For our
"Desktop Hunters" ad, let's have Julio go shopping for a "Nehalem quad core under $1500".
(This is an attempt to keep the discussion tied to the Microsoft ad topic
.)
Instead of hitting Best Buy and Fry's, this ad is online shopping.
The Mac Pro is a "huge beast of a computer", but when he looks at the prices, Julio sees:
Code:
Dell Studio XPS Core i7 64bit Mac Pro Quad
======================================= ======================================
Price $ 1,069 Price $ 2,748
Vista® Home Premium Service Pack 1, Mac OSX, 32-bit kernel, 64-bit app
with media, 64-bit
Quad Core Intel® Core i7-920 Quad Core Intel® Xeon® W3520
2.66GHz, 8M L3, 4.8GT/s, Turbo 2.66GHz, 8M L3, 4.8GT/s, Turbo
4GiB, 1066MHz,DDR3 SDRAM, 3GB, 1066MHz,DDR3 SDRAM,
NECC (4x1GiB DIMMS) ECC (3x1GiB DIMMS)
512MiB ATI Radeon HD 4670, 512 MiB NVIDIA GeForce GT 120
640GB SATA 3Gb/s with NCQ 640 GB SATA 7200
16X DVD+/-RW w/ Cyberlink PowerDVD 18x DVD+/-RW
and Roxio Creator Dell Ed
Dell USB Multimedia Keyboard Apple Keyboard with numeric pad
Dell Premium Laser Mouse Apple Mighty Mouse
3 Year Basic Limited Warranty and 3 Year AppleCare
3 Year InHome Service
Wow,
$1700 Apple Tax for a simple quad core tower.
We know how the ad ends....
==========
But, that's not where I'm going here.
Dell is making a good per-box profit here (I know, because I buy these for my corporation, and we pay quite a bit less than $1069 for them). (Of course, this is just sale price minus manufacturing cost - "profit margin" overall includes development and marketing overhead.)
What could Apple do here....
How about "innovate" and offer the system in two or three different models:
Let's do the two larger ones, laid out so that they can use the same motherboard. (Motherboards are cheap to design, but let's err on the conservative side.)
The only difference is expandability - the larger one has a couple more usable slots for IO and disk/optical.
Now, what about the all important issue of margins?
We know that Dell is making about 20% on the $1069 box (sales price - manufacturing cost). We also know that Apple is big enough so that their prices on commodity disks, memory, optical and whatever will be much the same as Dell's costs.
So, let Apple price the box at $1399.
- $130 extra for a "more aesthetic" case (the "Ive Tax")
- $200 extra for added profit margin (the "Apple Tax")
They'd "fly off the shelves like hotcakes" or whatever is the current cliché for a popular product.