Replies

But, *IF* it runs like the G4 tower, as you have indicated; then Apple has slit it's own throat. Why would anyone buy a $499 Mac (ie. ~3-6% margins) instead of a $2,000 Mac (with 15-30% margins)? So, in laymans numbers, Apple will have to sell 20 Mini-Macs (~$15 profit) for each $2,000 Mac (~$300 profit). When you consider the 20x ramp in labor costs, due to production, coupled with reduced sales of the more expensive Macs; I foresee a catestrophy coming.

Apple has already tapped out publishing / media world (Photoshop users) whereas there are lot of new customers in the consumer electronics market (media hub users). The lesson from the iPod was new market creation was much more valuable to Apple than clinging to a high margin, low sales model. If the publishing / media world doesn't expand or has very little hardware turnover, Apple doesn't grow. What I call the "iPod effect" gives Apple something it didn't have before, product and sales diversity beyond just desktops and laptops. Now Apple has desktop, laptop, servers, iPods, and the Mini (media hub) as product lines and each can follow different economic patterns.

The lesson from the iPod was new market creation was much more valuable to Apple than clinging to a high margin, low sales model.

Sure, creating a new product type is good; but this doesn't necessarily create growth, unless there is a financial boon to accompany that. Hence, for Apple go cannibalize sales of high margin products with much lower margin components will crush Apple.

Now, if the Mini-Mac is targeted to a unique market niche, and does not perform like the higher end MacIntoshes we have a differnt story entirely. My statement is that the Mini-Mac does NOT compete with the G4 Tower Macs, due to limited performance (slow processor, limited memory, HDD, etc). Others insist that the Mini-Mac is equivalent to G4Towers; which would mean that Apple has just removed the justification to buy a $2,000 Mac with a $499 Mac. Or in other words, Apple saw fit to risk selling 30x more Mini-Macs in volume, than it currently sells in G4 Towers. Unless the Mini-Mac's target is to open a unique market that does not compete against the G4 Tower (Mini-Mac has the H.264 chip), the Mini-Mac will be a bad thing for Apple.