I know its already a little late to comment on the Expo, but I have to admit it’s been wearing on my noodle for two days now.
First: If I have to hear another person complain about the shuffle not having a screen, I’m going to die. Apple’s move with the shuffle was brilliant. Why? Because it shows they understand feature-tradeoff, customer needs and differentiation. First, Apple swiped the screen so as not to endanger sales of higher-end iPods. That is the worst thing they could have done. Next, I don’t know about you, but I never look at the screen on my flash player. I rarely use the FM tuner either, but I use iTunes almost everyday, and it only plays nice with the real thing (iPod).
So I’m not interested in people’s “let down” (including Creative’s CEO and his broken English). But there’s something else that is bothering me.
This Expo Apple has significantly altered their business model. Apple used to rely on high-end design and refined consumer taste. Now Apple is all about creating vertically integrated “ecosystems” that lock in customers. At the Keynote, Jobs invited everyone into two important Apple ecosystems: iTunes+iPod and MacOS+Mac hardware.
The real power behind the shuffle is that it represents the cheapest way to enjoy the best online music store. Likewise, the Mac mini makes the elegance and power of the Mac OS available to everyone. This is a significant departure from Apple’s M.O.
And this isn’t bad. I think the shuffle will teach flash mp3 makers a sore lesson on the importance of a connected system, and the danger of “feature creep”. So, what’s worrying me? Well, it is cannibalism. I would eat through the muscle of my arm to get my shuffle a few days sooner, but that’s not what I’m talking about.
Consider this: consumer A is looking for a new Mac. He/she is replacing an ailing desktop, and is interested in making DVD’s. Pre-Expo this consumer was looking at PowerBooks and iBooks, because at the time adding a SuperDrive to even an eMac would push you to a thousand dollars. And why not get an iBook with SuperDrive for a few hundred more? Now Post-Expo the same customer realized he/she can get the Mac mini, keep his/her old keyboard and mouse and buy a monitor from Wal-Mart and still be burning DVD’s for an extra $100.
Where is the problem in all this? Apple gets $600 instead of $1000 or $1500 or even $1800. I know DVD burners aren’t the only reason to get a higher-end Mac, but I can’t help but think that the mini might be too good a deal. I guess we’ll have to hope that Apple is making a healthy margin on mini’s and will make it up on volume.
Despite this worry, I am thrilled to see Apple knock down the walls and finally invite in the unwashed masses (mostly PC users). Everyone deserves and Apple, whether it be an iPod or Mac.
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January 13th, 2005 at 7:56 pm
Agreed. It takes real genius (and guts) to take out features from a product.
But I don’t think removing the screen was primarily to preserve the high-end iPod sales. I think Apple decided it needed to hit $99 with acceptable margins and enough storage to make it a useful product. Adding a screen means a bigger battery and extra buttons, which makes for a larger and more expensive product. Apple is betting that customers would rather have 512 MB of space than a screen and FM radio, and I think they are making the right bet.
I also agree with the ecosystem comment. You see a lot of iPod specific 3rd party products, but rarely any for other brands. This is probably because there are too many other brands with small individual market shares to do anything other than generic accessories.
This point can’t be overemphasized, because it’s why retailer that wouldn’t touch a Mac with a 10-ft pole will carry iPod and related accessories. (Look up the comments made by the Sharper Edge CEO about this.) Also, it means Apple has a bunch of small companies that depend on the success of the iPod, and those companies will spend marketing money to help promote the iPod.
Where I disagree is that Apple has an equivalent ecosystem for the Mac. In fact, the opposite is true; the Mac doesn’t have much of an ecosystem compared to Windows and it suffers because of it.
I wouldn’t worry about the Mac mini cannibalizing Mac sales. There are a lot of people that won’t want to put together their own system or that want a laptop or a machine with a larger internal drive. Also, Apple is well beyond the days of selling stuff at a loss and making it up on volume. While Apple doesn’t make as much money on a mini as on a more expensive computer, I’ll bet that percentage-wise it’s still good, and better than what (say) Dell gets for its stuff.