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Small on size and margin

Small on size and margin

APPLE resellers hope the brand’s two new bargain-priced versions of its popular Mac and iPod lines will fly out the door - with little pushing from their end.

With retail prices starting at $949 and $178 respectively, the new Mac Mini and iPod Shuffle are the cheapest members of their families and are aimed squarely at the lower end of the market. The lower margins they come with, however, may be difficult for resellers accustomed to operating at the higher end of the price spectrum to deal with.

Murray Wood, managing director of Apple Centre chain MagnumMac, says while he expects the new products to “fly out the door”, the models will require different selling skills than traditional Apple gear.

“The margins on these products are lower, so hopefully there will be enough publicity around them so that we do not have to spend a lot of time demonstrating them. It will be a stretch working at the lower end of the market and will almost be like selling consumables,” he says, adding the Mac Mini further closes the price gap between PCs and Macs.

Talia Hochwimmer, sales manager of Auckland Apple Centre Ubertec, says the iPod Shuffle is undoubtedly a consumer product, and believes both products will bring new customers to the brand.

Devan Naidu of Logical Systems agrees, saying the new products will attract users who were unable to afford a Mac before. They are ideally suited to the Fijian market where his company set up an Apple store last year, he says. Apple resellers expect the new products will expand the market for Apple, especially among iPod owners who are not yet Mac users and are unlikely to shrink sales of higher-end Mac and iPod models.

Paul Johnston, managing director of distributor Renaissance whose Apple Division represents the brand in New Zealand, says the response to the new products from the channel has been phenomenal, with many already taking orders although stock is not due in the country before next month.

The two products are set to make Apple even more ubiquitous with digital entertainment as the company’s latest quarterly results show it already earns more from selling iPod than computers.

For the quarter up to December 25, 2004 Apple sold 4.58 million iPods globally, representing a 525% increase over the same quarter a year ago. In the same period just over one million Macintosh units were shipped, an increase of 26% over the previous year.

The ultra-compact Mac Mini measures just 165mm in width and length and 50.8mm in height, and weighs a mere 1.3kg. It is shipped without a monitor, keyboard or mouse, but does come with Apple’s Mac OS X and the new iLife ’05 suite for managing digital photos and music, editing movies and creating music.

Johnston says it will be an ideal choice where space is tight, such as in small businesses or the education sector, but sees the greatest market among Windows users who have been seduced by using the iPod and its accompanying iTunes software.

“We expect a significant uptake from Windows users as this lowers the entry barrier for them.”

Apple, meanwhile, also launched iWork ’05, a productivity suite that includes the new Pages word processor and the updated Keynote 2 presentation software, with a retail price of $142.

“This is a very simplistic, but powerful suite,” says Johnston.


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