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

  • From: "John Willkie" <JohnWillkie@xxxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Wed, 12 Jan 2005 10:45:27 -0800

Sure, there's something like it that came bundled with Windows XP.  Not much
like it, but somehow, it answers the needs of at least 98% of the
marketplace.

Fancy marketing and incredibly good industrial design earns Apple less than
2% of the marketplace.  Do you think it has something to do with their
closed-end system?

John Willkie
----- Original Message ----- 
From: "Mitch Cardwell" <mitchrc@xxxxxxx>
To: <opendtv@xxxxxxxxxxxxx>
Sent: Wednesday, January 12, 2005 10:12 AM
Subject: [opendtv] Re: News: Changing Course, Apple Offers Low-Priced Mac
for the Home


> 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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