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Is Steve Jobs Really Milking the Macintosh?

When I read a commentary from John Martellaro of The Mac Observer this week, suggesting that Apple might want to use some of its huge cash reserves to construct a highly-automated manufacturing facility as a hedge against poor working conditions and uncertainties in Asia, I was struck by a single paragraph that contained a quote from Steve Jobs dating back to February of 1996.

Speaking to Fortune magazine, Jobs said: “If I were running Apple, I would milk the Macintosh for all it’s worth — and get busy on the next great thing. The PC wars are over. Done. Microsoft won a long time ago.”

Understand this all happened months before Apple actually bought NeXT and brought Steve Jobs back to the company he co-founded, so maybe there was a touch of sour grapes or Monday morning quarterback posturing in that remark.

Indeed, it’s clear to me that Apple is becoming far more aggressive in its efforts to expand the Mac market, which has to come at the expense of Microsoft. Of course, this is one of those odd business relationships where two companies may compete in some areas, and cooperate in others. It’s all done for the worthy goal of making as much money as possible.

But what comes back to haunt us is whether there was something in the back of Jobs’ fertile imagination that encouraged him to make this statement about where to take the Macintosh. I mean, it’s not as if there have been huge advancements in Apple’s personal computer technology subsequent to the release of Mac OS X. All of the enhancements have been incremental, designed to better exploit the tools they were already using.

As far as Macs themselves are concerned, there really haven’t been huge changes in the form factor or the basic feature sets either. Apple is largely leveraging the latest chip designs from Intel, and, of course, AMD/ATI and NVIDIA, its graphic processor suppliers.

Even when there has an exclusive design from Intel tailored to an Apple product, such as the MacBook Air, Apple’s real competitive advantage is at best a few months. After that, the rest of the PC makers get their own chance to use the very same parts.

Certainly all this has combined to deliver lots of big profits to Apple. Mac sales are growing at several times the rate of personal computers in general, and the market share figures have exceeded 10% in some segments of the U.S. market. In fact, in the price categories in which Apple competes, Macs get a majority share of retail PC purchases. Way to go!

So is this really an attempt to milk the market until it plateaus? Indeed, are we, as some tech pundits have suggested, in the twilight of the PC era, where something new and different will inevitably take over in the near future?

Certainly, the overall movement is towards the mobile platform. Around two thirds of Apple’s computer sales are note-books now, and more than half of PCs in general. Certainly having the computing power of a desktop in a compact case is very convenient, because, except for a few niche markets, you don’t have to place a huge, lumbering beast of a tower below your desk. Today’s Mac note-books can be comfortably carted from place to place as needed — and that even applies to the 17-inch MacBook Pro. You can hook them up to larger, stationery displays and external input devices if you choose, so you definitely have the perfect all-in-one device.

At the same time, Apple’s new Wi-Fi mobile platform is taking portability into a new direction. Today’s iPhone 3G has far more memory, storage space and sheer processing power than Macs built not so many years ago. While the technology still has its teething pains, it won’t be too many years before you’ll be able to use a handheld computer to perform pretty much all of the tasks formerly reserved to larger devices.

Does this mean you are forever tethered to a touch screen to make such gadgets work? Not necessarily. There’s nothing in the basic technology that — with the appropriate software updates — would prevent you from hooking up wireless input devices, such as a standard mouse and keyboard.

What about external storage and a large flat panel display? Maybe a special docking system in the near-term would handle those chores. It won’t take a lot of time to develop cost-effective hardware that will allow you to get excellent graphics performance without a physical cable connection.

These developments, plus the expansion of standard note-books with low-power chips containing four or more processing cores, will send the traditional desktop PC off to a well-deserved retirement.

Until then, Apple will continue to milk the market for all its worth, no doubt. So it may well be, in what was probably just an off-handed remark, Steve Jobs was totally prophetic.