New iMac is $118 Cheaper Than A Dell

Let us begin with a small SAT type exercise.  No need to rush, the quiz has no time limit.

Dell 4600C is to a Toyota RAV4 as the Apple iMac is to a:

A) BMW X3
B) Porsche Cayenne
C) Honda CR-V
D) Hummer H1

Well what was your answer? If you answered” C) Honda CR-V” you’re correct, please send the results to the college of your choice for enhanced admission status. Why not the other cars? Truthfully you could probably make an argument for any of the vehicles but this is a contrived question so the reason the iMac and the CR-V are equivalent to the Dell and Toyota is due to the similarities in pricing.

That conclusion cries out for an explanation, one is forthcoming. Let us extricate ourselves from the Apple universe for a moment and talk cars, specifically small sized, low priced SUVs. The Toyota RAV4 and the Honda CR-V are pretty much the same car. I know this because I actually drive a 2002 RAV4 and have spent plenty of time in a Honda CR-V. There are differences but they are minor, generally the cars do pretty much the same stuff with equal aplomb. The only substantial difference is the starting price. When I bought my RAV a few years ago the starting price was around $16,000, pretty cheap for a new car. Naturally no one wanted the base model, you’d want to add the little amenities like nylon instead of piano wire seat belts, a steering wheel, and keys. Of course by leaving all these as options Toyota was able to get the base price down to a rock bottom wallet opening level (Toyota was kind enough to put all the usual options in a “quick order” package). Once you optioned everything that most humans require the price was about $19,000. In perhaps the least shocking twist of all time Honda had a starting price for the CR-V of roughly $19,000. Of course the Honda already came with all the stuff you needed to add to make the RAV4 drivable. Somewhere along the line Honda realized that most everybody was going to want things like gas pedals and windshields and included those items in the base model.  The RAV4 remained wildly customizable while the CR-V was offered in just a few trim levels and they cost about the same. A consumer going only on the base price would easily conclude that the CR-Vs were much more expensive than the RAV4s. With cars, perhaps because they are such a large expenditure, this rarely happens. With computers it is a completely different thought process. Everyone knows that a Dell is much cheaper than the equivalent iMac right?

The best way to sort the matter out is to take the newly unleashed iMac and compare it to the equivalent Dell. In this manner we’ll see what premium Mac users pay for the cool styling and space saving design.  (Styling is subjective and you may actually prefer the look of the Dell but at least we’ll just how much that styling is going to cost.)

iMac specs:
17-inch widescreen LCD
1.8GHz PowerPC G5
512K L2 cache
600MHz frontside bus
256MB DDR400 SDRAM
NVIDIA GeForce FX 5200 Ultra
64MB DDR video memory
80GB Serial ATA hard drive
Slot-load SuperDrive

Price $1,499.00

Dell Dimension 4600C
(Chosen because of the form factor)
Base Price $799

Intel� Pentium� 4 Processor (2.80GHz, 533 FSB)
Microsoft� Windows� XP Home Edition
256MB Dual Channel shared DDR SDRAM at 333MHz (2x128M)
40GB2 Ultra ATA/100 Hard Drive
17 in (16 in viewable,.27dp) E773c CRT Monitor
CD or DVD Drive

The Dell is a cool seven hundred dollars cheaper but it lacks in some areas, to get a meaningful comparison we’ll need to adjust a few things on the 4600C.

The most obvious difference is the monitors. The iMac has a very nice integrated 17” monitor so let’s add the 17” Dell 1704FTP Ultrasharp Digital Flat Panel display. It probably won’t be quite as nice as the iMacs screen but it is as close as we can get.
+$409

We also need to address the operating system. The Dell comes with Windows XP home but Dell recommends Windows XP pro. Apple recommends Panther. Let us heed the recommendations.
+ $79

Look at those hard drive specs, twice the drive on the iMac! The ever-malleable Dell allows us to even the score with a 80GB Ultra ATA 100 (Dell recommended):
+ $30

CD Drive. The Mac has a SuperDrive so the Dell gets an 8x CD/DVD burner
+ $129

Rather by design or obscurity it is a fact: Macs are fairly secure, while PCs are fairly insecure. Dell is pushing a Norton Internet Security 15 month subscription. Hey, its Dell recommended!
+ $49

The Dell comes with integrated video. This isn’t something you want. Let’s even up the video card spec by adding 64MB DDR NVIDIA GeForce4 MX� Graphics Card with TV-Out and DVI. It’s not the same card the iMac features but it is the only alternative offered by Dell.
+ $70

Besides decent styling the iMac also features something the Dell doesn’t have: speakers. The cheapest speakers offered are the Dell A215s.
+ $10

New total for the Dell? $1617
Mac total (no changes): $1499

The iMac is $118 cheaper than the Dell, not an insignificant amount, roughly equal to 15 movie tickets or one ticket if you also stop by the concession stand. What we learn from this exercise is that Macs aren’t as expensive as current wisdom would lead you to believe. The difference in prices between the two premium computer makers is more or less the same difference in Toyota and Honda pricing schemes: One looks substantially cheaper but it is a mirage.  Does that make the iMac a better value, objectively speaking, than the 4600C? The answer is yes if you want the all the integrated coolness and capabilities but what if you already have a flat panel display? What if, like most folks, you’ll never burn a DVD? What if you love viruses roaming like mad over your computers internals? Then the iMac doesn’t look like such a fantastic value; in fact it looks fairly expensive. Still if you’re just looking to switch, the new iMac is hard to beat.