Apple’s vertically integrated Mac could make interim Wintel model look like a detour

“Apple sold 2.29 million Macs with a growth of 51% y-o-y that is about 3.5 times the overall PC market rate of growth. Macs accounted for 59% of the revenue in the quarter, up from 47% last quarter. Our household now boasts a beautiful, large-screen iMac on which we’re playing with photos and music to create iMovie clips of our travels, horse, and such. We still have two Vista laptops, which are a source of continuous annoyance. Those two are probably on their way out,” Sramana Mitra writes for Seeking Alpha.

“Meanwhile reports of Apple’s $278 million acquisition of microprocessor design company PA Semi has overshadowed its earnings reports. PA Semi is known for its design of low-power chips. This acquisition has thrown cold water over Intel’s (INTC) hopes of securing a design win for Atom, its latest low-power lineup and will cause a shift in the iPhone component ecosystem. But more than that Apple has taken on a significant risk by vertically integrating into semiconductors with the hope that they can achieve differentiation in their core electronics, not only in design, OS and applications. If Apple’s move succeeds, then we’re going back to a vertically integrated computer industry, which is where it all started. The interim Wintel model will come to be looked upon as the detour. We can always trust Steve Jobs to create drama, and to be ambitious,” Mitra writes.

Full article here.

35 Comments

  1. More and more peole are learning that PC’s are commodities but Mac’s are entertainment and media hubs allowing people to do a lot more stuff a lot more easily. Let’s also not forget that the Vista debacle has also allowed Apple to gain share.

    If I were Microsoft I would develop a “skink works” for developers, lease an officec campus away from Richmond make it like Googles and tell the developers to explore the core foundation of Windows and revolutionize it to make it more blow people away. It has to be less costly than the $5 billion for the Vista flop and Apple’s weakness right now is that OSX has been out for a while and although Leopard was a nice upgrade it was evolutionary not revolutionary.

  2. “We still have two Vista laptops, which are a source of continuous annoyance.”

    Vista’s annoyances are intentional and by design.

    “In a Thursday presentation at RSA 2008 in San Francisco, David Cross, a product unit manager at Microsoft who was part of the team that developed UAC, admitted that Microsoft’s strategy with UAC was to irritate users and ISVs in order to get them to change their behavior.

    ‘The reason we put UAC into the platform was to annoy users. I’m serious,’ said Cross.”

  3. I caught this article by Sramana Mitra on Seeking Alpha this morning. One of the best reads I’ve seen in some time. I just love this quote: “We still have two Vista laptops, which are a source of continuous annoyance. Those two are probably on their way out.”

  4. “Somebody hasn’t figured out that PA Semi doesn’t make chips, they only design them.”

    We must be reading different articles (emphasis added below).

    Meanwhile reports of Apple’s $278 million acquisition of microprocessor design company PA Semi has overshadowed its earnings reports. PA Semi is known for its design of low-power chips. This acquisition has thrown cold water over Intel’s (INTC) hopes of securing a design win for Atom, its latest low-power lineup and will cause a shift in the iPhone component ecosystem. But more than that Apple has taken on a significant risk by vertically integrating into semiconductors with the hope that they can achieve differentiation in their core electronics, not only in design, OS and applications.

  5. “If I were Microsoft I would develop a “skink works” for developers.”

    It used to be called ‘skunk works’.

    Now there’s a ‘i’ in everything, ie: iPod, iPhone. Isaiah, etc..

  6. @ Rich Apple Person

    Interesting comment, and MS has the bucks to sink into a major, ground-up OS. Compatibility with the existing XP/Vista base could be achieved the same way Apple handed “Classic” after the movie to OSX. However I don’t think it is in the MS DNA to do that. Being bound to legacy software is actually a profit driver for MS, and it lacks the guts of say, Steve Jobs, to jump to a new OS or processor.

    Meanwhile, altho Leopard was evolutionary, the ability of OSX to take on different forms (a shape-shifter!) is now clear with OSX-Touch, which is in fact revolutionary.

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