InfoWorld: Apple Computer ‘should scare the hell out of any company that has to sell against it’

“A year ago, Apple CEO Steve Jobs cut Pixar’s ties with Disney, opting to handle its own marketing and distribution. With that move, the animation shop that made a name for itself with a hopping lamp became its own studio, in control of everything from the rendered frame, to the prints shipped to theatres, to the timing and pricing of its DVDs,” Tom Yager writes for InfoWorld. “Steve Jobs, speaking for Pixar, told Disney, ‘Thanks, Disney, Pixar will take it from here.'”

Yager writes, “Steve Jobs has [also] put Apple in control of its manufacturing, its distribution and even its own economy. He’s turned Apple into the equivalent of a sovereign state. Steve Jobs has sent the message to industry giants like Microsoft and Sony that they’re the next Disneys. They’re holding Apple back. From now on, they may not tell Apple where it may or may not play. Thanks, guys. Apple will take it from here.”

“Apple’s got a unique set of assets that will never run dry: Image, ingenuity, creativity, brand loyalty, nerve, and cash. Tech industry analysts that chuckled over the iPod company’s efforts to rack up real market share in computers now have to deal with a well-heeled Apple minus the humility and projected timidity of old. Apple’s $500 Mac mini is going to eat the lunch of low-end desktops. But not just that: Tricked out with accessories that are on the Macworld Expo show floor now, Mac mini is a DVR (think TiVo) without capacity limits, intrusive advertising, or phone-home reporting of users’ viewing habits. It’s a Playstation with a hard drive, USB, FireWire, Ethernet, expandable memory, a keyboard, and a mouse. Mac mini burns CDs, plays DVDs, and puts out composite, S-Video, VGA, or DVI (LCD flat panel) video. QuickTime 7 does that HD playback and editing thing, and the system’s performance is on par with Apple’s newest PowerBooks. It really is everything other Macs are, just smaller,” Yager writes.

“[Also] keep an eye on the fate of the dozens of companies that sell flash memory MP3 players. Apple’s $99 iPod Shuffle has no display and works only with a proprietary audio format, but it will automatically pick the songs you like best that fit in its memory. Apple targeted the flash music player market not to participate in it, but to wipe it out… Apple can’t be assured of control of every market it targets, but it can be certain of one thing: No one else will control its participation in its chosen markets again. Wherever Apple chooses to go, it will go alone, and that should scare the hell out of any company that has to sell against it.”

Full article, with much more, a great read here.

27 Comments

  1. Great article although one statement was a little misleading. Yager wrote: “Apple’s $99 iPod Shuffle has no display and works only with a proprietary audio format…”

    That’s not accurate. From apple’s website, the iPod shuffle will play: MP3 (8 to 320 Kbps), MP3 VBR, AAC (8 to 320 Kbps), Protected AAC (from iTunes Music Store, M4A, M4B, M4P), Audible (formats 2, 3, and 4) and WAV. The only proprietary item there is AAC with Fairplay (OK, I guess Audible is too) and I assume that’s what he meant, but to someone who didn’t know any better it sounds as though you can’t play music ripped from your own CD collection.

  2. Actually, he’s the opposite side of the spectrum and sounds ridiculous. The iPod proprietary file format comment aside, he compares the mac mini to the powerbook?

    Say it with me now….”ENTRY-LEVEL” Mac. geez.

  3. Great Article…the big ah ha here is the flexibility of the Mac Mini with just a “few tricked out accessories” can be anything from a TiVo to a play station, and plugs right into a TV set…this is powerful stuff here… and I didn’t see that potential when Steve showe how cute it was…think wolf in sheeps clothing Dell….he he he

  4. Now if Apple only owned it’s own chip foundry and hard drive factory. They’d never have processor or storages component shortages again…

    That would silly scary in a good way.

  5. I was thinking the same thing… Anyone ever use El Gato’s eyeTV (is that what it’s called?) Is it any good? I heard they showed a new version with new features at MacWorld. Anyone know…oh nevermind I’ll go check…

  6. AAC w/Fairplay is proprietary — Apple should license it before its too late. I will always buy Apple products first because they are the best, but it would be good if I wasn’t locked into only their products because they are not in every market. If they aren’t going to come out with a media server then license AAC to ElGato. It would be like buying a DVD movie from Sony and it only playing on Sony DVD players. Stupid.

  7. “Now if Apple only owned it’s own chip foundry and hard drive factory.”

    One word: faggeddaboudit. They’d be foolish to enter either or both businesses. Remember that Apple is a founding member of AIM, the consortium that developed the PowerPC, and still contributes to the chips design. The only thing they didn’t do was actually manufacture the chips, something they left to partners IBM and Motorola. And for good reason: chip fabrication plants are in the “Holy shit!” category of expensive. Let the manufacturing guys stick to what they do best, and let them have the research, development, and manufacturing headaches. Motorola’s well-known problems with the G4 seem to have been solved, but there’s no guarantee that Apple could have done better if they were fabbing the chips themselves. Besides, who could they sue if the bottom fell out?

    Same with IBM’s problems with yields at 90 nanometers. Could Apple have done better? And remember, IBM’s East Fishkill fab cost something like three billion dollars to build. To recoup their investment they’re they’re not just making their POWER series server chips and PowerPC 970’s, they’re actually fabbing for AMD. Could Apple, by themselves, have afforded such a plant merely to supply their own computers?

    As for hard drives, they’re commodity items. Let the players in that field continue to drive each other to innovate and lower costs. Apple is in a much better position to choose among several excellent alternatives, all jockeying for a piece of the business. Building their own hard drives makes no sense. Look at the continuing one-upmanship between Hitachi and Toshiba with their iPod drives. My three year old 1st Gen iPod has a 5 GB drive; my 3rd Gen iPod increased six-fold in just over a year. Could Apple, by themselves, have continued to increase the drive capacities as they have without the lash of competition?

  8. sg:

    But AAC is no more proprietary than either MP3 or WMA, and – whilst iTMS is growing in popularity every day and will reach 250 million downloads in around three weeks, with 500 million achieved sometime in July – FairPlay-protected AAC represents the merest pinnacle of the tip of a $35 billion global music industry.

    Apple can (and indeed should) wait another 18 months for total hegemony before widening the reach of FairPlay to anything more than a select group of (totally)-committed MPEG-4 supporters, for the simple reason that, under no circumstances, should anyone who has the potential to come under Microsoft’s velvet fist be given the opportunity to acquire intellectual property that could be used against Apple in the medium- to long-term.

    However, once iPod is utterly dominant – with around 50 million players in the market place – and with over 2 billion iTMS tracks downloaded, I don’t give a toss whether Apple licenses FairPlay or not.

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