Readers Talk iMac Supply and Demand

By Matthew Rothenberg  |  Posted 2002-04-01

Readers Talk iMac Supply and Demand

Funny: I didnt think I was stirring up anything particularly controversial with my last column, in which ruminated on the recent drought of Apple Computers next-generation iMacs and CEO Steve Jobs announcement at Macworld Expo/Tokyo that rising component prices had compelled the company to raise the price of the consumer desktop systems by $100 across the board.

Indeed, I reckon that most of my remarks hewed pretty closely to those coming straight out of Apple—a PC manufacturer whose products I happen to admire (and purchase) far more than the Wintel competitions.

For Steves sake! I even cited (and endorsed) Apple Vice President of Worldwide Product Marketing Phil Schillers official statement about the relationship between global supplies and the pricing of end-user hardware systems, Apples included. Touting the arguments of Apples tireless Minister of Propaganda: How much more Cupertino-compliant can a guy get?

But then it seems I raised the ire of some of my fellow Mac devotees by going Mr. Schiller one step further: I noted that Apple was especially vulnerable to these sorts of fluctuations, at least to the extent that it uses components that deviate from those used by the PC hegemony. (I also pointed out that its gumption in selecting non-standard components in pursuit of design excellence frequently contributes to the appeal of Apples systems.)

I stand behind all those statements, based on past Mac precedent, such as the shortage of 500MHz PowerPC G4 processors that compelled Apple to downgrade the specs of its initial Power Mac G4 line.

However, I happily agree with those correspondents who pointed out to me that this particular round of Mac increases indeed seems tied to an overall increase in PC costs—an increase that has affected such mainstream box makers as NEC and Dell.

For the benefit of those readers, I should also make clear that I applaud Apples forthright handling of its own case of the component shorts, compared with the shell game apparently being conducted by Dell and others. And although Im still concerned about the confusion Apples price increase has sown in the channel and in the market, I also think the new iMacs are still worth the extra $100.

Here is a selection of the reader comments I received about hardware price fluctuations and Apples place in them:

I dont think the price hike is as big a deal as many are making it out to be. The consumer electronics industry has for a long time delivered more and better for cheaper, and so people are conditioned to expect that the price of such items will always go down. However, we accept inflation in almost every other facet of life. Gas prices, groceries, furniture, automobiles ... all go up over time.

There is a legitimate price rise in iMac (and other PC) components, and it seems that other PC manufacturers are once again getting ready to copy Apples move. Once that happens across a wide segment of the PC industry, I expect people will adjust to the fact that electronics are subject to the same vagaries as a California lettuce blight that raises the cost of produce. They wont like it, but they will adjust. And prices will probably go back down again anyhow.

Paul Fieber

Please note that NEC and Fujitsu are now beating the same "raise it" drum. Prices are going up or the configurations of those beige boxes are being reconfigured downward for just the same reasons as dished out by Mr. Schiller. The line is forming behind Apple right now, and the OEMs are making the dash as this is being keyed.

No, this time it is not "Kupertino Kool-Aid" or the "lone-wolf" status. My Gawd, if anything, Apple, outside of design, has removed itself from the culture of Sculley and the mantra, "If it aint done here, we dont want it" mismanagement mode of the 90s several years ago. I think one could call it the maturation of Steve.

Last time I checked, anybody could bundle a flat-panel LCD screen with their beige or designer boxes and RAM is still RAM. Just about as generic as Kleenex. To my knowledge, there are no shortages of soccer balls cut in half or stainless-steel widgets for the iMac neck.

Kent Myhre
President, DataBaseDesignWorks Inc.

Its interesting that other Apple products that incorporate SO-DIMMs and LCDs have not increased in price: namely, the iBook and PowerBook. If the company line at Apple were at all to be believed, these products would have increased as well, no?

This is clearly a cash-grab exercise to maintain Apples staggering 30-percent-plus margins at consumers expense. With $4 billion in the bank, why take the chance of fostering goodwill and keeping the pricing as promised? As always with Apple: too little (or too much in this case), too late. Im sure PC users are dying to jump to the Mac platform and be held hostage by this garbage.

Geordie Carswell

One hundred dollars would not make any difference to me on the purchase of any decent computer. If they announced a $250 increase, then I would take notice. I read where NEC is following suit with increases, and I imagine that others will follow.

I have seen the price on standalone LCDs creep ever upward at my local CompUSA and Best Buy stores. I also notice that the standard RAM configuration at places like Dell and Gateway is 128MB, which is a bit of a joke considering that MS recommends double that for "decent" performance with Windows XP.

So, in summation, a bit of a wasted editorial on your part. There certainly must be more important and interesting things happening in the tech industry to write about!

Doug de Stwolinska

iMac Letters, Page 2

iMac Letters, Page 2

Personally, I think that this was a great marketing scheme to get people who were on the deciding edge of buying, a good reason to place a quick order before the price hike really hits.

I have seen all kinds of ploys to move a market, and I know that the marketing department always has the biggest budget. The sad part about it is the minute this rate hike was announced, two people I personally know went on line to order before the sellers raised their prices. (By the way, both of them were put on back order.)

Jack Pasut

Some Mac perspective: I bought some of the original Macintosh 512Ks way-back-when for my planning department to replace the early IBM PC XTs and was very happy with their performance. I purchased a Mac SE for home use over 10 years ago, and that machine is still running today to play some games we still enjoy (Stratego, Monopoly, Armor Alley). It survived a West Coast-to-Scotland passage and back.

We bought an HP Pavilion 450MHz on our return to California to appease the kids thirst for new games and Napster CD burning. My job also forced me to the Windows platform.

The Windows world is only a little more reliable than the old DOS quagmire. And now we are considering moving back to the new iMac at home, just for the simplicity of Mac OS X system and the idiot-proof digital camera/VCR-to-CD/DVD interface. $1,899 is actually less than the HP cost in 2000 (PC + monitor).

The circle logic in Windows is finally just too much for an old Mac user, and I cant afford a system technician at home.

Bob Ricketts

As a Wintel user, I can appreciate your point that Apple has some unique issues. However, Apple also has an attitude that makes some of the other issues forgivable.

My wife has struggled with Wintel machines and finally purchased one of the G3 iMacs. She has been thrilled. For myself, I am sick of Microsofts arrogant attitude and its insistence that it is making software better when it in fact is making it worse.

For whatever faults Apple and Steve Jobs may have, I am ready to go over to Apple. Their supply-and-demand adjustments to pricing and features are small compared with Microsofts control-freak attitude toward its users.

John Soderblom

Great column; I thought you had some very thought-provoking insights into the wacky world that Steve has (re)created. You hit on the primary reason why I am a PC devote and not a Mac addict: I refuse to allow my PC purchase to be commandeered and directed by one company.

In the business I am in, single-source manufacturing is a thing to be avoided at all costs; the risks are too great. The same logic applies to being completely beholden to one company to provide all of your computer and software needs.

In the past, the reason one would put up with this risk is the added benefit of having a stable, user-friendly superior computer. In my opinion, these benefits expired a while ago. The OSes and hardware available for a PC meet or exceed the Macs offerings these days and have for a while now, especially in the gaming area.

My thought is that Mac addicts are currently newbies who dont want much out of their computer or others who have always used a Mac and are uninterested in trying something new. The rudimentary tools provided as part of Steves "digital hub" are quickly outgrown by the user much beyond a newbie.

The "new" iMac strikes me as a regurgitation of an old concept: a space-saving PC. I am not "blown away" by any of the current offerings and refuse to pay a premium to climb on board.

It is unclear to me what if any true advantages lie in doing business with a small company that controls so little of the total computer sales. Therefore, I will remain a PC devote until Steve releases enough control and Mac truly becomes creative and competitive. Until then, I will chose to build my own with the parts I chose from the manufacturers I chose from the store I chose.

Jeffrey Pudlo

iMac Letters, Page 3

iMac Letters, Page 3

Its my opinion that $100 price hike isnt that newsworthy. It is just $100. What would be newsworthy if what is offered is less while the price is higher. That doesnt appear to be the case.

I do think its embarrassing that Apple doesnt have these supplies under contracted prices from before the i-R2D2 was introduced. The new iMac has yet to mature into a real presence around the publishing world.

One problem with the new iMac is that it suits many people but not graphics professionals. LCD screens arent a proper tool for color correcting photographs, art or graphics intended for publishing. Graphics professionals dont regard the quality of LCD screens to consistent enough to use in color management.

The first generation of G4s have been good enough for publishing work that I havent seen too many of the new Pearl G4s at work just yet. Where I have seen them in use is in video production, where their robust CPU is really needed to power Adobe Premiere. I dont think it will be until a G5 comes out that well see significant adoption of OS X and new hardware.

I think what is important is to get iMac add-ons before the public. If you want to build fervor for the new computer, show us more ways to personalize and customize it. A great new selling point of this model should be how it can be made into a serious computer not limited by its original iDome or the CRT as the original iMac was.

The exciting thing about the design of this computer should be that add-ons can become part of whole rather than lay lazily across office desktops for dust bunnies to collect around their cords. Its hardly a Beige-Bob Square Pants-type computer!

Darren Whitley
Professional photographer, Maryville, Mo.

Mac veteran Matthew Rothenberg is online editor for Ziff Davis Medias Baseline and CIO Insight magazines.

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