Apple Could become mainstream

Apple 2003

The Apple Luxury Tax column generated a huge amount of discussion. In fact, in preparation for a response, I printed out the comments and the final page count was just under twenty pages. Jesus, folks like to discuss all things Apple.

apple logoThere were many issues that I wanted to comment on, but upon reading and rereading the comments, a thought popped in my head that I want to lead off with.

I would like to suggest that Apple Computer is an absolutely huge success that need do nothing radical than stay it’s current course in order to continue to be a spectacular success story.

Huh? HOW’S THAT KOOL AIDE RANDS?

I’ll explain.

Once you get by the Apply ][ and early Mac years, Apple made a career of being just about out of business. Having not been there nor wanting to go over Apple’s balance sheet from ’88 to ’98, I can’t say whether or not Apple was on the brink of bankruptcy. I do know that while Apple was stumbling along, their major competitor in software, Microsoft, was putting together an unheard of string of hugely profitable quarters combined with phenomenal market share growth.

The story is similar if you choose to compare Apple with it’s hardware competitor, Dell. In the intensely competitive PC space, Dell has apparently come out on top, scaring the likes of HP into buying it’s competition (Compaq) in order to compete.

Problem is, both comparisons are flawed. Folks want to compare Apple to Dell and Microsoft because “they build the same stuff” and, in a very basic sense, they do. Still, they are in very different markets. Microsoft and Dell sell to the folks who need software and a computer. Apple sells luxury versions of these and sells them very well. Apple owns the high end luxury computer market and no one else comes close and when someone tries, they suck because that isn’t their primary business.

The Apple Luxury Tax is applied to those people who to make a statement about their hardware and software. The statement is not, “I hate Microsoft”, it’s “I appreciate the finer things in life.” The finer things are, by definition, scarce and; therefore, more expensive. This means the folks who can purchase these expensive items are in the minority and THEY LIKE IT THAT WAY.

This is stockholder heresy, but the absolutely worst thing Apple could do is become a market leader in software or hardware. The moment such a thing occurred, those who espouse the delicate beauty of Apple products would begin to rail on how Apple had sold out and turned it’s back on those people who got them there, the minority.

Apple is in a delightful, profitable Catch-22.

First, you have the business world who is saying, you must grow to survive. Take that four billion in the bank and give Microsoft a run for their money. Then,, you have the Apple zealots. They want Apple to grow, to be successful, but doing that means Apple could become mainstream (and very profitable) and WHO WANTS THAT? Well, everyone… sort’f.

Understanding this kooky contraction actually illuminates a couple of recent Apple news events:

1) Apple sucks at enterprise/big business sales not because they don’t know what that customer base wants, it’s just that customer can’t afford them — Apple’s gig is high-end niche player. This would suggest that for their enterprise play, Apple should be targeting an customer base who has lots of money and hasn’t already spent a lot of it on Windows infrastructure. I’m thinking BioTech… clusters… emerging uses for servers.

2) Apple continues to lose the education market share. Sure, they owned it in the beginning because they were the first ones there and they had the “ease of use” bit going for them. Rumors are that 80-90% of current Apple education customers are still on OS 8/9. It’s not that they don’t want to upgrade, they don’t have the money and if they did, they’re buying value and value = PCs. The main reason Apple hangs out in this market is because STUDENTS MAKE GREAT ZEALOTS. This idea alone must drive the deep discount Apple must be throwing at accounts of a reverse switch.

Ok, other random feedback from readers comments:

– Instantaneous sign that you are an Apple zealot: Usage of any of the following preposterous terms when describing Apple products “it just works” or “it never breaks”. I tend to stop reading articles when they include such claims because they don’t always work and they do break. Yes, even iPods… a lot.

– “There are no ‘OEM’ Macs. It’s a closed platform”: Of it is, only Apple can make Macs. If everyone made ’em, they’d be more and they’d cost less. Bad.

– “iApps rock”: I agree. What these applications do well is have a compelling answer to the question, “How quickly can I build the thing that I want” where thing may be a photo album, movie, CD, etc. The point is the mean time to productivity with Apple software is simply less than comparable products. The Final Cut Pro success story appears to imply the same is true of the Pro-version products. I can’t comment, I haven’t used them.

– “The truth worth”: The point made here was that there is no way to describe the Mac experience in words. You must touch Apple products in order to have an opinion… this also helps with swallowing that 30% tax. This must be one of the main reasons for the retail stores.

MacWorld is next week and the rumor sites are a buzz with tidbits of fact and fiction regarding potential announcements. I predict the following based on this column:

1) Following the steps of .Mac, the iApps suite will become a product that you must purchase.

2) While Apple may throw a new eMac out for education customers, it will continue to be very expensive relative to PCs. (Where very = >30% a comparably equipped PC)

3) Whatever the “dazzling secret” is, it’s going to cost us.

11 Responses

  1. FROST PIST !!! WORD 2 MAH BIZNATCHEZ IN #JERKCITY

  2. Harry 14 years ago

    Apple made themselves “cool” again, the same cool that was there when Apple first hit the scene.

    They’re also focusing on a certain goal, instead of trying to get into every single thing in the computing world and releasing a Quadra 34324e^2 along with their other Quadras.

    It’ll be a long time, however, until Apple is able to sell their computers at a slightly more lower price. Being a niche is hard, but Apple’s doing better these days. iPods are cool, their industrial design is superior to most competitor products and OS X is one of the best operating systems to come out in a long time.

    I don’t think the iApps will ever be sold for money. Perhaps they will release certain iApps which do indeed cost something, but programs such as iCal, iPhoto, iSync and iTunes will remain as part of the operating system’s application suite because they are part of a very important digital hub strategy.

  3. Like your stuff, but think you’re dead wrong about the iApps costing money.

  4. Huaghl 14 years ago

    Apple made themselves cool again… without the quality of engineering to back it up, I suppose.

    Which, of course, is good, because when that ‘sexy’ clear polycarbonate is scratched to shit and covered in stains that’ve slowly turned to black mold and left you looking like a wannabe trying to suck Death Vegetable’s dick at Defcon…

    …it means, in theory, you get to blow another $1,000+ on an Apple.

    It’s another beautiful irony; the company with the Californian-hippie image is really, quietly, sneaking in as much or more planned obsolescence (and I don’t see any recycling bins- pardon the pun- at Apple stores) than

    Also, analogy time- Apple wanted to be GM. GM was a pretty unprofitable business for god knows how long. Now they’ve somehow become Mazda. Different, but populist.

  5. Jimmy James 14 years ago

    Man, I don’t want to haveta go back to pirating Apple software. It’s hard enough to get anything without hotline…

  6. Floid 14 years ago

    Okay, just one prediction, and it’s qualified.

    *If* Apple actually releases anything that is hardware and called an iPhone, and it actually has anything to do with telephony… I predict they would have the sense to integrate VoIP-over-802.11, and create a new Airport (or X server software) for same.

    This meets a number of Apple-land criteria- it is shiny, it does not require much actual innovation beyond the casing, it’s ‘subversive’ yet also nothing more than a glorified cordless phone- “Iowa-safe.”

    Not that I expect it to be released now, but I imagine that’s what it’d look like once it is. I have no idea how well such a product would fly, but it’d be interesting- deploy these things as cordless phones for the super-rich now, and let the economy of scale kick in for a real ‘consumer-level’ price drop when the whole Intel/AT&T/??? urban 802.11 plan turns on.

    On the other hand, that’s probably far, far, far too business-savvy for the Apple we know and.. uh, know.

  7. Floid 14 years ago

    Actually, upon further deliberation… I’ll stick my neck out with a second prediction- whatever this new IT is, it either is a camera, or involves/includes one somehow.

  8. On the super-easy software piracy note (or at least marginally easier than FTP, since there’s a central listing of servers), try Carracho. In my first days as an OS X user with a T-1, Carracho worked and Hotline didn’t. There’s still no napster-kazaa-whatever centralized easy-search P2P program for the macintosh that I know of (VirtualPC DOES NOT COUNT), but there’s always the trust vs. convenience factor playing in there.

    Convenience: I can get ‘Tek N9ne – Slacker’, by name, in about thirty seconds with a typical P2P program.

    Trust: I’d much rather download executable code off of something more closely resembling an online storefront (or at least online crack house), namely, a server that I’ve had to donate some software to in order to gain access. (FTP/Hotline/Carracho).

    On rands’ note:

    “Instantaneous sign that you are an Apple zealot: Usage of any of the following preposterous terms when describing Apple products “it just works” or “it never breaks”. I tend to stop reading articles when they include such claims because they don’t always work and they do break. Yes, even iPods… a lot”

    Yes, of course stuff breaks. My personal comments claiming that they don’t was more of an “OH GOD, THIS IS SO MUCH BETTER THAN MY WINDOWS MONSTROSITY” reaction than an honest belief that they don’t break. My version of OS X (10.0.1.4, if I remember right) has some pretty bad memory leaks that accumulate over time and necessitate the occasional (bi-weekly or so) restart, and Internet Explorer likes to explode and die for no reason. But the problems I’ve found with OS X are much easier to understand, it’s like trying to understand the dyanamics of monopoly instead of the stock market.

    Side note: My Macintosh 7200/120 still plays marathon. The Mac SE/30 (no grayscale necessary) still works and prints for word processing. Both of the windows machines (one desktop and one laptop) I’ve purchased since have had many crippling issues continuing to this day. On the other hand, my friend’s brand new iPod (the windows ‘remix’) just had the touchweel stop registering for some reason, necessitating a trip to the mall, where we discovered the apple stores don’t handle warranty servicing, necessitating return shipping to amazon.com… Thinking different, but organizing their thoughts using the same braindead corporate bloat. As always, your mileage may vary.

  9. Floid 14 years ago

    Well, I suck. I was privately betting on Bluetooth, though, and there it is- and in retrospect, it’s serving nicely as the “well duh” Ericsson intended it to be for the telecom issues, and lets the Computer Manufacturer stick to selling Computers without having to worry about Euro vs. US cellphone standards.

    The prices are awe-inspiring, but this also looks like a sneaky sign of Apple professionalizing into NeXTspace… despite the fancy lighting, I’m sure the keyboard and touchpad still suck, but metal at least makes it seem like they’re trying, and the featureset is astounding.

    I get the impression the next few years may see the matrix split up on lingam/yoni lines as much as consumer/pro, too… or maybe I’m just getting too Freudian with the iTit.

    Still betting the next Digital Lifestyle Circlejerk will take photos, or at least utilize the iPod to store ’em.

  10. Fazookus 13 years ago

    On rands’ note:

    “Instantaneous sign that you are an Apple zealot: Usage of any of the following preposterous terms when describing Apple products “it just works” or “it never breaks”.

    Add “Anybody who calls their computer ‘My Mac’ instead of ‘my computer'”.

    And the “Apple Tax” is right on… a computer is a computer except for the bells and whistles (and I DO own a Mac). Of course music is music, food is food, sex is sex, and, hmmm…

    Faz