Why Apple should spin off the Macintosh into a separate company

“Apple finally introduced a pro-level machine, and updated its iMac line in 2017. However, many Macs, including the Mac Pro and the Mac mini, haven’t been updated in years,” David Gewirtz writes for ZDNet. “While these machines have marginal demand when compared to the iPhone, they’re certainly important to Mac users.”

“The conventional wisdom is that Apple just doesn’t have the share of mind to give these machines, compared to the behemoth that is the iPhone,” Gewirtz writes. “That said, the Mac’s revenue is far from tiny. According to interviews Apple did with analysts this summer, Apple sells $25 billion worth of Mac products each year. That’s more than McDonald’s makes (for the record the Mc made $24.6 billion compared to the Mac’s $25 billion)… Lenovo, the world’s largest PC maker by unit market share did $6.7 billion in Q4, or an annualized run rate of $26.8 billion… Apple’s PC business is as good or better than the actual market share leaders in the PC business — and Apple’s PC business is merely a rounding error on its balance sheet compared to its phone business.”

“All that brings us back to the idea of spinning out the Macintosh business. I know, I know. There are lots of structural reasons why this might not be possible for Apple,” Gewirtz writes. “Would a stand-alone company on the verge of market dominance ever let its flagship top-end machine languish for five years? What about its most versatile (the Mac mini)? Would it let that machine languish, without even a processor bump, for three years? Apple went two years without updating the iMac, and that’s a top-seller. The answer to these questions is ‘of course not.'”

Read more in the full article here.

MacDailyNews Take: Apple is broken.

No properly-run company can do what’s been done to the Mac – for years – and not be broken.

Apple is simply so massive and the iPhone so thoroughly blots out any and all mistakes, that, to the casual observer, the company looks to be well-managed. It is not, and the Mac – along with all of the recent software errors, poor hardware design choices, poor communication with customers, etc. – proves it.

So, yes, Apple is broken. Not irrevocably broken, not by a long shot, but some very basic things — focus, commitment, timeliness, and execution — need to be fixed.

Apple is broken like a car speeding down the highway, misfiring on a cylinder and with worn brakes. It still looks like its working just fine from the outside, but the timing is off and there’s potential for accidents. Tim Cook should correct Apple’s obvious issues or step down and allow someone to run the company who is capable of correcting these issues and who can focus singularly on Apple Inc.

There is no need to spin the Mac out into a separate company given a properly-managed, focused Apple Inc.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

51 Comments

    1. Yeah, another clickbait story to prey on the anxieties and fears of masOS users. Steve Jobs said “PostPC”… which means all PC form factors designed by Apple are on the wane, spin it off and it’s dead within 5 years…

      The hardware ONLY exists now to create iOS software and to run Apple’s macOS apps. Those purposes don’t require yearly refreshes. If you’re using macOS and aren’t doing the things mentioned above, you’d be well suited to switch to a platform more aligned to song what you do.

      1. Fabulous idea!

        The Apple chief of the only new product released under his watch. 😉

        Still no breakdown of sales numbers, though. Tsk, tsk, must be really embarrassing numbers for all the money and research they throw at the project. Otherwise, if sales were OUTSTANDING they would be shouting numbers from the rooftops.

        I suspect Cook is hit with watch sales reality and simply envious of the Mac business he had nothing to do with. After seriously neglecting several Mac models for up to five years, the Apple Watch probably brings in a pittance of sales cash by comparison. Naturally follows, this is the EXACT REASON sales numbers are kept SECRET, no?

        I like the idea of Cook as Apple’s fashionista CEO. Obvious that’s where his head has always been and can one day put up his own chic coffee table time. Besides, fashion is way easier and it’s way more FUN. 😄

        Leave the hardcore details of engineering computing and software design/implementation to qualified individuals like … Scott Forstall! 👍🏻👏🏻🙏🏻

    1. MND gross exaggeration and negative personal bias. Apple mistakes are minor issues compared to the complex global scale, distribution, turnover, etc. Its growth has been phenomenal and quality remains among the best manufacturers in the world.

      Why compare to a misfiring jalopy except for an arrogant self righteous narrow bias, including targeting tim cook professionally and personally.

      Not fair appraisal, I’m betting Apple has a great 2018.

      1. No, MDN is spot on. Imagine Mac sales if they built machines people really want and offered timely and yearly upgrades?

        Apple has largely forsaken part of their product line that can easily stand on it’s own and grow much larger if unleashed from the mothership busy elsewhere. And be more responsive, and not go down dead ends, and listen to their customers, and listen closer to the Enterprise, etc.

        Mac’s have the potential to grow exponentially but not under the current inattentive regime. Ah they love to give lip service on how important Macs are to them but it’s not reflected in the product itself, or many of the product deviations. In my opinion the Mac is not winding down, it’s only getting started.

        2018 Mac sales will of course be very good, but how much better could they be? How much more satisfied would all Mac market segment customers be? How much more would Enterprise embrace the Mac knowing they were finally cared about?

        1. Both perspectives are right to some degree.

          Every corpoation even a fraction the size of Apple is messed up. Apple seems better run than the vast majority. I’m not sure you could find a management team anywhere in the world who could do a better job.

          Having said that, as MDN says, just imagine where Apple could be if they got their Mac hardware act together and did a better job with software and cloud services quality control.

          1. Realistically yes, that’s what has to happen. I hope Tim has realized that MUST happen and stop treating the Mac as a bastard child. Problem is if they have talked themselves into thinking they are already doing a great job. That way lies madness, and neglect.

        1. Do you call people you disagree with in real life names like “apologist”? That would make you a bit of a jerk in real life, in addition to being a bit of a jerk online.

          A spin off company would have better focus, but it would lose software and services integration with iOS, iPhone iPad, and Apple Watch.

          A better fix would be:

          1) Treat Macs like valuable iPhone accessories and give them at least as much focus as the iPad and Watch get. I.e. annual upgrades at a minimum.

          2) Create a user interface for Apple TV (gestures, eye tracking, voice, …) that rivals the efforts they did for iPhone, iPad and Apple Watch. The fact that I can’t FaceTime (“RoomTime”) with my large screen, browse maps etc with the family, etc., talk to it as easily as an Amazon Echo, etc., is a massive wasted opportunity.

          1. More thoughtful post with excellent suggestions and I agree with every one.

            Bad news is you were too hasty and short sighted calling MDN out and I stand by my comments in that regard. The good news is if great suggestions went before degrading MDN excellence, I would not have been hasty with the term “apologist.”

            That said, what you failed to appreciate is I did SOFTEN it and said “sorry,” before “apologist.”

            Jerks simply don’t do that …

  1. It’s become clear that the Mac is no longer the priority for Apple. Whether that’s right or wrong from a business standpoint is something that business analysts will have to determine, although I think the developer community is pretty much unanimous that leaving the Mac to languish is a mistake. That being said, anything that brings the Mac back to prominence is a good thing, whether it’s a change in the mindset of management, or whether it’s breaking off the Mac and making it its own company. Whatever happens, let’s hope the Mac regains its rightful place in the Apple architecture.

  2. Spinning the Mac business unit out as separate business makes ZERO sense because the iPhone and the Mac OS are, at their cores, the same. They are linked. Changes in one affect the other and the underlying architecture and software are the same. It actually makes NO sense to separate the Mac into a separate company. The Mac and iPhone will always be too closely linked to be separated…

    1. In that case, then the necessary solution would have to be a change in mindset by Apple upper management to make the Mac more of a priority. How likely is that to happen? If it does, then great, I’m all for it, and it sounds like from your comment, that would be the preferable solution. But if the Mac business does break off, and as a result, Macs regain prominence in the market, then that is a win, albeit a small one.

      1. Not likely to happen at all. The Mac will die like the Apple II, and the Lisa. People will yell loudly that it’s wrong, but in the same way that I’d rather use a Mac today than an Apple II, I will prefer using whatever the “PostPC” thing is more than a Mac.

    2. You are right. The best thing to do would be to put in place a management team that has an executive in charge of each key product line responsible for maximizing the results of their products and keeping them at the leading edge of performance. Maybe they could even have a real business unit for network products and for TV products. The fact that the same business structure that Steve Jobs created about 30 years ago is still in force shows the lethargy of the current team.

  3. I agree with MDN that this is “broken”. But MDN’s solution seems to be to put a high fashion retail executive in charge who has done almost nothing of note since arriving at Apple, except cash gargantuan paychecks.

    1. MacDailyNews said nothing of the sort. I’ve read all of their takes regarding Ahrendts. MDN merely states that having an accomplished CEO on deck in case of a tragedy befalling Cook (hit by a bus, private jet malfunctions, etc.) occurs is a good thing. MDN says that having a potential successor on board avoids the previous succession nightmare caused by analysts and stock manipulators as Steve was dying of cancer. They don’t proffer Ahrendts as the ultimate “solution” to Apple’s CEO problem.

      (Brought to you by Carl’s Jr.)

      1. MDN has made this suggestion numerous times, touting her as a successor. She is not qualified, and more importantly has not done anything of note since joining Apple. She is the “sales VP” elevated to CEO that Steve Jobs described as the death of a good company. She should not be put anywhere near control of Apple. In reality, Apple needs an executive who understands how to put a corporate structure in place that maximizes the results of the company. This has never been done at Apple and the many recent failures are because of the absence of product accountability. Nobody is in charge of the products, except maybe Tim Cook. Everyone else is just the committee.

  4. So little effort has gone into the Mac in recent years I wonder whether it isn’t viable to “macify” Linux and create a standalone Mac replacement line for all of us frustrated Mac users. It doesn’t have to be a copy of OS/X but it could be based on the values which underpinned the original Macintosh.

    I think it’s time for something new. And not from Apple.

    1. You’re thinking along the right lines. It’s been this way for awhile, but many want to ignore that Steve Jobs called it for “PostPC” a long time ago and Apple has been sprinting in this direction for awhile.

      But instead of looking for something Maclike, many folks don’t bring ANY of the old with them, and the skills they pick up learning a new platform have benefited them well. Sure, some people don’t want to or are unable to change, but the future usually goes to those that can accept and work with and help create that future.

  5. Totally disagree with MDN’s take. As I said here once before, it was Steve Jobs who created the mindset to ignore and marginalized the Mac. He himself is the one who had the cheese grater Mac Pro discontinued and very reluctantly agreed to even include a modular mac in the lineup, the Mac Mini. He also felt that every product that Apple sells must carry itself revenue wise; if it didn’t make a significant profit it was to be sidelined. In Steves mind, a Mac was just a truck, and in truth there just are not enough pro users to make it all that big of a revenue generator. It was Steve Jobs who said something to the effect that the Mac should be milked for all it’s worth and then move on to the next thing. And that is just what he did. He was all about the iPhone.

    Now you and I could argue that there is value in nurturing the Mac in order to have a complete end to end platform that is integrated. But I really think that Steve thought the Mac was totally closed out from the enterprise and was not worth using it as an inroad to future success for Apple.

    Because of the paradigm concerning the Mac’s minimal importance to Apple was left as a legacy to Tim Cook upon Steve’s death, the attitude was carried forward. Everybody at Apple were and still are reluctant to second guess Steve’s wisdom, so we have as a result the neglect of the Mac.

    But, guess what, the leaders at Apple today now understand that Steve was wrong on this and are now in the process to correct this mistake. So if there is anything broken at Apple concerning the Mac, it was broken by Steve himself.

  6. The entire Apple business model is built around the Apple ecosystem, so I think this would be a massive mistake. A spun off Mac business would slowly drift away (style wise, software, hardware, etc) and lose the Mac selling points that allow it to succeed as a $25 billion business. Separate, it would be Apple, but NOT Apple.

    The Mac problems are not structural, they are managerial, and can be fixed with a managerial solution. I would argue that it may not even need that. It can be fixed with a budgetary solution. Give them more resources. More simply, things would be noticeably better if the Apple board was willing to concede the several points of extra profit margin they pick up during a product life cycle by allowing products to go stale and buy processors and main logic boards cheaper as they fall several generations behind what is current.

  7. – Levis 501 Jeans, unchanged since launch (1980).
    – Bic Cristal Ball point Pen, launched from Freedom 1931, over 100 billion sold and design untouched to this day.
    – Kitchen Aid Mixer, 1937. Design still to essentially the same specs.
    -Lego Bricks, made in 1958 still lock with those made today, great backward compatibility.

    Some products just don’t need to be updated constantly. The upgrade cycle for computers in their heyday was crazy but now it just may be that the upgrade cycles can extend themselves. After all the basics are done for now.

    Until the next revolution.

    Mobile devices, soft wear products like the apple watch, that’s where the action is.

    Get used to it.

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