Jim Brain wrote (perhaps quoting Jim Butterfield?):
I was amazed both at how reachable Woz still is, and how the fate of
Commodore and Apple may have been different. I don't remember the
initial PET price and how it compared to the Apple II price, but I
believe the PET was much higher-priced.
The PET was introduced at a substantially lower price than the Apple II,
as was the Radio Shack TRS-80. The Apple II probably had a lower
manufacturing cost than the PET, even if you don't consider the integral
video monitor and cassette drive in the PET, but that was not reflected
in the retail pricing.
I suspect the overriding
factor was Chuck wanting to do his own PC, and having the MOS fab at
his disposal to make customICs, where Apple had no such fab, and used
more off-the-shelf componentsfor the initial units.
The PET did use only off-the-shelf components. The only custom
electronic components in either the Apple II or the PET were the
masked ROMs.