Is there logic in Apple's Mac mini pricing?

I would actually like to replace one of my older Macs with a new Mac.  I am on a budget and would buy a Mac mini if the pricing were at all competitive.

It is hard for me to look at PC prices and give a product like the Mac mini a second thought except that I know the software, especially the operating system is far better on the Mac.

Still the Mac mini hardware configuration is anemic for the money.  Here are the two configurations.

1. 1.83GHz Intel Core 2 Duo
   1GB memory
   80GB hard drive- $599
2. 2.0GHz Intel Core 2 Duo
   1GB memory
   120GB hard drive- $799

In today's Circuity City flyer for $60 dollars more than the base Mac mini, I can get an HP with  2 Ghz processor, 2 GBs of memory, 320 GB hard drive, 17" LCD, keyboard, and mouse.   The same package is available on the web for $689 instead of $659.

Granted it comes with a ton of bloatware and Windows Vista, but the hardware pricing looks pretty good to me even though I have a hard time wading through the processor numbers.

In the same Circuit City flyer for $130 more than the top Mac Mini, I can get an HP with Core 2 Quad processor Q6600, 3 GBs of memory, 400 GB hard drive, 17" LCD, keyboard, and mouse.  The web and flyer price is $929.98.

I know the Mac Mini comes with a great remote which I probably would use as much as I did the one which came with my MacBook. In fact I have never used the remote. 

I also know that with a Mac I won't have to spend money $70 a year for a Virus subscription, but I will have to spend considerably more for Microsoft Office on a Mac assuming I can't live with iWork.

I will give Apple credit for a better software bundle and a better OS but it is hard to value the OS and software to the point that I want to be shafted.

I am not like the poor guy who believes Switching To Mac is a Waste of Time and posted the following.

A few weeks ago I bought a Mac. I know several people that speak highly of them, and they seemed to have some cool features. Three weeks into it, I would say that if you are considering it, don't waste your time. It's all bells and whistles, and functionally, they don't offer any advantages over a PC.

I know the Mac has some great advantages at least to those of us who have been using it for years.  I don't think there is a better system for video or images.

My problem is that I cannot understand why Apple, which now uses the same parts as the other hardware manufacturers, can't get an inexpensively priced system out the door.

It is so easy to do nice web work with a Mac, I can't give them up.

I can only believe that Apple just doesn't want to do it.  They would rather keep the Mac an elitist product.

Apple is bringing in boat loads of money with the highest margins in the industry.

I'm not asking them to compete with Acer or any of the lower cost producers, but it sure would be nice to seem some Macs competitively priced against HP.

Then again, maybe the Fake Steve post, Truly we rock,  is on the money.  Apple isn't for anyone but the young.

Look. Geezers, we love you...And we need to bring in loads of new customers and especially we need to bring in this new generation of young kids. Otherwise we're just stuck selling to you guys and let's face it, you're going to start dying off soon. Or at the very least you are going to retire and start living on fixed income and spending most of your money on Depends and medications, which will leave you very little disposable income for buying our beautiful machines. So building our company around you is simply not a wise move, demographically speaking.

I love my Macs and will continue using them but you would think Apple could do a little better job at being the computer for the rest of us.

It is so easy to do nice web work with Macs, I have no plans to move to another platform, but sometimes I feel like a hostage.

I would like to hear why others think the Mac minis are so expensive or even those who think they are inexpensive.  Maybe I am missing something.

Comments

[Joshua Ochs]

Duh - the Mac Mini uses LAPTOP components to achieve its size. Laptop components are much more expensive.

The processor in that HP is not the same as the one in the Mac Mini. The Mini uses the Merom laptop processor, the HP uses the Conroe desktop processor.

The hard drive in that HP is a 3.5", at that capacity probably $70 retail. The laptop drive in the Mini is similarly priced, but obviously lower capacity in a 2.5" form factor.

Everything else in the Mini suffers the same way - DVD burner has to be an ultra-slim laptop drive, the memory is laptop SO-DIMM's, etc.

Seriously, what is hard to understand about this?

[MacNScott]

This raises a good point. I read once that Dell, HP, insert other hardware manufacturer, sell space on their new machines for software companies to put trial software. This money goes to lower the price for the consumer. (The consumers often pay to have these removed though). Apple, on the other hand, refuses to do this. Maybe this could account for the price difference? Also the size of the Mac mini could be considered a feature. It takes up much less space than your standard CPU. I love most of Apple's products, however the mini is not one of them.

[Louis Wheeler]

Two issues here can explain the price difference between the Mac Mini and that Circuit City computer: quality and small size.

The Mac Mini uses the same laptop components as the iBook. Laptop components cost more because they are smaller. So if you want to use the same foot print as Mac Mini, you have to pay for the privilege. Aopen contructed a PC having a similar foot print, but not as good specs, which cost a $100 more.

Next there is the quality issue. Those PC's that you compare the Mac Mini to are "loss leader quality" that can be expected to have a Mean Time to Failure of about two years. Apple expects its computers to last longer than that-- three to four years.

I have an 800 Mhz flat screen iMac that is giving good service after five+ years. I would have bought two and a half PC's in the same time period. $1800/ 2.5 = $720 per PC. I can sell my iMac on Ebay for $250, so I think I got good service and a good price. I never had any hardware problems and never had to put up with Windows.

If you shave a $100 off the cost of an Mac Mini you lose about two years of service. That, combined with the Virus/ Malware problem, is why the Total Cost of Ownership of a PC after three years of use is double to triple that of an Macintosh. So, go ahead and be "penny wise and pound foolish." Buying quality always save money in the end.

Then there is the fact that you have to endure Microsoft Windows. No price difference is worth that ordeal.

[ocracokewaves]

"Seriously, what is hard to understand about this?"

Well for one thing, why Apple would choose to build its most inexpensive computer with parts that are expensive.

Maybe the Mac mini doesn't need to be so small. Perhaps being a little bigger and a lot less expensive might make it a much more popular computer.

[ocracokewaves]

Actually I don't buy into the Apple equals quality mantra or that those HPs that I used for comparison are loss leaders.

There are very inexpensive computers out there that I wouldn't use.

However, there is quality PC hardware out there that is priced under $1000.

I saw far too many Macs fail when I was at Apple. Look at how many MacBooks had to be serviced.

My own experience since leaving Apple is somewhat mixed on Mac hardware.

I had an Aluminum PB G4 which had multiple problems. In the end once it lost a memory slot and video just after going out of warranty, I decided not to fix it and bought a MacBook which also had to be sent back to Apple.

My dual G4 which I bought in Dec. 2004 had memory problems from the start and has had to have a new hard drive.

In November 2004, I bought a Dell desktop. It is still humming along without any problems. In September 2005 I bought a Dell Laptop, it is also still doing fine.

Now my wife and two daughters all have white half moon iMac which have done wonderfully well except for going through a few airport cards.

Our office is full of Dells which are still chugging along.

I agree putting up with Windows is something that I don't want to do, but I still resent being help hostage to the Apple's higher prices.

I can buy a copy of Windows to run on my Mac, why can't I buy a copy of OS X to run on my Dell.

I am not asking for support, I just don't want some software bomb that prevents it from running.

I think many of the problems on Windows machines come from the software.

I am willing to bet that an HP running OS X might be a pretty reliable machine.

It certainly would be a less expensive machine.

[Alex Patsay]

"why can't I buy a copy of OS X to run on my Dell."

I think it would be a nice idea to write a post about releasing OS X "into the wild" and why it would be a good idea for Apple. Personally I don't think so considering all the margins it makes on hardware. Plus changing a business model also is not easy. But apparently you think it is - can you write about it?

[Andru]

Seriously folks. Let's not forget that Apple is first and foremost a HARDWARE company. It's in the business to sell boxes, not software.

The bulk of Apple's income comes from selling boxes, not software. If no one bought the boxes, Apple would not be here today.

Remember what happened to Apple when they allowed clones? Apple nearly bit the dust!

Personally, I'm more than happy to pay a little more for a box that looks good and is well built from the ground up rather than an elcheapo box to ensure that Apple stays around.

Love it or hate it, Apple is also a brand associated with higher end products. It is an image that has been carefully cultivated over the years. It is 'cool' to be with the 'in-crowd' to have an Apple product.

Perhaps it is a little elitist, but hey so are brands like higher end hi-fi products like the Elite range of Pioneer, Cardas Audio, Sennheiser Audiophile headphoones, etc. These products have a totally different client base than the Walmart crowd.

It is not in Apple's interest to cater to the lower end of of the market. Apple's target customer is the person who is a little more discerning in their taste and isn't afraid to pay a little more for a quality product.

It is important to note however, that Apple is not positioning itself as a super highend product. If it was, everything it sells would be too expensive to purchase.

[ocracokewaves]

Folks I am not asking Apple to sell a $300 computer.

First I asked why the Mac mini's specs were so anemic? Let us be honest on the specs on this box.

An 80 gig drive and 1 gig of ram with no keyboard or monitor for $599. That is sticking it to your customers even if you include some great software and a remote.

There is no good answer why Apple does this other than they want to make lot of money on it.

That's fine, but it leaves a lot of not so cheap customers on the side lines or puts them in line to buy hardware from other companies.

As to a writing a post about OS X on other products, I wrote that a long time ago.

http://viewfromthemountain.typepad.com/applepeels/2005/06/apple_dell_the_.html

A lot has happened since then, but I still believe that OS X could conquer a lot of computing territory, and people would still buy Macs.

Everyone who throws up the old clone argument as to why Apple shouldn't do it again leaves out the fact that Apple was making some pretty crummy computers in those days.

I should know I was having to replace a lot of them for key customers.

If you make great computers and a great OS, I think both will survive fine.

My guess is that Apple just likes its little proprietary world where no one else can play in their pond.

[TRS-80]

You want the "Missing Mac" - many people have asked Apple to make it: http://www.sendmike2space.com/ http://blogs.smugmug.com/don/2007/08/08/wheres-the-mac/ http://www.philoking.com/2007/08/08/the-great-mac-debate/ http://www.macworld.com/weblogs/editors/2007/06/midrangemac/ http://blog.pixelperfectproductions.com/?p=41 for it, but Apple refuses.

[Lucky13]

I have to agree that from a hardware standpoint, the MacMini is both limited and overpriced. The Mac OS has its advantages, no doubt, but Apple might be pushing the limits of customer loyalty with this model.

The "cheap, loss-leader" tag doesn't really ring true either, at least with HP's offerings. I recently purchased one of their Slimline desktop computers to run Office 2007 and some other Windows-only software. It's quite a machine for the money and doesn't appear to be built to a lower standard. The case is considerably smaller than the usual suspects and is loaded with features...

2ghz dual core processor
1Gb RAM
Nvidia graphics w/128Mb VRAM
250Gb 7200rpm hard drive
16x DVD burner with LightScribe
Wi-Fi
media card reader
digital audio out with surround sound support
S-Video out
PCI-Express slot
full size, powered Firewire port
user accessible RAM slots and HD tray
front mounted USB port and headphone jack - very handy
recessed port for Pocket Media Drive
a surprisingly decent keyboard

It cost less than a base level MacMini. Yes, I installed a virus checker. It cost $30US for the year. I'm curious, how many MacMini customers would also have to purchase a copy of iWork, or AppleWorks, or Quicken? Virtually all consumer PC's include a copy of Works for basic productivity chores.

[Roberto]

I concur. Why, here in Malaysia I can get a dual core Xeon server from HP, IBM or Dell for *less* price than the Mac Mini!

To make it worse, Apple Malaysia for some reason charges about US$50-100 more for the Mini compared to the US pricing. This despite (a) there are no taxes on imported PC goods in Malaysia, and (b) I can get an HP or Dell for the same price as in the US.

I love Apple stuff. But I'm not in love with it.

[John Elberling]

Well, you left a lot of key factors out of your comparison/buying decision:

- what do you use the computer for? if it is just general home use, the lower-priced 1.83GH Mini is just fine. if you do video processing, however, you'll want the 2.0GH to speed it up somewhat - or smarter, buy an Elgato Turbo 264 USB stick for $100 list to go with the 1,83GH Mini.

- you didn't say if you need to burn DVD's. if yes, then you have to get the 2.0GH Mini for a combo drive.

- it sounds like you already have a keyboard/mouse and monitor to use. in that case, PC bundles that include these are not a real advantage (just more stuff to stash someplace). if you want to upgrade to wireless mouse/board, that will always cost extra. anyway, boards/mice choices depend on individual preferences and you will likely buy a different one ultimately than comes with a bundle (if you don't like your old one).

- if you already have MS Office on your old mac, it can be transferred to your new one automatically, you don't have to buy another copy (yeah i know in theory this is not allowed - which in real-life is a joke).

- stick with the small base hard drive in the Mini. always expand storage with an external drive(s). They are becoming so cheap now, 500G for $200 and falling. and then you have backup too (for Leopard's upcoming Time Machine). and perhaps you already have an external drive anyway.

- on the other hand, pay extra for 2G of RAM. this is the one real rip-off by Apple, they charge way too much for it, $150 more! only a techie should try to install their own (but maybe you are a techie?).

- as to software, if you are using your computer for video media, you must go with Vista premium at some extra price. whereas for the Mini you would want EyeTV software, since Front Row doesn't do DVR - but EyeTV already comes with the Turbo 264 stick per above anyway.

so do a real side by side list of all you got already and all you really need to add, to what level of spec, and price that out.

in the end, these complete side-by-sides always come up pretty close (i've done several). The Macs are very close to current model PC list prices for the whole enchilada set up. but PC's are discounted a lot, especially if a close-out model is good enough for you.

anyone that prefers MacOS will gladly pay $200 more. if that doesn't matter, why bother to ask?

[Constable Odo]

It has been said that Apple service and support is better than average. Maybe that can be figured in. I've been a Mac user for over 20 years but I also have to agree that you might be able to get a more powerful and more feature-laden Wintel PC for the same amount of money.
Right now the Mac has one thing going for it. I can run OSX, WinXP and Vista OSs at once using VM technology. Not that it matters if you don't need that feature. From my experience Macs seem to be built a little better, but if you're going to change computers every few years, what difference does it make.
I don't think there is any clear-cut logic of going one way or the other. You'd really have to try both for a while and see if one suits you more than the other. Buy the one that you're most comfortable with or the one that can complete the tasks you need to do with the least effort.
Sometimes I wish I could take a Mac and mess with it's BIOS to do overclocking. Or buy the most current graphics card made by any top company. Or an aftermarket motherboard. Not possible with a Mac.
If you like Macs, buy one. If you don't, buy a Wintel machine. You make your own choice and live with it.

[John Muir]

An option you've overlooked: the Refurb Store. That's where I got my Mini, all tricked out and for less than the base model. A friend's MacBook has proven perfectly reliable too. Much recommended.

[yie]

Order parts and install a *nix.

[joeschmeaux]

I think Apple is banking on OS X carrying it's hardware sales.
As frustrating as it is for those of us who'd like to run OS X on cheaper computers, I think it makes sense for Apple to keep it proprietary. As OS X gets more popular, more people will be willing to pay the extra $. Unless microsoft comes out with a good OS in the future, Apple will continue to gain market share, perhaps eventually becoming top dog in all of computerland.
As for the mini being over priced, you get what you pay for. There's a reason people pay more for macs: OS X. You wanna put up with windows to save a few $? Go ahead and get a PC. You'll be happier!

[Gregory Weston]

"Maybe the Mac mini doesn't need to be so small."

Depends who defines the need. The intended market for the mini includes multiple segments for whom size is - in all 3 dimensions - is more than an aesthetic consideration. If they made it big enough to offer the same specs using all desktop components, they'd necesarily be sacrificing exactly the customers at which they're really aiming that machine.

[Leo Stutzmann]

I think there is a little confusion in the specs being displayed in the original article. For the machine that is slightly more expensive then the top mini, it says a Core 2 Quad processor E6600. Well an E6600 is not a Core 2 Quad, so if the processor designation is correct, this is a Core 2 Duo processor.

[ocracokewaves]

My apologies it is not an E6600 but a Q6600.

Here are the specs. I have made the change in the post.

HP Pavilion Desktop PC (A6152N)
• Intel Core 2 Quad Q6600
• 400GB hard drive
• LightScribe-enabled

• 3GB of DDR2 memory
• Burns DVDs and CDs
• Windows Vista Home Premium

[brett_x]

I'm not an apologist, but c'mon. I take exception to a few points you raised.
1) You mention bloatware, but don't seem to add that into the equation. HP gets PAID TO HAVE IT THERE, which reduces the margin that they need to make on the actual PC. Apple has very little besides their own software installed. That also implies that they had to fund the development of those applications. Just what kind of software does HP give you that they developed? Do you think it took just a few hours of coding to pull off iPhoto?

2) As for the form factor... that is a choice. And it's one that I much appreciate. My mini runs OS X Server 24/7 (external drives for Data, of course). The mini runs at 19W and my external drive runs about the same. This replaced an old G4 that was running about 120W. If they hadn't used laptop components, this wouldn't be possible. It also takes up very little space, which is appreciated.

3) And do you REALLY think that OS X would be as stable if you ran it on 3rd party hardware? The biggest reason it is stable is because Apple tests it and supports it.

4) As for this gem: "I saw far too many Macs fail when I was at Apple." How many Macs did you see that DIDN'T fail while you were at Apple? When I worked for an Apple Service provider I used to see failing Macs all the time.. since then... not so much. (And I work in an enterprise mac environment.)

So I understand and appreciate the Mac Mini's place. I also understand that you would like everything in the package that you choose, but Apple just isn't that kind of company. That's why they are the only ones that do what they do: Offer great hardware and software as a package.

[Bill]

The new Mini's a bargain compared to other Apple models.

I was surprised it was updated at all, given cannibalization issues.

The C2D Mini is now the "headless MacBook"

I've been very happy with my C2D MacBook, which runs circles around my old 1.33GHz Powerbook G4.

I will absolutely choose the new Mini when it comes time to replace my desktop G4 system.

There are plenty like myself who already have a keyboard, mouse, and external drives that will work just fine with a $499 C2D Mini refurb.

[hank]

I bought a new mini to replace my G3 Pismo (with a 900mhz aftermarket CPU). I like skipping several generations of hardware at a time.
And replaceable processors. It gives at least the hope of improving the thing instead of throwing away an all-in-one machine.

Used my reliable Kinesis Ergo keyboard.

Got a free LCD monitor with the case only slightly melted from someone leaving town.

Life is good.

[PGE]

I have a G4 Mac mini and I love it. However, 599 EUR/USD for a Mini today that doesn't even burn dvd's are questionable. Recently my wife and I are looking at buying a new laptop, and we've been looking at the Macbook. Although I love Mac computers, we could buy two low-end laptops (although they have Celeron processors, not Core 2 Duos) for the price of a Macbook. We are really seriously concidering getting one of these, add another Gig of ram, delete Vista and install XP-Pro or Fedora Core, then we'd have a computer that would serve our need for quite some time to come.

Regarding antivirus for your computer, I suggest that you look at Anti-Vir or AVG Free for you Windows, then you have to spend 0 EUR/USD on your antivirus solution. And if you are concerned about spyware, then there is Windows Defender (Microsofts own free (so far) antispyware-software). Microsoft's own firewall is good enough, can't stand all these resource grabbing bloatware protection software from Symantec or F-secure among others.

[Louis Wheeler]

The point I was making was that Apple doesn't really want to be in this part of the market. Apple doesn't sell loss leaders like some PC manufacturers do just to get market share. Gateway sold about the same number of computers as Apple did last year, but Apple makes money at it. Gateway does not. That is why Gateway Computers was recently bought by Lenovo for $700 million.

There were a rash of rumors saying that the Mac Mini would be cancelled because it has the lowest mark up of the Apple line, but it got another round of spec increases. Apple doesn't want to cannibalize sales from the MacBooks or the iMacs.

What you have to compare the Mini to is the MacBook because it has the same components except for keyboard, touchpad and screen. So, you give up those for $500 less.

Can you buy cheaper PC's? Sure. Are a few of them of equal quality? Maybe. The problem is that buying a name brand cost more than for a no name product. HP has been increasing its market share by lowering its quality standards, but you won't discover that until the guarantees runs out.

You never addressed the small foot print of the Mini. If you want a bigger computer with desktop components, buy elsewhere. As long as there are people willing to pay extra for a small foot print, then Apple is okay. Apple is a fashion statement as much as a computer. High fashion costs money. Deal with it.

[phaedrus]

The main problem with PC's is the they are ugly and huge. I am glad to spend a premium to have a sleek form factor, not to mention a seamless plug and play operating system that works right out of the box and limited expose to viruses.

However, if you are such a geek that you need the ability (and have the time) to tweak with every little thing, and don't care much for size or style, feel free to purchase a PC - you weren't meant to own a Mac anyway.