A Look At Apple, Part Two . . .

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Yesterday, we had an article which indicated two things:

  • Apple’s desktop sales remain static.
  • Any Mac sales success is solely due to notebooks.

    What might be the ramifications of this?

    Dump The Mac?

    For years and years when people have asked “Why won’t Apple let me run MacOS on my PC?” the standard reply has been, “Because Apple would lose all its hardware sales.”

    We may be coming to a time when the response to that answer will become “So what?”

    For many years, Apple anchored itself to the desktop Mac. Now, the desktop Mac has become an anchor to Apple’s growth. Sales have remained static, indeed, Apple may have sold more desktop Macs in 1995 than they do today.

    Last quarter, desktop sales represented only 13.5% of Apple’s sales, compared to almost 50% for iPods and aver 20% for Macnotebooks.

    The mix of desktops have also shifted, reducing the desktop Mac’s profitability. Apple no longer breaks down desktop sales, but when they last did in 2004, only about 30% of desktop sales were high-margin Powermac sales, the rest were lower-margin iMac sales. It’s doubtful this situation has gotten better since then, and it’s probably gotten worse.

    It’s hard to see what else Apple can do to increase desktop sales and still make money.

    In comparison to that, one wonders how many copies of MacOS X would be bought for PCs if it would work on PCs, especially given the lackluster reception of Vista. Outside of writing a lot more drivers, Apple would have to spend little more on MacOS X, and even if they got only 10$ of the OS market place, that would probably be a lot more profitable than at least their desktop sales.

    A few other things have changed over the past few years, too. There is now a luxury PC industry out there. Even the most expensive Macs look downright cheap compared to some of the offerings out there.

    Mr. Jobs has been doing a lot of odd things lately, too. He certainly got everyone’s attention by switching to Intel, but that was just the last step of the PC-ification of the Mac that started in earnest when he came back to run Apple.

    Before the Intel switch, outside of the CPU and motherboard, a Mac was a PC, using off-the-shelf PC components. Now a Mac IS a PC, just as much as a Dell.

    More recently, Apple Computer became Apple. Yes, this could well be simply an acknowledgement that Apple is about more than computers these days, or it might end up meaning more than that.

    Mr. Jobs also recently published his thoughts opposing DRM. This is very odd given that all his computers use DRM to protect the MacOS X franchise. Unless, of course, somebody was going to announce that his company was going to drop their DRM.

    Not saying the following is going to happen. Not saying the following is more likely than not to happen. I am saying the following is no longer inconceivable at some point in the future:

    Maybe Apple wants to get rid of those units that are not growing and serve as an anchor on Apple’s profitablity. Maybe Apple looks at Redmond and sees a grossly bloated bureaucracy increasing incapable of action ready to be taken. Maybe somebody very important at Apple thinks it’s finally, finally payback time for the guy who beat him out of the PC industry.

    So maybe Apple sells the desktop or maybe all the computer division to some other (maybe a luxury PC company, maybe a computer company out to upgrade its image) or spins it off to a separate company. Maybe that’s the way to get back to making “insanely great computers” (or at least insanely priced) rather than pretty Dells with a different OS.

    Maybe, in one of the most dramatic speeches in PC history, somebody very important at Apple says, “Take down that wall, music companies. we’re taking down ours” and then introduce a version of MacOS X that will allow for ugly Dells with a different OS (run very happily on a Dell (maybe reserving some “ultimate” MacOS X that is DRMed for the formerly Appled Macs, or the laptops, the media won’t notice that). Or maybe not even that.

    In other words, turn the Mac into a really elite machine for those who need that, and for everyone else, if the iPoders won’t come to the Mac, MacOS X will come to the iPoders.

    I bet Bill would really like that.

    How many copies of MacOS X do you think Apple could sell to the PC world? Given MS’s profit margins, selling some tens of millions of OS X copies would have to have a higher profit margin than than some hundreds of thousands of Macs, with a lot less cost and effort.

    Would you buy one? I’d certainly give it a shot in a dual-boot system.

    Again, not saying it’s going to happen, but it’s making more and more sense for it to happen.

    Ed


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