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Macs more expensive? Not if you consider TCO

Written by: Dennis Sellers

Article Overview: Recently, two analysts said that the common perception of Macs as pricey items is indeed true. Richard Shim, an analyst at market research firm IDC, and Ian Lao, an analyst at In-Stat, said that, without significant price cuts, Macs continue to cost between 25 and 40 percent more than PC hardware of equivalent specs, say both Shim and Lao.The Sellers Research Firm disagrees.

Macs more expensive? Not if you consider TCO

Recently, two analysts said that the common perception of Macs as pricey items is indeed true. Richard Shim, an analyst at market research firm IDC, and Ian Lao, an analyst at In-Stat, said that, without significant price cuts, Macs continue to cost between 25 and 40 percent more than PC hardware of equivalent specs, say both Shim and Lao.

The Sellers Research Firm (that’s me) disagrees. In my talks with the folks at the The Enterprise Desktop Alliance (EDA)—an organization designed to help IT departments integrate Macs into the corporate environment—show that their studies show that, while the initial cost of buying a Mac may be more than Windows systems, the long-term cost is a different story.

When it comes to Macs, the initial cost of purchase is higher, but the TCO (total cost of ownership) is less. TCO s a financial estimate designed to help consumers and enterprise managers assess direct and indirect costs. It’s a form of full cost accounting. When you figure in ease of use, less malware/viruses/spyware/etc. than on Windows, lower IT costs, ease of use, bundled software and more, Macs are, in the long run, a better buy.

In fact, a 2007 report noted that, when it comes to Macs verses PCs, the old adage that Macs are more expensive than PCs just isn’t true—unless you’re looking at sub-US$600 systems.

“I have found in my research is that neither side has a lock on good value. If you start with Apple’s relatively short list of SKUs (three or four model variations for each of its lines, such as MacBook Pro, MacBook and iMac) and then look for comparable Windows machines, you’ll find that Apple bests the competition in some ways and not in others, but the pricing overall is surprisingly on par,” Scot Finnie wrote for Computerworld regarding the report. “Only a few years ago, it seemed like a no-brainer that Windows hardware was much cheaper. But if you’re talking name-brand hardware, that’s just no longer the case.”

And Macs have come down in price since that article was written. Another interesting piece, though it’s a few years old, is a 2006 report by Daniel Day Eran of Roughly Drafted in which he concluded that Windows is five times more expensive than the Mac OS. And that was before the Vista fiasco.

The question is, when purchasing technology, do you want to pay now or pay later? Of course, some of us would say that, straight financial considerations aside, when it comes to Windows, you’ll pay both now and later.

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Article Tags: brainer, brand hardware, computerworld, corporate environment, cost accounting, cost of ownership, different story, direct and indirect costs, eda, enterprise managers, lao, macs, market research firm, model variations, old adage, pc hardware, scot finnie, skus, windows machines, windows systems



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