A Look Back at Apple's 2003

Samvit writes "The end of the year is upon us, so it's naturally time for those retrospectives to start coming in. Ars Technica has a fantastic look back at Apple in 2003. 2003 was one of the biggest years for Apple, arguably the biggest in a very long time. Still, Ars is typically fair, so the author lays down not only the good in 2003, but also the bad and the ugly. There's a bit of prognostication going on too--a little something for everyone."

Comments

What about their bottom-line strategy?

[GeckoFood]

As I read through the article, I saw lots of ooh's and aah's over the cool toys and services they are offering, as well as the integration to certain systems. The iTunes service was acknowledged as their biggest gainer.

Ok, so they have all of this cool technology and neat services. So, now what? How are they working to increase market share and compete with the Wintel market? It's one thing to shore up the market you have, but when that market is relatively small, that leaves one to wonder how to expand. What do they intend to do about a limited market share? The article does not say that. iTunes might be making money for them now, but how will they keep it on top with new competitors emerging?

Re:What about their bottom-line strategy?

[GoofyBoy]

There are two ways to go about doing business.

You can be the big, for-the-masses, beat-them-with-price company. Examples of these are Wal-Mart and McDonalds.

You can be the small, speciality, beat-them-with-loyalty/quality company. Examples of these are Gucci and Apple.

As long as they steadly increase profit each year, why should Apple change their ways?

Re:What about their bottom-line strategy?

[Frymaster]

How are they working to increase market share

and market share is important because why?

the goal of apple is to be a successful, profitable company - not to "beat" windows. bmw and mercedes-benz are successful car companies. and you don't hear the shareholders whining that they're not beating ford on the market shart front...

Re:What about their bottom-line strategy?

[tbone1]

This is a legitimate question, and the honest answer is "I don't know". I don't think anyone outside of Apple knows. However, they have been positioning themselves for a big strike at market share; certainly they are better poised for that now than, say, five years ago. In fact, one never know about this. When the iPod was introduced, I yawned like most people. Now I own one, wish I'd gotten a bigger one, and it is proving to be a "killer app" on the hardware side, when coupled with iTunes. That combination allowed them to create and dominate a market, pay for downloadable music. (Admittedly, it's still early for that market, but still.) That may be levereged for other things; who knows?

I will say this, from what I've seen Apple has the infrastructure and processes in place to make that strike, which I didn't see them having in years past.

Re:What about their bottom-line strategy?

[droleary]

The iTunes service was acknowledged as their biggest gainer.

Kinda hard for that not to be the case: they sold an infinitely larger percentage of music this year compared to last. :-)

How are they working to increase market share and compete with the Wintel market?

What makes you think they have to? It's like you're saying that BMW needs to compete with Toyota's numbers for "road share". Apple makes a profit and does so while innovating ahead of the curve. With that business plan, they'll be around for a long, long time.

It's one thing to shore up the market you have, but when that market is relatively small, that leaves one to wonder how to expand. What do they intend to do about a limited market share?

Now you're just being moronic. The reality is the exact opposite of what you suggest. Apple is a success with 5% of the market; it has 95% of its potential market untapped. Microsoft has 90% of the market; it has just 10% of a potential market left. If you need to worry about how any company can capture a larger marketshare, worry about MS.

Re:What about their bottom-line strategy?

[sbma44]

marketshare *is* essential. It puts you in control of your own destiny. You don't have to have >50%, just a competitive share.

Interoperability is essential for computing. It's like language: english may not be the most efficient thing we could use on slashdot, but interoperability is the deciding factor.

Given that, if you only have 5 or 10% of the market, you will always be at the big guy's anticompetitive whim as they decide on some new proprietary standard that locks you out. Then you suffer losses for 12 months until the courts tell them to stop.

Apple doesn't have to be bigger than MS, just big enough that MS has to ensure they're products work with apple, the way apple has to be sure their products work with MS.

Re:What about their bottom-line strategy?

[Bytesmiths]

How are they working to increase market share and compete with the Wintel market? ... What do they intend to do about a limited market share?

Ah, yes. The old "market share" argument.

That's why Porche, Leica, Gucci, Hummer, Rolex, et. al. are all going out of business. That's why rich people buy posters at Wall-Mart instead of original art or even (gasp!) pseudo-originals like Thomas Kinkaid reproductions. That's why there are no houses on the market over about $250,000 or so. That's why fine dining has gone out of style, and the hoi-poli are all eating at McDonalds.

But it gets even better -- a Hummer costs at least 4x the price of a Kia, yet they will both get you to work in the same amount of time. A Rolex costs thousands of times more than a watch at the Dollar Store, but they both tell the same time.

But the new G5 is within a few percent of the price of an equivalent Dell, Compaq, Gateway, etc.! So YOU can be part of the hoi-poli on a budget!

Chasing "market share" is not an innovator's game. (Look what it did to Apple under Sculley.) The masses (Geoffry Moore's "mice") will always choose a product for reasons other than technical innovation. It's the "gazelles" that drive innovation, and they are always a minority, almost by definition!

So leave the market share game to those whose specialty is super-efficient manufacturing and marketing. And if you want the absolutely cheapest computer that everyone else has, it's a great time to own a Wintel machine! :-)

G5!

[BWJones]

I must say the biggest deal for Apple this year has been the advent of the G5 with significant help from IBM. Throughout the G4's life, I had been a supporter of Apple and in particular OS X because of the efficiencies that the OS provides. However, in raw number crunching power, the G4 simply did not scale in performance leaving me to do much of my hard core scientific computing on Intel or AMD hardware. However, now we have G5's, there is simply no comparison. I can now have the most efficient OS and the fastest CPU available in one platform. Apple needed the G5 and that I would say is the single biggest product Apple has come out with this year.

iPhoto performance?

[Otter]

The ugly: iPhoto performance with large photo libraries

That's their gripe on the software front? I'd say _THE_ single biggest screwup for 2003 was destructive software upgrades. The number one selling point for Apple is that things just work and you don't need to worry about them. Whatever they've been doing for QA on their upgrades, it needs to be massively revamped.

Re:apple should get out of the PC business

[presearch]

Although this has been beaten to death, let me take a quick whack once again.

x86 OS X makes little sense. PC people just want cheap compatibility with other
cheap Windows compatible people and workplaces.

Apple would sell less boxes if all they could compete on was design.
They would eat up any profit by attempting compatibility with the umpteen
billion PCI cards out there. Any profit that would be left would be eaten up by
dummies asking why the Windows game they bought doesn't work.

Slashdot would be full of comments on how you should just run Windows
instead of the emulation layer.

Current users of Mac stuff would have no end of fat binary grief.
All Mac developers would have to ship fat binaries and double
the support load in addition to the size of the distribution.

Things are fine they way they are for now. Let x86 die the quiet death it deserves.
And Windows with it.

Re:apple should get out of the PC business

[tgd]

This is real simple, for the 10,000th time its been stated on here.

Apple writes an OS to put on its hardware. It makes its money on the hardware. There's no reason for it to run its OS on anything else, because its not in business to sell software.

Its identical to Apple selling music to get people to buy iPods. Apple isn't in business to sell music, they're business to sell hardware.

They always have, and very likely they always will.

Re:An alternative to Longhorn...today

[the_rev_matt]

I've been hearing the "PCs are cheaper" argument since the early 90's at least. One problem: It's never been true. Sure, you can buy a PC for less than you can buy a Mac. But you cannot buy a PC of *comparable quality* for significantly less.

After college I sold computers for a few months at Good Guys. The was when the pentium processor was first introduced. A decent IBM (actual IBM, not a cheap crappy clone) was about $1400. A comparable Performa was about $1600. But the Performa came with a nice monitor, which was worth about $200. Gee, same price after all. You could pick up a Packard Bell for 1100, but they were pure garbage and got returned as defective more often than not.

These days you can buy a low-end computer for as little as $200 from Wal-Mart. By this logic, no one should ever buy a Dell or Gateway, because they cost more than the Wal-Mart PC. It's cheaper for a reason. Try it yourself. Look at the specs for an iMac or eMac and then spec out a Dell or Gateway of comparable power and quality parts. I doubt you'll find a difference of more than a few tens of dollars.

Re:Right Track

[iSwitched]

Bad for Linux?

First, do you have proof that OS X has significantly less 'substance' than Linux? Or is this just an opinion. Let's assume for a moment that I'm not just feeding a troll here.

Linux is a tool, OS X is a tool, some people prefer one, some another. If the number of people preferring OS X begins to outstrip those preferring Linux, then the Linux community has two choices:

It could pull a microsoft, wring its hands, and decry Apple as anti-choice and un-american, or...

It could stop bashing for just one second, examine what is being done that is good and innovative, evaluate why people are making the choices they are, and then compete, hopefully building a better Linux along the way.

How on earth could this be bad for Linux?

Re:Applause

[afantee]

You do realize that you are comparing Apple against the whole computer industry, and there is no single box maker in the Wintel world that is remotely as innovative as Apple.

The original iMac is the first legacy-free PC with built-in USB, Firewire and wireless, and its industry design has inspired not only computer makers but also designers of a wide range of products from mobile phones to printers. AFAIK, no consumer PC in 1998 could match the iMac in features, and it actually took the industry 2 to 3 years to catch up with Apple.

Dell is a cheap copycat with zero software and insignificant hardware engineering compared to Apple. Apple is 40x smaller than MS, but its software portfolio is comparable and often better than MS products.

Re:It's definitely the price

[alienw]

Sure, if you're willing to pay $5000 for a machine, maybe Apple is pretty competitive there. Most people out there buy something in the $1500 neighborhood (for a desktop) and there PCs clearly beat any of Apple's offerings.

Also, you have to look at how contrived the guy's examples are. He compares the desktop G5 to a server-class Intel Xeon. Obviously, the two are extremely different. The Xeon is an order of magnitude more expensive than a desktop processor. Comparing the G5 to an Athlon 64 or an Opteron would be more appropriate. Then, he goes on to compare a low-end Radeon 9600 to an Nvidia Quadro, a professional card! Then he goes on to bitch about how the soundcard sucks, and so on, when he could easily get a different one. It's more a comparison of Apple versus Dell. Which is not fair; the two serve completely different market segments.