Wednesday, September 08, 2004

Why the iMac G5 will succeed

In case you're living under a rock (or more likely, a Windows box) you might not yet know that at Apple Expo in Paris last month, Apple unveiled the new iMac G5. Like the iMacs before it, it is an all in one design, however this time the CPU is directly behind the LCD. If you imagine a 2-inch thick LCD display, that's the new iMac. Or go click the link for photos.

I have read some criticism of the new iMac, and I want to address the point that other computer companies (and, in fact, Apple itself - namely, the 20th Anniversary Macintosh) have done a similar designs before, but they haven't been terribly successful. There is one major reason I think the iMac G5 will be different.

Previous all-in-one-LCD designs have been compromised machines, generally with a far inferior price/performance ratio than a conventional tower/LCD combination, let alone a tower/CRT. But the iMac G5 is different.

The iMac G5 fits right in the Apple product line right where the iMac belongs, right between the Power Mac G5 and the eMac. Now, the iMac G5 is no Power Mac G5: The big tower features overall higher end specs, starting with the presence of two PowerPC G5 processors, rather than one. But it doesn't invert price/performance, that is, charge more for lesser performance. At $1899, top configuration, the 20-inch model with a 1.8 GHz Power PC G5, is $100 less than the lowest-priced Power Mac, the $1999 dual 1.8GHz model. Which doesn't include a display.

Compare this with Gateway. Their Profile 5 series places the CPU in the base, so it's really more like the iMac G4 rather than the iMac G5 in design. The low-end model, the Profile 5S-C, gives you a 2.6GHz Celeron processor for $1099.99. Compare this to Gateway's 310B, which gives you a a 2.8GHz Celeron in a mini-tower case for $499.99, including a 17" CRT. The specs are pretty similar, though the Profile does give you a DVD/CD-RW drive, but you can add that and also double your memory and hard drive size for $150 more.

Let's also look at Sony, which sells the Viao W700G, an all-in-one which places the CPU behind the LCD. $1999.99 gets you a 2.8GHz Pentium 4 processor and a 17.5" LCD. Sony's entry-level mini-tower, the Viao RS600C, when equipped with a 2.8GHz Pentium 4, runs $877.99. Add $399.99 for a 17" LCD.

I would have a hard time justifying either the Gateway or the Sony all-in-one models versus a comparable mini-tower. I suspect that most people have the same difficulty, and as a result these models don't end up selling well. The iMac G5, on the other hand, isn't undercut by a significantly cheaper model with similar specs but in a more ordinary case. Sure, you can grab the eMac for a mere $799, including 17" CRT, but that gets you a mere 1.25GHz PowerPC G4. But the iMac G5, starting at $1299, gets you so much more computer, most notably a G5 processor. There may not be as much as a difference now, but in a few years, there will be plenty of applications that will run only on a G5, just like now Mac OS X runs only on G3 and newer chips, ruling out the first generation (601) and second generation (603/604) PowerPC processors.

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