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Apple's Focus is Still Software
bonch writes "Via a Forbes interview, Steve Jobs reassures Apple faithful that despite the runaway success of products like the iPod they are still a committed software company. He also talks about the real motivations behind negotiating Microsoft's 1997 $150 million investment in Apple, the development that went into the original iTunes (only four months!), their future expected revenues, and much more. MacObserver provides an overview, and Fortune has excerpts here."
I watched Steve's kenyote speech, and he spent fiteen times as much time demo'ing software than talking about the Mac mini -- which I thought was the big event of the night. Some totally noncharismatic VP demo'ed Pages for ages, a band was called to demo GarageBand, and Steve generally spent a lot of time clicking around.
I ended up thinking "wow, Apple is really a software company that happens to make hardware".
If you want to read the full article, you need a subscription to FORTUNE magazine. Specifically, you need to enter the mailing address where your subscription is delivered.
By the way, I have it on good authority that NYU's Bobst Library, at 70 Washington Square South, New York, NY 10012, subscribes to a whole bunch of periodicals.
Wow, record time. Mods got an itchy trigger finger today?
Listen, the original iTunes was crap - I'm sorry. I'm a long-time Mac user and today's iTunes is worlds ahead of the original incarnation they put out.
Here's an old review. They didn't even add an equalizer (standard on MP) until the second release! Everything that makes the program useful today was lacking when they first released it. The only thing this had going for it was the fact that it was free - and, thankfully, that it got a lot better.
"My God, there really has been a genie locked in that bottle! Apple's innovation and creativity have been unleashed in a way that they haven't been in 20 years. Look at the results. This isn't a company about 5% market share; this is a company that is capable of competing with world-class competitors and achieving market shares of 65%, 70%, and even 90%."
.Mac (pronounced dot-mac) Internet subscription service, and a popular line of easy-to-use wireless networking gizmos to link computers and stereos and other devices in the home and office. And, of course, the iPod. The company has even become a player in retail with its 100 Apple Stores: chic glass and anodized aluminum temples that fuse fashion, technology, and reverence for personal creativity into something Jobs likes to call the "Apple user experience."
Steve Jobs, the silver-tongued king of Apple Computer, is explaining how the world's opinion of his company has risen with the triumph of the iPod. We're in our third phone conversation, following up on a 2 1/2-hour interview in the Apple boardroom a few days before. Jobs is obviously feeling good, and with good reason. Overnight, it seems, Apple has broken out of its box as a boutique computer maker and emerged as a force to be reckoned with in consumer electronics, music, and who knows what else. "The great thing is that Apple's DNA hasn't changed," he says. "The place where Apple has been standing for the last two decades is exactly where computer technology and the consumer electronics markets are converging. So it's not like we're having to cross the river to go somewhere else; the other side of the river is coming to us."
Apple's recent achievements, in fact, make it look as if it is walking on water. Its stock price, which languished during and after the dot-com crash, suddenly more than tripled last year. (It recently hit an all-time high of nearly $80 a share.) In January, Jobs crowed that Apple had posted the highest revenues and profits in its 28-year history for its fiscal first quarter ending Christmas Day. Propelled by sales of 4.6 million iPod portable digital music players, revenues zoomed by 74%, to $3.5 billion for the quarter, putting the company on track, by analysts' estimates, for a $13 billion 2005. Meanwhile profits more than tripled.
The DNA may not have changed, but the external transformation is dramatic. No longer is Apple's business limited to computers--though it did sell more than a million Macs last quarter for the first time in four years. Today the company's ever-expanding products encompass multimedia applications for creative professionals and consumers, the thriving
In his first extended interview since undergoing surgery for pancreatic cancer last summer, Jobs eagerly explains how Apple has pulled all this off and drops hints about where the company is going and how big he expects it to get. (For excerpts from the interview, see 'Our DNA Hasn't Changed'.) But as the conversation unfolds, Steve doesn't talk about the next gotta-have-it gizmo or ultracool ad campaign or trendsetting industrial design. None of those, he says, is Apple's core strength or primary competitive advantage. Instead he's going to talk about software--the central strand that runs through all of Apple's success.
Steve being Steve, he's doing this partly because he's selling something. This spring, Apple will unveil Tiger, an update of its OS X operating system that, at $129 a pop, will generate hundreds of millions of dollars of high-profit sales. (More about Tiger later.) Even so, for Steve to credit software for Apple's success sounds so hopelessly dweeby, so Bill Gates, that it seems hardly worth muting your iPod for--until you consider the new business model it has helped Apple spawn. Indeed, the whole iPod phenomenon is, underneath it all, one big interwoven software creation. The iTunes jukebox that coordinates the mind-meld between your iPod and your Mac or PC is just the most obvious chunk of code. The iTunes Music Store, which accounts for 62
Why? Because you want to use OS X?
You're trolling, but it's worth pointing out that Apple would die a death if they ported OS X to x86.
Several things would happen:
* People would either pirate it or buy it for their PCs
* It wouldn't work as well on the non-vertically-controlled hardware, so people would believe it was crap.
* Microsoft would work it's typical magic with PC vendors and make it financially painful for them to buy Windows licences for their PCs if they also sold PCs with OS X on them, or with no OS. Microsoft do this already, which is why PC vendors only ship Windows-pre-installed machines.
* The market share for Apple computers would decrease.
Jobs was "buying time" with the Microsoft deal and the original iMac to maintain interest in Apple and its perceived viability while software engineers furiously worked to bring Mac OS X to market, which Jobs saw as Apple's biggest bet on the future.
I am personally glad they made the bet. OS X is what brought me back to Mac after over 10 years. I know some older Mac enthusiasts who swear by the older OS's, but those OS's were losing ground. I had to use PC's for the lack of software. They were great if you did graphical layout or things like that. The problem for me was the unavailability of Matlab. I simply had to be able to use Matlab. I needed the fastest way to do that and throughout the 90's that meant using a PC. Once OS X came in, Apple courted The Mathworks to port it to OS X. From my memory, The Mathworks said no, so Apple did the port themselves using X11. Once I saw that Matlab worked on Macs with OS X via X11--and it was both stable and fast, I immediately began shopping for a Mac....and have never regretted that decision.
Having done so much with so little for so long, I now can do anything with nothing at all.
Hmm, the way I remember it was different too. I had registered my copy of SoundJam on OS 9 and absolutely loved it. Then when OS X first came out, a carbon beta of SoundJam quickly came out for it. Then it mysteriously disappeared from downloading, with some vague explanation from C&G. When iTunes was released, it was very obvious that it was made from SoundJam, but with a number of features stripped out. Also, I remember that you didn't have the same player that you could skin, and that really annoyed me.
I don't know what SoundStep is, and certainly SoundJam was ready for market long ago... it was reviewed in MacWorld, it was a popular product.
Who knows.
If you want to make an apple pie from scratch, you must first create the universe. -- Carl Sagan
Because Apple has nothing to prove to you.
Jobs is right when he says Apple is a software company, you just don't understand what he means by that. A Mac is nothing without OS X. An iPod is nothing without iTunes. Cameras are nothing without iLife. Software is the center, the key to the success of everything else.
But quite smartly, Apple makes money off both. Now why would Apple give up billions of dollars just so they can win a bet you seem to have with them?
The next comment I write will be ready soon, but subscribers can beat the rush and see it early!
Jobs keeps claiming Apple is a software company.
He does?
Microsoft seems to be doing just fine living off of the OS market, why couldn't Apple?
Apple currently makes 95% of its money on hardware. They use that money to fund software development, including OS X. If Apple made a version for Intel, they would be competing head to head with MS's monopoly. MS has partnerships with all the hardware vendors, software developers, and peripheral manufacturer's. All of those companies and the PC manufacturers are completely dependent upon MS's goodwill to survive. How many do you think will agree to ship OS X by default when it means they are suddenly paying double or triple the software cost to their competitors not only on those boxes, but also on the rest of their boxes? Do you know how small the margins are right now?
They could sell independent of the PC manufacturers, but really how many boxed OS's are sold? Almost all OS sales are pre-installs. Basically, you can't fight an established monopoly with more money than god. Especially while destroying what is currently your main revenue stream.
"If they're so focused on software they should release OS X for the x86."
I see this argument based in two points.
* PC hardware is so much cheaper than Mac hardware that users can't afford to buy a Mac to try it
* PC users want the operating system (and maybe iLife apps) from Apple because it's so good.
The first point is rebutted nicely by the Mac Mini. Now it's relatively cheap to buy a new Mac. Sure, it's not the most powerful Apple available, but if I wanted to try out something to see if I like it, I wouldn't buy the top of the line and hope that I *really* like it a lot; I'd buy a cheap model and test it.
So Mac hardware isn't that expensive for users wanting to try out the Mac Mini. With resale values being reasonably good, a user could buy a Mac Mini, use it for three months and sell it at a total loss of maybe US$100.
The second point is a 'grass is greener' point. Although I happen to believe that the grass actually is greener on the Mac side, I wonder how users will go when they realise that not a single application they own or use will be available for OS X on x86 for some time.
That's right - even if Apple release OS X for PC hardware tomorrow, you won't be able to run anything with it. There's no software at all for it. Every single app will have to be recompiled to x86 binaries.
Sure, we might have a 'fat' binary like we used to with 680X0/PPC and now do with PPC32/PPC64, but there'd be precious few of them around. Adobe took over a year (from memory) to get Photoshop to OS X. Carbonising was a process a single engineer did in a weekend, but the company waited until they had a full release before they moved.
Over time, apps would be released. Apple would include a full development IDE with the OS to increase uptake. That's all fine, but it doesn't change the fact that it'd be a long wait for commercial software.
And then - why should a company like Adobe release PhotoShop for OS X PPC, OS X x86 and Windows? If a user already has the PC hardware, why code up a new version for the same hardware? Every version costs money to develop and maintain, and what would be the return? The new platform would be a new thing, and it's success would be entirely unknown. Any developer looking to make money from it might conclude that there's no market there. After all - business users already buy the hardware that runs the software they want. Wouldn't the customers of Adobe already be happy with the hardware?
And would Apple put this out for x86, or for AMD64 only? Why worry about an old technology? I suspect they'd just go for 64-bit on the PC and not even try to support 32-bit x86. The PC industry will move from 32-bit to 64-bit completely over the next few years, so why bother supporting technology that is being obseleted (rhymes with 'deleted')?
What about the average users? They're sold on the idea that Windows has everything they need. It's got Office, games, just about anything they want. Why should they buy into OS X on PC hardware? It gives them nothing new. They won't have Office or any games. They'll have Apple's iLife, Mail, Safari and Chess, but what else? Why should non-hobbyists (ie the vast majority) buy this?
I don't know who would buy OS X for PC hardware. I don't know what software developers would sell software for that platform, and I don't know why the average user should switch. I see lots of questions, but no answers. I don't believe this idea will work very well at all.
I have yet to figure out why they havent botherd to make an OS to run on x86 based systems rather then there mostly proprietary hardware
Heh, x86 is proprietary and closed. Intel reverse engineered it. AMD reverse engineered it. Transmeta has an implementation. Contrast this with the PowerPC platform. IBM wrote most of the specs. It is completely open and documented. IBM and Motorola sell large numbers of systems and their is no barrier for any other company to enter.
In Bizarro world "closed but popular" means "open" and "open, but not as popular" means "proprietary."
If apple botherd to try and spread out into the larger PC market they would slaughter MS rather quick and I woudlent mind seeing it happen. Apples software is limited mostly to apple branded hardware and that limits how well the company can compete.
Yeah because so many companies have done well competing with a company convicted of abusing their monopoly to stifle competition. That is why OS2 and BeOS are so popular. It is especially a good idea to destroy 95% of your income by entering into an overpopulated commodity market where all but one player is losing money at the same time as trying to compete with said monopoly. Brilliant!
I think you hit the nail on the head. I am seeing a lot of slashdot articles and discussion about "Oh my god, look how small it is! People will line up to buy this!", but for a windows user my entire life like myself my thought was "I've heard so much about OSX I'd like to give it a whirl, now I can finally afford a machine to run it." OSX is by no means perfect, there are some annoyances, but I am so much happier with my new mac mini than my windows box. So much so that I haven't booted my windows box since the day I got my mini.
And to anyone else in my same position who hasn't even tried OSX, the learning curve is surprisingly small. I recommend David Pogue's OSX: The Missing Manual Book which helped translate windows fuctionality to the mac equivalants. Also check out The Top 100 OSX Applications, it has helped me determine what the mac equivalant of my favorite windows software is.
Quidquid latine dictum sit, altum viditur
Yes, their non-voting stock would be worth well over $1 billion if they hadn't sold it years ago (for a decent profit even then). Without mentioning this people might still believe that "Microsoft owns (a part of) Apple". Duh.
Nice article other than that though.
"I tend to think of OS X as Linux with QA and Taste", James Gosling, creator of Java
...PC user's will have *choice*... they could even have Windows+OS X on the same desktop. And it is *choice* where Apple will dismantle the Microsoft monopoly.
OS X is _NOT_ a monolithic OS, like Windows. Once Apple have OS X prepped and prepared on its modular foundations (no its not all there yet), Jobs will be able to rev OSX thrice for each new release of Windows. In a sideXside environment, OS X is going to look more modern, capable and powerful than Microsoft's aging sibling in the adjoining *window*... developer's will have a choice, user's will have a choice and Microsoft will have no choice... does anybody get it?