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Apple Admits USB Dominance Too Big to Ignore; Experts See it as Right Move

TMO Reports - Apple Admits USB Dominance Too Big to Ignore; Experts See it as Right Move

by , 9:10 AM EST, February 25th, 2005

Universal Serial Bus (USB) 2.0 is the king of connectivity and Apple Computer acknowledged that fact Wednesday by no longer including a FireWire cable with its new line of iPod digital media devices. Most industry experts agree Apple's decision was the right one in a marketplace where USB is standard equipment on every PC sold today.

In announcing new models of the iPod color and a second-generation iPod mini, Apple dropped the FireWire cable as standard equipment. Although iPod users can still use Firewire to transfer data and charge their devices, consumers must now pay an additional US$19 for the cable.

The move is part of Apple's gradual shift to use USB 2.0 as the defacto standard on the iPod, which is far more common in the Windows world.

"I think it was a prudent decision, as well as a cost effective one," Mark Margevicius, research director at the technology analysis firm Gartner, Inc., told The Mac Observer.

"USB allows for so much more diversity," Mr. Margevicius said. "It was a common sense decision for Apple, much like making iTunes available for Windows. You can't overlook what the marketplace is using.

"In the PC market in 2004, high-speed USB has nearly saturated the desktop market, and now comprises over three-quarters of the notebook market."

Mr. Margevicius also believes another factor in favor of USB 2.0 is its ability to now recharge via a USB connection -- something that wasn't available on iPods and PCs until just the past two years.

When comparing FireWire and USB 2.0, the speed at which data transfers is roughly the same. USB 2.0 has a theoretical top speed of 480 megabits per second while FireWire 400, or IEEE 1394, tops out at 400 Mbps. A faster version of FireWire, known as IEEE 1394.b or FireWire 800, is roughly twice the speed of FireWire and USB 2.0. It is currently offered on Apple's Power Mac G5 models and offered on a selected few Windows-based PCs.

But that is where the similarities end.

USB 2.0 is standard fare on the majority of Windows-based personal computers available today. Mr. Margevicius said market penetration of USB 2.0 is "virtually 100%" of all personal computers sold today and either it or USB version 1.0 has been in Windows-based PCs since 2000. USB 2.0 has been standard on iMacs since September of 2003. When the iPod debuted in 2001, it used only FireWire. When Apple released Windows-ready iPods, USB was not supported. It wasn't until April 2003 that Apple first offered iPods with USB 2.0 for an additional $19.

As for FireWire, it is often an option on Windows-ready PCs and its adoption on third-party hard drives and other peripherals has not been as profound as USB 2.0, which is found on everything from digital cameras to flash drives. While FireWire 400 is prevalent, Mr. Margevicius figures it is only available on about 25% of PCs sold today.

Another factor, according to Mr. Margevicius is adoption of USB 2.0 by third-party peripheral makers. According to the latest In-Stat forecast, the number of USB-enabled devices will rise from 705.7 million in 2004 to 2.1 billion in 2009 -- everything from hard drives and printers, to coffee cup warmers and adjustable reading lights.

"The more USB-ready devices that are out there just solidifies its acceptance and use," Mr. Margevicius said.

Another possible future factor: The growth potential of Wireless USB 1.0. Mr. Mergevicius predicts Wireless USB will make its debut in the PC market late in 2005 in the form of dongles that hook into USB ports.

"Wireless USB is a technology every PC product maker is looking at for the future," he said. "I'm sure Apple is too."

Pricing a factor in Apple's decision

Although the analysts TMO talked to agree the most popular connection standard won out fair and square, all agreed the issue of saving money had to have been a major factor Apple considered when deciding to cut its Firewire shackles.

"USB is cheaper to install for a manufacturer," said Brian O’Rourke, an analyst with In-Stat who has done extensive research on USB adoption. "It can often be installed at a much cheaper price because many of the components and processors USB works with are already configured to work with it."

Mr. O’Rourke's prime example: The fact that USB 2.0 is integrated into the core logic chipset -- known as SouthBridge -- of all Intel and AMD processors used in Windows-based personal computers. "That makes building in USB 2.0 much easier and cheaper for PC makers," he said.

So how much is Apple saving? According to one analyst who watches component pricing for a living, the savings is a little less than $1.

"I'd say Apple is saving about a dollar by dropping the Firewire cable," IdaRose Sylvester, an analyst with the research firm IDC, told TMO. "While that doesn't sound like a lot of money, it adds up to millions over time."

Firewire lovers fight back

No matter what the reasons, some Mac owners are upset with Apple's decision.

Gary Reich of Annapolis, Md. was so upset, he started an online petition saying "users and supporter" of Apple products are "dismayed" about the Apple decision.

"It is very unfortunate that you have left your faithful out in the dark on this one," Mr. Reich writes on the petition site. "it seems wholly irrational to remove it from the people who provide the support, promotion and word of mouth 'advertising' that provides your company with the millions of 'switchers' you want each year, free of charge."

As of Friday morning, more than 2,800 people had signed the online petition calling on Apple to again include a FireWire cable with iPods.

But despite the concerns of many, fearful that Apple might be ringing the death knell of FireWire, fear not.

"Apple is not going to get rid of Firewire," said Jupiter Research analyst Joe Wilcox. "While USB acceptance was an important factor, Apple has made a cost decision here. It was simply the more prudent strategy. But Firewire is not dead."

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