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http://www.insanely-great.com/news.php?id=505
Will eMac Kill iMac Sales?
By Remy Davison, Insanely Great Mac
June 4th 2002
How long can Apple make eMac available without hurting its own profitability?
Today''s announcement by Steve Jobs that the eMac would be available to all consumers
comes something as a surprise. Previously, IGM predicted a strong gray market would
develop if Apple restricted its supply line to education.
Jobs said that eMac production had ramped up ahead of schedule, and that demand for
the product had been exceptionally strong.
I bet it has.
A 17" G4 Mac for little over $1,000? Who is going to want to buy a funky-screened LCD
iMac for hundreds more? Even Mac portable afficionados are going to have to give eMac
a long, hard look before they plunk down their dough.
Granted, it''s clear that Apple can sell a G4 profitably for around $1,100 retail. But
it commodifies Macs and makes the rest of the model line look overpriced.
Look at the 2001 iBook: it was so well-equipped at the price that it quickly ate into
PowerBook G4 sales, to the extent that Apple had to up the ante considerably recently
to put distance between the Ti and i. How many TiBooks would Apple sell if the iBook
had a 500 or 600MHz G4?
The equation is not identical, but similar when compariing eMac and iMac. Certainly,
the eMac doesn''t have the purity of design and exceptional display quality and
flexibility intrinsic in the iMac.
But it does have one thing: 700MHz of raw G4 power. And a pretty nice display and a
lengthy features list.
PCI expandibility aside, I''ll wager you could run Photoshop better on this thing than
any Power Mac 350 or 400 sitting in a lot graphics studios and print shops right now.
Or Cleaner. True? Want more capacity? Fast FireWire ports.
Two for two grand.
An unbeatable value proposition. Smart consumers could find themselves a cheap Pioneer
DVD-R drive and screw that in somehow. Or use an external FireWire drive with DVD
Studio Pro.
The bottom line is whether Apple can increase its market share with eMac. Can it? I
suspect it might become too successful. Both Apple and its third-party retailers
cannot hope to make more than a few bucks per unit on this machine. Remember how tight
profit was on the original iMacs? Volume was the only thing that made it worthwhile.
Will Windows users buy eMacs? Some will. But most of them will be bought by the
existing user base. Us. Of course, Apple thinks eMac will put traffic into stores and
get people to upgrade (you know - walk in to buy an Accord and drive out with an
Integra). That might work - sometimes - with cars. But I don''t think it necessarily
works with computers.
Will it compel Mac users to upgrade sooner than they anticipated? Yes, probably.
That''s where a lot of the initial sales spike for eMac will come from.
But my fear is that the more profitable iMac line will be stifled by this new invader.
The fact that eMac is so damn good makes it all the more frightening.
Post your comments at:
http://www.insanely-great.com/news.php?id=505
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