Apple Should Get Out of Hardware? 730
SQLGuru writes to mention an analyst recommendation being reported on ZDNet. Despite a BusinessWeek article about Apple's record breaking hardware sales, the folks at Gartner think Apple should get out of the hardware business. Calling for the company to license its hardware to Dell, the analyst company says that gains in Apple's hardware sales are simply not sustainable. From the article: "Apple's margins for its Mac business, currently around 40 percent, are only sustainable because component makers such as Intel choose to prop up the business, Gartner claimed. Given that HP has forced Intel to offer it comparable pricing to Dell, Intel is unlikely to continue to subsidise Apple, the analyst argues. 'As a result of permanently changed market conditions, Intel has been forced to restructure and, in our opinion, cannot go on supporting Apple (or any other customer) indefinitely.'"
But the iPod (Score:5, Insightful)
Re:For the record... (Score:2, Insightful)
Dell sells in two weeks what Apple sells in a year. Corporations, and HUGE ONES, base their hardware, from servers to desktops to laptops on Dell.
No they ain't fancy, but they do work, and work quite well (this post brought to you via a Dell D620).
It's fanboi comments like this that make the Apple Religious laughing stocks.
I haven't heard this one in a while. (Score:5, Insightful)
But controlling the hardware is good for Apple. When none of the PC manufacturers jumped onto USB, Apple did. The same with Firewire.
This is why hardware is good for Apple. Because they can innovate like that with the least amount of Red Tape.
Without hardware, they would not have had their successes no matter how awesome Mac OS X - iPod, iMac, their notebooks in general.
Hell, I think they should produce more hardware - like a Newton successor, preferably something small and that can slide into a PCMIA slot to do the syncing and charging.
Anybody who suggests Apple gets out of hardware is smoking something. And it's not the good stuff either.
This comes up often... (Score:2, Insightful)
Perhaps if Microsoft wasn't so dominant in the software arena, Apple could get out of the hardware business, but until that day comes, Apple will always be primarily a hardware company above all else.
Moo (Score:5, Insightful)
Actually, Apple has a good name, with solid products like the Macbook, iPod, and OS X. I don't think Apple will have that mcuh of a problem. People don't run to Apple because of price, they run to them because they make decent, user-friendly hardware. Comparable devices are copies of them, and usually more expensive. If prices rise, Apple will go up a bit more, but will that actually drive people away?
Huh? (Score:3, Insightful)
The 40% margins are based on what? Because I would think that were Apple to get 20% of the market (over 3x what it is today), the individual costs of the OS are effectively 1/3 per machine in cost, comparatively. And the larger they get, the more sway they might have.
And let's not forget -- Apple on Intel is a form of advertising for Intel. Apple is very, very good at getting in the press, so Intel might be willing to take a smaller margin in exchange.
Re:Are you Kidding? (Score:2, Insightful)
That's absurd. (Score:5, Insightful)
I've had some decently-made PCs out of the 10 or 12 I've owned, but nothing like the quality of my Macs. I switched for home use a couple of years ago with a PowerBook. I added a MacMini last spring and a quad MacPro recently, and they are absolutely some of the nicest machines I've ever seen since I started as a tech in '79.
Apple would be completely stupid to give up that control and differentiation from everyone else.
Re:For the record... (Score:5, Insightful)
Apple makes the finest consumer equipment (Score:5, Insightful)
My recommendation (Score:5, Insightful)
Nothing but crap comes out of Gartner, how they are still in business is beyond me.
Re:Apple is a bit different (Score:5, Insightful)
Re:I can hear the Apple Fanboi's screaming now (Score:5, Insightful)
The major components like CPU, memory, and HD are the same but it is a simplification to say that it's all the same hardware. Especially when it comes to laptops. Except for BIY PCs, PCs are not all that interchangeable when you buy from the major manufacturers. You cannot replace a Dell MB with a HP MB and expect it to work perfectly. If you've done actually pricing between a Dell and an Apple feature for feature, the Apple is cheaper. Dell's target customer are those willing to pay the lowest price, period. Apple is not interested in that customer so their design is different than Dell's.
Some would argure one of the reason that OS X works so well it that it does not have to support the plethora of hardware that XP or Linux supports. Apple controls their own destiny when they control their own hardware. Again, Apple isn't looking to court the BIY customer.
Morons (Score:5, Insightful)
Gee with increasing volumes large margins are not sustainable because Apple won't get as good of deals from Intel? Yeah that makes sense.. err wait no it doesn't! As volume goes up, Apple will get better deals from component manufacturers, in general, not worse. Maybe Intel will not cut them as nice of deals, but with increasing volumes, Apple does not need to maintain margins. Most of their costs are fixed. OS development, marketing, industrial design, etc. make up most of their costs, but remain fixed no matter how many units they ship. If they ship twice as many, they can cut their margins in half without being affected.
Either the Gartner people are looking to the very short term or they're out of their minds. The only way to free yourself from the influence of a monopoly is to maintain a complete vertical chain of components, including the one they have monopolized, but separate from their market. Apple doesn't sell their OS to Dell for two reasons. One, it would seriously cut into their hardware sales as people went to what they perceive as cheaper machines and were unable to compete with Dell's market outlets. Two, MS will kill Dell if they tried shipping OS X pre-installed. As soon as Dell had to re-negotiate their OEM licenses for Windows, MS would offer them the choice of being the largest supplier of computers in the US, with the cheapest rate for Windows, or being the most expensive supplier of PCs in the US. Assuming Gartner is 100% correct and Dell took all of that market, they'd still only be selling 13% of the machines in the US and they'd lose almost all of their existing 32% of the PC market selling Windows machines. Oh Dell would love that bargaining chip, but it just might kill Apple.
No, now is not the time for such a move. Everyone who has tried to compete in that market has been killed by MS's lock-ins, even though several had superior offerings at the time. Apple needs to maintain their segregation until either the courts actually stop MS's antitrust actions or until they or Linux has grabbed a bigger chunk of the pie.
Apple doesn't make computers (Score:5, Insightful)
They design them.
Correct me if I'm wrong, but aren't ALL Apple products built under contract by factories in Asia?
What could they possibly gain by turning their manufacturing over to Dell?
This is not a slam at Apple. I own macs and ipods and I think they design great products. I just don't think there's an "Apple" factory out there churning out the gizmos. Why would they turn to Dell -- a company with a horrible, horrible track record for quality and reliability -- to make their products, when their current business arrangements seem to be working just fine?
$10B in the bank, no debt, 12 profitable quarters in a row, growing marketshare...this needs fixing how, exactly?
The Gartner guys must have mixed vodka with their Red Bull again.
Re:Smaller builders are helpful (Score:4, Insightful)
Dell making apple computers would be a bit like repurposing the old Ford Taurus plant to make Ferrari's.
Is Jaguar close enough for your analogy?
Re:For the record... (Score:5, Insightful)
Re:For the record... (Score:5, Insightful)
Keep in mind that huge corps also base their software on Windows, and that doesn't make that inherently better either. Huge corporations go with the flow - nothing to upset the cart, because that can get you fired. If you're old enough, you'll remember the "Nobody ever got fired for buying IBM" slogan. *That* is why Windows and Dell are prevalent.
Re:Smaller builders are helpful (Score:5, Insightful)
The fact is, the processor has become a commodity. The "experience" and end-to-end design that Apple sells is not a commodity. Who has lost their completitive advantage? It sure isn't Apple, and they know that.
Re:I can hear the Apple Fanboi's screaming now (Score:5, Insightful)
Intel 'subsidizing' Apple profits? (Score:5, Insightful)
Dell strikes a sweet deal with Intel after opening up it's systems to the AMD line...
HP muscles in and says it will go to AMD (I assume) unless it gets the same deal as Dell.
Dell and HP are in a deathgrip to maintain market share for the corporate and household WinTel platform, and are being nipped at by Lenovo, BestBuy, Walmart, etc, for market share, house branding, and margins
Apple, which has the luxury of owning premium software that can run on multiple platforms, let alone on an x86 platform, and is probably already paying slightly more (due to volumes) than Dell or HP, Apple is the EVIL one here, and should be punished by Intel asking for a higher per unit cost for components, because Apple is more profitable?
I see this as ludicrous as Goodyear asking for Honda to pay [even] more for the same tire as GM and Ford, because Honda can afford to pay it... x86 is a freakin' commodity, like pork bellies, and batteries (SONY, pay attention!!!). It's an important commodity, but fundamentally, a chip is a chip, and it's just that.
Intel is not subsidizing Apple... Intel is subsidizing the big boy PC maker market in order to stave off AMD and maintain market their share. This article infers that Intel will soon ask Apple to help subsidize this partnership, and apple will be in no position to fight back....
I hope Apple says either "AMD called yesterday and built a proto system on the PLUON chip... It ran OSX without mods... doesn't need another Universal Binary... just plug and play" or "You know, you should come over sometime... the boys in the labs, They built a sweet OS X system that uses a CELL chip from IBM.... Obtw, here's our order for 6million Core 2 Duo and Quad CPUs... volume pricing hasn't changed... correct?"
Re:I haven't heard this one in a while. (Score:5, Insightful)
what happend is that when Apple came out with the iMac.... ALL THOSE COMPANIES *IMEDIATLY* DEVELOPPED DRIVERS FOR THE MAC PLATFORM. If apple would have waited a year, those companies probably wouldn't have bothered.
the USB move was probably the smartest platform move apple made (untill the intel switch and bootcamp, specificly the time that move was made)
Re:For the record... (Score:4, Insightful)
That was a terrible move (Score:3, Insightful)
That was a terrible move: very anti-user. Apple would have been much better off phasing out non-USB ports only after the number of non-USB devices had dwindled a lot. What Appel did really screwed the user: making a machine without necessary standard-of-the-day ports in order to force the user to buy dongles or new peripherals because Apple thought that it was somehow immoral for users to use non-USB interface devices. (I've got a nice parellel-port printer I can still use on most PCs because they still have a port. Why? Because the printer is STILL A GOOD PRINTER, and PC manufacturers tend to respond to what the users need rather than Apple, which has fits of forcing morality like this.)
Yeah but... (Score:4, Insightful)
Who has rejected what? (Score:4, Insightful)
Excuse me? I look around at fellow IT developers and quite a few of them have accepted OS X.
Furthermore Apple has done a great job growing really useful framrworks in the OS like Core Image and Core Data. There are an ever expanding group of developers for OSX who have seen what a pretty good development environment (XCode) and a well thought set of frameworks can do for productivity.
I know the Apple fans out there will fight me to their death, but the facts don't match up with you. Apple is slowly making the transition...
I won't fight you, I don't need to - for the obvious progression is to use Windows for legacy apps and switch everything else to the Mac. Bootcamp is Apple's 3270 emulator - it lets you keep using some old applications while moving forward.
Or really parallels is, Bootcamp is a slightly less convinent form of the same thing.
If you think Apple is anywhere close to giving up OS X just as it is exploding in popularity and usefulness then you might have something.
Vista? Hardly (Score:3, Insightful)
Windows is rapidly becoming a victim of it's own success. Making substantial changes to the code is difficult because they have to maintain compatibility with all the crap that's already out there. Apple has been able to go back to the drawing board and start with something totally new which has allowed them to be far more innovative.
So while Vista will close the gap, it'll then be another 5-6 years before the next Windows version and Apple will come out with many useful changes in the meantime.
Aside from that though, I believe Apple would be foolish to change their business model. Their selling point is that they control the whole experience. Apple's always have the impression of being more expensive, but that's because Apple doesn't generally make low end systems. They make higher end high quality systems and then make sure everything works well.
Re:funny i think the opposite. so does apple. (Score:3, Insightful)
Eventually apple will announce the costs of maintaining OSX doesn't meet the interest of the public, and they will start going to head to head with Dell selling windows desktops.
Funny, I'd be more inclined to think the opposite. It seems more likely to me that, as Vista crashes and burns and IT departments reject it for it's insane piracy-protection measures, Dell and other PC vendors will look at Apple's success and wonder if they should start offering their own optimized versions of open-sourced software. Not that I think it's entirely likely right now, but more likely than Apple dropping OSX.
Developers haven't rejected OSX. Some developers just haven't been releasing OSX software because OSX lacked the market share to be a profitable platform for them. That appears to be changing, as Apple is getting more and more mainstream attention. In fact, I've heard a lot of developers say that Apple is a great platform to develop for, and that Xcode is a great environment (can't vouch for that, since I'm not a programmer).
Finally, I just can't imagine Steve Jobs will ever, so long as he's in control of the company, ship Macintoshes booting into Windows by default. I know, people doubted the Intel switch, said it would never happen, etc. But this is different. You're talking about Steve Jobs and Microsoft Windows here.
Re:I can hear the Apple Fanboi's screaming now (Score:3, Insightful)
They basically only do it for ram and Hard drive problems, anything else and you still have to send the machine in, plus you wasted extra time in dealing with getting a support person out there.
How do I know this. My mother recently bought her first new computer(she was getting hand me downs from myself and my sister). Oddly enough the HP laptop had a backlight problem she spent the better part of 8 weeks trying to get HP to admit it. Finally they did and the machine needed to be mailed(on HP's tab at least) to them repaired, and sent back. Are HP's total crap? Nope I don't think so. It was just a defect. But that On site warrenty isn't as good as you think it is.
I much perfer Apples. I take it to one of the many apple stores, and they deal with it, if they can, if not I too have to deal with the same hassle of sending it in.
Service wise Apple comes out slightly better. Hence why Apple is Consumer Reports best tech company for such things.
Re:For the record... (Score:5, Insightful)
Re:Apple doesn't make computers (Score:5, Insightful)
Re:That was a terrible move (Score:3, Insightful)
apple gained a shitload of third-party perfiral support they would NOT have had if the PC world would have had annough time to standardise on USB. developing drivers for a platform that has 50% of the market for USB devices is different then a platform that has 5% (which is what would have happened a year later). ADB users got the short stick in the short term, but in the long term.. well.. apple seems to be doing pretty well these days, don't you think? almost every printer, camera, and USB slave device that needs special drivers has mac support these days - in no small part a result of that strategic decision in the iMac HW design phase.
It has worked for everyone else (Score:1, Insightful)
It should work great for Apple, too.
Don't forget to rip on the Chooser... (Score:2, Insightful)
Also, do the Mac fans still get to be snarky about PCs in general because Packard Bell and eMachines made such awful clunkers, or is this tactic reserved for the Apple-bashers only?
Re:Are you Kidding? (Score:4, Insightful)
Re:Moo (Score:2, Insightful)
Macbook: Exploding batteries. This is Sony's fault, but no one but geeks care, because they didn't buy it from Sony, they bought it from Apple. Also palmrest discoloration, which is sad and stupid. Oh yeah, and it gets too hot to put on your lap. I'm sitting at a HPQ Compaq nw9440 which is virtually an identical machine, and it's never gotten too hot for laptop use. Ever. And I've definitely done plenty to peg both cores on many occasions.
iPod: I've personally seen an iPod get to a screen from which it cannot be rescued, even by a hard reset, without hooking it up to iTunes and doing a bunch of stupid crap to it. There is also the battery issue, which is STILL a serious problem. With typical use, most users get less than the stated battery lifetime.
OSX: Beachballs on me on average of twice a week, while running Adobe applications. Menus often do not pop up properly and/or are not responsive. Icons appear under the dock when they feel like it. Icons move themselves randomly around the desktop when they feel like it. Consumes more memory and has a slower GUI than, well, anything else.
What Apple has is a rabid fanbase that is willing to forget everything bad that Apple does, and an incredibly skilled marketing department.
Re:For the record... (Score:2, Insightful)
About 25 that have been dropped, water damaged or otherwise user destroyed.
Two that had unexplained video problems
47 that have had battery issues (not holding charges typically)
14 that have had the locking mechanism on the front damaged.
Still looks FAR under the 20% number you are giving and I have a much larger install base.
Re:I can hear the Apple Fanboi's screaming now (Score:5, Insightful)
It's all about how much your time is worth to you. $2k really is a lot of money, and I understand that it's too much for some. But like almost anything, quality costs more, and if you can afford better quality, you will spend less time maintaining it, or learning its quirks etc.
I used to be a mac hater years ago. Then I used one. learned that instead of feeling smug because i knew how smart you had to be to really get useful things done on a computer, I could just put that energy into just getting things done period. For most of us, it's not about the computer, it's about design, chemistry, architecture, whatever.
Re:For the record... (Score:5, Insightful)
Apple-haters really need to find some new material.
Of course it matters (Score:3, Insightful)
It wasn't morally offensive, it was just a nusaince. I too am glad to see the death of them.
Re:I haven't heard this one in a while. (Score:5, Insightful)
it's this kind of rewritting of history that pissess me off. Apple came to the USB game late. what they did different was that they dropped all legacy support at the same time. USB was intoduced in January 1996. the iMac shipped (with ONLY USB ports) in August 1997.
What Apple did was drive USB into the mainstream. No, they weren't the first ones, but by dropping all the legacy support and going USB-only, they signaled a change, which has yet to be completed on the PC side (most PCs still come with COM and PARALLEL ports.. God help us all).
Firewire (an apple created technology!) took even longer for apple to adopt! it was introduced in 1995, and shipped built-in in 1999. Sony may have even beaten apple to that game!
Again, I think the real point is that Apple again drove this more into the mainstream.
The OP is partly correct in that USB and Firewire on PCs were not commonplace before Apple made them defaults on their hardware. Hell, there are still a lot of PS/2 keyboards and mice floating around TODAY. I wish that the PC manufacturers had the courage to finally drop old keyboard ports, COM ports and Parallel ports -- welcome to the 21st Century!
Because Apple controls both the hardware and software side of the equation, it can push these things through much quicker than the PC world. No, they didn't invent it -- but they brought into the mainstream (much like they did with MP3 players )
Re:For the record... (Score:3, Insightful)
No, they care about user experience. Big corporations want Windows, multiple sourcing, and suppliers who know how to sell and support in large volumes. That's the user experience they care about, not the brushed metal themes, the fancy packaging and the grammatically superior dialogs. That's why they buy Dell and not Apple.
Re:Apple is a bit different (Score:3, Insightful)
Apple's offerings are NOT more expensive than comparably equipped, say, Dells. The issue is that they do not have a low end el cheapo to compete with Dell's $500 junk.
They do NOT sell OS X at a premium, they sell it at a very competitive price, compared to Windows. Get the story straight. But, no they will never dump the hardware side; that's their bread and butter.
Re:I can hear the Apple Fanboi's screaming now (Score:3, Insightful)
Re:I haven't heard this one in a while. (Score:4, Insightful)
It's true that FW has an 800 version but it is pricey. You can now get external SATA connections that are far faster, cheaper and don't require translation boards to talk to disk drives.
Re:My recommendation (Score:5, Insightful)
Re:For the record... (Score:5, Insightful)
FF Market Share will drop over the next year.
Actually it is based upon multiple methods of information gathering, including spot checking and anonymous tests.
Wait a second, you take a jab at Consumer Reports' methodology and then you make an assertion like this based upon your views of what you read in a particular forum? Is that supposed to be a joke?
You make a lot of generalizations and assumptions, but the truth is the best data to date indicates Apple's support is better than average and you have no data to refute that claim. If you objectively look at the information, the best guess is the Apple's support is better.
Have you ever considered that a lot of UNIX types know exactly what they are doing, but simply have different priorities than you do? Open source, free software is a feature of software, but considering only one feature rather than the whole package is absurd. I use OS X, Windows, Linux, and OpenBSD every day. Each has their strengths and weaknesses. I'd love to have a primary workstation that was completely open source. I'm just not willing to give up all the features of OS X or all the available library of software for Windows to do it. The sad truth is, for a lot of tasks, their is no good Linux solution. For a lot of tasks, Linux itself, regardless of the applications, is inferior. I don't have the time or money to get the features I want added to Linux and it is falling further behind on the desktop, not catching up. When Linux has functional system services I can use and a two step upgrade path to a new machine, via a firewire cable, let me know. Until then, Linus will be on servers and Linux and Windows will both be running in VMs under OS X on the desktop.
Missing the point (Score:3, Insightful)
The day I trust an analyst is the day I trust a politician.
Re:My recommendation (Score:3, Insightful)
Re:Smaller builders are helpful (Score:2, Insightful)
Actually, yes. I would think the Jaguar example is a good analogy. Before Ford purchased Jaguar, Jaguar was the maker of desirable cars. Ones that, while they weren't the most reliable, per se, they certainly looked good, felt good and were very unique.
Now, Ford owns them, and look what's happened. Aside from the top-end car, every other one is essentially a rebranded Tauras with leather seats. They're absolute crap both interior wise, and component wise.
So ya, if Dell made Apple computers, it would be the same thing. Rebranded crappy computers.
Re:Clue (Score:3, Insightful)
Re:For the record... (Score:3, Insightful)
Personally, I'm happy with any computer built since the Difference Engine (Hey, I'm old. Ada Lovelace was hot).
But I also know that the rest of the world ain't like me and you. There are whole groups of professionals who must - by charter - eschew innovation (floor care nurses come to mind) and the less they have to think about computers the more comfortable they are. For me, mouse buttons >= 3 is better. For others, mouse buttons > 0 are problematic, mouse buttons > 1 are Way Beyond The Comfort Zone. There are a lot of those people out there.
Re:For the record... (Score:3, Insightful)
In fact, I'm not sure that linux can ever reach that type of integration or functionality by the very nature of OSS. Not that it's a bad thing, but lack of integration will always relegate linux to server room or the techies desktop.
Nonsense business advice (Score:3, Insightful)
In addressing the premise of the recommendation from this particular Gartner analyst, one has to wonder why a company would get out of a highly profitable area of their business while it is still highly profitable. The day may come when selling computers is not a good financial thing for Apple to do, but until that time I am pretty confident Apple will continue doing it.
Of course, many of us also question the prediction for other reasons. First, Apple is not just in the computer hardware business. They sell an overall user experience. The unique design of the hardware and the software are components in that overall experience - each is not easily separable from the other. Second, Apple's current strategy has been extremely effective. They continue to increase market share in each segment they operate in. The line between the iPod and the Mac computer line is continuing to blur without risking the individual segments.
It continues to amaze me that any analyst would be unable to comprehend that Apple's business model is not Dell's. Having not read the analysts actual report (too lazy to download it), I hope that he is only referring to the supply chain and manufacturing efficiencies that Dell is supposed to enjoy over other companies. However, I suspect that Apple is getting as efficient as Dell in these areas. If you look at their component inventory on-hand (at about 4-6 days), they seem to be quite good in their supply chain management. The earlier point that their margins may decrease seems a more salient point than to suggest that Apple would be any less capable of being able to profit from the computer business.
Re:Clue (Score:1, Insightful)
There are companies that seem to lack consistent engineering skills and produce below par "PC" systems but there are very high quality ones as well. Your globing together of all PC hardware companies under "Windows" is not a fair assessment by any means. Your statement would be similar to stating all European cars suck because your Yugo sucked.
You can ignore the rest of my post because it is just my own anecdotal evidence that is probably worthless to you.
I have been doing rolling upgrades of my home PCs since the early 90's. I've probably owned and had at least 25 PC's pass through my hands (work computers not included). With the exception of hard drives, the only hardware I've had that failed was two motherboards, several power supply fans, a network card, and a stick of memory or two. Not too bad considering some was off brand and some was handed down from unknown origins. My Linux file server is an old no name P3 600 that I got for free when I installed some new systems at a local small company. It has been running 24x7x365 since 2002 at my house and god only knows how long at that company. That P3 replaced a much older Pentium I 200 that is still running 24x7x365 to this day as my home router. When I post this message, my packets will pass through it..
Oddly enough, my post about a PC running since 1996 will get marked as a troll or off topic but the parent post informing of an Apple running since 1996 is currently +4 Insightful. What makes one insightful and another offtopic? Shows the true motivation of those specific moderators I guess. You want to mod something insightful? Wait until someone shows how Apples core board components are "better" or any different then any other electronical device with electronic components. Until then, everyone agreeing with the parent does not want to actually think about that but would rather agree to the thoughtless catch phrase of "its just better". Yeah, the same thing a used car salesmen says.
Re:Smaller builders are helpful (Score:5, Insightful)
---- Apple computers make up a tiny market share.
Apple's market share is growing, and guess what: that growth had to come from somewhere. Apple is taking share away from the other players in the market. It's also interesting to note that while Apple is #4 is market share right now (behind Gateway, but not for long), their profits for this quarter were $584 million. Gateway (.3% ahead of Apple right now in sales share) lost about $80 million last quarter, and Dell (#1) had profits of about $510 million for its last quarter. In other words, Dell and Gateway had to sell something like six times as many computers as Apple to make $160 million less than Apple did over the last quarter.
---- Dell and HP will continue to grow.
That's debatable. Dell and HP sell a lot of $300 computers at either a razor-thin profit as an actual loss-leader. A company that buys 1500 cheap desktop units for the workers will also buy a couple hundred high-end laptops for the executives.. and the laptops probably bring Dell more actual profit than the whole consignment of desktops. Thing is, Apple's growing market share is coming from the $1500-5000 price range, where Dell and HP make their real money.
Apple will be absolutely delighted to see Dell and HP ship 80% of the computers sold in the market, as long as that 80% comes from the sub-$1k, $2-profit-per-unit loss-leader segment. Meanwhile, Apple will sit happily on the 20% of unit sales that generate 25% profit on a $1500-5000 sale per machine.
---- How many small incremental features can be added to the iPod before people look the other way? Rivals are offering similar devices with more features at a lower price.
And consumers voting with their wallets don't give a shit. Those lower-priced units with similar features also offer a lousy user experience, which is just certain to get better now that Microsoft has jumped firmly astride the fence with its dual Zune-to-be-coming and Plays-for-Sure-Unless-It-Doesn't initiatives. The numbers for the past several years show that Apple holds about 75% of the global market and everyone else competes for the remaining 25%. Any competitors who want to take market share away from Apple have to do better than 'similar features (but lousy usability) at a slightly lower price'. They have to offer something that's significantly better. And since the competition is currently stuck in "which one sucks least?" territory, that isn't likely to happen any time soon.
---- Apple is sunk without a strategic alliance and a different strategy.
Apple is making money hand over fist in a market where everyone else is fighting to survive. And if you want a strategic alliance, wait 'til the cross-pollination between Apple's R&D and Intel's R&D starts to kick in. Apple is willing to push new technology into the market, where the Wintel manufacturers wait to adopt (or release) technology until a trend is established (look how long it took to get rid of parallel ports). Intel has spent years developing concept platforms that none of the Wintel OEMs have been willing to take to market. Apple wants an edge on technology, Intel wants a vendor to showcase its new tech. And now the two are working together.
Re:But the iPod (Score:4, Insightful)
Also, from a business strategy perspective, Dell's company may be pursuing operational excellence, but Apple's value discipline is product leadership. If Apple tried to compete on cost, it would lose-- economies of scale alone would be against it, plus much more. Apple's value is that they have in the customer's eye a far superior product, one that people are willing to pay a premium on. You think that Apple could keep its already-slim market share if they became a commodity? Of course not, apple's strength has always been that they play their own game in their own little protected part of the market.
The accounting value of improving or preserving margins is far outweighed by the strategic value of their product differentiation and perceived customer value. If apple listened to gartner and lost that, they really would be dead.
Re:I haven't heard this one in a while. (Score:3, Insightful)
which has yet to be completed on the PC side (most PCs still come with COM and PARALLEL ports.. God help us all).
I am a UNIX admin and a Cisco network engineer. I configure my SUN, Linux and Cisco gear using the console. For that I need a COM port and guess what..... my fancy new macbook doesn't have a COM port so I had to go out and buy and USB COM port. So just because it is old doesn't mean it is useless. Personally it pissed me off when apple dropped everything bar USB as decent printers and world of other peripherals where hard to find for USB what didn't cost the earth.
NB in a large data center is far easier to bring a laptop with a COM port than a whole screen, keyboard and monitor. And yes KVMs fuck up all the time.
they already have (Score:3, Insightful)
Late response (Score:3, Insightful)
This is precisely why I never listen to such analyst. They are dumb.
The point of Apple is to make hardware ergonomic and user friendly. Software is the glue. But regardless of quality of glue, you cannot force user to stick with shit.
Look at M$ and its relations of OEMs & hardware manufacturers - and resulting quality of Windows, its drivers and integration with hardware. This is precisely what would happen to Apple, would it ever stop being vertical company: crashes & blue screens (since software would never know hardware it runs), incompatibilities & over-delayed releases (since exact way hardware works might be known only few weeks before it's released).
Apple would never do that.
HAHAHA! Morons! Apple survived not single CPU manufacturer/architecture in past, with Intel being third. Apple is outliving CPUs for sure. That's tradition.
What's more, for Intel now Apple is becoming important part. Compared to other HW manufacturers, Apple has very narrow well defined goals it is trying to achieve no matter what. That's something certain for Intel in the uncertain market.
Also, Apple is often early adopter. (I do not know even where to start with what they did first. Plug&Play & USB as two big examples.) And that's again good for Intel, since they can now pilot new technologies on "high end" Apple's hardware, w/o need to wait for other manufacturers who are in their turn wait for Intel to drop prices. Win-win combination: Intel can sell more expensive hardware to people who can appreciate it and Apple can improve its "exclusiveness" rating.