Why Macs Cost More than Dells, Leaving the Mac for Dell and Ubuntu, and Using Both Platforms

• How Apple Could Match Dell's Price
• Switching from Mac to an Inspiron with Ubuntu
• Dell on the Road Is Good Enough with a Mac at Home
• Apple Isn't Playing the Same Game as Dell

How Apple Could Match Dell's Price

From Doug:

How Apple could match the Dell price:

1. Make it a pre-sales platform for add-ons. Ship it brimming with adware and hamstrung scaled down versions of software. Not a final purchase, the very beginning of many purchases to come, in the guise of demoware.
2. No Research and Development.
3. Maximize use of old hardware. Mainboard, system buses, key caps, each and every component of the total system that does not figure into sales specs, rescue from the salvage bin wherever possible.
4. Push the time from sale to shipment out about 4-to-6 weeks for the low dollar machines. Offer slightly upgraded versions of the same machines for immediate delivery that sell for a few hundred dollars more.
5. Lower the sales margin. Because what are you actually offering that justifies a 30% markup?

Top quality, latest technology, attention to detail, and a simple hassle free sales experience, the value of exceeding customer expectations. It all takes work, and work costs money. Ten percent markup is plenty if the goal is to provide a commodity level user experience.

The race to the bottom is easily won.

Hi Doug,

Thanks for the comment.

I don't disagree entirely, but If I were to buy a Dell Inspiron 1525 for my personal use for US$499/Can$549 (you can get one cheaper than that if you can live with a Celeron processor), I would be running Linux on it, and there are vast quantities of Linux software available for free.

Research and development? Dell's is maybe not up to Apple's, but I think it's an overstatement to peg it at zero.

Old-school hardware doesn't bother me if it will do the job - I still have two Pismos in production service. Neither does waiting a few weeks to save hundreds of dollars. If you can get a satisfactory machine for a good price, as a consumer, who cares what the manufacturer's margin is?

Now, that Can$549 Inspiron 1525 has a Pentium CPU and a 533 GHz frontside bus, but going to a Core 2 Duo with an 800 MHz FSB will still take me up to only Can$700, which is $450 cheaper than Apple Canada would ding me for a new 2.1 GHz white MacBook with a slower Core 2 Duo processor, the same speed FSB, a gig less standard RAM, a 2" smaller display (albeit with the same resolution), and a half as large hard drive. The Inspiron also comes with an internal modem, while Apple Canada will extract another Can$59 for an external one (I have to have a modem, being stuck with only dialup available where I live).

Speaking of nickling and diming, Dell will upgrade the Inspiron's RAM to a maxed out 4 GB for Can$50, while Apple wants a whopping Can$225 extra for the 4 GB spec. That would make the price of the 2 GHz C2D Inspiron with modem (standard) and 4 GB memory (Can$849) Can$584 less than the 2.1 GHz MacBook with a modem and 4 GB (Can$1,433).

As I said in the column, I don't dispute that there would be compromises involved with opting for the Dell, but I'm persuaded that they are not intolerable, and I think that aside from not being able to legally use the Mac OS (a huge qualification, I concede), that the value for money equation strongly favors the Dell.

Charles

If you put Linux on a Dell and consider first cost the most important cost, you have run right past any argument I can find against using Dell.

Then my only argument would be against buying a new one. Rescue an old one from the dumpster instead, help preserve the environment. Nothing wrong with that at all. If everyone would do it, more computer literate people and less electronics in the waste stream. A win-win.

I have bought new Dells, new HPs on the high and low ends, new high end IBM hardware, Acers, Gateways, etc. And most recently, factory refurbed Apple hardware. I have run Linux and BSD on old hardware. I have built machines from the ground up to try to save a few bucks.

My experience has been that you pretty much get what you pay for. And the time versus money continuum holds just as true for IT technology as for anything else. Spend time or money, whichever you value the least. Likely you can learn much in the bargain.

The point I was attempting to make is that if Apple had to start selling at a lower price, there are ways to do that. And the obvious first place to look is at how it is being done by Dell, the best at doing it.

Thus the list of my personal frustrations with the Dell experience. And, tongue in cheek, how Apple could match that experience. Dell offers a better experience than what I have outlined, they may even do some R&D, but not at the low end of their offerings.

For real world users (not Linux or BSD), to achieve a Dell experience that matches Apple offerings, you are quickly at, if not above, Apple prices.

Without OS X, without resale value, without access to any OS X applications.

After three years of flipping open my MacBook Pro to get right back to work where I left off the night before, it is worth roughly half the original refurb price of $1,500. I have lost about $250 a year, call it $20 a month in resale value.

Every week, if not every day, I recapture that $20 in ease of use and productivity. Estimating the increased productivity at a conservative $20 per week, the first cost savings of a $500 Dell vs. a $1,500 MacBook Pro evaporates the first year. My gut feeling is that I recaptured the $1,000 in a couple of months, and it has all been gravy since.

When learning about computers was my goal and pleasure, time spent tweaking hardware and software was time well spent. Now that my goal is getting something accomplished with computers, OS X on a MacBook Pro provides the true value for me. No matter the IT challenge, it has never left me short on capabilities. I don't see how anyone can claim that for any other platform.

Maybe the Dell works fine for most users.

If it could be paired with a full sized keyboard to ease the task of text input, an iPod touch would work fine for most users I know.

I don't think first cost comparisons are fair when comparing something suitable for everyday, basic tasks to something that will handle absolutely anything you can throw at it. There is a huge difference in value. Admittedly, only for those who need the added value. The 10 percent versus the 90 percent, according to the current market.

Hi Doug,

Thanks for the follow-up thoughts. With me you're preaching to the choir, I guess, because I'm still on Apple hardware and likely to be for the foreseeable future - and for essentially the reasons you've so eloquently elucidated, especially ease of use and productivity and effortless pick-up-where-you-left-off contiguous workflow continuity. I might actually enjoy tinkering with computers if I had the time, but my dance card is enduringly over-subscribed, and the just works, no hassle, right now dependability of the Mac is priceless to me under present circumstances.

I paid about $1,500 for this Certified Refurbished 17" PowerBook with a 1.5 GB RAM upgrade I'm using right now just shy of three years ago. It's never missed a beat, and I guess still has a used value of about $850, based on Wegener Media's current price listings. That works out to just $216 a year, so it really doesn't owe me anything, although I got a better than average deal on it at purchase perhaps.

However, a lady of my acquaintance, totally un-tech savvy, asked my advice on replacing her ancient PC laptop running Windows 98 a couple of years ago. She is not one who would remotely consider switching from her familiar way of doing anything, especially computers, so I didn't even mention a Mac but suggested an Acer laptop that was at the time on sale at The Source (Circuit City in Canada). She bought one, and it died about 25 days later, fortunately just within the over-the-counter replacement guarantee period. The second one has been a solid performer for her, and she's been completely satisfied with it for more than Can$1,000 less than a roughly equivalently equipped Mac laptop would have cost her.

Charles

Switching from Mac to an Inspiron with Ubuntu

From Anonymous by Request in response to How Come Dell Can Sell a New 15" Notebook for Half the Price of a Refurbished MacBook?:

I bet you are getting a lot of mail on your article about the Inspiron. Well, I'd like to share my experiences with you a little, if you have a few minutes.

I am writing you this email on my new Dell 1525 running Ubuntu. I went through the same exercise you did. I had to get rid of my iBook G3 a while back, because the optical drive got fried and the entire computer was worth more as parts than the replacement for the optical drive, so I was without a laptop for a couple of years. This past month I just wanted to have a laptop again, but any new laptops from Apple start at $1,500. I use the laptop for email, viewing movies online (particularly Netflix, but also Hulu, etc.), and since I write plays on the site, I use the machine for those tasks.

Nothing that should task the computer too much, I think.

I bought this Inspiron with the exact configuration you mentioned, with the intention of installing Ubuntu in it (I keep Vista for watching videos on Netflix using IE, that's the fruit of DRM for you).

I haven't had any problems with this computer since I bought it. I use Google for email and keep my email in the browser. I have Open Office for documents, if I want to work locally, otherwise, Google docs online will do just fine. Ubuntu does have problems with Flash in Firefox, but that is in part because the Flash plugin is closed, and because Firefox in Unix consumes an ungodly amount of memory. Far more than it should. But those things will improve.

You asked in your article:

Steve Jobs says you can't build a laptop computer for under US$500 that isn't junk and that Apple doesn't do cheap. So the Inspiron 1525 is definitely cheap, but is it junk? I'll venture that there are some quality and design compromises by comparison with the MacBook, but are these egregious enough to justify opting for a machine that costs more than twice as much and isn't even brand new?

Is this machine crap, like uncle Steve says? No. That's just the reality distortion field. It may not feel as fancy as a Mac, but we love the bigger screen, just as shiny and glossy as a Mac's screen, and inside are basically the same guts as a Mac. Are there design comprises on this machine? I suppose there are, but I am not an aesthete enough to notice them when I am using it. In fact, the trackpad has gestures in it, for browsing with comfort. I didn't have that feature with the iBook that I can remember.

Uncle Steve is giving you the reality distortion field full blast with that one. The Dell is just fine. It just does not feel state-of-the-art like the Mac does. The laptop is not junk. I felt comfortable buying it, because I've been forced to use Dell laptops at my jobs for the past 8 years or so - and the laptops have given me almost no trouble at all.

So, in answer to your question from the article: Dell can sell this machine for about 500 bucks and makes a profit because it probably costs them between $300 to $400 to build the thing in the first place. And I am willing to say that that is about the same cost for a MacBook. But Uncle Steve's marketing makes the MacBook seem worth more than it is. If I were you, on a writer's salary and all that, I would be fine with the Dell and put my conscience to sleep in peace. I am a devoted Mac guy (my nickname a long time age was indeed, the mac man). But I feel more like a grown up now, choosing a computer for price and features and putting into it the operating system of my choice without restricting myself to Macs. And they do feel like a restriction.

I am happily using Ubuntu on this machine 80% of the time, and the rest of the time I have to use the Vista side for DRM purposes. Ubuntu is a great operating system, by the way. A breeze to install from within Vista (you download Wubi, and it installs all of Ubuntu as an application inside Vista . . . just like the alien in the movies). Ubuntu recognized all the important elements of the system: wireless, camera, etc. I use Google chat with the Vista side, since Google has not made it available for Unix yet. If you are a writer, Ubuntu on this Dell is ideal, because it reduces distractions considerably.

A plus to doing this change with Ubuntu and Vista is precisely that: a change. I don't know about you, but looking at the Mac OS X desktop has gotten old for me. I can't change it or customize it for variety. I can't even officially add applications under the Apple menu like I used to with OS 9. I like OS X, it just hasn't been exciting for me. And with Ubuntu there is no risk of viruses or malware, for sure.

The other plus about using Ubuntu is that it does feel like OS 9 in a way. Not perfect, but pretty good. It has features that make life simpler, without being showy about it like Uncle Steve. I love Uncle Steve, but I think the constant one-upmanship has gotten stale for me. Ubuntu feels hackable enough to make it interesting, and you can customize it with ease, both aesthetically and in terms of adding features to it. I can put a dock on it, but there's no point to that. Ubuntu has an applications menu that does not use real estate like a doc, and it works just fine.

Just to give you an idea of the type of customizability I'm enjoying with this system: Ubuntu comes with "panels", which are the equivalent of docks, but also of the Apple menu bar. You can place applets in the panels and move the panels around without fear and without hassle. The original Ubuntu install has two panels, one at the top of the screen, one at the bottom of the screen. The top one emulates the Mac menu bar, with basically the same things on it as you'd find on a Mac at startup. The bottom one emulates the dreaded Windows Task Bar . . . I didn't like it, but I do like the fact that I can switch applications easily with the applet, so I moved the applet with the functionality I like (and the Trash icon) to the top menu bar and deleted the bottom bar completely. Now I have all the functionality I need where I want it and don't have to worry about the bottom part of my screen.

I had to learn all this, of course, but the help files were there for the newbie.

My next Mac will likely be a Mac mini, to replace my aging but reliable eMac G4. I will buy a non-Apple monitor (for a reasonable price), and a keyboard and a mouse that won't feel overpriced. I like to have choices, and real choices involve not buying Apple products sometimes.

Well, anyway. Thanks for listening.

Anonymous

Hi A,

Thank you for the excellent commentary. This is just the sort of discussion I was hoping to elicit with the article.

You have helped confirm my suspicions about both Dell Inspirons and Ubuntu Linux, and I entirely agree with your reasoning.

Personally, being as I make a substantial proportion of my living writing about Apple and Mac computers, I guess I would be a bit of a bounder to operate on PC hardware, and I need to be able to test Mac OS software and peripherals, but if those dynamics were not in play, I think I would be ordering an Inspiron 1525 and installing Linux on it, as at least a trial run.

Charles

Dell on the Road Is Good Enough with a Mac at Home

From Ruffin:

Yep, that's exactly why I bought a Vostro 1400 for nuttin' a little over a year ago. Though I miss OS X, there's nothing on OS X that doesn't have an inferior replacement on Windows, and perhaps Linux if I ever get my idealism quotient back up. I feel like I got a larger drive, faster processor, webcam, and ports galore for half price. When I really want a Mac for iMovie, RapidWeaver, etc., it's waiting on me at my desk at home.

This is part of the reason I'm frustrated with the delay in updating the mini. I'd rather have a nice mobile computer and a new Mac sitting at home for the price of a MacBook.

I don't know, it seems to come down to if it's worth about $20 a month to have mobile OS X, as I tend to get a new laptop every two years or so. I used to say it did. After a little over a year with the Vostro, I'm not so sure.

Keep us updated!

Thanks for the comment, Ruffin.

It really does boil down to whether you can live happily without the Mac OS, and if you have a Mac at home, you don't have to go cold-turkey.

Charles

Apple Isn't Playing the Same Game as Dell

From Ken:

Charles,

You should be asking the reverse question:

How come Dell is forced to sell a new 15" notebook for half the price of a refurbished MacBook?

or

How can Apple effectively sell a refurbished MacBook for twice the price of a Dell 15" notebook?

The answer: Because everyone else (except Apple) is selling equivalent laptops at about that same price, so Dell must match the price or go even lower to get the sales. But everyone else (except Apple) is playing the same game, so the price keeps going lower.

Since Apple is the only major player selling a uniquely desirable product (a well-designed computer that runs Mac OS X), it is the only major player that can sell computers at a healthy profit margin.

Apple does not play by the same rules, and it's not even the same game.

When your product is essentially just like everyone else's product, you can't charge a premium unless there is an overall shortage of supply. There is definitely no shortage of Windows PCs in the current market.

Apple, on the other hand, can manage the level of supply for Macs to meet the actual demand and maintain healthy profit margins. That's a huge advantage. When the recession eventually blows over, Apple will be standing tall and more powerful than ever before.

-Ken

Hi Ken,

Good point, but IMHO the huge advantage Apple has is the Mac OS. The hardware is excellent, of course, and that helps, but the Mac OS is the soul of the Mac experience. I have to say that I would probably have switched to non-Apple hardware long since if I could legally run OS X on it. OS X is the game.

Which is why I figure Apple will never willingly license OS X. From their perspective it would be insane to do so, as the brief and nearly fatal detour into the land of cloning in 1996/97 proved (I bought a Umax SuperMac S900, and it was/is - I still have it - one of the best Macs I've ever owned).

Charles

"Good point, but IMHO the huge advantage Apple has is the Mac OS."

Actually, I think I said the same thing... :)

And, therefore, I agree completely with everything else you said.

Well, almost. When Apple grows Mac OS X market share to about 25 to 30%, then Apple may start considering ways to effectively license Mac OS X. "Never" is a long time.

Ken

Hi Ken,

I suppose you did. You said "a well-designed computer that runs Mac OS X", so it depends on where you place the primary emphasis in that clause. ;-) I think we're on the same page.

Touché on the "never" - a dangerous word for the prudent. Let's get to that 30 percent market share first and see what happens.

Charles

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