Newsletters
Customer Relationship Management News NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Click for more information, or
Home CRM Systems Customer Service Contact Centers Business Intelligence More Topics...
Apple/Mac
DDoS Protection Powered By Verisign
Average Rating:
Rate this article:  
Will Apple's Low-Cost iMac Backfire?

Will Apple's Low-Cost iMac Backfire?
By Jennifer LeClaire

Share
Share on Facebook Share on Twitter Share on Linkedin Share on Google Plus

Just why is Apple lowering prices? CEO Tim Cook is an operations guy, so he knows the impact price has on volume. That contrasts with former CEO Steve Jobs, a brand and marketing guru, who knew how to maximize margin. But lowering prices because of declining PC sales may cause Apple to pay a high price in profits and valuations.
 


Apple is known for its iconic designs -- and its high price tags. But the Mac-maker just rolled out a new 21.5-inch model with a price tag that could turn heads of PC diehards.

Apple is offering an iMac for $1,099 in an apparent move to draw consumers looking for a more affordable option in its Mac line up. Even with the lower pricing on an entry-level, all-in-one desktop the company is not skimping on the quality that helped make the Mac an icon.

The New 21.5-inch iMac has an ultra-thin display, a 1.4 GHz dual-core Intel Core i5 processor with speeds up to 2.7 GHz and an Intel HD 5000 graphics. The machine also comes equipped with 8GB of memory and a 500GB hard drive. All iMac models include 802.11ac Wi-Fi, and two Thunderbolt ports and four USB 3.0 ports that makes expandability and support for high-performance peripherals possible.

Response to PC Decline?

Although this is a significant move on the pricing front, it’s not Apple’s first in recent months. In April, the company updated its MacBook Air with faster processors and lower prices. You can now get a MacBook Air for $899.

That machine comes with fourth generation Intel Core i5 and Core i7 processors that provide the 13-inch laptop with up to 12 hours of battery life and the 11-inch model up to 9 hours of battery life. iLife and iWork come free with all new Macs, whether all-in-ones or laptops.

Could this be a new, more affordable Apple in a post-Steve Jobs era? Now that the company’s founder has passed on, is Apple turning over a new pricing leaf to sway PC users to its corner in the face of the industry’s declining sales?

Quarter after quarter, the forecast seems to grow worse. Now, market research firm IDC is predicting shipments will decline another six percent in 2014 and continue sliding through 2018. Worldwide PC shipments dipped 9.8 percent in 2013. Although that was slightly better than the expected 10.1 percent decline, it is nevertheless still the worst contraction on record, IDC’s Worldwide Quarterly PC Tracker reports.

Will Apple Pay the Price?

We caught up with Rob Enderle, principal analyst at the Enderle Group, to get his thoughts on Apple’s motives for its recent lower-price moves. He told us Apple CEO Tim Cook is an “operations guy,” so he knows the impact price has on volume. That contrasts against former CEO Jobs, a brand and marketing guru, who knew how to maximize margin, Enderle said.

“We are seeing a change in strategy from high margin to high volume, which will likely adversely impact valuation once investors figure out what Cook is doing,” he said. But why is Cook doing this?

“He doesn’t know how to manage a high-margin company and he is shifting Apple to a model that he better understands,” Enderle said. “Yes, this is his response to declining PC sales but he’ll pay a high price in profits and valuations as a result of using this particular tactic.”
 

Tell Us What You Think
Comment:

Name:

Elias:

Posted: 2014-06-19 @ 10:51am PT
1.099 is not exactly "head-turning", is it?

Mike:

Posted: 2014-06-18 @ 9:28pm PT
We are in a depression. This is just Apple dealing with reality.

AskAnExpert:

Posted: 2014-06-18 @ 12:18pm PT
Enderle go home! Cook knows better than you how to manage a high-margin company. He is not shifting Apple to a different model, he is adapting each product line to the margins it can sustain. Premium is in the display nowadays, no longer in the processing unit. So displays that are more in tune with what users want fetch a high margin. All-purpose computers, no matter how stylish and cool, do not, because they face competition by better / bigger displays (TVs) that can access as much computing power as needed from the cloud using cheap ARM-based set top boxes (or similar functionality integrated into the smartTV).



Salesforce.com is the market and technology leader in Software-as-a-Service. Its award-winning CRM solution helps 82,400 customers worldwide manage and share business information over the Internet. Experience CRM success. Click here for a FREE 30-day trial.


 Apple/Mac
1.   Popular Mailbox App Comes to Mac
2.   Apple Opens China iCloud Data Center
3.   Android Crushing Smartphone Rivals
4.   Apple Bans Toxic Factory Chemicals
5.   Apple's Workforce Mostly White, Male


advertisement
New App To Manage Time Better
Helping to organize your busy life.
Average Rating:
Popular Mailbox App Comes to Mac
Takes to-do list approach to the inbox.
Average Rating:
Apple Bans Toxic Factory Chemicals
Cleans up China production of iPhones.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Chinese Hackers Nab Info on Millions of U.S. Patients
A group of Chinese hackers has stolen the personal information, including names and Social Security numbers, of about 4.5 million patients at hospitals operated by Community Health Systems.
 
Premier FBI Cybersquad in U.S. To Add Agents
After helping prosecutors charge Chinese army officials with stealing trade secrets from major companies and by snaring a Russian-led hacking ring, the premier FBI cyber-squad is getting a boost.
 
Apple Opens iCloud Data Center in China
Treading lightly, Apple acknowledged it has started to store encrypted iCloud personal data of some Chinese users on servers in mainland China, operated by the state-owned China Telecom.
 

Enterprise Hardware Spotlight
Compression, Deduplication Come to Violin Concerto 2200
Violin Memory has announced that data deduplication and compression capabilities are now available on its Concerto 2200 solution. Typically, users will experience deduplication rates between 6:1 and 10:1.
 
Cisco Axes 6,000 Employees in Restructuring Plan
Faced with declining profits, Cisco is laying off up to 6,000 employees in the months ahead -- a whopping 8 percent of its global workforce. That's in addition to the 4,000 jobs Cisco cut last year.
 
Web Slows, Have Internet Routers Reached The Limit?
If you encountered problems connecting to the Internet on August 12, you weren't alone. Networking experts blame the wide-scale slowdown on outdated routing systems that are reaching their limits.
 

Mobile Technology Spotlight
HTC Debuts Windows Phone Version of One M8 Smartphone
HTC is bringing the Windows Phone mobile OS to its flagship One M8 device -- the first time any mainstream flagship smartphone has been offered with a choice of operating systems.
 
Verizon Earns Top Rating in Mobile Network Comparison
A new report says Verizon Wireless was the top-performing U.S. cellphone service provider in the first half of 2014, on a nationwide and state-by-state basis, as well as in metro areas.
 
Sprint Comes Out with Data Guns Blazing
As its new CEO promised, Sprint has rolled out a new aggressively competitive price plan. The shared data plans promise twice the high-speed data and at lower prices than AT&T and Verizon Wireless.
 

Navigation
CRM Daily
Home/Top News | CRM Systems | Customer Service | Contact Centers | Business Intelligence | Sales & Marketing | Customer Data | CRM Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.