Letters to the Editor
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Exiting the sub-$1000 market
You'll note I said they exited the market with these new iMacs (Apple used to sell a 17" iMac for a grand). The Mac Mini is still available at a very low price, but it's:
1) Anemic, even for a $600 computer
2) Not nearly as easy to setup or as feature-laden as an iMac, since you have to attach a monitor and other devices by hand
It's small, but that isn't a huge advantage for most users, and its overall footprint is probably larger than that of the iMac, what with the separate monitor and all the cables and such you have to run out of it.
I think Apple could easily make a stripped-down 20" iMac that sold for under $1000 - well under - while still featuring performance greatly superior to that of the Mini. In fact I was kind of shocked they didn't offer such a machine this time around, as there's a pretty big gap in their lineup between the Mini and the iMac.
I do love OS X, but newer versions of Windows - in particular XP - are pretty stable and reliable if properly configured, and Vista seems to be stable at least on new systems with new hardware (legacy drivers are another matter, at least for now). I think a lot of the folks who are having trouble with Windows are still running dogs like Windows 98 and Windows ME. Most of the rest have machines infected with viruses and spyware, which is not a huge problem on a properly configured XP system, and even less of a problem with Vista as configured out of the box.
This brings up another point which I don't often see made when discussing the merits of Apple's hardware. One of the big advantages of the switch to Intel processors was opening up the Macs to run Windows, for the many folks out there who need Windows compatibility at least some of the time, for work applications, games and the like. The downside to this is that performance under Windows matters, and right now you can buy a lot more performance for your dollar with a PC than with a Mac.
I think Apple is ultimately being foolish by not closing this performance gap, because there are a LOT of users out there who'd probably switch to the Mac if the premium were under a couple hundred dollars, as opposed to $200 - $500 (or more), depending upon the market segment. What Apple would lose in margins they'd more than gain in volume, increasing the number of OS X systems in the field and the amount of software produced for their operating system. This in turn would encourage more people to switch.
I could see Apple eventually capturing up to 25% of the PC market - probably over 50% of the lucrative high end home and small business market - if they pursued a more aggressive growth strategy. Even at 10-15%, I think they'd ensure the longterm survival of the Mac and OS X. It would make them too large for other developers to ignore, and give them an installed base and guaranteed demand that would support them through any economic downturns.