The $500 iMac Will Not Happen

35 Comments

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.

35 Comments

forex trade

Hello to ALL! I’m Sue Jet Everson, I found your site on Yahoo! Wow, what a nice blog. Im setting up my own Blog soon and I was just looking around.

Peter da Silva

A year down the line…

I was googling for something else and up popped this article, the one where I confidently predicted that Steve Jobs would never back down on “No ugly monitors on nice Macs”. Boy, was that weird… but then 2005’s been a weird year for Apple all round.

Oh well, at least I argued that it was technically plausible, and desirable, just like a flash-based iPod was, even if Steve was on record against them both. I didn’t expect Steve to drink his own blood twice in one event… on the Mac mini, and on the iPod shuffle.

This year, MWSF was pretty much an anticlimax. At the end of the keynote I was still waiting for the zinger. Where’s the media center Mac and the wide-screen iBook? Hey, Steve, 2005 a bit rough for you… or are you having too much fun buying Disney?

kirk

all I can say is audi vw, cadillac gm, yadda yadda yadda, if we are comparing computers to car companies… this is what I think of… general motors has its high-end… premium market cars… the cadillac and thus charges a premium price… however they also produce lower end vehicles and you guessed it charges considerable less for these models… needless to say there is nothing wrong with the lower-end cars… and no-one thinks believes this either… my two cents

J. Random Poster

The chances of this happening are exactly 50-50. (That is, either it will or it won’t.) Personally, I’d love to see it happen, and I think you’re mistaken when you assume that any sub-$500 machine has to be crap like Dell. Remember, Dell has to pay the MS tax, and Apple doesn’t.

G4 processors are pretty cheap these days, and so are one- or two-year old GPU parts. I think if anyone can make a solid, low-cost machine, it’s Apple.

pb

Your article isn’t taht convincing. Of course Apple could build such a machine and sell it at adequate margins in the $500 range. ANd don’t assume that it would be available to the general US public. Perhaps it’s education or government or non-US only. I think a little more outside the box on this.

Peter da Silva

“The reaction, worldwide, would be: “What? What’s wrong with this one? What were you doing for so long that made the others cost so much?””

. . .

Don’t be silly. A five or six hundred dollar Mac with the specs in the Think Secret article isn’t a “BMW for $5000”, it’s a “BMW motorcycle priced like a Chevy sedan“. That “$500 PC” you’re mentally comparing it with has better expansion and upgrade capability than a Powermac G5… THAT’s the “BMW Sedan” of the Apple line. The iMac and eMac are big motorcycles… this one, by comparison, doesn’t even have a sidecar…

. . .

And, you know what, a BMW motorcycle does cost as much as a modest Chevy…

xnu

mini Cooper (inexpensive BMW). I have two in my parking lot and a 328i. Weird how the Ipod hooks directly up to them too.

isamuel

First of all, let me say this: if I turn out to be wrong (that is, if Apple unveils a $499 iMac at the Expo), I will publicly and openly take my lumps. We can all have a good laugh as we stand in line to get one of these.

Here’s another reason Apple’s not going to do this. Imagine if BMW suddenly released a $4999 car. It wasn’t as good as their other cars, but it had the same sleek design and the BMW name.

The reaction, worldwide, would be: “What? What’s wrong with this one? What were you doing for so long that made the others cost so much?” And it would have the effect of undermining Apple’s place in the market.

They might sell enough to make up for it, but one wonders if the sub-$500 PC market is really one into which Apple wants. You guys are looking at this in a purely dollars-per-parts perspective, which is fine, but it reminds me of Dvorak with his market share numbers. You’ve got to understand Apple culture before you can understand why this won’t happen.

Remember, the 2GB $149 iPod mini sounded great (confirmed!!!!!) too. It made sense, from a dollars-to-parts perspective. Just like the Creative Zen Nomad makes sense from a dollars-to-parts perspective. But that’s not the only axis along which Apple does its business.

Peter da Silva

I think MacGilles is perhaps stating the case too strongly, but there’s some truth to it… many of Apple’s successes over the years, including the original Macintosh (which was practically a “skunkworks” project by Raskin), were accomplished despite Apple’s management… including Jobs… not because of them.

Josh Pigford

MacGilles, why are you even posting here? What on earth is the point of a statement like “Maybe it will never happen, and if it’s the case, it confims that Jobs is totally unable to succeed in the computer industry for more than 20 years now.” Your post is just as, if not more, invalid than what you say about this topic here on the site.

MacGilles

Mr Ian Samuel, are you mac-centric or do you totally ignore the reality of computing investment in compagnies ?

$500 is too low for a Mac with outdated components ? Have you really compared with PC from assemblers. You have the equivalent for $300 !!!

It’s time to have a really low priced Mac, in order to equip companies (banks, industries, etc …) with Apple Computers. eMacs and iMacs are way too expensive for just doing spreadsheets, documentation, CRM, decisionnal or datamining. Apple should have a computer in the same prices than Dell. And the choise to take a low cost LCD screen with it.

An yes this types of components cost nothing. It is even EXTRAORDINARY that Apple could still find 40GB drives !!! The eMac is the exemple of the computer that use all the components that the PC manufacturers doesn’t want anymore and it still cost $800 ! Crazy Apple World !

The majority of people working do not need multimédia capabilities. We are working, not playing with our computers ! We just need a professionnal inexpensive computer under OS X to work with efficiency, without bugs and viruses. And XServes for database and network services and management ;) By the way XServe/XRaid have a very good price, so why this shoudn’t be possible for desktops ?

Maybe it will never happen, and if it’s the case, it confims that Jobs is totally unable to succeed in the computer industry for more than 20 years now (remember Next, best OS, worst seller). For music and movies, he’s ok, but for computing, he’s a looser …

JT

It’s definetely not going to be a powerful device, however, it MUST happen (whether Steve likes it or not), because in a year from now, new consoles will offer similar features, for a similar price.
I think apple would be ready to settle for a headless, low cost sulution for the sake of not having to deal with PS3 or XBox 2 home network compatibility issues.

Peter da Silva

You’re exaggerating the specs given in the Think Secret article: it didn’t say it would have Airport Extreme, for example, it said it would have support for it… which would be a slot that cost them maybe 50c to add. It didn’t mention TV out. Adding the components it *did* include together comes nowhere near $500: apart from the processor (low power Power PC instead of VIA/Eden chipset) it’s specced similarly to small-form-factor low-end PCs that sell for $200. Adding a CDRW/DVD drive would add maybe $40 to the price, and the graphics chips Apple uses are pretty cheap ones.

I wish they WOULD discontinue the eMac, personally. I have been hanging onto and upgrading my old G3 instead of buying a new Mac because the only machine I can afford is the eMac… and the eMac’s display would ruin my eyes. For $800 they could at least spring for a Trinitron tube instead of that cheesy shadow-mask they’ve got in there: if I were to buy an eMac, it would have to end up “on the floor among the cheap components” instead of on my desk, because I don’t have room for my wonderful inexpensive CTX tube along with the bulky eMac.

But no, I suspect you’re right that this is a hoax. Not because of logistics, but because Steve Jobs irrational antipathy to “ugly monitors on nice Macs” is too well known… he’d much rather force Apple users to put up with lousy monitors in pretty shells than lose face by backing down on something like this.

prasado

It WILL happen. Apple wants to grow its market share. This computer is going to sell at least three times as much as the eMac and iBook series do today together. Besides, their profit will be at the same percentage. Why? Because FreeScale will provide the processor which will integrate several system components that used to have its own chips on the motherboard. That will make it a cheaper, simpler mac to produce.
The big question is: Will it be able to double as some kind of media center? I’m not holding my breath on that one, though. It’s probably too much to ask for, at that price…

Dave

I’ll give you credit – you’re willing to publicly say you don’t believe this rumor. You’re willing to open yourself up to the credibility loss if you have to eat crow in 2 weeks.

Me? I can actually believe this one. Despite only being “highly reliable sources”, this one had quite a bit of specifics about it. Maybe things got twisted as it was repeated everywhere, but the original report out of Think Secret (one of the more credible rumor sites) was not just some one-liner kind of thing.

Then you add in the other timely musings about how stale the eMac is. Or you look at the config – as Think Secret reported, not your take on it. US$499? For a headless G4? Possibly. At the very least, not as far-fetched as you put it.

I won’t buy one. Have no need for it. I’m not a gamer, I have an iBook and PowerBook already, and decided to make my desktop something I can keep around for years – meaning a dual 2.5G instead of those sleek looking iMacs. My next box will be a G5 laptop. I’m expecting that purchase shortly after they come out with them in 2006.

The REAL story for 2005 will be Tiger. This is the OS X release that will command the attention of all geeks. I’ve been playing with the latest seeds, and let me tell you, it rocks. You probably heard some about Tiger Desktop – but Tiger Server…. wow.

jon

there is one thing that makes your entire thesis incorrect….

i’ve never seen a “think secret” exclusive turn out to be wrong….

so there for a $500 mac will be introduced…

jon.

Someone

I agree.
Apple will never make a cheapo/featureless Mac.
All the deadbeats that want a Mac should work a little more, work a little smarter or wait for that inheritance to come…

Kidding right.

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.

Jeffrey McPheeters

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.

Charles Jenkins

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.”

Luvmac

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.

isamuel

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.

deepkid

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.

xnu

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.

nick santilli

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…
:)

PXLated

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.

Comments are closed.