Hidden Dimensions - A Review of Apple's Strategic Weaknesses
by December 8th, 2006
The collective Apple community has been so intoxicated by the
iPod, the success of the iTunes Store, MacBook sales,
and excellent Mac OS X security that no one is reflecting on the
areas where Apple is vulnerable. Perhaps it's unpleasant to think
about, but neither do we want to live in a state of denial. So
here are some areas where I think Apple should pay more attention.
1. High Performance Computing. HPC is hard work. It requires
infrastructure, subject matter experts inside the company who can
actually devote 100% of their waking hours to HPC, and it requires
deep partnerships with HPC customers. When Apple realized that it
would be perhaps a year from the time they announced the Intel
transition until Xeon-based Xserves would ship, they pulled back.
The best thing Apple has going right now is workgroup computation
for bioinformatics and scientific visualization.
Apple could clean up in this area in slightly larger clusters, say
64 to 256 nodes if they put their mind to it. They're no longer
constrained by IBM, and customers love what Apple brings to the
table in terms of quality hardware and integration with the OS.
Bottom line: there is money to be made.
2. Enterprise. Despite an excellent server platform in Xserve and
Mac OS X Server OS, Apple doesn't have the infrastructure
internally, the business model, or the business software to make a
serious assault on the general enterprise market, not because the
products are poor but because of the image Apple presents.
For example, does a corporate CEO really want to open
up his system preferences and be greeted by an option
called "Parental Controls"?
Here's another example. In 2005, Apple stopped providing
Internet Cafes for professional conferences. The argument was
that seeing Macs lined up in this fashion dilutes the brand.
What Apple corporate missed out on, and what the field sales people understood,
was that relationships with professional organizations are
greased by these Internet Cafes. While the Mac is the
best computer on the planet and the brand is strong, there
are Apple senior executives who don't get the importance of enduring
business relationships. There has to come a point
where arrogance and branding give way to actually selling computers
in the enterprise.
Enterprise customers just can't get it out of their mind that this
is a company without serious business software solutions that is also
focused on consumer electronics. As a result, Apple is relegated to
and remains satisfied to engage some niche areas like small
business, bioinformatics, and audio/video production.
But because they're not on the offensive thanks to
longstanding road blocks by the competition and Apple's own image,
companies that covet those particular markets have a free hand to attack Apple while
protecting their remaining business segments.
As Apple becomes more and more distracted by the entertainment side of
computers, they risk losing what credibility they have in the enterprise, business
and government, where customers desperately want to act like very sober,
grown up professionals. But I don't expect anything to change.
3. Music industry. I am more and more concerned about the
things I am reading about the music industry being annoyed
with Apple. Yes, Apple saved the labels' tushies. Yes, Apple
ignited the portable music revolution. Yes, the music labels
couldn't have developed their own iTunes Store if C.S. Lewis
returned with a legion of angels.
Apple has been enjoying this success and believes that
inspiration, perspiration, and innovation will allow them to
maintain the iPod mania for a long time. But it's also,
in my view, distracting the company from the idea that the
time for gloating is over, and it's time to start working
with the other players in the industry to further everyone's
goals. Otherwise, everyone's goal will quickly become
the eradication of Apple.
As I mentioned previously in this column, the Zune is not a
device designed to stand on its own merits. Instead, it's a
strategic platform that gives Microsoft an entry point into the
industry and a ticket to raise havoc with business deals that only
Microsoft knows how to do. After all, all the other players want
to do is make money selling music.
4. Entertainment industry's plans. There is
great confusion but also great ambition in the video
entertainment industry thanks to all the new methods of delivery. The Hollywood studios have
carefully studied where the music industry went wrong, and
they're learning fast. The industry as a whole is working
together, and Apple isn't exactly on their Christmas card list.
All factions in the entertainment industry,
the content providers and the carriers, are scurrying to
make sure that Apple doesn't dominate the movie business
the way they did the music business. So far, Apple hasn't
made any headway, and it's only the coziness with Robert
Iger at Disney that has allowed Apple to make it's first
foray into selling movies. But Disney hasn't been standing
still either, having overseen an agreement between ABC and
Comcast to deliver various video content on demand.
Motorola is working very closely with the cable companies,
Comcast, Time-Warner, Cox, et al,
to deliver hardware and software that will keep their
customers glued to the TV set, not the computer, and keep that cable bill cash
flow ongoing.
I suspect that it has been this massive effort by all concerned,
the studios, the networks, and the set-top-box manufacturers
to make sure their customers have wide choice, workable DRM,
and that all of them prosper in this new century. That could
well be the reason behind the endless delay of the so-called
"true-video" iPod with a full 100 mm (diagonal) screen.
Apple can't invest a lot of effort in a portable video
platform until they've secured broad agreements for content, and
those seem to be hard to come by lately.
5. iPhone stress and meddling. The cell phone companies
and the carriers aren't building the greatest, easiest to use,
most secure phones one could conceive of, but in aggregate,
Gartner says they're on pace to sell one billion cell phones per
year by 2009. Verizon, from the TV ads I've seen,
has learned some lessons from Apple about
how to advertise their LG Chocolate phone.
Meanwhile, Apple is trying to hit a home run on it's first
try with a cell phone, and it's causing a delay. Apple has a
conundrum. The iPhone will have to be both the Apple
of Steve's eye -- can you imagine how many engineering changes
must have been made in 2006? -- and be a commercial success
because Apple hates losing money on anything. And hates
shipping products that people don't swoon over.
Because Americans have so much experience with cell phones,
the iPhone's design trade-offs and potential risk
has probably caused a great
deal of distraction within Apple. Suddenly Apple
is struggling to enter the movie and cell phone business simultaneously,
both are critical to Apple's future and all this is likely
taking up all of the Executive Team's time.
What Does it All Mean?
The distractions I've cited can't be good for Mac Pro, Xserve, Xserve RAID, Mac OS X "Leopard",
the developer program, education initiatives, science, or the
the enterprise. I will, however, compliment Apple on the recognition
that with the success of the iPod, the Get A Mac ads must run
simultaneously in order to shore up that side of the business.
Even with that, Apple runs too lean to absorb too many
agendas. The structure of the company and the centralized
authority must be breaking at the seams. Are they in
denial? It's ironic that IBM is the source of
one of the best TV commercials ever in this regard. An executive is
telling his psychiatrist about a dream. He's being chased
down a hallway by ghostly creatures. They're his customers.
The creatures demand "everything now!" The executive begs,
"what does it mean?"
The psychiatrist tells the executive, "You're too slow.
You can't respond. And you're in denial."
The executive blurts "No I'm not!"
John Martellaro is a senior scientist and author. A former U.S. Air Force officer,he has worked for NASA, White Sands Missile Range, Lockheed Martin Astronautics, the Oak Ridge National Laboratory and Apple Computer. During his five years at Apple, he worked as a Senior Marketing Manager for science and technology, Federal Account Executive, and High Performance Computing Manager. His interests include alpine skiing, SciFi, astronomy, and Perl. John lives in Denver, Colorado.
Well written and thought out. Two points. Apple is making inroads to HPC. They've been co-sponsoring seminars on HPC at universities. They were at mine early this spring. The clusters are out there, being built by visionaries who see the value of cutting costs by 75%.
Second, consider entreprise a non-entity. After so many years, it should be evident that Apple doesn't WANT to go into this realm again. The margins are too small in fact for the amount of effort it takes to placate IT managers who don't have a clue about what to do with their hardware. Opportunity missed? Sure. But the time to dwell on it is over.
There is more easy money to be made in entertainment.
It seems to me that in the areas mentioned, Apple can hardly be described as failing, and the weaknesses are very subjective. We will be interested to look back and see just what failures these weaknesses brought about.
I'll bet the iPhone being ahuge hit, iPod and iTunes maintaining its lead, the movie industry coming into line behind Apple, enterprise more and more buying into OS X, and I am not qualified to even comment about the HPC issue.
In the medium term, Apple's positive spiral (and a negative one for many of its competitors) means that I won't count on there being any failures out of Apple.
A good start, but I think you missed one... Games. For the most part Apple can point to cross-platform either applications/solutions for most software catagories or programs that can read/write to compatable file formats. Most switchers can adapt currently.
However, if one goes to any store offering both Mac and Windows software, look at the available games for each platform there's about a 1:10 or 1:20 ratio in favor of Windows machines. Certainly some of the uber-popular games, Call of Duty series, World Of Warcraft, Command and Conquer etc. games are available to both, but many many games simply aren't available to Mac gamers. When was the last time Madden was upgraded for the Mac? Or the last update to a NASCAR game. I don't think switchers are going to see purchase of an additional license of Windows NT (or Vista) and Parallels to be an optimal solution, any more than long time Moto/PPC Mac owners are going to to see an Intel Mac AND WinNT/Vista AND Parallels to be attractive.
As time goes on the definciency in breadth and depth of available MacOS will hold further penetration of the platform into the rank and file of the Windows/PC hegemony. While existing MacOS users will look whistfully at commericals for games on TV or boxes on the shelves at stores and say "I wish I could play that!".
Apple should re-invest some of the massive profits it's made the past dozen quarters or so into efforts to increase the availability of games for the Mac. This can be more advanced developer tools, support for updates to the underlying game engines, or subsidies for the manufacturers.
Tiger wrote: Second, consider entreprise a non-entity. After so many years, it should be evident that Apple doesn't WANT to go into this realm again. The margins are too small in fact for the amount of effort it takes to placate IT managers who don't have a clue about what to do with their hardware. Opportunity missed? Sure. But the time to dwell on it is over.
I agree that Apple has long since made the decision that supplying data processing to big enterprise is not an area Apple wants to go. Apple is concentrating - and very well, mind you - on being the computer for the common folk. Their entire current ad series focusses on the difference between business computing and home computing.
Expanding into enterprise computing is not necessarily a lost opportunity. Instead Apple is in the process - again very successfully as of recent - EXPANDING their niche. Home computing is becoming more and more common, and Apple is out there grabbing a larger share of this expanding "niche". Several recent moves, such as dual boot capability, is aimed at grabbing the home computing market. Now the consumer can be compatible with work AND have all those easy-to-use FUN goodies (iPod, iLife, etc.) Apple is famous for.
Now, if Apple could get a handle on gaming, they would have the complete package to OWN the home computing market.
Speaking as an observer of the game market -- I don't play them -- I think games on PCs are past their prime, are they not? Is it not now all about consoles, for serious gamers at least? It would appear that gamers are OK with owning both a console and a computer. At least if my home is typical, any serious gamer who lived here would want to get another machine, be it console or computer, because my home computers are busy most of the time with people doing other things. And I suspect he would choose a console.
Very insightful article.
Apple's Xserve RAID was an example of how the platform barrier was broken and companies took Apple seriously for an enterprise product.
When the Xserve RAID was launched, its price point was incredibly low, very unlike Apple, but this is what made people consider their RAID system.
Not only Apple customers, but Windows, Sun, SGI and others were buying the Xserve RAID for storage because it is platform agnostic.
Today, the Xserve RAID is outdated and the value is not there as much as before, but....
If Apple can bring back the Xserve RAID in state of the art technology at a great price point as before, that would give them a solid foundation to build on.
Then quad core processors, enhanced chip sets, a solid multi-processor server OS and a few Apple developed features plus a good price point could put Apple Xserve in the game.
Then, the combination of the new server and new RAID would be one of the best values on the market.
Yes the iPod is now the first thing you think of when you think of Apple, but look at all the money that can now be funneled into the enterprise side...heck, maybe Apple will do some branding like "Apple Enterprise" to help distance the consumer side.
Apple already has a "Trojan Horse" going in their Mac Mini; that price point and the ability to run Windows (Vista?) almost as good as a Windows only box may give Dell a run for its money when the marketing kicks in and a the new OS and hardware upgrades hit early next year.
So I see it as it being up to Apple to choose the direction, because the pieces of the puzzle are coming together in 2007
The argument that Apple needs to be in the Enterprise or in HP computing is an old, boring and poorly considered argument. Both of these markets demand a degree of focus and support, as well as support from specialist software and hardware vendors, that far outweighs their current value to Apple. The secret of Apple's success since the return of SJ is FOCUS. They focus on a few things and do them exceptionally well. The consumer market place is the most potentially lucrative marketplace of all, and one that is the most open for a non-incumbant (ie not Microsoft) to penetrate. Apple should continue to do exactly on what they are doing now.
It is not clear from an observation of the computer market, nor is it stated in the article, why there is a strategic flaw in focusing only on the non-enterprise market? Actually, the point is arguable, but in no way a matter of "established managerial doctrine", and so if the author wants us to buy into his argument that there is any market risk in focussing on one segment, and gaining tremendous traction there, to the exclusion of another, discontiguous segment, then he must make some facile argument to sway us.
I think Apple has a credible name in HPC, and its current retraction of offerings is (and is seen to be) a temporary result of platform change. No one who understands market dynamics should make longterm prognostications (about Apple loosing relevance) based on patently temporary market moves.
His comments of there being no love lost with the Music industry are accurate, but the suggestion that things were once better are ludicrous. This is a play of two players with market power, and is bound to be frought with flexing of muscles. To conclude, from this little bit, that Apple is at risk of loosing, or may be unable to sign, key deals is (once again) an unsupported argument.
The whole lament of "Apple does not have focus" is demonstrative of the authors ignorance, than of Apple's failings. Convergence is the uber-trend of electronics-communication-entertainment industries, and is forging niches that companies like Apple can do really well in. There is room for others, this is no death match-- Nokia and Motorola are not Apple's mortal enemies, as the author's characterization will imply. Apple's niche (now bigger, but still a niche) has been the design concious, premium, user friendly electronic products for home use. Does a DVR, cell phone, computer, and mp3 player belong there? You betcha. So why will not convergent devices fit the Apple unbrella?
I think the author needs to hone his arguments better.
Decentralization is the wave that is building. Organizations are turning more and more of their core activities over to collaborative partners, users, enthusiasts, etc.
In entertainment, media convergence over multiple devices encourage free form but enthusiastic participation. In this sense entertainment is becoming more like gaming. Gaming is becoming more like a separate virtual world where the participants even get involved in adding to or creating the game on the fly.
The tendrils of Web 2.0 wikis, digg boards, blogging, networking etc. are making their way into the enterprise. Consequently, how much of what is done in the enterprise will remain IN the enterprise in the future.
When I look at Apple I see this equation:
Apple Culture (Jobs) + Rabbit + Hat = Next big thing.
1-Apple needs an Embedded version of the OS. UNIX is steadily being pushed out of the embedded market by Windows and Apple now has he largest installed UNIX base in the world. It's time to invest in an embedded version of the OS complete with an SDK. This is huge with the companies that make high $ machine tools, medical devices, etc.
2-Apple needs a PDA/Smart Phone version of the OS. If you work around the enterprise market you will understand. Palm is dead and if Apple stays out of this space, they will be handing over another market they invented to Microsoft.
3-Apple needs to develop a Thin Client version of the OS. A lot of commercial/enterprise computing will be moving this direction and the time is now to a Thin Client version of the OS ready.
4-Apple needs hardware available to OEM's that they can configure with their own graphics cards, memory, networking. Otherwise a more generic tower that doesn't cost 2k and have an easily damaged case. Computers come along for the ride on big $ hardware sales with proprietary software from the OEMs and many times require networking, storage or graphics options that are not going to be available on a low-cost mini or iMac. These same companies do not want a beautiful (and easily damaged) MacPro case. They want a generic 'whitebox' configuration. Apple can restrict these sales to enterprise markets, but needs them in order to get in the game.
5-Finally, Apple needs to invest in the OS by funding Mac OS/UNIX developer courses at key universities round the world. The current crop of developers coming out of college know Windows the way grads back in the day knew LINUX. Endow some seats to ensure X-Code and UNIX are on the menu at the schools cranking out tomorrow's developers. With $10 billion in the bank and no debt, Apple should be able to endow all the schools it wants to without putting a significant dent in it's finances.
Apple is steadily growing in the business sector and now with its new Xserves and Pro Macs online and with Leopard around the corner there will be many advancements with the pity nittpicking story. Parental controls can be ignored as they are not on by default. And a CEO of a company is not going to look at his system preferences anyways, that's why he has an I.T. department. The iPod is still on top with the best interface and online store on the planet. The Zune is a joke at best and already a total failure. Newer better iPods are on the way so I don't see any threat or failure on Apple's part there either. Ah yes, the entertainment business thinks there going to push Apple around. I think Steve Jobs has more clout then most are willing to believe especially in the media. They would essentially cut there own throats if they were to leave the iTunes music store owning almost 80% of the market. So all in all this story of Apple's weaknesses is truely all about nothing which means Apple has a lot going for it with more to come when MacWorld 2007 comes along.
I agree with other comments, though, that it is a strategic choice on the part of Apple to not go after the enterprise. It would be a huge distraction. They've gotten where they have since SJ's return due to disciplined FOCUS on consumers, creative pros, and education. This is a very conscious choice on the part of Jobs.
HPC falls into this category, I believe. My suspicion is that it used to be a strategic priority to some degree around 2-3 years ago when the G5, with its ahead-of-its-time 64-bit and AltiVec capabilities, was the centerpiece, and before the iPod/iTunes became the phenomenon that it is today.
Since then I believe Apple has seen the enormous opportunities in the consumer market and has shifted to focus on that market more fully (some would say almost completely).
I agree wholeheartedly that Apple needs to lose its arrogance wrt working with media content partners. This is a real concern. Couldn't agree more...
And I agree that the iPhone project has probably put enormous strain on Apple's executive team. But I do not agree with the premise that that is a mistake (or a "strategic weakness"). Taking risks and working hard on difficult projects is at the very core of Apple's competency. This is the stuff that Jobs lives for, and the reason that Apple is so successful. What should Apple do, just sit around and count the money as the iPod profits come in? No, Apple needs to innovate and solve difficult problems that no one else in the industry can solve.
Yes it is a strain, but fortunately Apple has taken a very slow and methodical approach to this. Remember that the iPod came out over five years ago now. Apple has been extremely careful to nurture and grow the iPod/iTunes platform, and has been careful not to allow its efforts in other areas distract it from making its iPod and Mac businesses flourish.
Apple is doing what it does best, and were it not working on a smart mobile device (which is essentially what the iPhone will become) I would be very, very concerned, both as an Apple shareholder and an Apple fan.
I work in the enterprize and I can say Apple needs to stay away. IBM, CA, SAP, Oracle, HP and the like build and sell kits (they call solutions) that always require "Specialist" to work on for a very look time. That cost you and me serious money when we buy and use products their products. Apple is fine right now and should continue to look into markets no one has been successful or can make it work. The iPhoney thing maybe one of those markets.
While it may seem like Apple is growing too thin, they are obviously planning for a future where they branch out much more. The 2nd Apple campus shows that they are wanting things to be more efficient. It will allow more engineers to work closer with each other. Apple has a huge potential for growth, it just has to re-adjust slightly to do that. The first stage of that re-adjustment was the switch to Intel chips, the next will probably be the iPod/iTV combo, the third being the iPhone
I really don't think the author really understands what Apple is all about. If you were part of the executive team at Apple and had the warchest of cash to spend on initiatives, would you spend it on realizing the vision you have been developing on for the past 9 years - Consumers. Or, would you put your cash towards enterprise stuff, which clearly has a lower payoff relative to the consumer opportunities. Clearly the investment and strategy needs to focus around Consumer. They don't need to be everything to everyone - that is both business and consumer - to be successful. What they need is a laser-like focus on the stuff that matters. That's what they have been doing. And the improvements in their business that they have focused on over the past few years that you don't see - better supply chain dynamics, more channel relationships, better fulfillment - really matter. The enterprise is important, but think of it this way: Why put your eggs there when the opportunity in the Consumer realm is just starting to blossom. Instead of splitting their focus all over the place, they are being smart, heading down a strategic path that is right on. So, your "strategic weaknesses" I think are actually strengths. Steve Jobs and his management team have and continue to execute to their vision. I admire them for their maturity on recognizing what their strategic strengths are, and capitalizing on them rather than frittering away resources on less promising opportunities.
I feel you are off the mark on just about everything in your analysis. I agree with horvatic et al who say that Apple has more clout in multi-media market than you give them credit for. I disagree that they need to dominate HPC or Enterprise (their current entry offerings are just fine, thank you). Apple is well on the way to a strong foothold in small business, which is probably a larger market than Enterprise.
Nor do i agree with your comment: The distractions I've cited can't be good for Mac Pro, Xserve, Xserve RAID, Mac OS X "Leopard", the developer program, education initiatives, science, or the the enterprise. I think we will find that Leopard is well integrated with voice technology and a fine OS, and the new Xeon Xserve has already started to receive accolades. Apple is a corporation. While Steve Jobs might have a tight hold of the reigns, there are other people who can manage projects without his micromanagement. His reputation notwithstanding, i think he understands that and isnt afraid to delegate.
CloseViewName:Guest Fri Dec 08, 2006 3:34 pmSubject:
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zewazir wrote: I agree that Apple has long since made the decision that supplying data processing to big enterprise is not an area Apple wants to go. Apple is concentrating - and very well, mind you - on being the computer for the common folk. Their entire current ad series focusses on the difference between business computing and home computing.
Apple marketing slogan circa 1984: "The computer for the rest of us." Big enterprise has never been APple's focus.
Thank you, John. It's always good periodically to do an overview of where Apple, as a company, is focusing its efforts. If a company focuses too broadly, for instance, a monopolist like Microsoft, then the result is mediocrity. We, then, get programs and systems that hold back innovation in the computer industry, not foster it-- like how Microsoft sabotaged Intel's EPIC. But, if a company focuses too narrowly, it misses opportunities. Are the items that you listed above lost opportunities or are they the result of Apple wisely choosing to focus its efforts elsewhere?
1. HPC, as I understand it, was an accident for Apple. It was the fortunate result of choosing NEXT's "Openstep" UNIX as the open source base for Mac OS X-- hence, new opportunities opened up. Researchers found that the combination of Apple hardware and UNIX software provided them with previously undiscovered capacities. This is not a big issue for Apple, because there are no high profits here, but the bragging rights are good.
Apple's Xserve system was originally designed to serve the needs of the technical klutzes in Apple's core market-- video and music. The Xserve is an excellent example of Apple focus; that is, of providing an easy to use interface for what had been a forbidding IT area. This allowed people who's minds were not technical to cheaply replace their expensive IT adminstrators. Combined with hardware that rarely broke, Video and Music producers could store copious amounts of data inexpensively. The Xserve also turned out to be a good Webserver and clustering system, but neither was what it was designed for.
The first Xserves were not technically compelling, but have vastly improved over the years. The Intel Xserve is reputed as among the best on the U1 market at prices much lower than average. The Xen and Xgrid clustering software have been brought over to Universal. The Leopard server software is truly 64 bit to match the new 64 bit Xserves. I'm no expert in this area, but it is unclear to me what Apple could do differently. Again, this is something that Apple is working on, but isn't a high priority for it.
2. Enterprise is a knotty problem for Apple since the playing field is intentionally set up against them. Apple's consumer based marketing demands tactics that alienates the Enterprise market which wants compatibility, predictability and long lead times.
The demand for second sources for hardware plays into Wintel's commodity hardware marketing system. This is becoming less important because of Apple's move to Intel and the fact that it allows Microsoft's Windows OS to run on Intel Macs.
The Major subsystems in the Mactels-- processor and support chips, memory, disk and optical drives, etc-- use the same components as does the competition. Apple uses open standards that make it fit better into the existing market than Microsoft's Vista will. Fifty percent of the current Wintel PC user base will be unable to run any version of Vista without costly upgrades. Vista's use may have to wait for the eventual replacement of most of the current PC hardware base.
Increasingly, more of the components of a computer are included inside the processor chip, so Apple will use very few components that will differentiate it from Wintel competitors.
So, the reasons that IT professions use to discriminate against Apple will disappear, except for the OS software. Increasingly, companies are allowing its personnel to use their personal PC's for company purposes. Many of them will be Macs, since Macs fit in so well that there will be nothing to tell the IT professional that they are different from Wintel.
3. The Music Industry spent the last twenty years trying to prevent innovation. Thus, they handed to Apple a near monopoly because Apple served music customers better the RIAA did. The Music Industry is still trying to retard innovation and Apple will continue to fight them. As long as Apple serves it's customers better than the Music Industry, it will have a huge market. I don't see how caving in to the monopoly plans of the Music Industry serves Apple's interests.
4. The Video Industry is following the Music industry's lead here by shortchanging its customers. Changing technology will decide who wins here. TV and Video is in flux. It is unclear whether Blu-ray, HD-DVD or various versions of movie and TV downloads over broadband internet will win. I'm betting that Apple will have better technology and will be fairer to its customers than the competition and thus, will garner a huge market. So, we have a disagreement over who is losing the opportunities here-- Apple or the Music and Video Industries.
5. I'm not sure that Apple has any business entering the phone market. It shouldn't unless it can serve customer's needs better in innovative ways. If Apple cannot provide an integrated way of providing consumers with increased value, then it should stay out of this market. Perhaps, it should, instead, provide software that allows other phones to access the iTunes Music Store.
So, the question is whether Apple is using its resources wisely. I suspect that Apple has been looking at these areas longer and more creatively than its competition. Many of the opportunities that are available to Apple now are because it invested in technology-- Quicktime, H.264, ACC, Zero Config, etc-- long before there was a possible market.
Often, Apple has had to wait for the hardware or open standards to catch up with its software plans. Right now, it seems to be waiting for the "802.11n" version of Wi-Fi to be approved by IEEE in early 2007 before launching its Movie Store. This is necessary because "802.11n Wi-Fi" has at least eight times the transmission speed of the "802.11g" version. Apple has been covertly placing preliminary Broadcom "n" chips in its Core 2 Duo systems and the Mac Pro without the drivers necessary to allow them to work. As soon as the IEEE approves "802.11n" Wi-Fi, then Apple will already have a base of millions of "n Wi-Fi" capable computers installed. So, here we have an opportunity that Apple has not missed, but simply isn't ready to reveal yet.
I'd like to throw in the risk presented by the growth in web app technologies - we're finally seeing what Java applets were supposed to give us - applications deployed through the browser.
In short, what threatens the MS dependency (dependency on the Windows APIs) also threatens Apple.
horvatic wrote: Apple is steadily growing in the business sector and now with its new Xserves and Pro Macs online and with Leopard around the corner there will be many advancements with the pity nittpicking story. Parental controls can be ignored as they are not on by default. And a CEO of a company is not going to look at his system preferences anyways, that's why he has an I.T. department. The iPod is still on top with the best interface and online store on the planet. The Zune is a joke at best and already a total failure. Newer better iPods are on the way so I don't see any threat or failure on Apple's part there either. Ah yes, the entertainment business thinks there going to push Apple around. I think Steve Jobs has more clout then most are willing to believe especially in the media. They would essentially cut there own throats if they were to leave the iTunes music store owning almost 80% of the market. So all in all this story of Apple's weaknesses is truely all about nothing which means Apple has a lot going for it with more to come when MacWorld 2007 comes along.
I think you one of the ones living in a state of denial. I work for a company of 7,000... Apple is a joke to an enterprise of this size. There are a lot of special applications that the company uses that only run on Windows and when I talk to my co-workers about buying a Mac, most simply turn their head and walk. I also see the music industry starting to turn their backs on Apple. The Zune is a joke... but it is just Microsoft testing the waters.
I work for a big telecommunications company as a data miner in the marketing department. I write SQL code in a text editor and execute the code in a simple query shell. I work in the Windows world, but live in the Mac world. We have the option to run Linux, but we have to be our own tech support. Now if there were appropriate enterprise applications for OS X, guess what I'd be using at work...
I wish Apple would at least take a swing at it.
...and yes, I can be my own tech support. I have been for almost 18 years.
John Martellaro is the best apple anaylyst I've read. It's clear Apple does not try in the enterprise. They may or may not be making the right decison. The enterprise is full of people who serve their own agendas. Enterprise is all about control, control, control. The whole enterprise is moving toward the terminal services model. Users have been so dumbed down by windows and by IT policies that they will soon be limited to terminal environments. Given the support problems with windows, this makes sense. If apple were to do onething for the enterprise it would be to clone remote desktop client and ensure that it is bullet proof and fully integrated with Mac, then they would roll out a mini based thin client mac.
Over time as apple penetrates the consumer market, that penetration will bleed over into the enterprise. It used to be that tech leaked out of the enterprise world, but the windows monopoly has killed the animal spririts of IT innovation and so now the model is reversed. Success in the consumer space will infiltrate the enterprise
I disagree with the fella that states that games are all about consoles. PC Gaming sales have been slow lately, I agree, but get ready to see some console hurt when DirectX 10 comes out, and Vista is available for consumers.
The PS3 for example is already outdated and their arguments for selling them at +$600 are running thin each day.
The Wii... well itīs a marketing stunt in my view. Once the hype is gone I canīt see it being nothing more than a gimick.
The Xbox360 is the best choice of the new consoles... yet, also old and outdated! And these consoles have a lifeline of 4-5 years!
Games on a Mac? I think not! I ran World of Warcraft on a MacBook and it almost melted my desk! Macs are fine machines, but they are steamy and have poor graphics cards. It seems just because they found success with the Ipod they think they can take over any market... Their monopoly over digital music will hurt them eventually.
In short: games on a PC are the cream of the crop. Consoles lack control (hence the Wii attempt), lack the graphics power, upgradeability is lame and the costs are enormous!
