Mac Pro pricing: Where did Apple's edge go?

Two years ago the Mac was unambigiously more powerful and cheaper right across the board; now it's more powerful only at the entry level and more expensive right across the board.

A few years ago, I compared the then newest dual G5 Mac workstation to its nearest Dell competitor. Here's how that looked:

 

ModelPriceConfiguration
G5 Dual$2,999Dual 2.5GHz PowerPC G5
1.25GHz frontside bus/processor
512K L2 cache/processor
512MB DDR400 SDRAM
Expandable to 8GB SDRAM
160GB Serial ATA
8x SuperDrive
Three PCI-X Slots
ATI Radeon 9600 XT
128MB DDR video memory
56K internal modem
Dell
Precision 670
$4,0092 x 3.4Ghz Xeon
512MB
160GB SATA, 7200 RPM Hard Drive
8X DVD+RW/+R
128MB PCIe x16 (DVI/VGA) ATI FireGL V3100,

At that time, the Mac workstation's relative advantage increased with the configuration and, of course, the initial configuration favored the Mac on connectivity, multi-media support, graphics, and processing power as well as price.

Things are different today. Here are the base configurations for the two competitors: First, from Apple's Mac pro page:

 

  • Two 2.66GHz Dual-Core Intel Xeon "Woodcrest" processors, 4MB shared L2 cache per processor, 1.33GHz dual independent frontside buses
  • 1GB memory (667MHz DDR2 fully-buffered DIMM ECC)
  • NVIDIA GeForce 7300 GT graphics with 256MB memory
  • 250GB Serial ATA 3Gb/s 7200-rpm hard drive
  • 16x double-layer SuperDrive (DVD+R DL/DVD±RW/CD-RW)

And from Dell's on-line store for large business (Dell 690n):

 

  • Dual Core Intel® Xeon® Processor 5050 3.00GHz, 2 X 2MB L2, 667
  • 1GB, DDR2 SDRAM FBD Memory, 533MHz, ECC (2 DIMMS)
  • 128MB PCIe x16 nVidia Quadro NVS 285, Dual VGA Capable
  • 80GB SATA 3.0Gb/s,7200 RPM Hard Drive with 8MB DataBurst Cache
  • 48X CD-ROM

For this Dell wants $2,250 including Red Hat Linux while Apple's base price is $2,499 and includes the MacOS X desktop release.

If you upgrade the Dell to two dual core 3.73Ghz Xeons, 4GB, two 500GB internal SATA drives, a Nividia 4500, the same Superdrive the Mac has, and a 24" LCD its cost jumps to a resounding $7,482.

Do the same for the Mac - upgrading to dual 3Ghz processors, 4GB, dual 500Gb internal SATA drives, a 24" LCD display, and the same graphics board the PC has- its price jumps to $7,648.

(Note too, that if you upgrade both to 16GB, Dell's cost will be only $10,532 versus $12,248 for the Mac - provided you accept their warning about shipping delays instead of more than doubling the system price by insisting you want it the extra memory right now.)

These are not the same CPUs and we don't know what the real performance difference between these two configurations will actually come to -although since both will run the same operating systems and code we can expect to eventually find out - but the directional change in the pricing differences is what's most interesting here.

Two years ago the Mac was unambiguously more powerful and cheaper right across the board; now it's more powerful only at the entry level and more expensive right across the board.

So where did Apple's price/performance advantage go? How do you lose competitive advantage on price and performance while everyone's component prices are going down at about the same rate and you're using the same manufacturing services everybody else is?

The answer in three letters? MacTel.

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