[HOM]

Originally Posted by Undertaker Good point HOM. But, people may not be buying macs because they do not go out and buy every single new computer. My Powermac 6100 lasted 6 years intill it got struck by lighting. Then I had to get a new computer. I think in 2-4 years we could see that number rise again because people would be buying new macs. I think mac buying is in a cycle. Sales are really high for 2 years and drops because no one else is buying computers.

I don't believe that Apple's cycles are that long and if you have any info on it I would like to see it. I do believe that Apple is too 'home run' based right now. Once a product is released Mac users rejoice and buy it in large numbers. However, the novelty quickly dies and unit shipments dry up rather quickly. Unfortunately, it's not an issue than can be quickly overcome.

When new Macs are introduced, they are sold at very little profit to keep prices within line. The margins and profits come later in the product's life, but for Apple to keep up with the Jones' they need to continually upgrade the system specs. I'm not talking about jumping 500 MHz every month, but keeping HDD, RAM, and GPU specs up to snuff. However, adding newer components drive down margins and make it even harder for Apple to make a profit on the Mac. Without Apple's ~25% margins there would be no OSX and no iLife. So if Apple does not make up the money by keeping specs the same over the course of a product's lifespan, they would need to sell considerably more Macs to make up for it and I doubt that it's the specs that are really keeping Apple back. I'm firmly in the "It's the network effect, stupid!" camp.

It just doesn't matter how much better Macs are they are not going to make that breakthrough that we all want.

Now, Apple could do very well by getting out of the Mac business. If Apple has kept Yellow Box for Windows up to date, as I hope they have, it would provide them and a considerable amount of third party companies a reasonable transition framework. Some applications can be ported over with a recompile while others are going to need some significant reworking. As I mentioned previously in this thread, does anyone doubt that iLife would completely dominate the consumer market on Windows? Or that Final Cut Pro and DVD Studio Pro would be far and away the industry leaders? I understand Steve's predilection to creating the whole widget, but he's also become a serious realist since beginning his second stint at Apple. The Old Steve® would never have opened the iPod up to Windows, but the New Steve® realizes that the there is more money to be made selling quality products into the Windows market than there is selling amazing products into a shrinking market.

Oh, there is one more thing...



Has anyone else noticed the way Steve talks about the music industry? For instance in this Rolling Stone interview Steve says the following:

When is Apple going to start signing musicians - in effect, become a record label? Well, it would be very easy for us to sign up a musician. It would be very hard for us to sign up a young musician that was successful. Because that's what the record companies do. Their value is in picking that 1 out of 5,000. We don't do that. We think there's a lot of structural changes that are probably gonna happen in the record industry, though. We've talked to a large number of artists that really don't like their record company, and I was curious about that. And the general reason they don't like the record company is because they think they've been really successful, but they've only earned a little bit of money. *SNIP* The winners pay. The winners are paying for the losers, and the winners are not seeing rewards commensurate with their success. And so they get upset. So what's the remedy? The remedy is to stop paying advances. The remedy is to go to a gross-revenues deal and to tell an artist: We'll give you 20 cents on every dollar we get ... but we're not gonna give you an advance. The accounting will be simple: We're gonna pay you not on profits -- we're gonna pay you off revenues. It's very simple: The more successful you are, the more you'll earn. But if you're not successful, you will not earn a dime. We'll go ahead and risk some marketing money on you, and we'll be out. But if you're not successful, you'll make no money -- but if you are, you'll make a lot more. That's the way out. That's the way the rest of the world works.

It seems that Steve has spent a great deal of time looking into the structural problems within the music industry as a whole. Steve has conquered the computer industry, insofar as the Mac GUI and way of doing things is dominant. He has conquered the movie industry proving that traditional animation is obsolete and reenforcing that story and characters count. It seems to me that he is gearing up to conquer the music industry.

The Apple of 5 years from now would look a little like this:

Apple Music:

• iPod & iTunes
• Apple Records (Bought from the Beatles as part of their settlement)

Apple Software & Services

• iLife
• Pro Software
• Dot Mac
• OSX?

The only way I really see this not happening, is if the iPod continues to be such a run away success. If the iPod can bring in ~$2 billion in revenue and over $500 million in profits, Apple can start easing the margins on Macs and can cash in some of the good karma they have received from the iPod. However, even if the iPod reaches these numbers, I doubt that Apple would lower Mac margins. They are addicted to the Mac like a Tyrone Bigguns is to crack.

God damn .org needs to a front page. I'm making way too many long winded posts. Put this on MacSurfer's and watch the users flock.