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theONbutton 60: The emergence of Appleiance

theONbutton 60 is a sixty second commentary on a consumer electronics topic

Question: With a hat nod to Monty Python, “What did the iPad ever do for us?”

Two second answer: More Appleiance, less Mac.

Ten second answer: iPad’s release and relative lack of Mac activity demonstrates Apple’s continued movement towards high margin easy to use consumer appliances with Macs decreasing in prominence.

The other forty-eight seconds: We continue to wait for the 2010 MacBook refreshes with current models behind the hardware curve; we have already had almost half a year of Core i7 Dell and HP laptops. There have been minimal recent OSX software releases with Google, Facebook and Windows 7 platforms stealing the large screen software industry’s spotlight.

Looking purely at component cost, the base iPad is estimated to be a 50+% profit margin product, Most Macs probably can’t get near that, especially iMacs which have low comparative volume, likely high distribution costs due to size and lower selling prices than Mac Pros. iMac and Mac Pro price points will likely increase as they continue to become niche products. Perhaps iMacs will even disappear from the line-up.

Perhaps OSX updates may become less frequent due to the expense of maintaining the environment compared to the growing range of iPhone OS devices. OSX end user support must also be that much more expensive than iPhone OS support since the iPhone OS environment is much more tightly controlled.

It is telling that Apple has chosen to focus upon a third iPhone OS device while we await MacBook refreshes. Steve Jobs recently said that Apple is now a mobile devices company. While I believe MacBooks will continue to be part of the Apple world for some time to come, looking out five years MacBooks may become the secondary devices iPad owners buy when they have a specialized need.

It used to be the case that iPhone OS device sales were seen as the way to bring in new Mac sales. I think that dynamic may alter as I expect Apple to encourage consumers towards a second iPhone OS device instead, due to their likely higher margin. I continue to view the iPad as the start of a series, with the potential for an iPad 13, 15 etc.

For a company famous for successfully maximizing its bottom line through high margin products, the temptation to turn iPhone OS consumer appliances into its main focus must be strong.

Neil Berman

www.theonbutton.com

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Mar 20, 2010 - Posted by | Analysis, Apple | , , , , ,

3 Comments »

  1. […] updates really fall in line with my post last month about how Apple seems to be focusing away from Mac in favor of iPhone OS […]

    Pingback by MacBook Pro refresh leaves Apple fans wanting more « theONbutton | Apr 13, 2010 | Reply

  2. […] Two months ago I would have agreed that is an absurd idea, especially for a product without a proven market. After a few weeks of daily use with my iPad 3G however, I believe with more conviction than ever in my recent article The emergence Of Appleiance. […]

    Pingback by Appleiance is really happening « theONbutton | May 22, 2010 | Reply

  3. […] not Mac I’ll admit I was pretty happy to hear that Steve Ballmer seemed to share my view on Apple’s strategy at D8 today.  The Microsoft CEO declared that the PC’s biggest competition in three years […]

    Pingback by Steve Ballmer: Future PC competition will be from tablets, not Mac « theONbutton | Jun 3, 2010 | Reply


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