BIG MAC STRIKES BACK
Is the Mac back? Apple Computer, maker of the iconic computer, is trying to leverage the phenomenal success it is enjoying with its iPod digital music players into a market where it has long been little more than a niche player: personal computers.
It wants to leverage consumers’ love affair with the iPod and the Apple brand by convincing them that the ideal accompaniment to their new music player is a new Mac.
The strategy is already showing signs of paying off, says Apple. “A lot of PC users who bought iPods are now buying Apple computers,” says Core Group director RJ van Spaandonk Core represents Apple in SA.
The iPod is the biggest phenomenon in music since the compact disc. The iPod brand has become synonymous with MP3 music players. Consumers don’t demand MP3 players, they demand iPods.
The devices, which come in various form factors, can store anything up to 15000 compressed music tracks or 150 hours of video.
Van Spaandonk says one in 10 people in SA who purchases an iPod goes on to buy an Apple computer.
It’s difficult to track iPod sales in SA, though. First, Apple does not provide regional sales information. Also, there are grey imports of the product. Some industry watchers think there are about 75000 iPods in SA.
The iPod has become a global phenomenon, with sales topping 14m in the three months to December 31 2005. This was well above the expectations of most analysts and has pushed Apple’s market capitalisation to US72bn which, on Monday, was slightly higher than rival Dell’s market value.
Can Apple CEO Steve Jobs keep the company’s dominance in the digital music market? David Kan, CEO of SA PC assembler Mustek, doesn’t think so. He says the success of the iPod has been overwhelming but that rivals will begin to erode its market share.
Kan sees rivalry coming from Sony The Japanese electronics giant has two advantages: it has an almost endless supply of music and film content from its entertainment companies, such as Sony BMG Music Entertainment and Sony Pictures, and has a history of coming up with innovative devices such as the Walkman that it could use to deliver this content to consumers. In fact, Sony’s hot new handheld gaming console, the PlayStation Personal, is already seen by some analysts as a rival to the iPod because, besides games, it also plays movies and music.
For Apple, the success of the iPod is reminiscent of the 1980s, when Apple’s Macintosh computers captured the imagination. It was the first computer to use a graphical user interface instead of a text-based command prompt.
But the good times did not last. By the mid-1990s Apple, despite the support of a few fanatical users who would not let go, had found itself struggling to define itself in the changing PC market.
The return of founder Steve Jobs in 1997 — he had been forced from the company he co-founded in 1985 — started to change Apple’s fortunes. It later released the affordable iMac computer as well as the iPod, returning the company to its former glory.
Now, Jobs is gearing up for the next phase of Apple’s growth — and that includes making headway in the competitive PC market. He’s also moving the company closer to the mainstream by adopting industry standard components in Apple products.
Last week, Jobs unveiled Macs that run the same Intel chips that power PCs made by Dell and Hewlett-Packard This opens tantalising possibilities. For one, it means that consumers might be able to install Windows software on Macs for the first time.
Van Spaandonk strongly denies that Apple will support Windows on its hardware. He says the move to Intel is merely part of Apple’s strategy of adopting industry standards.
He doubts many Mac users will use Windows, even though they might be able to. This is because the “essence of Apple is its operating system”.
Some players in the PC market think Apple had little option but to start using Intel chips as they have become the de facto standard for the PC industry.
Whatever the case, the fact is that Apple is trying hard to leave behind the reputation it has that it caters only for a select group of users.
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