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Motley Fool looks at Apple's margins

updated 05:20 pm EST, Fri January 14, 2005

Apple\'s margins falling?

Apple new Mac mini and iPod shuffle may not , although they may be lower than the profit on each Mac, according to one analyst. The Motley Fool says notes that Apple has chosen to deliver less than competing products: Dell is able to delivery a monitor, keyboard/mouse, and speakers for roughly the same price as the Mac mini and most flash-based players have an additional LCD screen that adds to the manufacturing and development costs: "the financial press has been aflutter with reports that the rollouts would cause trouble with margins. I find this concern peculiar, given that, over the past year, most of the analysts have ignored the three-year downward trend in gross margins while at the same time screaming, 'Buy!'"

by MacNN Staff

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dennis
Fresh-Faced Recruit

Joined: Aug 2001

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01/14, 05:42pm | report spam | close Reply |
Proofread?

Was the person who wrote this drunk? (I'm talking about the MacNN story, not the Motley Fool article.) "Apple new Mac," "The Motley Fool says notes that," and "able to delivery a monitor."

vortexlift
Fresh-Faced Recruit

Joined: Mar 2004

0

01/14, 06:18pm | report spam | close Reply |
Fool's Fools

The Mac mini cost more than a fully equiped low end Dell PC? First of all, Dell doesn't have anything like the Mac mini at all. No one does. Dell desktops don't have S-video out. Their cheapo low end boxes don't have ethernet or firewire built-in. They don't come with iLife equilvalent software with video editing, photo management/editing/print ordering, DVD authoring, Music creation/management/purchasing apps. They are not 6.5 inches square and 2 inches high and fits comfortably next to your DVD player, TiVO or cable box. In fact it looks like it was designed for home entertainment units rather than on or under a desk like a computer. OS Opinion has an article that compares the Mac mini with Dell "equivalents" that refutes the myth that all Apple products cost more. In fact, they cost less.
Also, they miss the point of the Mac mini. It's not really just a computer. It's a hybrid "Trojan Horse" device. It's as much a "digital media home entertainment" device as it is a compputing device. Afterall, you can hook it up to a TV and pipe video to it from it's DVD player or video games. With the right software, you can record your favorite shows onto its hard disk ala TiVO. Hook it up to the stereo and you can pipe music from an iTunes playlist or internet radio station. You can plug your camcorder into its firewire port and edit video with iMovie. Same with digital camera via USB and iPhoto. It's all there and more. A point not lost on all the car custom freaks who are planning to install the Mac mini in cars as a "digital hub" to control, store and deliver music, video, gaming, web surfing, etc..... The Mac mini has the potential to be the holy grail of convergence: the fabled "digital hub" (What the Microsofties call Media Center). All it needs is some custom software and a universal wireless remote and video & audio in ports.

waffffffle
Mac Elite

Joined: Sep 2000

0

01/14, 06:31pm | report spam | close Reply |
svideo

S video requires a $20 adapter from Apple.

As is, the Mac mini isn't really a good set top device. It will require quite a bit more in terms of hardware and software to do that. Probably in a year Apple will be offering a media center edition of this thing.

salmonstk
Fresh-Faced Recruit

Joined: Apr 2004

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01/14, 06:59pm | report spam | close Reply |
Not true

Go to Dell's page like I did 2 days ago.

Configure their cheapest PC. Add what needs to make equivalent to Mac mini. All I added was virus protection- really that is a must for a similar comparison. I also added MS works to make up for the Appleworks, dvd/cd bruner, and removed the free display. Then add an Apple keyboard and mouse.

You will find that the Mac is cheaper. I swear these journalists don't even check this stuff. They just assume Dell is cheaper.

lurkerdude
Fresh-Faced Recruit

Joined: Jan 2005

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01/14, 07:49pm | report spam | close Reply |
Down, Flicka

Boy, you guys make every Apple-related article sound like a travesty of Watergate proportions. But after reading all this, I went to the Dell Small Business site and configured a computer for $457. I'm sure anyone who wants to, can go to the Dell store, deduce my choices, spend three hours finding out what's wrong with what I chose, and return to do the triumphant dance of zealotry. h*** it could be $157 and it would still be "ugly" and a "PeeCee", right?

But that's already missing the point. The discrepancies aren't large enough to matter. First, the article was positive. Second, the article wasn't about the products, it was about the product margins, and how the margins are fine. The Dell comparison was to illustrate that Dell is already selling cheap PCs by the bucket and they're doing fine. Yes, the "similarly-configured Dell" is debatable, but marginally and academically debatable. It's only hotly debatable for insane Mac fans who froth at the mouth whenever someone doesn't prostrate themselves and tremble with joy before each Apple product announcement.

If you're a potential or actual investor, it's a positive article. If you are a consumer, it's mostly irrelevant -- maybe marginally useful in that it mentions similar offerings from other companies, and that might interest the reader. But I'm sure that's not gonna stop the crazies from writing this guy hate mail.

Oh, and sorry, but the Mac mini really is just a computer. It's not home electronics device meant to be stacked below the television. Sure, it could be set up that way, with additional software and/or hardware. But that's true of *any computer*. That's what makes computers great -- they are general purpose tools. And sure, the next version of the Mac mini might go that way, but that has nothing to do with the product being sold, and comparing a "fantasy Mac" to a real, shipping device is absurd.

Deal
Mac Enthusiast

Joined: Apr 2001

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01/14, 08:02pm | report spam | close Reply |
One in every crowd

Dude, go buy a Dell!

These Dells lovers spend so much time on MacNN, it makes me wonder why they aren't on some Dell site somewhere. I can guarantee there are no Mac guys there complaining about people liking Dells!

Jonathan-Tanya
Fresh-Faced Recruit

Joined: Oct 2004

0

01/14, 08:06pm | report spam | close Reply |
you forgot to add

an austin-healey is just a car and man-o-war was just a horse, and Winston Churchill is just a man.

The mac mini, is, just a computer. You are absolutely correct, but if it becomes well known as a media center pc (and the buzz around it now is huge)...then it is a media center pc.

time will tell, of course. It's easier to judge history in hindsight! and I'm content to wait.

MrKlin
Fresh-Faced Recruit

Joined: Dec 2004

0

01/14, 08:35pm | report spam | close Reply |
whine whine whine

* Macnn is too bust to post flamebait articles than to proofread.

* Stop trying to argue that Macs are *actually* cheaper than Dell. Dell's mission is to cost-cut not to innovate. And please stop with this similarly configured bull-c*** too. Not everybody needs firewire. Not everyone needs iDVD and SuperDrive. And believe it or not, there are freeware anti-virus tools, OpenOffice, Picasa, etc - all free.

* Stop accusing us of being Dell fanboys asi f that is the best you can come up with. We are just trying correct people here spouting inaccuracies and make ALL mac users look like fanatical idiots.

jpellino
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Joined: Oct 1999

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01/14, 10:32pm | report spam | close Reply |
dear lurkerdude

The point here is that the myth persists that a Dell (Gateway, HP, etc.) is cheaper. Not if you level the field.

I did the same thing you did at the Dell SOHO shop - go head to head, a Dimension 3000 with a real live Pentium 4 in it, Pro OS, 256/40/combo drive, firewire, subtract the keyboard mouse & monitor - guess what - you're $150 or so over the mac mini.

Go with the 2400/Celeron and you're STILL $100 over the mini.

It only took 6 minutes, and I'm not dancing about it, just trying to point out that pound for pound, Apple is now a better value than ever, and demonstrably a better value than the equivalent Dell.

Even before the mini, the differences were only about $50 in Dell's favor with a fully configured machine. And you'd save that in the time you spend with malware problems, viruses and spam, and all the software you have to buy to solve these problems...

I've run a few computer labs - one in particular with 16 iMacs and 4 gateways - it took more time to babysit the 4 Gateways than the 16 iMacs - and this was a torture test - a pool of about 100 users running these machines through every common app you could imagine, 16 hours a day, six days a week.

eddd
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Joined: Dec 2001

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01/14, 11:17pm | report spam | close Reply |
not just *any computer*

lurkerdude, the fact is that not just any computer can make a good multimedia computer. Have you tried making one? I have - the first thing you'll object to is the size (too big and/or in a vertical orientation) and the styling, but the final straw is the noise. It's much more irritating than you might expect. Silent PCs can be found, but they're very expensive and underpowered - much more so than the mini.

I think these things are gonna smash sales records for Apple.

JEB
Junior Member

Joined: May 2001

0

01/15, 12:12am | report spam | close Reply |
typos . . . !

Yes, I agree about the drunkenness typos here on MacNN, as well as glaring omissions:

"Dell is able to delivery a monitor, keyboard/mouse, and speakers for roughly the same price . . . "

Excludes the faact that the Dell is "able to delivery" also: OS-of-choice is a nice, fat Steaming Hot t***. Perhaps, biggest factor in the equation -- a tough idea to sell to invesortors, but hey, SHT's have been all the rage.

Too bad for Apple, I guess, which lacks SHT in the OS!

vortexlift
Fresh-Faced Recruit

Joined: Mar 2004

0

01/15, 08:11am | report spam | close Reply |
Form Follows Function

The Mac mini is "just a Computer". Then:
1 - Why did Apple make it so small, no, make that miniscule? The added cost in engineering and R&D required doesn't make sense if it was meant to be just a cheap headless PC that sits on a desktop or sit on the floor. The motherbaord alone is a marvel of integration with custom chips designed to reduce the component count to save space - all at a cost of added time and R&D expense.
2 - Why include S-video capability? Aside from Windows' "Media Center" PCs (coincidence?), almost no other PC has this capability built-in onto the motherboard. The extra space and expense required is no small thing in a box only 6.5 inches square. They obviously intended the Mac mini to be hooked up to a TV - not something people do with a low end PC.
3 - Why design its' look to be so much like a high end entertainment system component from a Bose or a Sony and not like a PC? Was it to confuse consumers? Afterall, do you think someone can tell it's a PC if they walked into an Apple Store and saw the Mac mini for the first time without knowing before hand it's a PC?
Jonathon Ives & Steve Jobs are both disciples of the form follows function, Bauhaus school of design and minimalism. Nothing is added that is not needed or intended to be there for a reason. Especially at such greater extra expense. For instance, these attributes were not present in the last headless Mac from Apple. You couldn't fit a Mac Cube on a shelf next to a DVD player or cable set-top box, can't be hooked up to a TV since it had no S-video out and cost too much to be considered for such a use anyway. It was never designed to be anything but a small stylish PC with limited expandability (that cost too much to attract a mass audience).
The Mac mini IS what IT is: a PC that can be hooked up to any A/V equipment (be it a stereo, CRT, LCD or TV), that is equiped to manage and play any form of digital media content and is small & stylish enough to fit into tradition entertainment systems furniture. The consumer chooses which they want it to be. If you want to use it as a PC only. You just need a keyboard, mouse & monitor. If want it to be a "digital hub". You get the S-video out adapter and/or other video & audio acessories. Or Both. That's the beauty of the Mac mini. It's almost an appliance. But one that is general purpose and you configure it to be what you want.
If the Mac mini gains any traction at all, it will spawn a whole new cottage industry of add-ons & acessories makers like the "iPod economy".
It will sell like hotcakes.

lurkerdude
Fresh-Faced Recruit

Joined: Jan 2005

0

01/15, 06:59pm | report spam | close Reply |
Yep, just a computer

First, these posts that continue the comparisons between a cheap Dell and the Mac mini are just proving my point. I originally went to the Dell Store to see for myself what the big, outrageous lie in the article was supposed to be. If anything, I found it hard to put a Dell and Mac Mini in a comparable configuration. They both had inherent features that the other model couldn't simply add on. But the article was just talking about pricing and margins, so the comparison was good enough for its purposes.

Oh yeah -- you do remember the article... don't you?

No, that's not as important as proving that the Dell is actually $32343.57 more expensive when converting the currency to Mac Quality Pesos. Just about everyone who reads MacNN already thinks that a Mac is better than other computers. But rabidly trying to prove your subjective judgement is objective reality, and using any opportunity to trash people who don't align with your views 105%, is just mindless fanaticism. Who cares what the article was about, he dared put Dell and Apple in the same sentence -- get a rope! And now I'm done with the subject.

Second, I've read a couple of posts that seem to take issue with the "just a computer" comment, but even those posts basically repeat this point: you can do anything you want with a Mac mini if you want to do the work to set it up. It's a computer that ships with a keyboard and mouse and is monitor-ready. It does not ship with an S-Video adapter, AV cables of any kind, or a remote. It's not a web TV (thank God), home theatre manager, game console, or DVR. If it's a DVD player, then it's the hardest-to-use DVD player I've ever seen. If you know what you are doing, then it can be used for a lot of things. Putting it in the category of consumer electronics just because of that, is way over the top.

Personally, I like computers. I don't know why anyone would have a problem with calling a Mac mini a cheap computer. The real revolution here is that Apple is actually catering to the low end! This might eventually outsell all other desktop Macs combined, assuming RAM/HD/CPU specs keep up. It's the first time in a while I've felt that Apple was aggresively trying to expand its share of the desktop market.

Jablabla
Fresh-Faced Recruit

Joined: Jan 2000

0

01/16, 12:02am | report spam | close Reply |
Europe

Given the fact that the conversion from a pound to a dollar is 1.8437.

So, from a British perspective, buying the mini is like buying a printer for $250. Getting a mac is not going to break the bank.

vortexlift
Fresh-Faced Recruit

Joined: Mar 2004

0

01/16, 09:58pm | report spam | close Reply |
It's a Trojan Horse

Hey "lukerdude", the Mac mini DOES NOT COME WITH A KEYBOARD & MOUSE. Please be more informed. And, it's NOT hard to setup stereo or TV to the Mac mini at all. All you need is the $20 S-video cable and a $2-$3 RCA stereo cable and plug it into the backs of each. How hard is that?
The Mac mini is NOT JUST A COMPUTER. Please go read the article at eWeek by Andreas Pfeiffer. It explains exactly what I've stated before: It is a "Trojan Horse" device meant to invade a homes' living room; not so much the computer desktop. But if it succeeds, it will do both.
Ives & Jobs are disciples of minimalism. They believe form follows function and nothing extraneous should go into a design that doesn't have a useful purpose or function. So the S-Video out capability & extremely small size was intentionally designed into the Mac mini for a reason (no, not so it can get lost amongst piles of paper that inhabits a typical computer desktop). So is the fact that it comes without ANY input/output device.
When a consumer buys a Mac mini and takes it home, it will at first be used as a conventional PC. But the minute they hook it up to their TV to see a slideshow of photos they just took or hook it up to their stereo to listen to a playlist of MP3s in iTunes, the hidden nature (and full power) of the Mac mini becomes apparent.
Yes, you can hook up just anout any PC to A/V equipment, but no $500 low end PC has the software and hardware design combination to allow an average person to easily do so without requiring add-on cards, installing drivers and run long cables (since the average PC box is too large to fit onto entertainment unit shelving and has to be located or hidden elsewhere in the room). In contrast, the Mac mini is simplicity itself by comparison. Just attach 2 cables, place it on the shelf, boot it up and launch the included apps to manage, create, edit and "play" your movies, music, games, etc....
The "Mac mini is just a PC" reminds me of all the computer heads that inhabit these forums saying the same thing about the iPod when it was first introduced 3 years ago. They all thought it was JUST AN MP3 player. Ho hum. It's another niche device from Apple. Too expensive and only geeks will buy it since it requires messing with a PC.
Well, we now know different.
In fact, it's just the first leg of Apples' strategy to win the digital home. The iPod becomes the lynch pin for their other products. Next comes the Mac mini: designed with the iPods looks but so minimalistic in design that it betrays its true function. No one will guess it's a PC unless told ahead of time. This ambiguity fits its' dual nature as a PC AND as a "digital hub" device that ties all the electronic gadgets in the home together (including the cell phone via iSync, iCal, etc....). Is it a fully refined product? No. But it will evolve into one in subsequent updates. Just as the iPod is evolving.
The Mac mini will surpri

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Motley Fool looks at Apple's margins

updated 05:20 pm EST, Fri January 14, 2005

Apple\'s margins falling?

Proofread?

Fool's Fools

svideo

Not true

Down, Flicka

One in every crowd

you forgot to add

whine whine whine

dear lurkerdude

not just any computer

typos . . . !

Form Follows Function

Yep, just a computer

Europe

It's a Trojan Horse

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Motley Fool looks at Apple's margins

updated 05:20 pm EST, Fri January 14, 2005

Apple\'s margins falling?

Related Articles

Recent Articles

Proofread?

Fool's Fools

svideo

Not true

Down, Flicka

One in every crowd

you forgot to add

whine whine whine

dear lurkerdude

not just *any computer*

typos . . . !

Form Follows Function

Yep, just a computer

Europe

It's a Trojan Horse

Login Here

Register for our weekly email newsletter:

Connect tools:

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10 Most Read

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not just any computer