The skyrocketing cost of aluminum? - Macenstein

The skyrocketing cost of aluminum?

Apple updated their entire line of Mac desktops today, and as often happens when Apple is foolish enough to attempt to release new products, people immediately began complaining about the price vs. perceived value of the new machines. Despite Apple bragging about lowering the entry point of the Mac Pro by $300, many have lamented that the sacrifice of features (4 cores down from 8, 8 GB RAM limit down from 32 GB) is not worth the $300 savings.

To put things in perspective, put together a chart showing the average entry level cost of Apple’s Pro Desktops over the last 10 years.

Umm… that’s ain’t inflation, folks.

Anyone else find it interesting that once Apple abandoned the proprietary components and chipsets in their PPC computers and switched to mass-produced off-the-shelf Intel components, the average starting price of the Pro machines seems to have increased 69%? The only thing I can think is that when Apple ditched the plastic chassis of the G4 towers in favor of aluminum (or “all-oo-min-ee-um”, as our cute little “petrol-saying” UK readers call it), they didn’t anticipate that today we’d be in the midst of a massive aluminum shortage which has caused the precious metal to eclipse gold in value. In fact, apparently the only thing more expensive than Aluminum right now is the RAM Apple uses.

We ARE experiencing an aluminum shortage, right? I haven’t noticed the price of Reynolds Wrap going up, but I can’t really think of any other explanation for this graph.

14 Responses to “The skyrocketing cost of aluminum?”
  1. OK, well then I’M stumped…

    – The Doc

  2. Jim says:

    The graph doesn’t mean much, really, without additional data, not the least of which would be:

    – quantity cost of the CPU at or shortly before the time of release
    – quantity cost of the RAM at or shortly before the time of release

    The Xeon Nehalem CPUs are more expensive to purchase from Intel than the previous generation was. Ditto for the DDR3 ECC RAM they’re using in the new model, although thankfully fully-buffered+ECC doesn’t seem to be a requirement any more.

    The cost of components on the market when the machine is released are meaningless because Apple had to source all the parts in quantity *months* before the release date. I haven’t been tracking RAM prices so I don’t know if that’s an issue here, specifically, although I do recall that it wasn’t very long ago that DDR3 RAM was extremely expensive because it wasn’t being manufactured in large quantities yet.

    Beyond the cost of components, you’re paying for the R&D investment to redesign, test, and certify everything in the box.

    There’s probably also a fudge factor in there where Apple figures they won’t sell as many of these over the next 12-18 months, compared to previous 12-18 months, so they raise the margin some percentage. Of course, to you and me, that seems self-defeating but that’s the way business works sometimes.

  3. Matt C says:

    The graph also uses nominal prices, not real prices. In other words, it doesn’t factor in inflation.

  4. Terrin says:

    The comparisons aren’t anywhere cost to being fair in terms of what people are paying to purchase. You may notice that many people are always clamoring for mini tower. This is because when Apple went to the G5 chip in it’s Towers it did away with the low end Tower that is used to sell for the longest time. I suspect Apple figured that low end Tower was taking away from iMac sales, so it did away with that offering.

    For instance, when I bought my G4 Tower Dual 450, there were three options: 1) a single processor 400 (listed above for $1, 599), 2) a dual processor 450, or 3) a dual processor 500. The single processor 400 that you have listed above cost only about $200 more then the most expensive iMac. Further, my Dual Processor 450 listed new for $2, 499, the same cost as the low end new Mac Pro.

    If I recall, the low end 400 Tower at the time couldn’t outperform the high end iMac Apple sold at the time. People mostly bought it for the expansion slots. Further, it was nowhere close in terms of performance to the 450 and 500 configurations.

    If people were to be fair, they’d agree the low end Mac Pros today are more akin to the mid level Towers that Apple used to sell before going to the G5 chips in the Towers. If you compare the specifications, that is obvious. Much to my chagrin, Apple simply doesn’t make a stripped down Tower anymore. That is the option I used to always shoot for because I wouldn’t need the performance of the higher end machines, but I appreciated the expansion slots. With the erosion of the Desktop market, Apple probably cannot afford to have that low end tower compete with the iMacs.

  5. Rowlings says:

    Inflation? The base 1995 Toyota Camry was $20,800.

    According to carsdirect, it’s now $19,145.

  6. jsk says:

    Inflation hasn’t been 70% over the last ten years.

  7. Mr Clicky says:

    The price tanks which = less production which (once existing stock dries up) = more demand = higher prices

    Good game huh…

  8. matt r says:

    yep mattc, I 2nd that.
    inflation accounts for more than half of that, at least for 35%

  9. Teegan says:

    This may explain some things:

  10. mmnw says:

    The graph should not only include inflation, it should also include dollar value. The dollar had an all time low during 2008 and gained value since then … looks pretty similar to the above graph. (Also the actual reasons may be way more complex).

  11. LlamaFragments says:

    I think that what used to be offered by the low end Mac Pro / Powermac is now offered by the iMac, so they just raise up the low end and let the iMac fill the space between the Mac Pro and Mac mini, whereas it used to have to fill a much wider space. The iMac is much more powerful compared to the Mac Pro than it used to be.

  12. Grover says:

    As others have mentioned, this chart doesn’t reflect the fact that the tower (which used to include every non-laptop they sold) is now a premium product and not their flagship workstation anymore. Even if you don’t throw in the price of a display, the iMac is actually $100 cheaper than the lowest dot on that chart.

    The tower of today isn’t the same product that it was in ’99 and it’s kind of absurd to compare the two.

  13. Daniel says:

    “In fact, apparently the only thing more expensive than Aluminum right now is the RAM Apple uses.”

    Haha, Zing!

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