I came up with this idea a few weeks ago after hearing that Apple would charge $79 for iLife ‘05, $79 for iWork, only $499 for the Mac mini, and only $99 for the entry level iPod shuffle. Numbers.
It’s all about numbers.
What put me over the top was an article I found on MacDailyNews about Microsoft’s Steve Ballmer, quoted in USA Today. Ballmer talked to USA Today about being “first.” You get to figure out what “first means.”
Ballmer: “You’ve got to be not just first in an area; you’ve got to be first with important innovations even in areas that you’ve pioneered.”
USA TODAY reporter: “Well, you guys have proved over and over again being first is not necessarily …”
Ballmer: “We love to be first.”
Reporter: “You love to be first but …”
Ballmer: “We love to be first.”
Reporter: “You certainly weren’t the first — you know, I mean, here looking at your …”
Ballmer: “We love to be first. Well, our big success is Windows. We were first. Windows, we were first — and then everybody faded out because there was a period during which the concept was — I mean, Apple stuck around with their concept of that, but everybody else faded out, basically.”
What’s that all about? Microsoft first? Click Here to read the whole article. Keep reading for my take on Apple’s “numbers” in 2005 (and beyond) and what it means for you, the Mac user.
Begrudgingly, we have to admit that it’s OK for Apple to make a good profit selling us Macs, software, iPods, and music. If they couldn’t make a profit Apple wouldn’t be around. Profit is important (compared to, say, Microsoft’s obscene profits and illegal activities as a corporate criminal?).
So, like it or not, Apple has, since Job’s return in 1997, been about the numbers. Sales numbers. Unit numbers. Profit numbers. Balance sheet. Cash on hand. Numbers.
More Macs and more software sold means more profits for the Cupertino computer maker. That means we get more cool stuff on a regular basis. Some could argue we pay a premium for Apple’s goodies, but we love it regardless.
Microsoft, the king of cash cows, has always been about numbers, too (obtaining appropriate numbers in a legal manner is a different issue). Sales, sales, features, profits, units.
The Redmond Goliath has more money (numbers) than it knows what to do with, so it’s giving some back.
In the past couple of years, Microsoft has had some problems with numbers. Not sales. Not profits. Problems. In numbers.
The number of problems Microsoft faces these days are enormous. The number of days, dollars, man-hours it’s taking to deliver the next generation of Windows (Longhorn). The number of security holes in all flavors of Windows products.
The number of customers who no longer appreciate Microsoft and are searching for new solutions has escalated rapidly. The number of Microsoft enemies has also increased. Corporations. Competitors. Governments. Countries.
While Microsoft isn’t going to disappear from the computer scene any time soon, the number of solutions relative to the number of problems appears to be disproportionate. They’ve got a lot more problems than they have solutions.
Apple’s numbers recently have been the best in the company’s history. Record quarterly revenue. Record profits. Near record stock price. Record numbers of products shipped (how does 4.5-million iPods in one quarter sound?).
The numbers don’t add up for Microsoft and they’re beginning to add up quite nicely for Apple.
Steve Ballmer claiming that Microsoft loves to be first got me to thinking. First at what? First at innovation? Nope. First at Swiss Cheese security software? Nope. First at profits? Possibly.
It occured to me that Apple’s numbers are the best they’ve ever been and are about to get much, much better.
For example, many of us headed out the door to pay $79 for a new version of iLife. Just a year ago it was free. It’s still free with every new Mac but the installed base is willing to pay extra for it now.
Millions of us have iPods. Yet millions more of us are going to ante up another $99 or $149 for still another iPod (shuffle). That’s good news for Apple as they’ll continue to dominate in a market they defined. Except this time, the numbers are on the low end.
The Mac mini
Apple’s announcement of a $499 Mac was a stunner. That number is about the bottom of the computer barrel, don’t you think?
You’d be hard pressed to find a comparable PC (in size, features, software, anything) for the same price. That means Apple has figured out how to make a quality, attractive product at a very competitive price.
Of course, Apple will need to sell about three of the Mac minis to make the same money as they did with an iMac G5. Here’s how they’ll do it and what it means for you, the Mac user. Apple plans to bring movies to your Mac mini over by the TV. Click Here for the final numbers on Page 2.
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See the numbers lining up? Microsoft is weakened. Apple is strengthened and growing. The numbers are now in favor of the Mac maker because the company has learned how to peel an onion.
Peeling By The Numbers
Think of the layers of an onion. The outer layers are rough and shed easily. The warm, moist, tasty part of an onion is in the middle. The onion’s skin has to be removed first.
Then, layer by layer, the entire onion can be revealed (for whatever insidious purpose you may have for said vegetable).
Steve Jobs and company are peeling the onion. Layer by layer we’re seeing it now unfold clearly before our eyes (and our checkbooks).
The move from Mac OS 9.x to Mac OS X. Jaguar. Panther. Soon Tiger. The move from fruity colored iBooks, iMacs, and PowerMacs, to a professional, sturdy, aluminum and white plastic product.
iTunes. Then the iPod. Then the iTunes Music Store. First on the Mac, then on Windows.
iLife is the digital hub, now expanded by the addition of Garageband. And a price tag. Even iWork is part of the layered onion from Apple.
First it’s just Pages and Keynote. Next year it’ll be Pages, Keynote, and (my prediction) “Numbers,” a spreadsheet we can be proud of and fully integrated within iWork.
The Mac mini – Redux
More numbers. The Mac mini is not designed and marketed as an iMac G5—premium and sleek and designed to make everyone who does have one a little more envious (so we can be smug and all).
The Mac mini is designed for numbers. Big numbers.
Apple needs to sell a lot of Mac mini’s. They’ll sell in big numbers to current Mac users who already love the most recent generation Macs. The mini will also sell in big numbers to the Mac installed base who haven’t upgraded to Mac OS X yet.
More importantly, the Mac mini needs to (and will) sell in big numbers to those millions of disgruntled, unhappy, dissatisfied, and tortured Windows users.
Layer by layer. By mid-summer Apple may have sold a couple million or more of the Mac mini. Then along comes Mac OS X Tiger.
Those Mac mini users will want to, and will, upgrade to Tiger. For another $129. More numbers for Apple.
By the end of the year, if not sooner, but certainly by Macworld 2006, another onion layer will be removed and further empty some numbers from our checking accounts or increase our credit card balances.
Yes, it might be iFlicks, or the iMovie Store, or whatever. Once a few million new, easy-to-use, and inexpensive Mac mini’s hit the streets, and broadband useage numbers continue to grow, and H.264 hits the streets (high quality video, low file size), you can bet on Apple to deliver a movie addition to iTMS.
Why was the President of Sony on stage with Steve Jobs at Macworld? Numbers. HD numbers. It’s coming and it’s H.264, the new standard in video compression that’ll show up on HD-DVD and BlueRay DVD (may the best man win).
Oh, did I mention that QuickTime 7 (don’t you just love those numbers?) will also handle H.264?
Oh, wait. There’s more. Did I mention that iChat AV in the upcoming Tiger will also use H.264 for video and audio?
Apple and Sony sitting in a tree. K-I-S-S-I-N-G.
Sony is banking heavily on the new HD products to take the nation by storm. And Apple wants to be the box you use to plug into that new Sony HD TV.
What? How’s that possible? Did you notice that many HD LCD TV’s are coming with DVI connectors these days? Did you also notice that the Mac mini comes with a DVI video connector.
Hmmm. Coincidence? I think not. At $499, a Mac mini will find a spot near many new LCD TVs—next to or replacing the DVD Player, perhaps the DVR/PVR player, maybe even the stereo system.
It’s All In The Numbers
It’s in the numbers. Apple is rolling in the cash numbers; revenue numbers, profit, numbers, and units shipped numbers. Market share numbers are on the rise. The market share numbers for music players are staggering. No one is close.
The iTunes Music Store has already sold over 250-million songs. Did you notice that NO ONE ELSE is mentioning how many songs they’ve sold on their online download stores?
Once the number of Mac mini’s is sufficient, look for more numbers from downloadable movies from Apple. Sony movies. Pixar movies. And many others.
It’s all in the numbers. 2005 will be a great year for Apple, for Mac users, and finally, some good news for Windows users.