Apple Neglecting the Mac?
Remember Macworld and all the disappointment that followed? No new mini, no new Mac Pro no new Apple TV. All you really got from on the hardware side was the 17" MacBook Pro getting caught up to the rest of the MacBook line. That's right, while the fans were screaming for a stunning surprise new Apple gave them something everyone knew was coming and pretended it was a big deal. Turns out that even the 17" MacBook Pro was introduced too soon. The only new bit of hardware that showed up at Macworld, hardware Apple knew it had to do for months, has been delayed. Again.
No big deal right? Delays happen all the time, maybe there is something about the 17" MacBook Pro that makes it extra difficult to move from concept to production. It could be hard to cram everything into the chassis of a 17"... wait that's not it. The difficulty could be that the dual video... Wait, no. Again, there's extra room. Maybe it is the $50 matte finish screen option? That can't be it, the matte screen is just a part swap, something for the assemblers to deal with. So what could be the holdup? Oh, of course. The 17" MacBook Pro just doesn't matter.
That makes a lot of sense. You have a notebook that really isn't, priced at a point most people won't pay. How important can it be to Apple to get that thing out? The worst case scenario is that Apple will piss off every ultra high end 17" MacBook Pro user and, in all truthfulness, those three people will probably stick with the Mac anyway.
That the MacBook with glandular issues is delayed is no big deal if that is the only Mac being shorted when it comes to updates. But the latest delay and that the 17" wasn't updated when the other MacBooks were carved out of a solid billet of aluminum might not just be about problems with 17" MacBook, the whole mess could be a sign of a new attitude at Apple towards the Mac. Has Apple become blasé about the Mac? There's one way to tell and that is to look at the numbers (data from Macrumors)
Mac mini:
Apple's most unloved computer was last updated August of 2007. That's only a year and a half to you or me but to a dog that is high school and college. The mini isn't being held back by lack of possible updates, Apple could certainly bump the processor speed or get rid of FireWire but the company has just let the mini molder like a leftover in the fridge that is too old eat and too disgusting to throw away. The mini is probably the worst indicator of how Apple feels about the Mac. After all the mini is Apple's cheapest computer and every mini sold is likely viewed as an iMac that didn't sell by the company. When you look at it that way mini buyers are lucky the thing doesn't have razor sharp edges and a case made of stinging nettles.
iMac:
Is Apple's mainstream desktop due for an update? You bet it is. While most companies like to keep the most popular machines updated the iMac hasn't been on the cutting edge for a while. The last significant upgrade? The tail end of April in 2008. No traditional back to school bump, no mottled case, nothing. If you've been expecting a new iMac for six months, you have had every reason to. Apple's reasons for not updating the iMac aren't nearly as clear as your reason for expecting one.
Mac Pro:
If you have a Mac Pro you're on the frontier of Apple computing. Unfortunately, the cutting edge of Apple computing is not the cutting edge of computing. Intel has had new chips ready since November of 2008 but the Mac Pro hasn't been updated since January 2008. If you pay attention to this stuff you know Apple will, eventually, get the new chips into a Mac Pro and you know that buying one before that happens is setting yourself up for a bad case of buyers remorse.
Xserve:
Word is that an Xserve upgrade is coming the next time someone buys one. Apple doesn't advertise this but Steve builds every Xserve personally as a hobby. He finds it relaxing. So maybe if you order an Xserve today it will get shipped to you with the i7 Core processor from Intel. Just kidding, the Xserve and the Mac Pro have been updated together in the past so that is probably the case this time.
That does it for the stationary Macs. What about the portables?
MacBook, MacBook Pro:
These aren't a big deal, they just got updated right? In terms of life cycle the MacBooks are about halfway through the cycle and these are the only machines that have been updated with the expected frequency. The one outlier is the supreme low end. The white plastic MacBook did get a nice bump recently.
All that adds up to company somewhat disinterested in one of its product lines. But why would Apple not be interested in the Mac side of things? The Mac still brings in a lot of dough, accounting for 35% of the companies revenue. Why not pay more attention to such an integral part of the business? Well, when the other parts of business are doing even better it kind of makes sense:
When illustrated graphically the case to forget about the Mac becomes more persuasive. Apple loves making the Mac and Apple loves the profits generated by selling the Mac. However, it is hard to justify putting resources into what is a flat lined market. If Apple has a great engineer, would it behoove Apple to have the person working on the iPhone or the Mac? You know the answer and it isn't the Mac.
There are people out there with kids who are very picky eaters. They'll only ingest chicken nuggets and fish sticks and view all vegetables as the most sublime form of evil ever put on a plate. This causes the parents much frustration and consternation. But in the end they end up feeding the kid what they want if only because they want to see the kid eat and don't want to put up with the epic battles that they lose every time. In Apple's case things are a bit different. The company can skip the part about worrying about nutrition and just focus on making what people already desire more desirable.
From Apple's perspective it is an easy decision. Every man-hour of a top designer, programmer or designer spent on the Mac is an hour they don't have to spend on what really matters at Apple. This doesn't mean that Macs are getting worse, that argument would be difficult to make, but Macs aren't improving at the rate Mac users have come to expect. Don't expect that trend to change. While you're wishing for a new mini or a "true" Mac netbook Apple is working on the tricky question of resource allocation. For Mac fans, the truth is the best allocation of Apple's resources isn't the Mac.
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What are you talking about? Have you looked outside and seen the current state of the economy? Did you go to Macworld and see how depressing it was? The REASON Apple sells more iPhones and iPods is that they are less expensive then a MAC, DUH! Do you really expect Apple to sell 10 million Macs in one quarter? Besides, where did you get this chart and why is it so small? Where is the data that backs up this chart? Oh yeah, the first quarter of 09 isn’t over yet so are you predicting those numbers?
Next time cut the pill in half before you take it.
Well Hammeroftruth here’s the deal:
The graph is the size it is to fit on the page and because all the useful information can be gleaned at that size.
The interesting thing about the graph isn’t the number of units sold, the interesting thing are the slope of the lines. Mac sales are flat. iPod and iPhone sales are growing. So you put resources into the growing market or the flat market. Where is the bigger bang for the buck?
I generated the chart myself using numbers from Apple quarterly reports. And Apple has already reported first quarter results for 2009 (the quarter ended in December of ‘08). Check it out for yourself:
http://www.apple.com/pr/library/2009/01/21results.html
So there you have it. I think I’ll stick with the whole pill.
I have to agree with Mr. Seibold. Apple know they will continue to sell their product on looks (and OS X) rather than capabilities and now they’ve gone to Intel they don’t have to push innovation anymore. They can just grab the latest generation of chips and chipsets when they need them, box them up and away we go. New generation.
Fact is, if you want a tiny PC with a dual core processor, you have the Mac Mini or the Dell Studio Hybrid. The Dell is leaps and bounds ahead of the Mac, but the Mac just looks so much… better. And if form factor is _that_ important, you’ll be willing to compromise on speed.
Same with the iMac, which I actually used as studio workstations because a grand for a dual-core with a 20” screen with two gig of RAM to replace aging single core G4-400’s was a cheap upgrade and the speed matched the 1.8 dual processor G5’s we’d bought. A lot of people might have gone this way, so Apple went glossy on their screens. No-one in that studio could have worked on a glossy screen, and we’d now find ourselves buying Mac Pros for twice the price. Thanks, Apple.
Finally, the Mac Pro. The best workstation out there. Dell’s equivalent PC’s are ugly as hell, noisy as hell and won’t run OS X. HP’s workstations are also plasticky-looking junk. The only attractive workstation that isn’t an Apple is the Sun Ultra 24… a beautiful piece of design, but it only holds 8Gb RAM and one quad-core processor. Fast, though. The Mac Pro is overpriced and uses outdated consumer graphics cards with overpriced server-quality RAM.
I bought the last G5 Powermac… the Quad core. It’s beautiful, a great piece of work. However, I need a replacement PC to run virtual machines for testing (plus the odd bit of PC-only software) and so I have two options: Buy an Ultra 24 as listed above, and max out my G5, or get a Mac Pro and max it out. so:
Ultra 24 (4x3GHz) $1645
8Gb RAM for Ultra 24 $160
16Gb RAM for Quad G5 $208
TOTAL: $2013
Or: Part Ex G5 for $1575
Mac Pro 2.8 Octo + GeForce 8800GT $2949
24Gb RAM for Mac Pro $920
TOTAL: $2294
To be honest, for the difference, three years ago I’d have gone for the Mac in a heartbeat. Now? Apple are treating their customers rather badly at the moment. My not-even-three-years-old professional Mac won’t play the video lessons in the new Garageband? The new OS won’t run on it? Many Intel Mac users crow over this, because they haven’t been treated like that… yet. Wait till Apple start producing an OS and software that requires a quad core and see how you feel then! It could happen.
Fact is, I don’t care if the G5’s are no longer supported, I’ve had three years great use out of mine and it’s as good as the day I bought it. But like I say, I should be going for that Mac Pro right now and I don’t want to. I want to run the G5 for 2 more years and run the Ultra 24 alongside it. I can bump the Ultra however I like, swap the processor, put in a graphics card I want, whatever.
In two years time, I’ll see if Apple’s attitude has changed and consider going back to Mac again, but their current attitude would have stopped me from laying out the 6 grand I spent on the G5 three years ago.
I’m not prepared to accept that the graph is telling the whole truth. Where is the huge year-over-year growth in MacBook sales? You can’t hide 20% growth without trying pretty hard. So that’s just what you did. You put the iPod shuffle on the same graph as a machine costing 25 times as much. Clever.
There’s also the simple matter of cause and effect. I believe sales aren’t growing because the machines aren’t being updated to be more appealing. The notebooks are updated regularly. People can buy with confidence knowing (almost) exactly when the next update will happen. On the desktop side it’s a crap shoot. Even the charts of introduction dates aren’t helping us predict when to buy. Combine that with the economy and it’s no surprise that Apple is having trouble moving desktops these days.
If I sit on the sidewalk with a sign I’m not going to have much luck getting a job. If I actually make an effort to upgrade my skills, advertise myself, etc. I stand a much better chance. Apple desktop computers are just sitting at the side of the road getting splashed by passing cars hoping someone will take pity on them.
I’ll concede that Macs don’t offer the same potential for rapid growth as handheld devices, but they aren’t likely to crash like your iPhone line so clearly shows. Pouring all your effort into an area that relies so much on trends and making a big splash can be a mistake. A couple of false steps or simply not being “cool” anymore can spell disaster. Back in the late 1990’s many companies tried to get rich quickly. Most of them don’t exist today. Those who stick to a sensible plan of steady growth will always prosper in the long run.
Well Bregalad Apple doesn’t break iPod sales by units so I can’t really not put the iPod shuffle in the mix since I got my numbers from Apple.
Here’s the interesting thing about the flat line for Macs. Year over year laptops sold by apple were up 34% but the graph stays flat because desktop sales were off by 25%.
As for the rest of your comment I agree. It is hard to say what is causing what.
The truth is that there is not much more in new releases of the Mac OS to get more people to buy new computers. I am happily running Leopard on my G5 iMac. I only upgraded to Leopard because of Time Machine. The other features in Leopard are fun, but they don’t really do anything very useful. Tiger had Spotlight and Dashboard Widgets to get users to upgrade. I have two iMac 600 Mhz. gumdrop computers running 10.2 that work great for surfing the net, playing music on iTunes and general things in Appleworks.
Until the next big thing comes along, I am set. As are a lot of other people. The iPhone and ipods are still innovative enough to keep sales going upward.
It’s much easier to make a flawed argument like this when you use figures that don’t reflect the true value of a product. Here’s a quick graph I made showing Mac, iPod and iPhone revenue over the same time period:
http://www.quicksnapper.com/pilky/image/apple-revenue
If you notice, the Mac is the highest revenue earner in all but 1 quarter. When you consider that units/market share aren’t of as much interest to Apple as revenue/revenue share then you’ll see that the Mac is pretty damn relevant.
That’s a nice graph pilky, it illustrates my article nicely. Should have made two graphs I guess.
If you take a look at pilky’s excellent you’ll again notice the flatish line for Mac revenue and a sharply upward sloping line for the iPhone. REcall that Apple accounts for iPhone revenue differently than Mac rev (the company spreads the iPhone rev out over 8 quarters) and note that the graph of iPhone will intercept the Mac revenue within the next two years.
It all points back to the same thing: Apple is putting its money where the future is, where the biggest bang for the investment is.
What OS was delayed for months and months? That was Leopard. What product shipped on the day the said it would? The iPhone 3 G. Where is this snow leopard that was supposed to be out the first quarter of this year? Not out. How close to out is it? I don’t know, my ADC membership lapsed.
It isn’t that the mac isn’t relevant, it’s more a question of resources allocation.
“The interesting thing about the graph isn’t the number of units sold, the interesting thing are the slope of the lines. Mac sales are flat. iPod and iPhone sales are growing. So you put resources into the growing market or the flat market. Where is the bigger bang for the buck?
I generated the chart myself using numbers from Apple quarterly reports. And Apple has already reported first quarter results for 2009 (the quarter ended in December of ‘08). Check it out for yourself:
http://www.apple.com/pr/library/2009/01/21results.html
So there you have it. I think I’ll stick with the whole pill.”
Thanks for explaining that. That means that true, Mac sales are flat compared to iPhone or iPods, they have remained constant and look like they might have grown a bit. I can’t really read it that well since it’s really blurry. Compared to the rest of the industry, that’s pretty good. Dell, HP and the others probably have a worse curve than Apple. The real surprising thing is that Mac sales didn’t dive compared to competitors or even the iPhone. Plus add the fact that a lot of countries got the iPhone this year is even more amazing that iPhone sales didn’t go even higher.
The main point I was trying to make was that Apple knows when to hold new releases of hardware until it’s economically sound to do so. We’re at a fragile point here with our economy. Big banks, big merchants and even some automobile manufacturers are near bankruptcy. Apple knows that this year is pretty much going to suck, so they are bagging it and going to hold on until things get better before releasing anything new, or at least until they sell out of what they have in the channel.
You have a point that Mac users have been treated like second class citizens compared to iPod and iPhone users. It could be that the OS team at Apple has gone through a lot of engineers. Just read what rixstep says about them. They did break a lot of things with Leopard that are still not fixed.
“If you take a look at pilky’s excellent you’ll again notice the flatish line for Mac revenue and a sharply upward sloping line for the iPhone.”
Problem with that is that it assumes the Mac won’t see further growth. As you point out, the desktop side of things hasn’t been updated in quite a while which means sales on that side are dropping. I’m willing to put the Mac Mini down to Apple not really caring about it too much, the Mac Pro down to it not being a high priority during a recession and the iMac down to technical delays. Update the desktop lineup and get out of a recession and the Mac will continue to see growth. And even on the off chance that I’m wrong, you don’t ignore or neglect a product line that:
a. brings you most of your money
b. allows you to make the other two product lines
“It all points back to the same thing: Apple is putting its money where the future is, where the biggest bang for the investment is.”
Apple is putting a lot of money where their priorities are, but the priority isn’t really the Mac or the iPhone hardware, but OS X and the developer tools. These are Apple’s two most important products and where most of their money is going.
“What OS was delayed for months and months? That was Leopard. What product shipped on the day the said it would? The iPhone 3 G.”
And the reason for that is that pretty much all the OS X team switched from Mac work to iPhone work, as at the time Apple was severely understaffed. The issue isn’t Apple wanting to put all their resources on the iPhone, it’s Apple being unable to split their resources between two products.
“Where is this snow leopard that was supposed to be out the first quarter of this year? Not out. How close to out is it? I don’t know, my ADC membership lapsed.”
There have only been two groups mentioning Snow Leopard for a 1st quarter release. The first was one apple employee on one slide of one presentation. The second group is all of the Mac rumour/news sites. Apple said in their press release at WWDC that Snow Leopard would be out in around a year, which means June 2009. I’m willing to go by their website and press release than one employee.
The thing is, the second group will also be complaining about all the “pulled” new features from Snow Leopard like a new interface or various other things that nobody has talked about but them and have never actually been in Snow Leopard. They like to make stuff up and then complain when Apple has “pulled” the stuff that they never said was going into a product.
Yes the iPhone is gaining increasing importance, but the idea that Apple is neglecting the Mac is ridiculous.
That is a good point about the Snow Leopard time frame pilky. I was certain that Steve himself mentioned the first quarter but I’ve looked into it and from what I can tell you are absolutely right. The release date has never been locked in stone or anything. Apple might of had a page up that said late first quarter or early second quarter but that isn’t even certain. So whatever I said about snow leopard being delayed was in error (for now).
All that said I still think Apple is neglecting the Mac. Or at least neglecting the Mac compared to the olden days. At one time the Mac was all Apple had. It wasn’t all the company wanted to have but it was the company had. If you’re an old school kind of guy you remember a time when Apple was all about the Mac. It isn’t that way anymore.
Its time for Apple to license OS X. They have all but given up on desktop hardware.
Apple’s ‘Less for More’ Strategy
We can see that Apple really do “Think Different”. We know this because ‘upgrades’ mean something a little different to Apple than most producers.
Perhaps we can all learn from their upgrade model. Surreptitiously stripping away features, adding eye candy and then hiking the prices seems to the winning strategy.
>Keynote 09 - Export to Flash (.swf) removed. You don’t know this until you’ve bought it. (A little honesty upfront would be nice)
>iMovie 08
Any and all decent editing features present in iMovie 06 were removed to put some distance between iMovie and Final Cut Pro and encourage people to fork out for the editing suite. It begs the question: you wanna play with movies? iMovie is the ticket. You want to edit movies? With iMovie? Don’t be ridiculous.
New Aluminum Macbooks (from Autumn 2008)
Firewire port removed on 13” Macbooks but left on 15” Macbook Pros.
With measly other cosmetic features, the price hiked from £699.00 to £929.
White Macbook RAM downgraded from 2Gb Standard to 1 Gb standard.
Price increased from £699 to £719.
(This has since been changed back to 2Gb).
These veiled rips-off make a complete mockery of customers. Rather sadly, I’m afraid, loyalty to Apple has had its day.
I agree that Apple is sort of neglecting the Mac, but I disagree about the cause. It’s not that the other parts of business are doing even better. First, your graph is wrong in so many ways. You shouldn’t compare Mac, iPod and iPhone unit sales, each product is in an entirely different category. At the moment, the iPod starts at $49 and its average selling price is about $150, for instance. The Mac ASP is hovering around $1,500, 10x as much as the iPod. Therefore, the iPod will move more units, this is a sure thing, a direct comparison is thus impossible. Unit sales is not the best metric to make your point; Apple mainly cares about revenue. Can you guess which product is more important for Apple in terms of revenue? Why, yes, the Mac. See graph:
I think this explains why Apple is not in a big hurry to unveil new models. From their point of view the Mac is already doing good, it’s still the main business, and there are more pressing matters to attend to. The iPod growth is slowing down and Apple is busy building itself a new cash cow, the iPhone. (Most of the iPhone revenue is deferred, its importance is difficult to represent in a graph. I’m using vanilla GAAP numbers and the hell with it, but there is more than meet the eye.)
“Its time for Apple to license OS X.”
Agreed wholeheartedly.