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Apple, Where Are Your Doomsayers Now?

Date:  15th January, 2005


Apple Mac mini

The hot topics of the moment are definitely Apple's new product announcements. It would be remiss of me not to at least give a respectful nod to Mac mini, iPod shuffle, iWork '05, iLife '05 and Final Cut Express HD. Apple product announcements always enjoy (generally) enthusiastic responses and those made following Macworld SF 2005 were no different.

For myself, the highlight of the range is the Mac mini, probably Apple's most significant release since the original iPod...

The Genius of Apple

“Apple is going after the consumer desktop PC market, with a vengeance”

We all know someone who wants a new Mac but who is put off by the perception that Apple's computers are over-priced. Personally, I believe that the costs of Apple's computers are extremely competitive, especially when compared with similarly specified Wintel machines. Anyway the argument is now moot, rendered obsolete by the attractively priced Mac mini (starts at £339 in the UK).

For existing Wintel owners who are longing to switch, the cost of entry is minuscule. This is where Apple has demonstrated real genius. The company appreciates that potential switchers already own monitors, keyboards and mice, so what better way to cut the price of entry than by releasing a "headless" Mac? In one fell swoop, Apple Computer, Inc. has opened its doors to the disenchanted Wintel user and, with welcoming arms, will embrace them. Once they've switched, Apple has a whole range of products just waiting to seduce them further. The message is loud and clear - Apple is going after the consumer desktop PC market, with a vengeance.

The Mac mini isn't a just a budget Mac. No sir! It's the ultimate component of a fiendishly cunning and carefully executed plan to recapture some of Apple's former glory in the personal computer market. It is the belief of this pundit (and at least one other) that this has been Apple's business plan since Steve Jobs returned to the company in 1996.

Apple has risen, phoenix-like, from the flames of a company that posted $1.5 billion in losses in 1996 (the company recently posted the highest quarterly revenue and net income in their history). Between 1996 and 2005, the company steadily rebuilt its product range and restored consumer and investor confidence.

Along the way, Apple introduced a few products and services that have paved the way for, what I believe will be, an unprecedented wave of "switchers":

  • Mac OS X: The Mac's operating system (OS). An industrial-strength OS built on a Unix core. OS X puts Unix onto the desktop in a way that should make desktop-Linux advocates weep. I call it "Unix without the frightening stuff".
  • iPod: The success of the iPod is well documented. At the time of writing, Apple owns the hard-disk-based MP3 player market with a 92.1% slice of the pie. Now, the company can expect to enjoy growth in the solid-state MP3 player arena with the iPod shuffle (price is no longer a barrier to iPod ownership - the iPod shuffle retails from just £69 in the UK). In short, Apple and her iPod brand are becoming synonymous with personal music players. It's notable that the iPod is fully compatible with the Microsoft Windows platform.
  • iTunes: Companion software to the iPod and interface to the iTunes Music Store. Free download for Mac and Wintel users.
  • iTunes Music Store: According to Apple, "the #1 music download store". The figures seem to back up this claim - Apple recently announced the two-hundred-millionth download from the iTMS. The iTMS is usable by both Mac and PC users and is available in many countries.
  • iLife: Again suggesting a cleverly conceived and deliberately executed plan, Apple release a remarkably cheap suite of applications that fulfil the needs of users. The iLife suite is important because it handles those tasks that are important to the consumer: photo, movie and music management.
  • iWork: Apple knows that the most used productivity application (aside from email and web-browsing) is the word processor. So they satisfied that requirement with an upgrade to the venerable AppleWorks. First reports seem to indicate that iWork isn't as capable as Microsoft Word or Open Office (both of which are available for the Mac), but that's not the point. The point is that the target market for iWork is, again, the consumer. In this market, the massive feature set of the incumbents represent considerable overkill - if all you want to do is write a letter to your bank manager or a "thank you" note to Auntie Susan, then iWork is all you need!
  • Apple Store: Apple's hardware and software is available on the high-street in the US, UK and Japan.

As you can see, Apple Computer, Inc. has everything in place to attract the switcher and all the perceived price barriers have been removed.

Apple took a big chance when they digressed from being a computer manufacturer. But the move into the consumer market (with the iPod) has paved the way for Apple to become a highly successful computer company once more.

Whilst enjoying the "halo effect" of the phenomenally successful iPod, Apple has continued to develop and refine a range of hardware and software for both the consumer and high-end markets - and they've enjoyed steady growth in sales in both. They've managed to rekindle the legendary passion in their brand and have generated awareness of that brand in a population of buyers hitherto ignorant of the "Cult of Mac".

Simultaneously, they have brought to market a range of high-end products for the professional business/industrial/educational verticals, proving that they're not just a consumer company. Hardware like the Power Mac G5, Xserve G5 and Xserve RAID, along with software like Mac OS X Server and Xsan combined with success stories from within industry all serve to cement Apple's position as major contender in the computer industry.

They used to say that Apple Computer, Inc. is doomed. The company could still suffer a catastrophic failure but, you know what, it's not going to be through lack of sales, the only thing that could kill Apple in the immediate future is not being to fulfil the demand.