Study Finds Macs Cost 2X Windows PCs

A new study released by NPD Group today says that the average price for Macs are twice as expensive as those for the "average PC." According to NPD’s study the average price for a Windows laptop has dropped from $877 to just $700 today. Although at this point, NPD Group did not reveal what laptops it was referring to.

NPD Group’s study also mentioned that the cost of the average Apple system remains above $1500 and has only dropped a measly $59 in the last two years of sales. NPD also mentions that the average price for a Mac is roughly $1000 more than the "common Windows desktop," which NPD says sells for $550. No configuration for the $550 desktop was revealed.

There’s definitely a large margin in prices for Windows PCs and Mac desktops. The issue with Apple is that while prices may be more competitive now than they use to be, there’s no major option in the mid-range for those interested. For example, while the iMac is well balanced and great for many, the higher-end Mac Pro is heavy weighted in processing power but very limp in terms of graphics and system memory.

Rumors over the last several months indicate that Apple may be introducing a tower desktop similar to the Mac Pro, with the balanced system components like the iMac, at a more affordable price than the baseline Mac Pro. Possibly called just "Mac" without the "Pro," the new system would offer users better affordability, more avenues for expansion, and no lock-down in the display category. The major drawback with the iMac systems is that customers are stuck with the display.

While Apple is quickly gaining market share, it’s total cut of the industry pie still lags far behind Windows desktops. Apple’s net gains on margins remain very high because of its pricing, and caters to the premium market. We contacted NPD Group for a clue-in on what system configuration it used for the $550 average Windows desktop it used in its study, but no comment was returned to us as of this writing.

We priced together the current Precision T7400 (the direct competitor to the Mac Pro) with similar specs as the base Mac Pro:

2 x Quad Core Intel Xeon Processor E5440 (2.83GHz,2X6M L2,1333)
Genuine Windows Vista Business Bonus-Windows XP Professional loaded
3 Year Limited Hardware Warranty with Next Business Day On-Site Service
256MB PCIe x16 nVidia Quadro FX570, Dual Monitor DVI Capable
2GB, DDR2 SDRAM FBD Memory, 667MHz, ECC (2 DIMMS)
16X DVD+/-RW w/ Cyberlink PowerDVD and Roxio Creator Dell Ed
C1 All SATA drives, Non-RAID, 1 drive total configuration
250GB SATA 3.0Gb/s,7200 RPM Hard Drive with 8MB DataBurst Cache
Dell 19 inch UltraSharp 1908FP Flat Panel, adjustable stand, VGA/DVI

Dell’s selling price for this system is $3948 ($4492 regular with discount). Dell however, includes a 19-inch Dell UltraSharp 1908FP display, which sells for $289 on its online store. We were unable to remove the display from the configuration as Dell indicated that the UltraSharp 1908FP was included in the system build. However, without the display, the purchase price would have been reduced to $3659 — for the targeted workstation space, Apple’s offering comes out cheaper. These two builds are based on current offerings from Apple and Dell. With both systems being offered with such closely related specifications, it’s clear that the systems are not for end-users and more for people doing business.

In the desktop space, we take a look at Dell’s Inspiron 518 desktop, which is comparable to Apple’s iMac offerings. In its best configuration, the Inspiron 518 comes configured as:

Intel® Core 2 Quad processor Q6600 (8MB L2, 2.4GHz, 1333FSB)
Genuine Windows Vista® Home Premium Service Pack 1
Dell E198WFP 19-inch Wide Flat Panel
3GB Dual Channel DDR2 SDRAM at 800MHz (4 DIMM)
500GB Serial ATA Hard Drive (7200RPM) w/DataBurst Cache
16X DVD+/-RW Drive
Integrated Intel Graphics Media Accelerator 3100
Integrated 7.1 Channel Audio
Dell Entry Keyboard and Dell Optical USB Mouse

Meanwhile, Apple’s baseline iMac comes with only 1 GB of memory, a 250 GB hard drive but a slightly better ATI Radeon 2400 XT for $1199 — The Inspiron 518? $749. Apple’s iMac however comes with a 20-inch LCD. Adding a E207WFP 20-inch for $234 brings the Inspiron 518’s price up to $983 — still cheaper than the cheapest iMac by more than $200 and customers are not stuck with a screen for the rest of the computer’s life.

NPD Group indicated that the drops in PC desktop and laptop prices will start to flatten out and unlikely drop further in the near future. The study indicated that competition in the Windows systems space is fierce and margin between systems remains extremely low. Apple’s margins however, remain relatively high.

With increased pressure from consumers and the industry overall, it will make sense for Apple to introduce systems in between its current offerings, which at this point leave a big gap between the low end and the high end. From the comments on Tom’s Hardware alone the biggest complaint is that people can source systems not necessarily from IBM, HP or Dell, that cost much less than the awkwardly configured Mac Pro — especially from the stand point of heavy gaming needs. For business needs, Apple’s pricing may make sense, but as many Tom’s Hardware readers pointed out, none of Apple’s offerings make any sense for them. Apple has indicated on several occasions that it would be more serious about gaming. While increased developer support in the form of dual platform releases (simultaneous Windows and OS X releases) indicate this to be true, its hardware configurations do not currently match the company’s promise. While the iMacs and Mac Minis may cater well to more casual or business users, serious gamers have clearly voiced their disgust at Apple’s pricier offerings.

Competitive Windows PC manufacturers continue to bulk up their systems with better specs to differentiate themselves instead of continuing to cut cost, have become very attractive to would-be Mac/PC decision makers. Apple on the other hand, has done little in comparison, to bulk up its specifications. Minor CPU upgrades over the last six months are disappointing to many who are interested in giving OS X Leopard a try, but are steered away from Apple’s up front costs.

My suggestion to Apple: Create several options that allow expansion, with a more balanced system spec instead of being heavy in the CPU department and lacking everywhere else. Offer a few more graphics card options and work with third party manufacturers to offer more compatible add-in cards and Apple may swing more favorable impressions from loyal Windows PC users.

While Apple may be competitive in the workstation market, its sparse desktop offerings and lack of upgrade options for the desktop leave many concerned. Apple’s prices for upgrades are also considerably more expensive than what Windows users are able to get.