn’t talk about price. I’ll mention a few of them later on in this post. The thing is, especially at the low end of its product line, Apple stands to gain a lot by trumpeting its price tags to the masses.

Why People Are Switching

In the past three months, I’ve seen three friends buy their first Mac computer. None of them purchased the 13-inch MacBook Pro that Apple has been so lauded for online and by the tech journalism community. Instead, all three bought either a Mac mini or a white plastic MacBook, and all three did so because these machines represent the lowest cost of entry into Apple’s Mac lineup.

That’s great news for Apple. Its low-end computers are doing their job, and bringing people in who otherwise might not have looked at a Mac. The problem is that none of those three people would’ve considered a Mac if I hadn’t recommended them. The reason? They all perceived Macs as too expensive.

I know this evidence is anecdotal at best, and doesn’t mean this is the case for the general computer-buying population, but everyday I meet people who just weren’t aware that there existed such a thing as a Mac that costs less than $1,500 or $1,600. Some used to use them for work in the eighties, when it would cost you $1,800 to get one for home use, but speak with fond longing about the user experience they remember.

When I tell these people that they can get back into Mac for as little as $600, they are completely flabbergasted. As in, never even conceived such a thing was possible, totally unaware. To me, that means that Apple isn’t doing its job right on the marketing side of things. Of course, word of mouth is probably part of the company’s marketing plan, but why depend on individual evangelists like me to spread pricing info when televised media is so much more efficient?

The Great Unmentionable

Apple has some very good reasons not to talk about price. For one, they can’t beat PC manufacturers in that area. There will always be a cheaper PC with better specs on paper out there. But talking to PC users, that isn’t as big of an issue as I thought it was. People who remember Macs from times past don’t care that you could get a better spec’d PC for the same price or better as the Mac mini. They care that Macs are so affordable as compared to their precursors from 20 years ago.

Another reason Apple might not want to talk about price is that it would be inconsistent with its branding to date. Apple’s computer products are targeted at a demographic that doesn’t list price as its top priority. The average Apple consumer is financially comfortable, and willing to pay for a quality product that sets them apart. “Think Different” really means “Buy Different.”

Getting Past Taboos

The fact is, Apple’s changed its pricing policy to target new growth and new demographics, and it should change its marketing strategy to be more in line with those new sales goals. A Mac mini commercial, done with all the usual Apple visual appeal, with a simple “Starting at $599″ at the end would do wonders for raising consumer awareness regarding pricing without diluting the strong brand Cupertino’s worked so hard to establish.

You can talk about features and reliability till you’re blue in the face, but if you want price-conscious consumers to listen, you’ve also got to talk about cost. If Apple really wants to convert new pricing structure into an exponential increase in sales, it would do well to make sure people know about it.

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  1. “A Mac mini commercial, done with all the usual Apple visual appeal, with a simple ‘Starting at $599′ at the end would do wonders…”

    No, it wouldn’t. Laptops are where it’s at, where it’s been, and where it’s going to be. For every one person who’ll drop $599 on a Mac Mini (then another $200 on a monitor, $30 for a mouse, $40 on a keyboard) there’s ten who’ll buy a $600 laptop PC without a second thought.

    As comical as the term is, the “Apple tax” is a very real thing.

    1. I was just thinking the same. That would do so much for them

  2. I see no reason why Apple couldn’t drop another $200 off all MacBook models and still make a decent profit. Imagine how an $800 white MacBook would sell.

  3. Apple’s proven that they don’t need to be the price leader in order to be a sales leader. They lead the pack in $1,000+ PC sales and they’re happy there.

    Undercut your product by cutting prices and you bring in a breed of users who simply expect more, whine more and honestly are customers you don’t want. A Premium product commands premium minds and no I’m not asking anyone to read between the lines. It’s just true.

    So an apple price drop would ultimately sky-rocket Apple into one of the top PC manufacturers but is that what we want? Apple’s quality has diminished over the years and most long time users know this. The sofware has improved and yeah the Intel switch was a good thing but my Titanium Powerbook & sunflower iMac were amazing machines and built to last years and years. I know Apple’s using cheaper internal components and cutting costs.

    Their margins are the same but the recent price drops have shown that they are cutting costs somewhere along the line. Maybe Intel R&D w/ hardware is cheaper but I’m not a hardware guy.

    My point is, if we undercut PC manufacturers like Dell & HP, we get their business and we dilute the brand. Apple is a premium brand and when I go to the apple store I actually feel like I’m walking into a porsche dealership where everyone looks in the windows of the cars dreaming for one day owning one and driving it around town. A select few save their pennies or just get lucky and drive one off the lot only to return next week for that $500 oil change (AKA $120 power adapters & $29 earbuds) and this status quo leads to passionate users who evangelize their porsche AKA Mac.

    Apple loves this and they’re not changing it anytime soon.

  4. I don’t believe Apple is after the cheap product market, a place where products are not differentiated by quality, but by price alone. Apple wants to be able to offer quality and that comes with a price most Apple customers are willing to pay.

    Using the car analogy, why are we not writing to Ferrari asking for them to lower their prices so the average Joe can buy one?

    1. I think you misunderstood the article.

      Darrell doesn’t suggest Apple lower their prices…he suggests they simply advertise their current prices to make more consumers aware that Apple products might be more affordable than they think.

      The car analogy doesn’t work here because we’re not suggesting Apple lower their prices.

  5. I think you misunderstood their comments. :) I think they were directed to a previous comment in response to the article.

    1. Ah, that’s what the “Reply” button is for under each comment…so people can response directly to a comment and we can all avoid feeling a little dumb. :)

  6. Did you consider that apple might not want the regular joe user as its customer? And thus set the image of being a bit more expensive and thus scaring of the cheap users away?

    Cheap users expecting a rich “Mac” experience are a pain to support and cost lots of money for Apple (or resellers) in doing so. So what does Apple do? THey don’t tell people about prices, expect the lot of people to think Macs are a bit overpriced and with that loose a bunch of potential customers.
    Customers who only would have bought a simple plastic macbook or a knockoff Mac Mini and would require hours of extra support. Support which would be free for the user but costs Apple and resellers dearly in labor at the Genius bars/phone support.

    This i gathered from my days working in support for the biggest Apple reseller in the Netherlands.

    1. I HIGHLY doubt Apple created their image simply to scare “cheap” users away. I am, however, quite certain that Apple wants any customer they can get. What they don’t care about is chasing every user looking for a cheap computer. If those users happen to buy a Mac, Apple is happy. If not, they don’t care.

      They don’t list prices because it’s not a selling point for them. Pure and simple. They know they can’t compete on price, so they don’t bother “featuring” it. Instead they focus on the features they can control and ones they know people who aren’t bargain shopping look for.

      To use the car analogy (yet again), you don’t see Lexus and Mercedes running coupon ads in the local paper. If Joe Sixpack making $25K a year buys one, great. But they aren’t going to waste marketing dollars trying to fight an eventual losing battle.

    2. I don’t think Apple is trying to scare anyone away. They simply don’t market their products based upon the price. The truth be told, Mac OS X has always been less expensive to buy off the shelf than Windows (except maybe older versions of Windows). Apple instead pushes the user experience instead of price. That is more important to me, and I have seen from experience having worked at an Apple store for more than 4 years that the user experience, and reliability of the product are more important for a lot of other people too. If someone is too cheap to buy a Mac, Apple doesn’t need to try and market to them. They’re doing quite well targeting people who care more about quality than price. If I had to have a new computer today, and I couldn’t afford a Mac, I would do without until I could afford it.

  7. If price is the only thing that people consider when buying a new computer, I say Apple doesn’t need them. Every Mac at any price point is a better value than their Windows PC counterparts on the market. Mac OS X and iLife are the two major things that make the biggest difference. Add to that beautiful industrial design, and rock solid stability, and the higher price becomes justified. Just because Dell, and other PC vendors, along with Microsoft have made the PC a commodity product, it does not mean that Apple must also do the same. There really is no difference between an HP, a Dell, an Asus, etc. They’re all the same. The Mac is different, and thus, comparisons to the Mac’s market share versus the market share of the rest of the computer industry are meaningless. Let the cheap bastards have their cheap PCs. When people buy one of the “entry level” Macs and see how great the Mac is, they will buy a higher priced model later on. They will do so because they understand what the rest of us know… That the Mac is well worth the higher price.

    1. “When people buy one of the “entry level” Macs and see how great the Mac is, they will buy a higher priced model later on. They will do so because they understand what the rest of us know… That the Mac is well worth the higher price.”

      Totally agree with this, I was one of those cheap people, who knew about macs, used older Mac’s but wouldn’t spend the money. I worked on Mac in the office but never actually owned my own. I finally made the move and got the MacBook White back in 2007 and it was the best experience ever, I’ve recently just brought a brand new Macbook Pro 15 Inch and the cost didn’t cross my mind, i knew what i was buying into and I wanted a bigger slice of it. ( Still waiting for it to come )

  8. Let me just preface my remarks by conveying that at no time do I ever give unsolicited advice to people when it comes to choosing an operating system. Like politics and religion, many people are extremely passionate about their OS. More often than not, it is fear (often the result of marketing FUD) that makes many people frightened about venturing into anything new. I also believe that no one OS fits everyone and that people should choose the right tool for their needs, though the advent of the OS-agnostic Internet is making this issue more and more moot.

    As for the argument presented in the article, I could not agree more. I, too, have converted many Windows PC users to the Macintosh and shared the same experience when conveying to stunned individuals how inexpensive the cost of entry is for the Mac Mini and white MacBook. Oddly, almost all of these converts opted to spring for the more expensive 15″ MacBook Pro when it came time to buy. None of them went the cheapest route. In fact, one of my longest holdouts that I had ever given up trying to persuade that Apple makes great hardware for people that have to work in multiple operating systems (ala Bootcamp, VMWare Fusion or Parallel) is now buying a loaded Mac Pro!

    My only hope is that Apple continues to push for open standards and addresses some of the concerns of developers regarding the App Store approval process. I think implementing Open GL and making Grand Central Dispatch open source are steps in the right direction.

  9. To be fair, I don’t think price is the only thing that people consider when purchasing a computer, but it is a significant part of their decision making process. People who have never owned a Mac compare the specs between Macs and PCs, and when they see that they can get a comparable machine for a significantly lower price, of COURSE they’re going to go for the PC.

  10. Look it’s simple, there are JETTAs and there are BMWs apple doesn’t want to sell cheap computers, They don’t care for that market either. BMW doesn’t sell cars under 25K because they don’t want that market to feel less special. If you want a quality computer you buy a Mac.

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