[opendtv] Re: News: Changing Course, Apple Offers Low-Priced Mac for the Home

  • From: Mitch Cardwell <mitchrc@xxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Wed, 12 Jan 2005 10:12:37 -0800

And you get the iLife software. Does something comparable even exist  
for PC?

On Jan 12, 2005, at 9:17 AM, John Willkie wrote:

> Only a Mac enthisiast would call this a "low-priced" computer.  Dell --
> nobody's idea of a cut-rate maker -- sells whole computers (with the
> keyboard, mouse and keyboard that the mini Mac doesn't include) for  
> the same
> price point.  And, they don't make you think that you're getting  
> something
> insignificant.
>
> John Willkie
> ----- Original Message -----
> From: "Craig Birkmaier" <craig@xxxxxxxxx>
> To: "OpenDTV Mail List" <opendtv@xxxxxxxxxxxxx>
> Sent: Wednesday, January 12, 2005 6:08 AM
> Subject: [opendtv] News: Changing Course, Apple Offers Low-Priced Mac  
> for
> the Home
>
>
>>
> http://www.nytimes.com/2005/01/12/technology/12apple.html? 
> adxnnl=1&oref=login&adxnnlx=1105536243-qJ8YQU+1thwxz7ZTf3ZzhQ
>>
>> Changing Course, Apple Offers Low-Priced Mac for the Home
>>
>> January 12, 2005
>>
>> Changing Course, Apple Offers Low-Priced Mac for the Home
>> By JOHN MARKOFF and SAUL HANSELL
>>
>> SAN FRANCISCO, Jan. 11 - Apple Computer introduced its first
>> low-priced Macintosh on Tuesday, signaling its bet that most
>> consumers now see computers as simply another appliance in the modern
>> house.
>>
>> While computers have long been sold as machines that can turn a home
>> into an office, most Americans now use them in their bedrooms and
>> kitchens as e-mail terminals; as hubs for playing music, storing and
>> editing photos; and as stations for navigating the Web.
>>
>> The new Mac Mini, priced as low as $499 without a keyboard, monitor
>> or mouse, is aimed squarely at the needs of this new digital
>> household.
>>
>> The new Apple strategy, which moves the company deeply into the
>> consumer electronics market, positions the new Macintosh as an
>> entertainment and communication device. It also promises to intensify
>> Apple's battle with Microsoft in the personal computer market
>> dominated by machines using Windows software.
>>
>> The move is in part propelled by Apple's success with its iPod
>> digital music players; with 10 million sold in the last three years,
>> the iPod has pulled Apple into the mass market. The popularity of
>> iPod, analysts say, may persuade consumers who have not been Apple
>> computer users to consider the Mac Mini.
>>
>> "I wish I had a nickel for every time people have suggested that we
>> do this," said Steven P. Jobs, Apple's chief executive, at a
>> conference on Tuesday. "We want to price this Mac so that people who
>> are thinking of switching will have no excuse."
>>
>> But Apple's introduction of a low-priced machine is not likely to cut
>> significantly into Microsoft's dominance in personal computing; more
>> than 90 percent of PC's are Windows machines.
>>
>> More important, Microsoft is also moving to turn PC's into
>> entertainment centers with its Windows Media Center Edition software,
>> which lets a computer double as a television and video recorder.
>>
>> Gene Munster, an analyst at Piper Jaffray, said that Apple's
>> consumers were probably not going to give up their Windows PC's but
>> might buy a Macintosh as an additional computer for entertainment.
>>
>> "It's not about switching but adding," he said. "People may still
>> need a PC because of work activities, but this is for doing
>> multimedia activities and searching the Internet."
>>
>> For the last few years, Apple has deflected criticism of its roughly
>> 3 percent share of the computer market by comparing itself to
>> prestige brands like BMW. It tried to make sophisticated and
>> attractive products that appealed to a small segment of consumers
>> willing to pay a premium for superior design.
>>
>> Mr. Jobs played down suggestions that Apple had any grand strategy to
>> transform itself, saying instead that the new pricing strategy came
>> in response to things that Apple customers have been requesting.
>>
>> In addition to the Mac Mini, which goes on sale Jan. 22, Mr. Jobs
>> introduced a tiny digital music player, the iPod Shuffle, which is
>> priced as low as $99. The less-expensive player has no screen and can
>> hold about 120 songs, compared with 5,000 songs on a standard iPod.
>>
>> "Today we saw the unveiling of a business strategy that people will
>> be talking about for years to come," said John M. Gallaugher, a
>> business professor at Boston College.
>>
>> Even with the low price of the new iPod, Mr. Gallaugher said that
>> Apple would probably make up the low profit margins from the music
>> player by selling a series of accessories with higher margins.
>>
>> Even loyal iPod users have resisted Apple computers because they are
>> perceived to be expensive and not compatible with the so-called
>> industry standard of personal computers based on Windows and Intel
>> microprocessors.
>>
>> But the advantages for consumers of using a Windows PC are less
>> significant if they are performing common Internet and entertainment
>> functions. Moreover, the computer viruses, worms and spyware that
>> plague Windows machines have been far less of a problem for Macintosh
>> machines.
>>
>> The question still remains, however, whether PC users will try
>> Macintosh machines in large numbers.
>>
>> "This is not going to return Apple to a high level of profitability,"
>> said David Yoffie, a professor at Harvard Business School. "The
>> margins on these new machines will be trivial. And I think they will
>> add no more than one or two points of market share."
>>
>> He said, however, that even a small growth in market share could be
>> enough to attract software developers willing to write programs for
>> the Macintosh.
>>
>> Apple has struggled to break out of its niche position in the
>> computer business since the Macintosh was introduced in 1984. Early
>> on, Mr. Jobs defined the Macintosh as an all-in-one appliance, but he
>> was forced to leave Apple just a year later after losing a management
>> battle with the chief executive then, John Sculley.
>>
>> During the 1990's, while Mr. Jobs was in exile from the company,
>> Apple flirted with broadening its market by licensing the Macintosh
>> operating system to companies that made systems that were Macintosh
>> compatible.
>>
>> The strategy backfired when those companies began stealing Apple's
>> profits and Microsoft successfully imitated the Macintosh user
>> interface with Windows version 3.1.
>>
>> Mr. Jobs canceled the Macintosh operating systems licenses when he
>> returned to Apple in 1997, focusing Apple instead on attractive
>> industrial designs and a new operating system, Macintosh OS X, which
>> he brought with him from Next, the company he founded in 1985.
>>
>> Most of the decisions Mr. Jobs has made since returning to Apple have
>> been well received, but the company's market share has continued to
>> erode in the face of fierce price competition.
>>
>> Some analysts said that the cheaper Mac Mini, which could cost a few
>> hundred dollars more than $499 with a monitor, keyboard and mouse,
>> could help stop the erosion. Inexpensive PC's sell for about $700 or
>> even lower. The low-end Macintosh, called the eMac, sells for about
>> $800.
>>
>> "The product is sensational for the market it's designed for," said
>> Charles Wolf, an analyst at Needham & Company. He said the new
>> machine was designed to appeal to iPod users with Windows systems who
>> have stayed away from the Macintosh in the past. "I think it's going
>> to stem any further loss of market share, and I foresee the day late
>> in the decade when they will double their market share because of a
>> product like this."
>>
>> Shares of Apple fell $4.40 Tuesday, to close at $64.56.
>>
>> Mr. Munster said that investors had been guessing that Apple would
>> sell more iPods in the fourth quarter than the 4.5 million the
>> company reported. Apple will report its first-quarter results
>> Wednesday afternoon.
>>
>> Mr. Jobs made the announcements in front of an audience of more than
>> 4,000 Macintosh enthusiasts. The announcements cap a year of both
>> success and personal challenge for Mr. Jobs, who has seen Apple's
>> stock more than triple.
>>
>> Last summer Mr. Jobs was found to have a rare form of pancreatic
>> cancer. After emergency surgery, he quickly returned to work at both
>> Apple Computer and at Pixar Animation Studios, where he is also
>> chairman and chief executive.
>>
>> He has resisted speaking publicly about his personal crisis. Yet some
>> at the conference thought the marketing slogan for the iPod Shuffle,
>> "Life Is Random," was a reference to the fortunes of Mr. Jobs.
>>
>> "It jumped out at me," said Roger McNamee, a Silicon Valley venture
>> capitalist. "It's existential marketing with maybe even a touch of
>> nihilism."
>>
>> Mr. Jobs said he had not created the slogan, which came from the
>> company's advertising agency, TBWA\Chiat\Day, but he acknowledged
>> that it had struck him as well. "I thought about it," he said.
>>
>> John Markoff reported fromSan Francisco for this article and Saul
>> Hansell from New York.
>>
>>
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