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  • The Products Apple Shouldn’t Make!

    February 5th, 2009

    You know a lot of the media and financial analysts out there write a troubling amount of copy suggesting that Apple is truly missing the boat if they don’t try a particular marketing strategy, or produce a certain product.

    While I am not above making a few suggestions myself from time to time, I don’t pretend to really have a thorough background in product development or sales, and thus I would probably be the last person to devise a workable strategy. I can certainly tell you what products I’d like to see, and hope that Apple or another company might find a way to fill that need, but that’s all I can do.

    Certainly, the folks who publish their suggestions to Apple are, for the most part, well-meaning and all, but sometimes they come up with suggestions that just don’t make sense, or were tried in the past by Apple and others and failed miserably.

    At the top of the list is the oft-repeated demand that Apple unlock Mac OS X and release it for all PCs, so that they can compete head to head with Microsoft on the very same hardware.

    They seem to forget that Apple tried a cloning strategy in the mid-1990s. The licensed the Mac OS and reference hardware designs and a few manufacturers signed up and began to sell Macs dressed in low-end PC clothing.

    Unfortunately, that particular deal was ill-advised. Rather than expand the market for Macs in the wake of the success of Windows 95, these Mac OS licensees went after Apple’s core markets with a vengeance. Power Computing was perhaps the worst offender. Indeed, not having to sell products in the same quantities as Apple, and spending minimal time designing their rebadged PC cases, they actually beat Apple to the punch in getting out new models with speedier processors.

    Well, that was long ago and far away. Steve Jobs returned to Apple and did his best to ditch the cloning program. What the critics don’t realize about Apple is that its structure is not like Microsoft or Dell for that matter. They sell hardware with integrated software, a complete solution. That situation is quite unlike the other PC makers, who have to go to Microsoft for most of their operating system needs; that is, except for the ones who are bundling Linux with their products.

    The Mac OS is what makes Apple’s hardware distinctive, in addition to the elegant looks of course. Letting other PC makers bundle Mac OS X might expand Apple’s share, but it would also help gut sales of the hardware, which is where the lion’s share of the profits originate from.

    Of course, if the pundits who seem to have forgotten such fine details would just break out their calculators before writing their purple prose, they might sing a different tune. Then again, maybe they just don’t care.

    Add to the list of products Apple doesn’t need is a cheap iPhone. Apple doesn’t want to become another Nokia, LG or any of the other mainstream cell phone makers. They only enter product segments where they think they can make a difference, and make great profits of course. Far too many companies believe that they have to fill every conceivable niche, and they might even add a few more for safe keeping. As a result, customers often have to choose from among overlapping products that seem to lack fine distinctions.

    Consider the cheap PC box you buy at, say, a Wal-Mart, for $499. It comes with the display, mouse and keyboard, and a basic software selection. I suppose it even works decently enough, but compared to even the Mac mini, it’s probably a load of junk, and Apple has protested time and time again that they cannot compete with such offerings without also delivering mediocrity.

    This isn’t to say that the Mac mini is going to disappear or just remain in the lineup without any change. Once you add the display and input devices, even the $599 mini sets you back $700 or $800, although you can use the ones you have, of course. That doesn’t make it overpriced, as some are apt to suggest, but I won’t get into the issue of genuine cost comparisons right now

    Apple is also highly likely to avoid requests to turn the Apple TV into just another DVR, one little different from a TiVO or the box your get from your cable or satellite TV provider. Other than TiVO, those products are usually rented or sold at low cost by those providers strictly to get you to order their services, from which they make the real profits. Where’s the value in that? Besides, when was the last time TiVO earned a profit — or the first for that matter?

    I’m sure you readers can come up with lots of other products that Apple doesn’t need to build. I suppose you can include a large screen flat panel TV and a host of other gadgets that serve already-saturated markets. As for me, I’ve only just begun.



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    8 Responses to “The Products Apple Shouldn’t Make!”

    1. hmurchison says:

      Apple does need a Netbook. I’m sorry but a low cost laptop with, in my opinion, an unusable keyboard (I’m not a hunt and pecker typist) and gutless processor isn’t my ideo of a revolutionary product.

      Apple doesn’t need a gaming console. Let Microsoft and Sony enjoy their crimson baths. Sure some parts of the gaming ecosystem are profitable but not enough. Apple’s stock has faired better than Microsofts over the last couple of years with nary an improvement in games beyond the iPod/iPhone.

      Apple doesn’t need a HDTV. TVs are basic devices. People want to turn them on and change the channel. There’s very little to differentiate beyond the panel. The latest TV have net connections and widgets but honestly do I really need to check my stock portfolio on my TV or view the latest weather widget when my front door is but 15 yards away?

      Would I would like to see.

      Apple needs a storage device for aggregating iTunes content. A device that is easy to share iTunes media and other media across Macs, PCs and iPod/iPhones.

      Apple needs a cheaper Apple TV. The heat that an Apple TV kicks out is impressive for such a small box. Apple needs a CE device which means cooler chips and asics. The next magic pricepoint is $149.

      Apple needs a Mac mini. Why shouldn’t the computer “market” mirror the microprocessor market. It became clear to Intel and AMD that clock speed wasn’t going to deliver the benefits that consumers needed thus they began to divide the processors like a cell branching out horizontally. Consumers are travelling on this same trajectory where today’s computer speed is enough for the basic user and thus we are branching out wider with more pervasive use of computing. The Mac mini isn’t sexy to Apple but it’s a workhorse and a Mac with charm. I love mine. Keep this going, the mini is the ultimate switchers computer or computer for space challenged folks.

    2. Hitachi McBoogernoodle says:

      I think a SOHO server edition of the Mini might be a hit. Replace the optical drive with a second hard drive to use as a RAID-1 mirror, tweak 10.5 to allow basic file, FTP, & web serving, and you’ve got a compact, take-anywhere workgroup server. They wouldn’t sell a bajillion of them, but they’d be great for small businesses that don’t really need an Xserve.

    3. themacbuddha says:

      Apple doesn’t have much longer legs for the desktop market. The current line up of screen sizes is just about optimal, whether built-in or stand alone. I can’t imagine anything larger than a 30″ iMac being the last of hanger-on device 10 years from now. Portable and handheld devices are the prime growth points for Apple for the foreseeable future.

      Apple will most certainly create an OS X-driven TV at some point. As Internet technologies mature, and more devices connect to it, the natural progression for users will be to the living room. Why shouldn’t my computer, whether a MacBook Pro or an iPhone, be able to communicate/control other things within my home? Where exactly is the true hub of my digital home? It isn’t in the custom server closet I had built into my apartment or house, not everyone has that sort of money or need. It isn’t my MacBook. Limited storage and processing power. It isn’t my iPhone. Even less power and storage and of more focused purpose. However, I can combine the power of all my devices. Things like Xgrid and OpenCL make that happen. For storage I need a central point that can easily be expanded upon. And ultimately I would like a big screen, 40 to 60 inches, that provide the most incredible experience. Combine that with the ability to use the most wicked/current graphics and drobo-like storage functions/capacity. It is hard to say to what degree OS X will function. But holy cow! How cool would something like this be. This is what I want in my living room someday.

    4. Hitachi McBoogernoodle wrote:

      I think a SOHO server edition of the Mini might be a hit. Replace the optical drive with a second hard drive to use as a RAID-1 mirror, tweak 10.5 to allow basic file, FTP, & web serving, and you’ve got a compact, take-anywhere workgroup server. They wouldn’t sell a bajillion of them, but they’d be great for small businesses that don’t really need an Xserve.

      Right now, they’re using the firewall port for server drives; at least that’s what I’m being told. You really don’t want to use a laptop drive for that purpose, even if you added RAID-1.

      Peace,
      Gene

    5. Kaleberg says:

      In summary, Apple needs to make products that make money and not make products that don’t make money. In this day and age, with CEOs pulling in tens of millions a year, this is a surprisingly unconventional business strategy. It’s as clever as buy low and sell high.

      It is interesting to see a convergence towards a desire for some kind of home server and media center. I’m not the only one who wants backup, synching, sharing, and ideally streaming for my household and under my own control. The exact set of services varies from user to user, but there is an evolving need.

    6. David says:

      I don’t think Apple should get into the business of selling TVs, even if an integrated AppleTV were part of the equation. In fact I think a upgraded AppleTV with better interactivity is as far as they should go in that direction. I’d like it to play my DVD collection because it would cut down on the number of remotes I need, but Apple isn’t going to do that.

      As hard as I find the iPhone screen to use for web browsing (text is illegibly small or I’m scrolling constantly), I don’t think there’s a strong market for a Newton sized device even though I look at the PSP and think a thin Newton sized iPod touch would be great. Once you reach the size of a woman’s clutch purse you might as well make it a folding device with a keyboard, in other words, a netbook.

      I know Apple doesn’t want to build a netbook or a low cost desktop at all and they can survive by only selling premium products, but they can’t continue to grow that way. Even if today’s netbook buyers find the experience poor, and from what I’ve been reading most are happy with them, there’s no doubt that Apple is going to be chasing an ever shrinking number of customers who are willing to spend more than US$1000 on a PC.

      I think the market has decided that a 50% Apple price premium is fair. You can see it in their notebook line where MacBooks at $999 and $1299 are doing well against $699-$899 PCs.

      The desktop line is suffering because it hasn’t kept pace with recent hardware advances. Apple’s wrong if they think refreshing a model once every 12-18 months is good enough. The 20″ iMac is underspec’d compared with PCs costing $800-1000 and even the 24″ model with its nice IPS display is looking overpriced because it’s so old under the hood. Perhaps most sad of all, $1000 PCs using the new Core i7 architecture compare well to the $2800 Mac Pro.

      Hopefully Apple’s forthcoming desktop refresh will restore the balance and the 50% price differential.

    7. Richard says:

      “There must be 50 ways to…say that Apple can not compete in the open market. This has been one of them.”

      Let’s face it, Apple is as cheap as any other company, they just charge more.

      Although Apple’s hardware “currency” is much improved since the move to Intel chips (a great move), Apple is still in the habit of pushing hardware with quite a few components that are out of date compared to what you can get elsewhere.

      Apple, it would appear, is not really capable of “keeping up with the Joneses” in terms of hardware implementation. They spend (waste) more time coming up with screwball implementations just for the sake of having some Rube Golberg device that does not do anything more than any other.

      What is significant about Apple is the OS. That is all. What is needed at Apple is a new commitment to expend more effort producing functional hardware which permits the user, either business or consumer, to get what they need in the way of hardware that fits their needs. Not everyone wants, or has their needs met by, an iMac. Not everyone needs, or wants, a workstation class Mac Pro.

      What could come to pass is that people who very much like the OS will depart because they will buy the hardware they need even if they are unable to obtain the OS of their choice to go with it. The other OSes are, in most circumstances, “good enough”.

      In an ideal world Apple would split into two divisions which operate under their own management. One would be the software division and one would be the hardware division. Left to their own devices, the software division would do what it needed to do to maximize revenue (and profits) and the hardware division would do…well, probably not that well because it is simply not that good.

    8. Kaleberg says:

      “In an ideal world Apple would split into two divisions which operate under their own management. One would be the software division and one would be the hardware division.”

      That sounds like a formula for disaster. That’s what Microsoft and the PC companies do, and it gives nothing like the integrated user experience one gets from a Mac. I think Apple does better by competing for customers who want hardware and software that work together, and leave people who just want the best hardware or best software, whether they work well together or not, to other suppliers.

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