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Comments by YACCS
Thursday, December 30, 2004

Yet another new Mac

displayless mac

EXCLUSIVE: Apple to drop sub-$500 Mac bomb at Expo
December 28, 2004 - With iPod-savvy Windows users clearly in its sights, Apple is expected to announce a bare bones, G4-based iMac without a display at Macworld Expo on January 11 that will retail for $499, highly reliable sources have confirmed to Think Secret.

The new Mac, code-named Q88, will be part of the iMac family and is expected to sport a PowerPC G4 processor at a speed around 1.25GHz. The new Mac is said to be incredibly small and will be housed in a flat enclosure with a height similar to the 1.73 inches of Apple's Xserve. Its size benefits will include the ability to stand the Mac on its side or put it below a display or monitor.

Along with lowering costs by forgoing a display (Apple's entry-level eMac sells for $799 with a built-in 17-inch CRT display), the so-called "headless" iMac will allow Apple's target audience -- Windows users looking for a cheap, second PC -- to keep their current peripherals or decide on their own what to pair with the system, be it a high-priced LCD display or an inexpensive display. Sources expect the device to feature both DVI and VGA connectivity, although whether this will be provided through dual ports or through a single DVI port with a VGA adapter remains to be seen.

The new Mac is expected to have a Combo drive only, but will possibly have an upgrade path to a SuperDrive at a higher price. It is unclear how big the hard drive capacity will be, although sources indicate it will be between 40GB and 80GB.

Other expected features of the iMac include:

* 256MB of RAM
* USB 2.0
* FireWire 400
* 10/100 BASE-T Ethernet
* 56K V.92 modem
* AirPort Extreme support

In terms of software, Apple will include a special iLife suite (minus iDVD) as well as AppleWorks, sources believe.

So what has changed to motivate Apple in producing a low-cost Mac? In a word, iPod.

"Think of your traditional iPod owner," said a source. "This new product will be for a Windows user who has experienced the iPod, the ease of use of the iTunes software, and has played around with a Mac at an Apple retail store just long enough to know he'd buy one if it were a little cheaper."

Apple executives announced on October 13 that 45% to 50% of its retail store customers bought a Mac as their first PC or were new to the platform in the fiscal fourth-quarter. The company has refused to divulge more exacting figures on iPod buyers who also buy a Mac, for competitive reasons.

According to sources, internal Apple surveys of its retail store customers and those buying iPods showed a large number of PC users would be willing to buy a Mac if it were cheap enough, less of a virus carrier than PCs (which all Macs already are), and offered easier to use software solutions not available on Windows-based PCs. Now, Apple feels it has the answer.

Apple has been working on the low-end Mac for almost a year, sources report. Indications are Apple has been working mostly on finding the right mix of price, performance and features that would motivate Windows users to consider a Mac, and less on the actual engineering of the product. "It doesn't take a rocket scientist to design a bare-bones PC," said one source familiar with the project. "What it takes is a team of marketing and software experts to find the right mix to convince Windows users to buy a Mac at a price that is not much more than the cost of an iPod."

Sources familiar with the product cautioned that the low-end Mac will be marketed towards a totally different audience than those who traditionally buy even a $799 eMac. "This product is not going to be about performance," said a source close to Apple. "This is going to be the basics, but with just as much of a focus on software as any Mac could ever be."

So when it breaks, I won't have to take it to TekServe?

Look, stripping the Mac of a monitor isn't going to make it appeal any more. That just hides the price. The problem is that at the end of the day, it doesn't run Windows. Look, a cheaper Mac has long been needed, but more people switch from Mac to Windows than the other way around. The people who love MacOS will continue to use it. But the people who don't aren't going to buy a Mac with a legacy of Windows programs around. Yes, you can convert some to MacOS, but there are so many Windows only programs, switching isn't really a desirable option for a lot people without a ton of photoshop files.

I think Apple doesn't get how unpopular it is with a key decision making cohort: teenage boys. Apple's designers seem to have a feedback loop which caters to their current customers, designers, artists and people who aren't comfortable with technology. They sneer at games, something they will admit internally at Apple. And they wonder why only iPod's sell.

Even their iPod ads slant towards women and aesthetes. And they'll wonder why Creative or SONY will eventually own that market. The problem with that is that parents often assign technology decisions to teenagers, especially boys. Tech savvy girls slant the same way away from Apple. They want a fragbox just like the guys they beat online. Apple doesn't make Fragboxes.

Ask a teenager what they think of Macs, and the reaction is frighteningly negative. Of all the tech companies they relate to, Apple has the most negative image. They associate it with school and they don't want it in their personal lives. When they buy a computer, they want a black Dell. As they get older, they want better, more powerful machines. Apple just doesn't appeal to them. Sure, they may want an iPod, because it's cool, but no iMac.

People get pissy when you say this, but they forget, kids have a major role in the way technology dollars are spent. Apple thinks by getting them in school, they can get life long customers. Instead, they make life long enemies, people who detest the Apple brand for it's lack of coolness. Something used in school, but not for their serious gaming activities. Microsoft didn't extend their brand into gaming for no reason. The XBox and PS 2 are black for a reason.

I think that many of Apple decisions have served to alienate the people who would be their most loyal potential customers. I can tell you what happens with many people who walk into an Apple store.

The parents like the machine. The kid likes the machine. They go home. In a house without the tech savvy, they may well buy the machine. But if their teenage techie isn't with them, the odds are they will react badly. They'll explain how it doesn't run the right software (parents think something for school, kid thinks Half-Life 2), how much it costs, and how their friends all have PC's. They will make the coherent, countervailing argument, and Michael Dell has another $800 to send to Bush. Or maybe New Egg has a new home builder. Either way, Apple loses a sale.

I never got that particular blind spot. I remember this, because when my nephew was 13, he begged for a Dell. He had a perfectly functioning Mac, and he hated it like Satan was in the mobo. I didn't get it at the time. Because to me, the Mac worked fine. But it wasn't cool, it didn't play the right games, it was a Mac, and they had those in schools. This in a house with a PS2. They now have three machines, two XP laptops and that Dell. My nephew wouldn't buy a Mac if you bribed him.

I never understood Apple's resistance to gamning or designs which had an appeal beyond their core user group, their small core user group. Apple wants to grow, but it seems to only want to grow with people who agree with it. And there aren't enough of those to successfully challenge Windows.

It would be a lot healthier for the industry if Apple had a larger user share. But Apple's machines simply don't appeal to the people who are most likely to be constant, repeat buyers of technology, young men. As long as Apple refuses to admit their marketing simply misses the people who could grow their company, teenage boys and young adults, then it won't grow. The iPod is a good step, but not enough of a step to get people to switch platforms. Apple thinks that if you get a taste of their technology, you'll jump ship. The problem is that if you get a taste of Half-Life 2, you'll want a PC.

posted by Steve @ 12:06:00 AM

12:06:00 AM

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