MacBook Pro sticker shock

He had his eye on a top-of-the-line Apple notebook. Then he ran the numbers.

From reader Richard Wanderman…

Here’s a 15” MacBook Pro, maxed out:

  • 2.9GHz quad-core Intel Core i7 processor, Turbo Boost up to 3.8GHz
  • 16GB 2133MHz memory
  • 2TB PCIe-based SSD
  • Radeon Pro 460 with 4GB memory
  • Backlit Keyboard (English) & User’s Guide
  • Four Thunderbolt 3 ports
  • Touch Bar and Touch ID
  • Force Touch trackpad
  • Accessory Kit

Total: $4,299

  • Plus AppleCare: $349
  • Plus a few cables: $45
  • Plus tax: $300

Total: About $4,900.

“Shocking number,” says Wanderman, who scaled back his appetite for solid state drive to 1 terabyte and came up with a more affordable, $3,199 package.

Entry level prices have also gone up, now that the  11″ MacBook Air ($899) has fallen off the display table. Here are the old and new starting prices, via JP Morgan’s Rod Hall:

screen-shot-2016-10-28-at-10-48-32-am

Click to enlarge. Not seeing the graphic? Try the website.

How inelastic is MacBook pricing? Apple may soon to find out.

22 Comments

  1. George Knott said:

    Although I am a long term Aapl shareholder and fan boy, if you will, I have been waiting to get a new Macbook Air and was hoping for a new one under $1000…I am hesitating spending over $1K for a computer I use strictly for personal use.

    In fact, on another note, I am really getting nervous about the current mgmt team at Apple. I not only think they are out of touch with innovation, but to me it appears they are resting on their laurels, all the while cashing in millions of dollars of stock options each quarter.

    So after this weeks disappointing earnings and Macbook revels on Thursday, I am not only reconsidering buying another Mac, but also continuing to hold my apple shares that are still trying to recover from their high 18 months ago….

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    October 29, 2016
    • Robert Paul Leitao said:

      George:

      What do you believe was disappointing about Apple’s September quarter results? As to innovation, in what ways do you think Apple is lacking? Are there other device makers in your view that are delivering more innovative products? If so, which device makers do you believe are delivering more innovation than Apple?

      2
      October 29, 2016
      • George Knott said:

        Well let’s see –
        Apple TV, the latest edition is very difficult to use without downloading individual apps. I liked the previous version better.
        Apple Watch – half baked…must be near your iPhone to use it ? What a piece of crap.
        Apple Car – who knows, but boy they are blowing through billions on R&D
        Apple Pods – delayed, okay if they aren’t ready but when? why?
        Ipads – were supposed to replace textbooks , didn’t happen.

        Then you have reports about the arrogance of Eddie Cue – what has he really done for Appl? No major deals regarding TV, networks , etc…In my opinion, he’s just an overpaid, ego driven buffoon.

        Angela – what has she contributed?

        Johnny – well he was working on a beautiful tree for the holidays, pics of that was posted on the net last week. I am sure you can google it

        Then on top of it, you have billions being sent on stock buybacks which support the price of the stock, so Tim, Eddie, Angela, Craig and Johnny can continue to exercise their millions of stock options each quarter….The buybacks are to keep the price high enough that their stock options aren’t underwater.

        Meanwhile, back at the farm, over the past 7 years of holding 3000 shares of Appl stock, especially the last 5 , I sit and watch NVDA, CRM, Amazon, Goog,, FB, TSLA, Msft and all the others outpace Apple in terms of stock appreciation. Yay, I have made a few bucks on Aapl but the entire market has appreciated since the crash in 2009. So really apple hasn’t been all that great compared to many others in the same space.

        Grant it , I haven’t lost money, but I don’t see the current regime at Apple doing much to raise shareholder value, especially if they keep doing buybacks, taking on more debt through bond offerings to support their stock options which are redeemed as soon as they are available to redeem.

        Not saying I am going to sell all of it, but definitely factoring the opportunity cost of holding apple vs investing in others such as FB, Amazon, NVDA and this aapl fanboy has lost confidence in Tim Cook.

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        October 29, 2016
        • Robert Paul Leitao said:

          George:

          Thank you for the response. Your frustration with Apple’s management reads loud and clear. I have a different perspective on Apple’s strategic decisions concerning the return of capital to shareholders through the annually rising dividend and the share repurchase program. That doesn’t make your perspective “wrong” in any way and it does spark a good discussion.

          Apple is borrowing cash only because management chooses not to repatriate foreign-sourced cash not permanently dedicated to uses outside the US at high domestic corporate tax rates. As a long-term shareholder, I consider total return (inclusive of dividends) in my evaluation of the company’s performance. I also expect the prices at which the company is currently repurchasing shares to be considered bargain prices well within a year and perhaps as quickly as within the next six months. Reducing the fully diluted share count will over time increase the dividend payout per share on the remaining shares.

          I do like the Apple Watch and consider the iPhone 7 Plus the best commercially available smartphone on the planet. Yes. I’m among the millions waiting on release of the Air Pods.

          The reason most executives today (and not just at Apple) sell shares immediately upon the exercise of options is because taxes on the gains are due immediately upon exercise of the options and the sales proceeds cover the often very high personal tax expense.

          I agree. There is an opportunity cost to holding Apple or any other equity or investment. If you were making the decisions at Apple, what specific strategic steps would you take to increase shareholder value and what product decisions would you make that are different from the decisions management has recently made?

          Also, what tech-related enterprises in particular do you think have greater total return potential over the next five years than Apple?

          I’m more than willing to remain patient as a long-term Apple shareholder. However, reading other viewpoints such as yours is always helpful.

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          October 29, 2016
  2. Fred Stein said:

    Mark Hibben asserts that Apple’s new MacBooks are competitive vs. MSFT Surface.
    http://seekingalpha.com/article/4016355-apple-key-mission-new-macbook-pros?ifp=0
    There’s nothing to cause customers to switch OS’s. He makes a case that Mac customers have strong reasons to upgrade. That’s all we (investors) care about.
    Looking at Apple’s lineup of seven MacBooks, it seems lopsided, with nothing below $999, and two at $1299. What’s the point of the MacBook? Hopefully Apple improves and expands the lower end of the portfolio. Perhaps they’re waiting for new chips from Intel.

    1
    October 29, 2016
    • Richard Wanderman said:

      I would never switch OS’s, but that’s not the point.

      When Apple inches prices up and has, as you say, a “lopsided” offering, it gives people pause, including people like me who are stockholders and significant long term customers.

      I will probably buy a new MacBook Pro, but the fact that I balked should be very meaningful to you, as a stockholder and I would assume, fellow user. I’m not the only one who balked. Yes, they’re selling well, but they might have sold even better if it was clear what Apple’s overall plan is for the Macintosh line. At this point, it isn’t.

      2
      October 29, 2016
      • Fred Stein said:

        Agree. Waiting for the other shoe to drop?

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        October 29, 2016
        • Richard Wanderman said:

          I’m not sure what the other shoe might be. I’m really in the dark on where Apple is going with the Macintosh.

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          October 29, 2016
  3. Gianfranco Pedron said:

    Apple still offers a $1,299.00 MacBook Pro on their website.

    For anyone who finds the price is too high, wait a couple of months and get a refurbished unit. My iMac, MacBook Pro’s, Mac Mini, Time Capsules and Apple TV are all refurbs from Apple. They arrived looking brand new and I’ve never had a problem with any of them. My oldest MBP is a 2009 13″ on which I just finished replacing the keyboard after a coffee spill … still running like new.

    The problem (for Apple and AAPL) with Apple gear is that it lasts way longer than most other manufacturers’ “best before” date. Considering the longevity, no charge OS updates, and high resale value, total cost of ownership is ridiculously low.

    3
    October 29, 2016
    • Robert Paul Leitao said:

      Gianfranco:

      I’ve sometimes purchased refurbished units for work and have yet to encounter a problem. Performance and longevity in my experience are no different than with “new” units.The only issue at times is finding refurbished units available. They tend to sell very quickly.

      Longevity does provide Mac owners with the opportunity to time their purchases based on desired new features rather than be compelled to purchase a new computer because of performance degradation or processor obsolescence. Additionally, the free OS upgrades each year provide for the latest services and functionality enhancements.

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      October 29, 2016
  4. Robert Paul Leitao said:

    A question for Richard:

    Upgrading to the 2 terabyte solid state drive on the 15-inch MacBook Pro from the stock 512 GB model does increase the price by $1,200. Absent the additional $1,200 cost of a 2 TB SSD drive, do you consider the product’s price reasonable for the power & performance of the new models?

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    October 29, 2016
    • Richard Wanderman said:

      Good question Robert.

      I’ve spent $3000 on maxed out MacBook Pros before so the new one is in range if not a bit higher. It’s an important tool for me and I can afford it, so my balking at this point is just trying to get used to the money.

      And, I’ve had a MacBook Pro and/or PowerBook as my only computer since they’ve been out (well, a bit after the PB 180 I got rid of desktops all together) and I’ve been waiting for Apple to update the Thunderbolt monitor… So, in watching the keynote and putting together a new system, I figured I’d spring for the new LG 27″ monitor since Apple is now out of the display business.

      But, when you add that ($1300) to the mix, the price is astronomically high.

      So, I balked and rethought it all.

      An alternative is to go to a two computer solution: a MacBook Pro with a 1TB SSD, skip the monitor, and when Apple updates the iMac with USB-C and maybe a new keyboard, get that as my “big monitor.”

      IMAP email and cloud computing generally makes this more possible now than ever before. My large resources (a very large Lightroom library) could live on a thunderbolt-connected external SSD or on the future iMac alone but that does make it tough to editing old images in the field… and LR doesn’t lend itself to the cloud: things get too slow with large RAW files coming over wifi, even fast ethernet.

      The savings from smaller SSD and no LG monitor go a long way toward the iMac (if the iMac is priced similarly to current models).

      That’s what I’m considering at the moment. I’m in no huge rush although a good friend would love to get her mitts on the computer I’m writing this on and she’ll get this one as soon as I get a new one.

      By the way, I’ve been reading the usual grousing from folks about price, the keyboard, the fact that Intel hasn’t come through with a new processor, the ports, etc. I do touch type and so keyboard is important to me but I’ve played around with the short throw MacBook keyboard and while it’s different, I could get used to it I’m sure.

      Yes, keyboarding is going the way of the dodo, but hopefully I’ll go the way of the dodo before there are no options for keyboarding.

      0
      October 29, 2016
      • Robert Paul Leitao said:

        Richard:

        Thank you for the response. Your reasoning is of course sound and the cost of the 2 TB SSD drive is high. I do like your consideration of a two-Mac option. For my purposes and because the only time I’m away from easy access to an iMac is my daily commute, I’ve chosen to forego a portable Mac in favor of an iMac and an iPad. My iPhone is also always within easy reach.

        I’m curious about your view of an iMac as a solution in relation to the MacBook Pro. Obviously one loses portability, but on a performance basis are you seeing the iMac as a satisfactory option for your performance needs?

        I’m eyeing the 27” 5K Retina display iMac for purchase sometime next year. In what would be my desired configuration, I’m coming in at about $3,000 including Apple Care but before sales tax.

        0
        October 29, 2016
        • Richard Wanderman said:

          The iMac is definitely a fine fit for me power wise, it’s more of a psychological thing that prevents me from getting a desktop computer. I don’t like to go to a computer, I want the computer to come with me wherever I am. However, one can have both these days I suppose. Still, the thought of having to go into my office to get to a computer bothers me as I’ve not had to do that since the very old days. My computer travels around the house with me daily (I’m sitting in the living room near the wood stove which is throwing off a very nice warmth on this rather brisk fall Connecticut day).

          I would avoid the current iMac: it’s video system doesn’t allow it to act as a monitor for another computer and it’s lacking the newer ports and no doubt, when they update it it will (maybe) come with a keyboard that has the Touch Bar and Touch ID on it, if that’s of interest to you.

          All of this has given me enough pause to really pause for a few days and just think about all of this. My current computer is fine, is running Sierra, and all of my peripherals work with it. So, I’m in no rush. But, if I heard a rationale for the close to $1000 difference in price between my current machine and the new one, I’d be all ears. I’m not against buying it, it’s just making me a bit uncomfortable.

          0
          October 29, 2016
          • Robert Paul Leitao said:

            Richard:

            I migrated away from the MacBook Pro (or similar class Mac portable) when my occupational components no longer contained web and content development on the fly. It was a bit irksome at first and a real change to routine to not have the convenience of a high-powered Mac portable on my lap, desk or nearby table for immediate use. I understand your preference for a high-powered Mac portable considering your uses. Though not portable, I do find at this time the iMac meets my power/performance needs.

            1
            October 29, 2016
  5. Robert Paul Leitao said:

    For those who consider the purchase price of a new MacBook Pro to be high:

    In 1987 (nearly 30 years ago) I purchased a new Macintosh SE and Apple-branded dot matrix printer for my employer for a cost of about $3,200 including tax. The last pro-level Mac portable I purchased was in 2002. It’s a Titanium G4 PowerBook that today sits triumphantly on an ottoman 14 years after its original purchase. It also cost at the time about $3,000. As of a few moments ago, it still starts up and can be used for occasional tasks.

    On an inflation-adjusted basis, Macintosh computers have become much less expensive over time.

    Is the perception of cost of today’s MacBook Pros based on the current purchase price of other pro-level portables or a cost comparison to a new iMac or a consumer-focused Mac portable?

    1
    October 29, 2016
  6. Richard Wanderman said:

    For your consideration, I “built” the same system minus the 2TB SSD:

    Hardware
    • 2.9GHz quad-core Intel Core i7 processor, Turbo Boost up to 3.8GHz
    • 16GB 2133MHz memory
    • 1TB PCIe-based SSD
    • Radeon Pro 460 with 4GB memory
    • Backlit Keyboard (English) & User’s Guide
    • Four Thunderbolt 3 ports
    • Touch Bar and Touch ID
    • Force Touch trackpad
    • Accessory Kit

    $3499
    AppleCare: $349
    Cables: $45
    Tax: $247.14

    Total: $4139.14

    The computer I’m using right now is essentially the same machine from 2014:

    2.8 GHz i7, Intel Iris Pro 1536 MB, 16GB memory, 1TB SSD with AppleCare and a few cables and tax: $3100. This was the maxed out model at the time.

    So, things have changed for sure.

    Then: $3100
    Now: $4139

    0
    October 29, 2016
    • Robert Paul Leitao said:

      Richard:

      If I understand your posts correctly, you are currently using a circa 2014 MacBook Pro. Is there any particular feature that is prompting you to upgrade to one of the latest MacBook Pros now? Would it be better to continue with your current MacBook Pro and upgrade when the next processor class upgrade occurs or some other conspicuous performance enhancement is added? I fully understand your previously posted views on Apple’s decisions concerning the available ports. I consider the purchase of a MacBook Pro to be an investment more than an expense. I would expect to keep it in active service for at least three years.

      0
      October 29, 2016
      • Richard Wanderman said:

        Robert: Power and ports.

        I want faster ports and I want more graphics processing power. I process RAW images in Lightroom and do fine art printing. I don’t buy new computers on a schedule, I buy them when my current computer is getting balky at the tasks I do every day, hoping the new one will improve things (and they always have).

        You make a good point: the current MBP has a similar intel i7 as my current machine. But, the newer graphics processor should make a significant difference in how fast the machine processes images.

        And, the SSD bus was improved a generation ago and then there’s the ports… All of that should make for a faster machine.

        But, you make a good point, I can live with my current set up another year easily. It works fine with Sierra and while it’s not as faster as I’d like, it’s fast enough.

        More food for thought. Thanks.

        0
        October 29, 2016
        • Robert Paul Leitao said:

          Richard:

          If it were me, I’d wait another year in anticipation of a new Intel chip class being introduced to the line. I’ll be in the market for a new iMac within the next year with that expectation. If the Touch Bar isn’t a “must have” feature you want now, it might very well be worth the wait since your current MacBook Pro continues to perform well.

          1
          October 29, 2016
          • Richard Wanderman said:

            You might find this piece interesting:

            https://medium.com/charged-tech/apple-just-told-the-world-it-has-no-idea-who-the-mac-is-for-722a2438389b#.khzugra5j

            It’s a bit over the top in places but I agree with its meta sentiment: Apple has forgotten about its Pro/core users.

            That aside, one of the comments (I hate Medium’s comment system) gave me a bit of hope: the new GPU and SSD bus speed should make throughput on this machine considerably faster than my current machine.

            So, my plan is to sit on my hands until they’re in stores and then go run some informal tests to see what’s what.

            But, I’m still bothered as both a user and stockholder by the “Pro” issue, and by the fact that the Macintosh line is all over the place and it’s tough to know where it’s going.

            0
            October 30, 2016

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