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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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  • by 2nd Post! (213333) <gundbear@@@pacbell...net> on Saturday February 26, 2005 @07:20PM (#11790008) Homepage
    Hook up near a TV, plug in your S-Video+Optical out, and you have your 'media center pc-less', or something.

    So for $189 you have a base station, streaming music, streaming video, a print server, and no need for another computer.

    Any bets on whether we'll see something like this soon?
  • In other words... (Score:3, Interesting)

    by TWX (665546) on Saturday February 26, 2005 @07:20PM (#11790011)
    ...what we've already known either because the products are out or because there have been pre-release photos of real equipment.

    As much as I'd like Apple to diversify and build more products suitable to my needs, a 17" wide "pizza box" of an entertainment center computer isn't very likely and probably wouldn't sell well enough to pay off development costs. I'd buy one if it were less than $800, but the odds of that are small.
  • by xlyz (695304) on Saturday February 26, 2005 @07:21PM (#11790017) Journal
    network, no video for iPod, portable media centers a failure

    I agree 100%

    I wonder why anyone would be willing to watch tv on a micro screen

    limit to portability are not in the device size, but in the UI size!!

  • by 2nd Post! (213333) <gundbear@@@pacbell...net> on Saturday February 26, 2005 @07:22PM (#11790027) Homepage
    Why do you think that, of all things, is going to sink Apple?

    If anything I would have thought their intensely secretive nature would kill them.

    Their iPod and iTunes products are exactly how they are expanding to the PC world.
    Their mini is exactly how the PC world will get OS X.

    If OS X is the only real desktop alternative, nothing is stopping people from buying Macs you know.
  • by Anonymous Coward on Saturday February 26, 2005 @07:32PM (#11790072)
    Adding video to the iPod costs Apple practically nothing. It doesn't matter if other portable media players were a failure, adding that feature to the iPod would lead to incremental additional sales at virtually no extra cost. I don't believe Apple when it says it isn't thinking about video for the iPod.

    The thing that is holding back portable media, in my opinion, is the lack of easy, legal, content. Providing people with easy access to digital content is something Apple knows a little about. Why wouldn't CBS license Apple to distribute survivor on iPods for $1 an episode? You think they are going to get money from syndication? I don't think so. $30 DVD sets? Maybe from some people. Don't get distracted by the specific example, the point is valid.
  • by 2nd Post! (213333) <gundbear@@@pacbell...net> on Saturday February 26, 2005 @07:33PM (#11790078) Homepage
    You have to consider the population in general: How many people have computers near the TV; isn't that why the PC/Microsoft world is hyping media center PCs?

    What I am describing is NOT a PC.

    Take that old G3 or G4, and have it running iTunes. Equip it with a $60 wifi card.

    Take the new Airport Express 2 and hook it up to the TV.

    Stream from the computer to the TV; build in 20ft bluetooth into the Airport Express to enable a wireless keyboard and mouse. Play DVDs, music, and other content on the TV, sans PC.

    Look up the Airport Express [apple.com] because I don't think you understand what I'm talking about here.

    A $189 device! Not a PC at all!
  • by Faust7 (314817) on Saturday February 26, 2005 @07:36PM (#11790091) Homepage
    This is somewhat believable. I'd wager that average college students would be a prime target for the Mac Mini, as well - unlike Apple's laptops, it doesn't cost a mint, and its size would be a great advantage for students living in space-challenged dorm rooms. Most of the software they'd need would be on it, too. Your usual non-computer-geeky college kid would play games on their console, not their computer, and the Mac has Microsoft Office and fine Internet capabilities. Colleges use plenty of specialized software (e.g. statistics packages) but most kids go to the labs to use that stuff rather than bothering to acquire their own copies. If the Mini can make a successful tie-in with the iPod in the minds of this particular target audience, then Apple stands a fighting chance of boosting its market share at least with that segment.

    Apple is very good at marketing perceived value (iMac, iPod, etc.) as opposed to embedded value (the way Microsoft pushes most of their products). I'd say that perceived value is what matters a lot in the impressionable minds of young students.
  • I Switched (Score:5, Interesting)

    by MBCook (132727) <foobarsoft@foobarsoft.com> on Saturday February 26, 2005 @07:49PM (#11790163) Homepage
    I switched. There are about 10-15 blog style entries on the page mentioned in my sig about it. Here is a short version of why:

    Used to like Apple, moved to PC for customizability/etc (in mid 90s). Never considered moving back because the more I learned, the more obviously out of date the Mac OS was. Then I learned Linux and fell in love with Unix. Add to that the hate and distrust I've gained in MS and I was ready to jump ship (and I knew it wouldn't be too hard for me, unlike some people). Linux didn't seem "there", I wanted something more mainstream. When OS X came around (and I got to try it on my brother's PB) I really liked it, and started following it. I got an iPod, which did serve to remind me of Apple's quality. Then when my current computer (a Dell laptop that served me well for 4+ years) became too slow for my needs I waited until new PowerBooks were announced and I bought one. The whole (longer) story is in the site linked to in my sig.

    So as for "the halo effect", I'm not so sure. It might happen for some people. I used to love Apple so I was really just finding them again. And even without the iPod I would have switched because of OS X. I have three observations on all of this. First is that iTunes really showed me how nice Apple software was these days (iTunes on Windows was the first Apple program I'd used since leaving my old LC II in about 95). Second was if OS X was available on a PC (as some want it, and as some other companies have been asking Apple) I doubt I would have switched (why switch processor architectures when you don't have to?). And third, I had been wanting a Mac to try OS X on for the last few years, but even used Macs were expensive (for what you got). Had the Mini been available 2 years go (the equivelent kind of computer, at that price point, not neccessisarily that size) I would have bought one as fast as I could and I may have switched earlier.

    I'm not the "typical" switcher (someone relativly new to computers and raised on Wintel that went to Apple) since I'm a power user (used the OS 7 back in the day, Linux, most flavors of Windows, etc); but I switched and I am VERY happy with my new little Mac. Next step: evangilizing when people ask me about what to buy for their first computer!

  • Bingo bango bongo (Score:5, Interesting)

    by mblase (200735) on Saturday February 26, 2005 @07:49PM (#11790176)
    Miss a TV show? Why DVR it when you can go to your computer, type "Battlestar" or "Babylon" to get the entire current archives, and for $3 (or $20 for the entire season), you can watch your movies *now*.

    A column not too long ago (don't ask me to recall who or when or where) discussed this sort of thing in light of sites like "Homestar Runner". The case was that this is the future of video entertainment -- visit the show's web site and download and watch any episode you like, in any order, at any time, rather than wait for your favorite episode to reach syndication or buy the whole season on DVD.

    The bandwidth, I think, is still the biggest problem, but that's just a matter of time and R&D. And the difference in quality from downloadable video vs. HDTV will, like the difference between MP3 and CD quality audio, keep the downloadable format from completely replacing TV broadcasts or DVD sales.

    All we (and Apple) need is the device to do it, at a price point people can afford. That too is a matter of time -- iPods arrived costing, what, $400? $500? Now you can get a Mini for $200 and a Shuffle for even less.

    I think Apple would like to sell just what it described in the article: a program that lets you download and view video on your computer, but supplemented by a small remote-controlled set-top device that streams it wirelessly to your television set, a la Airport Express. Video on an iPod-sized device is impractical by any measure, but video on your television set is a given -- but it has to be as easy to use as a DVD player. Fortunately, that sort of ease of use is Apple's specialty.

    I perceive this as a certainty, not a possibility -- it's just a matter of when.
  • switchers (Score:4, Interesting)

    by tverbeek (457094) on Saturday February 26, 2005 @07:50PM (#11790180) Homepage
    iPod "Halo" effect is causing some Windows switchers

    I can confirm that anecdotally. Last night I got a call from my uncle and my cousin the college student. She has yet another broken Windows laptop (it'll cost several hundred bucks to fix it), and they wanted the family geek's advice on what kind of computer to get to replace it. Without me even having to suggest it, she (an iPod owner) had already been looking at Apples. So I just steered them toward the 12" iBook with AppleCare. Talking to her, I added that it'd match her iPod; to him, I explained that it was the best bang for the buck of the Apple line, and AppleCare would be cheaper than any repairs that might be needed.

  • by MBCook (132727) <foobarsoft@foobarsoft.com> on Saturday February 26, 2005 @07:54PM (#11790198) Homepage
    Games are one of the reason I've switched to the Mac, in an odd way.

    I used to play tons of PC games, but recently there have been very few that I have been interested in. I want to play Pirates!, HL2, and Doom 3. That's basically it. Pirates! will get ported (I'm guessing, but it's not that important), Doom 3 has gone gold (comes out the 15th of next month, I think), and HL2... well I'll play that on my sister's PC.

    Consoles provide me with about all the gaming I want. If it's a good enough game, it will get ported (and I don't mind the extra time it will take to get to the Mac). Very few games remain PC only forever.

    For most people, games are not a good reason to cling to PCs, in my expiriance. And that's not counting people like my mom, who only play web games (like PopCap's) anyway.

  • by BasilBrush (643681) on Saturday February 26, 2005 @08:18PM (#11790429)
    Reality check, most people don't know one end of a screwdriver from another, let alone what parts to buy and how to assemble a PC. Geeks who build their own PCs are a fraction of 1% of the computer market. Apple have the other 99%+ as their potential market.
  • No media center PC? (Score:3, Interesting)

    by FaasNat (522755) on Saturday February 26, 2005 @08:26PM (#11790501)
    Thought there were going to be some big plans for a digital hub. Seems that a unit capable of displaying digital pictures (iPhoto), digital tunes (Tunes), digital movies (DVD player, Quicktime), and digital TV shows (through their own means or if they acquired TiVo) would be at the top of the digital hubs. I thought the Mac Mini would've been a great digital hub item, but it's missing a digital audio out.
  • by The Mutant (167716) on Saturday February 26, 2005 @08:27PM (#11790505) Homepage
    I've got not only a one hour train commute, but also an Archos AV400 [archos.com].

    I'm an American finance geek living in London, so every morning my handheld PVR records the overnite BBC Business News [bbc.co.uk] at 3:45AM. I watch the 45 news broadcast while I'm headed to work at 5:51AM damn early in the morning!

    I get a lot of utility out of time shifting the BBC, and would dump my iPod(s) (3G 20GB, 1GB Shuffle) in a heartbeat if my Archos (it also plays MP3's with cover art) matched half my iPods battery life. At present I get three hours tops.

    I own ten Mac's (two G3 iMacs, a ClamShell iBook, two SEs, a MacTV, a PowerMac 5500/275, a G4 TiBook, a 15" G4 PowerBook, a G4 Cube) and still use the OS X capable machines daily. Even though I grok Apple deeply, they'd better put together a PVR solution ASAP.

    It's their market to lose. I only own two iPaqs because my Newtons were getting long in the tooth.
  • Re:So, Mac's dying? (Score:1, Interesting)

    by Anonymous Coward on Saturday February 26, 2005 @08:38PM (#11790584)
    Fat Binaries don't solve the QA and Marketing problems. How many major commercial apps shipped on all 4 OpenStep platforms? 1 or 2?

    Apple: Hey Adobe -- We want you to release a OS X/x86 version of Photoshop.

    Adobe: What? OS X is only around 30% of our sales. You want us to split that in half? Forget it.

    Apple: Pretty Please

    Adobe: OK, we'll ship either on x86 or on PowerPC. you decide.

    Apple: OK forget we even brought it up.
  • by MBCook (132727) <foobarsoft@foobarsoft.com> on Saturday February 26, 2005 @08:44PM (#11790638) Homepage
    I meant the brand new "Sid Meier's Pirates!" that just came out on the PC. But any of my older PC games that if I wanted to play (doubtful) would run fine in an emulator (like VirtualPC or SCUMMvm or somesuch).
  • ipTV? (Score:2, Interesting)

    by sow251 (319031) on Saturday February 26, 2005 @08:50PM (#11790697)
    so does that mean that anyone can have a tv station -- all you need is an ip address and the new Airport will stream to the little box that's hooked up to the TV - video content from the web? everyone will be v. happy to watch their "tv" on their tv like they all seem so die hard about.

    with enough viewers (advertisers will love the registered hits stats) we might see advertising dollars going to some nice startups of whatever kind -- a nice departure from what the networks and cable companies have set up now. iptv would be nice.

    too bad the portable video device is a no go impossibility (is it?). iptv would work great on an ipod with a wireless card - you could watch CNN at Starbucks on your ipod! weee, that would be fun.

  • by mp3phish (747341) on Saturday February 26, 2005 @08:53PM (#11790721)
    If that is the case then apple had better watch out! Because the PC game sales is only beat out in sales of office programs and operating systems.

    How can you say that their target audience is ZERO gamers? It is the single largest market underneath word processing in the entire PC software industry. If they don't target gamers you could have fooled me when steve jobbs is ALWAYS demoing futuristic 3d games on the powermac G5.

  • by Anonymous Coward on Saturday February 26, 2005 @08:59PM (#11790781)
    Almost all the post OS X switchers I know, are 'power users'. All the other power users I know want to try OS X at some point.

    Most of the new to computers folks I know still use Windows.
  • Re:So, Mac's dying? (Score:1, Interesting)

    by idlake (850372) on Saturday February 26, 2005 @09:02PM (#11790811)
    Considering Linux and all, OS X is the only real desktop alternative.

    Considering that Apple has had inexpensive OS X machines on the market for several years now, has been marketing the hell out of their product line, and that there hasn't been a huge rush to switch to Macintosh, I think real world users have indicated their views: most of them obviously do not consider OS X sufficiently better to be worth switching to. In fact, according to IDC, Linux is now on more desktops than OS X, and that is despite the fact that you can hardly buy a machine with Linux preinstalled.
  • by orange7 (237458) on Saturday February 26, 2005 @09:19PM (#11790966)
    Go to System Preferences, Accounts, add a new account, click on the limitations panel, choose simple finder, and check the smallest subset of applications you need to get by. (Say Safari, iTunes, maybe that's it.)

    Log into the account. You'll notice there is just the dock at the bottom with an applications folder, and a documents folder. Single clicking opens apps or documents. Now, for maximum simplicity, open up each app, choose Open, and drag over the middle bar in the open dialog so the disks and default folders are covered up. That leaves no distraction from the documents folder.

    That's what I do to create an account for someone who doesn't "get" all that techie computer stuff. (And fair play to them.)

    Now, your point might be that there should be an option to set the machine up like this the first time you boot it up, and I'd totally agree.

    A.
  • Re:So, Mac's dying? (Score:2, Interesting)

    by Luke Mewburn (808356) on Saturday February 26, 2005 @09:22PM (#11790990) Homepage
    NeXT solved the multi-architecture binary problem many years ago. If Apple ever offered the OS on x86 again, you can bet that every software vendor would recompile their apps and have them available within a month. Most of them could do it in a week.

    Except for the OS X application code that makes assumptions that it is running on 32bit big endian processors (PowerPC) and fails when ported to 32bit little endian x86. And we all know the kwality of closed source vendor code, don't we? </ob/.troll> :)

    Remember all the UNIX code written over a decade ago for SunOS 4 [on] SPARC that didn't work on x86 boxen, due to lack of correct use of htons(3) (et al)? Nowadays the opposite problem exists; so much [open source] code does #include <linux.h> and assumes it is running on 32bit x86 CPUs.

    At least the trickiest endian-bugs won't occur when porting OS X apps to 64bit PowerPC. The tricky bugs are in 32bit little endian (x86) code ported to 64bit big endian (Sparc64, PPC64); they're harder to track down than 32LE->64LE (alpha) because the latter often didn't barf when accessing 32bit entities with a 64bit fetch due to the word layout in memory.

    Back to the topic; I'm fairly certain OS X still supports "fat" binaries which can ship with both PowerPC and x86 code in the same binary (package).

  • Indeed (Score:3, Interesting)

    by lakeland (218447) <lakeland@acm.org> on Saturday February 26, 2005 @09:30PM (#11791049) Homepage
    A while back I got irritated by some troll on slashdot trotting out the standard 'apple computers are slower and more expensive' line -- mainly because they were low-id rather than an AC, but I digress.

    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.

    The rules were pretty simple, configure a roughly similar machine at newegg and compare the price to apple's. Components had to be of acceptable quality (it isn't like apple uses $50 cases), and the same spec (speed, size, whatever) but within that I chose the cheapest I could at newegg and took advantage of any on-the-day deals.

    The end result was apple came out cheaper for both machines (though it would've been slightly more if I'd done a 17" imac). The dual G5 was a lot cheaper since dual proc PCs are considered workstation-class and therefore have a huge markup, especially when you want a processor the same speed as the 2.5GHz G5 (I used an athlon FX-55 IIRC).

    There are still price points where apple gets beaten by newegg -- e.g. without comparing properly, the powerbooks look lousy value to me -- but you can be sure that anybody claiming Apple is more expensive has had their head buried in the sand for years now.
  • by Your Average Joe (303066) on Sunday February 27, 2005 @12:29AM (#11792128)
    "97% of the market is not, and will continue to advise people to get what THEY know."

    A lady at work wanted to buy a graduation gift for her daughter, I suggested she get a Mac if she did not want to do tech support or hear her daughter could not get her paper done because a virus at school. At that time I was a 90% Windows user and 10% Linux user, what did she buy? 12" iBook for her daughter.

    A few weeks later the Mac Mini was introduced. What did I buy the same day it was announced? A Mac Mini!

    I know a few other employees at work that are fed up with Windows and have already purchased Mac computers in the last 30 days...

    Mac OS X, the ONLY version of UNIX your garandma can use!
  • by amichalo (132545) on Sunday February 27, 2005 @12:31AM (#11792137)
    I think it was a wise decision for the regularly tight lipped CFO to give some insight from the company. Here's why:

    (1) Usually it is Jobs that announces any sort of strategy or "feelings" Apple may have on a technology. This helps investors feel like someoen other than the CEO is running the ship.

    (2) With iPod obviously so huge, it is important to know if Apple is seeing itself as a music playrer company or what. Also, with TIVO rumors abounding, it is important for Apple to stake out their position on the DVR battle field.

    (3) Stating the intent of the Mac mini. Obviously people are seeing cool applications for the Mac mini and as the CFO said, some people will try to use it as a home media PC, but he clearly states that it isn't that which helps to determine what the thing IS - a Windows Switcher PC.

    (4) A glimp into Apple's crystal ball. It is interesting how he proclaimed the death of the personal video players. Jobs has said this before but with people trying to make the iPod Photo into a video player, it is interesting to hear another cheif reiterate the position.

    (5) Points 3 (Mac mini not a PVR) and 4 (iPod Video not in the future) help us to see Apple's implementation of the Digital Hub more clearly. At home, the Mac becomes a dual purposed iLife Workstation as well as a media server. Using products like AirTunes to stream audio around the house and one day perhaps AirFlicks (FireFlicks?) to deliver a 21st century family slideshow, streaming video from DVD, or even PVR style recordings.
  • by Thu25245 (801369) on Sunday February 27, 2005 @01:23AM (#11792343)
    Obviously, this is not practical yet.

    iTunes, of course, can stream lossless audio over a wireless network to computers or dedicated devices (AirPort Express.) It can do this using MP3s as the source, running in the background as other applciations are used.

    To make this work, we'd need a codec capable of carrying high-quality video at 802.11g speeds (easy enough, already done) and a computer capable of transcoding it on the fly, in the background.

    Maybe a dual-processor G5 could handle this load, or a future Mac with a cell processor. I very much doubt this could be done on an iMac, and definitely not on a mini.
  • Re:So, Mac's dying? (Score:4, Interesting)

    by TheRaven64 (641858) on Sunday February 27, 2005 @06:30AM (#11793199) Journal
    I suspect that a lot of the problem with corporate acceptance of OS X is that there is no second source. The MS monopoly has conditioned buyers to ignore the fact that there is no second source for their OS, but PC users are used to being able to second source their hardware if their primary source puts prices up. Licensing the OS to someone like IBM would eliminate this, particularly since Apple have repeatedly stated that most of their market is home users. Let IBM bring to the market cheap, no frills, OS X boxes aimed at corporate users (similar price / spec to the Mini, but a more boring box), and pay Apple for every copy of OS X they ship, and they could make a significant impact on the corporate sector.
  • by danila (69889) on Sunday February 27, 2005 @07:06AM (#11793257) Homepage
    Check out Apple Games [apple.com]. I guarantee that you will be surprised.

    My younger sister wants to buy a laptop and is seriously considering an Apple (no "halo effect", just word of mouth). She asked me about games and initially I responded with a comment similar to yours - there aren't many games available for Mac.

    However, I actually bothered to check whether I was correct and went to apple.com. As you can see for yourself, the quantity and quality of available games is more than satisfactory. Many bestselling games are available in all possible genres. While this may not be enough for me (I'd like to play all good FPS games on top graphics settings with a relatively new graphics card from ATi/nVidia), there are definitely enough games on Apple for a casual gamer.

    My sister doesn't need to play all PC games and she doesn't care for particular titles/franchises. If she can get 5-10 titles per year, that would probably be enough.
  • by bedouin (248624) on Sunday February 27, 2005 @05:40PM (#11796539)
    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 think this phenomenon has a lot to do with maturity as well. When someone is 16-21 building a computer from scratch, with all the bells and whistles, customized cabling and cooling, etc. is a really cool learning experience. However, it gets to a point where you've been there and done that, and just want something that works.

    That said, if I were still a PC user I'd keep building from scratch, simply because you almost have to unless you want integrated/shared video ram, on board sound, and other cheap components. I'd much rather just get a Mac, that generally comes with good parts, awesome ascetics, and just get work done. No need to read up on the latest and greatest cooling techniques, and which motherboard manufacture is the greatest, blah blah blah.

    It's just not worth it to be a PC user, unless you have a specific need for it.

The superior man understands what is right; the inferior man understands what will sell. -- Confucius

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