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Michael Kanellos


John G. Spooner

Staff Writer, CNET

When it comes to Apple Computer’s new Mac Mini, beauty is in the eye of the person holding the wallet.

The Mac Mini, unfurled Tuesday during Apple CEO Steve Jobs’ keynote at Macworld Expo in San Francisco, costs about $100 more than similarly configured PCs from Gateway, Hewlett-Packard and others, according to analysts and price checks. The price delta increases as one factors in the typical standard equipment on PCs–neither mouse, monitor nor keyboard comes with Apple’s Spartan box.

Adding features such as Wi-Fi and Bluetooth widens the spread even more. As an experiment, IDC analysts added “the stuff you’d want,” and the final price came to $1,300, said IDC’s Roger Kay, who nonetheless applauded Apple for putting out something that lets the company play in the bargain market.

Price considerations aside, the Mac Mini is unlike other PCs on the market. At 6.5 inches wide by 6.5 inches deep by 2 inches high, the unit, which weighs just less than 3 pounds, is far smaller and more stylish than “small” PCs. Dell’s small desktop PC takes up about four times the volume. Small PC specialist Shuttle makes a unit that measures 7 inches by 8 inches by 11.4 inches and weighs 13 pounds.

“Intel and some of its industrial-design partners have done a lot of ‘concept PCs’, but mostly they’ve been trying to reverse-engineer Apple’s sense of style–and without much success so far,” said Peter Glaskowsky, a technology commentator and Newton user.

Sony and others now make handheld PCs complete with screens that beat the Mac Mini in size, but these cost $1,600 or more.

The question now is whether consumers will flock to the new box or watch their budget.

“A lot of whether (the Mini) is a good value or not depends on who it’s targeted at and who is really going to buy it,” said Steve Baker, an analyst with The NPD Group. “Is it a good value compared to the entry-level PC that you can find at Best Buy or Wal-Mart? The answer, I think, is clearly no.”

Then again, “it fits the phenomenon of people adding PCs to their home–a PC in the kids’ room or in the kitchen–and in those terms it stacks up pretty well, because when you’ve finished adding some of the basics to it, it still comes in at the sweet spot (in retail PC pricing)–the $700 to $1,100 range–and that’s a good place to be,” Baker added.

On Tuesday, Jobs told the Macworld crowd that “this is the most affordable Mac ever. People who are thinking of switching will have no more excuses.”

So far, initial reactions from the public are strongly positive, but a number of people say the price and lack of a keyboard could hamper sales.

“Steve Jobs is the Albert Einstein of the computer industry–business smarts; consumer tastes, tendencies, and trends; and marketing,” Russell Rothwell wrote in a post on CNET

Wrote CNET reader Stan Johnson: “Very cool design. I agree that it is not much of a bargain when you add all the needed gear. I think it is great for Mac lovers. However, one could purchase a more capable PC for the same amount of cash.”

Under the hood
For $499, the pint-sized computer comes with a 1.25GHz G4 processor, 256MB of RAM, a 40GB hard drive and a combination CD-burner, DVD-ROM drive. It uses ATI’s Radeon 9200 graphics chip, with its own 32MB of graphics memory, and also includes connections such as a FireWire port, two universal serial bus ports, an Ethernet port, a modem and digital and analog ports for connecting a monitor. Apple adds a one-year warranty.

It does not include a keyboard, mouse, display or stereo speakers. An upgraded version with an 80GB drive and a 1.42GHz processor sells for $599.

This puts the two Mac Minis’ price tags at about $100 to $150 more than those of similar PCs. Right now, an HP Compaq Presario with an Intel Celeron or AMD Sempron–configured to match the Mini’s 256MB of RAM, 40GB hard drive and combination CD-burner-DVD-ROM drive–sells for $399 or $389, after a $50 rebate, via the company’s HPshopping Web site.

Gateway, meanwhile, offers a $499 (after rebate) desktop with a competitive configuration to the $599 Mac Mini, but it also comes with a 17-inch monitor, a keyboard and mouse.

When upgrading the Mini, its price gap with the PC widens.

The $499, 1.25GHz Mini, when given 512MB of RAM, an 80GB hard drive and a DVD-burning SuperDrive, as well as a keyboard and mouse, comes to $782. The $599 Mini, when receiving the same RAM, SuperDrive and peripheral upgrades (it already comes with an 80GB drive), lists for $832.

In one example of a similarly outfitted Windows PC, an HP Compaq Presario SR1000Z with an AMD Sempron 3000+, 512MB of RAM, an 80GB drive and a DVD burner comes to $519, before a $50 rebate, according to Upgrading the Presario to an Athlon XP 3200+ processor adds $30, bringing the price to $549 before the discount, while adding an Nvidia GeForce FX 5100 graphics card bumps it up another $70 to $619, before the rebate. Similar Intel processor systems from HP and other brand names such as Dell and Gateway were within about $50 of the Presario, before rebates.

When upgraded, the Mac Mini also begins to brush up against budget wireless notebooks.

Apple will likely argue that many Mini buyers already have keyboards and extra monitors on hand. But for those customers looking for a complete package, PCs from companies such as HP also have the advantage of being available in bundles with monitors.

Both Baker and Kay believe that leaving out the input devices could work in the company’s favor, or at least not hurt it, because many buyers will be picking up the unit as a second, third or fourth PC. It also comes with Apple software, which often receives raves from people who use it. Apple software and machines have also been far less susceptible to viruses, noted Glaskowsky.

“A lot of PC users who are tired of giving tech support to friends and family members will simply have them go out and get an Apple Mini. At the same time, those who have never used OS X but are intrigued by it are finding that the barrier to entry–cost–has been lifted,” wrote Anand Shimpi, editor-in-chief of AnandTech, an online review and benchmarking site.

Apple advocates will also probably argue that the Power processor at the heart of the unit is better than the chips from Intel and AMD. This is a tough argument. First, few benchmarks allow for comparing Power chips to x86 chips, said Kevin Krewell, editor-in-chief of the Microprocessor Report. Second, bargain consumers won’t care.

“If I were to ballpark a comparison between the G4 1.25 and an x86 chip, I’d say that it would be slower than any of the midrange x86 CPUs used today (Athlon 64 3000+, Pentium 4 2.8GHz), but it would be competitive with the low-end Celerons,” Shimpi wrote. “It’s quite tough to draw a direct comparison between the G4 and the current generation x86 architectures. That being said, I’d say it would be competitive with anything found in similarly priced Dell systems.”

In the end, the success or failure of the product may not be judged by actual sales. The Mac Mini’s main appeal for Apple may turn out to be its use as bait to lure people into Apple stores. Sales reps will then try to upsell them to other models, speculated Kay.

“Overall, retail purchasers should respond to the Mac Mini, flaws and all,” Tom King, a technology analyst, wrote in an e-mail. “This should allow fine-tuning of this new product line. It could also open the door to nice ‘iPod Mini + Mac Mini’ marketing and sales opportunities, especially with the large discounters like Target, Kmart, Wal-Mart and others.”

At least one analyst said it may encourage switching.

“We believe the Mac Mini will increase the percentage of iPod-toting Windows users who purchase a Mac by almost threefold,” said Charles Wolf, an analyst at Needham and Co.