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Apple Forms New iPod Division, Organizes Macintosh Division

by , 5:00 AM EDT, May 20th, 2004

Apple has formed a new division within the company dedicated to the iPod. Reuters is reporting that the new division will be headed by Jon Rubinstein, former Senior Vice President of Hardware Engineering for Apple, while Timothy Cook, former Executive Vice President of Worldwide Sales and Operations, will head the Macintosh division. From Reuters:

Jon Rubinstein, who has led the Cupertino, California-based company's hardware engineering efforts, will run the new division, an Apple spokesman said.

Timothy Cook, head of Apple's worldwide sales and operations, will lead a newly organized Macintosh division, Apple said. Tim Bucher, now in charge of Macintosh system development, will head up the Mac's hardware engineering.

[...]

"This organizational refinement will focus our talent and resources even more precisely on our industry-leading Macintosh computers and the wildly successful iPod," the spokesman said.

There's more information in the full article, which is being hosted by the New York Times (free registration required).

The Mac Observer Spin:

We have been wondering of late about the growing emphasis Apple is placing on the iPod, while the company is busily not advertising Mac OS X, or any Mac hardware. It's a dichotomy that is easy to understand when the company is making money hand over fist with the iPod, but we would like to see the company bring some more focus back to the Mac. [This editor discussed that at length in Part 5 of his heads up debate with Rob Enderle at MacNewsWorld.]

In this light, this reorganization, as we think of the formation of a new division, is good news. Having dedicated divisions within Apple that each focus on the iPod and the Macintosh will bring, as the Apple spokesperson said, new focus on each of them. This is in sharp contrast to having a company that was formally dedicated to only product line, the Mac, with a new product sucking up that dedication from what likely amounted to large sections of Apple. Having territorial divisions will allow the people within those divisions to keep their eyes on their specific areas.

Or so we hope, because even as we typed it out, we were reminded of the age in the mid 1980s when the new Mac division, headed by the pirate flag-waving Steve Jobs, made mock of the Apple II division, the old-guard within Apple that was paying all the bills. As detailed in Owen Linzmayer's excellent Apple Confidential 2.0, that situation got ugly, culminating in a literal food fight between employees of each division, which in itself helped lead to Steve Jobs' ouster.

The situations between the Mac vs. Apple II divisions and the iPod vs. Mac divisions are almost precisely analogous. Couple that with Steve Jobs' comment in 1997, before he came back to Apple, about milking the Mac for as long as possible while moving on to the next big thing, and it does give one cause to think.

That said, the culture at Apple is vastly different from the Apple of the mid-80s, and today's management team is vastly superior to the management structure of that Apple. Indeed, the entire industry has matured, and we honestly expect very good things to come out of this development, no matter the shades of ages past that might haunt our thoughts.

Observer Comments

Show: Subjects Only | Full Comments
View Name:Guest
Subject: first post!
Close Name:Bryan -   TMO Staff Posts: 7332 Joined: 11 Jun 2001
Subject:

Let's hope so, Guest! I definitely think that this sort of division of product makes that more likely.

Close Name:Kircle Posts: 271 Joined: 06 May 2004
Subject:

Will each divison have it's own marketing department?

Close Name:dynamicv Posts: 51 Joined: 06 May 2004
Subject: Jonathan Ive and the Design Team

I wonder how much more money Apple could make if the Design Team were given their own division, and allowed to market their talents to other companies (outside of the computer industry of course).

Close Name:BlueDjinn -   TMO Staff Posts: 708 Joined: 24 Jun 2001
Subject: Major difference between this & the IIe/Mac wars...

...namely, in that case, the products were in direct competition with each other, while in this case, the two products complement and enhance each other.

View Name:RealityCheck -   Troll Posts: 392 Joined: 06 May 2004
Subject: Money Losing Mac Division Spun Off, The Mac Is History
Close Name:jfbiii Posts: 109 Joined: 06 May 2004
Subject: Not a step away from the Mac

Definitely better to not have all your eggs in one basket. The introduction of the iPod/iTMS gave Apple some leverage they were formerly lacking to boost the Mac platform and OS X.

Whether or not spinning off iPod into it's own division is a good idea or not will only become clear with time. But I doubt that particular product line will have the staying power the Mac has demonstrated. The speed at which mp3 players will become commoditized is going to be much faster than it took computers (desktop computers, that is). Apple has a good profit history in that type of market but a poor track record in winning the broader philosophical argument.

I'd be more comfortable if they had labelled the new division a "Consumer Electronics" division. Because really, how many squares are there likely to be in an iPod product matrix? Right now they've filled one box with the Mini and three with the larger iPod. I have my doubts about the iPod brand carrying across broad chunks of the consumer electronics spectrum. Sony tried that with "Walkman" and eventually managed to dilute it. But expanding the brand is ultimately what an iPod division will have to do to remain viable, IMO.



Last edited by jfbiii on Thu May 20, 2004 9:53 am; edited 1 time in total
Reply | Quote
Close Name:mshoaf Posts: 112 Joined: 02 Dec 2002
Subject: Perceptions

I don't know about the public at-large, but since the success of the iPod, I have been kinda seeing Apple as having 3 different divisions anyway: iPod/iTMS, Mac hardware/OS, and then Pro Software (confirmed to me by the recent announcement of Motion). You might add a 4th: Servers/Enterprise. This is just my perception, but it seems that each of these is starting to develop it's own personality.

As previously posted, time will tell if the actual internal organization of this will pay off. Personally, I have high hopes.

Close Name:pyxl8 Posts: 171 Joined: 24 Dec 2003
Subject: NOT advertising OS-X or hardware?!

Well, there ARE those little things called Apple Stores, which IMO are the greatest form of advertising that Apple could have spent their money on. Macs and OS-X need to be seen, touched, and experienced. Now the potential consumer can wander into an Apple Store and poke around without any trauma.

The proper presentation of actual functioning machines that are equipped with a suite of integrated software apps which can be demoed by dedicated salespersons is far more effective than any 30-second ad. And the iPod is an integral part of this strategy: the iPod has been an effective lure to entice people into the stores-- people who would have NEVER set foot in an Apple store otherwise.

Having two separate divisions is not going to hurt that customer experience. I'm sure they each will come up with some cool new stuff to entice us-- both new and seasoned Mac users, and some PC folks-- to spend more money!

View Name:Guest
Subject: Apple's Digital Life Vision
View Name:RealityCheck -   Troll Posts: 392 Joined: 06 May 2004
Subject: NEWS FLASH - Napster Beats iTunes To Europe
View Name:Guest
Subject: Business as usual "ain't gonna cut it" for the Mac
View Name:Guest
Subject: Reality Check, Read This
View Name:Guest
Subject: Milking the Mac? Never heard of such a thing!
View Name:Guest
Subject: thuROT
View Name:Guest
Subject: Paul Thurrott''s comments...
View Name:Guest
Subject:
Close Name:greybeard Posts: 16 Joined: 07 May 2004
Subject:

One guest made the very PC suggestion:

Quote
Guest wrote:
What I would like to see are third party hardware venders such as “Via” getting into the act and producing 970 compatible mother boards and chipsets.


This sounds to me like Mac OS X on 386 lite. Much of the technology on the motherboard is in the memory/peripheral controller which is engineered by Apple. I think this idea would be a big money looser for Apple, Via would represent the "Return of the Clones". Apple does so much of the research that is done by Intel/AMD/VIA in the PC world. I see little chance that the volume will ever allow this to be a profitable strategy for Apple, which is the important issue.

Quote
Guest wrote:
Getting SJobs to relinquish his egotistical stranglehold on hardware as in “controlling the whole widget” would introduce the more traditional driving force of competition. One can only wonder at what a little good old fashion competition would do for market share, not to mention quality. Via has consistently produced more stable higher performance chipsets that what AMD was able to produce.


Why the bitter personal reaction to Jobs. He, at least builds and honest product. Something that you can not say about Gates. M$ reminds me of other "successful" american companies, e.g. Intel, Harley Davidson, GMC, old IBM, all marketing and minmal engineering.

Quote
Guest wrote:
I think Apple would stand to make a fortune just selling the OS to an ever expanding Mac market share..


Apple may be making progress slowly in the Server maket, but it would take a massive change in culture of buisnessmen for iMacs to replace the PC as the workstation of choice in the American Corporation. I do not think Jobs plays golf.

Quote
Guest wrote:
Anyways I would like to see Apple become a viable and affordable alternative to the Wintell camp. I would like to someday purchase a Mac; however, I feel at this time it would be analogous to jumping out of the kettle into the fire, from the monopolistic world of Microsoft to the megalomaniacal monopoly of SJobs and his grip of death on the incredible shrinking Mac…. Like the rest of you this has got me scratching my head..wondering??????


One big difference is that M$ is as dishonest a company as you can find, Apple builds an honest product. I think this is a needed change because the iPods and Macs hve different markets, different marketing, and different engineering. Remember that the basic engineering on the iPod was done out of house.

View Name:Guest
Subject: Question for greybeard...
View Name:Guest
Subject:
Close Name:John F. Braun -   TMO Staff Posts: 229 Joined: 11 Jun 2001
Subject: Zealots

Unfortunately, there are zealots on both sides of the fence. I certainly don't think that everything that Apple does is perfect, nor do I think most of the TMO crowd. Sure, we like to pat Apple on the back when appropriate, but if they screw up, we'll point it out.

As for the issues that were brought up, in this day and age, it is an unfortunate truth that a relatively few individuals can give the perception that a problem is a lot larger than it is. People that are happy with their product rarely speak up; it is the one's that are pissed off that make the most noise.

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