Apple: Can Sex Appeal Counter Sticker Shock?

When Virginia Tech set out this past summer to build a supercomputer that's now considered the world's third-fastest, the science and engineering school knew it needed great performance on a relatively slim $5 million budget. The university bought 1,100 Macintosh computers to make up the guts of the supercomputer. Apple Computer "has a better architecture than Intel currently has," says director of high-performance computing Jason Lockhart. For biotechnology and other software the school's scientists will run, "nothing can touch this thing," he says.

If only Apple had it so good in the business market. It's a perennial leader in bringing new technology to market--Apple introduced a graphical user interface, high-speed FireWire connections, and 3-D graphics faster than any PC company. But sometimes it seems the very things the company excels at are those least important to IT buyers. According to InformationWeek Research's recent study, Analyzing The PC Vendors, just 15% of business-technology professionals say advanced technology is their most important criterion for choosing a PC vendor. Cost tops the list, chosen by 83% of respondents. And Macs always cost more than PCs.

But Apple says its desktop list prices don't reflect how it can lower a company's cost of PC ownership. The company is marketing its latest Mac OS X Server to small and midsize companies running Windows. For $1,000, companies can license a version of the software that lets them work with an unlimited number of Windows PCs, says Apple product marketing director Tom Goguen. For a 30-person company, Microsoft's Small Business Server 2003 can cost three times as much.

Problem is, Linux users can get similar capabilities for even less, says Gordon Haff, an analyst at research firm Illuminata. "The challenge Apple has is they're not just competing against Windows in the server space. They're also competing against Linux," he says "And I don't see Apple having a clear knock-down punch against Linux."

Illustration by Scott Laumann

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