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Analysts: Mac buyers still pay more than PC buyers for same hardware 'guts'

Are Apple computer's intangibles -- OS, design and coolness factor -- worth the extra price?

By Eric Lai
March 5, 2009 12:00 PM ET

Computerworld - Apart from "Windows or Linux?" nothing will start an argument in a bar full of techies quicker than, "Which hardware gives you more bang for the buck, Mac or PC?"

A decade ago, it would've been hard for anyone but loyalists to argue in favor of the Mac. The PowerPC's clock speed lagged the Pentium and other x86 CPUs. Meanwhile, components and peripherals for the Mac such as graphics cards and CD drives were limited and pricey because of Apple Inc.'s proprietary designs.

Back then, "for every dollar you spent on a PC, you had to pay about $1.60 to get the same-performing Mac hardware," said Ian Lao, an analyst at In-Stat Inc.

But after Apple switched to Intel processors three years ago, Mac hardware immediately made up a lot of ground against its PC counterparts.

With Tuesday's refreshed Mac desktop lineup, Apple has brought the Mac's graphics capabilities nearly to par with PCs through the addition of new, faster Nvidia and ATI graphics chips and cards, Lao said.

Graphics was a glaring Achilles' heel for the Mac, which was ironic, considering the Mac's wide usage among graphic designers and other creative professionals.

Apple even pushed past rivals such as Hewlett-Packard Co. and Dell Inc. by being the first vendor to introduce a desktop PC with Intel Xeon CPUs featuring the new Nehalem architecture.

The refreshed Mac Pros come in four and eight-core versions and start at $2,499.

Intel Corp. will officially launch Nehalem-based Xeons later this month, according to a company spokesman.

Despite a tottering economy and slowing Mac sales, Apple only cut the entry-level price of its Mac Pro workstation, leaving the prices of Mac Minis and iMacs untouched.

With most PC makers slashing prices or embracing cheaper models such as netbooks, Apple could be dangerously out of step.

"You would think [Apple] would be a little more reactive," said Richard Shim, an analyst at market research firm IDC. "You can't discount the value of the Mac experience and the software. At the same time, the market is getting a lot more price aggressive."

"I would love to see Apple cut their prices to be in line with everyone else, but it goes against the grain of the whole cachet thing they like to sustain," Lao said.

Without significant price cuts, Macs continue to cost between 25% and 40% more than PC hardware of equivalent specs, say both Shim and Lao.

A quick Computerworld analysis found that Macs continue to cost a bit more than PCs, though premiums vary (see charts at bottom of next page).



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