Five Reasons Why There Will Be No Macs in 2010
The Mac, and Apple, have been counted out more times than Gabby Jay. Unlike Super Punch Out’s resident tomato can, the Mac keeps getting up off the mat. Credit the people who love the platform, or OS X for the machine’s resilience, but don’t count on the Mac being there forever. The era of the all-in-one hardware and software solution has been gone for at least the last ten years, even though Apple hasn’t quite caught on yet. Here are five reasons why Apple will catch on and abandon Mac hardware by the start of the next decade.
The most common complaint users have about Windows XP isn’t the playskool look or lack of a decent bundled version of iMovie (Windows Movie Maker, what were they thinking?). The most common complaint concerns security. For the tech savvy, security isn’t a big deal. For those who either don’t like mucking with the computer or who are galled by constantly running programs in the background, security is a major source of frustration.
Vista aims to change all that. By beefing up security, Window’s users should get a more secure feeling rolling around in the graphically enhanced Vista. A Version of Windows that includes a much better look, Mac like niceties plus enhanced security? That is a recipe for wiping out a lot of interest in OS X. Yes, many people will argue (perhaps correctly) that OS X is still superior to Vista but the argument will fall on mostly deaf ears because, for almost everyone, the comparison won’t be Vista versus OS X, it will be Vista versus XP. How great does Vista really have to be to look fantastic next to XP?
There are plenty of cat names to go around if you count every species of cat. However, Apple can’t just throw any cat name on their OS, it has to be a cool feline capable of taking down substantial sized prey. So, Leopard (obviously) would be in, but OS X Munchkin is straight out. With that in mind, we realize that the pool of useable cat names is dwindling quickly. No cool cat names, no OS revisions. No OS revisions, no reason to go Mac. Unless Steve and company start genetically engineering new cats, the Mac is in serious trouble.
The Switch to Intel:
You wouldn’t think that a chip change would be a big deal, but when you go from being the only home computer maker using a chip to using the same chips most computer makers use, price comparisons are suddenly very easy. Put differently, when Apple was using the PowerPC people justified the Mac’s price by glomming on to the perceived superiority of the PowerPC. When everyone is using Intel, it is hard to make the argument that a Mac is somehow technically superior to another box using identical components. You now have compelling price comparisons where an HP is $400 dollars less than a similarly equipped Mac.
Sure, Macs aren’t the most expensive computers out there, look at the AlienWare’s version of the iMac or AOpen’s naked aping of the mini. Still, when most people think reasonably priced computers they look to Dell or Hewlett-Packard. In those comparisons Mac prices don’t fare as well. Without the perceived, if erroneous, justification for Mac prices a lot of people might decide not to subsidize development of OS X.
In 2004, Mac market share hit an all time low of 1.98%. You would think that it would have been a terrible year for shares of Apple stock but it wasn’t, the iPod was there to pick up the slack. This year the iPod passed the Mac as the major source of revenue for Apple. Smart companies focus on the products providing growth and revenue, for Apple that product is the iPod.
Apple is following the expected path in this case and trying to extend the iPod brand as evidenced by last Tuesday’s introduction of speakers. Even more telling might have been the introduction of the seemingly ridiculous iPod sleeve. The sleeve isn’t nearly as functional as any random competing iPod case, and it is horrendously overpriced.* On the other hand the case would be perfect for a true video iPod where you’re either staring directly at the screen or have the thing tucked away.
As the iPod continues to grow and its brand continues to expand, reliance on the Mac and the manpower spent designing the computers will continue to decrease.
Dollars and Cents
More compelling than even the dwindling supply of large, predatory cat names is the bottom line. Currently, Apple’s profit margins runs anywhere from 15 to 25 percent on Macintoshes. Hence, a brand new MacBook likely nets Apple a profit of $700 where a mini brings $100 into Apple coffers. Those are nice numbers but they could easily be replaced by sales of OS X and the iLife Suite. That scenario doesn’t take into account increased sales of all of Apple’s other programs like Final Cut Pro and Logic. Which option seems more profitable: selling Final Cut to only people who have purchased Macs, or selling it to anyone who has shelled out $129 for a copy of OS X? The answer is obvious: If Apple thinks that by opening OS X for any capable machine instead of tying the system artificially to Apple subcontracted boxes would increase software sales enough to offset the loss of hardware revenue they would be foolish to continue making and selling computers. Apple’s software does have a pretty great reputation after all.
Here most people will argue that Apple is a hardware company, the software, they’ll say, is there to drive sales of the hardware. A nice notion 20 years ago but antiquated in today’s market. Apple is there to make great products in hopes of generating even greater piles of cash. Income from software fills up the balance sheet just as nicely (well more nicely because the profit margin is higher) than income from hardware sales. When people read articles that point out the cost savings realized when using Macs they’re undoubtedly itching to try OS X out but are stymied by the high cost of entry. Apple could rectify that situation…easily.
It Won’t Be a Bad Thing
When all this comes about, when Apple is seen not as a computer company but as an electronics giant, when you can install a shrink-wrapped copy of OS X on any computer that meets the specs, Mac users everywhere will howl and moan. Nevertheless, when those same users save the cost of OS X and iLife in their initial purchase of a computer a lot of the sting will be taken out. When people realize that they can now customize their purchase to their specific needs via any of a million generic PC makers the pain will further be dulled. To cite one example: every MacBook Pro and iMac ship with an integrated iSight. How many people would rather swap the cost of an iSight for a little more hard drive space? In the end, the change will be a winning situation for Mac fans everywhere.
*Well, maybe not. The sleeve is made from fine Italian leather. Sure, $99 is far too much for average Moroccan leather, but Italian cows simply produce the finest dead-animal-based iPod case material known to man.