Is the Mac Mini Apple’s Best Value, or Irrelevant?

By Rob Enderle March 3, 2009

Nvidia has been aggressively moving behind the scenes to capture Apple, and today announced that its GeForce cards are the new standard for the firm. In conjunction with this, Apple quietly launched a brand new Mac line (kind of a dull announcement without Steve Jobs though). Apple is a bellwether company: PC OEMs watch them closely now, because they are gaining share, and still retain one the most profitable PC lines (short of the pure gaming companies) on the planet.

These announcements have two interesting aspects. The first, in a market focused on value, is that it creates a true value in the Mac Mini. The second is that it may affirm that graphics are the next big PC differentiator.

Mac Mini Goes Mainstream

Since its inception, the Mac Mini has always seemed just short of the perfect Apple desktop PC. It is tiny, it isn’t tied to a display (giving you flexibility), and is the most affordable desktop Apple offers. If someone wants to just try an Apple, it’s the best deal. It is also one of the best living room interfaces to iTunes audio and video, with a number of my peers using it as their living room media center. And, for a product you might leave on constantly, it is the most power efficient.

But performance with the product always seemed slightly below where an Apple user would want it, largely because it was crippled by slow graphics. This latest announcement, which had been rumored for some time, puts Nvidia graphics on the Mac Mini and turns it into a machine you could live on.

Apple‘s problem as of late has been that many of its products are simply priced too far outside the buying sweet spot. It can carry a premium, it just can’t carry a 100 percent premium. The Mac Mini was the product that still fell within the buying sweet spot, and now that it’s performance is acceptable to the majority of the market, it could offset the loss in sales Apple has been experiencing in its desktop lines broadly (along with everyone else) this year.

The company still needs a response to the netbook, another product rumored to be coming in a few months, but this move is a solid step for them, and a huge piece of news for Nvidia, too.

Is the Mac Mini Irrelevant?

Over at ZDNet, Larry Dignan is asking whether the Mac Mini is irrelevant. He argues that netbooks are cheaper and have screens, non-Apple laptops cost about the same, you still have to buy an Apple display for up to $900, and that it’s not an iMac or a Playstation 3. I’m guessing my friends over at ZDNet need to stop smoking crack.

Seriously, it’s irrelevant because it isn’t a Playstation 3 or a netbook? And who says you have to buy a $900 Apple display? You can use the one you already have or buy someone else’s 24-inch display for around $200 if you need a new one. Hell, if we are going down this path, the $600 dollar version costs the same as 600 McDonald’s cheeseburgers too, and you can’t (well, at least I can’t) eat it. Right now, Apple doesn’t have a netbook, and doesn’t have a notebook priced within $300 of the Mac Mini. The Mini isn’t irrelevant; it is probably the most relevant product Apple has in a market defined by value.

For Apple, the new Mac Mini’s price is right.

Nvidia Driving Graphics

As I mentioned above, Apple is a bellwether primarily because it is enjoying one of the strongest income statements in the industry. As a result, its moves are closely watched. One of the causes for the pre-collapse slowdown in the PC industry was thought to be Intel graphics. They existed on the vast majority of desktops, and flattened their performance to a degree that made it difficult for the OS vendors, specifically Apple and Microsoft, to push graphics hard and use the result to drive people to new PCs.

This move by Apple suggests that Snow Leopard will make a big graphics jump, and Apple will market that leap as a reason to buy Apple. People can be attracted by eye candy, and Vista showed us exactly how vital graphics are. Microsoft backed off graphics performance with Vista so that it would work on Intel graphics being sold at the time, not only lowering resulting sales substantially, but crippling PC gaming on Vista, and also resulting in nasty class action litigation.

If this action by Apple is followed by the other OEMs, regardless of whether they use Nvidia or ATI graphics, it could allow Microsoft to push graphics performance in a future release of Windows (unfortunately, after Windows 7), This would not only improve sales for desktops in general, but give us all more exciting computers to play and work with.

All eyes now turn to Snow Leopard, to see if Apple has a graphics surprise in store for the fall, and Microsoft could have a few surprises in store for Windows 7 as well. Better graphics make both possible, and Apple is once again setting the pace for this.

Wrapping Up

Apple is best when leading the market: it sucks as a follower. This move to Nvidia graphics should be well-received by the Apple faithful, and those thinking of trying Apple out. The Mac Mini is now the most affordable way to try out a Mac, and if you don’t like it, you can either return it, or use it as your home media center. But the big news is that graphics are becoming the driver for the desktop market, and the result could be some amazing new interfaces and PC gaming experiences for all of us. We need a reason to buy new desktops, and Apple, teamed with Nvidia, may be helping give us both this week.

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