The first question someone asks when they see Apple’s new MacBook Air is “how much is it?”. Upon being told it’s $1799 ($1699 education), their first reaction, however, is near disgust. For an average consumer or even techie people like you and I, the price does indeed seem high. However this is not the case – the MacBook Air is not expensive by any means for what you’re actually paying for. The average consumer is not educated in basic business practices or knowledge, and thus they don’t understand why a product like this has such a high price tag. What would bring the price of the machine so high, from a business prospective?
Research & Development (R&D) – R&D would have been the biggest cost incorporated into the MacBook Air. For the thinnest laptop in the world, Apple definitely had to drop some money on research to create it. The design on this product probably spanned years, and thousands of hours of professional engineering pay time.
Production – Being the thinnest laptop in the world, the MacBook Air is probably very expensive just to produce. Those parts are really small, you know?
Custom Intel processor – Intel actually went out of their way for Apple and the MacBook Air – a smaller custom Core2Duo processor was designed specifically for the MacBook Air. I’m sure Intel charged a pretty penny for that.
Introduction to the Market – It’s common business knowledge that you introduce a new product into the market at a high price, to offset initial manufacturing, R&D, and marketing costs. The initial cost for the setup of up a plant to start producing the MacBook Air is high. Also, a products marketing budget is biggest upon its introduction to the market. Apple is spending lots of money on marketing the MacBook Air right now, and that is also incorporated into the price. Apple showed their practice of the market introduction teqnuqie with the iPhone. The introductory $600 price of the iPhone was lowered to $400 a month after it’s initial release.
High grade aluminum – The MacBook Air isn’t made of plastic like other laptop computers. It’s made of industrial strength high grade aluminum. That’s expensive.
1.8” Hard Drive – The 1.8” hard drive is the same one used in the iPod Classics – they are expensive little drives when compared to the standard 2.5” laptop drives. The optional 64GB SSD is obscenely expensive, but I applaud Apple for offering it because SSD is itself being introduced to the market – and thus is extremely expensive at the moment. There are, actually, people who will buy the MacBook Air with the SSD Hard Drive, and the more that do, the better it is for SSD Drive prices in the industry. Remember the first iPod mini, which was 4 GB of SSD and cost $250? Since selling so many iPod’s with SSD memory, the prices for them have dropped immensely.
802.11n wireless – 802.11n wireless is a hot new technology, and is expensive. Not to mention its 802.11n technology that can actually fit into the MacBook Air.
So there are seven causes of the MacBook Air’s high price. When you get down to it, you really are paying the premium price for sheer portability. Maybe if you sit down and think for a while of the cost implications of running a corporation and introducing a new product, you’ll be able to better understand why the MacBook Air actually isn’t so expensive.
This entry was posted by admin on January 15, 2008 at 8:40 PM, and is filed under Uncategorized. Follow any responses to this post through RSS 2.0.You can leave a response or trackback from your own site.