The $500 iMac Will Not Happen

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.

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