The Cattery

The Cattery

Intel Inside... but who cares?

11 January 2006
Filed under Mac, Technology, Text

Charles Wright, one of our local tech pundits, spat out a quick five hundred words on the Apple/Intel deal this afternoon, at the end of which he said he’d “be prepared to put money on Apple building market share”. I started responding on his site but as usual got a bit overblown and was ultimately thwarted by his commenting system; I’ve shifted my views to my own blog (where, frankly, I should be sharing them more often). Anyway, my very off-the-cuff take on the new Intel Macs and their potential for building marketshare is this:

While Jobs and co. might not see it like this, Apple’s marketshare is almost irrelevant in this case: the shareholders want profit, which they can as easily get from niche, high-markup products like the bigger iPods, iMacs and Powermacs as they can by flooding the market with cheap/Intel Macs. Getting into cut-price competition with the Dells of the world by releasing crappier, less ‘Appley’ machines only stands to erode Apple’s hard-won reputation for style and quality, and I can’t really see Apple going down that path.

Where Apple stands to gain marketshare in the long run is not by competing directly with PCs, but by doing what it does best, which is innovating. The iPod is a classic example: through innovation, Apple defined a market, and then set about dominating it. (Expect the same thing to happen to the PVR/Media Centre market later in the year). Putting Intel processors into Macs isn’t an innovation, and nor is it a step backwards; it’s just a kind of flirtation with the tech pages of the papers. The only people it’ll really appeal to is design-minded computer nerds who’ve always wanted a Mac but haven’t been able to part with VIM (or whatever); once the hacks for running Windows and Linux on an iMac are out there, expect to see these types trickling into Apple sellers country-wide.

For what it’s worth, I think the most exciting thing to come out of Macworld this year is the MagSafe power connector - as usual with a new Mac, the devil’s in the details. Forget the processor.

Views from the Floor

Joseph says:

I wouldn't be surprised if "products" became more and more of a sideline for Apple -- both hardware and software. There's not enough margin in innovation for them to grow, particularly now. I mean, they foot the bill for the research and design, but with everyone watching them so closely in this great extended iPod honeymoon, their window of niche profitability henceforth is very brief. Dominance in innovation is a "competitive disadvantage", as they say.

Dominance in services is an advantage, and they're likely to focus more and more on media distribution. Problem they've got is that such a move will likely cause a backlash in their very sensitive heartland, and their greatest asset will overnight become a significant liability. Not a dilemma I'd like to be confronted with.

Chai says:

Apparently, IBM wasnt responsive to Apple regd the Power chips. Plus I can imagine a percentage of existing Intel owners switching over, seeing that it is chip compatible (assuming Apple doesnt make it require some special firmware to force people to but "special" Intel PCs).

Virginia says:

I can see that Apple's attempting to position itself as a media company, but unless its leaders start to have a much more open-minded attitude to making their content work on non-iPod platforms they'll struggle to maintain dominance. The iTunes > iPod thing is a cosy little circle of love right now, but they need to be establishing themselves much more quickly among the mobile phone makers of the world (the Motorola thing has been an awful, unmentionable flop for both companies) if they want this closed network to keep working for them.

Anyway, while I can see Apple shifting its focus somewhat, I don't think it will need to ditch its hardware/products business: Apple's got wads of cash to play with, and for a while at least, the shareholders will be as excited to see what marvels can be produced with it as I am.

Tom says:

On a less eloquently technical note, the MagSafe Power Connector looks cool! I'd buy one just for that.

Power cord goes in, power cord comes out, power cord goes in...

Khoi Vinh says:

I have to respectfully disagree, here: attaining greater market-share doesn't necessarily mean fighting price battles on Dell's terrain of razor-thin margins. Apple has every reason to want to grow its market share and so do the company's shareholders, but it is possible to do so while maintaining their traditional gross margins. The company's move to Intel fits perfectly with that aim.

Granted, I think a distinction needs to be made between growing market share and becoming dominant in the market. I would guess Apple is realistic about this: they know they can perhaps achieve 10% or maybe even 15%, but beyond that is a pipe dream.

My point is that market share absolutely is relevant, at least insofar as the platform's ecosystem goes. The better the share, the fewer mac versions of products get canceled or get dumped on the shelves in absolutely crap form (looking Intuit's way here).

However, I'll concede that it's possible that Apple's smaller market share is the ideal condition for its true value, which is, as you say, innovation. It might indeed be a better strategy not to become a 10% market share player if it will mean the lack of focus and direction we saw in the late 1980s/early 1990s.

Virginia says:

I guess my point was really that marketshare isn't relevant to a discussion about the use of Intel processors: there's a whole lot of other stuff that Apple needs to do (some of it is happening already) to make people buy their computers, and for the consumer, the processor is basically unimportant. It might help a little from a marketing perspective, particularly if you want businesses to buy your product, but that's never been Apple's game, and I don't think that it is now. Not for the moment, at least.

In fact, I think that the move to Intel is quite closely tied to Joseph's point about content delivery: Apple wants a hardware DRM solution for iTunes / iFlicks / iWhatever, and Intel's providing it.

Chai says:

Article on /. regd cost of switch to Intel.

http://apple.slashdot.org/article.pl?sid=06/01/19/1543231&from=rss

Patrick Porter says:

Hey Virge,

as a right-winger I guess that makes me EXTREMELY FUNNY

how are things? nice to see you at dd's wedding, he's giggling as I write this, which means he's right wing as well.

drop in on my blog and abuse the shit out of me some time.

Patrick (aka Red Mist, Corpulent, etc)

Speak, friend, and enter


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