The iMac 2006 Value Equation: Intel Changes Everything

The first Intel-based iMac changes the value equation for the entire realm of desktop Macs.

Let that sink in. The Intel Core Duo iMacs benchmark at 2-3x the level of G5 CPUs at the same speed, yet the new models cost no more than the last ones.

If that's not enough to convince you of the value change, consider that the Intel Core Duo running at 2.0 GHz in the iMac should match and very probably exceed performance of the 2.0 GHz dual core G5 in the low-end Power Mac G5 Dual.

Finally, consider how vastly underpowered the US$499 Mac mini is with its pedestrian G4 CPU in comparison to the US$1,299 1.83 GHz Core Duo iMac. If a 1.83 GHz Core Duo is 2-3x faster than a 1.9 GHz G5 and that G5 is 40-60% more powerful than the 1.25 or 1.33 GHz G4 in the mini, the 2006 iMac should trounce that by a factor of 3-5x.

Once you add a 1280 x 1024 flat panel display (since widescreen LCDs are rare below the 20" mark) and a mouse and keyboard, you're looking at roughly US$900 for the Mac mini system. For about 50% more money, you get 4x the processing power, a 1440 x 900 widescreen display, a 160 GB hard drive (vs. 40 GB in the entry-level mini), and a built-in iSight webcam.

Like I said, the switch to Intel changes the entire landscape for desktop Macs.

Twice as Fast

It's probably going to be a few weeks before we get meaningful benchmarks, because they'll have to be compiled to run on both PowerPC and Intel hardware. Until then, let's assume the worst - that the iMac 2006 (for lack of a better name - "iMacintel" just doesn't roll off the tongue) has a dual core CPU twice as powerful as the single core CPU in the G5 models. That's the least you'd expect with Intel's new CPU architecture and dual cores.

Raw computing power isn't the only thing that defines system performance, but it's the only significant difference between the G5 and Intel Core Duo models. For tasks like ripping music to iTunes, manipulating photos in iPhoto, and working with video in iMovie, processing time could well be cut in half.

On top of that, Mac OS X 10.4.4 is probably better optimized for the Intel Core architecture than it ever was for PowerPC, making the OS more efficient than it's ever been before. The story behind that has two sides. On the one side, OS X is descended from NeXT's OS work, which was primarily done on Intel x86 processors. Thus a fair bit of OS X code is hacked to work on PowerPC or emulates features of the x86 to reduce the need for recoding and just get things done.

The other side is that Apple and Intel have been working hand-in-hand for the better part of a year to make this work. Parts of OS X that were optimized for the PowerPC G4 or G5 have probably been closely examined and carefully ported to the new CPU family. In fact, Apple could very specifically optimize OS X and their other apps for the latest Intel architecture because there is no need for the Mac OS to support legacy Intel CPUs.

In my talks with developers, I heard again and again how fast Apple's Pentium-based developer systems were, and with a new generation of CPUs architecture and dual cores, these iMacs are absolutely going to rock.

The iMac Value Equation

No matter how you look at it, the new iMac has at least twice the processing power of the G5 iMacs. That doesn't mean that the old iMacs are only worth half as much, however, since there are other factors involved - the display, iSight webcam, hard drive, and so forth have value, not just the CPU.

It is obvious that the old iMacs are worth less than the new ones, yet as I examine one dealer website after another - including Apple's - I have yet to see anyone reducing prices on the G5 models.

Because of the Rosetta emulator, the Intel iMacs should run practically every Mac OS X application. The only thing they won't run is Apple's classic Mac environment, and we may have to wait for the PearPC project or a third-party "classic emulator" before we'll have a way to run classic apps on Macintel hardware.

That is the only significant disadvantage to Intel Macs. If you are dependent on some classic apps - as we have been with Claris Home Page - the Macintel models are not for you until you find replacement software.

In our case, that replacement software is tipping us toward the iMac 2006. That software is iWeb, which appears to put every other WYSIWYG webpage editor to shame. From what I've seen, that program alone is probably worth the US$79 cost of iLife '06 - and iLife '06 comes free with the new iMac, further increasing its value versus the G5 iMacs.

All things considered, I'd suggest that the old G5 iMacs are worth about 30% less than the new ones - maybe US$949 for the 1.9 GHz 17" model and $1,199 for the 2.1 GHz 20" iMac.

We'll see what kind of price reduction Apple passes on to dealers, but I expect we'll see close-out prices of US$1,099 and US$1,399 at best - definitely more than this eclipsed technology is worth.

iMac or Power Mac?

For the first time, an iMac may outperform a low-end Power Mac. At the very least, the 2.0 GHz iMac should offer similar overall performance to the 2.0 GHz Power Mac G5 Dual - quite an accomplishment for a US$1,699 computer! (The 2 GHz Dual retails for US$1,999, has a smaller hard drive, and doesn't include a display. Configured with AirPort Extreme, Bluetooth, a 250 GB hard drive, and Apple's 20" Cinema Display, that's a US$2,897 package.)

Granted, the Power Mac gives you a faster CD/DVD burner, FireWire 800, and PCI Express expansion slots, but for most users none of those can justify the almost 50% higher system cost. I have a feeling the 20" iMac is going to really hurt sales of entry-level Power Macs.

What About Refurbs?

As I write this, Apple doesn't have any iSight iMacs listed on their Special Deals page. They do have the 17" 1.8 GHz model (the only one with a Combo drive instead of a SuperDrive) at $849 refurbished, the 2.0 GHz at $949, the 20" 1.8 GHz at $1,149, and the 20" 2.0 GHz at $1,299. These are the models without iSight and with slower SuperDrives. In my estimation they're worth at most $749, $849, $999, and $1,099 respectively when compared to the new iMacs and the just discontinued iSight models.

Speaking of which, at just under three months, the iSight iMac G5 may have been the shortest-lived Mac yet. Our guess is that Apple designed the PowerPC and Intel models in parallel to share as much as possible, so most of the R&D that went into the just-discontinued G5 model will amortize itself over the life of the Core Duo iMac.

And we're seriously considering that a 17" iMac 2006 may well become our next desktop Mac, displacing a 1.25 GHz eMac and a Power Mac G4/1.0 GHz dual. That's how impressed I am with this new iMac.

Tomorrow we'll look at the forthcoming MacBook Pro.