Filed under: Analysis / Opinion, Portables
Stephen Baker: Drop the MacBook below $800
Stephen Baker, Vice President of Industry Analysis for The NPD Group, released his analysis of Apple's sales trends following the recent release of January sales figures. In his opinion? If Apple keeps up its current pricing strategy, it's going to flounder in today's economy. The solution? If Apple can't produce a netbook, then slash the price of the MacBook down to $799 in order to bring a mainstream price to a high-end product.How low can you go? Discussion on this article behind the scenes here at TUAW resulted in the observation that if you drop the price too much, you'll wind up diluting the brand itself. Apple commands higher prices, but it also has the product to back it up -- and it has made some price concessions. You can pay $999 now for a better MacBook than I paid $1399 for just 15 months ago, and one that will last much longer than most PC notebooks on the market. Drop the price too much and not only will the brand get diluted, it'll spark even more fears that something is wrong with the company. There's a fine line between premium and cheap, and a lot of that is psychological.
Personally, I would also think less of Apple if it jumped on the netbook bandwagon just because everyone else did. It didn't even venture into the smartphone market until it could develop a device that not only blew away the competition, but changed the cell phone industry itself. If Apple is going to produce a netbook, then let it produce one that'll stand out and won't get lost among the Acers, Dells and eeePCs out there. But, don't slash MacBook prices to compensate for the lack of one either.
What are your thoughts on Baker's observations? Let us know in the comments.
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Reader Comments (Page 1 of 5)
mi_sat said 12:17PM on 3-11-2009
"You can pay $999 now for a better MacBook than I paid $1399 for just 15 months ago, and one that will last much longer than most PC notebooks on the market."
Link to data, please...
Being a happy owner of both Macs (MacBook and MacBook Pro more recently) and PC-based laptops (ThinkPads), I am always interested in reading facts that will influence my next purchase.
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1999ncsu said 12:23PM on 3-11-2009
I don't know what Megan bought, so you'd probably have to wait for her to give the specifics.
However, this link is handy comparing the different models and costs.
http://guides.macrumors.com/MacBook#Overview_3
Cheers...Aaron
Eric Warnke said 12:28PM on 3-11-2009
The white MB now has nVidia graphics. So for $999 you can get a white MB with firewire and have a better notebook then the pre-unibody high-end unit.
mi_sat said 12:29PM on 3-11-2009
Thanks, but I was looking for data behind the sweeping claim of greater longevity of Apple products relative to PCs, data which I doubt either existed or, at the very least, was serving as the basis for the claim.
1999ncsu said 12:33PM on 3-11-2009
Understand. I have only heard of anecdotal evidence.
Eric Warnke said 12:37PM on 3-11-2009
Does it count that I'm typing this on a G4 PowerMac (MDD). The last time they sold this unit was 5 years ago ( give or take ). It runs Leopard and iLife '09 fine and looks great on my Dell 22" widescreen monitor ( plug and play as always ).
If you want longevity claims I would look no further than schools. While standard WinTel replacement schedules are 3 years, most Apple schools I know are 5-6 year replacement cycles. They also tend to have fewer staff per system and lower maintainace costs.
mi_sat said 12:52PM on 3-11-2009
You potentially point out school budgets and not product longevity. Perhaps because PCs are less costly in an absolute sense (excluding the fine software bundle that you get with Macs), schools are able to refresh more frequently.
My point is simply that when bloggers write completely unsubstantiated "facts," it taints the credibility of everything else they write. The majority of blog readers agree with me. (See? That's unsubstantiated! And fabricated.)
required said 12:13PM on 3-11-2009
Apple will cut prices when pigs fly.
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ldog said 12:37PM on 3-11-2009
I believe you are right. Apple will never lower prices because they need to have that high margin. As much as I love Apple, I know alot more people would buy the macbook if it was lowered it to 799.
bob said 12:50PM on 3-11-2009
how many years have these guys been saying this? do they never learn? i think the last 10 years have proved apple know what they are doing and those little extras and osx are worth a higher price.
Gabe said 3:09PM on 3-11-2009
Baker is right. The fact of the matter is that Apple has never offered a mobile equivalent to the Mac Mini and that reflects a hole in their market. Besides, Apple has already done a very good job at alienating the white model Macbook by switching to an all aluminum line... leaving the Mini and the Macbook to be freely associated with each other based on aesthetics alone. Keeping the white model within the same price scheme as the newer Macbooks only serves to confuse unexperienced buyers and to further pollute the Macbook line of products, thus diluting the brand, and furthering criticisms set against Apple price schemes.
sodapop said 4:01PM on 3-11-2009
Apple succeeds by not following fool advice. Apple is the strongest of all computer brands right now. I would love a lower price, but it doesn't make sense in a 12 month window to lower the price. They just released new products and Apple unit sales are strong.
Frankly, I get tired of people complaining about the price. Just go buy a Dell if you want a lower price. You don't need an Apple computer.
bondsbw said 4:30PM on 3-11-2009
Apple won't lose marketshare during the recession. Their prices target the people who aren't being affected by the recession.
And, unfortunately for those affected harshly by the recession, those people don't have the money to spend on any notebook right now.
The bottom line: Apple keeps going strong, others have trouble selling notebooks for the next couple of years, Apple wins marketshare in the end.
(Besides, Apple can't produce a profitable notebook that doesn't suck for under $600, which is the price it has to beat before anyone in the "cheap" demographic starts looking at their products. So why do all of that just to leave a bad taste of mediocrity in their mouths?)
Gabe said 4:34PM on 3-11-2009
@Sod
There's a difference between complaining about prices and discussing possible weaknesses in the business practices of an OEM. Also, the Apple brand remains highly profitable by maintaining a steady flow of product innovation inline with customer demand/need and have had their share of flops just like every other brand.
johnnyb01011980 said 4:34PM on 6-05-2009
You guys are all fucken wrong a week ago the macbook 2.0 GHz was $1899
now it's $1299 you fucken dumbass
stevew said 12:35PM on 3-11-2009
Apple should keep the premium price on premium hardware and software. If they were to "take the low road" they'd be lost.
Apple's integrated approach to hardware and software is why I have 3 Apple computers and an iPhone. 2 of the computers have been on 24/7 for 2+ years at 90%+ cpu usage.
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Huh said 12:18PM on 3-11-2009
Who is Megan kidding? Dilute the brand by making it more accessible to the mainstream? Seriously?
Don't get me wrong, I love the MBP that I use every day, but if my company hadn't paid for it there's no way I could afford the Apple tax.
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Juaquin said 9:30PM on 3-11-2009
Well it would make her less exclusive if all the masses could have the same computer as her.
Gary said 12:22PM on 3-11-2009
Netbooks aren't simply cheap notebooks, they're small form-factor, portable computers designed for web-based activities. It's an established market, not just an economic abberation. Apple should be competing in the netbook market, just as it should be competing in the notebook, desktop and smart phone markets.
The difference is that Apple should do it their own way - not just building a netbook, but doing to the netbook market what the iPhone did to the smart phone market. Provide a well-built, well-designed small-form-factor machine running a cut-down OS, perhaps with its own app store. Give that machine the ability to access you iTunes library and files via any web connection. Apple can successfully charge US$100 more than the competition if they can bring something new to the table.
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Joey said 1:39PM on 3-11-2009
I agree there's more to it than just low prices. I'm currently in the market for a device that sits in between my iPhone and my iBook. Apple's product in this category is the Air which is both too expensive *and* too big. I might be able to deal with one of those deficiencies but not both. Especially since something like a Dell Mini 9 (which can easily run the Mac OS) is the right size and the right price.
Point being, I'd buy something exactly like the Dell Mini 9 for nearly twice the price if it were made by Apple. Based on Apple's current pricing structure, this should be right up their alley.