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Apple CFO Gives Info on Company Direction 418

Posted by Zonk
from the no-plans-to-make-furniture dept.
osViews.com writes "Mac World is reporting a recent talk given by Apple's Chief Financial Officer (Peter Oppenheimer) at the Goldman Sachs Technology Investment Symposium. The article illustrates several things about about Apple's business plan, much of which is totally new information about the company's current and future direction. Here's the nutshell summary: iPod "Halo" effect is causing some Windows switchers, little demand for satellite radio/iPod integration, iPod shuffle margins below HD ipods, happy with rate of growth - no plans to license OS X, margins on Mac mini equal to eMac (both below corporate average), retail store to expand to 125, no plans for media center PC - prefers to stream multimedia to TV from primary computer over wireless network, no video for iPod, portable media centers a failure."
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Apple CFO Gives Info on Company Direction

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  • So, Mac's dying? (Score:0, Insightful)

    by Anonymous Coward on Saturday February 26, 2005 @07:18PM (#11789993)
    no plans to license OS X

    That stubborn and insanely stubborn backward mentality is what's finally going to sink Apple. Apple needs to expand to the PC world and the PC world needs OS X.

    Considering Linux and all, OS X is the only real desktop alternative.

  • great submission! (Score:5, Insightful)

    by KingPrad (518495) on Saturday February 26, 2005 @07:19PM (#11790004)
    Kudos to the submitter and the editor for posting a useful and interesting story with a useful and concise summary. I wish we had more stories done exactly like this one.
  • by Anonymous Coward on Saturday February 26, 2005 @07:22PM (#11790024)
    I seriously doubt Apple will release something until after Tiger, as such a device will undoubtedly push h.264 video, and Apple will want to have their h.264 implementation in QT7 out the door first.
  • by TWX (665546) on Saturday February 26, 2005 @07:27PM (#11790051)
    That depends on how much it costs to develop, and how many computers are already owned by the target audience. I have a video projector and a lot of other AV equipment and I've had various rackmount form factor computers hooked up to it. I like having all of it right there usable with the wireless IR keyboard. For quite some time my DVD playback was through the computer. I've since taken that computer apart and not gotten it back together, so right now I'm without a web browser in there.

    If too many Apple fans already have a G3 or G4 tower laying around that has been obseleted by a more powerful Apple then they probably would hook that computer up instead of this one. Even an iMac could be integrated into an AV cabinet using a "TV View" or other VGA to NTSC device, or people could upgrade to something nicer like a TV with RGB inputs or digital. If too many people have other fairly easy options then Apple won't sell enough of these "Express 2" devices to pay off the development costs, let alone get into profit.
  • by solios (53048) on Saturday February 26, 2005 @07:32PM (#11790076) Homepage
    Everything Apple's ever done has, according to people who get paid to be taken seriously, been the death knell of the company.

    And the only thing that's stopping some people from buying Macs isn't the price point or the applications, it's the games.

    Feel free to spout off the list of everything with Mac support, and realize that Painkiller, System Shock, GTA, Half-Life, Half-Life 2 (and by extent Steam, CCS, etc) and a shitload of other games aren't available. And several Mac ports have been gutted on the way over- it's an old example, but Baldur's Gate for the Mac is missing multiplayer and any character customization capability.

    There's a large chunk of the vocal PC userbase who use the thing as glorified nintendo- it's really (imo) the ONLY area where the PC has any kind of advantage over the Mac.
  • and one for you (Score:5, Insightful)

    by Anonymous Coward on Saturday February 26, 2005 @07:32PM (#11790077)
    running OS X on a piece of shit Fry's discount x86 box doth not a Mac make.
  • by Dark Paladin (116525) * <jhummel@@@johnhummel...net> on Saturday February 26, 2005 @07:36PM (#11790093) Homepage
    no plans for media center PC - prefers to stream multimedia to TV from primary computer over wireless network


    I don't buy that Apple will buy Tivo, but I can see them creating a Tivo-like device with these abilities:

    DVR with free remote control service (why free? wait a second)
    Ties right into the iTunes Movie store.

    Right, Movie store. Imagine Jobs going to the MPAA and saying "Hey, remember all the problems the RIAA had with downloading? Lawsuits didn't help enough - but now we have legal music, and people are buying music online, and look how many songs I've sold.

    "Join with me, and we can end this pointless conflict, and bring order to - *cough*, I mean, we can sell movies."

    The PC/Mac will still be the hub - use iTunes to buy music, or buy a movie. You can put either on a new iPod, but for the movies, the iView (just a name I threw in) will be the best way.

    Want to watch a movie? Forget Netflix - just use the iTunes store. How about a documentary (independent movie makers who have limited releases would love this - what if you could pick up a documentary for $10, and around 50,000 people all wanted to - now that little indie project just broke even).

    Miss a TV show? Why DVR it (though you have that power) when you can go to your computer, type "Battlestar" or "Babylon" to get the entire current archives (including commercial), and for $3 (or $20 for the entire season), you can watch your movies *now* (or, with broadband and figuring about 300 MB per 30 minutes, about 30 minutes or so).

    The biggest thing of this is what it turns Apple into. With the iPod and the iTunes Music store, apple is moving away from hardware systems, and going towards hardware accessories and services. Eventually, I can see a Linux client - but in the end, Apple won't care what you run as long as you buy an iPod and use their iTunes store for movies and music - they still make money (though they'll still tell you a Mac will work better, and as the services do well they'll sell more Macs along the way).

    Anyway, that's just my opinion. I could be wrong.
  • by Wonderkid (541329) on Saturday February 26, 2005 @07:39PM (#11790108) Homepage
    OSX is in fact irrelevant to Apple's future, as are most other major operating systems to their creators. What is the future, and the iPod and Nokia's 200million per year mobile phone sales prove, is that various interconnected devices that confirm to industry standard protocols are the way forward. The electronic musical instrument industry has proven this thanks to the amazing success of MIDI which binds most instruments, yet each instrument is based on it's own unique software/hardware. OSX will become a server OS and Apple will eventually tailor software to suite the client device - as per the iPod which communicates with it's host using standard protocols (USB, MP3, Firewire etc). And if Apple don't (continue) to do this, an as yet unheard of (unformed?) company will, and they will sell products in the sort of quantities Nokia do, which dwarf even sales of the iPod and Mac. Ironically, Nokia could become the all powerful mega entity that networks our world. After all, the future is all based on communication and sharing.
  • by Leo McGarry (843676) on Saturday February 26, 2005 @07:47PM (#11790150)
    No, college kids buy iBooks. Mac minis are no good for dorm-bound teens. The Mac mini is specifically for switchers who are replacing an obsolete PC with a new Mac.
  • by mrchaotica (681592) on Saturday February 26, 2005 @07:49PM (#11790175)
    unlike Apple's laptops, it doesn't cost a mint
    Bullshit. An iBook only costs ~$400 more than the Mini, and that's including a keyboard, mouse, LCD screen, battery, and portablility. At least an equally good value, I'd say.

    I am a college student, and I bought my "good for college students" Mac more than a year before anyone had even heard of the Mini! Saying "the Mini is a good value" is good, but saying it's the only Apple with good value is just FUD.
  • by ilyagordon (822695) on Saturday February 26, 2005 @07:58PM (#11790236)
    Heh, good point. The thing that bothers me the most about Slashdot story submissions is that they fail to give any background information of what the hell they're talking about. The thing that bothers me almost as much is when links within the submission must be clicked in order to decipher what the hell the submitter is saying. As a general rule of thumb, if you take the plain text of your submission (no HTML), read it, and it made no sense, maybe you should rephrase it.

    An anonymous reader writes "The court ruling [linkexample.com] about this [linkexample.com] found that $15 million is owed to them [linkexample.com]. In other news, this [linkexample.com] happened [linkexample.com] before [linkexample.com].
  • by BasilBrush (643681) on Saturday February 26, 2005 @08:04PM (#11790305)
    Because most people aren't like you. Take a look next time you visit a non-geek. You'll notice that there isn't a tatty old computer sitting by or under the TV. And if you even suggested such a thing, Mrs Non-geek will tell you your not having any such thing in her lounge thank you very much. Computers belong in the office/den.

    Even for those people that are OK with the idea, most desktop computers have too much fan noise to be used for the purpose.

    You go with your idea. It's just the thing that geeks do. I might consider doing it myself. But recognise that you and I are in the tiny minority.

  • by NutscrapeSucks (446616) on Saturday February 26, 2005 @08:10PM (#11790353)
    The Mac mini is specifically for switchers who are replacing an obsolete PC with a new Mac.

    Funny how the Apple exec didn't say that. I'm guessing the main markets for the Mini are (in this order):

    1) People who would otherwise buy eMacs (schools, etc)
    2) People with older G3 Macs that are looking for a cheap upgrade
    3) People with newer Macs that want a second machine
    4) Switchers or PC users who are Mac Curious.
    5) New computer users

    This is based on the historical trend that most Mac sales tend to go to existing Mac users. Even for the most successful machines like the G3 iMac, only a small % of sales went to switchers.

    All in all, the Mini is great for Apple because it allows them to the 'trailing edge' of their installed base up to OS X-level specs before they are tempted by Dell's prices. But whether it is compelling to PC users is still an open question.
  • by BasilBrush (643681) on Saturday February 26, 2005 @08:21PM (#11790444)
    Forget it. The only way you are going to get OSX is to buy a Mac. Wishful thinking won't get you there. Apple don't need the PC market, they are growing market share regardless.
  • Re:switchers (Score:4, Insightful)

    by michaeldot (751590) on Saturday February 26, 2005 @08:30PM (#11790529)

    they wanted the family geek's advice on what kind of computer to get to replace it.

    Yes, I think that's how most people decide to buy computers - word of mouth from trusted friends & family.

    Lucky for her (and Apple), you're obviously a Mac enthusiast, but 97% of the market is not, and will continue to advise people to get what THEY know.

    (Most of my computer using relatives know nothing about Macs, just that they can't stand them because they only have one mouse button, don't have any software, no one uses them at work, and are too expensive, blah, blah, blah. Guess what most of my extended family uses? Windows...)

    I guess that's why us Apple fan(atic)s get so annoyingly evangelical: we have to get our 2% voices heard about the 97% louder voices.

  • by justin12345 (846440) on Saturday February 26, 2005 @08:48PM (#11790674)
    Adding to what you said:

    At this point, every geek I know (hardly a scientific sample, I know) who used to build their own unix/ linux boxes has now bought a powerbook. Eventually they just got tired of fooling with something that was going to be their primary machine (plus BSD tends to be a pain on laptops).

    I know... I'm getting flamed for this one.
  • The iTunes TV Store for $1 an episode!
    Or $15 a month!

    That's the back end solution I'm sure Apple will find.
  • by Anonymous Coward on Saturday February 26, 2005 @08:51PM (#11790703)
    It would be tough to get enough bandwidth over wireless, unless we're talking about material that's been compressed with H.264 [apple.com], which is a prominent new feature of QT7 and Tiger, hmmm...
  • by tentimestwenty (693290) on Saturday February 26, 2005 @08:54PM (#11790732)
    The mini is the repository of everything and it gets beamed to the Airport Express. It already works nicely with music. Apple is going to skip the whole DVR in the living room which will always be a commodity and keep it all coming off the PC wherever and however you want. Brilliantly efficient, simple, and they control the front end of the media delivery. No one is ever going to make money with something like TIVO.
  • by BasilBrush (643681) on Saturday February 26, 2005 @09:01PM (#11790803)
    The processor in an iPod can barely handle OGG remember, let alone video. So it would have to be upgraded. And then the major thing that consumes power on an iPod is the disk spinning up every 20 minutes to shunt a lot of data into the cache before powering down again. With video, that disk would be powered up most of the time, and so an 8/16 hour battery life would become something like a 30 minute battery life. When you look at the Microsoft PMC devices, they aren't that size because they thought a large size would be nice, or because they need to be that size for a decent sized screen (the device is normally much bigger than the screen). It's that size because it needs a big battery.

    Putting video on an iPod would require much bigger iPods than we have now. And Apple thinks there isn't a market for it. And lack of interest in PMCs means they are probably right.

  • by am 2k (217885) on Saturday February 26, 2005 @09:15PM (#11790923) Homepage
    Now, you want to run Photoshop. OOH, which do you install? Photoshop for Mac OS X? No, it's compiled for PowerPC. Photoshop for Windows? No, it's compiled for Windows. You would need to buy a special Photoshop for OSX/x86, a third option.

    Apple could integrate WINE into Mac OS X, to let it run like the bluebox (Mac OS Classic) does on Mac OS X/ppc. That way, you could use all of your Windows apps right there in Mac OS X!

  • by 2nd Post! (213333) <gundbear@pacREDHATbell.net minus distro> on Saturday February 26, 2005 @10:02PM (#11791301) Homepage
    Okay, forget size for a moment.

    Where can you get a $499 PC with:

    CD-RW
    DVD-ROM
    Firewire
    non integrated, non shared 32mb video (ATI or NVIDIA)

    And with software, to boot:
    Movie making
    DVD making
    Music making
    Photo album

    Yes, all that software exists. Yes all that hardware exists. None, to my knowledge, come in kit that's $499. For $349 you can get a PC without CD-RW and with shared video ram and integrated video. For $649 you can get the video+CD-RW and DVD.

    Likewise software; for $699 or more, you get the movie making software, but for bundles of $499? You get Quicken or Windows XP Home and Norton Antivirus.
  • by Anonymous Coward on Saturday February 26, 2005 @10:06PM (#11791330)
    "Halo wasn't even that good, but it's being given now not only credit for the success of the XBox but the success of the iPod??"

    err, no, he's talking about the halo 'effect' caused by iPod - ie someone buys an iPod, loves the design, decides to switch to a mac ("iPod "Halo" effect is causing some Windows switchers")

    Halo's a word that's been around for a long time before Bungie decided to make the game. I suggest you read the posts properly before you make such silly comments. You may want to checkout a dictionary as well.
  • by Anonymous Coward on Saturday February 26, 2005 @10:40PM (#11791536)
    I call bull shit. I can buy a pc from any number of companies for sub $1000 that out perform Macs. As for the Mac Mini, it performs about as well as the average 3 year old pc.
  • by NutscrapeSucks (446616) on Saturday February 26, 2005 @11:26PM (#11791812)
    I'm not going to bother arguing whether or not a electrical outlet and security cord is a dealbreaker, only point out that the lack of AIO hasn't hurt Apple's competitors for the most part. (Plus according to my EDU source, AIO is not exactly ideal if eMac's CRT fails, which is a main reason they are looking at Minis)

    Fully one out of every two Mac sales during Q42004 was made to a customer who self-identified as a Windows user

    That was Apple Stores retail only. I don't think they've stated a total breakdown, but Apple Stores seems to be about 20% of revenues, so 10% switchers might be a fair guess.

    http://www.appleinsider.com/print.php?id=690
  • by Leo McGarry (843676) on Sunday February 27, 2005 @01:36AM (#11792382)
    Yet again, you are not understanding me. You should really see about getting that checked out.

    Most people do not play computer games. Okay? I don't care how big the industry is in dollars. As a fraction of the potential customer base, people who play computer games just don't count. There aren't enough of them.

    Apple's key demographic is young, professional parents. These folks just don't play computer games. Every penny Apple might spend trying to woo computer game makers to port to their platform would essentially be wasted, because the people who are going to buy Macs are not interested in computer games. They're interested in taking their home movies of their toddlers and putting them on DVDs to mail to the grandparents. That's the key Apple home user demographic, right there.

    Until you understand this, nothing Apple does will ever make sense to you. Your "wise the fuck up" remark is just a symptom of your overarching myopia.
  • Re:Indeed (Score:3, Insightful)

    by toddestan (632714) on Sunday February 27, 2005 @02:30AM (#11792592)
    Anyway, I compared two machines, a 20" iMac and a dual 2.5GHz G5. The iMac was there because they wanted to see a budget range computer, and the dual G5 because they claimed AMD was faster.

    You consider the 20" iMac, which costs $1,899, a budget computer?!? And then you turn around and wonder why people claim Apple computers are more expensive?

    Here is some news for you, most people in the PC world would consider a budget computer something that is $500-$600 or less. And that is with a monitor, keyboard, mouse, and maybe even a printer.
  • by Anonymous Coward on Sunday February 27, 2005 @02:32AM (#11792601)
    Apple isn't stupid. They know they have a hot one in the iPod right now. Why would Apple dilute the value of the iPod and this whole new market segment at a time when the music industry and consumers are still being converted to the Apple way of doing business? Why would Apple introduce a radio-enabled iPod that would distract consumers from buying product at the iTMS (iTunes Music Store)? I don't believe Apple has a clear idea right now of how to distinguish itself (ie, compete and dominate) in the portable media player market, because the content isn't available. When you see a broad selection of video content available to consumers as readily as music content has been, then there will be an opening for iTMS-like video services. Why should Apple fragment its expertise now, though, and jeopardize the success of the one and only market it currently dominates?
  • by bluk (791364) on Sunday February 27, 2005 @02:51AM (#11792706)
    That $10 billion figure is for the entire video game industry. The majority of that figure is from console video game sales. They absolutely dwarf PC/Mac gaming sales. Computer gamers, while a very vocal group, are really just a minority. Apple has to overcome the one mouse button only, limited software, and other misconceptions about Macs before they start tackling games. They also need to conquer the business purchases as those deals are much more lucrative.
  • by King_TJ (85913) on Sunday February 27, 2005 @03:18AM (#11792800) Journal
    Actually, the trend I've observed via news articles on Mac-centric web sites and so forth is, the schools are currently most interested in using iBook laptops - rather than buying up more eMacs.

    Apple even offers a whole package with a rolling cart full of iBooks and power strips to recharge their batteries as they sit in the cart, etc. It's sort of a "mobile computer lab".

    The iBooks are fairly inexpensive, and can be doled out as-needed to students to use right at their desks - instead of requiring an actual dedicated computer lab.

    I also question the accuracy of Apple's marketing research if they really believe fewer than 1% of non-business Mac owners own more than 1 Macintosh! I've been to the local Mac users' groups and practically everyone who shows up there owns several Macs. When I go to the local Mac stores and talk with people, I get the same feedback from their sales staff. "Yep - I think just about everybody that comes in here has a spare, older Mac around the house someplace!"

    In fact, until the fairly recent "switcher" phenomenon, most individual Mac users were pretty fanatical about the machines, and kept buying new models every so often, while hanging onto their previous models. That's one big reason you see better resale value on older Macs than older PCs. The older Macs tend to still see regular use up until the time they're finally resold, so their owners believe they should fetch a higher price. (If your old Windows PC just sat in the closet collecting dust for 2 years and you finally went to sell it, you're probably just letting it go for peanuts because you want the space back and just want to see it go "to a good home".)

    Lastly - asking customers if "they're interested in purchasing additional computers" is pointless, no matter which company you are. If Dell or HP or anyone asked this in a survey, they'd get a resounding "No!" from the public. Typically, they ask this in some type of survey taken right after you make a purchase, so it's the time you're LEAST likely to be in the market for another computer. But also, you typically don't think you have any use for ANOTHER computer at home until you discover a need/use for it all of a sudden. Then and only then would you answer "Yes" to this type of question. (EG. Kid suddenly starts becoming a heavy computer user due to school assignments, so you decide it's time to buy a new one and just turn the old one over to him/her completely.)
  • by Anonymous Coward on Sunday February 27, 2005 @03:59AM (#11792898)
    What they say and what they'll eventually do may not be the same.

    Remember what Jobs said about flash memory iPod? No way. No how. We are not interested in flash memory iPod. Fast forward to today. iPod Shuffle uses flash memory to compete against other low end digital players.

    Remember what Apple said about headless iMac? No way. No how. We provide complete solution in our consumer Macs. Fast forward to today. iMac mini. BYOKDM.

    Apple says they are not interested in many things, until the time they work out the design and the infrastructure to the point they are confident they get it right.
  • by SilentChris (452960) on Sunday February 27, 2005 @08:15AM (#11793403) Homepage
    "We don't have to guess at this stuff. We have actual data."

    Who's "we"? Where did you get this data?
  • by Phillup (317168) on Sunday February 27, 2005 @11:57AM (#11794053)
    Here is a bit of perspective:
    Today, more than 130 million personal computers are sold each year!
    link [pegasus3d.com]

    Let's be conservative and call it a 100 Million.

    That means 92 percent DO NOT play one of the most populare games out today.

    A clear majority, even if you let the "other party" count the votes.
  • by MysteriousPreacher (702266) on Sunday February 27, 2005 @12:00PM (#11794068) Journal
    Well, yes. Assuming someone from today were to buy a Mac Mini, travel back in time to 2001 and sell it to someone.

    The specs are decent for the price and it's intended audience. I don't think anyone buys a Mac mini expecting to be able to play Doom 3 on it.
  • by ABaumann (748617) on Monday February 28, 2005 @11:52AM (#11802810)
    The main reason that this will never happen is that Apple actually enjoys selling their hardware. While they're competing with the PC market, why would they give the PC market their biggest advantage? (a far better OS) Ask any Mac user, if OS X was available on a P4 for 1/2 the price of your standard Power Mac config, which would you buy?

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