Robert Cringely editorializes on the latest changes inside Apple with the shifts of the execs and the creation of the iPod division. He believes that Apple is exiting the Mac hardware business (maintaining it only until their margins are not met) and it is going to focus on the OS, apps and the music business.Our Take: Down in Cringely’s article, he suggests a per-month fee to lease a Mac instead of a hard fee. Two problems with that:
-people will want to upgrade their hardware as often as possible – not economically viable for Apple.
-so Apple’s interest is to release as few new machines as possible. Not a good strategy either.
Worse, they’re stuck between a rock and a hard place. Old machines are powerful enough for their target market. If they want people to upgrade their hardware, they need to make their new software explicitly incompatible with old hardware, which will –obviously– piss people off like crazy.
Besides, Apple can’t become an OS-only company (not even in the long run), they don’t have the resources to develop an OS that works on 3rd party hardware (especially the vast x86 or alike platform). Mac OS X would be as expensive to develop as Windows is. If Windows costs 10% in R&D off its retail price, and Mac OS X stays at ~2% market share, Apple would have to sell MacOS for 3 times as much as Windows to just even out.
If Apple was to do what Cringely suggests, we would have to say bye-bye to the Mac platform and I don’t think that Apple would want to do that just yet. However, I do find fishy why there was no new/faster G5 Macs announced since last year, it seems unlikely now that Apple will jump directly to 3GHz on the upcoming WWDC (a speed Jobs promised for this summer).
Cringely’s article is not completely off the mark, he has many valid points. However, some of his suggestions probably wouldn’t work well in the real world.
I say this because there is a whole culture surrounding when to upgrade and about Apple’s upgrade cycle.
If they move it to a 1 year cycle on the top end machines, the bumps become big performance bumps, plus you know that when you buy a machine it is going to be obsoleted in 3 months.
I honestly can’t understand why people continue to give this guy column space. At least in regard to Apple, he has consistently been plain wrong and uninformed. His articles are poorly researched flights of fancy. Guess that’s all it takes to be a mainstream columnist these days.
if he thinks that having a separate Mac division means that they might have more freedom, he is mistaken.
though, I would like to see a mac on a Pentium-M or a Cell processor.
If Windows costs 10% in R&D off its retail price, and Mac OS X stays at ~2% market share, Apple would have to sell MacOS for 3 times as much as Windows to just even out.
This could easily be offset by the work done by the projects running darwin on x86. Or as another option using Linux as a base system. Why pay that much for R&D when you can get it done for free?
Yet another “Death of Apple” article.
Can’t simply be a reaction to the Apple Music lawsuit, which will probably mean a fully owned spin-off division to divorce the music division from Apple Computer, and remove the Apple name from the iTMS.
Doubtful Apple will do a stock spinoff, since they haven’t in the past, and many of the spinoff companies really haven’t performed well for either company.
But Apple has used spinoff divisions to help track corporate expenditures in the past, and Apple is running a bunch of fully-owned subs right now.
I’m so sick and tired of reading these articles written by these stupid analysis/journalists saying that this is the death of Apple Computers. Apple’s main income if from their computers, not from their iPod/iPod Mini’s even though they sold more iPods and computers. This guy isn’t even making any sense here. He just another ignorant PC person waiting for something like this to happen so he can report that Apple is dying. They have been saying that for the last 10 to 12 years. If Apple stops selling computers it will be the death of Apple. I believe it was Apple’s idea to sell iPods to get Apple’s name out there so people see them and see how cool they are. Then maybe if they buy one and see how easy it is to use and how good it is over the competition, maybe they will look at the Macintosh Computer too and buy one of those. Now maybe that hasn’t happen a lot, but I bet you it has turned some heads about Apple’s lineup.
The death of Apple would be a terrible day for the computer industry. Apple does a lot of things that some people don’t realize. Microsoft would be in a world of $hit because they would have to come up with their own ideas. Besides that, Apple creates a lot of things to keep the industry going and pushes the competition go try and release something just as good. I really hope that Apple does something though to get its computer sales up. Its getting so coolness doesn’t sell as well anymore.
“Even Pixar uses Intel-based hardware in its rendering farm.”
come on get your facts right…nice lame attempt at trying to say that even Steve Jobs doesn’t use macs…Pixar was using linux based intels in 2003 but switched when the G5 came out.
What are you people talking about? Cringely doesn’t talk about the “death of Apple”, he talks about its internal focus shift!
Many of my peers in CS buy Macs in no small part also for the hardware. The integration is key and the hardware is a big part of that. Apple doesn’t need to take over huge chunks of the hardware market, all they need is to find new ways to justify the added cost.
When I worked at my university bookstore I sold a decent number of Macs to families that were originally going for PCs on the basis that:
1) It will do everything you need for school
2) It will “just work” and maintainence is minimal and mostly not damaging the hardware
3) It will last you longer and more reliably than a PC, plus the OS is cooler.
What I did, that Apple’s rep didn’t from what I saw of his sales pitches, was that I appealed to the typical American attitude of “you get what you pay for.” I didn’t diss the PCs we sold, I merely pointed out that Macs tend to be very solid, far more so than the average PC. Since most people have just an average PC they quickly got the picture and realized that the price premium is less headache money.
The best example I give to people who I meet and who bad mouth the cost is this. I paid $5000 for a used Honda Accord LX nearly two years ago. My girlfriend spent $2000 for a used Ford Escort and my car in 2 years hasn’t had a single major replacement needed, and it’s I think 6 years or so older than hers. I paid $3000 more, but got a car that “just works.” She paid what she could afford mind you, but she’s already had to replace her windshield and is going to have to get her power seatbelts replaced.
You just have to beat into John Q’s head that a $800 new PC is about as shady as a typical $500-$1000 used car.
“realized that the price premium is less headache money.”
Its important that we clear this up so that this doesn’t get misunderstood.
There is no Price premium for Macs. You buy more and pay more than the average PC. That doesn’t mean that there is a price premium, but it does show that the Mac is less configurable at the outset… (although you can mod your Mac to your heart’s content after the initial sale) Apple’s price are very much in tune with the PC industry when you match the PC hardware to that of the Mac in any configuration. Apple simply makes you buy more… thankfully they have computers that have less thus allowing you to pay less… and prices these computers in every popular price point to a PC except for the ultra low end.
-people will want to upgrade their hardware as often as possible –
Do you mean instead of buying new computers?
Otherwise, most people prefer to not upgrade and not get new computers. They want it to work on their computer. The vast majority of people buy new computers instead of upgrading, due to how low priced computers are now.
he talks about its internal focus shift!
“Internal focus shifts” give me bad taste in my mouth… Be Inc…
He means that if Apple moved to a subscription model for the computer HW itself. Instead of having people buy new HW every once in a while, they just sign up for the subscription program that keeps them in the latest and greatest.
Pretty stupid idea FOR HOME USE, IMHO. (Business leases are different.)
There are many, but Cringeley appears willing to overlook a huge gaping hole in his argument. If the Mac Division goes away, what happens to the Retail division? According to him, AppleStores will be the only way to get a Mac (pretty retarded prediction)… but that iPods will be everywhere…. So why build an expensive retail division to sell expensive software and iPods you can buy anywhere (particularly when software is not the strongest element of the stores)? So, according to him, Apple is abandoning the Mac division soon while they CONTINUE to build out an expensive and asset-intensive division where the (almost) sole purpose is to push Mac hardware? Sorry, but try again.
Give it a rest. You’ve modded down so many comments that are not flames but are simply contradictory to your own opinions.
I’m up for a discussion about this… hopefully we can correct the problem. So far, every attempt to discuss this issue has been met with hostility.”
If you’d really like to discuss this. Please email me, and we’ll discuss it. No more picking fights in the comments please.
Cringely is getting overly excited about the enormous success of the iPod, and the OSnews blurb is also misleading (big surprise there).
“[Under the scenario that Mac sales don’t keep rising] I can imagine that Apple might stop Mac sales entirely and become a consumer electronics and software company.”
Take this with several grains of salt:
1. This is one of several future possibilities Cringely imagines. Remember that Cringely likes coming up with wild, controversial theories and predictions.
2. Mac sales have been increasing quarter-by-quarter and year-by-year. Margins are strong. IBM is a powerful partner. Apple’s retail presence is expanding. There’s no reason to stop selling them in the near future!
3. Short-sighted people love to jump on short-term success and say “let’s drop everything else!”, or harp on short-term failure and say “let’s cut it loose”. Far-sighted leaders like Jobs, however, aren’t going to make such rash decisions.
if Apple was going to make a shift, this would be the time to do it. Longhorn is still a long way off, and Apple’s mindshare is bigger than ever. If Apple did make the move to x86, and became software only (on the computing side), it would have a strong stable of applications (Final Cut, DVD Studio, Keynote) which could generate a lot more money, as well as the OS. Perhaps make the new x86 OS X an iPod requirement, and bundle it in with the players.
As for Eugenia’s statement on the cost of supporting 3rd party hardware, if you’re going to break compatibility once, you might as well break it twice. What if Apple ported the Aqua interface to the Linux kernel, or perhaps FreeBSD? Keep it proprietary, use an open base. It wouldn’t require to much work for 3rd parties to get their apps up and running on a new kernel, after all, compatibility has been broken to a lesser degree between Darwin-based OS X releases. They could make strong headway into the server and workstation markets at the same time, and put the fear of Steve into Red Hat, Novell, Sun and friends.
From what I read when the G5’s came out, Pixar is still using the Intel PC’s for the farm, it was the artists’ workstations that got replaced with G5’s. They did say they plan on moving the farm to G5’s, but I don’t believe they have done so yet.
yep. intels for the render farms, g5s for the desktops. at the moment xserves do have good price/performance ratio though but it *really* depends on the applications. i imagine if they optimized the renderman algorithms for altivec and moved the cluster to xserves they would see a performance inprovement though.
still, they have an invested interest in intel for the render farms, and have probably already optimized it for that platform. pcs aren’t know for their bad price/performance ratio so intel works just fine in the back end rendering.
a little taste of what it would be like if those who lurk and don’t commnet could read with out being interupted by his filth,
That’s because I banned him.
Maybe being a programmer I resent the idea of ipods elbowing out macs, but I just can’t see how music players like the iPod can avoid getting totally commoditized and turned out cheaply by the millions by no-name asian manufacturers in the coming years. I’m glad Apple is making a mint out of them, but how long can it last?
“but how long can it last?”
I think of it as being comparible to the Walkman. In it’s time it was selling a lot more than the iPod is now, so there really is a lot of room to grow.
He has his facts wrong on that one… the only way intel helped in the Star Trek project was to donate a 486 clone to each member of the team… It was a team made up from Novell and Apple employees who did the work. And it wasn’t all of apples software it was the os and the desk accessories and the like…
” He just another ignorant PC person waiting for something like this to happen so he can report that Apple is dying.”
He was also one of the first employees of Apple Computers.
Around employee 22 if I remember right…
Anyway, as the computer becomes more and more commoditized, it would probably be in Apple’s best interest to get more into the comsumer electronics area.
Of course there will always be a small market for print/graphics/etc, but look at SGI (among others) and how they have been bumped by powerful and cheaper Apple/X86 products.
It just doesn’t look sustainable over the long haul…
Its strange because where this guy see the end of the macintosh, i rather see a new wave for the mac. The new Ipod and mac divsion, the people behing those divisons show that Apple is more than ever commited to the mac plateform development.
Since Apple has introduced MacOsX, apple has found strong new markets, as science, high end computing, video, music creation, entreprise, and on the personnal market there are still strong. So there is no sense to drop the mac now, when they have made some much things and advances in their platform.
And i read in many articles that people are agree to see that these new changes at Apple show that the mac platform will grow in a better way.
“However, I do find fishy why there was no new/faster G5 Macs announced since last year, it seems unlikely now that Apple will jump directly to 3GHz on the upcoming WWDC (a speed Jobs promised for this summer).”
We know why! Unfortunately IBm could not provide enough Powerpc 970fx at high frequencies to Apple, because of problems in their manufacturing process at 90 nm. I rather think that they decided now to drop the powermac G5 revision that they wanted to introduce in January-february, and go directly to the the 3 ghz during the WWDC.
I love all these comments – Mac hardware is compelling, Mac hardware is high quality, Mac hardware is blah blah blah.
Forget it! Apple is a public company that only looks like a cult from a certain oblique angle.
Mac hardware will be gone in five years. Why? Because not enough people are buying them. No one cares if it is “better” if it doesn’t sell.
I think you’re wrong and people do buy them. Shareholders do care about brand and customer loyalty. Apple makes computers, just like pixar does animation.
I’m as pleased as anyone about the success of the ipod, but maybe apple is not thinking about refocussing on the ipod, but liquidising the fashionable ipod/itunes asset? As it is the ipod was designed as a simple, cheaply (well perhaps not that) developed accessory, and in order to sell the thing apple created a music shop and a propriatory music format which it operates with minute margins. On top of that there is the ongoing hassle of the beatles legacy record label, the arrival of the sony psp with the nifty disks and then there is the microsoft device.
Clearly there is a great business to be had here, but it does look like a lot of work. Although as the MS guy said, apple knows how to compete. Anyway. It’s just a thought.
… but I sing “Other Words In The Wind”.
I think that all the MacZealots can shift as MacSaints, cause only the saints can survive againt this hate. You hate us, because we are the only computer users they can change the world with their own passion.
LinuxUser are full of words about open source and they can’t make software good enough to fight the Micro$oft-moloch or its partners (don’t tell me about OpenOffice.org cause it is nothing without the Sun’s milions of dollars).
In Italy we say: “The envy is an unpretty beast!”
Some good points have been made about why Apple simply isn’t going to get rid of the Macintosh hardware/OS/software combination in the short or even medium term. This is likely a straightforward business restructuring, as happens semi-regularly to large organisations.
However, since we’re speculating, then it may just be that the very clever employees at Apple have come up with “the next big thing” in microcomputing (or maybe not microcomputing even!), and will be working towards that. The “Apples” were supplanted with the “Macintosh”… perhaps now the “Macintosh” will be supplanted. What it will be supplanted by is an exercise left to the reader.
As the old saying goes: Time will tell.
Apple’s business model has been customers first and market share 3rd and they have been successful since Steve’s return. That approach has brought me great computers and excellent softwares.
I believe Apple could take Sony’s place or rival them in niche or special devices like he iPod that everyone wants.
From the article: “If switching to a direct sales model for Mac hardware goes well, that may be as far as the change will go. But what if sales don’t rise significantly, or they rise for a few quarters and then plateau or even decline?”
Why on earth would any sane person think that taking Macs out of Best Buy and CompUSA and selling them only through Apple stores and the web INCREASE Mac sales? That doesn’t make sense at all.
as per usual. It’s almost at the point that if he says it it must be total BS. How many years has apple switched to x86 , you know , which BREAKS THEIR ENTIRE BUSINESS MODEL. This is just one “Cringelyism”. I’ve read him before saying Apple will have 5 GHZ before intel. I’m such an arrogant anti-cringely I don’t need to read his spouting bull to know he’s wrong wrong wrong. cunt-scab.
“Why on earth would any sane person think that taking Macs out of Best Buy and CompUSA and selling them only through Apple stores and the web INCREASE Mac sales? That doesn’t make sense at all.”
Because if you’ve ever seen them in a Best Buy or CompUSA you know how bad of a job those places do. The sales strategy of the past few years is a big reason for their sales not rising as fast as everyone elses. Moving to Apple Store only has a two-fold solution…1 – get them out of the poor strategy they are in now, and 2 – give a MUCH better customer experience in an Apple Store.
Some years ago Cringely used information gleaned from his many contacts at Apple to produce insightful columns with the occasional accurate prediction about what the notoriously secretive company would be up to next. Clearly his information supply has been cut off (or else he’s being fed disinformation) because lately his predictions have really been missing the mark. Too bad.
anyone notice how he totally got the fact about Apple predicting they would sell one million songs in a year? They actually predicted to sell 100 million songs and were short by 30 million.
Why cant apple just support only a couple of good components, like make a nice deal with ati and intel for example. They keep making design computers with cheap hardware, other vendors can make macs out of the same hardware then and apple can just keep selling the os.
And third party’s could eventualy want support for there hardware and write drivers them selves.
I dont really see a problem here…just make sure you tell you dont support all x86 hardware, bingo you done..
Never worry about Apple getting out of the computer business, if nothing else MS will pay them to stay in it. Microsofts development of the new Office Suite for OS X is a pretty darn good indicator of Apple’s commitment to the business. MS damn sure had some assurances of them staying in the biz before rolling out this version for Apple.
I certainly wouldn’t hold my breath waiting for a x86 version of OS X either, highly unlikely to happen. It’s one thing to support an OS on the few bits of hardware Apple has available, quite another to open the doors to all of the tens of thousands of combinations available on the x86 side of the fence.
One would certainly think IF Apple were to have ever headed in the direction of an x86 compatible version of anything; they would have done it when the developed OS X.
Stranger things have happened in this world, just not by much.