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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





  1. dennis

    Joined: Dec 1969



    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."

  1. vortexlift

    Joined: Dec 1969


    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.

  1. waffffffle

    Joined: Dec 1969



    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.

  1. salmonstk

    Joined: Dec 1969


    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.

  1. lurkerdude

    Joined: Dec 1969


    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.

  1. Deal

    Joined: Dec 1969


    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!

  1. Jonathan-Tanya

    Joined: Dec 1969


    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.

  1. MrKlin

    Joined: Dec 1969


    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.

  1. jpellino

    Joined: Dec 1969


    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.

  1. eddd

    Joined: Dec 1969


    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.

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