I don't even know if I CAN read these debates, because Enderle uses such crap to support his arguments, I just get upset. The man is a fraud.

Now, to take a shot at Apple, I wish they'd get some hardware updates out, and soon. It's already May, and Jobs promised some great things on this 20th Anniversary of the Mac. Very disappointing. It seems that the hardware part of Apple has in recent memory been the weak part of it's hardware/software widget. The G5 initially changed that, but the hardware updates are late to be updated.

there are two computer companies that had black ink for hardware sales this past year, apple lead the pack with dell at second. when apple is the leader in profits for hardware sales, i would say that bot the hardware and software compliment each other, and neither is dominant over the other.

i think enderle's only legitimate point was "if iLife were available on windows, i would buy it". of course you would, it is simply the best digital media suite in the lay man's world. and when dell's photo album is $70 itself, movie maker is $100 and there is no lay equivalent to garageband on windows, of course you would buy iLife for $50. heck, you would buy iLife for $100 or even $150. the problem is that iLife attracts mac sales for digital recording and editing with seamless integration between all of the products.

so, rounds one and two go to bryan chaffin by a wide margin.

rounds three and four were closer, but because bryan actually knew of different business models than dell and M$, bryan takes these rounds.

i think we all know who is going to win out in rounds five and six

kick his @$$ bryan

TRO

Dude Apple seriously needs to start showing people what they can actually do with a Mac and OS X. Regular people can afford iBooks and eMacs, so Apple needs to let these people see how great these products are. They have established credibility with the masses thanks to the iPod. They have products that are priced right. Go in for the kill!

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Biff wrote:
Dude Apple seriously needs to start showing people what they can actually do with a Mac and OS X. Regular people can afford iBooks and eMacs, so Apple needs to let these people see how great these products are. They have established credibility with the masses thanks to the iPod. They have products that are priced right. Go in for the kill!

Good point. I think the Apple Stores have done some to help out the cause, but they need more mass advertising for their computers, including iLife and OS X. Get back mindshare, so they can increase marketshare.

Yes, Apple is a hardware company. But the only hardware making money are the iPods.

In the last quarter Apple sold 807K iPods, with a 25% margin a $400 iPod gives Apple a net of $100 per iPod, times 807K iPods equals $80.7 million, which dwarfs Apple's profit of $46 million last quarter.

The Mac computer business is a big money loser and getting worse as more Apple stores are opened. I'll give it to Steve Jobs that he is successfully covering up the Mac financial disaster with large iPod sales.

Mr. Enderle is a consultant. He is hired by organizations to assist them in making technology decisions. His clients' decisions, including that of hiring him, are limited by their perceptions of reality, however far from actual reality they are. Enderle is simply reflect the misconceptions of his clients and you should not expect him to adopt ideas that are contrary to the world view of his employers. That's not good business.

The root of the problem that faces Apple lies in the fact that business IT professionals are notoriously conservative. They are not rewarded for taking chances. They are most definitely punished for the failed taking of chances. More and more business IT organizations are only funded well enough to barely maintain the status quo. This is another impediment to the adoption of any new technology or platform. To get past this, Apple has to generate "buzz" as they have with iPod. They must generate the perception, "if you're not moving to MacOS X, you're missing the boat". Only then, will business IT professionals "panic" and start looking seriously at Apple's fine offerings.

Mr. Enderle fulfills, in the mind of the current business IT professional, a valuable role as an "independent" analysts who shares their (albeit mistaken) opinion that Apple is not ready for business. Truth is not at all involved here. Hence, you may spend countless hours on rational arguments, but in the end, they make no difference. Mr. Enderle is simply a fading echo from the past - one not likely to bite the hand that feed him.

I object to the assertion that the switcher campaign failed. The fact that it's still being talked about two years later indicates that the it succeeded at what it was supposed to accomplish: To plant Apple's name into peoples' heads, stir up discussion, and maybe push a fence sitter or two in a particular direction. Not all advertising is intended to create sales. Name recognition and PR are valid advertising goals too.

17 posts logged (countless before the comments section changed) and he says the same freakin' thing in every single one of them. Sheesh...one would think even he'd get tired of hearing the same thing over and over.

(Must be one easily amused shmoe...)

If software were covering the cost of hardware, it would make sense to offer extremely inexpensive Mac models -- say it with me now... "headless iMac" -- so that more people would have Macs for which to buy all that revenue-generating software. Apple is not doing this, and it's not because they're dumb. It is the hardware that keeps Apple in business.

While I would like to see the balance shift slightly if it resulted in cheaper desktops, I don't think Apple would dream of abandoning their world-class hardware business.

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Guest wrote:
Mr. Enderle is a consultant

There's the problem. . . read any Dilbert strip and you'll see it for what it is!

$ The Masses = eMacs and iBooks
$$ Power Users = G5 iMacs and iBooks/Powerbooks
$$$ Professional = G5 Powermacs and Powerbooks

THERE ARE ONLY TWO profitable computer companies in the world. Apple, and Dell. One of these is contempt to make clones of the same computer every day, and has for two decades. The other one (Apple) is innnovative, profitable, and has the world's bast GUI(Graphical User Interface). Except for RC, which one do you think will still be here on the computer market in 50 years? I say Apple. Microsoft has huge problems, and WILL come un-stuck(where is longhorn?) then the whole world will eventuall cross to Apple, and we can all laugh and tell them WE WERE RIGHT ALL ALONG, and the converts were wrong!

Gunhedd:
> (Must be one easily amused shmoe...)

not surprising when people always take the bait.

the only way to get him to go away is to *ignore* him.

From the day the Macintosh was introduced, Apple was an all in one company, software driving hardware sales, driving software sales. It's a sign of the industry's immaturity that this kind of question still is being asked, 20 years after the introduction of the first mature mass produced Personal Computer. Akin to "is Volvo an engine or a car manufacturer".

The only difference between Post Jobs Apple and Re-Jobs Apple is that Jobs knows they have to be much more aggressive in their software policy.

The moment it seems there's not enough incentive for software makers to provide to the mac platform, they need to step in, buy the most promising company and develop a best of breed for the mac. And the moment they see an oportunity to make a new convergence (walkman-musicshop-computer) they break their own model in order to capture the market.

So, in short, Apple has never been about Hardware or Software, it's always been about empowerment, whole-sale solutions and integrated real life experiences.

Ignore Enderle, either he doesn't get it or doesn't want to get it. As a consultant he's remarkably lacking in perspective.

Apple is a design company. What they do is take everyday products and make them easier and more enjoyable to use. Apple gets more plaudits for design than any other reason, not just their hardware and their software but their music players, web sites, stores and advertising - many people say there is too mich design in their advertising.

They were a computer company to start with, but even then their focus was on design (making products easier and more fun), branching out in to design of associated products is a natural progression.

Apple's standout products of the last several years, Final Cut Pro, iTunes and iPod to name but a few, are all based on bought in technology. Today's Apple takes ideas and components from disparate sources and designs better products. They add ingenuity and insight and they clearly listen to customers and consumers because they get so many (design) 'hits'. They don't actual make much (any?) hardware anymore, they design products which they outsource for manufacture.

If the number of employees Apple has in hardware manufacture was compared with employees in software manufacture were compared I am sure they have more in software. By that measure they would be a primarily a software company but there is no comparable company in the computer business so hardware vs software is a spurious argument. Which is why much of the computer industry, especially the analysts, simply can not comprehend what Apple is all about.

It's easier, and makes more sense, to think of Apple as a design company.

I don't think you'll see much out of Apple until WWDC. If there is new hardware on the horizon then you will probably see it in late June.

In year's past the official story was that Apple didn't announce new products at WWDC, if that is still the case I don't know what the story is with the introduction of the G5. Nevertheless, even when Apple's official story was that it didn't introduce new products AT WWDC, there have been a couple of years where they announced hardware and such in "special media events" immediately prior to WWDC so that they could discuss them with developers.

Maybe Tiger won't be the only fun new toys introduced at WWDC.

Rob, the tribe has spoken. You have to leave the island until you grow a real penis.

Jeff Probst
Survivor, Silicon Valley

...Bryan is pretty fly for a white guy.

-The lead singer of The Offspring

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RealityCheck wrote:
Yes, Apple is a hardware company. But the only hardware making money are the iPods.

In the last quarter Apple sold 807K iPods, with a 25% margin a $400 iPod gives Apple a net of $100 per iPod, times 807K iPods equals $80.7 million, which dwarfs Apple's profit of $46 million last quarter.

The Mac computer business is a big money loser and getting worse as more Apple stores are opened. I'll give it to Steve Jobs that he is successfully covering up the Mac financial disaster with large iPod sales.

1) Margin is only reported at a gross level, not for individual product lines. Where did you get this 25% figure?
2) Gross margin for the period to which you are referring was $530M. The $80M that you calculated, assuming it is correct, is a part of the $530M. If the iPod is the only thing making money, where did the remaining $450M magically appear from?
4) Net sales of iPods was $264M for the period, versus $1.9B for all other products. iPod sales, while impressive, are a drop in the bucket as part of total revenue.
3) Straight from the 10-Q : "The year-over-year declines in quarterly and year-to-date gross margins were primarily due to the increase in mix towards more lower margin iPod and iBook sales."

Discounting RC's usual flawed analysis, there may be some need for concern surrounding reduction of gross margin, from 28.3% for prior year's quarter to 27.8% for the most recent quarter. Still not too shabby when compared to the likes of Dell, which is struggling to get their gross margin over 20%. Apple needs to sell less iPods and more high-margin stuff!

Keep dreaming.