Miscellaneous Ramblings

Thoughts on the iMac Price Hike

Charles Moore - 2002.03.26 - Tip Jar

According to a Cnet news story last week, some Mac fans are "outraged" by Apple's announcement of a $100 across-the-board price hike on the G4 iMac last week at Macworld Expo Tokyo.

While nobody likes to see prices go up (at least from a consumer perspective), people who waste their energy getting outraged by a price increase on a commodity like a computer, especially when reasons for the change are indisputable and beyond the vendor's control, ought to get a life.

Apple explained that the reason for the price uptick is a "significant increases in component costs for memory and LCD flat-panel displays."

iMacIndeed, given increasing RAM prices plus a worldwide shortage of the special type of glass used in flat panel LCD display production, I have been wondering how long Apple could hold the line on both iMac and iBook prices.

If you've been following RAM prices over the past few months, then you know there have been sharp increases. For example, the price of a 512 MB RAM module for my Pismo PowerBook bottomed out last fall at about $85 but began to climb sharply toward the end of 2001. By the time I decided I'd better make my move in January, it cost me $124.95 for a RAM upgrade from Other World Computing. I checked the current price over the weekend, and it's now up to $139.95.

As for flat panel displays, the strong demand for glass laminate from manufacturers of thin-film transistor liquid-crystal display (TFT-LCD) panels combined with raw material procurement problems have caused a panel shortage, and glass panel suppliers in Taiwan have raised prices

DigiTimes.com reports:

The price of large-size TFT LCDs, including that of 14.1-inch notebook panels, 15-inch panels for both LCD monitors and notebooks, and 17-inch LCD monitor panels, have all increased in March. However, many industry observers now warn that while the continuous price hike is marvelous for panel producers, it certainly is not good news for end-product producers and consumers and might eventually hurt market demand.

15" LCD monitor panels like those used in the iMac have increased in price from $210 in October, 2001, to $250-$260 in March 2002, a jump of 19-24%.

If Apple is to be faulted, it would have to be because the writing was already on the wall last December when they would have been finalizing prices for the iMac. However, if they already had a stock of RAM and LCD displays purchased at the depressed prices of last year, why not pass them on to the early adopter iMac purchasers for as long as they could? And, of course, the low-ball prices helped in the with the initial publicity impact of the new model.

Even at US$1,399-1,899, the G4 iMac is a whale of a deal. When it was discontinued last spring, the basic 450 MHz G4 Cube with a DVD drive, 64 MB of RAM, and a 20 GB hard drive was selling for $1,299. When you added a 15 " Apple Studio Display, that bumped the total cost up to $1,898, or just a buck less than the high-end 800 MHz iMac with a 15" LCD display; SuperDrive for playing and burning custom CDs and DVDs; 256 MB RAM; a 40 GB hard drive; and Nvidia GeForce 2 MX graphics with 32 MB of DDR memory.

Viewed in that context, the new iMac is still a stupendous deal even at the new prices.

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Charles Moore has been a freelance journalist since 1987 and began writing for Mac websites in May 1998. His The Road Warrior column was a regular feature on MacOpinion, he is news editor at Applelinks.com and a columnist at MacPrices.net. If you find his articles helpful, please consider making a donation to his tip jar.

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