Mac Pro with Snow Leopard Server
Mac Pro systems deliver performance and expandability equal to or surpassing Xserve, and offer an excellent server solution for customers looking for the highest levels of performance, storage, and expandability. Now preloaded with Mac OS X Server, the Mac Pro tower form factor can be deployed in an office environment on or under a desk, or in a data center environment on a shelf in a rack with two units per 12U.
Mac mini with Snow Leopard Server
Since its introduction in the fall of 2009, Mac mini with Snow Leopard Server has become Apple’s most popular server system. It brings great capability in a small, efficient form factor that is affordable and can be deployed anywhere. Perfect for small business and workgroups of up to 50 people, a single Mac mini can run the full suite of Mac OS X Server services. A single Mac mini can also be deployed as a single-task server for a larger number of users in a business or education environment.
Depending on the workload and number of users, a single Xserve could be replaced with one or multiple Mac mini server systems.
During the gradual transition from Xserve, Apple will continue to provide warranty service and complimentary technical support for the product. Apple continues to offer Mac OS X Server on the popular Mac mini with Snow Leopard Server solution and the new Mac Pro with Snow Leopard Server solution as alternatives to Xserve.
Apple will continue to take orders for current Xserve models through January 31, 2011. These systems will have Apple’s full standard one-year warranty. The AppleCare Premium Service and Support program for Xserve is available as an option at time of order to extend complimentary technical support and hardware service coverage to three years from the Xserve date of purchase.
Apple will honor and support all Xserve system warranties and extended support programs. Apple intends to offer the current shipping 160GB, 1TB, and 2TB Apple Drive Modules for Xserve through the end of 2011 or while supplies last. Apple will continue to support Xserve customers with service parts for warranty and out-of- warranty service.
Customers can rest assured that Intel-based Xserve systems will continue to provide useful service during and after this transition.
More info, including benchmarks of Mac Pro and Mac mini vs. Xserve, in Apple’s “Xserve Transition Guide” (.pdf) here.
[Thanks to MacDailyNews Readers “Fred Mertz” and “Edward W.” for the heads up.]
Disheartening.
Cramming Westmeres in a 1U case is obviously hard work.
Ummmm. WTF???!
I read this news earlier and was waiting for MDN to post it so I may voice my dismay. I feel Apple is big enough, able enough to continue some of their product lines even if they seem a bit dead weight. This was important, Apple, for those that care to run Final Cut Pro etc. in an enterprise environment. Suggesting Mac Minis or Mac Pros are just offensive.
It was prestigious when Apple servers were used at Virgina Tech’s System X cluster. I had built a SMPS cluster at my school using left-over 200 HP and IBM boxes in 2005, and had recommended school to switch to Xserve when the budgets would allow.
Not one of your insanely great moves Apple.
MDN MW: ‘costs’ aren’t always monetary kind.
What are they using in the new data center?
Sales clearly lagged.
The Xserve has been a wonderful but horribly overpriced unit for years now.
Too hard to make inroads in that limited market.
Good. Dump unnecessary low margin products.
Makes me wonder about the future of Xsan now. Or for that matter, Mac OS X Server itself. So much for Apple being serious about playing in the Enterprise space.
Dumb, incredibly stupid move.
I too am now worried about Mac OS X Server.
I would say that this opens up the possibility of licensing OSX Server to companies with more inroads and support networks for that market.
Isn’t it true, that Steve Jobs and Fred Mertz have never been seen in the same room? Isn’t it in fact true that, whenever Mr. Jobs is in view, Mr. Mertz is nowhere to be seen and vice-versa?
Just wondering…
I really liked the 2 Xserves I have administered in my career, but I have to say they are big beasts and VERY noisy. I understand they should be installed in a separate room away from people, but many small businesses don’t have the space to do that.
The Mac mini server is incredible value for money, and it includes unlimited client OS X Server so it’s a no-brainer in my opinion. I currently have 2 running in my workplace, and they are sweet. Small, silent and very fast.
I haven’t used a Mac Pro Server but I imagine they are a lot easier to install (no rack required) and much quieter but just as powerful as the Xserves.
RIP Xserve.
Critic…my first thoughts exactly…
What will be the next move?
I don’t take their temp solution just like that…
Licensing it?
Just when apple seems to be penetrating the enterprise, they do this? Seems like a mistake, even if they don’t sell many.
Apple has started, then pulled back, then re-started and now pulls back again with enterprise. This will kill Apple in govt and enterprise forever. XSAN do not depend on it long term the writing is on the wall. Apple is as focused on enterprise as Intuit is on Apple software. Maybe when they can figure out how to put a touch screen pullout in the Xserve then it will come back.
There goes my effort to consolidate.
I don’t want to run buggy Linux in order to continue using 1u servers. Minis are fine for name and print services but heavy mail? I doubt it.
This is disappointing but not surprising considering Apple’s consumer direction and silence on the product.
Apple should just convert the Xserve into the mythical mid-range headless Mac that so many of us have been dreaming about!
It’s too bad to see Xserve go.
Funny, but I’ve never actually seen one in person!
This is NOT COOL at all. We have an entire rack of Xserves that are hosting websites for clients. WTF are we supposed to do after this transition happens?? Geez, thanks for nothing, Apple.
I would imagine that there will be a replacement given the moves into business…
Apple are pushing for iOS and Mac OS in business, then go and drop the server line in favor of desktops running server software. Apple are
Incredulous!
Apple are pushing for iOS and Mac OS in business, then go and drop the server line in favor of desktops running server software. Apple are not doing themselves any favors here.
Incredulous!
I assumed that Apple put the Xserve computers in the billion dollar server farm. That is a lot of Mac mini servers. Maybe they have a mix of Mac Pro and Mini servers there. I would love to see a few pictures or a tour done by Steve Jobs later this month. Assuming it is “on schedule”!
It means that Apple is going Licence Xserve !!!!!!!!!
Our company has 4 of these. We buy rack mounted systems not Mac Mini’s or Mac Pro’s to sit on the floor. The next time one of MDN’s crazy readers wonders why IT folks don’t support Apple remember this episode. I will continue to support Mac clients but will never buy into their Server hardware or Server operating system again.
There absolutely will be a replacement, but I wouldn’t expect an immediate response from Apple (if for no other reason than for Apple to clear out inventory). Apple will probably make an announcement with a partner.
As for MacBill, your rack of xserves are going to be supported, so no need for immediate panic. If you don’t hear anything else on the matter from Apple by December, than a bit of panic may be justified. In the meantime, use this as an excuse to take off early today and have a couple of drinks to kick off the weekend.
The Truth is simply, but uncomfortable. They are not using their own servers in the new data center.
I hate this move Apple, I have clients that will have to redesign their entire data center to accomidate those big towers, and they will never use mac mini’s, give me a break.
RAID, redundant powersupplies, headless configuration, all gone..WTF
Please also keep in mind the recent announcement on the Apple-Unisys partnership for enterprise and govt.
Unisys has a wide line of servers (much better offerings than Apple), all of which can run OSX Server
http://www.unisys.com/unisys/theme/index.jsp?id=1120000970004610072
Apple is in a position to go for market domination in mobile, desktop and living room computing. To do so, they are lowering costs and reducing profits.
My guess is that as they increase market share with more lower margin devices like the iPad, they are looking around their business for place to cut costs and get there profit numbers back up. Xserve is probably expensive to make and market.
I would bet that 90% of the customers who want an Xserve platform only need the performance of a mini.
@krquet
I share your dismay. Apple needs to demonstrate a consistent and long-term dedication to the enterprise in order to be viewed as a viable vendor. Companies invest much more in the software, tools, training, and custom software developments than they do in the server hardware. They are highly reluctant to hitch their wagon to a fickle vendor. Apple seemed to be making inroads into the enterprise with the iPhone and iPad. The Xserve seemed like a natural way to administer those mobile devices.
On the optimistic side, I have seem doomsday reactions to Apple product announcements in the past, only to see something much better and more cost effective replace the discontinued item. Hopefully that will be the case with the Xserve…
@critic
Good call on the Apple-Unisys partnership – that sounds like a viable forward path. Perhaps Apple is finally serious about penetrating the enterprise market in a major way.
i went into 2 different apple stores and none of the sales people knew anything about it.. nor were there any on display with see and play with… when i have to spend thousands of dollars on something i prefer to see it and see it in action.. if apple would have displayed it at the stores and trained sales staff, it might have sold better… i am aware of consumer driven stores vs. industry buyers, however every single person who works as a buyer for industry is a consumer
just my opinion…
I’m somewhat inclined to believe the line of thinking which has Apple licensing Mac OS X Server to run on alternative hardware. Likely to be VERY specific hardware, but I don’t think they’re ready to kill the server variation as the mini server is a very popular product.
Can anyone here recommend 1u server hardware? I hate Dell. I’d consider HP.
I’m considering using OpenBSD on some PC maker’s 1u to replace some of my aging XServes.
really lame
they will start losing their pro users
those of us who switched to Mac because it is stable and great are not happy about this
they need to keep some pro level servers in the mix
using the mac mini or the GIANT Mac Pro in a server environment is really not that great of an idea
the mac mini is ok but not for a large server environment where you want quick and easy access into each server to swap drives, etc
really really lame
shame on you Apple
at least offer a real alternative
you are giving up the server market to Dell basically
This is not a sign that XServes are thru…it is a sign that Pro desktop sales are weak…Apple is stopping its own cannibalization and choosing the best of the two high ends…the mini’s do the job and are cheap and if you need more server space…just grab a ‘couple more cheap.
Also, Apple want to sell Cinema displays, so the XServes have to go. Dell made up for its cheap prices and cheap quality on the consumer end with it’s high end machine prices…and look at them now. Apple is consumer oriented first and doesn’t have to do that.
When the XServe was announced several years back for $3,000 even Oracle was pushing them as a great low end, low cost server for large server farms.
Then the price started escellating and the relative performance versus costs as compared to the rest of the industry went down hill. Currently the XServe is no great value as compared to what you can get elsewhere.
I was really looking forward to a few 12 core 1U servers tied to a SAN all from Apple, all in a compact configuration. That is out of the question now.
Apple has made a lot of dumb moves with servers and killed a lot of systems that had great potential (remember the Network Server running IBM’s AIX — a great start to a Small to Medium Business [SMB] server if Apple had evolved it rather than kill it). The XServes could have been the keystone on which Apple moved into the enterprise environment — much more likeable in my estimation than Dell systems being pushed at me on a weekly basis.
Now the battle for Apple systems in the enterprise (not just for desktops but also for iPhones and iPads) just got 100 times harder. Tying cheap phones and cheap tablets to cheap servers running MS software (note I did not say inexpensive!) because all are supposedly “made to work together” is going to be an even harder thing to discount going forward.
Want to give Windows Phone 7 a large loophole to jump through? You just did that Apple.
I suppose this was inevitable. Apple never actively promoted its Enterprise offerings. They never publicly revealed whose servers were behind the curtain – not those supporting iTMS, not those going into the NC facility – so it was a fair bet they weren’t “eating their own dog food”. We also learned months ago that Apple was abandoning their work on super-computing like that at Va Tech, as such initiatives required long term commitments.
I knew of only one Xserve/Xraid installation in all of a branch of Treasury where I once worked – mine. We used it as a cheap way to store a few TB of data. So much potential and lost opportunity. Sorry Steve – this was a bad call.
So far the news is not announced officially by Apple yet.
Before any negative comment I will wait until Apple is announcing its strategy.
When Apple seems to put efforts in Enterprises penetration,this seems to be an odd move to say the least.
So let’s wait for the full story before getting worried!
Apple’s fool day!
I hate to say that but it’s time to go away from Apple brand. From 1984 I have a mac and I run more than 50 Xserves and I feel Apple is leaving us in the dark. When will be the time Apple will discontinue Macs? Is this move supposed to force us to move to the cloud!
Not the smartest move for sure!
this is why apple will never make it in the business world. sorry, but desktops and mini’s will never replace the server farm.
apple is just a niche, consumer product company now…
There’s probably a sound strategy for this. If the XServes were not being competitive and able to penetrate the market then it is probably a waste of time. Better to focus on areas that they can succeed.
Given the Unisys partnership for the server products Apple could go the licensing route. V.specific application and no chance of cannibalizing other Apple products. If Apple let Unisys build the units and install the server product then they may have more success selling systems.
The idea was good but in practice the server market is run by key players.
Macminicolo, a commercial Mac web hosting company, has been getting along on Mac mini servers for years:
http://www.macminicolo.net/
Although, it looks like some Xserves in one of the pictures of their site.
When Apple switched to Intel processors, the advantage the G5 XServer had in the world’s marketplace disappeared.
First to be killed off was the X-Raid, now comes the XServer.
Next will be the MacPro you watch. Apple hates a open box.
Apple Computer > Apple. Apple is no longer a “computer” company, but a consumer hardware products company.
The next thing on Apple’s agenda is locking OS X and programs to their hardware, they can do this with their new custom A4 processor.
Yep, soon all Apple computers will be simple appliances with iAd monitoring users behavior.
Pro’s are leaving for Windows 7 and the Mac App Store is going to have the same sort of lame, restricted programs as iOS App Store.
Congratulations Steve Jobs, you have out shined even Bill Gates in monopolistic behavior. As a Apple using customer from the early days, I’m ashamed.
People cried the sky is falling when the iMac came out and hand no floppy drive. People loved the Cube but that didn’t last long but it lead to better products. I’m willing to give Apple the benefit of the doubt and wait and see what happens.
Is Apple going to buy Oracle?
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WHY??????
I wouldn’t be too surprised if we hear of a new product from Apple that replaces Xserves.
Xserves were nice, but they are pricey and noisy. I’d like to see a Lego-block approach to servers; one that lets us build up a cluster piece-by-piece, with inexpensive building blocks stitched together with 10Gb ethernet or Infiniband. Storage would be external; minimal SSD for booting, minimal local persistence.
Such a cluster could scale without practical limit; would make more sense than today’s Xserves.
I want dual power supplies, a slim rack mount, not 12Us wasted on just two servers.
I have 4 Xserves, 3 UPS’s, multiple backup systems, switchbox, keyboard, mouse and monitor in a rolling half hight rack.
There is no way this could be done with Towers.
What are you thinking Apple??
Long term Apple is betting on the cloud. (Whose servers will they use? Apple won’t want to waste space in their new and expanding server farm with Mac Pros. Maybe they will reserve some Xserves for the expansion).
Question: will corporations ever see hosted cloud services as secure enough for their proprietary info? I don’t know enough about cloud security to get a sense for this. Anyone…?
The MacPro is next to be killed for the following reasons.
1: Since 3D games have moved to consoles like the X-Box and PS3, most consumers don’t need a expensive powerful computer anymore with self-upgradeable graphic cards.
2: The new frontier is now mobile, mobile apps, mobile laptops etc. bringing the power of the computer with you, everywhere.
3: “Pro’s” don’t make up hardly squat of Apple’s business anymore, ordinary ignorant computer appliance loving consumers do.
4: Apple cr*pping on Adobe, Adobe no longer fits into Apple’s future plans. Desktop publishing and graphics pro’s on Adobe software will move to Windows 7.
5: Apple will eventually exit the “Pro” program market and transform those programs into a iLife X, for extra abilities and sell them through the MacAppStore complete with DRM.
6: “Cloud processing” Apple is going to use their new NC server farm to allow more complex programs requiring heavy duty processing to offload that to the servers. This way a person can carry a light(er) iPad and still run processor intensive programs like Aperture (renamed iPhoto X) and store massive files on line.
That’s all my crystal ball has to say right now.
” in a data center environment on a shelf in a rack with two units per 12U.” but Xserve only took 1U each.
HUGE!
“Is Apple going to buy Oracle? “
Probably not. Even for Apple, Oracle is an expensive acquisition ($150 Billion market cap). Most of Oracle’s business also doesn’t really fit with Apple’s direction.
However, they would be another potential fir for licensing onto Sun x86 servers. Anyone know if OSX can run on SPARC?
Also, Steve and Larry Ellison are good friends.
I’m sure Apple is going to release something more powerful than Xserve.
Horrible call!! I guess Apple is truly just a consumer company. Too bad as I, professionally, am seeing traction for them in the enterprise.
… situation. The mini option offers less of just about everything – less CPU, less RAM, less storage, less throughput – but offers it in a convenient, QUIET, package at a bargain price. And they’d be building the box anyway so engineering costs are lower. The Pro option offers more of some things – more CPU, more storage – in a less convenient, quiet package. And they’d be building the box anyway.
The Xserve is a better server-room option than either, but is limited to server-room applications. And nothing else shares the box.
This will be used by every single ‘IT win blows guy’ to tell their bosses not to use apple since they can stop, start and kill any investment in a heartbeat. There might be good reasons for doing this, but it would really help to see their future plans on servers so that corporate keeps pulling the wallet.
… “” in a data center environment on a shelf in a rack with two units per 12U.” but Xserve only took 1U each.
HUGE!”
Let’s do the math.
8 Nehalem cores vs 8 Westmere cores at a $100 cost. 3GB RAM vs 6GB RAM. Drive Bay 1 comes with 160GB vs 1TB. 3 Drive bays vs 4. I’d say the Mac Pro wins all those contests. Plus, you can get 24 of those faster cores in those 12u … not quite the same, I know, but think of the heat you are not having to dissipate!
… “” in a data center environment on a shelf in a rack with two units per 12U.” but Xserve only took 1U each.
HUGE!”
Let’s do the math.
8 Nehalem cores vs 8 Westmere cores at a $100 cost. 3GB RAM vs 6GB RAM. Drive Bay 1 comes with 160GB vs 1TB. 3 Drive bays vs 4. I’d say the Mac Pro wins all those contests. Plus, you can get 24 of those faster cores in those 12u … not quite the same, I know, but think of the heat you are not having to dissipate!
This is a bad move by Apple. The Mac Mini and the Mac Pro are not suitable replacements for the XServe. I know that the FBI and a lot of State Law Enforcement organizations have been using XServes in they computer forensics departments not to mention the department of defense.
Just a short sighted move and really a setback for Apple. When the company is gaining mindshare in the consumer segment they should be using that to their advantage in enterprise. Instead they remove a credible hardware option for business and have NO CREDIBLE REPLACEMENT.
The question I have is if Xserve production will be “passed” to a third party similar to ActiveStorage “continuing” production of the Xserve RAID. The same team that was involved in the RAID project at Apple started ActiveStorage following the unit’s discontinuation.
As a user of almost 50 XServes, this is a disaster!
Mac Pros are not an option. Can only get 6 of those in a server rack at the colo. Will be forced to move over to a few linux boxes (not so bad) but ultimately windows boxes which is horrific.
The cost of licenses for side grade products we use will be high. We will also have to find some new alternatives for services with no sidegrade option.
This will cost a crapload in both time and cash. Not to mention the headaches of switching over to new hardware and systems on servers that support thousands of users a day.
This is so NOT GOOD!
Companies have been moving to virtualized servers. OS X Server can run in VMs. Perhaps Apple will just change their licensing with VMWare to allow server to run on other hardware.
Jim
Few!! We just had four video server farms with xSan installed. I bet had this news come a bit earlier, it would have killed the project then and there. Now we’re good for some four years and can see what happens. Still, it sucks IMHO :-(.
Two words – Stupid Move
@chuklz
Good question sir.
That sucks, I’ve spec’ed a job with these, and I have 3 more similar projects in the pipeline. I might be able to get by with a combo of Mini’s and Pro’s, but I’ll have to crunch some numbers first.
Oddly enough, I’ve looked at BTO Pro’s as servers before, but the numbers never worked. At least they made a reasonably priced Pro Server, before, it was very expensive to do the same set up BTO.
I’ve got two, one has an XRaid. Two UPS and an LTO Auto changer all in an Xtreme Mac half height rack. How can one deploy OSX server with big bulky Mac Pros? And no the minis won’t do what we need.
This sucks.
What was all the babble recently of Apple making inroads into the enterprise? Sheeesh
Apple cloud forming?
I’m sure this has something to do with Light Peak or USB 3.0(?) newer, faster, modular devices (?). Maybe Light Peak is near completion and will be in the next Unisys-partnered device to totally blow away the competition. Aside from these, I’m sure there’s a damn good reason for this move.
The end of the first paragraph here in the History section says, “At the same demonstration, Intel maintained that it expected hardware manufacturing to begin around the end of 2010.”: http://en.wikipedia.org/wiki/Light_Peak
Coincidence?
I can see the writing on the wall for Apple…
Time to slowly convert back to the Windows world despite majoring in digital arts. I see no future left in pros and artists with Apple. Just a consumer company hellbent on milking your wallet dry.
I never understood why Apple even bothered with the X-Serve and it makes perfect sense for Apple to shed a product line that doesn’t add to the company’s overall value chain. Apple is a provider of client products. Apple is a consumer electronics company that also provides content. That’s where their focus needs to be.
Apple’s internal IT and data center needs are provided by a hodge-podge of IBM/AIX, Sun/Solaris, Red Hat Linux, customized UNIX, Oracle, SAP, even Windows, etc. These are systems that would cost tens of millions of dollars. Just do a search of Apple’s job listings that Apple is trying to fill on the IT side and there is hardly any mention of the X-Serve or the Mac OS X Server at all. It’s mainly heavy duty enterprise backend stuff dominated by IBM, Linux, SAP and Oracle/Sun.
Apple’s push into the enterprise is for the adoption of the iPhone, iPad and, to a degree, Macs, but it’s mainly about mobile. Apple hired Unisys to help large enterprises integrate the mobile devices into their IT infrastructure. Again, it’s about the client side, not the server backend. Apple is not going to compete with the likes IBM, HP, Fujitsu, NEC, Dell and Sun, etc on this end. What is the point? It’s just not Apple’s area of expertise.
What value would Apple add on the server side when cheap generic Wintel or Linux machines can do much more for much less? Industrial design, the look and feel, the user experience and the ecosystem mean nothing in this space. Let’s remember what happened to Sun. The server machines have become commoditized. That’s why the likes of IBM, HP and Dell are focusing on software, storage, networking equipment, and services like consultation and systems integration. They can’t grow or rely on the increasingly thin margins of the server hardware. And unlike on the consumer client side of things, Apple has absolutely nothing to add to the value chain there.
Xserve hardware has not been moving.
Something else is on the horizon.
Stay tuned.
@alexkhan2000 – spoken like some who knows absolutely nothing about Apple Server Technology. You said it yourself, you don’t understand why Apple even bothered with the Xserve. That statement right there disqualifies you from offering any kind of insightful commentary on this topic.
@Horseman,
Actually, my company (small company of around 40 employees and a complete Mac shop) uses the Xserve so I’m familiar with it but I’ve also worked in companies with thousands of employees in primarily mixed Windows/UNIX/AS400 environments. I’m certainly not knocking the X-Serve as it works just fine for our business, but I just don’t see how it fits in with where Apple is going with their business model. That’s what I’m getting at.
It made sense when Apple introduced it in ’02 to serve small businesses but I don’t believe Apple ever thought of getting into the large enterprises that do hundreds of millions per year or more in revenues. But a lot has changed since then and Apple is now a bona fide consumer electronics company that competes more with the likes of Sony, Samsung, and LG, etc. than HP or Dell. What I really meant to say is that I’m surprised Apple even kept the Xserve going as long as it has.
Apple has shown no interest on the backend side of running an enterprise. Apple also goes for the high-margin differentiated value-added products on the client side. How can Apple compete in the server space when it has become a vast sea of horizontal and modular commodity gear provided by dozens of vendors ranging from IBM to no-name kit providers in China using Wintel and Linux?
As I said, I’m not knocking the product and OS X Server software. It all works great where I work and we don’t worry about support issues down the line either. I’m just saying that Apple’s focus has changed over the years since its introduction and have never really tried to market it properly even with all of their resources.
I ain’t happy at all… for all of the reasons posted, plus more.
What the hell is Apple doing?
I thought Apple was a hardware company?
I’ve been reading comments here and elsewhere that Apple discontinuing the Xserve is a harbinger of them abandoning the enterprise market and even the Mac itself altogether. Please… Let’s try to look at the bigger picture. From what I’ve seen, Apple is dead serious about getting into the enterprise and we’re talking about Fortune 500 companies that do many billions in revenues on an annual basis. It’s just that Apple is focusing on mobile usage of these companies’ employees with the iPhone and the iPad, not the backend – an area in which Apple does not have expertise compared to the likes of IBM, HP, Dell, Oracle/Sun, etc.
Macs can be added as well for client usage but let’s be honest here: Macs are not the first choice for a bank’s credit card payment data processing and other mundane tasks of number crunching by people in Accounts Payable departments. We don’t expect to find Macs being used at a local auto mechanic’s shop or at the Department of Motor Vehicles or on the front desk of a hotel. In a way, I think most of us are glad that we don’t see Macs everywhere.
The Mac is gaining serious market share in the PC market and growing much faster than the growth of PC sales of competitors like HP, Dell, Acer, Toshiba, etc. Also, both for Apple and the rest of the PC makers, laptops account for much larger chunk of all PC sales than the desktops. The Windows crowd will say that the Mac is still a “niche” product but it is a very profitable one for Apple. As I’m sure some of you are aware, the Mac has a share of 90% for all PC’s that are over $1000. Even though Apple’s global market share in PC shipments is less than 5%, it is estimated that Apple makes 35% of the profits. Now why would Apple abandon such a profitable business?
Remember Tim Cook at the last earnings call pointing out that the Mac accounts for $22 billion in annual sales and that this business alone would be #65 on the Fortune 500? And it continues to grow fast at 25%+ rate. Apple has more than doubled the market share in the US PC market over the past decade and is now at a respectable 10.6%. If that’s still a “niche,” it’s a very profitable one and the envy of the industry. Even Microsoft takes notice and has a section on their site dedicated to prevent the Windows-to-Mac defections.
And then there’s the halo effect of the sales of the iOS devices all around the world. Certainly, most of these iPhone and other iOS device buyers are not Mac owners – especially overseas. This means a great opportunity to sell more Macs to these iOS customers and getting them fully integrated into the Apple ecosystem. Now all these people (especially the ones in Asia where Mac usage is virtually non-existent) who would have never considered a Mac are at least open to getting one for their next PC purchase.
Now how is this a bad thing for the Mac platform? There’s a good reason to make future Macs have iOS features as well as the look-and-feel. There’ll be many tens of millions of Windows users with iPhones, iPads and iPod touches who will now seriously consider getting an iOS-like Mac in the years ahead. Sure things are all going mobile in the future but, in the meantime, 300 million PC’s will be sold per year and Apple can get a much bigger chunk of that than they’re getting now.
As for the Xserve, how does it fit in to this grand strategy that Apple has for the future? It’s not even a profitable niche. To even call it a “niche” is stretching it in the big scheme of things when the entire Mac market is still considered as such. And Apple is hellbent on making sure that the iOS platform will not become a niche. Let’s face it: that’s Apple’s top priority right now. Apple’s focus is making iOS the dominant mobile platform (although no one expects any platform to achieve Windows-like dominance in the PC market). The Xserve and the backend enterprise market just isn’t something that Apple could focus on nor should it be.
Look at this chart of the enterprise server market. I knew it was bad but hadn’t checked in a while and didn’t know that it was *this* bad.
Now why should Apple devote their resources to compete in this sinking ship of a market? And the margins must be horrible. Now who here still believe that Apple should have bought Sun?
It’s no wonder that the likes of IBM, HP and Dell are focusing on storage, networking equipment, software, consulting and systems integration. Selling servers has become a dead-end business.
Apple’s Mac business ($22 billion in fiscal ’10 and growing at over 25% rate) is now over half of the entire server market.