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Mac software still hugs the low end.

Compared to their DOS counterparts, early Mac applications carried bargain-basement prices, usually in the $100-$150 range. Low software prices gave Apple a slight edge when customers compared the total cost of a fully-loaded Mac system against a PC system with equivalent software. But low prices also crippled the growth of Mac-based software companies, who often suffered the double whammy of low unit prices and low sales volumes.

The Mac world has seen software prices creep gradually upward over the last few years. But have Mac developers achieved parity with their DOS counterparts? Apparently not, judging from an informal pricing analysis we recently conducted. We recently took a look at data on pricing and development platforms for the "most popular title" identified by respondents to our Benchmark Survey on Manufacturing operations (Soft-letter, 9/l/89). We were able to compare 31 companies whose Product lines are primarily Mac-based, against 126 companies with product lines that are primarily DOS-based. (A large number of respondents said they support both platforms; we didn't count these in our analysis.)

The comparison reveals a dramatic difference in pricing levels: Median list price for our sample of Mac titles is $195, while the DOS-based group's median price is $270. When we graph the entire price distribution for each platform, moreover, the Mac sample shows a distinct shift toward the lower end of the price spectrum. In fact, only 16% of the titles in our Mac sample carry prices of more than $400, compared to 38% of the titles in the DOS sample:

These numbers are a bit rough, of course; the data we used was a byproduct of a survey on manufacturing, not a formal price analysis. But we're reasonably confident that the numbers reflect a genuine trend. A growing number of DOS companies have been moving upscale, into markets that were once dominated by workstation and minicomputer software vendors. Apple itself has been following this trend by developing systems that are increasingly workstation-like (Soft-letter, 4/l/89). But, judging by software prices, Mac software developers still seem to feel more comfortable serving what is essentially a low-end consumer market. Ultimately, that's not a healthy situation for Apple--or for Mac developers who expect to follow the Mac into more lucrative markets.
COPYRIGHT 1990 Soft-letter
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Apple Macintosh
Publication:Soft-Letter
Date:Feb 3, 1990
Words:375
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