Apple Stays the Course

October 22nd, 2008

One line still used by politicians running for reelection is that they did a good job and want to continue to perform in a similar fashion, to stay the course. That is, unless things are going badly, in which case they try to reinvent themselves as reformers, who will fight all those big, bad politicians.

Of course, they will probably find the worst offender simply by looking in the mirror.

In any case, during a surprise guest shot during Apple’s meeting with financial analysts this week, Steve Jobs answered some questions and delivered a tantalizing hint or two of what was going to come. That should keep the rumor sites buzzing until Macworld Expo 2009, where the speculation will be shown to be true or false.

It does seem that, despite his reputation as a master at the great art of verbal spin, Jobs was refreshingly honest in some of his comments. Take, for example, his remarks about the present state of economic uncertainty: “We are not economists. Your next door neighbor can likely predict what’s going to happen as well as we can.”

And possibly better.

As far as those future products are concerned, Jobs admitted they were watching the “nascent” category of netbooks — cheap, low-feature note-book computers — closely, but hadn’t decided whether it was worth their attention as a future product category.

When it comes to Jobs, of course, you can’t always know for certain where his intentions really lie. He might, for example, dismiss a product category outright, and then introduce it a short time later. Consider the Mac mini, for example. During a certain analyst meeting in the fall of 2004, Apple’s financial people were asked whether the company was going to enter the low-cost PC space. They said no. Sure enough, at Macworld Expo 2005, in San Francisco, the Mac mini was unveiled.

Now it’s also true that the mini probably hasn’t fulfilled its promise sufficiently for Apple to deliver regular upgrades. There are even published reports from Europe that it has reached end of life status, with no indication whatever that a successor is waiting in the wings.

We’ll probably know for certain when the expected iMac refresh arrives later this month. If there’s no accompanying Mac mini speed bump, perhaps using the same NVIDIA motherboard that premiered in the new MacBooks, you’ll know the mini’s days are numbered.

That, of course, would be unfortunate. I always saw tremendous potential in the mini. For one thing, it was a cheap way for Windows switchers to adopt the Mac and still keep their existing monitors and input devices. But not just Windows users. One of my clients actually sold off his Power Mac G4 and replaced it with a Mac mini. For him, it was just the perfect computer, and actually a whole lot faster than the one he had, despite the mini’s well-known performance limits.

Consider all those millions who buy $399 PC bundles at Wal-Mart. At $599, the mini might seem pricey. But if they’re on a budget, paying $999 for the entry-level MacBook may be way out of reach, particularly in difficult economic times.

The question is, of course, whether Apple is really losing lots of potential sales there, and whether the profit margins are even worth the bother. Besides, isn’t it also true that more and more personal computer users are ditching desktops and relying strictly on note-books?

In fact, when I interviewed Bob “Dr. Mac” LeVitus for this week’s episode of The Tech Night Owl LIVE, he confessed that he now does all his work on a MacBook Pro. Sure, it’s often connected to separate input devices and an Apple display when he’s in his home office, but this is his ideal all-in-one solution.

More to the point, over 60% of all Macs sold these days are note-books. So they might indeed feel there’s no incentive for Apple to develop any more desktop models at this point in time. It’s not as if they can or should occupy every potential market segment. They pick and choose carefully, and you can bet they gave careful thought to a thin and light note-book before the MacBook Air debuted.

Now I remain among those who stick with a dedicated desktop Mac. While I wouldn’t buy it personally, I still see potential for that “mythical midrange Mac minitower” or headless iMac that some of us have been clamoring for.

But if desktop PCs are truly yesterday’s news, where’s the incentive to develop yet another entrant into this segment? Besides, if the current economic crisis continues without letup through the coming year, Apple will have to fight tooth and nail to sell you the products they have, and the prospects for new gear have lessened considerably, at least for now.

On the other hand, Apple’s existing lineup seems powerful enough to definitely withstand the worst the economy can throw at them. That is, so long as there are still enough people around who are able to buy.

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7 Responses to “Apple Stays the Course”

  1. Jim says:

    I use only desktops as I abhor trackpads. Funny, my iPhone doesn’t bother me at all. FWIW.

    Have a great day,

  2. Andrew says:

    I generally have very little use for desktops, but when I need one, I REALLY need one. There are certain tasks that just go much faster on a desktop, and while external displays work great on modern laptops, the flexibility of multiple video cards on a tower just cannot be matched by a laptop.

    Where Apple’s emphasis on the all-in-one and previously the Mini disappointed me was in the area of multiple monitors. Yes, the iMac can drive a second monitor, but what about a third, or fourth? In that regard, it is the same as a laptop.

    I just bought a Mac Pro to replace a 9-year-old Power Mac G4. The G4, in addition to an ATI Radeon 9800 card in its main AGP slot, also has an additional Radeon 9200 PCI video card. My Mac Pro has the base ATI graphics card. I use two 20″ (non-wide) UXGA monitors, both hooked up to the stock video card through DVI on the Mac Pro, while on the G4 each was hooked up to a DVI port on its own video card. Graphics performance was excellent in Tiger on the G4, and remains excellent in Leopard on the new Mac Pro.

    The Mac Pro was very expensive, but then again, so was the G4 back in 1999. The G4 has stayed current for 9 years through judicious upgrades, but even with its original 400MHz G4 and ancient 16MB video card it can still serve well as a basic office productivity machine running Tiger and Office 2008. I am sure that the Mac Pro of today will, 9 years from now, be able to run if not the latest release of OS XII or whatever, then at least the previous generation. If I can get the same 9 years out of the Mac Pro, it isn’t expensive at all, but actually quite a bargain.

  3. Kaleberg says:

    Back in the early 1980s, when networking was still young, I’d often visit startup companies, and they’d have a few PDP 11/05s just sitting around in their machine rooms or sometimes in utility closets. I asked about these at one company which had much more powerful systems for use by their programmers. The answer, “The PDP 11/05 is just the computer science equivalent of a piece of wire.” They were using these as routers, to control disk drives and generally to convert one protocol on one side into another protocol on the other side and push traffic through.

    Apple sells a number of “computer science equivalents to a piece of wire”. There is the Airport Extreme, its little cousin, the Airport Express, and the Apple TV. The problem with the Mini is that it is just a bit too expensive to use as a piece of wire, and it is a bit too weak to serve as a proper desktop workstation. As one commenter noted, laptops are great for a lot of things, but when you really want power, you have to sit down at a desk. If you sit down at a desk and don’t get the power you need, you might as well go back to your MacBook Pro.

    Every so often I consider buying a media computer to drive a large flat screen TV. The Apple TV has its followers, and the TiVo is getting more network oriented, so it should be able to work with Hulu, Youtube and other such sites. Unfortunately, the Apple TV is a closed box. If I decide I want to watch DailyMotion or some other site, I can’t just download some modestly priced application. The Mini might serve, but it is a bit expensive, and the off the shelf media software is still lacking.

    I expect this situation to last another year or two, but eventually there will be a new “piece of wire” to handle home video.

  4. hmurchison says:

    I’m under the “we need low cost desktops” umbrella. I do recognize the convenience and portability of a laptop but there is one immutable fact about laptops vs desktops.

    1. Laptops are always more expensive within a given performance band.
    2. Because of #1 they are more expensive to repair.

    Laptops are great if you can afford them. But they invite the potential for higher repairs, lower performance and poor posture (I’m into ergonomics and frankly most laptop setups are very poor).

    Apple simply doesn’t want to play in the low cost/low margin arena. The computing needs of my 6 year old son are not the same as his 37 year old father. Why would my son require a kilobuck computer? His needs are very simple and there are few Macs that can help me affordably meet his needs.

    I think a Macbook is what you send your High School upper classmen or College child to school with. A Netbook is what you send your Jr High kid to school with. You have to mitigate your risks here with lower cost options because child ought not be carrying around expensive technology that they cannot care for.

    When I look at Apple’s lineup it’s crafted in a way that makes the most sense to Apple. It’s not crafted to make for well fleshed out options for consumers. If it was we’d have consumers Macs resembling appliances less and computers more.

    As technology sprints down multiple paths of evolution what was once prohibitively expensive becomes passe. Because Apple could not make a $500 desktop 5 years ago profitably doesn’t mean they cannot do that today. In many ways Apple is still that fearful and “beleagured” company. The reason why I say is because they still are beholden to selling high margin products to less people rather than expand their offerings and manufacture new ways to profit from these masses. I believe what they’re doing is conservative but successful but that doesn’t mean I do not believe they could be doing better.

  5. Sean says:

    I’m not sure how successfully eating the big PC box makers’ lunch in the high and mid-range computer market is being ‘beholden to selling high margin products’. If you can sell products you are proud of profitably, what sort of responsibility do you have to sell unprofitable systems just because customers you choose not to serve want them? As to the profitability of $500 computers, apparently you and Steve Jobs disagree, as he specifically mentioned that Apple doesn’t know how to make a $500 computer they want to sell.

    Not to directly compare Starbucks to Apple, but there was a time in this country (the 1980s) when coffee came, black, with half-and-half, and one or two sugars. Somehow Starbucks convinced Americans that Lattes, Espressos and Frappuccinos were not only not un-American but worth paying quite a bit more than the cost of ‘coffee, black, two sugars’ to obtain. I don’t frequent Starbucks, but last time I was there I don’t remember anything that would have been recognized as ‘coffee’ when I was a teenager. Apple does not have to participate in the race to the bottom in order to grow market share.

    Having said that, I too like the Mac mini and hope that Apple chooses to expand its capabilities, perhaps by adding a TV tuner, DVR software and the functionality of Apple TV. A mid-range tower is also a product I would like to see. Such products, however, could have serious repercussions for Apple, with competitors and on its bottom line.

  6. Bill in NC says:

    Can we at least get a Mini revision with Santa Rosa?

    But preferably with the new MacBook internals instead.

    Though I’d like to keep Firewire.

    My 5 year old eMac is getting a little long in the tooth…

  7. Andrew says:

    A 5-year-old eMac or a 5-year-old iMac have both lived their useful lives, and may have more life yet depending on what you want from them. Consider though that if you had bought a Power Mac 5-years-ago, while soon to be left behind by Snow Leopard (probably), it would remain extremely powerful and capable under today’s Leopard and just about all front-line software applications.

    Actually, had Apple not stunned us all in 2006 with the move to Intel and remained PPC, that G5 would likely have another 3 or four OS revisions to go before obsolescence.

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