With 21.5 iMac at A$1,349, Apple Strategizes on Ripping Market Share from Windows PC

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By Athena Yenko | June 19, 2014 2:08 PM EST

On June 18, Apple Inc. releases new entry-level 21.5 inch iMac that features a 1.4 GHz processor with Turbo Boost speeds up to 2.7 GHz, 8GB of memory and a 500GB hard drive.

REUTERS/Robert Galbraith
The Apple logo is pictured at its flagship retail store in San Francisco, California January 27, 2014.

The new iMac is affordable at a suggested retail price of just A$1,349 inc. GST. It has a sleek ultra-thin design, brilliant display, Core i5 processors and OS X Yosemite.

Apple Inc had been making Mac more affordable for its consumers in 2014.

On April 30, the company updated its MacBook Air at a suggested retail price of A$1099 inc GST. The updated MacBook Air has powerful processors, fast flash storage, 802.11ac Wi-Fi, up to 12 hours of battery life and Apple's iLife® and iWork®.

"With MacBook Air starting at A$1099, there's no reason to settle for anything less than a Mac," Philip Schiller, Apple's senior vice president of Worldwide Marketing said in a statement.

Making Mac affordable appears to be Apple's strategy in ripping market share completely away from Windows PC, especially now that more Windows users are frustrated with the latest Windows 8.1.

Not only will Apple gain from users switching from their PCs to Mac, but as these affordable Mac units work with iPhones or iPads, switchers will possibly shift to these Apple devices too.   

Mac comprises a smaller part of Apple's total revenue compared with the iPads and iPhones as revealed from Apple's 2014 second quarter's result. Mac sales are at $5.5 billion while iPhones are at $26.1 and iPads at $7.61 billion.

Still, gains from Mac are significant in shaping Apple's share in the PC market.

From 2004, the ratio of PCs sold to Macs sold continued to decline - in 2012 the ratio was estimated at 19 PCs sold to 1 Macs sold, coming from a high of 56 to 1 in 2004. By 2013, there was only 1.18 more Windows PCs sold than Macs sold. By 2014, the ratio of PCs sold to Macs sold reflected a continuing decline as shown on charts created by Horace Dediu.

Dediu noted that despite decline on both PCs and Macs shipments, the latter's decline was modest. In 2013, Windows PCs shipped 309 million units from 337 million units in 2012 while 16.4 million Macs were shipped in 2013 down from 17 million in 2012.

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(Photo: REUTERS/Robert Galbraith / REUTERS/Robert Galbraith)
The Apple logo is pictured at its flagship retail store in San Francisco, California January 27, 2014.
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