Apple walks tightrope with budget iBook strategy

PC laptop prices are continually falling, while demand is seeing a trend in the opposite direction. So, how is Apple and its iBook to keep up with this, especially if it wants a new wave of 'switchers'? The answer, the budget iBook, but it has its risks.

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The 2001 iBook debuted at $1,299, and fell to $999 a year later, where it's remained ever since. At $1,299, Apple's 14" iBook finds itself competing with a 14" $549 Dell budget system. With such a price difference, it's hard for the halo effect to shine much of a light. The Apple machine boasts dedicated graphics memory, integrated Bluetooth and Wi-Fi, a larger hard disk and a DVD burner,but these matter little to the impecunious student. More tellingly, bringing the budget Dell up to spec by adding Wi-Fi, a bigger disk and DVD burning adds only $180 to the price. This leaves the iBook $550 more expensive - a tall order for any sales department.

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[The Register]

Hows this for a comparison worth taking note, for a apple 14" iBook, you could have a tablet PC.... Hmmm, which would you choose as a student?

Uc this is the thing with fan boys that pisses me off, their blind to the fact that apple had piss poor build quality with the ibooks, charged loads.

Cheap apple? How can they actually cut the feature set they currently give and have anything less?

Then why on earth is he comparing the low range apple against the low range dell? You could have two for the price of one apple? What genomes is he comparing on?

Argh, he's really anoyed me now!

I think he is trying to say how much an equivilent product by dell is, so how much better value it is

Apple here are trying to muscle in on a market that just isn't theirs. By being the only company that can manufacture Mac computers, they can charge whatever the hell they want for them. But then they can't just change their tune like this - they've cemented their position because in the past it was profitable for them.

As this being my first post also suggests, I am not an expert on these matters. However being an economics major(and having recently studied this matter as part of a homework), I believe focusing on this sort of mainstream products is not something Apple chooses to do, its something they just have to do. Since IBM decided not to pursue common interests with Apple resulting in a new partnership between Apple and Intel, their (Apple's) future products were bound to be open to direct comparison to Wintel products. As a result of this one will look at a Mac and the realize that the price premium he is to pay for a Mac is only for a privilage named MacOS X. This sort of thing is hard to justify - in the past Apple easily lied left and right about the performance of the PowerPC processors (how they get away with such false and biased benchmark results are beyond me) - thus they will be forced to sell products at a mainstream price, at least to keep their sales figures on par with what they are nowadays.
Selling cheaper products at the risk of lower margins of profit right now, will increase the number of people who will get acquainted with MacOS X. Apple will benefit from this over the long term because when the switch happens in a year or so they will have more people acquainted with their software which will ultimately translate to a broader consumer base. Feel free to flame me (I know my approach is too simple to explain big corporate decisions and ultimately focuses only on one factor) but just look at what Apple has done with Mac Mini : People who bought this gadget mostly liked what they bought and IMO will be willing to pay a price premium (though not as high as it is now) for getting an Intel based Mac as workstations, mobile PCs etc... (maybe gaming as well but that's just wishful thinking)