Apple Should Get Out of Hardware?

SQLGuru writes to mention an analyst recommendation being reported on ZDNet. Despite a BusinessWeek article about Apple's record breaking hardware sales, the folks at Gartner think Apple should get out of the hardware business. Calling for the company to license its hardware to Dell, the analyst company says that gains in Apple's hardware sales are simply not sustainable. From the article: "Apple's margins for its Mac business, currently around 40 percent, are only sustainable because component makers such as Intel choose to prop up the business, Gartner claimed. Given that HP has forced Intel to offer it comparable pricing to Dell, Intel is unlikely to continue to subsidise Apple, the analyst argues. 'As a result of permanently changed market conditions, Intel has been forced to restructure and, in our opinion, cannot go on supporting Apple (or any other customer) indefinitely.'"

Comments

Re:This comes up often...

[falcon5768]

Mac OS X is a decent OS, but not good enough to convince companies and schools around the world to spend thousands on software to make the transition away from the more commonly used Windows OS.

This is a problem of Apples sales, not of the software. If Apples sales force did better at showing that its more benifitial to spend thousands on stuff that works, versus thousands on stuff that needs thousands more to work after wards then Apple would do great. OS X it's self is far beyond a "decent OS." Its probably the best consumer OS on the market bar none.

Apples margins are due to Macs costing more.

[argent]

I find no evidence that Apple's margins mean they're getting a better deal than any other manufacturer.

Apple is simply able to charge 40% more for the same hardware because people are willing to pay 40% more to get Apple's software. This has been consistently true... even back to when Apple's software was built on top of rotting dogmeat held together by formaldehyde and Reynold's Wrap. Now that Mac OS X is a first-class operating system in its own right, they're easily worth the premium.

You can do the calculations yourself. I did. When I got my Mac mini I was able to find a number of objectively better Wintel-compatible computers for under $300. I put together a package on HP's website. I put together a machine using generic parts and paid retail prices for them. That's 40% all the way down to the low end.

Apple's margins aren't due to any sweetheart deals from manufacturers.

Personally, I would love to see Apple get out of the hardware business. Not so much because their hardware is unexceptional and expensive, but because it's an ergonomic nightmare... whoever is responsible for the keyboard on my Macbook Pro has a special place reserved in hell being forced to climb flaming rocks while his wrists are flayed to the bone. I'd prefer a Thinkpad and a copy of generic OS X to run on it any day.

It's not going to happen though, not as long as voluntarily handicapping themselves like this keeps them out of Microsoft's gunsights.

One out of three ain't bad...

[argent]

Apple's products are better because of the software, the industrial design and the build quality.

As I sit here with my overheating Macbook Pro using a Dell keyboard and a Microsoft mouse because Apple's horrid keyboards and stylish-but-unusable "might mouse" aggravate my RSI something awful, I can only say "one out of three ain't bad". It's the software:

But the real kicker is that if you want to run Mac OSX you have to buy Apple hardware.

Yep. that's the one.