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Apple Business Software & Hardware Technology

Could Apple exit the hardware business? Part 3

What if I said there was something on the in between? Some way for Apple to keep one foot in the hardware business and one foot in pure software sales. Would that pique your interest? Hope so.

an image of a Mac Pro tower computerIn the first installment, I looked at what makes Apple money, the hardware they have in place right now as well as their current crop of multimedia offerings.

And in the second installment, I looked at big business and how Apple dislikes unfamiliar territory as well as the problems ahead of them if they commit to fully pursue the enterprise market.

In this third installment, I’ll be examining a possible (though purely hypothetical) scenario where by Apple could, as my dad would say: “have the penny and bun!” – the best of both worlds!

Bulk purchasing, tier one OEM’s and keeping the guy in IT happy

The biggest issue for Apple to address is the ‘degree of freedom’ that they enjoy so much and large a degree they maintain. But I believe there’s a way to ensure Apple can preserve that degree of freedom while giving their more particular business customers the degree of control they seek.

For example, in this scenario, Apple operate at the edge of the corporate network. To bring them in, the IT guy wants a computer that he can do with what he does with all of the other PC’s that sit on his network.

Well for Apple, why not give this guy what he needs? Why not not sell him the hardware at all? Well, at least not for the desktop. Why not let him buy in his own PC’s as usual and then let him install Apple’s Mac OS X on top?

Now, there’s a cost issue here. And it’s a big one. With the sale of every PC, there’s the so-called ‘Microsoft Tax’, which is essentially the fee you pay for Windows to come with the PC.

So how do you get around this?

Not so long ago, there was the rumour that Apple had been asked, neigh begged to allow a number of major PC manufacturers to install Apple’s Mac OS X on their PC’s:

“Most tantalizing of all is scuttlebutt that three of the biggest PC makers are wooing Jobs to let them license OS X and adapt it to computers built around standard Intel chips. Why? They want to offer customers, many of whom are sick of the security problems that go with Windows and tired of waiting for Longhorn, an alternative.”

Apple said no. Simple as that. But like any good salesman will know, ‘no’ doesn’t necessarily mean ‘never’, which is key to this idea of mine.

So to keep Apple happy, and to give them the degree of freedom they so clearly enjoy, Apple could allow the IT guy to install Mac OS X onto PC’s, so long as they’re top brand name PC’s that meet with certain technical and qualitative criteria that Apple would happily give the nod to.

But there’s the threat of Apple having their market share undermined by selling the Mac OS X operating system, surely? Of course there is, but if Apple put in place a minimum purchase order of say, 50 units, that would preclude anyone but either education or business from buying. Plus, there would be some licensing arrangement in place, too.

So in this scenario, Apple can control the types of PC’s onto which the Mac OS X operating system is installed and as a result, restrict the support issues into the bargain. Plus, maintain a healthy image for the Apple brand by having their operating system and their software running on branded PC’s only, and not generic PC’s.

After all, for the likes of Apple, image is everything!

Apple take hardware & software to the next level

So back to the original question.

Personally, I don’t see this current Apple moving away from the hardware business. There’s just too much to be gained from this current strategy of building integrated, ‘vertical’ markets from devices married to software in such a way that the experience is the product, rather than the sum of its parts.

I think that Apple have their sights set of market share growth and brisk, highly-defined diversification, a movement that’s well-planned and built atop the golden glow of the brand that Apple has created over the years and have recently given a good buff & polish.

So watch out for new devices, new and intriguing ways of doing old things. Maybe not as cheap as the other guy, but in all likelihood a great deal better to use and iconic into the bargain…

Part 1, 2, 3

By Wayne Smallman

Wayne is the man behind the Blah, Blah! Technology website, and the creator of the Under Cloud, a digital research assistant for journalists and academics.

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