The Critics Are Losing the Apple Price Argument

Tech Night Owl ^ | October 29th, 2010

[Swordmaker]

On this week’s episode of The Tech Night Owl LIVE, we talk with Laptop magazine’s Avram Piltch about Apple’s spanking new MacBook Air. Along with reports that the product may already be flying off the shelves, particularly the 11.6-inch version, the early reviews are nothing short of spectacular.

Piltch, who is certainly no ardent fan of Apple, has high praise for this revision of this sexy thin and light notebook, and it’s not just the performance factor. You see, compared to other notebooks that use solid state storage, the Air is actually priced competitively. It may even be cheaper than some of the generic PC alternatives, simply because Apple is able to get the best price on flash memory.

With a base price of $999, the entry-level MacBook Air may not be the cheapest notebook on the planet, but the designs that come closest cost even more.

Now take a look at the promised iPad killers that are slowly coming to market. Some companies are tying them in to two-year data plans with wireless carriers to make them seem less expensive, but soon as you add up the price of admission — particularly in the months where Wi-Fi access is sufficient for you — you’ll find that the iPad is a much better deal.

Worse, without a 3G plan, such products as the Samsung Galaxy Tab, with a 7-inch display, may be priced at the same level or higher than the cheapest 9.7-inch iPad. Go figure!

Add to that the fact that Apple’s latest SEC filing warns of somewhat lower profit margins — still high compared to most of the consumer electronics industry — and that typically conservative outlook has spooked Wall Street and stalled the meteoric rise in the company’s stock price.

But remember that Apple never releases a product that fails to deliver great profits to the company, even if it’s a few percentage points less than some might hope. What that means is that Apple is going to be far more aggressive about pricing, not to mention the need to cover R&D for new product releases. In the end, as much as Apple is regarded as the BMW of the tech business, you can’t call their prices high compared to identically-equipped competitors.

So, yes, you can buy a big screen Windows notebook for $700. But now load it up with essentially the same options that Apple provides as standard issue, including a superior LCD display with higher resolution, and suddenly the Mac doesn’t seem so expensive.

When you move to the high end of the equation, the Mac Pro has almost always been priced similar to, or lower than, competing workstations from Dell and other top-tier PC box assemblers.

Yes, there are loads of PC boxes out there that are much cheaper than a Mac, and businesses may not particularly prefer to buy computers equipped with Wi-Fi, digital lifestyle apps, not to mention a Web cam. None of those features may be suited to an office environment, yet all of Apple’s notebooks, along with the iMac, have them. It makes them more expensive to build, and the price of admission is higher, but Apple sharply limits customization. You can’t, for example, buy ten thousand copies without these and other features, and that is often a reason why businesses won’t choose Apple.

I wonder how things might change with Apple’s new enterprise push, and their deal with Unisys to mine the corporate and government markets. Certainly Apple is taking business customers seriously, but it doesn’t appear they’re going to sacrifice product design or customization to get there.

When it comes to the iPhone, pretty much any competing smartphone using the Android OS, RIM, or Windows Phone 7 OS, will have a similar subsidized price. There may be times when a carrier will cut prices to move product, such as those two-for-one deals at Verizon Wireless. But since Verizon didn’t grow its postpaid subscription roster as much as they hoped in the last quarter, the days may be numbered for such product giveaways.

You can rest assured that there won’t be any two-for-one deals if and when the iPhone joins Verizon’s product list. Apple wouldn’t accept such a marketing scheme for a moment, and Verizon clearly would have to cede major levels of control to get an iPhone to sell. That the iPad is already available almost certainly cements the likelihood such a deal is already in place.

In any case, the next time someone tells you that Apple’s gear is way overpriced, remind them of the iPad, iPhone and iPod. At $49 for an iPod shuffle, you can’t call it costly, nor can you say anything of the sort about the $499 iPad. Indeed, that trendsetting product is priced far more cheaply than pretty much any alleged analyst expected when it was introduced earlier this year.

The version 2.0 iPad will likely be priced the same, since there appears to be no incentive for Apple to drop the price. At the same time, it’ll have more features; consider the presence of a camera almost a lock.

But Apple did reduce the price of the MacBook Air, and that decision has made it tremendously — surprisingly — competitive, even against cheap PC gear.

[Mr. Blonde]

You have said ridiculous things on Apple threads, but that Ayn Rand is for the common man takes the cake at least so far. I await you topping yourself in the future. Pretty high bar though.

[dennisw]

Ayn Rand is for the common man who is a capitalist or has entrepreneurial inclinations.

[LearnsFromMistakes]

And Dell sends a person TO ME the next day to fix any problems.

Good for you - you have had much better luck with Dell than I had. It has been a while, was hoping it had changed for the better.

[ReignOfError]

the Dell 101z and the HP tm1z both are small laptops with equivalent features for about half the price

"Equivalent features" except for the processor, mechanical hard drive instead of SSD, video card, size and weight. You keep using the word "equivalent." I do not think it means what you think it means.

[ReignOfError]

You forgot the people who are content with the specs you mention on the Dell 11.6" machine.

You forgot the meaning of the word "equivalent." Apple does not compete in the low-margin commodity bottom end of the market. No one is disputing that point. The cheapest Windows box is and will always be cheaper than the bottom-end Mac. BMW will never release a vehicle to compete with the cheapest Ford. It's not the business they're in.

Translation: Apple caters to the hoity-toity elites. Dell is for the commoners like me. Same as Robin Hood. Same as Ayn Rand. Same as Thomas Jefferson.

Yeah, Ayn Rand and Thomas Jefferson were known for their thriftiness. And Robin Hood would have been perfectly happy with a cheap sword that's sufficient for what most people want to do.

[PugetSoundSoldier]

"Equivalent features" except for the processor, mechanical hard drive instead of SSD, video card, size and weight. You keep using the word "equivalent." I do not think it means what you think it means.

On the contrary, I believe you are the one misinformed! Of course, you're also the one in this very thread who announced they will not try to learn of other options...;) Perhaps you'll read this post and gain a bit of education?

Check the CPU ratings for the Intel U9300 (Macbook Air) and the AMD K625. Bump the score of the U9300 by 17% to compensate for the higher clock speed, and you'll find the U9300 comes in around 874. The K625 is 942. Meaning the K625 is about 7-8% more powerful. Small enough that I'd consider them to be equivalent. But if you don't, then you can hang your words on the fact the U9300 is the inferior processor.

SSD? You get a little more speed for a LOT less storage. I personally like having 500 GB of storage in my laptop! Having just 64 GB would be too little, far too little. What's the limit on the Macbook Air? It tops out at about 1/3rd of what the other offerings START. For lots of people, that's a big tradeoff. Consider you can buy an iPod Touch with more storage than your laptop!

Performance? Well Anandtech just tested the Macbook Air and found its SSD to be mid-pack in terms of performance of SSDs. Not last, not leading, comfortably in the middle. And yes, I realize that SSDs tend to be faster than HDDs, so that is a performance area for a stock unit.

However, since the Dell and HP ultraportable laptops use industry standard components (not proprietary designs like Apple), they can be upgraded. Do you WANT that screamingly fast SSD? Well, then get the OCZ Agility 2 which clearly bested the Macbook Air's SSD in every test. And you also get 100 GB of storage (that's another $100 on the Macbook), too.

What does this mean? Well, you can save $500 and get a 320-500 GB HDD with the Dell or HP, or if you absolutely must have a fast SSD, you can save $250 and end up with a faster SSD than the Macbook Air. I know, more for less, again the meme of the original post is shattered...

Size? check the dimensions:

- Dell M101z: 11.5" x 8" x 0.9"
- HP dm1z: 11.4" x 8" x 0.8"
- Apple Macbook Air 11: 11.8" x 7.6" x 0.7"

Those all look REALLY close to me, less than half an inch in any dimension separating them. Close enough that they'd all be called tiny. I don't think any of them will be lambasted for being too big!

And with that slightly larger size of the Dell and HP comes increased connectivity - SD card readers, Ethernet jacks, more USB ports, microphone inputs, etc. For some people that doesn't matter; for others (such as myself) it's crucial. I have two programs that use USB dongles, and I have a USB mouse. That's 3 ports required - can't get by with 2.

And over here in Asia, most of the hotels (even 4 and 5 star US and European chains) still do not have WIFI in the rooms - it's a wired jack. Not having an Ethernet port means I would need to bring yet another device, a small WIFI router with me, making the size and weight for the entire functional system even larger (and being yet another device to potentially lose or break).

Weight? Already acknowledged that - you're carrying an extra 10-12 ounces with the Dell or HP. Of course, that's with the HDD; going to the SSD and you'll save 4 of those ounces, bringing the difference down to around 6-8 ounces - about half a can of soda or a 50 sheet tablet of paper.

If that's worth a $300-$600 premium to you, then by all means get the Mac (and also to a gym - if a 3 pound laptop is too heavy, you have other problems to consider)! If you prefer the styling and perceived quality of the Mac, get it! However, to claim it's a better value, that you get more performance or capability for your dollar, or even equivalent performance for the dollar as compared to mainstream offerings from Dell or HP, is sadly mistaken.

[PugetSoundSoldier]

My last laptop - an ancient Dell Latitude D505 that I had upgraded the HDD (40 GB originally to 160 GB at the end) and RAM (1 GB original to 4 GB final) on - finally died after being stepped on. And even then, it was a power supply connector that took it out - cracked the motherboard at the connector, laptop still worked fine. Battery lasted long enough I was able to do one last backup of everything before it finally was laid to rest.

I had 4 years and about 300,000 miles on that laptop, and it was a workhorse. Never had a problem with it at all. It was getting slow, but it kept working, the battery life (also replaced after 3 years - $35) was great, and spare parts (like $25 for a new keyboard after an unfortunate accident with rum and Coke) were plentiful and cheap to replace.

My new laptop is an HP G71 monster, mainly because I wanted the bigger 17” screen (great for CAD and schematic capture), and I got a screaming deal at the local Office Depot ($400 out the door for the floor model). Otherwise it would have been another Dell for me. I’m happy with this unit - $400, 17” wide screen, 500 GB HDD, 4 GB RAM, lots of ports and expansion. Yeah, it’s big and heavy (about 6 pounds) but then I’m a big boy, I can handle carrying a 6 pound laptop without running out of breath...;)

With the Dell, you can get a serious warranty for 3 years with on-site service. No need to mail the laptop back, or take it to a store - give them a call, if it can’t be fixed over the phone they’ll send someone out the next day to fix it for you. THAT is a convenient warranty!

And given that it’s being sold at a lower cost than AppleCare ($169 versus $249), and most assuredly costs more when used (live human visits are more expensive than mail-in or you going to them), on lower-margin products, Dell must have a pretty good quality record for the hardware. Otherwise they’d quickly go bankrupt servicing their equipment.

When I had my own company in the US, we used Dell devices exclusively - laptops, desktops, and servers. Most of the desktops and servers were bought from the refurbished Dell site (laptops were generally new Latitudes). Never had problems with them, always ran and ran and ran, doing their jobs quietly and reliably for low price (like $200 for a decent-at-the-time desktop and $600 for a decent-at-the-time server).

[Swordmaker]

Well I have to hand it to you, there is no way you will ever prove yourself wrong.

He doesn't have to. You do.

[dennisw]

More Apple overkill.....the Apple boys just don’t get it. You try and shove your “equivalents” that cost more than twice as much down the throats of people who don’t need them. You try and make people think that this Apple 11.6” Air is the only 11.6” laptop worth getting. That an Inspriron 11.6” cannot do what most people want it to do at 40% of the price

More Apple snobbism and one upmanship. Your post exudes elitism, the kind that Limbaugh talks about. And what’s so bad about Ayn Rand? Apple/Jobs play the hyper capitalist game.

[Swordmaker]

Battery ratings? Anandtech independently tested the battery and found it rather "optimistic" at 5 hours. In fact, it came in at about 2:45, about the same as the Dell when running xVID playback and heavy web browsing. No surprise given the equivalent CPU capability, graphics capability, and bigger battery in the Dell unit (the SSD does save power, but the battery is a lot smaller).

I see you are back to your old FUD tricks, Puget: misrepresentation.

Which MacBook Air is THAT you are referring to, Puget? The one this article is about? Or the one released ALMOST THREE YEARS AGO???

The fact is, Puget, and everyone reading his reply, contrary to what you want everyone to infer, Anandtech HAS NOT TESTED the batteries in the latest MacBook Air.

In addition, the Anandtech MacBook Air Battery article", which your link erroneously DOES NOT LINK TO, is the worst case scenario, doing tasks the MBA—intended for light usage—is REALLY not designed to do, I.E., simultaneous display of xVID video, heavy web browsing, and downloading large files with constant hard drive access.

"...downloading 10GB worth of files from the net (constant writes to the drive), browsing the web (same test as the first one) and watching the first two episodes of Firefly encoded in a 480p XviD format (Quicktime is set to loop the content until the system dies)...

Anandtech found, instead, the following in it's tests:

Even Anandtech's mild usage test, was a bit on the heavy side, more than most average users use when using a laptop:

The wireless web browsing test uses the 802.11n connection to browse a series of 20 web pages varying in size, spending 20 seconds on each page (I timed how long it takes me to read a page on Digg and came up with 36 seconds; I standardized on 20 seconds for the test to make things a little more stressful). The test continues to loop all while playing MP3s in iTunes. This test is designed to simulate the intended usage of the MacBook Air: something you can carry around with you to class, work, on the train, etc... to comfortably and quickly browse the web, take notes and generally be productive all while listening to music.

It is my opinion that the average use does NOT spend four hours constantly moving from page to page at 20 second intervals downloading page after page over WIFI, and listening to MP3s all the while. This is purely an artificial creation. Using a more standard mode would get the five hours usage Apple predicted... as Anandtech states:

Apple's 5 hour claim is laughable but not as much as I expected. If I wanted to I suspect I could hit 5 hours by making the web browsing test less stressful, but my focus was on real world usage scenarios, not proving Apple correct. Regardless, 4 hours and 16 minutes doing what I consider to be the intended usage model of the Air is respectable. It's not great, but it's not terrible either.

''

Which your toss off, mis-directed, out-dated criticism carefully ignores. The fact is that the MacBook Air's battery life, when released, was REMARKABLE for lightweight notebooks... and far exceeded other computers in it's class that offered full size keyboards.

YOUR misrepresentation here at 2.45 hours, is FUD, intended to make readers think that Apple lied about the 5 hours by more than 100% over the true time.

In actual fact, Puget, contrary to Anandtech's contrived stress test, many 2008 MacBook Air users, including other reviewers, reported getting clocked battery lives of over five hours... some approaching six hours.

What Anandtech's review has to do with an entirely NEW model with different batteries and different loads is irrelevant... and you know it.

[dangerdoc]

I have to prove him wrong? No thanks, not my job.

Are you telling me that you can’t see the inherent humor in his stated position? Seriously?

BTW, dealnews.com is a great source for bargain prices for both PC and Mac.

[LearnsFromMistakes]

Dang, Dell is in a tough market. You talked about how good your last box was, how they took care of you, and then how you switched to another vendor because of a timely trip to a misc office store with a clearance option. I have done the same thing...

[PugetSoundSoldier]

Hey Sword,

Rather than attacking as FUD, how about showing something solid and rigorous, on par with Anandtech's testing quality. The numbers speak for themselves, and show the 5 hours is quite optimistic.

You can drop the personal attacks any time...

Oh, and if you'd actually check out Anandtech you'd find you are completely and unequivocally wrong. Anandtech HAS checked out the new Macbook Air and the battery lasts 2.5 to 4 hours.

Before you go into attack mode, you really should try to get your facts straight.

[PugetSoundSoldier]

Yeah, it’s cutthroat out there! Massive deals and bargains and huge bang-for-the-buck if you go with non-Apple systems...

[ReignOfError]

More Apple overkill.....the Apple boys just don’t get it. You try and shove your “equivalents” that cost more than twice as much down the throats of people who don’t need them.

Quickly, let me know where you are, and I'll call the police about these people breaking into your house and forcing you to buy expensive computers.

That an Inspriron 11.6” cannot do what most people want it to do at 40% of the price

A Tata Nano will go everywhere a BMW will. That doesn't make them equivalent. The Tata will probably sell many more units than BMW, too. I know which one I'd rather have.

More Apple snobbism and one upmanship. Your post exudes elitism,

You have this weird Harrison Bergeron definition of "elitism" that includes any opinion that one thing is better than another.

the kind that Limbaugh talks about.

You mean the kind that Limbaugh posts about from his Macs?

And what’s so bad about Ayn Rand?

The issue is your farcical claim that she somehow opposes elitism or, in her own life, would favor the cheapest sufficient option.

[ReignOfError]

Oh, and if you'd actually check out Anandtech you'd find you are completely and unequivocally wrong. Anandtech HAS checked out the new Macbook Air and the battery lasts 2.5 to 4 hours.

"Light web browsing, document creation and music playback have minimal impact on the Air’s battery life. In fact, we actually beat Apple’s battery life claims in our light tests. The 11-inch Air delivers nearly 7 hours on a single charge and the 13-inch managed 11.2 hours. For a writer, you can’t do better than this." They got 7 hours out of the 11-inch and over 11 hours out of the 13-inch.

The Anandtech tests managed to come in below Apple's estimates in one of their tests, a pretty extreme test for an unplugged laptop: "Our final battery life test is the worst case scenario. In this test we have three open Safari windows, each browsing a set of web pages with between 1 - 4 flash ads per page, at the same time. We're also playing an XviD video in a window all while downloading files from a server at 500KB/s."

As a side note, I find it amusing that Anandtech's tool of choice for torture-testing laptop batteries is ... Flash.

So, yeah. If you're loading Flash-laden pages every 20 seconds in each of three browser windows at the same time, while watching a movie, you'll only be able to download about 5.4 gigs of data before the battery craps out. And if you're doing all that at once, an 11-inch screen probably isn't for you.

Before you go into attack mode, you really should try to get your facts straight.

Before you go into attack mode, you really should try reading your own links.

[PreciousLiberty]

“Why would I want a 64 GB SSD when I can get a 320 GB HDD?”

Speed, ruggedness, reliability, quiet and power consumption.

But, by no means let reality intrude on your fantasies... ;-)

[PreciousLiberty]

“Yeah but it was not the best or only comparison. You Apple guys simply won’t admit that someone can buy a lesser computer (with same 11.6” screen size here) and be happy with what it does. Sorry for my tone in the first reply to you”

I think you’re confused. I certainly admit “that someone can buy a lesser computer (with same 11.6” screen size here) and be happy with what it does”. If it’s sufficient, that’s great. Just don’t forget it’s “lesser”.

Two things that aren’t being mentioned are X and the iLife suite. That’s a ton of added value in software alone.

[dennisw]

I think you’re confused. I certainly admit “that someone can buy a lesser computer (with same 11.6” screen size here) and be happy with what it does”. If it’s sufficient, that’s great. Just don’t forget it’s “lesser”.

It is not a lesser computer. It fills all his needs. If he spent twice as much for the Apple product he would not use it to the max or appreciate it is half a pound lighter or eight hours battery life or what have you....IE he is not a power user. Just someone who wants some connectivity. So he should buy a Dell Inspiron because it's a better fit

My sister and her husband bought a Samsung netbook. They use it on vacation and it sits in their second home.....a condominium by the ocean. They just use it to get on the internet and for email. Why on earth would they spend $1000-1200 on an Apple Air 11.6" model?

[dennisw]

BMWs are yesterday’s news. So lame. Honda Accord is good enough. You can go drive that tin can Tata. You know they have motorized rickshaws and pedicabs in Asia. Tata is the next step up.