“All Macs are expensive. Even the bottom of the range ones. And with Macs and PCs being basically the same under the skin, the simple fact is, for significantly less money, you can get a much higher specifications of PC than any Mac. It therefore cannot be denied Macs are massively overpriced...
Macs, overpriced? Say it ain't so!
If the 'reasons' in the site weren't in random order, this would undoubtedly be at number 1. By a large margin. The issue of the cost of Macintosh computers compared to other PC brands, is certainly the most commonly expressed reason why Macs are not used by more people than they are.
So I guess the short analysis would be:
"Can you get a PC cheaper than the cheapest Mac?"
"Are Macs more expensive than equivalent PCs?" Possibly.
"Are Macs overpriced?" That's subjective.
So, clearly a few caveats to cover. Pull up a chair folks. This is gonna be interesting... ish.
- How are you comparing?
- Brand vs. brand
- Budget vs. premium
- Outer enclosures
- Profit margins
- Apple's expensive options list
- Software bundle
- Pricing between updates
- Resale value
- Build it yourself vs. pre-built
- Any other differences?
1. How are you comparing?
There's two common, yet very different ways of looking at Mac vs. PC price comparisons. And it very much depends on what you use as a baseline. In simple terms:
- Decide on a narrow set of minimum specifications and features, find the lowest cost PC and Mac that fits those criteria, then compare prices.
- Take as closely similar models of Mac and PC as possible, specify them as closely as possible, in every way possible, then compare prices.
When you take the first approach to comparing price i.e. taking a narrow set of theoretical specifications as the baseline Macs will usually come out of it with a bloody nose. For example:
- What if you wanted a desktop PC in an expandable tower based form factor? Cheapest Mac to fit that requirement starts at around $2500. Cheapest PC, less than $300.
- What if you wanted a laptop with a 17 inch screen? Cheapest Mac, around $2500. Cheapest PC, less than $500.
In both these examples, these Macs will be stratospherically more powerful, better specified and better built over the cheaper, so-called 'equivalent' PCs. So does this prove these Macs are overpriced?
These are extreme examples. But the point is that with the combined ranges from every manufacturer that makes up the PC platform, you inevitably get more choice; the choice to spend less for something that is worth less. Whatever criteria you specify, you're much less likely to find a model that fits those exact criteria with a Mac than you would with a PC. So from that artificially narrow perspective, it does prove that Macs are usually more expensive...
...but does it also follow that they're overpriced?
Or, like for like comparisons
A comparison using the second approach however i.e. like for like, using an existing Mac model as the baseline Macs can often come out looking reasonably competitive.
Take a model of Mac. Compare with a PC from a similarly respected and established manufacturer. Compare with a PC that's similarly specified. Compare with a PC that's loaded up with similar features and software bundle. Compare with a PC that's similarly sturdily built. Compare with a PC of a similar form factor. Compare with a PC that's assembled with similar quality components. Compare with a PC that offers similar after sales technical support. Now compare prices. If there's still a big gap, you've probably missed something.
This highlights probably the biggest reason why this accusation of Macs being overpriced refuses to go away. It simply depends on which way you choose to look at it.
2. Brand vs. brand
There are PC brands that do, as a matter of course, tend to offer models of an ostensible bigger 'bang for the buck', achieving a much more impressive looking specification numbers to price ratio than Apple does. But there are also brands (and models within brands) just as premium priced as Apple's. However, they don't make up a unique platform by themselves like the Macintosh does. They're just one small niche part of the overall PC platform, and hence, doesn't get singled out for similar criticism.
For example, look at Sony's PCs. Particularly their upper end models. Nice, stylish, well built machines, but not cheap by any stretch of the imagination.
If you just want a cheap PC, you can get a low end model from a low end manufacturer, and that's fine if that's what you want. But that does not imply that a higher end model from higher end manufacturer is not fairly priced.
The low margin game
But what if there is some lesser known PC brand offering bargains even below that of other better known PC brands? Ask yourself, how? They're not charities. They're not in business to feel warm and fuzzy about their generosity. So what are they sacrificing to reach this low price point? Have corners been cut under the skin of their products? Or could it be they are trading on razor thin margins?
Okay, as a buyer, you may ask, "Why should I care how big their margins are, just so long as I'm getting a bargain?" But could a consequence of those low margins be that the manufacturer is of tentative solvency, with no capacity to conduct any meaningful research and development, and no room to ride out any storm when the economy takes a downturn? And if they do go bust, what does that mean for your warranty and customer support?
So should this be a business practice Apple should follow? Should they cut more corners and degrade the quality of their products? Should they slash their margins to a point where they can no longer afford to do research and development on their next generation of models and operating systems? Should their solvency be frittered away in pursuit of unprofitable market share?
See also reason 33
Premium brand or brand snobbery?
Just like in any consumer goods, brand names are something some people don't concern themselves with. Others however, prefer, and are prepared to pay for 'the good stuff' from a brand whom they trust. Each to their own.
If you want the Mercedes, you gotta pay for the Mercedes. Or do without. The choice is yours.
3. Budget vs. premium
Apple is the only manufacturer that makes up the Macintosh platform. Their range is small, condensed into the mid to 'premium' end of the market, and with some quite prominent gaps. This in stark contrast to the combined PC platform that will have models all the way from luxury powerhouses, right down to nasty disposable garbage, and everything in between.
The main pertinent gaps Apple has chosen to steer clear of to date, is the meagre profits of the budget beige boxes, flimsy laptops, and basic spec netbooks. They're markets most other PC manufacturers have an extensive presence in, due in no small part to having little to differentiate themselves from each other beyond price. They have little choice but to compete here.
Apple however, in offering the distinct differentiation of their own OS X operating system, have the luxury of being able to target only the highly profitable, 'premium' portions of the PC market, and offering models reflective of such.
More than just a price tag
Do remember, there's more to value than bullet point specification numbers. Just because two PCs appear to have similar specs, that doesn't necessarily mean they're worth the same. There are numerous additional considerations; hardware build quality, quality of parts/components, bundled OS, bundled software, quality of technical support/warranty, etc.
If something is cheap, it's usually cheap for a reason.
Why no budget Macs?
But indeed, the fact remains, Apple don't make cheap PCs remembering 'cheap' isn't just a price tag. Given how financially comfortably they're doing in recent times, one would presume they don't feel the need to. And they're probably right.
There's no technical reason why they couldn't build a cheap PC. If they did, additional market share would inevitably result... to an indeterminable degree. But there's no guarantee it wouldn't also be at the expense of cannibalising sales of their better, higher margin products. All of which would serve only to have a highly negative impact on their bottom line.
Sadly, it's unlikely we'll see $300 Macs on the shelves anytime soon.
Disclaimer: That is of course not to say all Macs are the first word in quality in all areas, and all PCs are cheap disposable tat. Even an Apple can be a lemon. But the point is, just be mindful when comparing, to consider all factors, and not just the bullet pointed ones listed in the sales brochure.
4. Outer enclosures
One prime example of value significant factors that affect a PC's cost, is its outer enclosure. Or at least it is with a Mac.
A laptop enclosure for example. One could be cheap plastic. Another could be made of an alloy, such as aluminium or magnesium. Or maybe even super-light carbon fibre. Or perhaps cardboard and sticky tape... maybe. But even that is only part of the story.
Products made of the same basic material are not necessarily going to be built the same. You would assume for instance, that a thick and sturdy polycarbonate construction will be somewhat more resistant to the wears and tears of long term portable computing, than something whose cheap saggy creaky plastic case has been built as thin as the budget allocated to making it.
And then there's the method of construction. Plastic injection moulding, as employed in the construction of the majority of laptops, is a very cheap means of construction. Inevitably much cheaper that precision milling a billet of aluminium down to a unibody case, as employed in the construction of most/all current Apple laptops. And it's not hard to imagine that the result of the latter would be somewhat more sturdy and a much better quality feel than the former.
So in short, an outer enclosure goes much beyond superficial aesthetics. It's a primary characteristic of quality, and quality costs!
5. Profit Margins
It will often be touted that Macs must be overpriced because it's possible to buy PCs from other manufacturers that have similar or better headline specs for, "half the price". This is therefore considered sufficient proof that Apple are ripping off their gullible customers with massive, over-inflated profit margins. Let's analyse that...
Apple vs. the rest
Each product will be able to absorb a different margin into its price. The more high end/premium a product, the more margin could be applied to it. By contrast, "Stack 'em high sell 'em cheap" budget products will only sell if everything about them is cheap, including their razor-thin margins. Apple doesn't really do much in the 'budget' end, hence, higher average margins.
It is estimated that Apple runs the computer arm of their business with an average gross margin of approximately 30%. And this is indeed thought to be higher than most other PC manufacturers whom offering a plethora of budget models, lower their average margin. Dell for instance runs at an average of less than 20%. So what if Apple were to simply reduce their margins to Dell's level?
Let's test that theory
Take a hypothetical Macintosh computer of say $1000. In simple terms, a 30% margin would equates to $300. A 20% margin would reduce the price of this Mac to $900. However, to now make up for the resultant $100 loss, Apple would need to sell 50% more than before.
So the inevitable question now is, would a 10% reduction in price really achieve a 50% increase in sales? Even when you consider you'll still be able to get a much cheaper Windows based PC for a lot less? Probably not. So what possible business reason could there be to do so?
No, the only practical way Apple could significantly reduce the cost of Macs, would be to significantly reduce how much they cost to make them, i.e. degrade their build quality, penny-pinch on the components used, make the standard issue niceties as optional extras, skimp on the attention to detail, load them up with 'nagware', and cut back on OS X development. I would suspect many an Mac fan would prefer than not to happen.
That may be how the Windows based manufacturers have to do business to compete with each other, but to date, Apple have not. And for it, they seem to be doing rather well, thank you very much.
6. Apple's expensive options list
Up to yet, we've looked at relative values of Macs verses other PC brands, and how in many ways, the cost differences are not as wide as many assume when you look beyond the spec numbers. However, then you hit the options list...
On most Mac models, you can build to order higher than standard specifications on some items, e.g. size of RAM and hard drive. Here is where Apple's pricing will more often than not, be eye wateringly high. Certainly much more than if you purchased those components separately from a third party PC component supplier.
The obvious solution is, when pricing up a new Mac, look into if it would be cheaper to buy a standard model, and then add the extras as needed yourself. However, do check how easy user expandability is on that particular model first.
See also reason 2
Don't get me wrong here, many other PC manufacturers also offer optional extras that are somewhat pricey, but Apple do seem to take it a step further beyond reasonable.
7. Software bundle
When comparing prices, don't forget there's more to the deal than hardware the stuff you can see and touch. Don't forget to factor in software.
Some PCs may appear cheaper, but what (if any) additional software will come bundled with it? And what there is, is it worth having? Or is it of limited usefulness, a quality you'd expect to be freely downloadable, or limited 'nagware' trials only, and hence, adding nothing to the value of the package?
The distributors of these 'nagwares' so called because they nag you to buy them will have paid the PC manufacturer for them to be bundled on their PCs. The plus side of this is the more nagware you have, the more savings can be passed onto you, the consumer. This means cheaper PCs. The downside is, they're usually of limited usefulness. So if you don't want it on there intrusively cluttering up and slowing down your new PC, you're going to have to spend time and effort removing them. Some PC manufacturers have even been known to charge a not insignificant fee to have the nagware removed for you.
And Macs differ, how?
Most of the software bundled with new Macs, will be full applications. There may be one or two time limited free trials, but on the whole, usually pretty useful, good quality stuff, and certainly nothing worthy of the 'nagware' moniker. The obvious downside of all this is, there are no cost savings to be had from it being there.
Of the bundled software, of particular note will be Apple's own much acclaimed iLife productivity software suite. This including applications for music organising/CD burning, photo management/editing, video editing, DVD authoring, music creation/recording studio, and WYSIWYG website creation. Plus there's the obligatory internet browser, e-mail, on-line chat/video conferencing, DVD player, address book, calendar, etc.
All this of course may be invaluable to some, but to others, superfluous. But it does all have additional value that other brands of PC may not offer as standard.
8. Pricing between updates
There is one other area of pricing where Apple does differ from most other PC manufacturers which may colour how they compare.
All PC manufacturers periodically update their range. Most of them will gradually lower the price of their models between updates the older they get and the closer they get to being superseded.
Apple however, doesn't tend to do this. They will launch a new model which will initially be reasonable value for what it is, but then retain that price throughout its life. The downside of that is 6 months later with the same price tag, its starting to look somewhat less competitively priced.
To get the best value from a new Mac, it's usually best to get one when it's just been updated.
9. Resale value
When you decide to replace your PC or Mac with a new one, it will have inevitably depreciated in value. Any aspirations of now selling it will depend on how much it's worth doing so.
What history has shown is that used values of Macs are significantly higher than similar aged PCs. So while you may still expect a healthy wad of cash in return for even a vintage Mac, with so much more choice of used PCs cluttering up the second hand market, even relatively new and still perfectly usable ones invariably end up having to be virtually given away. Or even thrown away.
As an exaggerated hypothetical illustration, if one PC costs $500 and is worth $100 3 years later, and another PC costs $1000 and is worth $600 3 years later, which one has cost the most? And which one would you rather spend that 3 years living with?
Like a low volume prestige brand of motorcar, Macs hold their values well, and hence, the price per annum costs can be highly competitive with other PCs of a fraction of the initial purchase cost.
10. Build it yourself vs. pre-built
While Macs and PCs are technically very similar, one difference remains that for all practical purposes, only a PC built by Apple can run Mac OS X. If this means something to you, you have little choice but to buy a Macintosh.
Granted, there are hacks available that enable OS X to run on some non-Apple hardware, but it's not officially supported, or indeed allowed, and involves processes not for the faint of heart.
See also reason 29 for more of a look at this.
If running OS X is not important to you however, it is entirely possible to assemble your own parts and built a Windows or Linux compatible PC yourself. And while it won't run OS X or at least not supposed to it will often be cheaper than a branded pre-assembled PC, like a Mac.
See also reason 19 for a closer look at this.
11. Any other differences?
Value is the perception of benefits relative to price. So does the Macintosh range offer any other atypical benefits that might add additional value?
Nowadays, internally, Mac hardware is not much different from any other comparable PC. The most obvious difference to the naked eye, is that Macs tend to be somewhat more polished and styled with more attention to detail than a ubiquitous big steel box or a bulky plastic laptop. For some, that's worth something. Whereas critics may argue it's further evidence of 'Style over substance'. To each their own I guess.
The biggest differences between Macs and PCs though, is now largely defined by the software, not the hardware. As looked at previously, for all practical purposes, the Mac is the only PC that will enable you to run Mac OS X. This is more often than not, the reason why Mac users are Mac users, and are happy to pay the, 'Better OS tax'. Just like any PC, they can run Windows too, but only Macs gives you the simple choice of both! That's got to be worth something, surely?
Seefor more details of this.
So in summary...
...it comes down to simply this: If there's something about Mac OS on Mac hardware that you want, then they cost what they cost. If however the absolute rock bottom initial purchase price is your primary and overriding concern, then I guess a cheaper PC is a better option. And if you really don't see any value is what the Mac offers, then I guess likewise, you'll be looking elsewhere. And that's fine...
But just to reiterate, the best value product is not by definition the cheapest product. While a premium priced product doesn't necessarily make it a superior product, nor does the existence of a budget product necessarily make a premium product overpriced. It's all a matter of subjective perspective.
This diversity of opinions is why this argument will never go away.
Page content last updated 12 September 2009