Personal computers still at core of Apple Inc.

“Jack Minsky built a successful business by writing software for Apple’s Macintosh computers. So when Apple last week dropped the word ‘computer’ from its name, and dedicated its annual Macworld trade show to noncomputer gadgets, Minsky might have felt concern for his company’s future,” Hiawatha Bray reports for The Boston Globe.

Bray reports, “Not so. Minsky, president of SoftwareMacKiev Co. of Boston, thinks Apple Inc.’s new strategy is right on target. ‘We’re excited as we can be about the way Apple is going,’ Minsky said. In his view, Apple chief Steve Jobs’s decision to downplay Mac computers is part of a strategy that will make the machines more important than ever.”

“Despite the hoopla surrounding Apple’s iPod music players, and the hype over upcoming Apple home entertainment servers and cellphones, the company still makes a lot of money on computers. During the fiscal year ended Sept. 30, Apple sold more than 39 million iPods, compared to just 5.3 million Macs. But the Macs brought in nearly as much revenue, $7.4 billion, as the $7.7 billion in iPod sales, and have a better profit margin. Besides, since the rise of iPod, Apple’s computer business has been better than ever, with unit sales up 61 percent over the past two fiscal years,” Bray reports.

Bray reports, “Arnold Reinhold, an analyst at Hurwitz & Associates, a Waltham technology analysis firm, said that like automaker BMW, Apple has succeeded in ‘carving out a luxury niche in a commodity market… Microsoft has this very strong position in personal computing,but it’s very vulnerable.'”

“Jobs aims to establish Apple’s OS X operating system at the heart of a computing ecosystem that will make personal computing easier and more elegant than anything its rivals can offer. That means staying well ahead of Microsoft, which rolls out its latest Windows upgrade, Vista, this month,” Bray reports. “But Apple will respond this spring with Leopard, its newest OS X upgrade. Reinhold said that Jobs refrained from touting Leopard last week because he’s ‘saving his bullets’ until the software is ready. ‘They clearly are waiting to answer Vista,’ Reinhold said, ‘and they’re going to make sure they can put some distance between themselves and Vista.'”

Full article here.

Related article:
Apple’s Schiller: We’re not getting out of the computer business – January 10, 2007

20 Comments

  1. There’s a lot to be announced by Apple over the next few months. Updated Mac Pro’s, 12″ MBP, iLife ’07, iWorks ’07, etc, etc.

    Plus the unveiling of the next OS. Best to leave this until after Vista is available to Joe Public.

  2. MikeR

    Trust me, the Boston Globe doesn’t “get it”. Hiawatha Bray is an MS Tool. I read him all the time. If he can say something bad about Macs, or underplay their value, he will. He must have hated this relatively positive article, though he still got some digs in parts of the article that MDN didn’t quote (e.g., “Vista is really going to give Mac a run for its money once it gets going,” said Roger Kay, president of Endpoint Technologies Associates in Wayland. “It’s a much better operating environment than XP was.”)

  3. Does anyone remember the original Mac? Steve Jobs didn’t even want to call it a computer. There was no mention of an operating system! That’s because computers are difficult to use objects maintained by IT departments. The fact is that the iPod, iPhone and Macintosh are all computing devices, not those nasty computers the other guys sell.

    There is an iPod halo effect because the iPod really is a Mac at heart, and so is the iPhone. Apple knows that there is no real distinction between them, other than power, but that’s always been the case. The less mobile the device, the more powerful it can be.

    A key part of Apple’s marketing is going to be getting people to forget about the computer and simply buy the device they need. It has to be that way, because Windows has taught people that computers are trouble. Devices like the iPod are not.

  4. Bray has had quite a number of good things to say about Apple products in the past and quite a few bad things to say about Windows in the past.
    “Vista is really going to give Mac a run for its money once it gets going,” said Roger Kay, president of Endpoint Technologies Associates in Wayland. “It’s a much better operating environment than XP was.” is absolutely valid! Both halves of it. Stop and <u>think</u> for a second … a product from the market leader giving a like product from a niche player a “run for its money”? That so obviously states that the product from the niche player – and that’s what Apple <u>computer</u> is – is better than the product from the market leader. If Bray is an MS shill, why is he placing his dominant – close to 90% of the market – master as an underdog? Oh, and the quote doesn’t say Vista is better than OS X, just that it is better than XP – is that a surprise?

    DLMeyer – the Voice of G.L.Horton’s Stage Page

  5. It’s not really about the OS. The OS is primarily a means to startup and operate the computer, launch and manage programs, and connect to the network and Internet. The problem with Microsoft is that it wants Vista to take center stage. But an OS should really do the following: be unobtrusive, provide a secure environment, and allow programs to use resources efficiently.

    On those three points, XP fails. By all accounts so far, so does Vista. Mac OS X succeeds, and even Mac OS X 10.3 Panther was superior to Windows Vista.

  6. Artisticulated: And I loved this line from Andy – “I’m half-expecting that shortly after it ships in June, an online gambling site will pay $34,000 to a Midwestern woman for a grilled cheese sandwich upon which the iPhone logo has miraculously manifested.”

    It’s funny because it’s true.

  7. Without the deep computer and software resources and skills, there would be no iPhone, no Apple TV, and no iPod. Without the computer core — the core of Apple, so to speak — Apple would die. All of this talk about computers being relegated to some lower position at Apple is idiotic clap trap. What we see in the other Apple product lines is innovation based squarely on the computer core as a foundation.

  8. Artisculated,

    This paragraph from Ihnatko’s article is completely wrong:
    “Gates is a fantastic humanitarian, and let’s all manfully concede that Microsoft wouldn’t be where it is today without having a reliable knack for producing the technology people want, in a form that they can understand.”

    Melinda Gates is responsible for most of the philanthropy, with Bill taking advantage of the tax write offs and seeding Windows computers to beneficiaries. Microsoft is clearly where it is today primarily because of IT departments that traditionally have had little desire to install anything that was easy to use.

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