The cashcow gene in Apple

Sometime recently I read an online article which could euphemistically be summed up as saying that Apple gets a lot of mileage out of its computer case designs these days while you can expect something new on the iPod at the drop of a hat.

It my memory serves me correctly the case on the Mac Pro was introduced in the summer of 2003.  It as far as I can tell is still state of the art compared to many computer cases, but there is no arguing that it hasn't changed in over four years.

The Mac mini was introduced in January 2005 at the price of $499.  Not only has Apple not changed the case design, they have done what few have ever accomplished in the computer world, they have raised its price and in spite of what many say kept its specs a little anemic.

I love my Mac laptops, but I haven't seen much innovation in the laptop space from Apple in a long time unless you count the magnetic power connector.  Of course it immediately made obsolete my other power supplies.

The interesting fact is that Apple can keep its designs the same, and there will be a whole crew of people defending those designs to the death.

Now there is something to be said for a company who can design a computer case so well that four years later it is still better than anything else on the market.  I am not one to think we need change for the sake of change.  Still when you position your company as a design powerhouse, at some point you have to come out with something new.

There was a time when computer excitement at Apple came out at a furious pace, but Apple has always been good at enjoying cash cows.  Just look at how long the Apple IIe kept selling.  It was customer driven demand that kept the product going long after Apple would have been happy to see people stop buying it.

Apple also did some products that set some benchmarks for design and reliability.  There were plenty of people who used Apple's Laserwriters for years after they were pulled from production.

So all this leads me to the questions to which I don't have the answers.

Have computers become a cash cow to Apple?  Is all the innovation going to the iPod and the iPhone?

Is Apple just milking its old cases stuffed with technology that they get from Intel?

Has Apple finally transitioned itself to the point that the real computer genius is in OS X or will the next release just be more bells and whistles?

If iLike and iWork are any indication, I am not very hopeful for Leopard, but we will some find out soon.

While there are some nice features in Apple's new software suites, I don't feel the buzz from using them that I have gotten from some of Apple's great software achievements. 

In fact I find that it takes me longer to do a few things in the new iPhoto than it did in the old one.  I will grant that there are some nice new tools but I have ended up keeping the old version on my MacBook because I get some things done faster and putting the new version on my desktop for the specialized tools that I like.

Still I get this nagging feeling that Steve has lost interest in computers.  If that has happened, it is a really bad thing for those of us who want and expect ever more innovative computer products out of Apple.

Just maybe next year will be Apple's year to drive computer innovation once again, if not they are eventually going to have start lowering prices.   I continue to be amazed at how inexpensive other Intel vendors can produce products, and I know not all of them are junk as I will soon be hearing.

I work with lots of people who get years out of their PCs with little trouble other than what Windows might create for itself.

We have an ancient Dell in our real estate office.  It still uses a non-USB keyboard.  My Dell at home is a Pentium 4, and it is still chugging along.

So in the end have we customers for Apple's computers become the ultimate cash cows which Apple knows will buy Macs to the bitter end even while Apple is headed off in another direction?

I wonder if this is the precursor for Steve dropping the whole ball of wax as we faithful Mac users all end up wondering how we ended up on a road with not nearly as bright a future as we imagined.

Comments

[Jay]

I think you're misinterpreting the situation. Two factors are conflating here- the iphone and ipod are newer product lines while the computers are more mature- this is true- but also, the computers just made a transition to a new architecture.

With apple when they change something major about the internals of one of their products, they usually keep the next release in the same formfactor- there are so many things that have to be nailed down just right when you release a new product, that you don't want to change too much all at once.

So, the Mac Pros use the G5 case-- and the next release of the Mac Pros will probably have a modified case. The first release of the iMac was in essentially the same case as the previous iMac, but the next release had a new redesigned slimmer case.

The MacBook got a new case right off the bat, but not radically new (new keyboard though) while the MacBook Pro has evolved rather than been redesigned.

Apple is working on redesigns I'm sure but it takes time for these to reach fruition. I'm a little surprised that the MacBook Pro looks a lot like the Titanium powerbook from years past, but that is probably because there is a limit to how thin a machine can be- a DVD drive is a certain thickness as is a hard drive, as is a battery....and the screen size dictates the size of the rest of the machine. (Though I wish they'd at least give us Black as an option.)

Anyway, just as the ipod touch has a new case design that is obviously the future, the ipod classic keeps the old case design because the whole product isn't ready to make the transition.

We'll have new case designs for the pros soon I'd bet, and assuming apple has an innovation in the laptop space then we'll see new styles of macbook pros, or we'll see them come in colors.

I think the Pro is more likely for a redesign soon because it could be much smaller (possibly) .... not sure what could be done to change the Macbooks- they are pretty well optimized now.

[Tom]

Steve is about doing things that make Steve, and Apple, money. Your comments are spot on. I have been saying the same thing ever since the iPod took off.

Computers are not the cutting edge frontier that took Apple from the garage workshop to Y2K. When OS X did not really take off and give Apple a 10% market share Steve starting looking elsewhere. The iPod success caused the R&D money budget to be re-directed away from the Mac. We see that in a major way in the delay of Leopard to get iPhone out the door.

There simply is not much low-hanging fruit left in laptop or desktop computing. Apple is smart to take the battle for the consumer dollar in a different direction. Think Different, Really Different.

Tom

[John]

Something that nobody seems to mention about the Mac Pros is the power consumption. I would happily upgrade from my G4's if the Pros weren't so hungry.

As it is, I would not only have the expense of running thirsty Macs, I would have to install air con. Which at the moment, living in the UK, I can get by without. And don't get me started on the size. Why are they so damned big? Bring back the little fellers that you can stuff under the monitor.

[Seth]

Tom: do you honestly think that Apple had an early goal of snagging 10% marketshare with just the release of Mac OS X alone? Given how many computers a single percentage point of marketshare represents and the special barriers Apple faces in gaining marketshare that HP or Dell don't have to deal with, such talk is simply unrealistic and I'm sure Steve knows that well.

John: the Mac Pros use less power and generate less heat than the PowerMac G5s did. I use a Dual 2.0GHz PowerMac G5 tower still: it doubles as a free-standing space heater and the fans are always uncomfortably audible. The Mac Pros I've worked with are whisper quiet and don't emit nearly as much heat.

[ibvanmat]

I think you are missing the bigger picture here. To me it's pretty obvious that the computer industry is on the verge of moving into more specialization. There really isn't much more that can be done with the desktop/laptop paradigm. A laptop can only be so thin, and a desktop can only be so small. They will continue to get faster and more efficient, and new designs will come out when necessary, but they will not change significantly.

What is changing is our definition of what a computer is. I would argue that the iPhone is a computer (it runs OS X after all). The same can now be said about the iPod, and Apple TV. All of these devices are specialized computers meant for specific tasks that regular computers simply could not perform well. Computers are likely to continue to infilrate our daily lives, just in new and unique ways and in form factors we haven't yet even thought of.

Innovation on desktops and laptops should continue to come in the form of software, but unless there is a huge shift away from the file/folder metaphor it will be a slow process. OS X is most likely entering a state of refinement, yet will still include new tools (like Core Animation) that could yield some impressive changes to how we work with software.

Personally, I hope the next innovation will come when wireless broadband becomes pervasive and everywhere. Then all these specialized devices will be able to tie directly into each other over the network. Cloud computing will get closer to reality. While some applications will move to the cloud, there will always be a need for well done locally hosted apps.

As for the question of what's on Steve's mind, it seems that everyone wants to sell him a bit short considering what he's done in the last 10 years. I doubt he lacks the ability to stay focused on all the areas of Apple's business. Sure, there are some parts (like .Mac) that should be better, but I think the overall strategy is still good and is being proven on a daily basis. Apple's business is growing steadily and the products are being refined and updated to continue to push the digital hub strategy. Who knows what could be possible if the network cloud becomes available?

It's a very good time to be an Apple user, yet people still want to be cynical and unhappy with the company. Isn't the war and the state of our government enough? Can't we just let this one company that seems to be passionate about what they do continue to bring us some joy in our daily lives?

[Sebastian Lewis]

Uh... the Mac Pro did get a case redesign, but it was an internal change that Phil Schiller stood on stage at WWDC 06 and bragged about like a father brags about his son hitting a home run in the little leagues.

Laptops is the one that gets me, they can be about a billion times better if people stopped treating them like a portable desktop. Due to their design they're a natural for WANs, a convertible laptop would open up an entire world of new software and new features in existing software and new software designs that you could switch between as fast as you can flip the screen around if somebody (Apple I hope) does it right! Also Zeroconf (Bonjour) networking isn't getting enough attention. It's nice not having to plug in a printer to use it since I hate plugging extra wires into my Macbook, but my scanner is built into the printer and to use that I have to plug it in. Why can't I just use Bonjour? What about Optical Drives? Speakers (Airtunes isn't really what I'm thinking of, it only works with iTunes)?

Apple isn't doing nearly enough to advance their hardware and I simply can't use anything that runs Windows (nor do I wish to have anything to do with Linux, BSD, or Solaris if I can help it, at least not as my main computer).

Sebastian

[Tom]

John

10% is an arbitrary number. The fact is that Apple did not get any significant boost in global market share from OS X. What has changed since 2001 is the share of computer revenue in Apple's income stream. MacIntel and OS X did nothing to that trend.

If you were Steve Jobs what would you do with your R&D effort?

Tom

[ReginaldW]

We are SOOOOOO jaded. We have to be impressed with everything new all the time. Unless we are continually impressed with each new release, it just becomes so much trash.

Items are revolutionary when they are first released (at least for items that never existed before and that are truly revolutionary). From then on, it is a matter of refining and honing the product to make it better, to fix the flaws that weren't thought about, the ideas and problems that come about from using a new product in ways that were not originally thought about. After a while, those refinements are just more of the same and it becomes 'boring, same old, same old.'

Sorry you're ADD causes you to have a low attention span and hankering for something shiny and new to keep your attention on the toys. Others just want to do things with their TOOLS that JUST WORK.

[ocracokewaves]

There a huge difference in just something new and innovation.

Apple is a company built on innovation. The company's history is one of blazing new trails from user interface, to wireless networking, to figuring out how to successfully meld an Open Source heritage with a shrink wrapped proprietary operating system.

If Apple stops innovating, Apple will die, and if Apple stops delivering great value for the price, Apple will also die.

I'm not looking for new for the sake of being new, that's actually the problem I pointing out in the new iPhoto. I find it less productive than the old one and think that aside from a couple of very welcome new features most of the changes are window dressing and a step backwards.

You might want to check Apple's page on Leopard.

http://www.apple.com/macosx/leopard/

It says something to the effect of "300+ Innovations."

If Apple isn't going to provide real innovation, we probably need to see some price reductions.

[ReginaldW]

Prices are seldom reduced except when competition occurs, or economies of scale and competition dictate that you can sell more and make more by selling for less. Witness the price drop on the iPhone, after they had better gauged the demand and were able to ramp up production to meet demand.

Delivering value also has to take into account the competition. If everyone else is selling something for $100.00 that costs everyone about $75.00 to deliver, but you develop a process that can cut the cost to deliver to $50.00, you have a significant advantage over the competition. You can milk it and get more revenue from each one you sell, or you can drive the competition into the ground by pricing it just above their cost ($75.00) and still make money while they lose money or work for nothing.

Looking at the website you list, there could well be 300+ innovations, but it only shows 8 larger areas, so how many innovations are there that really make anyone go WOW!? Time Machine is supposed to be wonderful and will hopefully make backups easier so more people do them.

The desktop showing a "stack" is definitely different from how its been done before, but again, it is evolutionary, not revolutionary. Enhancements to the OS.

Taken on the whole, yes, it makes things better. Going from the Apple II to Macintosh was revolutionary. Going from OS6 to OS7 had major advances that did wow you, but they were evolutionary, the same as going from 7.x to 8 and from 8.x to 9.x

Too much revolutionary can be difficult to take, unless it makes things better. Going from OS7/8/9 to OSX was major revolutionary, but it wasn't necessarily better for OSX 10.0 or OSX 10.1. People thought 10.2 was the first workable version, 10.3 was a major improvement, 10.4 was a quantum leap.

But, most of what went on from 10.0 to 10.4 were refinements, improvements under the hood with some quantity of innovations and putting back features lost from OS9.

Innovation is what is useful to you that determines its worth. What is worthwhile to you may be useless to me, and vice versa.

I still have an Apple //e and I miss it. I learned about computers on it and I am nostalgic for its simplicity, of the original text Appleworks that worked wonderfully, and a lot of features didn't make it across to the Macintosh version of Appleworks/Clarisworks.

Apple has different product categories - computers, iPod, iPhone and AppleTV. They market by concentrating on one of them, get the publicity and the public interested and later switch to another category with new features and services. Computers will come back with the Leopard launch and then they will go on from there with something else.