Apple riding iPod to a bright new future

“I don’t care how fast the new Power Mac G5 is — or isn’t (if you believe the critics). Apple’s future doesn’t ride on the speed of its Macs. In fact, Apple’s future doesn’t ride with Macs at all anymore,” writes Charles Haddad, thankfully back at BusinessWeek. “Oh calm down. I’m not saying the Mac isn’t a great computer and won’t keep improving, if only incrementally. But it’ll no longer set the computing world on fire. Nor will the Mac ever represent more than 3% to 5% of all PC sales. And it certainly won’t drive growth for Apple.”

Haddad writes, “What I am saying is that Apple is at one of the most important turning points in its history. It stands at the threshold of crossing over from cult favorite to household name, especially if that household has a teenager. Apple is making this crossing on the slender back of its little iPod. This portable digital-music player is at the cusp of doing for music what the original Apple did for computing in the late 1970s: setting the standard as the mass market for these players starts taking off.”

Haddad writes, “…even without the addition of Window users, iPod sales will swell to 975,000 units this year, giving Apple 54% of the market. And, when the Windows version is available, sales will jump even higher to 1.25 million, or equivalent to the sales of some Macs. With that kind of growth Macs will become a nice little side business — perhaps even a giveaway someday to lure eager iPod buyers. Let’s face it. The Wintel duopoly has won the battle for PCs, but they can have it, since PCs have by and large become standardized, safe and boring. Not so with portable digital-music players. With the iPod, Apple has truly designed a thrilling new computer with wide appeal. Mac fans, behold the future.”

Full article here.

16 Comments

  1. Maybe the iPod is Apple’s newest frontier. I don’t believe for one second though that a $300 pod can generate $1 billion in revenues to keep Apple alive. Just as Microsoft’s cash cow is Windows and Office, the Mac is, and always will be, Apple’s bread and butter. Microsoft has dabbled in the Xbox and other areas, but so is Apple, and more power to them. But Apple’s core business is the Mac, and everything that comes with it.

  2. it’s simple math. even if everyone bought the $500 iPod, and sold 1.25 million of them as theorized, that’s $625 million in sales.

    It’s a great sales numbers for a side item, but not really what I think they’d base their company around. Particularly when Apple seems on the precipice of great things with their partnership with IBM. They’ve all but guaranteed a 3Ghz G5 within 12 months, and I’m sure better things lie beyond.

    The computer industry is and always will be their future. But it’s nice to have a little brother like the iPod keep raking it in…

  3. I’d also like to add the author was remiss in indicating iPod for Windows is on the way. It’s been out for quite some time. So most of the logic behind is article is flawed given the fact he’s operating under the assumption that iPod has thus far been unavailable to the vast PC market.

  4. I think the author is confused a little with iTunes Music Store for Windows which is on its way. But, he is right that the iPod is about to hit critical mass. Every kid I talk to wants one, and I mean the kidults (20-30’s) are lusting after them. No doubt the holiday buying season should be huge for Apple.

  5. Rubbish. There is much more profit to be made from PC’s than with iPods. Apple uses no proprietary technology in the iPod and others can easily make a similar product. It is precisely because PC’s are boring that there is still a lot to innovate. The Wintel crowd have lost their way and cannot think of anything new except DRM. Apple is leading the way and can still become very successful. The time is now!

  6. I really think Charles has missed the point, yes sales of iPod are excellent but Apple is unlikely to drop all it’s R&D and put the mac desktop in the back seat and make iPod the main focus of the business.

    …..unless they managed to squeeze an entire G5 system with 17″ colour screen into the current iPod case. I think this is somewhat unlikely to happen, although those engineering and design guys at Apple are pretty good.

    IPod is simply another market niche. Apple is extremely good at entering, improving and leading unfocused markets.

    Apple and the Mac computer will always be around because they are a leader in their industry. According to some people, Apple Desktops only account for 5% of all PC’s in the world, yet Apple still creates, dictates and leads 95% of all new computer technologies and standards with their computer development.

    Currently the Mac is the hottest thing in the computing industry, nobody else is doing anything like it in terms of design, operating system and software. Because nobody can.

    I really think the BOOM for Apple has only begun. The new G5’s are great, and the OS is rock solid. Much like a chameleon, the Mac is changing is skin and using stealth to blend in. It can connect to any kind of Windows PC seamlessly (pier to pier), transfer and exchange files and do everything a PC can do with much less effort and simplicity.

    Suffice to say, Apple’s PC market share will grow hand-in-hand with lifestyle products like the iPod.

    Toby

  7. Hey Toby, it’s “peer to peer”
    not “pier to pier” (unless you’re using a boat.)

    I’d also like to meet the folks who say: “Apple still creates, dictates and leads 95% of all new computer technologies and standards with their computer development.” I’m guessing they aren’t EEs or CS guys (maybe a nice typesetter in NY?) Like most fields, consumer-level equipment is a trickle down from business and high-end equipment. Apple isn’t even a player in those fields. That’s ok, because Apple is key in making things user approachable. Just don’t confuse the two, otherwise you’re just buying into Apple marketing and fandom.

    Hell, I just love reading this board where there are posters who are in love with differentiating pro-level and consumer level products based on whether they fall under the PowerMac or iMac tiers. It’s ALL consumer level! The closest Apple gets to professional is the raid Xservers– and even that is barely off the ground.

    Apple’s focus on the “digital hub” is what will keep Apple in good standing. It’s the concept of easy integration of all products that will attract users to Apple and bring Apple into the home. The iPod is a great start to show the mass market Apple still has a place. (iSight on the otherhand is not (poorly executed))

  8. I have an idea to enhance iPod function. I wonder if anyone knows of any software out there that would do this.

    With the availability of both Firewire and USB connectivity, it would be nice if iPod can be connected to the digital cameras on-the-go and serve as a temperary storage of all the picture files when people are traveling. Just imagine that now we don’t need to buy many of those memory cards that cost almost as much as the iPod itself!

    Somebody has to come up with a software for this!

  9. Rawfish. I thought about that too. I would have to see that. Even though it’s a music player it has all types of ability to store files. It does now. Somebody needs to do it.

  10. I think Haddad needs to go back on sabbatical. He’s way off base. How can anyone look at the combination of the G5 and OS X, and say that all Apple has going for it is the iPod. Don’t get me wrong, the iPod is amazing, and I want one badly, but it’s pretty obvious that he doesn’t rely on a Mac for his livelyhood, otherwise he’d see things very differently.

    And to the poster “zee” who wrote: “Hell, I just love reading this board where there are posters who are in love with differentiating pro-level and consumer level products based on whether they fall under the PowerMac or iMac tiers. It’s ALL consumer level! The closest Apple gets to professional is the raid Xservers– and even that is barely off the ground.”

    I’m a graphic/multimedia/web/video designer. I’ve been doing it for nearly 15 years, and been using Apple computers for 22 years. Are you trying to tell me that that computers I use are not “professional” because I’m not in the IT industry? I beg to differ. People in my business may have different computer needs than those in yours, but I assure you, we are no less “professional” because we make our living using a G4. Therefore the computers we use are also “professional”. That’s a point you would be wise to ponder.

  11. Nick

    The term “consumer” vs “professional” is not in reference to what the equipment is used for, it is in reference to the actual equipment. I am not insulting your career. Just because a Denon AVR-2803 is in a sound studio, it doesn’t make it a “professional” piece of equipment. It’s still just a nice mid-level consumer audio. Denon’s “professional” line has different standards to judge quality.

    The same goes for computer technology and I’m afraid, the best judge for professional vs consumer computer equipment is IT professionals and the such.

    If you use an iMac instead of a G4 tower to do your work, is it now “professional”?? Ponder this…

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