Why is the MP so expensive?

[ActionableMango]

This entire thread is stupid

These arguments have been going round and round for years. They are always exactly the same.

Most money arguments go to the PC crowd. In some limited comparisons you can show value in the Mac crowd. Arguments either way can be nitpicked to find some flaws. This doesn't invalidate the main point of the argument.

Included software and user experience are subjective and hard to assign a monetary value to.

We can go a hundred pages on this thread over the next few years and I fully expect the above to continue to hold true.

 

[Whaditis]

^^^ Excellent take on this never ending debate.

 

[afrowq]

Included software and user experience are subjective and hard to assign a monetary value to.

But you get the same software and user experience on a much much cheaper imac or laptop. So the question remains: why is the Mac Pro so expensive? I know they're more powerful than an imac or a laptop, but the ratio of performance to cost is way out of whack.

 

[AMDGAMER]

Anyone who tries to even start to say a quad core xeon with 3GB ram and a 7200rpm drive with a decent video card is worth $2500 to start is silly. Its not even about value. The mac pro can be configured MUCH more powerful and then it makes a LOT more sense...people who need 12 cores of Xeon power, 4 HDs, 16GB RAM, 2 graphics cards for multiple displays...etc..THEN it starts to make sense. The problem isn't that its not "worth it", its that they need to offer more bang for the buck at the base model end...then this wouldn't be such a debate.
For that price a 27" LED should be INCLUDED...then you'd have an expensive yet complete package.

 

[daceymathers]

Hello,

I don't want to start a Mac/PC/Hackintosh debate. Yet what those hackintosh prove is that Apple is charging a "Mac Pro tax" of around 1000$, +/- a few hundreds depending on configuration. Even if that tax was only 500$ +/- a few hundreds, the question remains: why?

Now don't answer that it's the general Apple tax. How can Apple sell the iMac, which offers very good power (some even rivalling the MP), very good graphics on everything but the base model, an incredible display, more RAM than the base MP model, for a very very good price? Add to that the fact that iMac are rumored to be upgraded in the next few days/weeks with Sandy Bridge.

So again, why does Apple charge that MP tax?

Loa

Mac Pro is very expensive because $2,500 Mac Pro includes a $350 CPU, $165 graphics card (unchanged from its PC counterpart), $75 of RAM, and a $70 hard drive. The four most important components of the machine — processor, graphics card, memory, and storage — total up to $660.

 

[philipma1957]

But you get the same software and user experience on a much much cheaper imac or laptop. So the question remains: why is the Mac Pro so expensive? I know they're more powerful than an imac or a laptop, but the ratio of performance to cost is way out of whack.

imac and laptops go obsolete much much faster then a mac pro. you pay for the upgrade path that mac pro's offer.

take a base 2010 quad 2.8 with no upgrades. you can drop in a better graphics card twice. the oem 5770 to a 5870 to a 6970 even a 7070 yet to be made.

the iMac is what you got you keep. a macbook pro is what you got you keep.


for cpus a 2010 quad 2.8 becomes a hex 3.2 in less then 1 hour for a net of 400. the upgrade can go back to stock. both the imac and the macbook pros can be upgraded in more like 2 hours and you have to crack a warranty seal.

ram 4 sticks in the pro can use 3 16gb sticks for 48gb ram.

iMac 8gb sticks cost a lot no known user of 32gb ram. macbook 16gb ram max a pair of high cost 8gb sticks.


if you are running a business and need the above you pay for it.

now I am using a mac pro to iMac or macbook pro comparison. I will give another example when the t-bolt/sandybridge came out for iMac and macbook pro last years models are not even close to the same speed.

when the new mac pros come out my upgraded 2010 will be faster then at least the base if not the second level mac pro

 

[Tsuchiya]

Lets not forget that the Mac Pro has a very different target audience and a very specific USP which separates it out from the rest of the Mac range.

1) It's a workstation, people who buy Mac Pros are probably working professionals who are willing to shell out the extra cash for an essential "tool" which helps them make a living.

2) It's flexible. It's the only Mac you can tinker around with and change the internals. We are seeing a definite shift in Apples manufacturing process where components are being fused together to save space (RAM in MBAs for example). This only makes the Mac Pro more appealing to the future-concious Mac user.

The blunt truth is that Apple can charge these prices for the Mac Pro because it has scarcity power. I don't really hear of Mac Pro users complaining though...

 

[Tucom]

Mac Pro is very expensive because $2,500 Mac Pro includes a $350 CPU, $165 graphics card (unchanged from its PC counterpart), $75 of RAM, and a $70 hard drive. The four most important components of the machine — processor, graphics card, memory, and storage — total up to $660.

That's a little short sided don't ya think?


Here's where some of the rest of the cost goes:

The case alone puts some $300 Lian-Li cases in last place when it comes to A.) Quality B.) Airflow and C.) Ease of expansion (not dissing Lian-Li, they make some exquisite cases, but the Mac Pro case is a thing of engineering beauty)

The Power Supply is a 1000 Watt server grade beast that to get a comparable one of quality would probably be this Corsair one: http://www.corsair.com/power-supplies/modular-psus/professional-series-gold-2/ax1200.html

That's like another $600-900 that you'd have to pay to build a comparable DIY rig.

Then there's the fact Apple's sourcing server/workstation grade components and motherboards straight from Intel, which are probably higher quality than any DIY motherboard, or at least as high quality as the priciest out there.

How expandable the machine is.


And finally, you're getting Mac OS X for $30. It's like paying taxes with the Mac Pro that gives Apple reason to sell one of the best OS's in the world at a cheaper price lol, but I can dig that logic.


So yeah, let's put another $1000-1200 on top of your $660 and that's about $1860 that one would prob. have to spend to get a comparable quality PC Rig, but even then, Apple's fit and finish, the quality of the fans (Dell actually uses Delta fans too, Dell can make some great quality PC rigs IMO) alone are excellent.

Oh, and, the fact it comes fully assembled from the line.

So really, I think the Mac Pro represents a good deal overall.

And add to the fact Apple products can be premium priced, but I think it's evident that the quality matches the price.

 

[nanofrog]

Then there's the fact Apple's sourcing server/workstation grade components and motherboards straight from Intel, which are probably higher quality than any DIY motherboard, or at least as high quality as the priciest out there.

Unfortunately, this isn't actually the case any longer.

2006 - 2008, Intel did make the boards for the MP (ODM versions, not off-the-shelf models they offer). But in 2009, Apple shifted to Hon Hai Precision (aka Foxconn) to do the board work and final assembly (cheaper bid by Foxconn = more margin for Apple).

Unfortunately, Foxconn isn't known for quality design work either, so there's a "cost" for those cheaper prices. So I wouldn't recommend the presumption their boards are at the same quality level as past Intel made MP boards. Or even other board makers such as SuperMicro, which has quite a strong presence in the enterprise market.

Now this doesn't mean they're total crap, just not as likely to hold up under the heaviest abuse, particularly over time (which they'd likely never see, as they're not in rackmount enclosures; we'd need long term data on the now defunct XServes made by Foxconn to gauge that).

 

[Tucom]

Foconn is known for excellent quality in some cases I think, as the 360's Mobo (RRoD's were caused by a miscalculation in how strong the X-CLamps needed to be for proper cooling, but I think the Mobos when cooled right lasted forever), all Mac Mini mobos, and some Newegg reviews would indicate Foxconn can make some excellent products.


I think it's probably the case where Foxconn is really bumping up the quality for Apple products, as Apple has standards that need to be met, and I seriously doubt Apple would put any even remotely sub-par quality Mobo in their enterprise product, or really in any of their products.

 

[nanofrog]

Foxconn is known for excellent quality in some cases I think, as the 360's Mobo (RRoD's were caused by a miscalculation in how strong the X-CLamps needed to be for proper cooling, but I think the Mobos when cooled right lasted forever), all Mac Mini mobos, and some Newegg reviews would indicate Foxconn can make some excellent products.

Generally speaking, they have a horrible reputation in the industry for both design and manufacturing QC (take a look here). I've seen a lot of it myself at HP, as Foxconn does a lot of ODM work under this badge as well. They've caused issues for other brands as well, including Sony's Vaio laptops and Apple's laptops, both are high-end products (not where you cut corners).

Take a look here (specifically refers to Apple and Sony's dealings with Foxconn). Quanta is another big player (who Apple and Sony are cutting deals with in lieu of Foxconn), and they do focus on notebooks and have entered the device market as well IIRC (i.e. smart phones). Now I'm not saying they'll abandon Foxconn entirely, but there are reasons to reconsider extended partnerships where the products are costing the retail vendor money in terms of product returns past what was designed into the MSRP.

For example, a big peeve of mine is component selection based on costing alone (lowest cost for the specified value). They never tested tested potential components for the BOM in the design at working temps. Cold solder joints (especially with the lead-free solder), is another major issue.

In the case of the Xbox 360, there were multiple problems. First, Microsoft decided to do their own ASIC internally to cut out an ASIC maker, and their design ran hot. They eventually went back to a traditional ASIC vendor to reduce thermal output. There were also cold solder joints.

In terms of the cooler, I recall there were issues with Nyko coolers (didn't pull out enough heat, and would burn out the DC side of the PSU - scorching, as it drew too much power).

Now as per Foxconn's boards available on newegg, you'll notice that none of them are what most would consider high-end. They do seem to do better with AMD based boards than their Intel based products, but none of it seems to be all that consistent (2 - 4 eggs).

I think it's probably the case where Foxconn is really bumping up the quality for Apple products, as Apple has standards that need to be met, and I seriously doubt Apple would put any even remotely sub-par quality Mobo in their enterprise product, or really in any of their products.

Take a look at the links.

Foxconn did put money into tooling and processing to create the enclosures. But the circuits/PCB's aren't what such a product demands (remember, we're talking about high-end, not entry level, where their products tend to do better in terms of cost/performance ratios). But they could even improve matters here for under a nickel per unit (drastic improvements mind you, just by better component selection or adding them where they're actually needed).

Unfortunately, corporations aren't looking at things long term (only looking at quarterly profits, not things like damaged reputations or the cost of higher than expected returns). But they are slowly learning. Lets just hope it's not too late by the time they figure it out completely (need to go back and re-examine Deming in order to figure out what they've forgotten/ignored in the pursuit of maximum profits).

I apologize for the length, but this is something that's very personal to me (a lot of great engineers have lost their jobs over this - outsourcing for inferior products). I'd like to see OEM return at a bare minimum, though the best quality comes when both the design and manufacturing are both in-house (engineers can go to the factory floor and figure out what's going on in order to solve problems before the "bad" units ever get shipped, or at least keep it to a minimum).

 

[Tucom]

No dude all the info is welcome as it's better to know the knowledge that's relevant to this situation than not ofcourse! Thanks for the write up, way sick, but like I said the Mac Minis I have are all Foxconn-based MoBos (opened them up to clean them out and upgrade the RAM) and have never had even the slightest of hiccup and my main C2D one has been used at my brothers house for years as a 24/7 server if I'm not mistaken, so I think it's evident that Foxconn can make quality components, but given their issues in the past and like you posted Apple (and Sony too?) are talking to other manufactures, you think Apple may drop Foxconn altogether?

In the end ultimately I think what matters though is that the product that Apple ships is a reliable as any other, regardless of who made what parts, or what I mean is that they're as high quality and reliable as can be or up to very high standards.

 

[nanofrog]

No dude all the info is welcome as it's better to know the knowledge that's relevant to this situation than not of course! Thanks for the write up, way sick, but like I said the Mac Minis I have are all Foxconn-based MoBos (opened them up to clean them out and upgrade the RAM) and have never had even the slightest of hiccup and my main C2D one has been used at my brothers house for years as a 24/7 server if I'm not mistaken, so I think it's evident that Foxconn can make quality components, but given their issues in the past and like you posted Apple (and Sony too?) are talking to other manufactures, you think Apple may drop Foxconn altogether?

In the end ultimately I think what matters though is that the product that Apple ships is a reliable as any other, regardless of who made what parts, or what I mean is that they're as high quality and reliable as can be or up to very high standards.

I'm not saying it's impossible for Foxconn to turn out a good board, but it's inconsistent (older Intel is decent, such as LGA775 socket based boards, as is their AMD based products). Here's an example of a complaint on an HP Pavilion to give you an idea of what I'm talking about.

Now keep in mind, Foxconn labeled products aren't marketed as top-tier lines, but rather on the budget side. But they'll take similar shortcuts on top tier products made for other manufacturers in order to increase their margins and undercut other bidders to gain the business (case in point, laptops/notebooks mentioned in one of the links), and this is where the complaints have validity. If you pay for a premium product, you don't want it to break at ~ the same rate as a budget product. But the additional funds spent don't seem to be getting users additional reliability as should be the case (consistently throughout their ODM products).

As per Apple (or Sony) for that matter completely dropping Foxconn, it will depend on various factors, such as if they can get quantity requirements met by another vendor, and if they're willing to pay what those companies bid per unit (better parts and design = higher per unit cost).

In terms of overall product quality, it seems that there has been a decrease in quality in Apple labeled products manufactured by Foxconn (see the link that mentioned Apple and Sony laptops).

Part of it is also Apple's fault in terms of what they develop (poorly written firmware and software = increasing bug count/persistence; see the 2009 Audio Bug for example, but it's not the only one).

To me, it all comes back to the corners being cut in the pursuit of ever higher margins (shift from Deming's observations and how it had a positive impact on product development and QC). In simpler terms, never under-estimate the power of greed.

 

[TheFridge]

That's a little short sided don't ya think?


Here's where some of the rest of the cost goes:

The case alone puts some $300 Lian-Li cases in last place when it comes to A.) Quality B.) Airflow and C.) Ease of expansion (not dissing Lian-Li, they make some exquisite cases, but the Mac Pro case is a thing of engineering beauty)

The Power Supply is a 1000 Watt server grade beast that to get a comparable one of quality would probably be this Corsair one: http://www.corsair.com/power-supplies/modular-psus/professional-series-gold-2/ax1200.html

That's like another $600-900 that you'd have to pay to build a comparable DIY rig.

Then there's the fact Apple's sourcing server/workstation grade components and motherboards straight from Intel, which are probably higher quality than any DIY motherboard, or at least as high quality as the priciest out there.

How expandable the machine is.


And finally, you're getting Mac OS X for $30. It's like paying taxes with the Mac Pro that gives Apple reason to sell one of the best OS's in the world at a cheaper price lol, but I can dig that logic.


So yeah, let's put another $1000-1200 on top of your $660 and that's about $1860 that one would prob. have to spend to get a comparable quality PC Rig, but even then, Apple's fit and finish, the quality of the fans (Dell actually uses Delta fans too, Dell can make some great quality PC rigs IMO) alone are excellent.

Oh, and, the fact it comes fully assembled from the line.

So really, I think the Mac Pro represents a good deal overall.

And add to the fact Apple products can be premium priced, but I think it's evident that the quality matches the price.

Lets not forget a kick ass screen.

 

[Avro]

Now keep in mind, Foxconn labeled products aren't marketed as top-tier lines, but rather on the budget side.

You seem to miss the point that companies can produce models of varying quality and price. No one expects the $20,000 Mercedes A Class to be in the same price/quality class as the Mercedes McLaren SLR at $500,000.

Engadget had a recent discussion on the difference in quality and price of computers coming out of Foxconn and noted that workers producing Macs are better paid and more experienced than those on budget computer lines.

 

[mark28]

That's a little short sided don't ya think?


Here's where some of the rest of the cost goes:

The case alone puts some $300 Lian-Li cases in last place when it comes to A.) Quality B.) Airflow and C.) Ease of expansion (not dissing Lian-Li, they make some exquisite cases, but the Mac Pro case is a thing of engineering beauty)

The Power Supply is a 1000 Watt server grade beast that to get a comparable one of quality would probably be this Corsair one: http://www.corsair.com/power-supplies/modular-psus/professional-series-gold-2/ax1200.html

That's like another $600-900 that you'd have to pay to build a comparable DIY rig.

Then there's the fact Apple's sourcing server/workstation grade components and motherboards straight from Intel, which are probably higher quality than any DIY motherboard, or at least as high quality as the priciest out there.

How expandable the machine is.


And finally, you're getting Mac OS X for $30. It's like paying taxes with the Mac Pro that gives Apple reason to sell one of the best OS's in the world at a cheaper price lol, but I can dig that logic.


So yeah, let's put another $1000-1200 on top of your $660 and that's about $1860 that one would prob. have to spend to get a comparable quality PC Rig, but even then, Apple's fit and finish, the quality of the fans (Dell actually uses Delta fans too, Dell can make some great quality PC rigs IMO) alone are excellent.

Oh, and, the fact it comes fully assembled from the line.

So really, I think the Mac Pro represents a good deal overall.

And add to the fact Apple products can be premium priced, but I think it's evident that the quality matches the price.

If the case, mobo and power supply are so much better than PC's, how about you try to clock a i7 Quad Core CPU to let's say 4.5 ghz on air with the Mac Pro which has to be stable?

This will really test how good the mobo, power supply and airflow is.

 

[nanofrog]

You seem to miss the point that companies can produce models of varying quality and price. No one expects the $20,000 Mercedes A Class to be in the same price/quality class as the Mercedes McLaren SLR at $500,000.

Engadget had a recent discussion on the difference in quality and price of computers coming out of Foxconn and noted that workers producing Macs are better paid and more experienced than those on budget computer lines.

Which article are you talking about, as I don't see it (search results for "foxconn" on Engadget)?

Now I realize the point you're trying to make, but the electronics industry has some significant differences. Mainly, that the products tend to be created under the ODM methodology rather than entirely in-house or OEM (which both have far more control over the product quality).

To use the auto industry as you seem keen on it, imagine Mercedes contracting Hyundai to design and manufacture the McLaren SLR... Do you seriously think the product quality would be the same?

It's not an issue of Asia vs. other parts of the world, but how Business Culture has shifted in most industries, especially for consumer products (toss QC out the window in the pursuit of ever higher margins). Deming came up with the ideas of QA/QC procedures throughout the entire process = design to finished good (it still allows for different lines or tiers of products; think feature sets).

Companies like Mercedes still follows Deming's methodology, and is evident in their products. Other auto manufacturers had to learn the hard way (i.e. Ford), and some still are (actually having to re-learn, as they've fallen prey to the pursuit of margins in the form of cheap, uneducated/under-trained labor). VW's Mexico facility certainly comes to mind...

Industrial products are a more immune, as they're used in environments that demand reliability, consistent performance (repeatable, with little variance), ...

In the specific case of Foxconn, they're not really all that experienced with top tier products (don't offer them under their own brand), nor do they follow Deming. So they take the same approach with everything they design; short-cuts in order to increase margins.

Now please understand, that manufacturing alone may not follow this (ODM is where these issues are more prevalent), as some of the products may be OEM (vendor did the design work and created the BOM <Bill Of Materials = electronic components to be used in the form of manufacturer and specific P/N, and where it's to be soldered>), such as the iPhone and iPad in the case of Apple's products.

For the iDevice products, Apple even bought PA Semi in order to get custom chips (add whatever they need to an ARM design which PA Semi is licensed to do on a single chip, aka SoC), and have TSMC manufacture them solely for Apple products. But it makes sense for these particular products, as they have the sales volume to justify it.

 

[DisMyMac]

For that price a 27" LED should be INCLUDED...then you'd have an expensive yet complete package.

I can take what you say figuratively and agree. The fact is, there is no iMac sold without a screen (the Mini isn't it). I'm not sure why, other than to price iMacs with the extra assumed value of the display, and to prompt a few desperate people to buy Pros.

It seems like Apple's strategy is to never offer THE perfect machine priced less than the next class higher. This causes value across their entire selection to shift up in their favor, with no benefit to buyers.

 

[clyde2801]

I can take what you say figuratively and agree. The fact is, there is no iMac sold without a screen (the Mini isn't it). I'm not sure why, other than to price iMacs with the extra assumed value of the display, and to prompt a few desperate people to buy Pros.

It seems like Apple's strategy is to never offer THE perfect machine priced less than the next class higher. This causes value across their entire selection to shift up in their favor, with no benefit to buyers.

Agreed. They are downright evil geniuses what comes to marketing upgrades. "But wait, for $2-300 more you also get ..."

 

[slughead]

All that matter is GROSS MARGINS on the financial reports. Apple's gross margins far exceed dell or hp's gross margins. HENCE, apple is making more profit for any piece of equipment they sell. The prices could be lower, but they are going to charge higher because they can charge higher, and people will still buy them. I wonder how many people here really can read a financial statement from a corporation. The answers are there, not in component costs. It is basic business to any MBA.

I took 2 semesters of accounting. This was covered in the first 2 weeks of the first semester.

I swear people should be forced to take accounting in college, especially more than a foreign language they'll never use. People always pontificate about companies and are forced to invest in stocks because of the tax/monetary system, but they have no idea how to actually read an income statement. I took ACC101-102 like 8 years ago and I can still google WalMart/Apple/anyone's annual report and cut right through the BS and see what's up in like 3 minutes (and I am not that smart).

As for why MPs are expensive, see other posts on various "taxes" you pay. Really it's not a tax at all, just attributes that add value in the eyes of the consumer, which don't have to be anything real. This is why Steve Jobs often refers to some of his products being MAGICAL. Honestly, he's kind of right: it is magical why people prefer one brand to another regardless of actual quality and price (a cynic would say ignorant, but let's be positive today!).

People talk about the longevity of their Mac Pros, for instance, neglecting the fact that a homebuilt PC of similar quality (and 30-40% cheaper) would last just as long (longer on average, when you realize the warantees on individual components of homebuilts outlast even AppleCare). It's confirmation bias influenced by the laser-etched Apple on the side of the purdy case.

 

[theSeb]

As per the posters above, the basic rule of free economics is that the value of something is set by what the market is willing to pay for it. There is no reason for Apple to reduce the price as long as the market keeps paying what they're asking.

 

[zephonic]

As per the posters above, the basic rule of free economics is that the value of something is set by what the market is willing to pay for it. There is no reason for Apple to reduce the price as long as the market keeps paying what they're asking.

Well, in this case there is a monopoly as well. Thing is, if we all refused to pay the exorbitant premium Apple would discontinue the MacPro because "nobody is buying them".

 

[Avro]

Well, in this case there is a monopoly as well. Thing is, if we all refused to pay the exorbitant premium Apple would discontinue the MacPro because "nobody is buying them".

How does Apple have a monopoly?

Exorbitant Premium? Better VFM than the junk that comes out of the OEMs.

Yes, if nobody bought them Apple would discontinue the Mac Pro. They are not like Microsoft with Windows Phone 7.

 

[englishman]

Total Cost of Ownership

By the time you add in all the bits of the computer experience: printer, internet, backup, apps the small proportion that the core hardware takes up is not worth worrying about.

As someone who uses my computer all the time for business/home I just get the best that will do the job. For me thats a base MP. I have experimented with others but like my dual screen setup.

As I often buy a used machine and upgrade regularly the price of the machine over a year in depreciation is very small - a few hundred if that.

The support community is also a big factor with the likes of hellhammer, nanofrog, transporteur etc and the Apple forums support being mostly superior and easier.

Yes I do like the logo/fashion/zen of Apple.

 

[wisty]

MBA is cheap, compared to the competition. MBP is expensive.

This isn't because "Apple sucks, PC is cheap". It's because MBP users are able to pay top dollar.

The average consumer is very price sensitive. They won't buy a low-end Mac if it looks like an absolute rip-off. But pros are already invested in the platform, and don't care about the extra $1000. After all, they will pay thousands for software and peripherals, especially if they have to change their OS.