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Why are apple products....
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Mar 5, 2007, 02:27 PM
 
so expensive? I am doing a research paper on why apple products are expensive compared to PCs. I have found next to nothing on why they are expensive; just that they ARE expensive. If you could give me a few FACTS or a web address that would be great!
     
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Mar 5, 2007, 02:40 PM
 
Originally Posted by homeruntilly View Post
so expensive? I am doing a research paper on why apple products are expensive compared to PCs. I have found next to nothing on why they are expensive; just that they ARE expensive. If you could give me a few FACTS or a web address that would be great!
How deep will this paper go? Ticket price? It's what Apple thinks people will pay for their product perhaps? Expensive in ownership? Expensive in software purchases? Expensive in time? Expensive in commitment?


What are you looking for?
     
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Mar 5, 2007, 02:42 PM
 
Basically, im doing expensive in general. The software, the products, not really expensive to run, but the main topic is WHY. The paper has to be 5-10 pages double spaced. im an 8th grades, so this isn't a college-level paper. I am pretty computer savvy so you dont have to explain what RAM and a HDD etc. is.
     
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Mar 5, 2007, 02:48 PM
 
Up-front costs are never the entire story when it comes to any complex "appliance" that will be used for years to come.

But, since you're asking a simple question, I'll give you a simple answer: Because people are willing to pay more for quality. Why do some people buy a Mercedes/BMW/whatever when a Camry or Civic will get you to the same place just as well?

Then again, you might be surprised to find that Mac Minis and MacBooks are relatively low-priced compared to the competition ...
     
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Mar 5, 2007, 02:54 PM
 
i also need to put together a Biblyography and a Works Cited list... so putting some forum down on my biblyography isn't gonna cut it.
     
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Mar 5, 2007, 03:00 PM
 
Are you going to include TCO studies? Are you going to do equivalently spec'ed product price comparisons? When you look at equivalent specs you'll see much less of a differential and in some cases lower prices on the Apple side. The only place where Apple truly lags at this point is in the gaps it fails to fill in the product line, such as a discrete GPU option in the MacBook line or a "Prosumer" tower.

"The natural progress of things is for liberty to yield and government to gain ground." TJ
     
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Mar 5, 2007, 03:04 PM
 
im doing an MLA style paper. yes ill do price comparisons. ill include the fact that they are high-end top of the line products and that the designs of the products are very pricey on apples side. i didnt really understand much that you are asking... heh
     
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Mar 5, 2007, 03:23 PM
 
Look into TCO - total cost of ownership.

"The natural progress of things is for liberty to yield and government to gain ground." TJ
     
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Mar 5, 2007, 03:24 PM
 
ok but thats not really what the topic is about. I guess i can include that though. thanks.
     
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Mar 5, 2007, 03:26 PM
 
The Mac is a boutique product, like a fancier car or a fancier piece of clothing. Some people are willing to pay a premium for it because of its uniqueness and perceived quality.

I think the best way to study this might be to take a marketing approach and study how niche products like Macs are marketed. There are a ton of other products you can use as examples to compare and contrast against.

Since this is not a paper for computer geeks, I'd focus more there than on all the geeky specs and sales-type marketing drivel. Your teacher will be impressed if you can look at this objectively and distance yourself from your like of your Mac. You aren't trying to sell the Mac in this paper, so don't make it a sales pitch about how great the Mac is.
     
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Mar 5, 2007, 03:33 PM
 
are you saying like they [apple] pay alot for tv advertising and the design of their products (like their retail stores and ipods)??
     
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Mar 5, 2007, 03:39 PM
 
Originally Posted by homeruntilly View Post
are you saying like they [apple] pay alot for tv advertising and the design of their products (like their retail stores and ipods)??

No...

lookup "niche" in the dictionary, and then read something like this:

Marketing, business - 3 Rules for Niche Marketing
     
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Mar 5, 2007, 03:40 PM
 
After you've read that article and have digested what a niche product is, can you think of any examples of other niche products out there?
     
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Mar 5, 2007, 03:54 PM
 
"a distinct segment of a market."
     
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Mar 5, 2007, 03:59 PM
 
...
     
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Mar 5, 2007, 04:03 PM
 
well i guess like an all-in-one printer like the article mentioned as opposed to buying a scanner and a fax machine and a printer because it saves money.
     
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Mar 5, 2007, 04:05 PM
 
another example would be, lets say, a linksys router with a built in file server and... maybe a firewall. niche product? i think so.

this all-in-one stuff is hinting that all-in-one products are niche products.

iMac: All-in-one desktop
HP Printers: All-in-one printers/fax/scanners/etc.
Linksys router/file server: all-in-one office network.
     
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Mar 5, 2007, 04:06 PM
 
Well, does your average person drive a Ferrari around town? Probably not... A sports car is therefore a niche product.

Where to people get most of their clothes from? Target? Sears? Or, do people buy special designer clothes to wear on a day to day basis? Some clothing can be niche products.

Where does your family like to shop for groceries? Do they buy pretty ordinary food from Kroger or something, or do they buy exotic foods? Hypothetically, if you sold nothing but exotic foods, you'd be catering to a niche market.

A niche product is a product that is not really a part of the mainstream - most people do not own these products. A niche market is the buying and selling channels used to sell niche products.

If you made Ferraris and wanted to sell one, where would you market your product? Would you put your advertisements on the side of a bus? Maybe, this would be called mass marketing... However, since only a small percentage of people would be interested in buying a Ferrari, this wouldn't be that smart (and overly expensive). It might be better to specially target your product... Who would be likely to buy a Ferrari? How would you reach them?

Let's see what sort of ideas you can come up with.

Bear with me here, I think once we get you thinking this way you'll have lots to write about!
( Last edited by besson3c; Mar 5, 2007 at 04:15 PM. )
     
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Mar 5, 2007, 04:09 PM
 
When you are done, see if you can come up with some ideas as to what motivates people to want to buy niche products, when it can often be easier and cheaper to just buy the same products that everybody else has...
     
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Mar 5, 2007, 04:12 PM
 
Originally Posted by homeruntilly View Post
well i guess like an all-in-one printer like the article mentioned as opposed to buying a scanner and a fax machine and a printer because it saves money.
Something that is cheaper is usually not a niche product, because most people usually like cheap things.
     
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Mar 5, 2007, 04:13 PM
 
Originally Posted by homeruntilly View Post
another example would be, lets say, a linksys router with a built in file server and... maybe a firewall. niche product? i think so.

this all-in-one stuff is hinting that all-in-one products are niche products.

iMac: All-in-one desktop
HP Printers: All-in-one printers/fax/scanners/etc.
Linksys router/file server: all-in-one office network.

No, all-in-one products are not necessarily niche products. They can be, but I don't think you can generalize here.
     
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Mar 5, 2007, 04:16 PM
 
If i were selling a ferrari, i would target the richer, upper class people.
     
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Mar 5, 2007, 04:18 PM
 
reaching them would be a little harder.
     
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Mar 5, 2007, 04:22 PM
 
a change back to the Mac category. i would target the graphic designers, movie producers/editors, music composers, etc. And do what they are doing... donating macs to schools so kids get familiar with them and want one of their own. Also, develop new software that makes movie editing easier (iMovie), composing music easier (Garage Band) and editing photos easier.

for future reference, its pronounced [nitch] right?
     
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Mar 5, 2007, 04:27 PM
 
Originally Posted by homeruntilly View Post
a change back to the Mac category. i would target the graphic designers, movie producers/editors, music composers, etc. And do what they are doing... donating macs to schools so kids get familiar with them and want one of their own. Also, develop new software that makes movie editing easier (iMovie), composing music easier (Garage Band) and editing photos easier.

You understand the target audience of Mac owner pretty well then.

Where I was going with Ferrari marketing was something like a car trade show, a sports car magazine, or something that is more likely to receive attention from car fanatics rather than just the mainstream public.

With exception to the iPod, Apple products (i.e. the Mac line) are niche products. What attracts Mac users into wanting to buy a Mac, other than their perception of them being good quality machines?
     
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Mar 5, 2007, 04:30 PM
 
They are user-friendly, you have to do minimal repairs, no worry about viruses, barely crashes and you don't lose unsaved work.
     
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Mar 5, 2007, 04:30 PM
 
Other factors that add to the cost of Macs:

R+D. Apple develops its own software and OS for its systems, and they spend a significant proportion on their R+D. Other computer manufacturers don't, therefore, they only have to pay MS to licence the software. Because MS has a significantly higher proportion of the Market, they can afford to sell their OS at a cut price rate to licensees as they are able to make more profit than Apple purely on the numbers.

Design. Apple actually designs its products to fit the OS and vice versa. PC makers very often don't (putting it very simplistically, e.g. Dell is a computer assembler - they buy parts and put them together - not a computer manufacturer and designer). Those manufacturers that do design their own products - e.g. Sony - charge more for their PCs than those that don't.

Numbers. Dell sells many more PCs than Apple by a significant factor. Therefore, they can get better discounts for parts from suppliers than Apple simply because they are buying more of them.

Discounts. MS and e.g. Intel will subsidise manufacturers if they advertise their products when selling their PCs. Apple is too brand conscious to do this (hence the reason why you don't hear or see the annoying Intel jingle and logo on Intel Macs) and therefore does not receive any such subsidies.
     
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Mar 5, 2007, 04:34 PM
 
Originally Posted by JKT View Post
Other factors that add to the cost of Macs:

R+D. Apple develops its own software and OS for its systems, and they spend a significant proportion on their R+D. Other computer manufacturers don't, therefore, they only have to pay MS to licence the software. Because MS has a significantly higher proportion of the Market, they can afford to sell their OS at a cut price rate to licensees as they are able to make more profit than Apple purely on the numbers.

Design. Apple actually designs its products to fit the OS and vice versa. PC makers very often don't (putting it very simplistically, e.g. Dell is a computer assembler - they buy parts and put them together - not a computer manufacturer and designer). Those manufacturers that do design their own products - e.g. Sony - charge more for their PCs than those that don't.

Numbers. Dell sells many more PCs than Apple by a significant factor. Therefore, they can get better discounts for parts from suppliers than Apple simply because they are buying more of them.

Discounts. MS and e.g. Intel will subsidise manufacturers if they advertise their products when selling their PCs. Apple is too brand conscious to do this (hence the reason why you don't hear or see the annoying Intel jingle and logo on Intel Macs) and therefore does not receive any such subsidies.
you put that in a way that is easy to understand. thank you for taking time to write a little summary of why they are expensive
     
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Mar 5, 2007, 04:44 PM
 
Originally Posted by homeruntilly View Post
They are user-friendly, you have to do minimal repairs, no worry about viruses, barely crashes and you don't lose unsaved work.
Other than that, like I said?

Maybe you don't know exactly where I'm going, so I'll elaborate...

If the Mac was just like any other PC, would people buy it? What would be the point? People buy the Mac because it is *not* like any other PC. It is unique. It is different than a Dell or an HP.

If you offer uniqueness, this means that nobody else offers what you do, right? Therefore, a company can get away with making their products a little more expensive providing people think they are of higher quality, because where else could you get a Mac? Nobody offers a Mac except for Apple.

Some people like being unique, because it makes them feel good to stand out. Why do people dress differently and have different hair cuts, and choose to pierce different parts of their bodies and decorate them with tattoos?

So, look at all of these factors:

- perceived higher quality
- uniqueness of brand
- desire to be a unique individual

As you begin to examine each of these factors, I'll think you'll come up with many good reasons why Macs are more expensive.

Don't just focus on the higher quality thing, because your paper will just sound like a sales pitch.
     
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Mar 5, 2007, 04:50 PM
 
Originally Posted by JKT View Post
Other factors that add to the cost of Macs:

R+D. Apple develops its own software and OS for its systems, and they spend a significant proportion on their R+D. Other computer manufacturers don't, therefore, they only have to pay MS to licence the software. Because MS has a significantly higher proportion of the Market, they can afford to sell their OS at a cut price rate to licensees as they are able to make more profit than Apple purely on the numbers.

Design. Apple actually designs its products to fit the OS and vice versa. PC makers very often don't (putting it very simplistically, e.g. Dell is a computer assembler - they buy parts and put them together - not a computer manufacturer and designer). Those manufacturers that do design their own products - e.g. Sony - charge more for their PCs than those that don't.

Numbers. Dell sells many more PCs than Apple by a significant factor. Therefore, they can get better discounts for parts from suppliers than Apple simply because they are buying more of them.

Discounts. MS and e.g. Intel will subsidise manufacturers if they advertise their products when selling their PCs. Apple is too brand conscious to do this (hence the reason why you don't hear or see the annoying Intel jingle and logo on Intel Macs) and therefore does not receive any such subsidies.

All good aspects of what it means to offer a unique product, which is definitely worth putting into your paper... I hope we have given you some worthwhile ideas and a good plan for your paper!

I would structure it by thinking about what makes Macs unique, what it means to be unique (including these points that JKT has laid out), and how unique products are priced. I'd suggest comparing how Macs are marketed and sold to sports cars and other niche products. I'd discuss the psychological aspects of why individuals desire to be unique, and how the additional expense of Apple products is justified to many by their reputation for being of high quality.
     
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Mar 5, 2007, 04:51 PM
 
Are you sure they really are more expensive?
     
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Mar 5, 2007, 05:05 PM
 
To get an equivalent Dell to the 17" MacBook Pro costs ~$3200.

I have the paper lying around here somewhere.

That, of course, does not include the 1" form factor, Magsafe power adapter, two finger scrolling & click, backlit keyboard, FW800, or IR sensor, among other things.

So look twice before you consider Macs "expensive". You get what you pay for.
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Mar 5, 2007, 05:09 PM
 
They are more expensive if you look at it from the simple perspective of "how much money do I need to buy some sort of Mac"? Of course, Apple doesn't offer super lowend Desktops or Laptops, but it would still be correct to say that Macs are more expensive, you would just have to qualify this claim by stating these sort of specific reasons.
     
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Mar 5, 2007, 05:34 PM
 
Originally Posted by Tomchu View Post
Up-front costs are never the entire story when it comes to any complex "appliance" that will be used for years to come.

But, since you're asking a simple question, I'll give you a simple answer: Because people are willing to pay more for quality. Why do some people buy a Mercedes/BMW/whatever when a Camry or Civic will get you to the same place just as well?

Then again, you might be surprised to find that Mac Minis and MacBooks are relatively low-priced compared to the competition ...
That's funny, if only because I was just reading the 2007 car issue of Consumer Reports yesterday...and they recommended 0% of all the Mercedes models they reveiwed. BMW seems to be going to crap, too.

It would make more sense to say why some people buy a Lexus or an Audi when a Camry or Civic will be just fine. But I'm nitpicking.

I agree more with the guy who mentioned perceived quality. It might not be so much about actual quality or longterm reliability as it is about appearance, trendiness, and desire to be "alternative".
     
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Mar 5, 2007, 06:34 PM
 
some things are hard to put a price on... user experience, user-friendliness etc... and the problem with many of the things apple can hang over PC's head is that they're not measurable. what about R&D though? a much smaller development team at apple is contrantly refining and revising what's often referred to as 'the world's most advanced operating system', making it a more effective and pleasurable tool... that amount of development time and money surely is worth something.

i personally don't have a problem with paying extra for apple's major products, macs, ipods etc, simply because for me they're so much more pleasant to use, and they integrate so well together. to me, that is worth extra money. the only prices that piss me off are those for upgrades such as ram on BTO orders, and general accessories... one look at the ipod accessory line will make you hang your head in shame. the simple solution for these problems? buy third party RAM and accessories where there is a quality-matching equivalent.

i personally think that if apple wants to drop their reputation among PC users (particularly IT-savvy ones) as being rip-off merchants, they should drop the prices of their upgrades and accessories, but leave their main products at their current levels, as i find them to be more than reasonable considering the experience they provide.
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Mar 5, 2007, 06:43 PM
 
Maybe its because there isn't any competition, theres no where else to get a machine to run OS X but Apple, so Apple feels that if you want to run OS X then you will be forced to pay whatever price they set. I think if there multiple companies that sold machines capable of running OS X then the prices would go down on Apple products. Its also like other people said, its a high quality product, so consumers are willing to pay more for it.
     
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Mar 5, 2007, 07:30 PM
 
Originally Posted by homeruntilly View Post
so expensive? I am doing a research paper on why apple products are expensive compared to PCs. I have found next to nothing on why they are expensive; just that they ARE expensive. If you could give me a few FACTS or a web address that would be great!
You presuppose that Macs are expensive, which is a logical fallacy. While it's appropriate to claim that some Macs are relatively more expensive than some PCs, it makes no sense to claim that Macs are simply expensive. Expensive to whom?

Valuation is a tricky business. The true price of an object is simply that which a person/business is willing to pay for it. Some try to argue that the value of an object is just the sum of the prices of its components, but in that case human beings would only be worth the price of the carbon, hydrogen, oxygen, etc. that comprise them. Do you agree that you're only worth a few dollars?

Obviously, Apple adds additional value to the price of the components it uses when it assembles them into a product. To put it another way, Apple cooks better with the same ingredients that PC makers use; that's why people are willing to pay more for Apple's proverbial Kool-aid.
     
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Mar 5, 2007, 07:41 PM
 
It's really not clear to me that we have established that they are more expensive - they certainly used to be, but current models are very competitive with similarly speced PCs, when you accept that PCs can't run OSX, the whole expensive thing is really unclear.
     
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Mar 5, 2007, 08:03 PM
 
     
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Mar 5, 2007, 08:17 PM
 
Originally Posted by peeb View Post
It's really not clear to me that we have established that they are more expensive - they certainly used to be, but current models are very competitive with similarly speced PCs, when you accept that PCs can't run OSX, the whole expensive thing is really unclear.
Yes, but the fact that there is no budget Mac ala a $500 Dell means that it costs more to buy some sort of Mac. This initial ticket price is enough for people to draw these sorts of conclusions, and technically, they are right.
     
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Mar 5, 2007, 09:38 PM
 
Originally Posted by besson3c View Post
Yes, but the fact that there is no budget Mac ala a $500 Dell means that it costs more to buy some sort of Mac. This initial ticket price is enough for people to draw these sorts of conclusions, and technically, they are right.
Well, they are right that there are no basement price Macs, but spec for spec it is not clear to me they are more expensive than comparable PCs.
     
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Mar 5, 2007, 09:44 PM
 
I wonder if it is worth talking about the time Apple used to license its OS to third parties like umax and powercomputing? If you can find articles from the time they dropped them all you may gain more insight into how Apple works.
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Mar 5, 2007, 10:14 PM
 
Originally Posted by besson3c View Post
Yes, but the fact that there is no budget Mac ala a $500 Dell means that it costs more to buy some sort of Mac. This initial ticket price is enough for people to draw these sorts of conclusions, and technically, they are right.
I've met people on the street begging for money to buy some sort of Happy Meal, but that doesn't make Happy Meals inherently "expensive."

The second logical fallacy occurring here is the assumption that Macs and PCs are interchangeable. Insofar as they are not exact replicas of one another, they are not simply interchangeable.
     
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Mar 6, 2007, 01:50 AM
 
I wouldn't necessarily consider Macs to be more expensive than PCs. There's more to cost than just the price tag. As many have noted, there are features on Macs that competing computers don't offer, particularly when it comes to the MB and MBP.

Originally Posted by shifuimam View Post
That's funny, if only because I was just reading the 2007 car issue of Consumer Reports yesterday...and they recommended 0% of all the Mercedes models they reveiwed. BMW seems to be going to crap, too.
They do recommend most Lexus models, and those compete with Benz and BMW.
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Mar 6, 2007, 01:53 AM
 
A good theme for your paper might be: the myth that Macs cost more. As noted above, in most cases, if you compare what a given Mac model has included (especially the iLife software, but also likely a remote control, built-in iSight camera, etc. etc.), you'll usually find that the Mac is no more expensive than a non Mac equipped with the same features. There are plenty of articles in various computer magazines that demonstrate this.
As stated above, the one exception is for the bare bones, stripped down model PCs you often see advertised in the Sunday paper. Apple chooses not to compete in this niche because, I assume, they figure it would cut into their profits (not enough more buyers at the lower price to compensate for the buyers who'd abandon the higher priced models for the bargain basement prices) and that there's not much per-unit-sold profit to be made at that commodity (a word you should look up) level anyway.
Your paper offers you a great opportunity to learn some economics lessons that are a bit more advanced than the usual 8th grade level. As you'll see, it's NOT only about price. The lowest price may not equal the optimum value for many users, or for Apple Inc. as a corporation. If price alone were the sole determining factor, you'd never see vendors selling $200 jeans, $30,000 cars, and so on. But I hate to compare apple to those luxury items because it's not just the staus symbol of apple products that make them so compelling, but rather the inherent value to many (not all) users who find ease of use, reliability (i.e. no viruses), the unexcelled software bundle included in all new Macs (but not cut-rate PCs), and all the other factors enumerated above to be worth paying for. That's value.
     
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Mar 6, 2007, 03:58 AM
 
Apple does not sell stripped down models. Macs are not expensive, they just are not cheap. There is a difference.
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Mar 6, 2007, 11:48 AM
 
Since you're looking for source information, the Washington Post had an article comparing 6 different laptops to buy for a student. If I remember correctly, the author's conclusion was that the MacBook was the the best buy. Article is: "6 Ways to Go"
The Washington Post; Aug 13, 2006; F.6.

You'll have to pay them something to get it out of their archives, but you nearest library may have microfilm archives of the Post that you can access for nothing.

Good luck!
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Mar 6, 2007, 08:51 PM
 
PCs arent really cheaper, the reason they appear to be is PC companies are willing to sell 4 year old technology today as a new product; essentially you can buy an expensive NEW PC with the fastest intel processor and you can still buy old old intel machines boxed up as new for $400, but really those processors were released years ago... Apple also doesn't mass produce like the other guys.
     
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Mar 6, 2007, 11:09 PM
 
I sell PCs sometimes (the bonus on the service plan pays better), but when I have the chance I love selling Macs. Someone once said that you will spend money and time either way (PC vs Mac). On the PC side, you will spend more time and money on AntiVirus software, maintenance and time. On the Mac, you might experience a learning curve, but in the long run, that small amount of time learning something new proved to pay off. And because you spend less time maintaining your computer (software-wise), it's kind of paid off on it's own.

As far as desktops, the Mac has the advantage. I always point out that the iMacs are an all-in-one design, which costs less than the compeition for a similarily priced PC (C2D [T7200+]) with wireless and other features. You also have on Mac desktops (excluding the Pro) Airport (n-Draft), camera (30 fps, high resolution), and BT. Those three alone would cost 250 at least when added on to a desktop. On top of that, AppleCare on an iMac covers the computer and screen from defects. For similar results, you have to buy a seperate replacement plan for the monitor for the PC. Even then, AppleCare has 3 years tech support and is valid internationally. iMac AppleCare is dirt cheap (170 for three years!).

The bottom line is that while Macs are dollar-wise more expensive, you are buying into a lot more technology that most people will use. Software-wise, PC software sucks, including Vista. You can't even edit movies decently (much less with ease) on XP or Vista without having to buy mediocre software that doesn't even work with your other Appls (OK, programs for Windows users).

Any thoughts?
     
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Mar 6, 2007, 11:13 PM
 
I'd also like to add that is is extremely frustrating to work with people who think with their wallet, ignoring (sometimes because of limited intelligence) the VALUE associate that comes with the quality of the product. By far, the Mac buy itself is a far more complete solution for digital media enthusiast than any PC could ever be, mainly because of the integration between the software and hardware. Period. So far, the only convincing argue I found for using PC which doesn't even apply to a fraction of most users is that PCs have more software. But not necessarily more quality software.

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