Anthony Frausto-Robledo, EIC ([email protected])

9 July 2004

 

Opinion: Apple needs a New 'Mac LC' for Market Growth - Part 2

The Apple ePower Pro

Apple can come up with its own name but for now I want to call the new Mac LC the Apple ePower Pro. Quadra is a great name too but Apple should reserve that for a future product with four something (like four processors!). So what's so great about the ePower Pro?

For starters it doesn't have Mac in its name. Secondly, the letter "e" stands for two things intricately related to market share growth in the computer market: enterprise and economical.

When Saab decided to broaden its product portfolio with the new 2005 Saab 9-2X it needed to describe its key attributes. They did it like this:

"The list was short: the vehicle needed to have a high-performance personality, all-wheel drive, distinctive European design and be priced below the 9-3." --- Saab Magazine

There are only four key attributes in that description above. If I was to try to do the same with a product aimed at broadening Apple's portfolio with the intent on increasing market share I would likely say this about the Apple ePower Pro:

The computer needs to have a flexible businesslike personality, an OS X / Linux boot strategy, distinctive Apple design and ease-of-use, and be priced below all other Macs.

Apple's General Motors: IBM

Since I am constructing an argument that says Apple should look at what is going on in the automobile world in order to learn how to increase market share with a luxury brand, I may as well take the analogy to its full extension.

What's going to make the new Saab 9-2X so successful is that Saab (which is owned by GM) was instructed to work with Subaru (which GM has a 21 percent stake in Fuji Heavy Industries, the manufacture of Subarus). GM used its full resources in Subaru to tap their expertise in all-wheel drive as well as to tap Japanese Subaru dealers for sales points for this and other future Saabs in Japan. As I said before, I think this new Swedish-Japanese hybrid is going to expand the Saab market share in the US and Canadian markets, which is exactly their goal.

In many ways IBM is Apple's GM. And in the past IBM has seen Apple as a type of possible luxury or unique-brand division. The two companies have come very close to merging in the past (in essence IBM buys Apple Computer) with the goal of the two collaborating and maintaining separate business identities. I have several IBM friends. It is no secret to those who know the inside story that IBM has had a fondness for Apple for well over a decade. The two companies, if anything, have one very mutual enemy. Both companies were burned badly by mistrust in Bill Gates.

IBM can serve as Apple's GM in many ways. In the vision of the Apple ePower Pro noted above, IBM's role might include co-manufacture and co-engineering. Additionally, IBM might sell it only to its IBM enterprise customers, so it wouldn't be possible for consumers to individually buy an ePower Pro, even if they wanted one.

We have to remember that its entirely possible that a six-figure individual who owns a $40,000 Saab 9-5 might just buy a $23,000 Saab 9-2X just for fun, as a second car. In like manner, professional graphics artists who regularly buy Power Mac G5 computers might want an ePower Pro for some particular reason, but it would be additive to Apple's overall OS X market share.

Flexibility and Linux

Perhaps the best reason why IBM might want to do this with Apple is to push their PowerPC platform into the enterprise market on the desktop. But IBM is not going to do this if Apple makes all the profit. So they have to figure out how to both win.

These days IBM is pushing Linux and its flexible nature. But IBM could win really big if they were able to push a Linux/OS X combo. That's real flexibility. And something that HP and Sun can't do. Paul Murphy of LinuxInsider thinks IBM is headed towards pushing Linux on the corporate desktop with or without anybody's help with the Cell processor at its center. He suggest that Apple could lose big time if this happens. If I was Apple I would go to IBM and say I want to help you with this goal but let's figure out a way where OS X can play into this.

What we are talking about is Apple market share. There are many ways we can shape this analogy which started with GM and Saab. Here is one way. In the proposed ePower Pro Apple and IBM could agree to co-produce it and ship a dual boot system that enables IBM's enterprise customers to run either of the two PowerPC-based operating systems.

In the case of a large government IBM client, managers, secretaries and administration folks might run Blue Linux (if it exist?) or SuSE Linux on the ePower Pro, while scientists, engineers, and marketing folks might run OS X most of the time. Ideally both OS's would be able to run simultaneously. Here IBM has expertise in making processors that can run multiple operating systems at once. This is a core capability of IBM, not Apple, in much the same way as all-wheel drive at Subaru was a core capability of GM's larger resources that benefited Saab's strategy.

Closing Comments

What Saab needed to succeed with the 9-2X was all-wheel drive -- a core attribute for a car with a high-performance personality. They used GM's vast resources to tap Subaru's expertise here.

What Apple needs to succeed in the enterprise market (the meat and potatoes of market share seats) is a dual boot system with Linux and OS X. This would be a compelling core attribute for a flexible businesslike computer. And I might add that this is a different personality flavor than Apple is used to, but one not incompatible with the Apple brand. What Apple needs to do is find a way to tap IBM as their GM (which they arguable do already with PowerPC) and collectively work out a strategy where they both can win with common goals. The ePower Pro is just one possibility among many. ---- ANTHONY FRAUSTO-ROBLEDO, Editor-in-Chief

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