Apple Refreshes Desktop Lineup: Is the Mac Mini Irrelevant?

Apple (AAPL) on Tuesday outlined a refresh of its iMac, Mac Pro and Mac mini lineups and the headliners are the Intel Nehalem-based Mac Pro and the iMac 24-inch update. However, perusing the updates you have to wonder if the Mac mini is irrelevant.

First, the highlights, which are outlined by Adrian Kingsley-Hughes, Jason O’Grady, Techmeme and Apple’s statements on its Mac Pro and consumer desktops. The Mac Pro starts at $2,499, uses Intel’s Nehalem Xeon processors and features the latest graphic chips from Nvidia and ATI.

In the statement, Apple seems to be pushing price for value hard–a fact that isn’t surprising given the economy. Philip Schiller, Apple’s marketing chief, calls the Mac Pro a significant upgrade that starts at $300 cheaper than before.

It’s a similar story on Apple’s consumer lineup where Apple touts its 24-inch iMac starting at the same price as its 20-inch predecessor.

Piper Jaffray analyst Gene Munster also notes Apple’s nod to pricing, but adds that the product refresh/pricing is consistent with historical standards at the company. However, Munster also adds that Apple’s desktop refresh comes amid what’s likely to be weak Mac unit sales for February. Munster writes in a research note:

Next Datapoint On Apple: Expect Feb NPD To Be Relatively Weak On 3/16. Month of February NPD is scheduled to be released on 3/16. Through the first month of March quarter (January), the Mac unit NPD data was tracking down 6% y/y. We expect month of February Mac unit data will be down ~12% y/y, given Feb-09 is a tough comp vs. Feb-08, due to Macbook Air launch. Street is modeling for Mac units down ~4% y/y for the March quarter.

The afterthought in this equation is the Mac mini, which doesn’t line up with better performance and seems priced out of its niche. The specs for the Mac mini are certainly better than before, but Adrian Kingsley-Hughes notes:

The Mac mini update really is little more than the bare minimum Apple could have done.

Good point indeed. And then you consider the price. The Mac mini has two prices–$599 or $799 depending on the memory you get. Now let’s acknowledge that the Mac mini has a neat design. It’s also green. But the value proposition of a Mac mini is questionable. Why?

• Netbooks are much cheaper and have screens.
• Non-Apple laptops will cost about the same as the Mac mini.
• You still have to account for a monitor (Apple’s store suggests the $899 24-inch Apple LED Cinema Display.
• And it’s unclear what niche the Mac mini fills. It’s not quite a living room PC–think Apple TV and Sony Playstation–and it’s not an iMac.

In other words, I have no idea what would convince me to buy a Mac mini even if I loved Apple. There are too many options that offer better value–even on Apple’s own store. If I really wanted a Mac I’d buy something other than the Mac mini. Hell, I’d even get an Apple TV over a Mac mini.

Add it up and it’s quite possible that a Mac mini buyer could eye the $799 version and go either two ways: A person spend another $400 and get an iMac or walk away for more value somewhere else. Apple obviously bets on the former, but you have to wonder why the company needs the Mac mini in its lineup at all. It’s a tweener that just doesn’t make a lot of sense these days.

Comments

[User 368662:]

I completely disagree with your comments about the Mac Mini. In fact, I'll be buying a new one as soon as I have time to set it up.

It's for my wife, and it will replace her existing Mac Mini. She'll carry forward the keyboard and LCD monitor (far better than a netbook). The Mini uses virtually no real estate on her desk (vs. a traditional desktop). It's actually easier to place than an iMac. The monitor and keyboard were hand-me-downs to begin with, so there was never an up-front investment there.

As for buying a Windows PC, get real. The Dell laptop we have for professional purposes is pathetic compared to any Mac -- even her old Mini.

OK, so it doesn't fit the writer's needs. Well, I'd guess he's not the target market then. But just because I don't like Rocky Road at Baskin-Robbins doesn't mean B-R should drop the flavor.

(I understand that lots of institutions have found the Mac Mini to be an excellent choice for server farms because of low price, compact size and low heat.)

Mar 03 11:31 AM

[Murphy Mac:]

The Mini now has the power to replace a G5 I bought in 2004. The G5 runs sort of like a house server at this point, connected to a Drobo, processing video that comes in on an EyeTV.

The Mini could do this work, generate a lot less heat and consume less power in the small office room where the G5 is parked.

For lots of people who want to go with OS X but don't have a big budget the Mini is the place to start. It might not be for you, but you're not everyone.

Mar 03 11:46 AM

[Bastion:]

I also have to disagree. An Apple TV is NOT a Mac mini. Apple TV is like a large iPod you connect to a TV. While a Mac mini is like a living room *computer* - not just a media server.

The ideal living room configuration:
A Time Capsule, with
An Apple TV on top, with
A Mac mini on top of that,
and all controlled via Apple Remote and Bluetooth keyboard/mouse

That's why they are all in that same form-factor: they are designed to live together in your living room, all connected to your HDTV.

Mar 03 11:55 AM

[WHAB:]

The Mac mini may not make sense to you, but it may for many of us: in this time of economical crisis, some people (in particular switchers) may not want to buy an all-in-one computer while they already have a good display, keyboard and mouse. That's one of the reasons the mini has been successful so far. This new version gets better (in particular in terms of graphics and ports) and uses much less power. This makes the Mac mini an even better wireless home server, and the perfect solution when space is limited (eg, labs). My 4 year old G4 Mac mini connected to my TV will retire soon... though it is still in good shape despite working 24/24. No Netbook can replace my Mac mini...

Mar 03 11:55 AM

[JWCinNC:]

Our current use for the Mac Mini is to attach to our 56' TV in the media room. From there, we can stream video, watch movies, etc. just like an AppleTV - except we can also surf the internet, play internet games, do work, etc. So for us AppleTV just doesn't cut it - whereas the Mini does.

Our biggest complaint about the previous version was the video card, which had difficulty rendering game graphics on a 1080p screen (it had to be shrunk to 800x600 - which is a pain). It sounds like the new one will do better.

So here's a choice the author may not have thought of. We want a new computer for our kids. We want it in a public location. The kids, like us have many needs (and a lot more wants). We are thinking of another TV as well (we currently have only the ... gasp ... one). So I could buy the 24" iMac for $1200 and then buy the eyeTV tuner ($50 I think). OR I could go to Costco buy a 32" LCD flat panel TV for $500, and and a new Mac mini for $700. Since it's the same price - I do think the kids will enjoy the larger picture.

Mar 03 11:58 AM

[usblues:]

I've been waiting for apple to update the minis! I want to hook it up in my living room so i can use it with my tv. I don't think i will order it from the apple store though, they never seem to put anything on sale. I was there last week to get an external hard drive and they wanted almost twice as much as i what i found it for online. In fact i found some great deals on this site:

www.zingsale.com

It's a free service that tracks prices of products from online stores (like amazon) and sends you an email when the price drops.

Mar 03 03:31 PM

[miniuser:]

I would call being able to use the new 24" Cinema Display AND the 30" Cinema Display in extended desktop mode pretty useful (for some) and hardly makes the Mini irrelevant.

Mar 03 04:12 PM

[cherf:]

I was waiting for a refresh on the mini to drive the current aftermarket down. I use the 1.6 Ghz dual core minis to drive the TV sets in my house. Apple TV might be ok but I need something I can administer easily in a network, right now I have 3 minis and 4 Mac Book Pros, I don't need the headaches that would come with an embedded version of FrontRow. It's a *whole* lot easier to integrate a mini.

Sure, an Apple TV box is a cheap way to get iTunes on your flat screen. Personally I have better things to do with my time. For me, the mini is very well positioned as a media server/access point. It has a niche. It has a very large niche.

Mar 03 04:16 PM

[Duo:]

I have two HP 24 inch debranded lcd monitors that I will attach to the new mini. Bought them for $460 total. How can you go wrong?

Mar 03 06:37 PM

[Zoltan L. K...:]

Just one comment: Apple is again first on the 2009 list of the “World’s Most Admired Companies”.

Mar 04 08:43 AM

[tommylee:]

Quite simple why the author is wrong about the Mac mini. I know a lot of small and mid-sized companies that use mini's as network and web servers including on that everyone should know: (mozilla) firefox ....

Mar 04 09:48 AM

[mollytjm:]

the beauty of the mini for me is that it's a lot easier to bring to the Apple Store for upgrades than an iMac.. plus, when you want a 'new computer' and already have a great screen, the screen stays instead of going into the landfill.

Amazon just announced it will sell (starting today) ebooks for the iTouch and iPod, just as it does for it's Kindle.

Apple stock will move hold or move up, even in this crummy economy. They just know how to do things right.

Mar 04 10:00 AM