Commentary--Finally, a Headless iMac?

There's not much news during the holidays leading up to Macworld Expo 2005, the week of January 10th in San Francisco, so one might expect that rumors will begin popping out all over. Yesterday morning, the entertaining Mac rumor site Think Secret broached the "headless iMac" rumor again, claiming that one will be announced at Macworld with a price tag of less than $500.

We have no knowledge of this possibility and wrote "again" because the "headless iMac" clammor has been around since well before Apple marketed the Power Mac G4 Cube in 2000. Many, including us, have argued for a long time that Apple should produce one at a low-to-mid consumer price point. Just a few years ago we pointed out that if Apple excised the most expensive part of the iBook, i.e. its 12" LCD screen, and took out the keyboard and trackpad that it could have a very nice inexpensive consumer desktop in a 9x11" by 1" thick form. If Apple placed the optical drive and mother board in parallel it could produce a slightly thicker but smaller desktop, maybe about the size of a cable/DSL modem box in a variety of interesting forms.

Of course, the issue is not whether Apple could produce a low cost "headless iMac" but whether it should do so. Apple's long-term prevailing opinion as voiced by its CFO Fred Anderson was that Apple was not interested in marketing commodities. In fact, Apple's current CFO Peter Oppenheimer said essentially the same thing earlier this year when questioned about a sub $800 Mac. Apple's economic thinking might have been that since Macs are sold primarily to existing Mac owners, a low cost headless iMac with a very thin profit margin would simply cannibalize more expensive eMac, iMac and iBook sales, a no brainer if true. In addition, Apple's cultural thinking might have been to snub the scruffy consumer low end, except for the education market.

So what might have changed in the world to make Apple reconsider its long-held position? The success of the iPod, of course. Apple has sold millions of iPods at $250-600 each and the majority of them have been sold to PC users. iTunes and iPods work well on a PC and have introduced millions of PC users to Apple's cultural core of elegant simplicity. Cheap PCs are utilitarian at best, have little-to-no useful software and are fraught with constantly increasing security issues and complexities that many people don't care to deal with. The question is would enough of them see a neatly designed little white box running Mac OS X, AppleWorks, iLife and the rest of Apple's free applications to fork over $500 or so to make marketing a headless iMac worth the cost of some cannibalization of eMac, iMac and iBook sales?

If Apple is finally going to market a sub $500 headless iMac, it has to be confident that there will be a net benefit and that leveraging its sales off the iPod sales to PC users will be successful in providing a majority of it. If Apple does this, we would look for Apple to fortify this leverage by also adding some additional innovative ties between the iPod and the headless iMac.

Needless to say, we would love to see Apple market a headless iMac. In addition to being a computer, it would make a great silent server for the home or small business. Maybe Apple would even "think diffferent" about the server paradigm for use in the home for music, images, automation and security and produce simple-to-use extensions to the iLife suite for these functions. Just maybe.... [Bill Fox]