Chart of the day, Apple price edition

By Felix Salmon
October 6, 2011

Many thanks to the wonderful Silvio DaSilva for putting this chart together; I think it explains a lot of what happened with Apple over the years.

During Steve Jobs’s first stint at Apple, before he was fired in 1985, he was making consumer products which were far out of the reach of most consumers. The Apple II cost $1,298 in 1977, and that was the bare-bones version with 4K of RAM; if you wanted a more powerful version with a whopping 48K of RAM, that would cost you $2,638. Or $9,862 in today’s dollars.

The Macintosh, when it came out in 1984, was even more expensive. $2,495 was a lot of money, back then. (And never mind the LaserWriter: that had a list price of $6,995.)

When Jobs was fired, then, Apple was trying to sell consumer products to people who simply couldn’t afford them.

But when Jobs returned, in 1996, it was a different story. His first big product launch, the iMac, was priced at $1,300 — or just about $1,800 in today’s dollars. Not cheap, but at least somewhere in the ballpark of mass-market. Today, the entry-level MacBook Air — arguably the most gorgeous computer Apple has ever produced — is $999, just 55% of the real price of 1998′s iMac. And you can get a Mac Mini for $600.

And the non-Macintosh products are cheaper still. Here’s what you see when you visit the Apple Store online today:

store.tiff

This is a range of hugely powerful computers — the iPad 2 has the same computing power as a 1980s Cray supercomputer — at prices which are accessible to hundreds of millions of people around the world. The iPhone 4S — the first computer in the world to be able to have some approximation of a natural-language conversation — starts at just $199. And the iPhone I’m using right now is being given away for free. (With a two-year contract, but still.)

Jobs, of course, can’t take credit for the fact that technology becomes steadily cheaper over time. In fact, his technology has always sold at a premium; given the choice between making the entry-level Apple computer cheaper and making it better, Jobs always chose the latter option.

But Jobs can take credit for always being a step or two ahead of the technology curve, for seeing where the technology puck was going, and skating to that point before anybody else. Both in terms of what was possible, and in terms of what wasn’t needed any more. He saw, when he returned to Apple in 1996, that technology had improved to the point at which he could basically put his NeXT workstation ($6,500 in 1990, or $11,267 in 2011 dollars) on the desks of millions of people in the US and around the world. There was a basic level of quality he had to have, in any computer. And by the time that he launched OS X in 2001, he had built a company capable of delivering that quality at a price accessible to the broad non-geek middle classes.

The rest is history.

Update: I forgot the Lisa! $10,000 in 1983. That’s $22,745 in today’s dollars.

11 comments

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Someone forgot Newton in the chart.

Posted by GRRR | Report as abusive

The IBM PC, when introduced in 1981, cost more than $2,000. PCs were not for everybody back then, whether Apple or IBM. You had to really want a computer, and know what to do with it (there was no web).

Apple has always been trying to sell computers to consumers. To imply that he was fired because consumers couldn’t afford them is ridiculous, for the company had already grown pretty rapidly selling to consumers. He was fired because the soda salesman he hired was arrogant enough to believe he could be CTO and CEO.

Posted by KenG_CA | Report as abusive

Here’s my retrospective. For the record, I still own a 1984 128KB Mac, and it still boots. http://wp.me/pJhAL-9x

Posted by Curmudgeon | Report as abusive

I remember getting a 100-series PowerBook for about $1150 (education) in 1994. And there were plenty of cheaper Quadras, Performas, PowerMacs, licensed Mac clones (which were great values), etc. The iMac was reasonably priced, to be sure, but it’s not like it was the first Apple product in a consumer price range. It was just a better product.

Posted by Anonymous | Report as abusive

“But Jobs can take credit for always being a step or two ahead of the technology curve, for seeing where the technology puck was going, and skating to that point before anybody else.”

Apple not so much anticipated the technology curve as set the curve. Apple is a marketing powerhouse. If any other company would have said, “hey, look at this great tablet!” or “look at this great PMP,” Fuggetaboutit. Apple can make it work not because their technology is superior but because their product has built-in legitimacy and status from their devoted, dare I say, irrational followers. Then again, that’s what marketing is all about, isn’t it?

Posted by figg94 | Report as abusive

The idea that an iPad is as powerful as a Cray Computer is a common misconception.

Basically, it’s comparing MIPS to MIPS, but a Cray, or for that matter any vector processing supercomputer, uses MIPS only for house keeping, basically loading the program, not running the program.

You need to compare FLOPS.

Posted by Matthew_Saroff | Report as abusive

“Dr. Dongarra estimates that the iPad 2 will have a Linpack benchmark of between 1.5 and 1.65 gigaflops (billions of floating-point, or mathematical, operations per second). That would have insured that the iPad 2 could have stayed on the list of the world’s fastest supercomputers through 1994.”

http://bits.blogs.nytimes.com/2011/05/09  /the-ipad-in-your-hand-as-fast-as-a-sup ercomputer-of-yore/?smid=tw-nytimesbits& seid=auto

Posted by FelixSalmon | Report as abusive

Why no modern Mac computers in that chart? It makes it look like Apple stopped making computing when the iPod came out. Since then prices have continued to fall (as with all technology) and innovation continued with such models as the Mac mini, the MacBook Air and so on.

Posted by FifthDecade | Report as abusive

In 1989 the Apple SE/30, with 1MB of RAM and a 40MB had drive, and a slower 16MHz 68030, for a list price of $6500. (With an educational discount, mine was $3495).

The monochrome NeXTStation came out in 1990, and cost $4,995, with a 25MHz 68040, 17″ monitor, 8MB of RAM and a 105MB hard drive.

Posted by jonhendry3 | Report as abusive

Fantastic chart. The time element is off slightly….it looks as if the Mac was introduced in the late 70s. I think it was 83 or 84, and then in the late ’80s (wilderness years?) the Mac plus came out, and then, wonder of wonders, the SE with a hard drive.

Posted by otter4 | Report as abusive

What about the MacBook Pro and the Mac Pro?

Do they throw off your graph too much?

Posted by mattmc | Report as abusive