BusinessWeek Asks If Apple Is Diversifying Too Much

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BusinessWeekis regular Mac columnist, Charles Haddad, is on leave, according to this weekis Byte of the Apple column. In his place, Alex Salkever has penned an excellent piece looking at all the cool new products from Apple. Mr. Salkever says that the thinks Apple may be diversifying too much, and that the loss of focus could be a problem for the company moving forward. He specifically compares Appleis product line today to the chaos of John Scullyis product line from the early 90s. From the piece:

Letis look at these concerns one at a time. When Scully was ousted as Apple CEO in 1993, it had a bloated product line, with multiple hardware configurations that created a supply-chain nightmare. When Jobs returned in the mid-1990s, he cut the fat, reduced the offerings, and brought in a former Compaq exec to whip logistics into shape. But now it looks like he may be sliding down the same slippery slope.

Apple has been branching out into a handful of very different businesses. Itis now running a retail operation with its Apple Stores, which did $148 million in sales during the first fiscal quarter of 2003, ended Dec. 31. Apple plans to spend tens of millions more pushing its store count from 51 toward 100.

Apple has also started a Web-hosting business, with 280,000 customers paying $100 a year for the .mac package of Web publishing, data backup, calendar synchronization between multiple computers, and other applications. Apple is also becoming a big software shop, overseeing the development of dozens of applications including iCal, iSync, iTunes, iDVD, FinalCut, and others. Finally, Appleis hardware line is starting to bloat again, with the iBook, iMac, eMac, iPod, PowerMac, AirPort, and iPod.

Jobs & Co. claims it still runs a tight ship. Perhaps. But itis tough to stay lean with so many businesses under one roof. Thatis particularly true when the segments are so different, each requiring its own expertise. After all, itis hard to imagine businesses with more disparate requirements than software development and retail chains. The growing product lineup introduces complexity. And too much of that brought Scully down.

Mr. Salkever goes on to say that Appleis PowerMac line is lagging, and that the company is losing education business, and points to both of those issues as deserving more attention than a snowboard jacket. You can read the full article at BusinessWeekis Web site.

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