[ljlolel]

This is not necessarily a good thing. Apple has largely $1000+ computers. Them taking 91% (and having single-digit overall market share) means that consumers increasingly prefer small portable cheap low-power computers (netbooks and similar), while the high-end market disappears.

As an analogy, it would be like Cray boasting 20 years ago that they owned 90% of the $10,000+ computer market.

Apple needs to innovate on the low end, or die.

On the other hand, it seems like computing for the masses will converge onto mobile devices, and Apple currently has the strongest offering in that market.

[pchristensen]

I don't know, this is like saying Mercedes needs to get into the sub-$40K market. Maybe they do, maybe not. I think Mercedes and Apple would rather own the top and have the market rise to them.

[pavlov]

Mercedes is quite active at the lowest end of the market: they produce cute microcars under the Smart brand. (I guess Smarts might not be available in the US at all, considering Americans' excess-oriented taste in automobiles.)

[pchristensen]

OK, fine. Apple makes the iPhone, the SmartCar of computers.

[thwarted]

The iPhone may be the SmartCar of computers, but it's the Mercedes of phones. While we'd all like the believe that that highly capable phones are really full fledged computers, that isn't yet the case and Apple doesn't even strongly market it as such (there's no "replace your desktop computer with an iPhone" marketing).

[vaksel]

smarts are around, but they are not that popular. I think they've been out for two or even three years here, but I haven't seen one yet

[olefoo]

I see two or three a week, but that may be a function of the places I spend my time. They strike me as tippy and underpowered. I could see using one in the city, but I wouldn't want to take one from Portland to Seattle, or to the mountains.

[swombat]

I've driven a smart a few times, both on the motorway and in the city, and I have to admit that it's really quite pleasant to drive, in town anyway.

In town, it feels really, really nimble and quick. It accelerates quickly, it parks easily, it fits into small gaps and spaces, it can turn on a dime, and generally it just feels good.

On the motorway, it's ok until 75mph or so (speed limit being 70mph here). Above that it start to feel very light on the road... 85mph was the highest I dared to take it, and it felt like every gust of wind might knock me off the road. Around 70mph, though, it felt small but steady.

On the whole, I think it's a really nice car, particularly for those who like a modern gadget feel. The Smart feels like an iPhone car, if you see what I mean. You wouldn't do your excel spreadsheets on it, but it's damn nice when you're out and about in the city.

[icefox]

Seen a few, even thought about getting one, but for 2K more I got a used 3 year old car that has a bigger trunk, back seats, much better gear box (manual 6-speed) and is overall much nicer.

[sgoraya]

Very true - In Europe, you see those tiny Mercedes everywhere. A couple of people commented that they have been spotted in the US though I have not come across one yet in California.

[russell]

It is available in the US, but it is not cheap. IIRC it's in the range of 20K.

[gamble]

Smart has been a huge money pit for Daimler. They lost billions, cancelled most of their unreleased vehicles, and had to be absorbed back into Daimler.

[Locke1689]

Fine - Porsche.

[pavlov]

I don't think the "Apple of automobiles" exists, in the sense of there being a premium brand with substantial marketshare that would be operated by an independent company. (Porsche recently became a subsidiary of Volkswagen.)

Edit -- on second thought, I guess BMW could be it. They are still independent and don't produce anything cheaper than the Mini.

[Locke1689]

Porsche works fine as long as you consider their very long history before the month or so ago where they got acquired by Volkswagen.

[mechanical_fish]

the high-end market disappears

Or the whole market for things called "computers" is growing, and the high-end market is just growing slower than the rest of it.

This doesn't mean that the high-end market is doomed. It might just be growing at a slower rate.

You may ask: Why doesn't Apple then try to get into a business that is growing faster? The answer is: Sales growth is not the metric. Any business can boost sales by lowering their profit margin. (Old-school dotcoms used to grow like wildfire by giving the product away below cost and hoping to make it up in volume.) What matters is profit growth.

[adamc]

No, my answer would be: they did. iPhones and iPods are definitely markets that are growing faster. Apple did the smart thing and moved into other markets where its design expertise could make a big difference.

[ptomato]

People have been saying for years that Apple needs to come out with lower end products or they'll die. Their steadily increasing profits (even through the recession) and massive cash reserves say otherwise.

[anigbrowl]

True, but (1) we had many years of quite good economic growth until 2008 and (2) their big $$$ are coming from the iPhone right now - wasn't there a post yesterday observing that it's outselling the Mac? So one could argue that the iPhone is their lower-end product line: Mac design philosophy that goes in your pocket.

[ptomato]

Except that as far as mobile phones go, the iPhone isn't particularly low-end pricewise.

[josefresco]

There's a big difference between being successful and being change-the-world successful. I'm sure Apple would love a piece of the latter but given their business model it probably won't happen.

I can't imagine Jobs is happy about being just being a billionaire when there are guys like Gates who dwarf his wealth and success (and therefore have the cash to actually saves many more lives and alter world history)

[jemmons]

I'm sorry, it seems one could conclude from your statement that you don't believe Jobs-era Apple (which, after all, has had basically the same business model all these years) hasn't changed the world. It seems to me they've already done that a few times over.

The iPod. The iTune Music Store. The iPhone. A world-class music studio for $500. A world-class motion picture studio for $1000. The evolution of the digital hub. The insistence that technology should "just work". I honestly don't know what else you could expect from any other company of any size or business model.

[anigbrowl]

I think josefresco meant the world outside the computer market. The iPod and iPhone, I agree 100%.

Music and movie software...no. As a professional in that sphere I personally feel Apple comes late to those parties after working out or buying what everyone else is wearing. That's not meant as a put-down, I just think you're overlooking how much innovation comes from third parties.

[jemmons]

I've been using Logic since the Atari days, and I certainly don't mean to belittle the contributions of eMagic! I'm less familiar with the linage of Final Cut, but I'm sure whoever developed that before Apple did fantastic work.

But, though it's become a cliche in this context, I think what makes these products world-changing is Apple's vision. [EDIT: actually, now that I think about it, it's not their vision. It's their business model (the very thing the OP was deriding). Apple sells hardware and can use software as a loss leader. So it's able to sell Logic and Final Cut for much less than when they were the sole income of their respective companies] After Apple bought Final Cut and Logic, they slashed prices, refined the interfaces to make them much more approachable, and gave users a way to migrate from simple iApps, to Express versions, to the full-blown Studio packages.

This ease of use, low cost, and easy migration vision of Apple's all works together to democratize the creation of media. As a platform, it places an emphasis on the creation of media, not merely the consumption of it.

That's what I find world-changing about it, and I think its all stuff that's happened post-Apple-buyout. But I'd love to hear more about any similar efforts made before Apple bought these products.

[anigbrowl]

Well, the cliff notes version:

Adobe were the breakthrough company to develop video editing on Mac, with what is now Premiere. Final Cut was a spinoff of that when the developer left for Macromedia, which was in turn split between Apple and Adobe (FC & Flash, respectively): http://steveblank.com/2009/05/11/supermac-war-story-x-the-vi...

Now you're right about Apple's price cutting, and it's more obvious how this drove down the cost of video - but on the music side while you had ProTools at the extreme high end and Logic at the prosumer price, over on the (post-Atari) PC side you had very aggressive competition from Steinberg (Cubase), then Cakewalk, and ultimately a host of others - not to mention trackers. eMagic had a big first-mover advantage in their price space, but competitors were really eroding that with a combination of pricing and ease-of-use. I personally think EMagic would have gone bust within 2 years if they hadn't been able to fall into Apple's arms.

To be fair to Apple, they were very smart to focus on things like high bus bandwidth and high-resolution hardware timers which are de rigeur for this sort of work. Wintel was able to play catch-up in large part because of the rise of electronic music, where things like hardware latency and so forth were less critical.

[josefresco]

You're living in a consumer bubble.

When I referenced "changing the world" I meant grand social problems and solutions that effect almost every human. Not a bunch of spoiled tech/gadget obsessed "Haves".

Ask the kids in Ghana how the iTunes Music Store has effected their lives.

"I honestly don't know what else you could expect from any other company of any size or business model."

We should all expect more from ourselves than simply overpriced/shiny electronics.

[jemmons]

I admit I'm a very pro-capitalism type of guy and I indulge in many excesses that I should not take for granted, and yet do.

But I absolutely refuse to feel anything but joy and elation when I consider the miraculous tools I have available to me that allow me to complete works undreamed of by any generations previous.

It may naive, but I have to believe that if we are to care for the children of Ghana, we have to make more of ourselves, not less. To put it another way, would I know anything of Ghana's plight were it not for my shiny electronic computer and its connection to the miraculous interconnected network of shiny electronics?

[jimbokun]

Cringely has an interesting take on the relationship between Gates and Jobs and how they perceive each other.

"In Steve's mind, he has the best of everything. Apple software is cooler than Windows will ever be. Palo Alto, where Jobs lives, is trendier than Seattle. Even Jobs' plane, a Gulfstream V, is cooler than Gates' Challenger 604. It goes on and on. Gates has never even considered this latter point, but I'll guarantee you that Jobs has, and he revels in it."

http://www.pbs.org/cringely/pulpit/2002/pulpit_20020110_0007...

So, no, it is not clear at all that Steve believes that Gates is more "successful" than he is. Furthermore, it is no longer insane to imagine that, depending on how long Jobs health holds out, he could presiding over Apple one day with a higher market cap than Microsoft (consider how Apple surpassed Dell in market cap a few years back).

[inovica]

Apple has always had the philosophy of selling at higher prices than others based on the 'quality' of their products - I'm not judging on this, just saying - it also gives them better margins. I remember there was a quote from Steve Jobs saying that they had a market share akin to BMPW (I might have that wrong) and that there was nothing wrong with being the BMW of the computer world.

[potatolicious]

I disagree. Netbooks are a fad that will not last over a few years. For one thing, the margins on netbooks are even slimmer than the cheapo laptops Dell was making before the "netbook revolution", and manufacturers are getting murdered left and right by this.

It's the Wal-Mart effect - you flood a market suddenly with cheap, shoddy product and people will jump for it, but it's not sustainable as your vendors and suppliers start dying off.

Profit margins are disappearing for the likes of Asus, Dell, and HP, and they're skating on thinner ice than ever before. Would you rather be selling $300 computers at a $5 profit each, or $1200 computers at a $100 profit each?

People got on Sony's back early on when they claimed that the introduction of a netbook will do nothing but start a "race to the bottom". They were attacked for being out of touch with reality and trying to peddle overpriced ultra-portable notebooks. But they were right.

[briancooley]

Them taking 91% (and having single-digit overall market share) means that consumers increasingly prefer small portable cheap low-power computers

Their market share might be single-digit, but hasn't it been growing?

Another interpretation might be that consumers are simultaneously migrating towards Apple PC's and laptops as well as purchasing netbooks and similar for added convenience. That's the story in my household.

[rimantas]

I am not sure that consumers prefer netbooks. I still don't know anyone owning one. I must admin I don't believe in netbooks market—one part will be taken by smartphones, another by proper notebooks. Speaking of which: Apple's computers sales grew only by 4%, but notebook sales grew by 13%. Going into low-end, low-price and nonexistent margins market would be the sure way for Apple to die.

[adamc]

Another alternative is that they live with being the Jaguar of computers and look for growth in other markets.

[josefresco]

Oh what a horrible, horrible analogy. I wouldn't wish being the "Jaguar of anything" on my worst enemy.

[sahaj]

is cray still relevant?

[sahaj]

i don't understand the downvote. this is a serious question. i have not been around this world long enough to know cray well. it seems to me that the original commenter made a point that cray targeted the high end market and it has not been well for them, and i would like to understand how they are doing today.

[jodrellblank]

Looking at the Top 500 Supercomputers list, there are Crays in position 2, 6, 11, 12, 13, 21, 23...

http://top500.org/list/2009/06/100

So, they aren't out of the game. The previous lists are available, if you're interested you could compare Cray's standings with previous years.

I don't understand the downvote. this is a serious question.

The way you asked it carries an implication that Cray is not still relevant - it has the impact of a statement dismissing Cray rather than a quesiton about Cray.

[newacc]

i agree with you that "Apple needs to innovate on the low end, or die" because cloud computing and browser OS are going to be a game changer - if every task is done on the net and if the browser is the OS then how would one differentiate a PC from MAC??? all you need is a hardware with a browser OS that is slick and speedy, while all the apps that resides on the net will have same look and feel on all the browsers doesn't matter what hardware you're using!

[arrrg]

market revenue =! market share

[zimbabwe]

Apple's market cap is around Google's, according to Newsweek. They make a pretty awesome profit on every product they sell.