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Together we add up, divided we're just a fraction - Thomas Monk, Accelenation
A new reality requires a new strategy at Apple
IT WOULD BE an understatement to say that we are in difficult times. People are losing their jobs left, right and centre; businesses are going bust, and many companies that continue to trade are reporting massive losses.
But some companies have been weathering the economic storm rather well. Apple is one of them. For the last quarter, the Cupertino, California-based company reported its best ever revenue and earnings to date.
Being so successful in an economic downturn would suggest all is well and that Apple should hold tight to its money spinning strategy. But an NPD report said that Apple retail sales for February dropped nearly 17 per cent from the same month last year - sales for January declined 5 per cent.
NPD analyst Stephen Baker said the reason for Apple's continuing sales slide was the higher prices that Apple charges for its kit. It's interesting to note that the PC sales for the same February period increased by 22 per cent.
If the negative trend continues what can Apple do to stem the tide? Some bold changes to Apple's strategy would reap not only increased sales, revenues and earnings, but more importantly, would diversify its user base in a very big way.
Before we talk about the specifics let's look at what makes Apple the company that it is.
Iconic design
When design brings forth function, usability and beauty in its purest form, iconic status is arrived at. Companies that reach that pinnacle can only maintain it by continunal iconic development. Such companies though are few and far between.
But with the second arrival - some would say the Second Coming - of Steve Jobs to the helm of Apple, that company has undoubtedly earned its iconic status.
The continual stream of jaw-dropping designs that exit the doors of Cupertino puts the company's competitors to shame. Because of this, Apple is able to stick price tags on its portfolio of products that other companies can only dream about. Also, Apple doesn't have to dilute the image of its brand - like the rest of the industry - by sticking tacky processor, graphics and OS labels on its hardware.
But leading-edge industrial design is only half of the Apple story. When iconic software is fused to Apple hardware a perfect union is born - the iPhone is a case in point.
So from an iconic perspective Apple has it all. Because of this isn't it now time for the company to broaden its appeal to the whole computer industry?
Windows on a Mac
When Apple changed over to the x86 processor architecture in 2006 the company had a great opportunity to make Windows powered SKUs available as well. But that didn't happen. Instead Apple introduced Boot Camp, which is a boot manager utility that officially allows Mac OS X to dual-boot with either Windows XP or Vista.
But that's the major problem with Boot Camp. Some people will view Mac OS X as baggage that they really don't need. Others will feel - even if it isn't justified - that setting up a dual-boot system is just too much hassle. Why make it hard for people who only want to run Windows on a Mac?
When the MacBook Air was launched everybody just said "wow". What Windows user who was in the market for a laptop wouldn't want the option to buy a MacBook Air that just ran Microsoft Windows?
As many are wedded to a Mac and even greater number are married - and happily so - to the Windows platform. So the likelihood of converting these Windows users to Apple would appear to be very remote indeed.
So Apple, if it wanted to, could introduce a Windows PC that few in the industry could rival. To differentiate the Windows OS from the rest of Redmond's offerings Apple could tweak it to give it a Mac look and feel. Of course, diehard Windows users would have the option to revert to what they know and love.
Many Windows users would pay a premium for such a machine. So why should Apple deny its shareholders this moneymaking opportunity?
A Mac for the masses
When Steve Jobs unveiled the original Mac Mini at MacWorld in 2005 it was billed as a Macintosh for the masses. Jobs described the machine as the most important Mac made by Apple.
The $499 starting price was cheap by Apple standards - even though it didn't ship with a monitor, keyboard and mouse. But today's Mac Mini starts at $599, which is just too expensive - that sort of money buys a fully-featured Windows laptop.
That MacWorld also saw the introduction of the iPod Shuffle, which had a starting price of $99. Today's counterpart starts at just $49. It should be possible for Apple to sell a Mac Mini - without a monitor, keyboard and mouse - for just $299 and still make a tidy profit.
Making Macs affordable
Because x86 underpins the Mac platform, Apple doesn't have to remain totally loyal to Intel. The company could offer boxes powered by AMD and VIA processors, which would help lower costs. But that wouldn't be enough. Apple would have to differentiate the software stack to justify the cheaper Mac.
So on an OS10 powered entry-level Mac - be it a laptop, desktop, iMac or Mac Mini - Apple could offer a version of OS10 minus all the eye catching candy. This would clearly differentiate this Mac from its high-flying siblings and would help to speed up processing on lower powered hardware.
Since all Apple Macs now ship with at least a dual-core processor as a minimum, a single-core powered offering would differentiate the entry-level Mac even further.
Embrace and conquer
Keep your friends close and your enemies even closer is a saying that many are familiar with. By officially adopting Windows as an alternative OS choice would certainly keep Microsoft close to Apple's bosom - that might also stop Microsoft CEO Ballmer from bad-mouthing Apple products.
But why stop at Windows? Apple should adopt and adapt Google's Android for use on its leading-edge iPhone. If Apple did that, the company would not only have another top-end phone, it would no doubt be a sales hit as well.
Offering Windows SKUs alongside Apple's current offerings would offset the company's declining Mac sales. If Apple was to also make entry-level Macs available and made Windows versions optional as well, this would accelerate Apple Mac sales by a quantum leap.
Apple's industrial design, the company's brand, and Apple's smart marketing would be the reasons behind the acceleration in sales. No other PC company has those attributes that would guarantee success.
People want cheaper PCs. Apple has to respond to that need. With its qualities, Apple doesn't have to compete at the very bottom of the value PC market. Apple can position its value offerings at the top of this market where money can be made.
In this economic downturn, we don't see anything else that Apple could do that would offset and then accelerate its declining PC sales. Does Apple have the sense to do the obvious? Let's hope the company is listening. µ
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You can't even shut up about them for your April fools jokes. What is up with you?
My eyes were on stalks reading this... until I looked at the date.
nuff said.
What we want is cheaper fully-featured Macs. And there is a Hackintosh netbook in my future, la la la :P
I just bought a Mac Mini for £680 so they better not lower the price NOW. :p It will be nice having a sleek, office PC that "just works" next to my gaming PC.
nuff said.
this article was pretty funny...
As if anyone in their right mind would think windows is good for anything...
ah ah ah ah.
hilarious.
This was a well written article and I agree Apple is too expensive for a bunch of hardware with Chinese labels all over it. I can say this because I have bought 3 Apple computers (One Core 2 17” iMac, one G4 Powerbook and a 2.4Ghz Black Mabooksince OS X Panther was released. So I know from direct experience that China is a major supplier of Apple products. They look great because of great design engineers working for Apple. Apple is for the most part is one of the best computer makers with reliability in mind, yes I have looked at several graphs about their reliability, IBM is real good too. Put that information with OS X and you have the obvious winner. I do disagree when you say,
“But that's the major problem with Boot Camp. Some people will view Mac OS X as baggage that they really don't need. Others will feel - even if it isn't justified - that setting up a dual-boot system is just too much hassle. Why make it hard for people who only want to run Windows on a Mac?”
My Reply, “People who shell out the extra cash for Apple gear do so mainly for OS X (OS 10). So saying they would buy a Mac then go 100% Windows is about the same as saying Linux on it though I have heard of people with money doing it. The option to run Windows is an extra incentive for those users who need to run windows specific applications can now do so without running a virtual machine that is slow at best.”
I highly disagree with this statement, “So on an OS10 powered entry-level Mac - be it a laptop, desktop, iMac or Mac Mini - Apple could offer a version of OS10 minus all the eye catching candy.”
As a Mac user for years OS X uses Open GL for the eye candy and the Aqua interface is not near as computer intensive as DX 10 is. I ran the full Aqua (There is only on or off) under with Leopard on a Macbook with only a X31 Intel graphics chip and it was as responsive as Vista is on this 2.13 Core 2 Acer with 4Gb of Ram on a GMA 4500 Intel chip. The idea of a stripped down version of OS X, thus copying Microsoft and all their versions of Vista is blasphemy! Besides there is actually is a striped down version of OS X, it's called the iPhone.
Have a great day,
Regulas
Windows (and ONLY Windows) on a mac: what a great idea, Mario! In fact, it would be a dream come true! My other dream come true would be to be able to buy a BMW M5 and replace its engine with the one from a Kia...
"If Apple did that, the company would not only have another top-end phone, it would no doubt be a sales hit as well."
It's broad assertions like this that make this a very poor analysis and the journalist should stick to reporting and not commentary.
Why would Android create another sales hit? Would they sell considerably more than the already top selling iPhone just by switching phone OS? Of course not.
However, if the article is actually an AF joke, then the joke is on me.
Heheh, had me going there for a while.
On a serious note, it really would never happen. Apple WANTS people to differentiate its products from the common PC. Even the word "Mac" is used to try and convince you that their machines are somehow different to everything else on the market.
And running Windows? Cut-down operating systems and single cores? That's just not what owning a Mac is about... the whole idea is a 110% experience - contiguous, entertaining, pleasant. To do anything else would render the point of buying a Mac irrelevant.
That's why it will never happen. If they release a netbook, you can be your ass it will not be running 'cut-down' anything ;)
some of you can not be any more narrow minded. the author isnt arguing everyone wants windows on mac machine, but SOME people will want to do that.
And there are plenty of people that want a macbook AIR: execs who has the money but need the lap top to adhere workplace winodws based policy, running windows based in-house software; for rich kids who has the money but want to play windows only games; for geeks who like max design but want the windows software versatility.. the list can go one. if these make up for 1% PC population who had no choice with mac so they had to buy an expensive PC laptop, you realise it is equivalent to extra 10% buyers for Apple?
That was just the first wave.
Wave 2 begins tomorrow:)
Just because the cost of an mp3 player falls by half in a given time period doesn't mean the cost of a Mac Mini can do the same.
An mp3 player contains parts that get cost-reduced all the time; you can use less flash chips in your new model with the same specs, and maybe you combined the processor and chipset into one die. It's certainly possible when you have as much pricing control as Apple does on an mp3 player.
But when it comes to a laptop-based system like the Mac Mini, Apple has little control over price reduction. The Core 2 mobile processor is kept at artificially-high prices by Intel (the one in the entry-level Mac Mini retails for $200). The DVD drive and hard disk have minimum costs that you just can't get around (laptop-sized DVD drive + 2.5" hard drive = around $120 in retail). Throw-in the cost of chipset+PCB, memory sticks, assembly, packaging, and the $20 PSU, and you're topping $400-450 just for the box. And Apple needs a high markup, so the $600 price makes sense.
Apple COULD make a Mini for $400-500, but it would have to be an Atom platform with crappy performance. Intel's outrageous pricing model for their high-end mobile CPUs means you have to sacrifice lots of performance to reduce costs. But hey, what do you expect Intel to do when AMD can't compete in the mobile market?
What's a Windows "SKU"?
I've never heard of SKUs before. Google and wikipedia suggests the acronym might stand for "stock keeping unit", which makes no sense.
Besides, the article is crap. The only new strategy Apple needs, is the same one with slightly lower prices. And of course widening their product lineup with something in the middle of the mini and the mac pro:
A nicely designed midi desktop box with replaceable processor and the ability to install two hard drives. Add two PCI-slots for graphics cards.
Voíla! Instant doubling of Apple marketshare!
There are LOTS of Windows AND mac users who long to buy such a machine, capable of running OS X for productivity, and Windows for games, without forcing you into the stupid all-in-one factor. It could cost 50% more too, and still be a hit. People have been crying about the lack of this machine has for a decade!
But unfortunately Jobs likes non-expandable all-in-one machines, because he is a control freak. He's both the saviour and the nemesis of Apple, all wrapped up in one.
dude are you living in year 1999?
Laptops sporting the specs of Mac Mini cost easily 1/4 less, now that is including a screen, keyboard, mouse and possibly better connectivity.
here is New Zealand 320 GB mini cost a whooping 1828 NZD (in line with US pricing), a Dell Inspiron™ 1525 cost 1199 NZD with 250 GB HD, but it has 1 more GB of ram. as well a screen, keyboard and touch pad as mouse. that is over 35% less and you get more stuff!
so there is no reason why Mini (and all apple product in general) cant drop their price by about 30% and still make a decent profit.
Mainly good points, but a lot depends on you actually thinking Apple's designs are beautiful. I don't. Iconic they may be but to me they look more like they belong in a kitchen.
This is the dumbest article i have read in a long time. And i have read some REALLY DUMB stuff lately...
pfft, boot camp.
the windows 7 disc can boot straight off an efi-based computer, so you can install it without ever touching that osx filth
seriously, no amount of flashiness makes up for the dock being such an unorganized, arse-backwards ui. mated to an operating system that hogs more memory and supports less applications.
Wow! This author doesn't "GET IT!"
Improve Windows on a Mac? Ludicrous!
My Wincrap machine went in the dumpster years ago. One of the most satisfying Mac experiences is listening to all the morons who still use Wincrap! Let them defend their expertise at keeping a piece of junk running and fending off viruses. If they like Fords, that's great and makes owning a Bentley all the more pleasurable.
It is possible to install Windows only on a Mac computer. Partition a drive with Boot Camp, lay down a Windows build on one side, and absorb the Mac side back into the Windows. I wouldn't trust it on a laptop, but we've done it on several iMacs and Minis with great results.