January 03, 2005

Future Apple I

Evan Kirchhoff takes a stab at divining Apple's future. He analyzes one of those rumors that never die, "the cheap Mac". He gets pretty much everything right until the end when he should have just said that it's a false rumor but he breathes life back into the dead and gives it a 50% chance of being true. It's just not so and I've seen this rumor come up so many times that it's obvious that it's not.

First of all, if Apple wanted to drop the entry price on its computing technology, it would much more likely pair with the new IBM initiative to promote their Power line of chip products and create a $299 satellite computer with a tiny flat screen that would run cut down versions of OS X specially tuned for the "digital dashboard" applications to be rolled out in 10.4 and fitting into a home network. The problem with a $499 computer isn't that it's too cheap for Apple but that it's too expensive.

Apple has garnered plenty of expertise in how to take over market segments by being the low price producer. Try competing with Final Cut Pro, Xserve, or Xserve RAID on price. You can't without getting out of the brand name space. Price out a 50 person workgroup with simple file and print needs using Mac OS X Server v Windows Server. Licensing costs drop the Mac OS X price far below the Windows one.

Whenever Apple has decided to win a segment by entering the low end for that segment, they have always dropped their prices down to crush the competition, never, ever meeting the low cost provider. This rumor would meet the low cost providers. That means it would not only depart from the old "high price, high chic" Apple of the past but also the new Apple "category killer that crushes on price" present.

If Apple goes low, it'll go low in creating a new category, say something in the iMac G5 form factor but wall mountable with a 9" lcd screen that will automatically hook up to mama Mac and provide you with dashboard computing functionality where you want it. Buy a 10 pack and put one in every room in the house (and yes, there will be a ruggedized version for the bathroom). Microsoft can't follow because it doesn't make the whole widget. The x86 clone makers can't follow in Windows because the Microsoft tax won't let them. The Linux folks could follow but won't succeed in the space because the 9" wall mount form factor will highlight user experience, an Apple strength and a Linux weakness.

Now this isn't a rumor. I'm just providing a prediction based on what people want, computing where they want it, when they want it. It will appear when the hardware is ready. Apple's laid the foundation for this sort of thing over the past couple of years, just as they've laid the foundation for their push into the enterprise that you'll see in the next 5 years.

Posted by TMLutas at January 3, 2005 11:42 PM