The price difference between Macs and PCs widens

For some time, Mac fans have argued that, feature-for-feature, Apple's computers aren't really that much more expensive than their PC competitors. When the processors, memory, hard drive and screens are all matched up, the price premium on a Mac was negligible, they insist, and sometimes non-existent.

But eWeek's Joe Wilcox says that, while he wasn't looking, that has changed. Windows-based computers -- and particularly notebooks -- are now much more powerful than Macs, and a lot cheaper. He thinks Apple not only must lower prices, but is actually planning on it.

On Saturday, Aug. 2, I got to wondering about Mac versus Windows PC pricing after seeing two HP notebooks on sale at the local Target. One of them, a 14-inch model, the HP DV2946NR, sold for $699.99 and packed 4GB of memory and a 320GB hard drive. Capacity for both features is twice that of the $1,299 MacBook--and shared graphics is 356MB compared with a meager 144MB for the MacBook. I wondered: If Vista notebooks are selling for so little and packing so much, how does this compare with Mac desktops and notebooks?

Today I contacted Stephen Baker, NPD's vice president of industry analysis, about computer average selling prices at retail. That HP notebook is right on mark: ASP for retail Windows notebooks is $700. Mac laptops: $1,515. Yeah, right, they're more than twice as much. But there's more: The ASP for Mac desktops is more than $1,000 greater than for Windows PCs, and Mac desktop ASPs were higher in June than they were two years ago.

Wilcox also pulled together some specs on desktop PCs and Macs, just to make sure it wasn't an aberration in the notebook market:

iMac: $1,199; 2.4GHz Intel Core Duo processor, 20-inch widescreen display (integrated), 1GB DDR memory, 128MB ATI Radeon HD 2400 XT graphics, 250GB hard drive, 8x double-layer DVD burner, Bluetooth 2.1, 802.11 g Wi-Fi, Webcam and Mac OS X 10.5.

Inspiron 518: $739 (after $150 instant savings); 2.4GHz Intel Core 2 Quad processor, 19-inch widescreen monitor, 3GB DDR memory, Intel GMA X3100 graphics, 500GB hard drive, 8x DVD burner and Windows Vista Home Premium Service Pack 1.

One of the most interesting aspects of comparing Macs to PCs at the moment is memory. More and more, I'm seeing Windows-based desktops and notebooks with 3GB or more of RAM selling for well under $1,000 -- often in the $700-$800 price range. Macs, meanwhile, start at $1,100, usually with only 2 GB of RAM, and adding Apple memory is a notoriously pricey proposition. Adding 2 GB of RAM to an iMac costs $200, which is about four times what it would cost if you were to buy 2 GB from, say, Crucial.com. That's a lot less than Apple used to charge for memory, but still way too much.

PC makers, meanwhile, charge a lot less to add memory at the factory. Dell's cost to add 2 GB to an XPS 420 desktop is $50 -- about what you'd pay to buy it at Crucial.

Memory is one of the biggest factors in a well-performing computer. The more, the better, so the cost of adding RAM is not a trivial consideration.

Apple has told financial analysts to expect the company's profit margins to drop, and Wilcox believes that's going to happen because its product specs have to go up while prices must come down:

Back to average selling prices, the gulf between Windows PCs and Macs is simply stunning--and desktop Mac ASPs are $111 higher in 2008 than 2006. No wonder, Apple has such high margins. But they can't last, and I believe Apple realizes it.

Windows computer ASPs have reached a plateau from which manufacturers are building bulkier systems. If Apple is going to continue its market share gains, or simply maintain that 8.5 percent U.S. share, prices must go down and configurations bulk up. The math is simply undeniable.

Of course, Mac fans will tell you -- ad nauseum -- that Apple computers have other benefits, ranging from better reliability and stability, to great service and support, to fewer hassles with security malware. There's also the fact that Macs can also run Windows, but the reverse isn't true (unless you're willing do some hacking and violate some EULAs). But then, when your budget is the bottom line, those secondary benefits become, well, secondary . . .

Wilcox's piece appears in his Apple Watch column, and he's got a companion piece that looks at just how much PC prices have dropped, while specs have improved, in his Microsoft Watch.

If you're interested in buying a new computer and are considering becoming a part of the growing Macintosh tide, you should read both of them.

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