Apple doesn't have to sell itself to succeed with Intel
Tags: Apple, Intel, Microsoft, Marketing
I was going to write some more thoughtful reflections on the Apple/Intel this morning, but I see that Robert X. Cringlely has beaten me to it. It is a truly inspired article; if you haven't read it, go do so. Robert's assertion: Apple isn't worried about the Osborne Effect killing off their near term sales because Intel will buy Apple to finally get out from under the thumb of Microsoft. Steve Jobs exits his interim CEO role, and resumes as CEO of Pixar/Disney/Sony (you choose which other buyout scenario you most believe).
I have to say, it sounds attractive. But is this the type of outcome you'd expect from an executive who has nurtured a risk-reduction plan for Mac processors for five years? Again, looking at this deal as a marketing strategy provides a little different point of view. Viewed through a marketing and analyst lens, I see a somewhat different future:
The more I think about the Apple/Intel deal, the more I like it -- and I'm typing this entry on a Powerbook. But I think what Jobs sees is that there are huge opportunities in new types of products that people don't strictly think of as computers. The new Apple/Intel alliance allows him to address those markets, just as the Pixar/Disney alliance did for Pixar's movies. And if Microsoft's monopoly gets broken, that's just icing on the cake, not the goal. But more importantly, it could establish Steve Jobs legacy as truly the smartest marketer in Silicon Valley for once and for all.
The next two years are going to be very interesting.
I was going to write some more thoughtful reflections on the Apple/Intel this morning, but I see that Robert X. Cringlely has beaten me to it. It is a truly inspired article; if you haven't read it, go do so. Robert's assertion: Apple isn't worried about the Osborne Effect killing off their near term sales because Intel will buy Apple to finally get out from under the thumb of Microsoft. Steve Jobs exits his interim CEO role, and resumes as CEO of Pixar/Disney/Sony (you choose which other buyout scenario you most believe).
I have to say, it sounds attractive. But is this the type of outcome you'd expect from an executive who has nurtured a risk-reduction plan for Mac processors for five years? Again, looking at this deal as a marketing strategy provides a little different point of view. Viewed through a marketing and analyst lens, I see a somewhat different future:
- Apple plans to differentiate in new ways compared to its past. Apple made the Intel deal because it has established itself as a design and systems leader, not as the users of the best and fastest chips. People love Apple iPods and Powerbooks (myself included), despite the fact that Apple doesn't make them; Taiwan-based manufacturer Quanta does. Yes, it is nice to have fastest computer in the world bragging rights, just as it is nice to be the car manufacturer that wins the most NASCAR races. But Jobs rightly recognized that this is not the only differentiation that matters, or even the most important one. In exchange, Apple bought never having to write the following sentence in press releases: "Revenues for the quarter were below expectations because of processor supply limitations.
- Apple has more announcements to limit the Osborne Effect. Jobs isn't dumb; he knows about the Osborne effect of announced products killing sales of current ones. So I believe that Jobs has more announcements waiting in the wings that will help keep current sales aloft prior to the arrival of Intel Macs in 2006 (and has said as much in interviews).
- Probable new short-term products are processor-agnostic. I'd bet on two specific product areas that have nothing to do with processors: music and movies. We will certainly see new iPods and music offerings, and we may see the iMovie video store before Christmas, along with an Apple-branded flat screen TV/media center to watch those movies on (although we'd bet that is more likely for Christmas 2006).
- Intel doesn't have to buy Apple to have a huge effect on the market. Blackfriars agrees that Intel is looking for a way to show more of its value, yet Microsoft stands in its way with little innovation and slow release cycles. With Apple, Intel can now deliver showcase products in Apple skins years before Microsoft will ever support them. And because Apple doesn't support a million different configurations, it will innovate two to three times faster than Redmond ever could.
- An Apple platform could still be rebranded by OEMs. Pat Gelsinger, one of the smartest guys in Intel, now heads up the platform division. While Apple's OS may not run on garden-variety Wintel hardware, there is no reason Intel could not sell Mac hardware as a platform to its OEMs. HP already sells Apple iPods under its name, and the world hasn't come to an end. HP could just as easily license Apple Macs for sale -- -as could Dell, Sony, and eMachines. The fly in this ointment? Microsoft's secret OEM deals with PC manufacturers. The trick to getting around it? Intel and Apple have to clearly define this new Mac platform not to be a PC.
The more I think about the Apple/Intel deal, the more I like it -- and I'm typing this entry on a Powerbook. But I think what Jobs sees is that there are huge opportunities in new types of products that people don't strictly think of as computers. The new Apple/Intel alliance allows him to address those markets, just as the Pixar/Disney alliance did for Pixar's movies. And if Microsoft's monopoly gets broken, that's just icing on the cake, not the goal. But more importantly, it could establish Steve Jobs legacy as truly the smartest marketer in Silicon Valley for once and for all.
The next two years are going to be very interesting.
posted by Carl Howe at
6:41 AM
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