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Apple - What A Difference Eight Years Can Make 580

conq writes "It's been eight years since Michael Dell was asked after a speech at a Gartner conference in Orlando what he would do if he were in charge of Apple Computer. His answer: Shut the company down and give the money back to shareholders. BusinessWeek in its new Byte of The Apple Blog looks at how the tables have turned since then. For example, over the last four quarters Dell has been coming in with a net profit margin of about 6.5%. Meanwhile Apple just finished its fiscal 2005 with a profit margin just shy of 9.6%."
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Apple - What A Difference Eight Years Can Make

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  • by Anonymous Coward on Friday November 04, 2005 @04:00PM (#13952547)
    6% versus 9% sounds good, but how much actual profit are we talking? 9% of chump change is worse than 6% of real money.
  • R&D (Score:5, Insightful)

    by BWJones ( 18351 ) * on Friday November 04, 2005 @04:00PM (#13952548) Homepage Journal
    Fundamentally, Apple Computer has invested in research and development and has come out with revolutionary products that functionally make things easier while Dell has simply operated as a reseller and box builder. Where is the innovation coming out of Dell?

    Although I just yesterday placed an order for two $379 commodity boxes from Dell that I will run headless behind OS X boxes for security reasons, almost all of our purchases have been going to Apple. From the Mac Mini to iMacs to dual G5s with 30in Cinema Displays, Apple has been building systems around an operating system, OS X that meets our needs. In addition, the security issues make them easier to administrate, freeing up time to get work done that we are actually interested in.

  • For example, over the last four quarters Dell has been coming in with a net profit margin of about 6.5%. Meanwhile Apple just finished its fiscal 2005 with a profit margin just shy of 9.6%."

    As a wise man once said to me about allowing investors in my company, "Would your rather have all of a grape or a slice of watermelon?"

  • by Anonymous Coward on Friday November 04, 2005 @04:04PM (#13952588)
    Really? So you would rather own shares in a big company that returns you 6% on your investment, than own shares in a small one that returns 9%?

    I think you might want to re-think that.
  • by Ikn ( 712788 ) <> on Friday November 04, 2005 @04:05PM (#13952598) Homepage
    Not everyone is content with the same uniform workstation at home that they have to use at work / school. People used to be content with their stock Civic too, but F&F came out and people realized their vehicle could reflect their personal expression; Apple is going to do the same thing, albeit more slowly, with the PC market.* There may be a whole market of grandmothers out there willing to drop $700 for something for e-mail, but there are many more young IT and graphic design people willing to drop $2500+ for a Powermac w/ studio display. Innovation and creativity -do- matter; learn the lesson now. *F&F and Civics used purely for example, please do not flame talking about how lame a Civic with a coffee can exhaust is, we all know it. Thanks so much.
  • This isn't news... (Score:1, Insightful)

    by PhatboySlim ( 862704 ) on Friday November 04, 2005 @04:06PM (#13952603)
    Is it really a surprise if a CEO which sells PC systems and competes with Apple computer sales says he thinks they should get out of the game? Bill Gates would have said the same thing from the OS standpoint.

    If he said anything else he would be criticizing his own company. Give me a break...

  • by TimmyDee ( 713324 ) on Friday November 04, 2005 @04:07PM (#13952612) Homepage Journal
    True, but in terms of a financial future, Apple's is certainly brighter in spite of their smaller market cap. Dell's business model inherently undercuts its financial stability. In order to stay competitive, they need to continue to cut costs. Pretty soon, cutting costs comes at the expense of things like customer service, R&D, and other things that are required to maintain a viable, growing business.

    Apple has certainly come a long way since then. I think it's safe to say that we are comparing Apples to Apples in this case, since Apple was on the track to commoditization in the mid to late 1990s. However, when Jobs took over, they made a conscious decision to move away from commoditization and towards innovation as their primary driving force. What I think we're seeing here is the results of that decision. Had Apple continued down the path they had set out during Spindler/Amelio, they would have ended up like Dell -- perhaps a larger market share in the short term, but a much more dismal future outlook. Instead, they are a vibrant company that has great promise to grow its market share in a far more sustainable fashion.
  • by Jerry Coffin ( 824726 ) on Friday November 04, 2005 @04:07PM (#13952619)
    It may sound arrogant, but it's entirely possible that Mr. Dell really had it right -- Apple's making 9.6% profit margins today, but certainly hasn't for that entire eight years. The real question isn't "how well is Apple doing right now?", but "would the stockholders be better off if they'd invested elsewhere?"

    At the same time, the fact is that most stockholders are reasonably intelligent adults, and (IMO) it's perfectly fine that it's been left up to them to decide to keep their money there instead of investing elsewhere. If the investors had all agreed with Michael Dell, Apple would simply be gone -- or perhaps, like SGI, being de-listed for having too low of a stock price.

    The universe is a figment of its own imagination.

  • by drhamad ( 868567 ) on Friday November 04, 2005 @04:08PM (#13952620)
    If everyone followed what something looks like at the time, because of their fiscal or market share position, all the PC companies should have shut down in the face of IBM, or even before that IBM should have not started a PC division because Apple ruled that world. TWA should have sold out to Pan Am. Torvalds should have joined Microsoft. T-Mobil would fold up in the face of Verizon. The Bell's would never have formed Cingular.
    etc etc.

    If "lucid advice" just means /;the company looks like it's doing badly," we'd never have half the innovations or companies of the world.
  • by acvh ( 120205 ) <geek.mscigars@com> on Friday November 04, 2005 @04:10PM (#13952647) Homepage
    How many PC clone manufacturers have come and gone in the time that Apple has been making computers? Hell, even IBM and Compaq are gone. Dell is trying desperately to become more than a PC clone maker - selling TVs and home theater equipment now, but I have serious doubts on the long term viability of that strategy. Not that Dell hasn't been a great story - it has been - but as far as innovation, creativity, adapting to and creating new markets, Apple wins hands down.

  • by HerculesMO ( 693085 ) on Friday November 04, 2005 @04:11PM (#13952651)
    OS X is Apple's real core product yet, they are becoming more and more, instead of the Apple Computer Company, rather the iPod company. I know I may get modded troll, but I'd much rather see Apple making its sales off of OS X instead of on the iPod which is a relatively mediocre product in a sea of other mediocre products. Sure, the interface is great, the scroll wheel brilliant, but in the end it only does one thing -- play music (and videos now -- poorly).

    The cost of entry to use a *nice* Apple is just too damned high -- and this coming from an Apple FAN! Microsoft is already seeing the consequences of its horrendous licensing schemes with the upstart of Linux use and development -- I am unsure why Apple cannot see the same thing.

    There will be an iPod killer at some point -- when the iPod isn't as 'cool' as it is now. And just like the Windows 95 debut, the time will come that the all supreme market leader will be playing catchup. In Apple's case however, the fact that their business model is structured now around iTunes and iPods instead of the great OS they created is unfortunate and will put them in a predicament in the future.

    The day Apple decides to put OS X onto a DVD and let you install it on your whitebox built computer is the day the grave is dug for Microsoft. With the closed environment of OS X right now, I liken it to Betamax and VHS. Betamax was a superior technology but because Sony wanted to keep the rights to themselves, they got beaten handily by VHS. In the future Betamax was a niche product -- and successful for video editors etc, but oh, what could have been?

    I hope not to ask about Apple 5 or 10 years from now, "Oh, what could have been?" I worry more and more however, that I will wind up with a really nice and fashionable MP3 player and an OS that is used as a niche product, being better or not.
  • by King_TJ ( 85913 ) on Friday November 04, 2005 @04:11PM (#13952657) Journal
    I might actually say not.... The slice of watermelon requires a lot more work to eat. All those seeds to remove, and a messy outer skin you're left with afterwards too. The grape = instant enjoyment.

    So too, it is with Apple. They might always just be a "niche company" compared to the PC/Windows market, but millions in profit is still millions in profit - and heading up a company you can truly be proud of can mean a LOT more than even more millions in profit on your ledger sheet.

    As it was recently pointed out with portable MP3 players, how "cool" and "stylish" or "trendy" is it right now to wear around a player with a big, blue DELL logo stamped on the front of it? Compare that to carrying around an Apple iPod. Apple has achieved something no other computer company has ever really achieved -- the ability to make computers and technology "hip" instead of "nerdy/geeky/dorky".

    So no, Michael Dell isn't "crying". He has one of the most successful businesses around mass-producing PCs as commodity items at as low a price as possible. But if I could be another Micahel Dell or another Steve Jobs, I'd have to pick Jobs. His company actually does R&D, experiments with possible product ideas just for the sake of seeing how they work out, and he still has time to head up Pixar - a company creatively doing very fun AND profitable things with computers.
  • Re:R&D (Score:2, Insightful)

    by Richard_at_work ( 517087 ) <{richardprice} {at} {}> on Friday November 04, 2005 @04:12PM (#13952669)
    Why does there always have to be innovation? Dell is Walmart - stack it high, sell it cheap and make profits in the process, wheres the need for innovation in that? Let others spend the money to do that, when theyve perfected what the market wants, you step it and do it a billion times with better margins.
  • by G4from128k ( 686170 ) on Friday November 04, 2005 @04:13PM (#13952677)
    Dell does NOT maximize profits -- I've heard several Dell executives speak (including Micheal Dell) and their pricing strategy is more subtle that just maximizing the short-term revenue minus costs bottom line. In fact, they said that they will actually penalize sales divisions that create too high a profit margin.

    The reason is that the higher the profit margin, the higher the price. The higher the price, the lower the market-share. Dell is more interested in gaining market-share than in maximizing price. For a commodity such as PCs, the way to achieve long-term success is high volume with a more modest profit margin. Undercutting competitors is more valuable than earning more on each sale.

    The key is that total profits are a second-order curve as a function of price. Too low a price results in too low a total profit. To high a price means lower sales volume and lower total profit. The optimum price foregoes some profits per PC, but makes it up in volume.

    Perhaps the big lesson is that Dell and Apple are NOT in the same business. Dell is just one more PC maker that sells a commodity that is strongly subject to price competition (Dell is very good at competing on this). Apple is a sole-source for an intrinsically valued product. Sure, some people do avoid Apple because of price, but many buy Apple (and don't even consider buying a PC) because of the unique value provided by Apple.

  • by OpenSourced ( 323149 ) on Friday November 04, 2005 @04:15PM (#13952700) Journal
    Well, in eight years from now, it could seem that now was the time to close Apple and give the money back to the shareholders. Who's to know that? Apple is depending too much in the iPod for its success. When the iPod frenzy abates it'll have to find some other hit to keep on sailing. That's not so easy. That said, it'll probably always have a niche in the computer field, and perhaps it can reinvent itself as a consumer-electronics company, but that's far from sure.

    There is one clear difference between Dell and Apple. Dell is a lean machine of a company, offering the same as everybody else just easier, cheaper and with more options. Its margins are always going to be small, but it'll probably always make money. Apple is a boutique company that will always have fatter margins because it'll offer exclusive products. But it depends too much on fickle consumers that can change brands as easily in electronics as in shirts. Dell is like Wal-Mart, and Apple is like a successful delicatessen chain.
  • by Golias ( 176380 ) on Friday November 04, 2005 @04:16PM (#13952713)
    Oh, you want to talk about ROI? Let's look at how the value of Apple's share has moved in contrast with Dell and their ilk: 9e4e6356c1df1ec7b8b67d8578 []

  • 6.5% isn't bad. (Score:2, Insightful)

    by autopr0n ( 534291 ) on Friday November 04, 2005 @04:16PM (#13952716) Homepage Journal
    As I remember it, apple was losing $700 million dollars a quarter. A 6.5% profit margin isn't very bad.
  • by soft_guy ( 534437 ) on Friday November 04, 2005 @04:17PM (#13952719)
    It is nice to see a comment like this from a non-Mac user. I can't help but think that more choices are better and that's why I've always been so baffled by folks who root for Apple to go out of business.

    I only use Macs, and I was sorry to see the Amiga come to a bad end. I was sorry that Be didn't make it. I applaud when Linux makes gains. I don't wish for Windows to disappear.
  • Re:Profit Margins (Score:4, Insightful)

    by argent ( 18001 ) <peter&slashdot,2006,taronga,com> on Friday November 04, 2005 @04:20PM (#13952741) Homepage Journal
    Which would you rather have?

    Depends on who I am. If I'm Michael Dell, probably the 6.5%. If I'm a stockholder or an employee, who has the same absolute amount of income or stock riding both percentages? I'll take the 9.5% thanks.
  • Re:R&D (Score:3, Insightful)

    by anaesthetica ( 596507 ) on Friday November 04, 2005 @04:27PM (#13952811) Homepage Journal
    ...Dell has simply operated as a reseller and box builder. Where is the innovation coming out of Dell?

    That is exactly where Dell's innovation lies: in being able to produce on the fly boxes in large or small volumes customized to the user's designs at a very low cost. Their innovation is in logistics and supply chain, not necessarily computing technology. Still, it is a genuine innovation, and one that has made them piles of cash.

  • by SquadBoy ( 167263 ) on Friday November 04, 2005 @04:36PM (#13952880) Homepage Journal
    Only if you consider some random store brand of tool to be comparable to Dewalt. Granted you *can* and I have and do build high end PCs that a pro would be proud to have for a tool. You can also buy Macs (12" iBook in my case) that will take your breath away and make you glad to compute again.

    Pros have *always* been willing to pay for their tools and to reject the low end. I have a hard time understading why so many people working with computers have a hard time with this concept. But clearly I'm serious about my tools. This is why a mix of high end PC gear and Macs are my tools of choice.

    Apple is the Dewalt of the computing world.
  • by coult ( 200316 ) on Friday November 04, 2005 @04:37PM (#13952895)
    Of course they are maximizing profits...what about your description is not maximizing profits? They are simply choosing to use different model for their profit than just "next quarter" or "next year," and choosing to maximize total profit rather than profit margin as a percentage of cost. You seem to think that maximizing profit means maximizing profit margin as a percentage, which of course it does not.
  • by TGK ( 262438 ) on Friday November 04, 2005 @04:37PM (#13952900) Homepage Journal
    I think you're using the term "Commoditization" in a different way than I would.

    While I ponder what you mean by the word, let me interject my views here. Yes, Apple has turned down a path of trying to sell innovation... but only sort of. Apple is more in the buisness of selling "little and cute."

    I don't mean that in a derogitory fassion. Little and Cute seems to be making them buckets of money. I think that Apple's revenue stream comes from a fundamentally different viewpoint on the same basic idea. Apple sells brand name consumer electronics. They have a look and feel to them that says "I'm an Apple." Like many consumer electronics, they do exactly what they're billed as doing and little else. In the case of the iPod line is this restrictive, but appropriate.

    In the case of the G4 line, this is less restrictive (though still somewhat limiting for those who don't fall into the Unix poweruser category). Fundamentally though, I think that Apple's success stems more from their successfull attempts to brand their systems as more of a appliance than a tool. There is a fine line that they are walking with the desktop/laptop products they make, but even in that case, there is definately a feel to them as being less generalized than a pc.

    Apple has definately hit on something here, but they have to keep running. The question for the next eight years will be this. Can Apple summon the willpower to keep running?
  • by JLEGERE ( 321312 ) on Friday November 04, 2005 @04:40PM (#13952924)
    Ok, I'll give you that - but HOW is it an expression? By simply choosing not to use the defacto computing platform? I guess I just don't understand the whole moral superiority complex that Mac Fanatics carry around with them.

    Is it just because they're such a minority and feel the need to stick together? I've owned Macs and PCs and liked them both for different things, but I really didn't get any enlightenment from using either. So not sure where the mystical self-expression comes from....

    Just my .02 - and I'd like my change back...
  • by hellfire ( 86129 ) <.deviladv. .at.> on Friday November 04, 2005 @04:41PM (#13952937) Homepage
    As many threads have already noted, the percentages are misleading because Dell's total amount of profit is larger than Apples total profit. Dell's 4th quarter profit for 2005 was 667 million while Apple's was 430 Million.

    Okay, Dell's revenue is higher, but it's not that much higher. Also, Dell's profitability is falling while Apple's is rising. Del's profit was 749 million last year. I think it's premature to rub anything in Dell's face but I do think that even thought they are percentages, they are significant. The percentage is even more significant since Dell's revenue and expenses over all are higher than Apple's. This means that they are more severely effected by slimming margins.

    The article might be premature, and it's most likely hype, but there is a valid point here, and that is 8 years ago Dell wrote off Apple, and now Apple is trending up, while Dell is trending down.

    Making all the "do you want a whole grape or a slick of a watermelon" analogies you want, but If the watermelon slice is dried out and sour, and the grape is perfectly ripe, I'll take the grape. (see I can make analogies too!)
  • by kmo ( 203708 ) on Friday November 04, 2005 @04:44PM (#13952960)
    The real question isn't "how well is Apple doing right now?", but "would the stockholders be better off if they'd invested elsewhere?"

    Eight years ago a share of AAPL [] was selling for $4.61 USD (split adjusted). It is currently selling for $60.68 USD. I'm sure any investor that stuck with them for those 8 years is pretty happy with the decision.

  • This reminds me. (Score:2, Insightful)

    by tthomas48 ( 180798 ) on Friday November 04, 2005 @04:48PM (#13953006) Homepage
    I was out smoking at Dell one day when I encountered a marketing exec. I mentioned that I thought PCs wouldn't really take off as home appliances until they brought out colors and made them look interesting so they matched the decor (this would have been about 1996). He scoffed and said that Dell would NEVER have a computer that was any color other than beige, because that wasn't what customers wanted. Dell's entire culture has become built around trailing the pack and just finding out a way to build the "current thing" cheaper than everyone else.
  • by Jeremi ( 14640 ) on Friday November 04, 2005 @04:49PM (#13953013) Homepage
    Apple is just as evil as Microsoft, just not as successful.

    Microsoft is very successful at aggressively marketing poor quality products. Apple markets high quality products to a niche market (whether they do so successfully or not is a matter for debate).

    Therefore, if we are to define "evil" as proportional to the amount of pain a company inflicts on the world through its products and practices, Microsoft wins hands down.

    I think where you are going wrong is that you are attempting to define evilness by guessing at the companies' intentions -- but intentions are impossible to ever really know; you can only infer intention by looking at the companies' actions and statements, and those are always open to interpretation and thus endless, pointless debate.

  • by tm2b ( 42473 ) on Friday November 04, 2005 @04:51PM (#13953050) Journal
    People really like to repeat that VHS vs. Betamax canard, while completely missing the important lesson.

    The thing that really killed Betamax wasn't so much the licensing issues as the fact that you for early US models, you couldn't put a 2 hour movie on a betamax tape, but you could on a VHS.

    That's huge. Being able to ship movies on a single VHS tape is what estabilshed the distirbution channels for those tapes and is what encouraged people to buy in to the VHS technology, in turn creating the demand for more VHS tapes, and so on.

    And that's the big lesson lurking behind it all: pay attention to what your customers actually need, and what aspects of the technology will support the distribution and consumption models. It doesn't matter if your product will do a thousand things more cheaply than the other product, if most people can't easily get it to do the one thing they really buy it for. That's why the iPod has been so successful, even though there are tons of cheaper, more feature-rich products out there.
  • Re:Profit Margins (Score:2, Insightful)

    by Carnage Pants ( 801975 ) on Friday November 04, 2005 @04:54PM (#13953083)
    All this means is that apple is overcharging for its products.

    Overcharging? No. More akin to getting what you pay for. A quality product that does it with style. To me, aside from the fact that I just vastly prefer OS X to Windows for a plethora of reasons, Apple just knows how to make things look good. I look at my friends' laptops here at school, and the various Dells or Sony VAIOs are just plain ugly. I think the price of my 15" Powerbook is perfectly justified.

  • by Anonymous Coward on Friday November 04, 2005 @04:55PM (#13953089)
    you're out to lunch on at least two points (actually more, but i haven't the time to take them all up)

    a) apple is clearly shifting their core away from pc's. how well/long they can pull this off, we'll we will see.

    b) your analysis of the ipod is badly flawed. it is almost tautologically a great product. Sure, we can all think of things we would like it to be --- but the market just *loves* these things. Furthermore it isn't an `ipod killer' if it doesn't win until ipod `isn't as cool as it is now', by definition

    ok, quickly c) OS X on white boxes isn't such a great idea. Steve Jobs is a lot smarter than you are --- you really think he hasn't thought of (and rejected) that?
  • by nine-times ( 778537 ) <> on Friday November 04, 2005 @04:56PM (#13953103) Homepage
    Why is this insightful?

    in the end it only does one thing -- play music (and videos now -- poorly).

    Uhhh... what should it do? I mean, besides play music, video, store contact info, calendars, photos, play games, work as a stopwatch, and work as an external hard drive, what is the iPod supposed to do?

    The cost of entry to use a *nice* Apple is just too damned high

    $500? Geeze...

    There will be an iPod killer at some point -- when the iPod isn't as 'cool' as it is now.

    Sure, *eventually* people won't be buying iPods, but when is that going to happen? Who's to say Apple won't be prepared? And what product won't become old and obsolete at some point? I'm sure Apple is shaking in their boots that the iPod won't be so trendy in 20 years.

    The day Apple decides to put OS X onto a DVD and let you install it on your whitebox built computer is the day the grave is dug for Microsoft.

    Maybe, but it's also the day their current business model is ruined. Apple is basically a hardware company that also makes the software to run their hardware. That's kind of how they work-- selling the whole package. I'm not saying being a software company, selling OSX, couldn't be a profitable business, but it would damage their hardware sales, which is, right now, their bread and butter.

  • Arrogant? (Score:1, Insightful)

    by EraserMouseMan ( 847479 ) on Friday November 04, 2005 @04:58PM (#13953115)
    If an unstable company like Apple can prove all the arrogant folks like Dell wrong then I guess the mac and linux zealots are REALLY arrogant for thinking that an ultra-stable 800 pound gorilla like MS will die!

    I'm sorry. It's Friday and I just feel like having fun by messing with the /. zealots!
  • by Douglas Simmons ( 628988 ) on Friday November 04, 2005 @04:59PM (#13953128) Homepage
    Well, they might indeed not be stupid, but from where I'm sitting they could have been doing better relative to Apple over the year. [] The legal obligation of these public companies is to do everything they can to make their line go up over the X axis, not necessarily to impress Joe Slashdot.
  • by FFFish ( 7567 ) on Friday November 04, 2005 @04:59PM (#13953130) Homepage
    The cost of entry to use a *nice* Apple is just too damned high -- and this coming from an Apple FAN!

    How do you figure this? I purchased a 12" iBook this summer. It cost about the same as my last Windows laptop. The iBook feels as fast, or faster; it came with more memory, wireless, bluetooth, firewire, larger hard drive, and a far better OS. And it looks to me that a Mac mini is about price-equivalent to low-end Windows boxen.

    I'm not exactly seeing the "too damned high" here. Perhaps 10% higher price, but with more than 10% extra value, IMO.
  • by pauljlucas ( 529435 ) on Friday November 04, 2005 @05:03PM (#13953164) Homepage Journal
    The day Apple decides to put OS X onto a DVD and let you install it on your whitebox built computer...
    For the millionth time, this will never happen. Aside from the fact that Apple is a hardware company and the $99 price of OS X is enormously subsidized by the sales of hardware, OS X isn't (and never will be) developed for and tested on the myriad of PC boxes having various motherboards, video cards, sound cards, etc.

    One of the reasons OS X works so well is because Apple knows exactly what hardware it will run on -- their own. Apple doesn't want to deal with the nightmare of having to support OS X on a generic PC box. Besides, what kind of support do you expect for $99? Do you really expect that a Mac Genius at an Apple Store is going to spend time diagnosing OS X on your PC?

    The cost of entry to use a *nice* Apple is just too damned high
    Not really if you compare it to a comparable PC. That aside, apparently Apple doesn't care that some people can't afford their computers just like BMW doesn't care that some people can't afford their cars. Yet you don't hear people bitching about the price of BMWs. A Mac is simply better (not to mention more stylish) hardware that "just works" with a killer OS. Better things tend to cost more. Get used to it.
  • Dell was right. (Score:5, Insightful)

    by hey! ( 33014 ) on Friday November 04, 2005 @05:04PM (#13953178) Homepage Journal
    Just because he was proven wrong doesn't mean that what he said wasn't justified. I have friends who were Apple fanatics who in those days had stock in the company for sentimental reasons. They've done way better than they had any reasonable right to expect.

    Apple makes money by doing everything that is supposed to be suicidally stupid. It sells hardware and software tied to each other. It tries to do many things well instead of concentrating on one area of strength. But it breaks the rules because it sees the opportunity created by others following the rules, which is that things built by this kind of cross corporate ecosystem just don't work that well together. But even seeing this possibility is a long way from taking advantage of it: there are plenty of contrarian schemes that sound good on paper but never succeed. You need actual leadership which is connected to realities of consumer behavior.

    I detest Steve Jobs' personality. I think he's a self-centered, manipulative bully. But he's also got the brains to match -- I'm just grateful he's not in politics. Bastards who think they're geniuses are common enough, but bastards who are geniuses, who are way out on the right hand of the bell curve on both scales, those are rare. If Apple didn't have Jobs or somebody alike to him as two peas in a pod, they'd have been bought out by some far east PC manufacturer by now.
  • by jamrock ( 863246 ) on Friday November 04, 2005 @05:05PM (#13953183)

    "If they hadn't gotten a $150 million cash infusion from Microsoft in 1997? That kept the company afloat when it was about to go down for the third time."

    It wasn't the money that kept Apple afloat. Jobs and Gates settled the old "look-and-feel" lawsuit brought against Microsoft by John Sculley, with an agreement that Microsoft would buy $150 million of non-voting stock (which they've long since sold for a tidy profit, so would all the "Microsoft bought Apple" theorists kindly go away), and much more importantly, Gates' promise to continue making Mac versions of Microsoft Office for a five year period. While the $150 million was nice, it wasn't what kept Apple afloat; Office for Macintosh did.

    Incidentally, the five year agreement expired two years ago, but Office for Mac still exists for two reasons: Microsoft isn't stupid enough to cut off a source of revenue, and it provides a nice fig leaf to show the Department of Justice: "See! We play nice with others! What, us? Strangle a competitor? Perish the thought!"

  • by IAmTheDave ( 746256 ) <> on Friday November 04, 2005 @05:09PM (#13953220) Homepage Journal
    While I ponder what you mean by the word, let me interject my views here. Yes, Apple has turned down a path of trying to sell innovation... but only sort of. Apple is more in the buisness of selling "little and cute."

    I certainly don't think it's "little and cute" - I think it's more like superior design. Apple plays towards the people that appreciate superior design, in both software and hardware. Near-obsessive, industrial design blankets every one of their hardware products - love 'em or hate 'em.

    The thing that Apple has done well is to convince the world that their products are in fact high-end. Cutting costs is not something Storehouse or Design Within Reach does, it's something Walmart and Target do. Apple has positioned itself in the high-end consumer market, and they've reaped the benefits of not having to play the price-slice game Dell battles with constantly.

  • by shotfeel ( 235240 ) on Friday November 04, 2005 @05:33PM (#13953436)
    The benefits of small market share, and in fact the entire Apple experience, are intuitive for a certain kind of person. Artists, fashion mavens, leftists, and other creative personalities [] can sit down with an R&D-heavy business plan and comprehend its sensitive, tasteful aesthetic

    I've always wondered about this view of Mac users, because from my experience, the people on the "opposite end" have traditionsally been heavy Mac users too. By "opposite end" I mean scientists and researchers. Particularly in University research labs yoiu find Macs all over the place (and have for decades). Its in the business domain that Window and Intel have domintated.
  • by The GooMan ( 892098 ) on Friday November 04, 2005 @05:37PM (#13953476)
    "Dell can afford to sell its home computer stuff so cheap because it's making more money on the high-end stuff."

    Exactly! I was talking to a co-worker just yesterday about the money our organization spends on servers every year. It seems like every day there are pallets of PowerEdges on the loading dock. It used to be Sun & HP but now Dell is the big dog where I work. There is absolutely no telling how much money they make from just our organization. I would guess that probably 75% of all our PCs come from Dell too. I have no problem with Dell, I just bought an Inspiron 6000 for my wife from them a couple of months ago, but it seems the people in charge here won't even consider it if it doesn't come from Dell (Unix/Linux boxes excluded of course). Some of the exec level people here are starting to catch on because I see more and more RedHat boxes on the floors. What is really sad is I can turn around and walk down the hall about 30 feet and be face to face with 3 or 4 Sun v880s that only cost about $150,000 a piece. Total waste. :-(

    Dell could start giving PCs away and stay in business for a long time just by riding their server sales. That is where the margins are.

    Just for the record I have at home: a Dell PC, Dell laptop, an old Dell box running Linux, and 2 Macs. Me loves the Apple stuff.
  • by ultranova ( 717540 ) on Friday November 04, 2005 @06:19PM (#13953838)

    The legal obligation of these public companies is to do everything they can to make their line go up over the X axis, not necessarily to impress Joe Slashdot.

    Actually, no. The legal obligation of a company is to do its best to obey the wises of its owners. Those owners usually want the company to concentrate on increasing its share price; however, no law whatsoever forces them to. For example, if the majority of shareholders agreed that the companys number one priority was to provide humanitarian help to catastrophe zones, then that would be the companys number one priority.

  • Re:R&D (Score:5, Insightful)

    by rsborg ( 111459 ) on Friday November 04, 2005 @06:20PM (#13953854) Homepage
    I just attended MILCOM and one of the guest speakers was talking about innovation and they listed both Apple and Dell. What did Dell do? They innovated the process of purchasing and distributing a PC.

    Problem is, Dell's innovation wasn't something they could patent and protect, whereas, with Apple, some of their innovation is very protected (OSX UI, iPod interface, iTunes, iTMS exclusive contracts, etc).

    Taking a look at Apple's supply times and online ordering capabilities, they have not only copied Dell's direct-to-customer innovation, but even gotten some of Dell's efficiencies of scale in effect. Problem is, Dell relied on:

    • Microsoft to push the (software) innovation angle
    • Intel to push the hardware innovation

    Leaving them to really innovate in the supply chain area...

    However, now that both MS and Intel are no longer the innovation leaders, and they have their own troubles to deal with, Dell is stuck without any way to push those companies to do that innovation. It remains to be seen whether this will mark a slow decline in Dell's fortunes, or they make a bold move to re-establish themselves as not only a market leader, but innovative and interesting.

  • by pomo monster ( 873962 ) on Friday November 04, 2005 @07:29PM (#13954380)
    Scientists, particularly in academia, probably fall into the category of "...and other creative personalities." Think about it. They're unafraid to question established doctrine. They rave about theoretical "elegance" and "beauty," in fields ranging from physics and mathematics to astronomy and earth sciences. Science used to fall under philosophy's umbrella, you know.
  • by fermion ( 181285 ) on Friday November 04, 2005 @08:53PM (#13954941) Homepage Journal
    Companies whose primary innovations is low price are not stable firms. Look at how easily Walmart took out Kmart. Cheaper prices, less ghetto, more customers. Walmart did much good in lower prices through a better supply chain, just like Dell, then continued by cutting off any supplier that did not provide deep disccounts, or, even better, just contract the factory. Now, in desperation, walmart is resorting to illegal employee pracitices, like illegal aliens, withholding wages, and the like. At some point, keepping prices low will result in signficant executive reductions, and will result in the problems we have seen with other big retailers.

    What Walmart and Dell share is lack of growth prospects. In the US all the people with no choice already shop, and the only others that shop at Walmart are the very rich looking for some chic trash for their third home. Walmart is not finding much success in finding new lands, and the foriegn market has not been success, as Walmart cannot meet local needs. The problem them becomes supporting the huge infrastructure. The very existance of the computer networks, warehouses, and trucking liabilities is what makes Walmart such a juicy target. Anything as large as walmart is inherently ineffecient, and must at some time collapse under the weight of it own excess.

    On the other hands, firms of more reasonable size,that can more easily changes in market conditions, are more likely to work out. Look at how Target was able to redevelop it's image and capture the very customers that Walmarts now covets, but are unlikely to shop at a store whose main purpose to push cheap products.

  • by Jesus_666 ( 702802 ) on Friday November 04, 2005 @09:28PM (#13955147)
    Yup, there are some new ones that are silent, small and/or light - and I've seen an Intel book that looked like the iBook's little brother, downright sexy. There are some good ones, but sadly they tend to be too expensive for a poor CS student and most of the Intels I see are of the huge/noisy/ugly type, probably because most people around me are poor CS students themselves. Point in case: I know a couple of guys with iBooks but only one PowerBook owner.

    At least I haven't been modded Insightful.
  • by Anonymous Coward on Friday November 04, 2005 @10:22PM (#13955360)
    Monopoly of what? Computers? MP3 Players? OS? Applications? Oh you meant Mac hardware and iPod. But isn't that a computer and MP3 Player? Closed? Not really, there are hardware accessories that fit in said hardware. Both are even hackable. Google can tell more.

    Won't work with anyone? check this: owpage&cart=GOI1131155893356999 [] ...something about an iPod economy. (Wished I was that guy with 3 man operation who sold 1 million units of his iPod casing in one year.)

    Real wanna help? MS wanna help? (acutally, they probably don't wanna) Great. But aren't they competitors too. Is there a compelling reason for doing business with them? Thinking to oneself..."... leading market by differentiating product. Everyone wants to help. Why would they want to help? A lot of them wants compatibility. Compatibility means to be more like them. More like them mean losing differentiation. Counter to successful business model. Also, too many cooks spoils the pot. Won't know what is cooked in the end. Still, they wanna help. What to do? What to do?

    What you seem to say is that Apple is not operating their business to your liking. Wel, I guess they lost you as a customer. Can't win everyone. Next...
  • by i41Overlord ( 829913 ) on Friday November 04, 2005 @10:39PM (#13955443)
    Yeah, sort of like the ultra-opinionated youth that tries so hard to think out outside the box and be original that he ends up looking like everyone else.
  • Re:R&D??? (Score:2, Insightful)

    by Halfbaked Plan ( 769830 ) on Friday November 04, 2005 @11:47PM (#13955760)
    Yes, and the fact that Apple designed the chips in their systems is what keeps them cruddy consumer machines, as compared to what IBM does with the POWER architecture in their systems.

    Apple has just piggybacked on hardware vendors for the entire life of the company, all the way back to them choosing the 6502 because it was cheap and available.
  • by silverkniveshotmail. ( 713965 ) * on Saturday November 05, 2005 @01:01AM (#13956069) Journal
    It's hard for some people to understand that just because a lot of the loudest mac users are like that it doesn't mean most mac users are.
    and everone seems to think that everyone who has a mac is exclusively a mac user. We have 3 PC desktops and 3 apple laptops between the three of us.
  • by ablair ( 318858 ) on Saturday November 05, 2005 @02:25AM (#13956315)

    "Apple is a boutique company that will always have fatter margins because it'll offer exclusive products. But it depends too much on fickle consumers that can change brands as easily in electronics as in shirts."

    Apple has one of the most loyal customer bases in the history of the computer industry, one that most other companies can only wish for. This same base is the reason for the company's survival even in the darkest days for the company in the 1990s, when it could seemingly do nothing right. In contrast, I doubt that Dell's customers would bat an eyelash before changing to a cheaper alternative when - not if - one comes along.
  • by jayratch ( 568850 ) <slashdot.jayratch@com> on Saturday November 05, 2005 @03:51AM (#13956526) Homepage Journal
    Dell does well because they make decent stuff cheaply.. They are the Honda of computer makers, and though they ain't perfect, they are pretty darn good and TONS of people like 'em.

    Umm, No.

    I've owned Hondas. Honda cars last forever and ever and are painfully bland. I put 99000 miles on a Civic and had one problem... a turn signal switch that didn't return automatically. I got rid of the car because it bored me.

    Honda also makes excellent motorcycles, ATVs, lawnmowers, etc, and in every area of industry that they exist, their customers swear by them, and their products are innovatively designed with intelligent features and bulletproof reliability.

    Not terribly unlike Apple.

    Dell, on the other hand, would more aptly be compared to one of the American car companies, say back in the nineties before they started to wake up. Mediocre products that, when it really comes down to it, are just ever so slightly lacking in quality or innovation, slightly subpar design, but sold in huge numbers because of price and familiarity, and the oft misplaced "buy American" philosophy. (Not sure this applies quite as much, as most American car makers are starting to correct themselves, but it's still mostly true.)

    I think you're trying to compare Honda and Dell on the commodity nature of their product? Hondas are commodities because of another attribute of commodities: they're reliable. A true commodity item, ie coffee or oil, does not vary substantially in quality, and can be reliably priced as a function of supply and demand and other market/economic forces. Honda cars are ubiquitous enough to ALMOST meet this definition, but even in that case, consumer perception plays enough of a role to skew it off; people will pay more for a Honda than for a Chevy, to the tune of paying >sticker vs sub-invoice.

    Sadly, you're right about "tons of people like 'em". I got a phone call recently from a friend who wants help picking out a Dell laptop. It has to be a Dell, he says, because his company gives him a discount with Dell. You can't compete with them on price alone, and to most consumers that's all that matters, especially when you have a geek family member to fix it when it breaks. I've had at least three Dell laptops, and while they were decent for the price, I'd never actually pay money for one. The only computer I've ever bought in once piece was a Mac, and I'm never going back.

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