Test-driving the new Intel-powered 24-inch iMac from Apple

Fortune's Peter Lewis looks at top-of-the-line iMacs and Dell PCs - and concludes you'll get more for your money with Apple.

By Peter Lewis, Fortune senior editor

NEW YORK (Fortune Magazine) -- Normally Steve Jobs concludes major Apple product introductions with a sly, "Oh, there's just one more thing..." It's a Pavlovian phrase that causes the Macintosh faithful to bark and howl and salivate, having been trained to expect something new and wonderful and unlike anything else in the PC world.

So when Apple (Charts) called to say it was introducing several new computers last week, just a week ahead of a major product introduction already planned for Sept. 12, it became clear that something sly was in the works. It could have been one of two things: Apple, a company that used to be known for making "computers for the rest of us," apparently did not want the introduction of mere new computers to distract attention from whatever "one more thing" it is planning to unveil Sept. 12.

Or two, Apple - a company that is becoming known primarily for iTunes and iPods - didn't want the computers to get lost in the expected hoopla over the OMT. Both could be true, but my guess is the former. Other than the announcement of a dazzling new 24-inch iMac all-in-one computer, the news was mainly of upgraded iMac and Mac Mini machines.

Ho hum: Apple is not unique in offering computers that run faster than last season's models. But it's not every day that a computer company gets into the business of selling full-length Hollywood movies over the Internet, which is expected to be a main Thing of the Sept. 12 event. (Apple already dominates the legal selling of music over the Internet, and it subsequently pioneered the sale of television episode downloads, so movies are the next obvious step, especially since Jobs now sits on the board of Disney (Charts).)

Apples to iMacs

But a closer look at the comparatively minor announcements last week reveals something really significant: Apple is making applesauce out of the old canard that Macs are a lot more expensive than Windows computers.

Now that Macintoshes use the same Intel (Charts) processors found in higher-end Windows machines, and can even run Windows XP and Windows applications, the old "you can't compare apples and oranges" argument shrivels. In August, when it unveiled its new Mac Pro computers, Apple boasted that the high-end desktop machine actually cost nearly a thousand dollars less than a comparably equipped Dell Precision workstation.

One can quibble with the fairness of the comparison, but no matter how you sliced it, the Dell machine was hundreds of bucks more expensive than the Mac Pro. (Why pick on Dell (Charts)? For starters, it's the biggest PC company in the world and No. 1 always gets picked on. Then there was the crack by Michael Dell back in 1997 when he was asked what he'd do if he ran Apple. "What would I do? I'd shut it down and give the money back to the shareholders," the Dell chairman sniped. Jobs countered, "We're coming after you, buddy.")

Will the same hold true for Dell's consumer computers? It certainly looks that way, with a new $999 price point for a 17-inch iMac. Sure, you can get a PC and monitor for less money, but not with anything close to the power and multimedia features and software and ease of use of the iMac.

At the high end, the new Intel Core 2 Duo 24-inch iMac introduced last week is theoretically a consumer machine, although I suspect it will catch the attention of many graphic designers and other digital media mavens.

So let's put "apples and oranges" to the test, and compare the new 24-inch iMac to a Dell XPS 410 media PC. Yes, we know: The Dell is a traditional desktop tower computer with a separate monitor, while the iMac is an integrated all-in-one model that takes up less space and has won all sorts of design awards.

A fairer comparison, esthetically, would be to match the new Core 2 Duo iMac against another all-in-one design like Sony's gorgeous Vaio VGC-LS1, but the Sony does not offer a Core 2 Duo model, and this isn't a beauty contest. The Dell 410 paired with a 24-inch Dell LCD is a powerful and versatile computer.

A feature-by-feature comparison of the iMac and the Dell shows there's no way one can argue that the iMac costs considerably more than a comparable Windows machine. To upgrade the standard $1,999 24-inch iMac to match the basic specs of Dell XPS 410, we have to add a gigabyte of system memory and the equivalent of a 250GB hard drive, driving the price to $2,374.

To tweak the Dell XPS 410 to match the hardware features of the iMac, we have to spend $2,304. Apple did its own comparison, ignoring the hard disk issue and configuring the XPS 410 to 1GB of system memory, matching the iMac. In that comparison, the iMac is about $200 cheaper than the XPS 410.

I think my comparison is fairer, showing the iMac $70 more expensive than the XPS 410. Is the Mac arguably $70 more valuable? It depends on how much value you place on the iMac's appealing space-saving, one-piece design, on the more advanced and more secure operating system, and on the broad collection of Apple software that comes with the machine.

In my view, the extra $70 represents one of the best bargains in the PC world. I use both Windows and Mac OS machines in my daily work, but the real key now is that I don't have to, because the iMac can run both Windows and the Mac OS.

I wish Apple would improve its warranty, and adopt more reasonable pricing for upgrade parts. But I also wish Dell would improve its customer support, its industrial design, and make its computers more fun to drive.

Bottom line: There have always been lots of reasons to buy a Macintosh computer, but now there is no longer a reason not to buy one.


What will we see on Sept. 12 when Steve Jobs takes to the stage in San Francisco to reveal that One More Thing?

I'm looking for Apple to announce that it will offer Disney movies for downloading from the iTunes online store for $10 a pop.

Remember, when Apple launched iTunes it did not have the support of all the major music companies. Today, Apple sells more song and album downloads than all the other music services combined.

When it launched music video and TV episode downloads, it had only a few major partners. Eventually other studios came aboard. But everyone else in the industry has seen Apple's success, and Hollywood remains the greediest enclave this side of Wall Street. If Apple can re-create its success in music and TV shows in the feature-length movie world, it'll be a trifecta.

What I'd like to see Tuesday, meanwhile, is a way to view those downloaded movies on the big-screen TV in my living room, not the computer screen or the little iPod in my hand. If Apple reveals a duh-simple way to get those videos from my Mac to my TV, that would be the real news.

I'm also looking for Apple to come up with higher-capacity video iPods to take advantage of the movie downloads, and higher-capacity iPod nanos to match or surpass the 8-gigabyte capacities of rival plays from SanDisk (Charts) and others.

Patricia Dunn should resign as chairman of HP.

Praising Microsoft - and attacked by wolves. Top of page

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