Readers Talk iMac Supply and Demand

Matthew Rothenberg's column on the recent drought and price hike of iMacs raised the ire of some Mac devotees.

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