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Apple's Business Plan


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Apple's Business Plan
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NaMo4184
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Join Date: Feb 2005
Location: H-Town
 
2005-06-09, 05:46

With the recent events and all i think apple should take a different business strategy when they settle into intel hardware.

First they should separate the hardware (Apple) and the software (macintosh). Commodity hardware works fine. There really isn't going to be a big difference in stability for what hardware OS X runs on. As for chipset compatibility I am under the impression that Darwin is an open source project. If you can get Darwin to work on all the x86 hardware I don't see why OS X can't. So I am saying that OS X should not be tied down to Apple hardware. The befits of this are enormous: the increased market-share will mean increased third party development for OS X=increased market-share, Also It means more people using quicktime and itunes meaning more ipod sales, Also with more users there will be more bugs found which will lead to a better OS.

Apple should be pretty aggressive with getting people to actually try the OS. I think they should sell a special trial addition OS that is like 10 bucks dollars. I think it should be like virtual PC in the sense that you can still run your default OS and just have OS X in a separate window. This trial addition should last for quite some time( 2 months). I figure people will try it for like an 1-hr just to play with it and then use it off and on. Until they are like "hell yeah this is great" and decide to buy it. They Trial Version should give links to download Trial versions of ilife iwork, and all the other apple software available. If you decide you want to use apple's stuff then just buy a license if not no harm done, just 10 bucks instead of 500 for a mini. What ever the method the point is that there needs to be a easy way to try out OS X for an extended period of time. I took me like 3 hrs of playing with OS X before I finally got how the dock, finder, and file system worked to my benefit compared to windows. They should also try to sell this trial version through PC vendors that they contract to sell OS X.

As for the hardware, it needs to hold its own weight. You can't tie down one product for the sake of another. The best solution here is just make the hardware worth the money. Apple has Ive and he is a freaking genius, giving them a decisive advantage in the design area. Also Apple can bundle iLife and iWork in for free. If they have those things and are 5-10% more expensive than dell then they will still make a shit load of money. because the software plus the hardware combinations is 100% apple, looks, better, and is cheaper in the long run because it has all the the software you need. I am not saying they shouldn't cut other rPC vendors a deal, just not a deal as good as there own.

John Coltrane's 'Giant Steps'
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Franz Josef
Passing by
 
Join Date: Jan 2005
Location: London, Europe
 
2005-06-09, 06:48

This would be a very loooooong thread if we did this topic justice. This is all about cocks on the block. Does Apple, which is a fraction the size of Microsoft (albeit punches well above its own weight), want to go head to head with Microsoft? As likely as not, the answer is no or certainly not yet. As a long term user of Microsoft (much against my inclination) they are very bad at what they do (software and the like). But they do seem to do 2 things very well - firstly, they crush direct or would-be competitors very well; secondly, they win lawsuits and regulatory issues very well (even when they lose, they win). And as perceptive as Steve Jobs is, he probably reckons the day for a head to head is some time off. Maybe 10 years from now we'll look back and it will have happened.
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Gargoyle
http://ga.rgoyle.com
 
Join Date: May 2004
Location: In your dock hiding behind your finder icon!
 
2005-06-09, 07:20

Quote:
Commodity hardware works fine. There really isn't going to be a big difference in stability for what hardware OS X runs on.
IMO, this is exactly the kind of false statement that a lot of people are making. Apple make and sell good quality machines, then then support those machines with AppleCare etc (Let's not get into an AppleCare quality argument here - just stick to theory).

Now imagine that Apple plop OS X onto the shelf for any old Wintel user to grab and install on his PC. You are going to get a massive surge of people with cheap hardware (especially memory - as was discussed in another thread) calling AppleCare with their OS problems, which are not actually OS problems at all - in fact, they are not even Apple problems!

Then you will be back into the situation whereby the OS maker and the Hardware makers just blame each other when something doesn't work! I like the way Apple make and sell the OS and the Hardware - It keeps things neat and easy to support.

OK, I have given up keeping this sig up to date. Lets just say I'm the guy that installs every latest version as soon as its available!
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NaMo4184
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Join Date: Feb 2005
Location: H-Town
 
2005-06-09, 17:35

Quote:
Originally Posted by Gargoyle
IMO, this is exactly the kind of false statement that a lot of people are making. Apple make and sell good quality machines, then then support those machines with AppleCare etc (Let's not get into an AppleCare quality argument here - just stick to theory).

Now imagine that Apple plop OS X onto the shelf for any old Wintel user to grab and install on his PC. You are going to get a massive surge of people with cheap hardware (especially memory - as was discussed in another thread) calling AppleCare with their OS problems, which are not actually OS problems at all - in fact, they are not even Apple problems!

Then you will be back into the situation whereby the OS maker and the Hardware makers just blame each other when something doesn't work! I like the way Apple make and sell the OS and the Hardware - It keeps things neat and easy to support.
If something goes awry then its the hardware vendors fault. There is no apple care for non apple computers. Just good documentation from Apple.

Also I think that they should at least work with HP and corporate oriented hard ware makers. I read somewhere corporations tend to buy everything from one source. You don't want to try to switch a corporation by making them switch everything to apple hardware because that would make the entry price point too high to give apple a try.

John Coltrane's 'Giant Steps'
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dviant
Lord of the Spoiler
 
Join Date: May 2004
Location: Lost
 
2005-06-09, 18:12

I think the business plan here is to put Apples fate into it's own hands and not be at the mercy of IBM or Motorola. The move to x86 puts them on the same playing field with MS but I think it's highly unlikely that they'll make any serious moves against Windows until the dust is settled and the transition had been fully set in.

I suspect we'll see OS X for generic PC boxes or OEMs at some point, but Apple will wait for the right time. Leopard/Longhorn seems too soon. I imagine they'll hold off until OS X86 has matured in the marketplace to make their move. Let demand come to a boil, and allow time for PC developers and hardware manufacturers to see the light before going on the offensive.

Shhhh, I can't see!

Last edited by dviant : 2005-06-09 at 18:17.
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BlueRabbit
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Join Date: May 2004
Location: Denver, CO
 
2005-06-09, 19:11

Quote:
Originally Posted by Franz Josef
This would be a very loooooong thread if we did this topic justice. This is all about cocks on the block. Does Apple, which is a fraction the size of Microsoft (albeit punches well above its own weight), want to go head to head with Microsoft? As likely as not, the answer is no or certainly not yet. As a long term user of Microsoft (much against my inclination) they are very bad at what they do (software and the like). But they do seem to do 2 things very well - firstly, they crush direct or would-be competitors very well; secondly, they win lawsuits and regulatory issues very well (even when they lose, they win). And as perceptive as Steve Jobs is, he probably reckons the day for a head to head is some time off. Maybe 10 years from now we'll look back and it will have happened.
It's just like playing Risk - you can't afford to overextend. If you do, the opponent will take back their territories the next turn, and then some. The best approach is to slowly expand until you are strong enough to sweep your opponent off the map. This is what Apple is doing.
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FireDancer
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Join Date: Mar 2005
 
2005-06-09, 20:05

Apple is a funny company in that in terms of revenue it is first and foremost a hardware company. So far so good. What's strange is to me the "Mac" experience is almost entirely about OSX. The revenue is made by selling hardware but the real "value" in the platform to me is in the OS. The two can't be separated.

Also, this transition to Intel only works because Apple still controls the hardware. Apple has had the chance to release a boxed version of OSX for 5 years now but they haven't.

They could build the drivers release the boxed version for x86 but how do you get the developers to make software if the hardware isn't eventually going to force the 20-40 million Mac users to the new platform?


That's the key to the Intel switch working....we all know OSX is better than Windows but that's not enough to get us and the developers to x86. If you want OSX (the "Mac" experience) you are forced to eventually go x86.

Because of the hardware connection, Apple is telling developers make x86 programs because it's the future of where our 40 million active "hardware restricted" people are going but still make PPC programs because it's gonna take a lot longer than 2 years to get the majority of Mac users to Intel boxes.

Last edited by FireDancer : 2005-06-09 at 20:11.
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NaMo4184
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2005-06-09, 20:53

My point is that apple does not control the hardware--Intel does. However I can see the wisdom in taking it a little slower and taking one step at a time. As in getting the transition out of the way first then changing the business model. I doesn't make sense to keep the same business model when you are in a new market though. You have to adapt to different situations.

Really I don't think Apple can take on Microsoft but i do think that Apple+Intel can. If intel subsidizes or buys Apple, I think Apple has a damn good chance of kicking the crap out of Microsoft. The problem with that is that Microsoft has already planted the seeds to help AMD take over should intel fail Microsoft. The problem I see with Microsoft using AMD is that They can't all of a sudden become incompatible with Intel--but IBM has no such problem :smokey:.

Sorry if the post seems a bit to speculative.

John Coltrane's 'Giant Steps'
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Messiahtosh
Apple Historian
 
Join Date: May 2004
 
2005-06-09, 21:17

I don't know....it doesn't seem like a stretch at all to imagine that the only hardware Apple sells one day being the iPod. Apple could be a software/iPod company. Just like Microsoft is a software/Xbox company. I dunno...it doesn't seem impossible. With the sales of software, media content (iTunes, maybe video stuff sometime soon), and the iPod (with accessories), Apple could make out pretty well.

It will definitely be a long time, if ever, that they decide to ditch computers though. Who knows. It seems that things are up in the air now as to what Apple's future is.

And I think that's the key to this Intel deal. Before, the PPC had Apple locked into a particular path, now it's anyone's guess as to what Apple and Jobs are going to do in the long run.
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Dave J
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Join Date: Dec 2004
 
2005-06-10, 00:00

Pure speculation...

Jobs took the enormous risk of a 1-2 year pre-announcement of the move to Intel (thereby killing off millions in sales) because he and Intel have something up their sleeve to market NOW. (Well within the next 3 months or so.) Question is what? Will it be a PC with an Apple BIOS that runs OSX? Or something else?

Thoughts?
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JLL
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Join Date: May 2004
Location: Copenhagen, Denmark
 
2005-06-10, 01:51

Apple will probably use EFI instead of BIOS and they will run the latest and greatest from Intel since they don't need to worry about legacy stuff.
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error406
New Member
 
Join Date: May 2005
 
2005-06-10, 03:02

Quote:
Originally Posted by Dave J
Pure speculation...

Jobs took the enormous risk of a 1-2 year pre-announcement of the move to Intel (thereby killing off millions in sales) because he and Intel have something up their sleeve to market NOW. (Well within the next 3 months or so.) Question is what? Will it be a PC with an Apple BIOS that runs OSX? Or something else?

Thoughts?
Yes and no. Apple and Intel are probably ready to launch an Intel-Mac within much less then 1-2 years. The issue is the software. OSX might already run fine on x86, all the other major software manufacturers will have to be ready for it, otherwise the machine is useless. Hence the big margin.

Which is also why the low-end macs are likely to be Intel-ed first. They don't require much in the way of difficult to port third party software, basic OSX and iLife stuff will do just fine for most Mini and eMac users.
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Doxxic
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Join Date: Mar 2005
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2005-06-10, 05:05

I think the restrictions in possible configurations are one of the main *positive* features of the Mac system.

My guess is that Apple will distantiate it from the Windows jungle as much as it can, in order to keep it's brand clean and well-defined.
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FireDancer
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Join Date: Mar 2005
 
2005-06-10, 08:12

Quote:
My point is that apple does not control the hardware--Intel does.
Intel will control the CPU. A huge advantage/difference for me using Windows vs. OS X is the integration of OS and hardware on the Mac. Apple still controls the hardware. Sitting here typing on my 20" iMac, yes IBM made the CPU but the design (a huge part of what makes a Mac a Mac) and the technologies used are decided by Apple. In two years I could easily be typing on a similarly designed iMac running a Intel Pentium somethin'-or-other. It's still designed and manufactures under the control of Apple.
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sunrain
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Join Date: Jun 2004
Location: Portlandia
 
2005-06-10, 10:27

Quote:
Originally Posted by Doxxic
I think the restrictions in possible configurations are one of the main *positive* features of the Mac system.

My guess is that Apple will distantiate it from the Windows jungle as much as it can, in order to keep it's brand clean and well-defined.
I agree with you.

But distantiate isn't a word. It took me a while to figure out what you meant. At first, I thought you were going for the opposite of substantiate, but then I realized you were probably trying to combine "distance" and "separate." Distance would work, but yeah... Anyway, not a word. Carry on.

"What a computer is to me is it's the most remarkable tool that we've ever come up with, and it's the equivalent of a bicycle for our minds."
- Steve Jobs
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Bryson
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Join Date: Feb 2005
Location: Whitby
 
2005-06-10, 10:42

Probably meant "differentiate."
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dviant
Lord of the Spoiler
 
Join Date: May 2004
Location: Lost
 
2005-06-10, 11:02

This may sound crazy but I wouldn't be at all surprised if we see Windows offered by the Apple Store. The reasoning? If they aren't going to actively block Windows installs (per Schillers words) then they know that part of the appeal of the Mac-on-Intel boxes is that you can have a dual boot machine. Though this seemingly helps Windows, bottom line is that it makes it more convenient to buy from Apple and puts a machine with OS X in front them. A sort of half-step switch if you will. BTO would probably be taking a bit far as it would possibly get too close to raising support questions. If it's just something thats available in the software area it could more easily be taken out of inventory. I think they'd draw the line at selling Windows-based software though.

In a way by purposely leaving it open to install Windows on Macs (without support of course) they are setting themselves up to more directly compete with PC hardware manufacturers like Dell, HP etc. It's insidiously clever actually. The key here is pricing. As long as Apple doesn't price itself way out of the ballpark, the curious folks (early adopter types) may opt for a Mac to run Windows as it allows them try out OS X without making a full commitment.

Interesting (scary?) prospect is running benchmarks on a dual boot Mac. There will be no question as to which OS performs better when comparing cross platform apps. I can't imagine they'd even be considering allowing Windows installs on their machines if they weren't confident that OS X will be better at everything though... so bring it on!

Shhhh, I can't see!

Last edited by dviant : 2005-06-10 at 11:13.
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sunrain
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Join Date: Jun 2004
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2005-06-10, 11:08

Quote:
Originally Posted by dviant
This may sound crazy but I wouldn't be at all surprised if we see Windows offered by the Apple Store.
Uh no. They already offer it. It's called VirtualPC.
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dviant
Lord of the Spoiler
 
Join Date: May 2004
Location: Lost
 
2005-06-10, 11:14

Who in their right mind is going to buy Virtual PC when you can actually boot into Windows? Unless you think that MS is going to revamp Virtual PC to be more like a sort of Classic layer for OS X-Intel?

That in itself would be an interesting business decision for MS (if its even technically possible), and to me would seem like some sort of concession to OS X. Running Virtual PC right now is sort of a "if you have to have it" kind of deal. Performance is not great and comparatively a real Windows machine is much much better. If MS could somehow implement a speedy Windows-ala-Classic kind of thing that is pretty fast for Intel based Macs it seems like they'd be shooting themselves in the foot a bit, mindshare-wise. Fine line I guess.

Shhhh, I can't see!

Last edited by dviant : 2005-06-10 at 11:23.
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nota12b
New Member
 
Join Date: May 2005
 
2005-06-10, 11:38

The long-lost pre-keynote thread....

iTunes 4.8 upgrade - why? all it did was give us quicktime video.
um.... Steve also controls Pixar.
um... didn't a post go something about Sony, et al the Hollywood shops liking some techno-breakthru (read as iTunes for Hollywood movies)
(last) um... Macintosh tablet

Steve and Intel are about to drop (it like it's hot) a Mac-tel tablet and unleash Hollywood movies on a oh-hell-no-we're-too-slow-to-market M$ a kick some MAJOR ass with it. It'll run OSX (now) and OSX86 tomorrow. Migration of OSX86 will flow to the rev. b Mini and take the place of the (x)box M$ wants SO DESPERATELY to bring to everybody's living room.

iTablet to movies
as
iPod to music.

Oh yeah, and a full YEAR before the (most-recently-delayed-dates) Longhorn (read 'M$ hopes of staving off Mac and Linux') ever sees the light of (a consumer's) day. By the time it DOES waddle out of the gate, Tiger (and who's NOT betting Leopard isn't out first too?) will have nibbled a fair amount of the scraps from M$ in installed base, and created an iTablet/movie halo to go with iPod.

Love my new 12" PPC iBook. But I can't WAIT to see what this might lead us to!!
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JLL
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Join Date: May 2004
Location: Copenhagen, Denmark
 
2005-06-10, 12:28

Quote:
Originally Posted by dviant
Who in their right mind is going to buy Virtual PC when you can actually boot into Windows? Unless you think that MS is going to revamp Virtual PC to be more like a sort of Classic layer for OS X-Intel?
VPC is like a sort of Classic layer. VPC allows you to run both systems at the same time.
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Banana
is the next Chiquita
 
Join Date: Feb 2005
 
2005-06-10, 12:32

Quote:
Originally Posted by JLL
VPC is like a sort of Classic layer. VPC allows you to run both systems at the same time.
Actually, I think this is now what is meant. Right now, VPC has to take commands from Win XP to x86 then translate it to PPC. The VPC proposed would simply just go directly from Win XP to x86 (no translation needed).


Shoot me if I'm still ignorant.
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dviant
Lord of the Spoiler
 
Join Date: May 2004
Location: Lost
 
2005-06-10, 12:58

I didn't explain that well. Little designer brain and all. I guess what I was getting at was basically what Banana said. Seems like it could operate more directly, which seems a lot more like Classic than what VPC is currently doing. Taking it a step further couldn't it be implemented in such a way that is sort of a Red Box rather than a simply a toggle "between" the OS's? Allowing you to run Windows apps on your OS X desktop. Is that even possible for them or am I in no-progamming-knowledge-la-la-land?

(perhaps this belongs in a diff thread though as it's not really on topic)

Shhhh, I can't see!
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Baron Munchausen
Senior Member
 
Join Date: Jan 2005
 
2005-06-10, 13:54

I think Stevie Boy has a great opportunity...

1) Right now we have entering the universe a version of OSX via the ADC route that boots (I believe) on STOCK INTeL motherboards and Phoenix BIOS.

2) This version will not be the final deal, IMHO, as I am suspecting we will see Apple using EFI based motherboards (see posts, passim) and OSX requiring same with other tweaks.This would be to ensure we have the Mac Experience and not the Plug-and-hang-yourself alternative that is the current WINTEL offering using a 8088 CGI 640x400 16 colour steam powered BIOS.

Where am I going with this? Well, I think it may be an excellent way to allow all those WINTeL clockers, hackers and slackers to take a good long sneaky look at OSX on their beige towers using pirated bit torrent copies without diluting the real deal OSX that will emerge.

When INTeL Apple Macs emerge, they will be EFI rigs. EFI rigs will not work with anything other than Longhorn in WINTEL land. How many clone EFI motherboards will be sold widely in WINTeL land before Longhorn gets loose? Not many, especially as Longhorn is backwards compatible with Phoenix (har har, never free of the legacy, eh, Bill?)

The EFI rigs will be the catszazz. Apple rigs will be top quality and stylish to boot (in more ways than one). The PC crew will by then know OSX. They will look longingly at the Apple lineup of EFI kit and think to themselves that this is familiar OS ground, a superior architecture and drop-dead gorgeous to look at. They will not be scared.

Apple have switchers at the top of the tree asthetically and, frankly, economically. With this move, they may just get the geek-side clocker/board swappers too.
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JLL
Member
 
Join Date: May 2004
Location: Copenhagen, Denmark
 
2005-06-10, 17:19

Quote:
Originally Posted by Banana
Actually, I think this is now what is meant. Right now, VPC has to take commands from Win XP to x86 then translate it to PPC. The VPC proposed would simply just go directly from Win XP to x86 (no translation needed).


Shoot me if I'm still ignorant.

Yeah, I read it as that, but what I forgot to explain was, that VPC will probably be very easy to make to run directly on the Intel CPU.

What I reacted on was the "Who in their right mind is going to buy Virtual PC when you can actually boot into Windows?" part.

I don't want to dual boot if VPC can run at close to full speed on the coming Intel Macs.

- No matter where you go, there you are.
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julesstoop
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Join Date: Oct 2004
Location: Leiden, the Netherlands
 
2005-06-10, 17:54

Hmm guys. Wasn't it Microsofts plan to run VPC-derived technology on Windows to be able to virtualize certain memory spaces? They will obviously be able to run a native-like VPC derived product on Mactel as well (and if they don't create it, someone else will...)
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Baron Munchausen
Senior Member
 
Join Date: Jan 2005
 
2005-06-11, 04:35

Quote:
Originally Posted by JLL
Yeah, I read it as that, but what I forgot to explain was, that VPC will probably be very easy to make to run directly on the Intel CPU.

What I reacted on was the "Who in their right mind is going to buy Virtual PC when you can actually boot into Windows?" part.

I don't want to dual boot if VPC can run at close to full speed on the coming Intel Macs.
I second that - I want a full windows "tide pool" locked down and with no net connection to run apps in. I do think now that there will be no need for x86 emulation that it will run like a train. It will become like Classic. BTW, is the Edsel considered a classic?
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i1ducati
 
 
2005-06-11, 08:43

This was based on the Harvard business Case apple in 2002, might be outdated but it is where I think apple is moving. Keep in mind this is before itunes. My teacher liked it...

EXECUTIVE SUMMARY
The computer industry has become very competitive and specialized with consumers reaching to products far below Apple’s price points. In order to maintain a position in the industry, Apple must diversify into new markets and seek sources of revenue outside its core computer market.
It is recommended that Apple leverage its core competencies of R&D and design to generate increased revenue and a larger market through software and technology licensing. Additionally Apple should use R&D to pioneer and create products for home networking solutions while lowering the prices of its products.
EXTERNAL ANALYSIS
The computer industry in 2002 has evolved rapidly in the past 30 years. Currently there are two main options for computer users: an Apple computer running a Mac OS only available from Apple or a PC running Windows from a wide range of sellers including IBM, Dell, and HP. Windows based PC’s dominate the market with 90% of new PC’s worldwide shipping with Windows and only 3.6% shipping with Apple’s OS.
Computer buyers are segmented into four categories business, government, education, and home (see exhibit 1). All segments consider price to be critical in making computer purchases. The majority of computer shipments are made to the United States, but international growth is projected to be much higher with China being the fastest-growing market (see exhibit 2).
The computer industry consists of hardware manufacturers and software developers who are responsible for developing operating systems as well as applications. Currently the trend is for companies to specialize in either hardware or software (see exhibit 3).
In addition to this trend, the industry has also reached two inflections points regarding customer perceptions. First, consumers see PC’s as a commodity and have become very price sensitive, dramatically increasing competition. Also, PC’s, operating systems, and software has become much easier to use, limiting the further development of more user friendly machines. As a result of these inflection points most large players in the industry are not increasing research and development.
The major segments of the computer industry: hardware, software, and peripherals have different competitive forces (see exhibit 4). The main forces shaping the industry are:
Threat of New Entry: is high in hardware due to increased competition, but low in software because of high development costs. In peripherals the threat is medium because it is a newer market than hardware and software.
Rivalry: is high in both hardware and software because these segments are competitive and require a large amount of investment, while growth is stagnating. Peripherals have a low to medium rivalry in which growth can be fueled by new innovations.
The value chain of the computer industry and specialized nature of most companies exhibits the trend of specialization (see exhibit 5). Companies are creating value where they have competitive advantages and moving away from activities where superior value is not created.
INTERNAL ANALYSIS
Apple is one of the few computer companies that develops its own hardware and software. It has survived in a very competitive and changing environment despite remaining unspecialized in both hardware and software.
The company pioneered the PC industry and continues to innovate by leveraging its experience curve and core competencies (see exhibit 6). Apple’s main core competencies are:
Innovation through R&D: Although Apple spends more than most companies on R&D this is only a temporary competitive advantage because Apple innovations can be replicated on non Apple PC’s.
Operating System: Apple’s proprietary OS is a temporary competitive advantage. The software is substitutable with Windows and does not have enough market share to maintain a sustained advantage over Microsoft.
Positioned as Easy to Use: Apple’s ease of use represents a sustained competitive advantage, but is in jeopardy of being lost due to PC’s becoming easier to use in general.
Hardware and Software Expertise: Apple’s expertise in both hardware and software is a sustained competitive advantage that allows it to ensure seamless integration of its products.
Apple’s market in the United States is very competitive and growing slowly. Apple products are priced above comparably configured PC’s and it has not been able to cut into Windows markets share. Additionally Apple’s largest customer segments, home and education, are the most price sensitive. The company has been able to draw in new customers with innovative designs such as the iMac computer and iLife software. Additionally the sales effort of Apple stores shows promising results of developing new customers and capturing Windows users.
BUSINESS MODEL
Apple’s current business model revolves around its core competencies of developing hardware and software that are completely integrated and easy to use. This model is clear when looking at the company’s value chain for both hardware and software (see exhibit 7).
Apple has trimmed some activities, production and assembly, of the computer industry from its value chain in order to create a more effective business strategy of competing with both hardware and software companies to provide a computer, operating system, and software.
The 5 activities in Apple’s current value chain are not completely aligned with its core competencies. Marketing is not adding value to its targeted customers because Apple’s prices are not competitive. Additionally, the lack of support activities is not strengthening the ease of use competency.
Apple’s current management has closed down all past efforts at licensing the Apple OS on clone computers while as keeping well received software such as iLife off of Windows machines. This decision allows the company to maintain full control of its products, while severely limiting its potential customer base.
RECOMMENDATION
License R&D and Software - Apple needs to open its proprietary R&D, technologies, and software to other companies through licensing. In doing so, the company can leverage its core competencies of innovation and positioning to enter new markets. Licensing hardware and design developments will create a new revenue stream as well as opening up Apple products to a much larger customer base. If software such as iLife were licensed to Windows machines it could produce large returns on apples development investments with little additional cost.
Develop Products for a Home Networking Solution - Apple should also create a new market by developing products for home networking solutions. This would allow apple to sell additional products to its largest customer base, home users, while attracting new customers through diversified product offerings. Apple can again leverage its R&D to develop hardware for TV’s, radios, phones, and networking needs in homes. The hardware and software developed should be open and compatible with both Windows and Apple OS, making either a PC or Apple computer the digital hub for the home. Developing a new market in such peripherals will allow Apple to charge premiums through innovation rather than only competing in the price sensitive and saturated hardware market.
Lower Prices: Apple needs to lower prices in order to adjust for increased competition in the industry as well as a change in consumer preferences that views computers as a commodity. Without making such changes in pricing, Apple continues to overprice its key customers in the education and the home segments. Apple must adjust to the industry inflection point of all computer purchasers being much more price sensitive. Lowering price will allow customers to compare Apple systems with comparable computers from Dell and HP.
Apple’s new value chain based on the previous three recommendations outlines its new business model (see exhibit 8). Support activities should be outsourced to a third party because it provides less value than licensing.
Apple’s new strategy will allow the company to adjust to industry inflection points while leveraging core competencies for growth in its current market of hardware and software as well as the new markets of licensing and home network solution products.
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NaMo4184
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Join Date: Feb 2005
Location: H-Town
 
2005-06-11, 10:14

i1ducati: That post expresses a lot of the feelings I have about the new situation rather lucidly. I feel Apple has entered a different arena and needs to have a different business strategy.

Also my new catch phrase: market share begets market share. I just talked to my Dad to see if he would buy an intel based Apple and he said,"if Apple is so good then why isn't my company using them. Nobody is using them they are only 2%" And like the article said hardware is commodity so you aren't going to easily increase your OS market share taking that route.

You can't say market share doesn't matter and Apple is profitable with a small market share because with small market share small things mean a lot. One upset can cause the whole down fall of Apple.

John Coltrane's 'Giant Steps'
  quote
Banana
is the next Chiquita
 
Join Date: Feb 2005
 
2005-06-11, 10:41



One problem with licensing and so forth is this

It won't be same. The idea of control frealiness was to make sure it will "it just work". Allowing os x and ilife on non mactel would only mean Apple get blamed if it cause a poorly built computer to explode. This is kind of liability Apple can't afford right now.

Besides, with their present controls they're in a relatively safe niche. I say that because the paradigm surrounding "it just work" is a niche in itself; there are some people out there who want/need such machine.

Ill agree that Apple should tread carefully and change their plan, but not by licensing or cloning.
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