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by - January 12th, 2005
In October of 2004, Seth Jayson wrote a piece about Apple for a Fool vs. Fool debate titled "Apple is Rotten" (see our full coverage for more information). He, of course, took the con side of Apple when it came to investing. On Wednesday, Mr. Jayson penned a new piece called "Apple's Magic Act" that takes a more aggressive and direct approach to completely dismissing everything announced by Apple this week at Macworld Expo.
Operating from the premise that Apple's stock is still overvalued, and that target prices of US$100 from analysts like Piper Jaffray's Gene Munster are way off base, Mr. Jayson said that the iPod shuffle (or iPod waffle as he called it) and Mac mini are the wrong products to make Apple a better investment.
"Unfortunately for Apple shareholders," wrote Mr. Jayson, "Jobs had to pull a rabbit out of a hat. He did yank out a couple of cute little white critters, but let's just say Dumbledore's position looks pretty safe for now. There's nothing particularly magical about either of these, and that may add up to trouble for everyone expecting Apple stock to continue its moon shot."
Concerning the Mac mini, Mr. Jayson wrote: "The Mac Mini -- I'm pretty sure Minimac is something you get from Kraft -- is a cute little device. Yes, it cribs mercilessly from PC-based mini-ITX designs that have been around for over a year now, but it does put low-end Mac guts into a smaller, stylish little Mac package. The most interesting magic trick here is the illusion -- somehow completely lost on the mainstream press -- that this is really a $500 computer. Check out this sleight of hand."
From there, Mr. Jayson takes exception to the lack of a keyboard, mouse, and monitor for the Mac mini, and compares it unfavorably to a $450 box with monitor from Dell.
About the iPod shuffle, he wrote: "Jobs also introduced a cute little flash-based iPod subtitled the 'waffle,' I mean, 'Shuffle.' Silly me, where did I get waffle? Oh yeah, the famously opinionated CEO derided the need for a display and visual user interface on this model, saying that it would be too small to be useful. Need I point out the irony in that point of view?"
His angle is the fact that Steve Jobs has dismissed flash-based music players in the past. Dismissing a market and then saying that Apple has finally fixed whatever kept that market from being viable is actually a long-standing pattern for Steve Jobs. He did so with the original iPod and the iTunes Music Store when both products were introduced.
The rest of the piece is dedicated to explaining why Apple can't grow with the iPod forever, and is therefore obviously not worth the stock price where the company is currently trading. In the process, he calls Walt Mossberg of the Wall Street Journal "Mac-happy,"" and hurls a few more somewhat pedantic epithets at Apple and its products that are similar in sophistication to calling the iPod shuffle the iPod waffle.
In his usual myopic look at Apple -- his perpetual doom and gloom has yet to be born out -- Mr. Jayson is both selective in his criticism and in what he doesn't mention. For instance, when he said that the iPod can't sustain Apple's growth indefinitely, he never mentioned the notion that Apple could develop, and will need, other innovative devices, and perhaps new markets, to achieve new growth. He doesn't allow for the iPod to evolve into new uses.
Similarly, when criticizing the Mac mini's lack of keyboard, mouse, and display, he doesn't acknowledge the idea that many potential Switchers want to be able to continue to use their existing peripherals and displays, instead focusing on the fact that buying those products from Apple bumps the price of the mini to about $800.
All of the issues he raises certainly merit discussion and being pointed out, but in the end, his analysis is marred by his obvious issues with Apple and the Mac platform. He called Mr. Mossberg "Mac-happy," but it would be fair to call Mr. Jayson "anti-Apple."
You can read the full article at the Motley Fool.
Bryan Chaffin owns shares of Apple.
began using Apple computers in 1983 in a high school BASIC programming class. He started using Macs in 1990 when the Kinko's guy taught him how to use Aldus PageMaker, finally buying a Power Computing Power 100 in 1995. Today, Bryan is the Editor of The Mac Observer, and has contributed to the print versions of MacAddict and MacFormat (UK).
You can send your comments directly to him, or you can also post your comments below.
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Observer Comments
Wed Jan 12, 2005 5:29 pm Subject: Excellent Article - All iLemmings Should Read
Wed Jan 12, 2005 5:45 pm Subject: RC: "You Can't Handle The Truth"
LOL --- yer so cute, RC. anyway, again, I already wasted too much oxygen just mentioning your initials. But here goes for some more usual banter in your direction... what truth? That Dells cost less but come with even LESS crap? That to put on a Dell the same software equivalent in usefullness to oh.. let's be nice, iLife *04*, would bump it up another 2 or 3 hundred?
Hey - make sure to tell your parents to let us all know when you leave this planet so we know when we can celebrate...
Guest: Yep, Mossberg hasn't been real pleased with Macs until the swivel flat screen iMac and OS X came out. Those changed his mind.
"The most interesting magic trick here is the illusion -- somehow completely lost on the mainstream press -- that this is really a $500 computer. Check out this sleight of hand."
Seth Jayson does make a point here - most buyers will spend more than $500 when they start adding options. But all companies do this. Have you ever bought a car for the MSRP that you see in the ads? Not likely once they add on the "optons". That's how they make money.
Wed Jan 12, 2005 6:12 pm Subject: Background of the Article Writer
According to the bio on the Motley Fool, Seth Jayson is an "Art historian, photojournalist, and Fool writer Seth Jayson is just a curious Iron Range boy who relishes the challenges of living cheaply and investing successfully . . . [and a] nerd who never lets ignorance stop him from disassembling expensive machinery or trying to build his own PCs and TiVos, he's interested in computers, software, and every other kind of gee-whiz technology out there."
The phrases "living cheaply" and "trying to build his own PCs" are is some ways mutually exclusive from Apple.
Wed Jan 12, 2005 6:14 pm Subject: No sleight of hand here...
For it's intended audience they can get a Mac for 5-600 bucks. Period. End-of-story.
Look. Anyone can spin this as they see fit. I am probably a typical customer who will soon be looking for new machine on the cheap. I have a formidable display...a perfectly good keyboard...two or three mice laying around. I'm set. I also get a Mac that runs OS X NOW!!! (Tiger too) You can bet that when Longhorn finally makes its debut, it will require purchasing a new system as well.
RC...most people buying the Mac mini would probably only pick up a new keyboard to bash your head. (Best $30 bucks they'd ever spend too...)
This isn't the last new product Apple will ever produce, either. I can hardly wait to see what they'll come up with next. And besides...Apple's Kool-Aid tastes better. : )
Wed Jan 12, 2005 6:17 pm Subject: He is partially correct
OK, let's admit that the Mac Mini is not a $499 computer.
You have to add: keyboard, mouse, monitor to make it into a computer.
Also let's admit that Dell sells a complete computer for $499 (the Dimension 3000:) which includes a 15-inch LCD monitor.
So, the cheapest Mac would be $750 (Mini + cheap keyboard + cheap mouse + cheap LCD 15-inch monitor).
Comparing the products is difficult as each has different strengths and weknesses. For example: Dell +512 MB, -CDROM (no RW, no DVD), +PCI slots, -integrated video, -no modem, -no FireWire, +faster CPU, -bundled software
All of this is not relevant!
What is important is that you can buy a Mac for $750. This is 1/2 the price of the cheapest Mac that was available last week.
This removes PRICE as the primary objection about Macs.
,dave
The Mac mini is aimed squarely at two audiences - switchers and schools. In both cases, the customer probably already has a keyboard, mouse, and screen. (Apple even makes a point in the product description that it will "work with your two-button, scroll-wheel mouse.") For these people, it really is a $499 computer (or $479, education price). It's a turnkey system with all the software normal people would need. A school can refresh an entire 15-computer lab for only $7,185. If they decide to lease them, it will only cost them $2,500 per year for three years. Now that's a deal.
QuoteGuest wrote:
Anyone who would compare an Apple to a PC is just an id10t. Do you get a virus free machine with a PC? Do you get iLife with a PC (free by the way, find a similar product for a PC and tell me how much it is?) Do you get a spyware free machine with a PC? Do you get a built in (secure) web server with a PC? Do you get a built in FTP server with a PC?
Windows XP does come with IIS, which supports web hosting and FTP.
QuoteGuest wrote:
PC users have accepted the fact that they “need” a virus scan program (heck, SP2 screams like crazy if you don’t have one).
I don't have a virus program, and I have service pack 2, and my computer doesn't "scream" bloody murder.
QuoteGuest wrote:
They accept that they need a spyware scanner (MS now offers you one (another revenue stream)). Why should I have to dedicate my CPU time to either of those?
Trust me, I’m an ex-PC-User, and an IT professional who supports MS all day long.
I am less likely to take the opinions of an "ex" anything over someone who is still actively using it.
Just thinking:
Do guys like Jayson choose dates/girlfriends like they do PCs?
Do they choose plain girls with no education or sense of style, and who will happily consider going to McDonalds on Saturday night? Or, do they prefer a good looking well-educated girl with a good sense of style, and who expects to go a white-tablecloth restaurant on a date?
The irony here is the plainer girl of PCs is the high-maintenance one; she is a hypochondriac who needs constant medical attention.
a third market for the cheap mini is the people who want soemthing they can hook up to their television and show off photos
or be able to move a desktop (with good speeds) to a projector in a multimedia room without having to rely on format compatibilities, and also weight of moving a tower
or, people like me who have a laptop and want a mac to compliment each other, but dont have the money to spend on other computers-- when it is simple to attach to any TV
TRO
Quotedavebarnes wrote:
OK, let's admit that the Mac Mini is not a $499 computer.
You have to add: keyboard, mouse, monitor to make it into a computer.
Dave:
I agree 100% with your premise, but I'd just like to point out that you don't have to buy a keyboard, mouse and monitor unless you are a first time computer owner. Even if you don't plan on decommissioning the one already running, whether Mac or PC, all you need to do is connect the peripherals to a KVM switch, and you're good to go. Honesty does compel me to point out that a decent KVM switch is about $100.
Thu Jan 13, 2005 1:54 pm Subject: Oh, the humility...
From that Fool, Seth Jayson, today:
"Of course, when you talk smack, sometimes you get smacked back. Like now.
Mmmmm... crow."
"I believe that everyone who disagreed with me about the widening appeal of Mac computers has earned the right to a hearty Nelson Muntz "Ha ha!" For now, even this critic is a believer."
http://www.fool.com/news/commentary/2005/commentary05011301.htm
Thu Jan 13, 2005 2:22 pm Subject: RE: RC's "Excellent Article - All iLemmings Should Read
Sun Jan 16, 2005 9:03 pm Subject: BWAHAHAHA! Seth Jayson and RC EAT CROW ! ! ! ! ! !
Mon Jan 17, 2005 6:10 pm Subject: Re: Missing the point
QuoteAnonymous wrote:
Products have certain MARKETS, and like one guy already said... the Mac Mini market is for SWITCHERS AND SCHOOLS... and, like Jobs said, it is meant for people who already have a mouse, keyboard, and monitor... hence the point of the KVM switch Jobs mentioned (the one sold in the accessories section of the Mini Mac). The sticking point is that the keyboard and mouse have to be USB, but a lot pf PC's use the old connecter (I can't recall the name of it... serial maybe? ), which the Mini Mac doesn't have.
PS/2 connector. Won't go into what the P and the S stand for.
Mon Jan 17, 2005 8:31 pm Subject: Re: Missing the point
QuoteIt is as sticky as requiring Windows XP and USB for using iPod with a WinTel. The initial target is 7% of iPod users, existing Mac OS 8/8 users and 2nd-/3rd- Mac users. Out of these 3, two groups have USB mouse/keyboard. How many of those 7% iPod users don't have USB mouse/keyboard? Not many.Anonymous wrote:
... The sticking point is that the keyboard and mouse have to be USB, but a lot pf PC's use the old connecter ...
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