'Best of Breed' Business Model a Chink in Apple’s Armor? 32 comments
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A funny thing happened to me on the way to the Apple (AAPL) store. I picked up the latest copy of Information Week magazine and read an article about the HP (HPQ) Voodoo Envy 133. Long story short, I’m no longer going to the Apple store. I’m waiting for the Envy.
Vista Woes
After a painful year running Vista (MSFT) I want need a dependable lightweight laptop with amazing battery life. So I did the once unthinkable: considered getting a Mac. In the past two weeks I’ve visited the Apple store twice to checkout and ask some questions about the Mac Air. I would have bought it the second time, but it was the South Beach store and it seemed the price was a couple hundred dollars higher than in Dallas (no surprise there).
While many rave about the OS X, and I have no doubt it is better than Vista, corporate types like me simply need some applications that do not run on the Mac; and I want to avoid dual boot (granted VMware (VMW) does have a better solution). However, since I could do 90% of my work on OS X I was willing to get a Mac as a second mobile laptop primarily due to the amazing battery life.
Apple’s Killer Products
Apple has re-built their business this decade on the back of its product designers. Their sleek integrated products simply blew away the competition. Their best two products the MacBook and iPod have driven astounding growth.
The iPhone looks like it may be a third category killer. Granted, Apple has some pretty powerful competitors to overcome like Nokia (NOK), Samsung, Sony (SNE), Motorola (MOT) and HTC. I don’t include Research in Motion (RIMM) because in a couple years battery life will reach a point where the last feature (RIM’s battery efficient devices) Blackberry dominates will be a non-issue. Since practically every other phone supports ActiveSync, IT departments will finally be able to jettison the extra cost of maintaining a Blackberry server. Soon, when Apple releases its 3G / ActiveSync iPhone for $199 its sales should sky rocket. Although, how long can Apple maintain its lead in the cell phone market? Probably the most cut throat product market.
The iPod is still head and shoulders above the other MP3 players. In fact, I just bought my second iPod Nano a couple months ago. However, this market is leveling off as it is becoming more common to find people with even multiple MP3 players. The HDTV / LCD market is commoditizing like the original TV market did. You can see this at any Best Buy store or even at Dell’s (DELL) Northpark mall store. This is making Apple’s nice sleek desktop models look comparatively less impressive. Especially when doing a side by side comparison at the Best Buy stores that conveniently now offer Apple computers.
Mac Attack
So back to the Mac, the heart of Apple. The MacBook is a solid product, but I just saw a Gateway laptop at Best Buy for less than $900 that included 4GB of memory and an Intel Core 2 Duo – undoubtedly very competitive with the Mac book. It is amazing how more power can make up for many of Vista’s issues. The Mac Air has been the wow product. While this year the Air has faced stiff competition from the Toshiba Portege R500 and the Lenovo ThinkPad X300 the HP Voodoo Envy 133 ups the bar compared to everything in the market right now.
It has features the Mac Air is clearly missing like a removable battery and more than one USB port, but the amazing part of the Envy 133 is its design. Its appearance is cool. It has a removable battery. It has a removable battery (repeated for emphasis). It is .7 inches thick. It’s sturdy due to its carbon fiber chassis. It has introduced a few new design elements that upon seeing them just appear to be common sense, such as putting the Ethernet port on the power connector. It has an HDMI port. It has instant access to Skype and an Internet browsing through the Voodoo IOS.
Rahul Sood may have bested a fragile Steve Jobs and made Voodoo HP’s Lamborghini. I don’t expect Apple to stumble any time soon. They still have a stranglehold on the MP3 player market; with no end in sight. They still are releasing a game changing iPhone while competitors aren’t innovating but instead copying Apple. Which Nokia appears to admit.
“I don’t know what is copy and what is original but if there is something good in the world we copy with pride.”
Windows Vista is finally getting to the stabilizing service pack time frame and despite prevailing wisdom the MacBook and OS X have not been completely without defects either. Windows Vista is still a very disappointing product that will be skipped by most enterprises. However, Apple doesn’t offer anything close to true enterprise client management software. If enterprises migrate from Windows they are more likely to embrace a Linux based thin client than OS X. Now if Apple decides they want to move to the enterprise by purchasing Sun Microsystems (JAVA), things could get interesting. That doesn’t seem to be the direction Apple is pursuing.
Apple depends on being the best of breed consumer product. Something that HP Voodoo’s division might have something to say about, exposing some kinks in Apple’s business model…
Disclosure: I own a very small position in out of the money MSFT Jan 2009 calls and I own EBAY. I do not have a position in: HP, APPL, VMW (although I do own EMC), NOK, SNE, MOT, RIMM, BBY, TOSBF, LNVGY, JAVA, or DELL.
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This article has 32 comments:
You also still miss one main point regarding Apple computers to non-Apples. With the Apples you get to run Mac OS. You admit it's head over heels better than Windows, yet you choose the latter. You don't get it...yet. You almost did, but then you didn't. Oh well!
To think that battery life is the only competitive advantage that RIM has is another bad joke. The layman totally misunderstands their true advantage: bandwidth efficiency. This will not go away when iPhone 3G is introduced. A comparison of download speeds of the bold vs. iPhone will show this very clearly.
Finally, regarding the Macbook Air vs the Envy: The specs are basically the same except it appears that the voodoo's battery life is rated at 3h45m while the Macbook Air is rated at 5h. It will be interesting to see how it's priced by HP. I would guess though that they will basically price it the same as Apple. But once voodoo launches, Apple will upgrade the Air again and give you more for the same price. I think you are fooling yourself to keep going with an OS that you yourself realize is inferior when any of the objections posted above are easily surmountable.
a dual boot would be the least of your problems
this kind of reminds me of a dog who gets fed half the time his master calls and beaten the other half. the dog comes when he calls but ears back cringing on his belly every windows user thinks the problem is he is too stupid to run the system right not that the system just does not run right
Save yourself from Windows regret. Find a friend or a switcher and ask them, "How's it going?"
You might see a reason to go w/ the Mac.
Good luck, whatever your choice...
I am forced to run Windows to access my business. Once I realized how easy it is to run OSX and Windows - simultaneously - it was easy to replace my old laptop with a MacBookPro. It's a little odd at first seeing Mac and Windows icons coexisting on the same desktop, but the operation is seamless. Once your brain gets used to the new layout and functionality it is hard not to increase your productivity.
Am I insane? Perhaps. But it gets better. When I decided to upgrade from Tiger to Leopard - different versions of OSX like going from XP to Vista for Windows people - I didn't have to buy a new computer. I just installed the software. I didn't have to hunt down drivers for my peripherals, either. Everything worked.
The Macs might have been more expensive at the outset if I only purchased on specs. But I would have missed the increased productivity and loss of frustration over constant error messages. More importantly, I likely would have been buying new computers if I decided to go with Vista. Instead, I know that my computers won't be obsolete in 2 years. That's something that I appreciate at home and for my business.
To wrap it up, I have to agree with Roger. Encourage your competitors to use Windows. If they see you with a Mac just say it was a gift or something and that you really only run Windows on it.
No surprise to you perhaps but a hell of a surprise to me. In my experience there is NO price differential between Apple Store prices. Indeed Apple makes a point of NEVER discounting. So your comment seems somewhat suspicious to me. I cannot believe that Apple has MBA (a very new product) with a $200 discount. If I am wrong can you please post a link here where we can validate your claim.
HP is taking a lesson from . They are enticing people over to a better operating system (in this case Linux) while giving them the security blanket of what they know. This is the same strategy that has worked so well for when they introduced Boot Camp & switched to Intel chips.
Wow! I would never use anything else but OSX, but I applaud HP for trying to get out from under the M$ titanic ship that is sinking. This is a suburb and genius strategy to ensure their long term survival and independence.
Quote from HP's Voodoo website:
Voodoo IOS Quick Boot System
"When you first press the power switch on most personal computers you typically wait as the BIOS loads, the memory count goes by, and the system proceeds to tell you hardware information before you get to the OS. This is the difference with the new Voodoo ENVY: When you enable the Voodoo IOS, you are immediately greeted with a menu when you press the power button! As we mentioned at our launch HP is placing a big emphasis on our own software solutions. We designed the look and feel for the new Voodoo IOS to be simple to use and easy to manage.
How it works: Envy customers can choose to boot into an optimized Windows Vista, and Voodoo IOS includes a Linux operating system which takes seconds to load. So if you’re at the airport and you simply want to browse the web using an optimized version of Firefox, chat with your friends on Skype, instant messaging using Pigeon (an instant messaging client which allows for MSN, GTalk, Yahoo, and more), view photos or listen to music – you can do all of this without the need to boot into Windows."
- I like that, ..."without the NEED to boot into Windows." M$ has shafted these companies long enough, now that the hand writing in on the wall, they are fighting back... if not only to ensure their own survival as M$ continues to fail.
"Eight cylinders? Check. Oh the Ford Explorer must be the same as the Porche Cayenne."
A "review" like this makes me totally doubt the intelligence of the reviewer, if they truly don't know why/when they would want/need to run one OS vs the other, they have no business reviewing computers.
I just ask that you do not use this word in any context.
Thanks.
And five, for someone who makes a special point about battery life, the Envy needs a removable battery since its battery seems to be especially small, 3-cells, and only rated for 3hr 45m. The MBA has a battery that is rated for far longer, and does actually seem to last comparably longer than other similar products. I mean if you need a removable battery, to get "amazing battery life", you can get an external battery that sits under your MBA. No big deal, but I'd rather have a superthin laptop with "amazing battery life" built-in.
And, one more, I'd like to check to see if that battery adaptor isn't some gigantic beast, seeing as they moved some functionality over to it. If you have to carry it, it should count, and not be a cheat to a superlow weight spec.
From the dictionary, the common use of the word goes back to the 16th century, while the offensive slang dates from the 19th. Read more here:
chink 1 | ch i ng k|
noun
a narrow opening or crack, typically one that admits light : a chink in the curtains.
• a narrow beam or patch of light admitted by such an opening : I noticed a chink of light under the door.
PHRASES
a chink in someone's armor a weak point in someone's character, arguments, or ideas, making them vulnerable to attack or criticism.
ORIGIN mid 16th cent.: related to chine 2 .
chink 2 |tʃɪŋk| |tʃɪŋk|
verb
make or cause to make a light and high-pitched ringing sound, as of glasses or coins striking together : [ intrans. ] the chain joining the handcuffs chinked | [ trans. ] they chinked glasses and kissed.
noun
a high-pitched ringing sound : the chink of glasses.
I do agree that the Apple Iphone could be easily replaced by something better. But if Apple does what they do best they may be able to come out strong.
1. The folks who love computers and want the best user experience and don't care about price per say.
2. Folks who love the Apple Brand and all the chic and cultured associations that go with it.
If you are a spec comparer you wouldn't understand and you deserve a Window PC and a few more dollars in your pocket.
www.apple.com/business...
Trust me. I've worked on both.
As to the author - the poor soul obviously hasn't a clue as to why the Mac is superior - but his self-description as a "corporate type" tells us all we need to know (think Dilbert's pointy-haired manager).
As for the droll notion that one needs a Windows box to run Windows apps on - that wasn't true even in earlier times - for example, Mac Office would open and run, or "save as" Windows documents - they were cross-compatible. With MacLink, you could open almost anything.
And of course, now with Mactel, there is no earthly reason not to run a Mac - in fact, XP (I refuse to use Vista!) opens faster, runs smoother, and (so far) hasn't crashed on my wife's Macbook.
As to enterprise, etc., see the comments above - large and small enterprise is starting to go Mac - propelled by the endusers who are adopting Mac products including the iPhone, and forcing their companies to adopt it as well - despite the sand-bagging by some IT departments who see their pink slips written on the wall.
Last, the author clearly doesn't comprehend either the cloud computing concept, or the fact that iPhone is not a "cell phone" - it is the first true mobile, hand-held computer.
But hey, at least the comments here have tried to straighten him out...
Now I carry just ONE laptop instead of two. See, I have to use Windows on occasion, because my company's software runs only on Windows. But I have to use the Mac, because the software I use for creating training programs runs best or runs only on Macs.
I use the Mac as much as possible, because I prefer to get things done without spurious interruptions from an operating system that wants to control me. XP works, but it's still an insult to my intelligence every time I boot it, even if it runs a lot faster on the MacBook.
In short, don't short-change yourself. I have never met anyone -- ANYONE -- who has been disappointed with the last two versions of Mac OS X, the iApps, or recent Intel-powered Macs. And if you've ever been frustrated by computer vendors' service options, you've got to experience the Genius Bar at the Apple Store. If you have AppleCare, they treat you like a god.
Oh, and the secret to the iPhone has nothing to do with phone service, but everything to do with the fact that it is an OS X device! It's a TRUE mobile computing platform.
If you don't think we're witnessing another paradigm shift as we watch iPhone 2.0 mature, you're unaware of how these things work. Look at the Apple II, the Mac, OS X, Airport WiFi, the iPod/iTunes, the iPhone... I think you have to be blind not to understand the importance of Apple's influence on, and contributions to, the electronics industry. They are among the top 5 true change agents of the last 30 years.
Micro$oft??? What a bloated mess. I think we're going to watch them decay for a good while under Steve Ballmer. They NEED to fail to get better... They haven't yet learned their lesson. IBM learned theirs in the late 1980s. Apple learned theirs in the late 1990s.
(Full disclosure... I don't own any stock in any computer or electronics company.)
The Envy and Air have many things in common:
Same screen with same resolution.
Same CPU and same shared video card.
Same hard-drive options.
Same 2 gb of RAM.
Both have no optical media drive.
Both built-in camera.
Both back-lit keyboard.
Ambient sensor for screen brightness.
Envy Exceeds Air in several areas:
Its .06" thinner.
It has 2 USB versus 1 USB.
One of those USB is also an eSATA.
It comes with an external optical disk drive.
Envy takes a 34mm ExpressCard
It has a personal wifi base-station in the power adaptor.
HDMI video out.
Removable battery.
Sensor to only light keys when hands are near.
There are a few areas where Air is better:
Air is lighter by .3 lb
Air is less expensive by $200. ($100 if you want the external drive.)
Air power adaptor looks to be much smaller and has MagSafe.
Air battery, though built-in, is slightly larger 37 wh versus 33 wh.
Then again the Air has been shipping in large quantities for nearly 6 months now and will be potentially updated soon.
A few additional points on the Voodoo machine:
In this video www.engadget.com/2008/.../ the Voodoo guy said that they have a very aggressive cooling system on it - suggested to me that it might be noisy. That would be very bad, perhaps carbon fiber does not dispel heat very well?
In the same video cited above the voodoo guy said two things that seem to contradict each other: on one hand, they mentioned that it would be made in very limited quantities because of the carbon fiber, on the other hand they said that without HP's "scale" the machine's carbon fiber casing would cost $5000. So the question is: how to do you benefit from scale without having large quantities of production? Either it means that HP has some incredible carbon fiber technology that they are using, which would be news on its own or more likely that HP is losing money on these machines and that scale means that HP wants to see this sort of machine sold even if its a loss leader. The loss leader explanation seems more plausible to me otherwise why would the Envy made be in such a limited supply. Is the goal here to show that HP/VooDoo can match Apple's design chops? If so, does it really demonstrate anything if you make the machine in a material that is so impractical and expensive that you need to limit the production runs.
If the Envy is really very expensive to make, that is a potential advantage to the Air in that one, it is widely available and two, that over time the price could drop. Nothing on the Air seems to add a lot of cost to it and it seems quite viable to be produced on a mass scale.
Additionally we see all these special efforts made to get around long boot times - clearly HP is chaffing under Vista. i can't imagine how much frustration there is in the OEM camp about how Vista is ruining the PC market - it must be unreal.
In summary, while the Envy has some cool features and matches in the Air in many ways, it weighs more and is more expensive than the Air. The Envy seems like a lose-leader to generate hype for HP and to keep people from doing what this writer says he was about to do - switch to Mac.
I believe Apple’s brand has a more devote following than any other corporation. For example, last year Business Week named Nokia the number five brand in the world. In this post I basically trash Nokia for copying Apple and zero commenter’s came to support Nokia. Instead dozens wrote to support Apple even though this post was largely complimentary towards Apple's products. Of course, this has very positive implications for Apple investors.
Unfortunately, the gist of my post appears to have been missed or largely ignored. I'm not questioning their product quality; I'm examining their business model. In the post I espoused how Apple has great products; currently the best. However, outside a very core following of rabid users, who will always use Apple branded products, Apple relies on having the best of breed products. It is extremely difficult to have best breed products over more than one product generation.
In recent years Apple has benefited from the lack of innovation from HP, Dell, Microsoft, and others in the consumer computer/MP3 market. However, the next batch of products from HP's Voodoo line appears to be surprisingly innovative. If this is the beginning of a trend it could mark an inflection point of increased competition; potentially affecting Apple's margins. Apple's margins are astronomical compared to other consumer electronics companies. How sustainable is Apple's margins, even with their powerful brand?
Bottom line: if you can afford to look at an Apple computer then get it and forget about it. There is no way you can compare the experience of it with any Windows computer. I would understand the story if you would look at a $500 Toshiba laptop and try to justify why not spend another $1300 for a MacBook or an MBA. That would make sense. But for somebody in the right mind to pay $2200 for a PC in 2008 - that is really hard to justify. Really hard to justify. Just try to imagine of what people would think of you... (Kind of paying $50,000 for a Saturn or KIA because it looks better or has better specs than a Mercedes?)