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Apple Considering a Break-Up?
rlthomps-1 writes "Despite Apple's recent sucesses with the iTunes music store and the latest round of PowerBooks, TheDeal.com has an analysis of the options that Apple investors might force the company to take, including a breakup into separate hardware and software companies, a merger with both Universal and Pixar, or a leveraged buyout by private investors. Their analysis points to Palm as a case study for a successful breakup of a company that made both operating systems and hardware in a competitive market. Could separate Apple hardware and software companies revitalize the brand and challenge Microsoft's monopoly?" He forgot to call Apple "beleaguered;" however, he did say their decades-old position is "untenable."
There is nothing new in this article that hasn't been said before and argued to death. This will never happen under Jobs' reign, as this is exactly what he reversed after he returned to Apple.
Some points:
There is still no sign that non-tech people using PCs will switch to an Apple-built OS, especially not in the numbers that would justify the port.* (Note that PC users currently aren't switching to other OSes in big numbers. Remember how Sun was considering cancelling Solaris for Intel?)
The jury is still out on Palm Source. It is far too early to consider it a success.
There is no sign that Apple shareholders are particularly discontented.
*Yes, we all know that the port exists. The problem is the cost of maintaing the port as a consumer product (esp. all those drivers).
I don't see this as very likely. OSX is so good because it runs on very specific hardware. Since the hardware is so limited they can optimize a whole lot. The same reason video game consoles have better graphics than the pc even though the hardware is half as fast.
If there is a breakup of some sort it will be awesome though. That virtually guarantees OSX for x86.
The GeekNights podcast is going strong. Listen!
Apple currently has several wholly owned subsidiaries such as:
FileMaker - database sw
Emagic - audio production hw & sw
PowerSchool - student information system sw
These subsidiaries are all primarily software companies that were purchased to round out Apple's offerings on their platform. Steve has long touted Apple's strength being it's ability to control and integrate both hardware and software.
I could however see some of the following happen:
? WebObjects sold to FileMaker
? Webobjects becomes it's own company
? Alias/Wavefront acquired as W.O.S.
? AMD($2.6B) acquired by Apple($6.8B)
they're forgetting that Microsoft got to their dominant position by illegally abusing their monopoly.
Oh, come on. "Microsoft got to be a monopoly by illegally being a monopoly." Huh?
Microsoft got to be the dominant OS provider by giving the market a product they wanted at a price they wanted to pay. That's all there is to it. Whatever happened after they made it to the top of the heap is entirely separate.
I dislike Microsoft as much as anybody... well, okay, that's not true. I dislike Microsoft a lot, but way less than your average Slashbot. But let's be fair about this. Condemn them for what they did wrong, praise them for what they did right.
Palm is quickly on their way to becoming the "Iomega" of PDAs -- fast start, no forward momentum, and eventually moribund.
You say that based on what, exactly? My girlfriend dropped her Palm Vx on Friday and broke the screen. (She's an MD, so she's hell on Palms.) We went to the store and looked at all the options, and decided on a Tungsten T. Built-in Bluetooth (which is more of a gimmick than a real feature right now, but that's just because iSync isn't quite there yet), bright color screen, incredibly fast, expandable, $500. If she'd wanted fewer features, she could have bought the m515, or even the Zire thing.
Palm is still the standard against which all PDA's are judged, and rightly so. They do it right.
Geez, did reading that article make anyone else's temperature rise? The whole thing is a mishmash of poor conclusions based on shaky assumptions, with a little bit of misinformation thrown in. Apple doesn't have a 'proprietary PPC' microprocessor. Why would people want to buy OSX on their PC? Half the non-computer people I know don't even know what version of WINDOWS they're running. And given that Dell and HP have had such a time trying to offer Linux on their machines without Microsoft breathing down their necks, this author and those analysts think that OSX on Dell is going to fly? What fantasy world do these people live in?
- it-yet articles.
Splitting up Apple MAY be a good idea, but the way they propose and the conclusions that they come to are all stupid. If it's a good idea, it's not a good idea the way THEY'VE laid it out.
For anyone that hasn't read the article yet, don't bother. It's another one of those Apple-is-already-dead-but-they-just-don't-realize
Steve jobs seems to be leveraging the HW/SW integration as a strength to make mac systems work as well as they do. I don't think he wants to give this up.
Exactly. In his keynote speech at Macworld in January, Jobs stated that he wants the Mac to be the digital hub of your home, business or school. He wants the Mac to be the best by having the hardware and software completely integrated. The iLife software package is proof of Apple's commitment to making Macs enjoyable and easy to use for everyone. The new release of iTunes Music Store only confirms Apple's commitment to both hardware and software. They are both close to Jobs' heart, and they should be close to the shareholders' hearts as well. To split the company up would negate all of those wishes.
To me, Apple stock is on sale. Sure it hasn't moved in a while, but if I buy a whole bunch, that in no way implies that I want them to split the company up, as the article suggests. I am merely waiting for the next big thing that's going to send the stock soaring. This happens with Apple every once in a while. Good things that happen with this company are always preceded by negativity.
Just watch. You'll see.
Mr. Bond, they have a saying in Chicago: Once is happenstance. Twice is coincidence. The third time is enemy action.
DELL!
In seriousness, Anyone that believes Apple would perform better as two disconected halfs is a total idiot- and really doesn't deserve to own stock in any company!
Apple has built a whole merchindising scheme based on products integrated with hardware....
Nothing suprises me anymore...
> I own and love a Palm, and I still wouldn't buy the stock.
You're absolutely correct. If I were going to buy a PDA today, it would be a Palm, hands down. However, their business is doing poorly, and I see no way for them to fix themselves in the long run. That doesn't mean their PDAs aren't good; it's just that they're not positioned to be a strong business in the long term.
An additional problem is where will PDAs be in 3 years? The problem is, when people travel, three common things to carry are:
1. Mobile phone
2. PDA
3. MP3 player
The problem is the functions are starting to overlap. Mobile phones can store hundreds of contacts, and with iSync, they can be synched automatically. And since it's kind of silly to have to look up the number in a PDA and then type it into a phone, it makes sense that for plain phone numbers, the phone takes precedence.
Now for MP3 players, the iPod is the coolest. And it can store phone numbers and addresses too (although why you can't assign categories to the addresses so I can easily find one address out of the 600 in my iPod is beyond me!). So out of the three devices, if you have to give up one, it will likely be the PDA.
Therefore, between cell phones and MP3 players like the iPod, I think the regular PDA will eventually be squeezed out.
Perhaps Palm should have bought Rio a few years ago (before the iPod) and gone that route instead of stagnating with their PDA line. Or maybe they should have partnered with cell phone companies (and I don't mean that funky SprintPCS phone thing they built) to build a small phone with excellent synching capabilities.
Insert simplistic political, ideological, or personal proselytization here.
Even though there are several business practices which are uniquely prohibited for monopolies, rest assured that there are plenty of other illegal acts that businesses can and do commit - including Microsoft. Many of the resulting cases are settled out of court, oftentimes with agreements that are disproportionately favorable to the 800 pound gorilla.
If you are really so interested in the REAL world, it's about time that you accept the fact that Microsoft's big break came from striking a particularly favorable deal with some soft-headed IBM execs to sell a product that they bought off another company which in turn blatently stole from a genuine computer visionary. Their success has largely derived from using that break to foist a series of mediocre products on a largely ignorant public until they reached the critical mass necessary to quash nearly all perceived threats.
I hope that Apple continues to thrive. First, because I love an underdog. Second, because, whenever you use one of their products, you can tell that the people who made them really love computers - much like myself. I have never had that experience using anything made by Microsoft.
That strategy worked so well for sgi.
The only one who made out from that mess was Rocket Rick Beluzzo, who got a cushy job at M$ for hatching that brain fart. Although he isn't with MSFT anymore. I could see Steve playing Billy G's lap dog (yeah right).
Yeah, Apple should alienate their user base, force an inferior OS on them, with hardware that will be overpriced because they will feel compelled to use some of their own ASICs to do things more correctly than the PC/AT standard architecture. That will win them a big market share with people who already perceive them to be building non-compatible overpriced hardware. Otherwise, they could import whatever crap they can muster from Taiwan, and just call their decades of hardware engineering investment a write-off. That would obviously be the best course of action.
This smells like it was funded by Redmond.
-- Len
I am convinced that Apple has much larger mindshare than its market share shows. Apple users LIKE to use their Apples, and use them a LOT for a LONG TIME. I would bet the usage per dollar expended on Apple machines is much more favorable than for Wintel boxes.
As a consumer or a developer of applications that depend on good UI design and solid infrastructure (as opposed to cutting-edge performance-critical applications), I am interested in finding systems that work for me for a long time, not in finding systems that compel constant infrastructure hassles, learning and retooling costs, and on-hold music from unhelpful help desks.
THe existing Apple strategy will gain total sales and market share but only slowly. (At some point, it may actually shrink the total market size, as it returns more value to the consumer.) This may be small consolation for investors. The current strategy has a good chance of winning in the long run, but the turnaround will continue to be slow.
Splitting Apple won't help from the financial point of view.
Consider. Why does Apple suddenly have stunningly good software? There are three parts to the answer. 1) capitalizing on excellent pre-existing software (BSD and NextStep) 2) hard work by talented people and 3) a closed, finite set of hardware platforms.
Support random Wintel boxes and away goes your ease of development and low cost/high quality support.
If Apple splits in order to sell OSX to the WIntel platform, the hardware division suffers direct competition from Dell and the software division gets huge support nightmares in exchange for either a tiny market (post-OEM OS installs) or a market that MS has shown no inclination to share (commodity Wintel platform OEM installs).
There's no great market advantage to Aqua screens of death. Though I am sure they would be more attractive and polite, I don't think that's the best way to gain market share.
There are tremendous productivity and reliability advantages to an integrated hardware/software company for commodity machines, and Aplle stands alone in owning this space. Apple has it right and should stay the course.
If the investment community tries to derail this, Apple should indeed go to a privately held company, but held by people who appreciate the amazing work they have recently done and intend to hold to the plan to capture the eventual return. I wonder if ownership by a user consortium might actually work to protect the platform from this muddleheaded strategy.
mt