Divide and Conquer: Why Apple Has an iPod Division

Robert Cringely editorializes on the latest changes inside Apple with the shifts of the execs and the creation of the iPod division. He believes that Apple is exiting the Mac hardware business (maintaining it only until their margins are not met) and it is going to focus on the OS, apps and the music business.Our Take: Down in Cringely’s article, he suggests a per-month fee to lease a Mac instead of a hard fee. Two problems with that:


-people will want to upgrade their hardware as often as possible – not economically viable for Apple.

-so Apple’s interest is to release as few new machines as possible. Not a good strategy either.


Worse, they’re stuck between a rock and a hard place. Old machines are powerful enough for their target market. If they want people to upgrade their hardware, they need to make their new software explicitly incompatible with old hardware, which will –obviously– piss people off like crazy.


Besides, Apple can’t become an OS-only company (not even in the long run), they don’t have the resources to develop an OS that works on 3rd party hardware (especially the vast x86 or alike platform). Mac OS X would be as expensive to develop as Windows is. If Windows costs 10% in R&D off its retail price, and Mac OS X stays at ~2% market share, Apple would have to sell MacOS for 3 times as much as Windows to just even out.


If Apple was to do what Cringely suggests, we would have to say bye-bye to the Mac platform and I don’t think that Apple would want to do that just yet. However, I do find fishy why there was no new/faster G5 Macs announced since last year, it seems unlikely now that Apple will jump directly to 3GHz on the upcoming WWDC (a speed Jobs promised for this summer).


Cringely’s article is not completely off the mark, he has many valid points. However, some of his suggestions probably wouldn’t work well in the real world.

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