What do Apple Customers Need in this Economy?

| Analysis

At this time of year, there is often a tendency to fantasize about what new product or service Apple might introduce at Macworld in January. However, in this economy, perhaps a better question is, all things considered, what do Apple customers need?

Apple is well known for giving its customers things that they need, but didn't know they needed, until the product shipped. In that spirit, Apple is in a unique position to make further gains with that philosophy, especially as other companies pull back, reduce R&D, or get out of some markets completely.

I written before about how Apple's financial position gives it a unique competitive advantage over the competition. That discussion pointed to how Apple can pay cash for components, get to the front of supplier delivery schedules, then through volume, drive prices down, putting extreme price pressure on the competition while they develop the next generation with R&D dollars.

Even as Apple does this, they are mindful of their brand. Selling cheap products doesn't sit well with Apple, and they definitely don't want to undercut or cannibalize other product lines.

So if one asks the question about what Apple can deliver in a time when customers are watching every penny, it's silly to envision a cheaper, stripped down version of a product that's already doing well. Instead, as Apple ponders how to deliver new products to cost conscious customers, the company tends to think about holes in the market that can be exploited with their technology -- but which don't undercut current products.

There are other considerations as well. For example, the iPod touch doesn't have a camera or an FM radio. Other than the CPU, it doesn't radiate and can therefore be used in corporate or government environments that would otherwise forbid a device that could be a security concern. Our fantasies often neglect to consider such things. Because people expect to use their iPhone anywhere, that device has a different set of design constraints.

So here are the criteria for any new device to be introduced at Macworld:

  • Appeals to price conscious customers.
  • Doesn't undercut a current or planned evolution of a current product.
  • Is something we need but didn't know how to express it.

I might add that not everything we need is a candidate for Apple. There are some markets Apple just doesn't want to explore. Perhaps they would distract Apple or diminish its brand. For example, I'd love to eliminate the USB wire required to upload my camera photos, but there are already storage cards with built-in Wi-Fi transmitters. That's neat, but not a major market for Apple.

Where Macs and iPods Meet

When I think about netbooks, my first reaction is, if I already have a Mac notebook computer, why would I want to add another computer? Keeping a notebook small and light means yanking a lot of useful features, and then having a headache keeping track of files on two computers, MobileMe notwithstanding. I do like the idea of 1.8 lb, 9-inch screen MacBook Air-lite, but that's evolutionary, not revolutionary. Anyway, keyboards tend to become cramped at that size.

On the other hand, a larger iPod "supertouch" with a 5-inch screen would get into a realm where battery power for the larger screen becomes a problem, and it's no longer something that fits into a shirt pocket or waist holster.

As a result, it would seem that Apple's current Mac and iPod lines has room for technological development, better performance, and slightly lower prices, but don't really have elbow room for a slate-like competitor.

Another Realm

Where Apple can really gain some ground is with the Apple TV. That product has barely reached its potential. The existence of the Boxee project suggests that many people yearn for more flexibility and aren't happy to buy a box and find themselves limited or channeled into specific content.

The proliferation of content from various different sources is an emerging problem. One can watch Heros live on NBC, TiVo it, search for it on Apple TV commercial free or watch it with commercials on hulu.com. It's getting to be insane when it comes to trading off time, HD vs SD, cost, and optimum choice of various available set-top boxes vs. using a Mac. This market fragmentation seems like a perfect task for Apple to tackle -- in a way that doesn't step on the toes of the content creators.

It's the Software Stupid

What Apple customers really need is the hardware and developer tools that enable imaginative solutions. Apple has provided that -- 10,000 iPhone apps have proven it. It's hard to imagine how new hardware, caught in the twilight zone between a MacBook Air and an iPhone can offer something more compelling to the mass market, and that's why I believe Mr. Jobs was been coy about pocket slates and netbooks.

Would I travel with an 8-inch MacBook touch and a virtual keyboard? No. I'd probably still take my MacBook Pro. Would I leave my iPhone at home? No chance. Would such a new product make a big splash? Yes. Would Apple sell millions? Probably not.

In this economy, software can solve a lot of problems, even problems that have been bubbling just below our consciousness. The price is often right. I expect to see a lot more of it, imaginative stuff, in 2009 as Apple seeks to beat up on the competition, not invest in low volume experimental hardware.

Comments

alapalooza

I wish people who write columns, like you, would get over yourselves for just a few seconds and realize that just because _you_ wouldn’t buy something doesn’t mean the whole world wouldn’t either.  I need a netbook!  I have a laptop and an iTouch but I would buy a mac netbook the day it came out.

I know this is inconceivable for you (please stop admiring yourself in the mirror for a moment, I’m not done talking yet), but there are a lot of people out that who aren’t you (yes, I know, how could God allow such an imperfect world) and they find laptops too big and iPhones too small.

Maybe after you’re done with your morning three-hour self-adulation you could actually go out and mingle with the unworthy masses to get their thoughts on the matter before passing your divine judgement.

bluevoter

My wish is very simple: a MacBook Pro with a matte screen.
I *hate* the glossy screen.

If this wish doesn’t get fulfilled, then all of my future Mac purchases will come from Craigslist, which doesn’t provide much revenue to Apple.

Richie

Couldn’t agree with you more…  Those Glossy screens are a real PITA in any areas where reflective light is an issue.  The only reason Apple went that route is that they are cheaper than the old screens….  At least give us the option of getting a matte screen.

Japester

I completely agree with John Martellaro. I think he’s portrayed what is feasible, not fantastical.

@alapalooza: Just because you want a netbook doesn’t mean enough people want one to make it feasible. I don’t think John is spouting what he wants, just what he thinks might be possible.

@bluevoter and Richie: I think the glare factor is overstated. Some people find themselves unable to escape glare but most of the glossy users I’ve met, known or spoken to do not complain about this. Therefore, it is a minor problem. And Richie, what makes you say that glossy is cheaper? I doubt that. Most likely the majority of users want glossy, so glossy is becoming king. Your choice is a personal thing, but Apple’s choice is a majority thing.

rezonate

If they put a DVD or Bluetooth burner in the Apple TV, it could be used remotely by an Apple Tablet, in the same way the Macbook Air does now. The aTV would gain DVR capabilities, and a new line of Apple peripherals would be free of keyboards and drives. All would work together to drive more sales to Apple, Inc, and help us mere mortals finally break free from the traditional desktop or laptop PC. They have their place, but in a digital lifestyle can be cumbersome overkill.

Japester

@rezonate: I agree that the product that needs a big change is the Apple TV. I’d like to have an optical drive in it, but I’m not sure if they’ll do it because they push the iTunes store. It’s still a good idea.

I’d like to see the Apple TV remote evolve into a smaller version of the iPod Touch running the Remote app, running over a wireless technology like WiFi or Bluetooth.

But even more than that, I want the Apple TV to get a beefier processor and graphics subsystem. Performance is the issue. It skips, often doesn’t register button presses, locks up. Performance should be the priority in terms of development.

njs

I want a notebook a reduced price that tips me over to make the purchase.  Everything I see is less than 20% reduced.

deasys

@alapalooza: “I need a netbook!  I have a laptop and an iTouch but I would buy a mac netbook the day it came out.”

Hey—get an iPod touch! There’s your “netbook.” (BTW, what’s an iTouch?)

deasys

@japester: “But even more than that, I want the Apple TV to get a beefier processor and graphics subsystem. Performance is the issue. It skips, often doesn?t register button presses, locks up.”

I’ve had an Apple TV for 19 months. I have never seen the problems you mention and I’ve rented many HD movies. Playback is always flawless.

Maybe you’re streaming? If so, the host computer and/or your network may be causing the problems you noted.

Spike Spiegel

alapalooza—-My God, take a chill pill, man! This article by John Martellaro is not that unreasonable. The Netbook concept is stupid—Apple does not cater to the bottom the barrel crowd. My only wish is simple, as well, an iPhone Nano, with its emphasis on built in WiFi/iTunes/Phone…I do not need to pay AT&T $80/month for a Data Plan. I would hardly use it.

Japester

@deasys: I’ve had 4 units. Apple thinks it’s got something to do with my library, as it streams from multiple machines without issue. The library is pretty old—about 5 years old, upgraded through many iTunes versions. The music library is 13,000 tracks, all on the Apple TV. The TV Shows library is about 750Gb, of which about 30Gb is always on the Apple TV. Movies is about 100Gb, of which about 10Gb is always on the Apple TV.

My next action is to create a separate 100Gb library and test syncing from that. If the lock ups and crashes disappear, then it’s my library at fault, not the hardware. The Genius said that he would compile the data for Engineering to review.

I’ve noticed with small libraries that performance is good. There’s something about the size of mine that appears to cause problems.

iJack

I would love a nice, small, cheap notebook, which I read over and over, ain’t gonna happen.

What I need is a goddamn job, and maybe some health insurance on the side.  If not that, maybe the last two months rent still outstanding.

JonGl

@Spike Why should the “netbook” be the “bottom end” crowd? It’s not the price that appeals to me, but the _size_. I used to use Apple’s Duos (a 230 and later 2300), and I’ve been longing for a computer that size or smaller ever since. I recently broke down and bought an MSI Wind, because it was highly rated for running Leopard, and I can attest that it is a dream machine for running OSX. It is the computer I’ve been longing for ever since i put away my Duo in 2000, and bought my Pismo (that’s the 2000 model G3 Powerbook for you yung’uns). I use it for much more than just internet and email. It is great for Keynote presentations, and for tossing into its sleeve, and then into my bike’s panniers, or my car seat, or carrying on the bus or tram when just running about. This size is _not_ to be denied long term. Now, Apple can get just a software sale (as they did with my Wind) or a hardware sale. I would gladly pay $1200 for a genuine Apple of this size. The _only_ compromise, IMO at this size (the 10” screen) is the lack of an optical drive, and Apple already has this with the Air’s external drive. Apple could easily scrap the 13” MacBook, putting out a 10” book instead, and dropping only a hundred or two, and still outsell the rest. I am sure of that. Not a single Mac user I’ve shown my Wind to has not drooled over it. If Apple dropped the price to $999, they would still be twice the price of others, but would sell more, and still be considered the ‘elite’. Just dump the MacBook line. I look at them now, and think they are so big and unwieldy. Blech. But that’s only one man’s view….

-Jon

geoduck

iJack said
<quote>What I need is a goddamn job, and maybe some health insurance on the side.  If not that, maybe the last two months rent still outstanding.</quote>
I agree 100%. What people need in an economy like this is a job, a place to live, food on the table. More shiny gadgets are not really what many people ‘need’.
Good luck.
In that spirit I’d like to see Apple go back to its roots. Rather than a big new gadget, how about aggressivly putting hardware into schools. whenever times get tough, politicians want to cut school funding. Help out schools with low or no cost equipment andf expertise. Show them that a school running on Macs is LESS expensive to maintain than one running Windows. Get the next generation of customers off on the right foot. With all the money in the bank Apple could afford to undercut Dell, HP, and the rest and take back what used to be their base. In the process do a lot of good and gain a lot of goodwill.

rezonate

Talking about size, I’ve posted this numerous times in a the last couple years. Stop what you’re doing right now and go grab a DVD case. Hold it in both hands, portrait style. The perfect size to read the news or the latest ebook. Now rotate it to landscape. Great for browsing your media libraries in cover flow. Rotate back to portrait and hold it in one hand. THAT is my concept of the right size. Bigger means a bigger battery. Or faster processor - which means netbook, without the book. The keyboard is on there like the iPhone.  Apple could turn one of these out in a couple of weeks. It just needs to want to.  And I want one. Or several.

Japester

@rezonate: That’s one of the better physical descriptions I’ve heard for a tablet/netbook class device.

princess

I’m expecting cheaper iPhones in the future, that might help our economy.. but it will hurt iPhone companies pockets too… another impossible thing to happen.

gslusher

JonGl wrote “I used to use Apple?s Duos (a 230 and later 2300), and I?ve been longing for a computer that size or smaller ever since.”

Apparently, you missed the 12” PowerBook G4, though that should have been an obvious choice.

PowerBook Duo 230: 1.4” x 10.9” x 8.5” = 129.71 cu in; 4.2 lbs

PowerBook Duo 2300: 1.5” x 10.9” x 8.5” = 138.98 cu in; 4.8 lbs

12” PowerBook G4: 1.18” x 10.9” x 8.6” = 110.61 cu in; 4.6 lbs

Even better, the 12” PowerBook G4 has a SuperDrive (vs nothing), 1024x768 display (vs 640x480), USB 2, FireWire and WiFi and can run Leopard. Sounds like what you want has been around since January 2003—and you can still get one at PowerMax, for example.

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