A Look At How Apple Prices The New Macs

I’ve always been impressed with how some companies price their products. Ideally, a company usually strives to extract the most money possible from a sale.

Apple does it better than most. Apple’s iPod pricing is a text book example of pricing migration with only a few dollars separating each iPod in the line, from lowest price to highest price.

Guess what? Apple’s new Macs are priced the same way. The pricing strategy maximizes the gross margins of each product, yet makes it tempting for any buyer to migrate from a lower priced product to a higher priced product.

For example, I’ve been browsing around the online Apple Store. Generally speaking, and with the exception of the recent aluminum MacBooks, Apple has added more or better features, and either dropped prices (iMac and MacPro), or kept prices the same (Mac mini).

Let’s say you want to buy another Mac, an inexpensive machine as a second household Mac. Assuming you have an extra display, an extra keyboard, and an extra mouse (who doesn’t?), the Mac mini is a good buy with a $599 starting point.

That price gets you a Mac, OS X, iLife, five USB ports, a Firewire 800 port, a couple of video ports, a modest hard drive, a modestly powered CPU, gigabit ethernet, audio in and out, and AirPort Extreme.

What’s not to like? After all, the very low end 20-inch iMac starts at $1,199, $600 more, but has a faster CPU, larger hard drive, more RAM, keyboard, mouse, and a 20-inch display. That’s quite a bit for $600.

So, what happens when you price out the Mac mini to be more comparable to the iMac, any iMac? That’s where it gets interesting. Max out the Mac mini and suddenly, even the high end iMac becomes a bargain.

Loaded the way I like, the Mac mini, with fastest CPU, largest hard drive, keyboard and mouse, four gigs of RAM, and the Apple 24-inch LED Cinema Display, and the price tag balloons to $2,046. Uh oh.

On the other hand, the not-quite-fastest but fast enough 24-inch iMac, with four gigs of RAM, a one gig hard drive, and the fastest graphics card available, weighs in at a paltry $2,099, $53 more than the maxed out Mac mini.

In other words, whatever Mac you want, and in whatever configuration suits your fancy, you’re just a hop, skip, jump and a few hundred dollars away from the next model up the line.

A similar price migration occurs in the MacBook and MacBook Pro line. It’s not so evident in the MacPro models, where the quad-core model starts at a seemingly affordable $2,499, but the high end model, the dual CPU quad-core Mac Pro that is faster than Warp 6, can add approach $6,000—$2,600 extra for the CPUs alone.

For MacBook buyers, the low end is $999 for the white polycarbonate shell. $300 more gets you the aluminum body, slightly faster RAM, and a larger hard drive. That aluminum body is pricey.

The thing to take away from this is that Apple is very smart about pricing, and manages to squeeze the absolute most out of a customer. They make it easy to configure a Mac the way you want, then you realize that just a little more money gets you more.

Are there value Macs in Apple’s stable? Yes. The Mac mini (assuming you have keyboard, mouse, display), is not a bad deal at $599. The white MacBook, relative to the other MacBook models, is a steal at $999 (it comes with Firewire, while the other models do not).

Likewise, the entry level 24-inch iMac amounts to a better iMac for the money than any iMac in Apple’s history. Regardless of your needs or Apple’s pricing strategy, any company with $25-billion in the bank has a good handle on product pricing.