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  • That Silly “Apple Must Compete With” Argument

    May 28th, 2013

    Along with the announcement of a new version of Microsoft’s Xbox gaming console, the One, comes renewed demands that Apple must release a fleshed out Apple TV to compete. After all, it’s Microsoft and Apple is falling behind the curve. When others lead, Apple must follow, or something like that.

    Now I have little doubt that Apple is working on some sort of strategy to gain a more significant place in your living room. Maybe it’s a souped up Apple TV with more features and the ability to manage all of your entertainment gear. Or maybe it’s a connected TV with the aforementioned features. Or maybe it’s both. Apple surely wants to keep us guessing.

    There are also demands that Apple must produce a cheap iPhone, or fall way, way behind other companies, such as Samsung, which have already littered the market with cheap stuff. Little profit? No matter. Apple merely needs to sell more units to catch up, but that doesn’t seem to have really helped the competition in the mobile handset market or even the PC industry for that matter.

    When it comes to mobile gadgets, Apple gets most of the profits and Samsung is in second place. The rest of the companies earn a bit, lose a bit. So selling lots of gear doesn’t really help if the profits from each sale are small.

    If it was a matter of big profits versus market share, what would a company run by a sane CEO prefer? Well, big profits mean more money for R&D, larger buckets of cash for employees, especially those who occupy the executive suite, funds to help shore up a company during an economic downturn, and maybe something to return to shareholders. Nothing wrong with that, although Amazon continues to survive without showing much in the way of profit. But they sure have to sell lots of stuff to stay ahead of the curve.

    Apple has also been urged to come up with a cheap PC. The closest they came was the Mac mini, which debuted at $499 in 2005, and now sells for $599. This model arrived some weeks after Apple once again reminded you that they do not build cheap gear. But as PCs go, the mini is really a medium-priced computer, and you don’t even get a mouse or display. There are loads of PCs that sell for less, and contain everything you need. Well, other than providing aspirin or a substitute to help deal with the headaches you might suffer setting them up or using them, particularly if Windows 8 is preloaded.

    However, in case you haven’t noticed, Apple isn’t in the habit of building something because the media or financial analysts tell them to. How many were clamoring for an iPod anyway? Sure, after the iPod arrived, other tech companies were racing to compete, and even Microsoft tried and failed, but not before.

    The iPhone? Well, Motorola once did build a feature phone that supported iTunes, the ROKR. Motorola boasted that the ROKR “is rocking the world,” but it didn’t move a pebble. Motorola’s design and user interfaces were pathetic. The product failed, and that might have been the end to Apple’s flirtation with the mobile handset market. Well, until the iPhone arrived.

    But before the iPhone appeared, all eyes were on the BlackBerry, and even the imitations from Samsung and other companies had tiny physical keyboards. The BlackBerry was an executive plaything, and even a certain future U.S. President had one. When Apple announced the iPhone, far too many said the product was dead on arrival. Until after it arrived, and almost every other mobile handset maker decided to follow Apple’s design lead.

    The iPad? Well, before Apple’s tablet was launched, the critics suggested Apple needed to jump on the netbook bandwagon before it was too late. Netbooks, which were little more than tiny PC note-books, seem to catch on in a big way until customers realized they were cheap hunks of junk. Since tablets, or at least the convertible PCs that Microsoft labeled tablets, had gone nowhere outside of a few vertical markets, the arrival of the iPad was greeted with extreme skepticism.

    Until people started buying them. Suddenly there were iPad imitations all over the place. Microsoft? Well, the Surface is basically a slim and light PC note-book, combining the original concept of a tablet with a netbook. And, predictably, there are few buyers.

    So should Apple make a cheaper iPhone, one that’s inexpensive without a subsidized carrier contract? Considering the fact that the iPhone 4 sells for $400-450 unlocked, a lot of potential customers in less-developed countries cannot afford one. As these countries become more prosperous, the populace will be able to buy more expensive gear, and if they’ve already become accustomed to an existing ecosystem, and I’m assuming Android, would that hurt future business for Apple?

    But Apple sells a cheap iPod, the Mac mini isn’t terribly expensive, and the iPad mini brings Apple’s halo to a larger market. If Apple can pack the best of the iPhone in a classy yet less expensive package, they’ll probably do it. But not because the media tells them to.



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    2 Responses to “That Silly “Apple Must Compete With” Argument”

    1. Articles you should read (May 28) …. says:

      […] “That Silly ‘Apple Must Compete With’ Argument: Along with the announcement of a new version of Microsoft’s Xbox gaming console, the One, comes renewed demands that Apple must release a fleshed out Apple TV to compete. After all, it’s Microsoft and Apple is falling behind the curve. When others lead, Apple must follow, or something like that.” — “The Tech Night Owl” (www.technightowl.com) […]

    2. DaveD says:

      I do wonder if the folks at Apple find the “tech” pundits’ suggestions as to what to build next, humorous. A laugh a day at least.

      I am all for constructive criticisms. It is what I would expect from evaluators who do field tests on a new product and from users of existing products. Knowing what doesn’t work is invaluable. Making the proper corrections make the product better.

      Every time I pick up my MacBook Air, it has the feel of excellent quality of a well-built machine. I remember the sticker shock when it first came out. The one I have now is priced at the low end of the MacBook scale. This product has evolved in a few years showed how amazingly fast Apple is. The 11-inch MacBook Air and the iPad are Apple’s way of showing it couldn’t build a sub-$500 piece of junk.

      Where are all the netbooks today? It is becoming another footnote in the history of computers.

      In April 2009, Apple COO Tim Cook filling in for Steve Jobs made this remark during quarterly earnings conference call with the analysts.

      “When I look at what is being sold in the netbook space today, I see cramped keyboards, terrible software, junky hardware, very small screens, and just not a consumer experience, and not something that we would put the Mac brand on, quite frankly. And so, it’s not a space as it exists today that we are interested in, nor do we believe that customers in the long term would be interested in. It’s a segment we would choose not to play in.”

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