The Real Macworld Keynote Announcement: Independence
MWSF 2003 - The Real Macworld Keynote Announcement: Independence
by , 9:00 AM EST, January 8th, 2003
Back in July 2002, Steve Jobs took the stage at Macworld Expo New York and amid the product introductions Apple clearly had one thing on its mind: revenue. It was the end of free internet services, the rise of .Mac, and the lack of an upgrade path for most Mac OS 10.1 users to the new Jaguar operating system update. The iPod, intended as a PC switch incentive went cross platform all to bring much needed revenue to Apple in a down economy.
The goal was revenue and it definitely helped in the September quarter and we'll soon see about December. Six months later and the throng gathers together again for the latest broadcast from Apple's CEO, Steve Jobs, and today he was transmitting a new word: Independence.
It might not have been obvious to Wall Street, or the Windows switchers Jobs seemed to be talking to during the keynote. He was telling them about the successes of the Switch campaign, Apple's retail stores and the iPod; 5000 native Mac OS X applications, 5 million users on the way to 10. Jobs carefully walked through demos of the puzzle pieces in the iLife applications suite, clearly pointing out how easily Mom and Dad can become the envy of their neighbors.
For them, there was plenty to get excited about, but what lies under the surface were several secret weapons, innocently presented, to decrease the company's reliance on two others, Microsoft and Motorola.
With the special relationship between Apple and Microsoft no longer embodied in a binding legal document, Apple seems to be inching its way towards the door. There's been talk around the Mac net for a few months about an Apple branded browser in development (Cyberdog, may you rest in peace) so Safari wasn't a jaw dropping surprise. Apple is no longer required to include Internet Explorer as the Mac OS's default browser, and rather than wait for Microsoft's free-of-charge shoe to drop, it took the initiative to develop its own browser, optimized for its own hardware.
Microsoft may not have a reason to care about this particular development unless it somehow ends up hurting their MSN or .Net strategies on the Mac. Then there'll be money to lose, but right now it's just bragging rights. Apple on the other hand is probably looking at Safari the same way it looked at retail: build your own and you'll be able to control and provide a pleasant experience for your customers. With Safari, Apple gets to present the web the Apple way. Considering how much time users spend on the Web, it couldn't come any sooner.
Then there's Microsoft Office. Microsoft is no longer required to keep updating the Macintosh version of the default office suite. Over the summer, the company didn't hide its displeasure when poor Mac OS X migration numbers translated into poor Office v.X sales numbers. Apple and Microsoft quickly filled the pothole with the "Office Party" promotion that, at $199, put the suite within reach of far more people when buying a new Mac. Jobs hailed the promotion as a success and announced its extension called, wait for it... "Office Romance."
It might be turning into an S&M romance because now there's Keynote. The PowerPoint killer-elect. Showing off a full featured presentation program, fluent in QuickTime, PDF, and PowerPoint itself while using an open file format, Jobs made it seem too easy. Why hadn't it been done before? No one seems to care now that it's done.
The way it's priced, most customers buy the whole Microsoft Office suite, not the individual applications, and with PowerPoint the least used of the four, Keynote's effect on sales may be negligible. Probably not enough to raise the ire of mighty Redmond, but watch for the next act. If Apple were to bring AppleWorks up to date, call off the romance and hide the kitchen knives.
With those shackles removed, Jobs continued to pull at the restraints in which Motorola has had Apple for years. The performance bottleneck Macintosh computers have suffered through for most of Jobs' tenure at Apple continues, and Steve continues to find ways to wiggle around, if not entirely escape. At 1.25 GHz, the G4 chip is in no danger whatsoever of reaching even half the clock cycles of its Intel competition. It's a much more productive chip, so performance tests have never been as lopsided as the megahertz would have you believe.
What the G4 is very good at is operating on less power, generating less heat. While Intel has to sacrifice lots of performance to produce portable versions of its desktop goliaths, Apple can use the same desktop chip in its laptops. That's where the playing field slants Apple's way, all the way. Steve Jobs said the industry trend is away from desktops and toward laptops, and he's right. Laptops haven't cracked 50% of the market, but they're on the way. Apple on the other hand sells more laptops as a percentage of it unit sales than the Wintel crowd, and is therefore ahead of that trend. Part of that is due to killer portables that are great values for the money, but the dirty little secret is that part of that is also the slow sales of desktop Macs, specifically the high-margin Power Macintosh line. Apple hasn't sold nearly as much as it thinks it should and it's because of speed.
Professional customers need absolute top performance and Apple can't give it to them right now. The only way Apple can move forward with the current rate of Motorola's PowerPC development stuck somewhere between slow and glacial, is by innovating the form factor. Make compact, low-energy use computers. Laptops. Intel couldn't hope to fit a chip that powerful into a 1 inch thick machine that won't burn through laps, down to the center of the earth. Apple can.
So by expanding the PowerBook line in two directions, Apple can ensure that it fully saturates the one market it can dominate. As long as Apple can excel in the portable space, it can't afford to leave any money on the table while the desktop matter gets resolved... a matter for another keynote. Meanwhile Jobs has brilliantly created some more room to maneuver with independence.
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