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Apple focusing its business segments around Mac OS X - analyst

post #1 of 30
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While some industry watchers have argued that Apple is diversifying its business too dramatically, analysts at investment research firm Piper Jaffray said Wednesday they believe the company is actually preparing to more closely focus its business and consumer electronics segments around the central core of its Mac OS X operating system.

Reacting to Apple's just-announced media event next Wednesday, analyst Gene Munster and his research team said the Cupertino-based firm appears ripe to usher in its holiday iPod offerings during the event, which are likely to include radical redesigns of the flagship video iPod and iPod nano.

"We expect that the new pods will be based on a modified version of Apple's operating system, OS X. Currently, Macs, the iPhone, and Apple TV run on OS X, and with these OS X-based iPods, Apple would have an entire line of consumer electronics products based on OS X," Munster wrote in a note to clients. "Instead of diversifying its business too dramatically, as some have argued, we believe Apple is focusing its business."

A third-generation iPod nano is likely to include video capabilities, a wider viewing display, and come in five new colors, the analyst said. However, he isn't expecting major advancements in storage capacity, which he believes will remain at 2GB to 8GB. He added that Apple will likely maintain its lowest price point of $149 for the new nanos.

Meanwhile, Munster said he's less certain about the specifications of a sixth-generation iPod video player, but believes there is a 70 percent likelihood Apple will finally unveil a widescreen, mutli-touch model akin to the iPhone.

"It may also have WiFi capability and the capacity could be as high as 160GB," he told clients. "Apple will likely raise the lowest iPod price point back up to $299 (from $249). The fifth-gen iPod is the longest-lasting iPod model ever; it was released nearly 2 years ago and refreshed with high capacities and a lower price last September."

Speaking more generally in his note to clients Wednesday, the Piper Jaffray analyst also emphasized his belief that Apple is entering the two strongest quarters in company history.

"With new iMacs ahead of the education buying season, we believe Apple may see upside to our estimate of 1.9 million Macs in the September quarter," he wrote. "Likewise, if Apple announces new iPods on September 5, they would be well-timed for the critical holiday shopping season, possibly providing upside to our estimate of 22 million iPods in the December quarter."

Munster maintained his "Outperform" rating on shares of Apple with a price target of $211 a share.
post #2 of 30
Same storage capacity? WTF really, does anyone else believe this? Hard to imagine that Apple is about to intro a 2gb nano replacement.
post #3 of 30
Quote:
Originally Posted by 128pluspb100siduo230 View Post

Same storage capacity? WTF really, does anyone else believe this? Hard to imagine that Apple is about to intro a 2gb nano replacement.

I doubt it would be the same storage. If they come out with the wide screen iPod then you need more storage for the video. Apple knows that like we do.

I'm just interested in seeing OSX on an iPod Shuffle with a screen to boot.
post #4 of 30
Quote:
Originally Posted by MacTel View Post

I'm just interested in seeing OSX on an iPod Shuffle with a screen to boot.

first time i read that i thought you meant boot from your iPod shuffle. hehe.
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post #5 of 30
I think that analyst is talking out his ass. It doesn't even make sense to put OS X on an iPod right now.
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post #6 of 30
I've said before that I'd like to have an EPIC Mac. Perhaps Apple is heading that way, leveraging more the operating system and less particular hardware implementations. The Mac Mini is almost there but as far as I know, doesn't give one access to the sort of digital and analogue I/O of a true EPIC. Perhaps the USB port is good enough for that though with the addition of high-speed analogue and digital boxes plugged in.
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post #7 of 30
Quote:
Originally Posted by 128pluspb100siduo230 View Post

Same storage capacity? WTF really, does anyone else believe this? Hard to imagine that Apple is about to intro a 2gb nano replacement.

Piper Jaffray has been pretty accurate lately, but I can't imagine new Nanos without increased capacity.

I also don't see how OS X will run on a Nano with such a slow ARM processor and low RAM. It would just run too damn slow.

I also don't see Apple using the 160GB HDDs. 120GB would be the max they'd utilize.
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post #8 of 30
Quote:
Originally Posted by onlooker View Post

I think that analyst is talking out his ass. It doesn't even make sense to put OS X on an iPod right now.

Huh? you're not expecting an iPhone like experience then? Just increased storage? No (touch-) widescreen? I'm very intrigued now, what makes you believe that?
post #9 of 30
#1 I don't think an iPod needs a touch screen to operate, It has a proven interface, and #2 Apple just paid off creative with 100 million dollars to keep using the iPod interface indefinitely. I don't think they need to pay them 100 million to let them keep using it if they were planning on changing it immediately after - it makes no sense. And it just doesn't make sense to have a touch screen on an iPod anyway. You don't need it. Why add all that cost to a low cost item? The less they cost the more popular they will become. THey may have one high end model that could have it, but I still don't see a absolute need for it.
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post #10 of 30
Quote:
Originally Posted by IQatEdo View Post

I've said before that I'd like to have an EPIC Mac. Perhaps Apple is heading that way, leveraging more the operating system and less particular hardware implementations. The Mac Mini is almost there but as far as I know, doesn't give one access to the sort of digital and analogue I/O of a true EPIC. Perhaps the USB port is good enough for that though with the addition of high-speed analogue and digital boxes plugged in.

EPIC Mac? Not that I would say no, but why do you want a Mac running Itanium?

/Adrian
post #11 of 30
Quote:
Originally Posted by Zandros View Post

EPIC Mac? Not that I would say no, but why do you want a Mac running Itanium?

/Adrian

Good one! Not the Itanium EPIC architecture, the Embedded Platform for Industrial Computing EPIC!

All the best.
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post #12 of 30
I think that this article is really about taking on Microsoft in the OS wars (and winning). With more diverse devices being run on a version of OS X, Apple is competing with all the different varieties of Windows such as Windows Mobile and Windows Media Center.

They will prove that devices running Apple's OS X not only have a more stable underlying architecture, but also a more beautiful and intuitive user interface.

This is a big deal.

Oh, and I would love to have a touch-screen iPod with Wi-Fi. Please.
post #13 of 30
Quote:
Originally Posted by neudesign View Post

I think that this article is really about taking on Microsoft in the OS wars (and winning). With more diverse devices being run on a version of OS X, Apple is competing with all the different varieties of Windows such as Windows Mobile and Windows Media Center.

They will prove that devices running Apple's OS X not only have a more stable underlying architecture, but also a more beautiful and intuitive user interface.

This is a big deal.

Oh, and I would love to have a touch-screen iPod with Wi-Fi. Please.

I don't know about winning, but, yes, I've been saying that same thing. This a plan to move X into a much more widely used space.

The only problem with the plan is that the interface is so different, most people won't realize that they are using X.

MS was smart to make their mobile OS look like Windows, even though doing that slows down the entire device. It gives comfort to people who want Windows everywhere, even though the OS has nothing in common with Windows, code-wise, and is not compatible with any of the programs.

Apple's phone "desktop", on the other hand, looks, and acts, nothing like our familiar desktop. That means that people don't think they are having a similar experience, and causing program rewrites to be almost as difficult as coming up with a new program for Windows Mobile (assuming, of course, that third party programming moves to a higher level).
post #14 of 30
Quote:
Originally Posted by melgross View Post

MS was smart to make their mobile OS look like Windows, even though doing that slows down the entire device. It gives comfort to people who want Windows everywhere, even though the OS has nothing in common with Windows, code-wise, and is not compatible with any of the programs.

True the OS itself does not share much code however when writing applications in .Net there is considerable reuse of code possible for desktop and mobile versions.

m

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post #15 of 30
Quote:
Originally Posted by onlooker View Post

I think that analyst is talking out his ass. It doesn't even make sense to put OS X on an iPod right now.

So why do you care? What support do you hold that makes it contrary to your opinion?

These guys make a living by researching/analyzing the data and making stock recommendations to their clients to buy, sell or hold. They get it wrong and they lose customers; enough of that and it's goodbye.

True, you have a right to your opinion. But until you provide evidence to the contrary, you are talking out of your ass.
post #16 of 30
Quote:
Originally Posted by dutch pear View Post

Huh? you're not expecting an iPhone like experience then? Just increased storage? No (touch-) widescreen? I'm very intrigued now, what makes you believe that?

Touchscreen would be OK, but not really necessary, and a slightly larger screen (not as big as the iPhone, to save battery power) would be fine.

I think the interface could use a little refinement... not a LOT of refinement.

And I see no point to putting OSX on an iPod unless they are going with a larger form-factor, making it more like a personal planner with the added functionality of the iPod. A personal planner, an iPod, a wireless garage door opener! A PERSONAL PLANNER, AN IPOD, A WIRELESS...

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post #17 of 30
Quote:
Originally Posted by onlooker View Post

I think that analyst is talking out his ass. It doesn't even make sense to put OS X on an iPod right now.

Steve Jobs stated (Apple Town Hall meeting notes) that iPods with OS X are coming, and given the context, now seems the right time.
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post #18 of 30
Quote:
Originally Posted by melgross View Post

The only problem with the plan is that the interface is so different, most people won't realize that they are using X.

MS was smart to make their mobile OS look like Windows, even though doing that slows down the entire device. It gives comfort to people who want Windows everywhere, even though the OS has nothing in common with Windows, code-wise, and is not compatible with any of the programs.

Apple's phone "desktop", on the other hand, looks, and acts, nothing like our familiar desktop. That means that people don't think they are having a similar experience, and causing program rewrites to be almost as difficult as coming up with a new program for Windows Mobile (assuming, of course, that third party programming moves to a higher level).

I don't think it matters if people realize they're using the same OS underneath. Apple is more concerned with providing the best possible UI for the given form factor, rather than trying to squeeze a desktop UI into a tiny device. I honestly don't think that getting OS X into many devices is intended to be a "Windows Everywhere" type marketing push at all. Sure, they mention it to get the geeks in a huff, and to maybe push the security angle on devices like the iPhone, but it doesn't matter one bit from a consumer point of view. Do you care what software is running in your microwave? Apple wants to push the "Apple" brand to their consumers, not so much the "OS X' brand. If you love your iPhone, you'll want to buy a Mac, not because they're running the same OS, but because they're made by the same company and you like their products.

How is it good for Apple though? It means they only have to write the core OS for all of their products once, and then make the relatively small device-specific tweaks on top of it. That means that the price of developing all of their fancy technologies and libraries is spread out across a number of different product lines, rather than having to write and test the same kind of stuff over and over. Whereas they used to have to absorb the price of developing OS X through their Mac sales (and boxed OS X sales), it is also now being directly subsidized through AppleTV, iPod, and iPhone.
post #19 of 30
BINGO.

Instead of associating OS X with an *interface* (which is going to change over time), they're associating it with *attributes*: stability, security, ease of use.

Not *a* particular interface, but easy to use interfaces geared towards the device in question... this is an important distinction.

MS has long marketed to the interface - even when having that same interface makes zero sense whatsoever (Windows Mobile, IMO). They figured people wouldn't care what was under the hood, as long as it looked the same, even if it was harder to use.

Well, people do care about what 'under the hood' can offer them... and Apple is offering OS X (*NOT* MacOS X, mind you, but a nice little kernel with extensibility and flexibility) as a solution for the issues that most consumers are worried about in their computer products: security, etc.

So when they hear that the iPhone is running OS X, they (hopefully) think of stability and security. Then they see the interface, use it, and don't give a rat's ass that it doesn't look just like MacOS X - it makes sense for the device they bought.

As usual, MS focused on the surface glitz, and forgot to get their ducks in a row behind the scenes. They're betting that a singular UI and a... um... catalog of APIs will make users and developers happy. Not so much, so far.

Apple is betting that having a single engine driving everything, and customizing the UI for the devices being offered to make each one highly usable, is the way to go. They get a huge win in development costs, and they can *nimbly* enter new markets in the consumer space ad hoc. The average consumer couldn't give a rat's ass if their new phone runs Windows Mobile, Palm, OS X, or ZOMGOS... they just want it to work at what it advertises itself to do, without too much pain.

Gotta hand it to Apple on this one, it's a gutsy move that turns the 'conventional wisdom' of the industry on its head. Again.
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post #20 of 30
"Meanwhile, Munster said he's less certain about the specifications of a sixth-generation iPod video player, but believes there is a 70 percent likelihood Apple will finally unveil a widescreen, mutli-touch model akin to the iPhone."

post #21 of 30
Exactly what Kickaha said...

... using OSX (the OS, not the entire UI) in as many areas as possible.

Then developing/refining the interface that sits on the OS as it applies to that particular device.

Not trying to make it look like the UI on the Mac, but possibly using SOME of the UI pieces on certain devices.

Brilliant, IMHO.
post #22 of 30
Quote:
Originally Posted by TrevorD View Post

I don't think it matters if people realize they're using the same OS underneath. Apple is more concerned with providing the best possible UI for the given form factor, rather than trying to squeeze a desktop UI into a tiny device. I honestly don't think that getting OS X into many devices is intended to be a "Windows Everywhere" type marketing push at all. Sure, they mention it to get the geeks in a huff, and to maybe push the security angle on devices like the iPhone, but it doesn't matter one bit from a consumer point of view. Do you care what software is running in your microwave? Apple wants to push the "Apple" brand to their consumers, not so much the "OS X' brand. If you love your iPhone, you'll want to buy a Mac, not because they're running the same OS, but because they're made by the same company and you like their products.

How is it good for Apple though? It means they only have to write the core OS for all of their products once, and then make the relatively small device-specific tweaks on top of it. That means that the price of developing all of their fancy technologies and libraries is spread out across a number of different product lines, rather than having to write and test the same kind of stuff over and over. Whereas they used to have to absorb the price of developing OS X through their Mac sales (and boxed OS X sales), it is also now being directly subsidized through AppleTV, iPod, and iPhone.

It's more than that. If it weren't, then Apple wouldn't have made a big deal about it being "true" OS X.

No, they are publicizing the fact that these devices will use OS X. It's a publicity move as well as a practical one.

The idea is for Apple to be able to say that we sold 75 million devices running OS X this year, rather than saying that they sold 9 million.

It's not only a dig at MS, it's also a dig against Linux. It's a war of words as much as anything else.

Lastly, by saying that the phone or iPod that people are using has OS X, Apple is hoping that it will convince them to buy a computer that also runs OS X.

Don't assume that there is a relatively small amount of work to "tweek" it for other devices. These other devices are totally different from the Mac. ATv comes the closet in regards to the cpu, but the others are on different platforms. It's like the difference between the PPC and X86.
post #23 of 30
Indeed - and now's where we start to see the true benefit of their move to processor-independent code. Migrating to x86 was just the start. It's gonna get interesting, real fast.
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post #24 of 30
Before, developing for iPod, iPhone, and Mac required developing for three interfaces. If iPod goes OS X, developing for iPod, iPhone, and Mac still requires developing for three interfaces (since iPod nano or its replacement will likely still not have a touch screen interface). So no change there.

But before, developing the non-UI innards of iPod was completely separate than developing the innards for Mac or iPhone. Now those are united. Lastly, non-UI (and some UI like Coverflow) iTunes code for Mac OS X is now running on OS X for iPhone, and it will now also be running on iPod. If the wireless iTunes store, as rumored, comes to be, then another piece of the iTunes codebase will be reused on the iPod and iPhone. To me, that rumor only has validity if the iPod is using OS X; I can't see Apple developing an iTunes download interface (with DRM, financial transaction security, and all that) for two separate OSes (iPod, iPhone).

As to onlooker's comment, no one has reported on the actual Apple-Creative agreement. At the time, many thought Apple got off very cheaply (assuming Creative really had a valid case of infringement, which, given that Apple gave in means that Apple thought it was not worth fighting out further in court). So it could be that Apple paid so little because it agreed to abandon the "Creative" interface by a given date - end of 2007. It may be that if Apple continues to use the interface, it would owe Creative further financial payment.
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post #25 of 30
Quote:
Originally Posted by melgross View Post

It's more than that. If it weren't, then Apple wouldn't have made a big deal about it being "true" OS X.

No, they are publicizing the fact that these devices will use OS X. It's a publicity move as well as a practical one.

The idea is for Apple to be able to say that we sold 75 million devices running OS X this year, rather than saying that they sold 9 million.

It's not only a dig at MS, it's also a dig against Linux. It's a war of words as much as anything else.

Lastly, by saying that the phone or iPod that people are using has OS X, Apple is hoping that it will convince them to buy a computer that also runs OS X.

Don't assume that there is a relatively small amount of work to "tweek" it for other devices. These other devices are totally different from the Mac. ATv comes the closet in regards to the cpu, but the others are on different platforms. It's like the difference between the PPC and X86.

Excellent points.
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post #26 of 30
Quote:
Originally Posted by melgross View Post

It's more than that. If it weren't, then Apple wouldn't have made a big deal about it being "true" OS X.

No, they are publicizing the fact that these devices will use OS X. It's a publicity move as well as a practical one.

The idea is for Apple to be able to say that we sold 75 million devices running OS X this year, rather than saying that they sold 9 million.

It's not only a dig at MS, it's also a dig against Linux. It's a war of words as much as anything else.

Lastly, by saying that the phone or iPod that people are using has OS X, Apple is hoping that it will convince them to buy a computer that also runs OS X.

Don't assume that there is a relatively small amount of work to "tweek" it for other devices. These other devices are totally different from the Mac. ATv comes the closet in regards to the cpu, but the others are on different platforms. It's like the difference between the PPC and X86.

Maybe so, maybe not. I still don't think that majority of peoplewould be stupid enough to count oranges as apples. If they implemented Safari to iPod on the other hand, they would add drastic weight against IE in the new browser wars. Maybe then we could finally get standard web pages, and companies moving out from activeX components. Then there would be one obstacle less for companies to start slowly leaning towards Macs.
post #27 of 30
If the iPod nano comes with video capability and only 2GB of memory it's pretty much going to limit it to video Podcasts.
post #28 of 30
There are many, many embedded systems using a FreeBSD or Linux core and ARM processor. My D-Link cable router at home, for example, all $39 worth of it, in a tiny grey box not much larger than an iPhone, is actually a Linux core running on an ARM for example. The actual Unix core (the low-level OS API) is actually quite lightweight, since it was originally designed to run on a PDP-11 minicomputer with a whole 256K bytes of memory and far less CPU power than an ARM.

It doesn't surprise me that Apple wants to migrate all of its appliances from using whatever embedded OS they were previously using to the FreeBSD/Mach core that is the OS-X core. That gives them 100% ownership of the product and provides better functionality in multi-tasking type environments (such as running the front panel buttons while displaying videos coming in over a WiFi network) while requiring less OS core maintenance for the appliance guys, since they are now no longer required to heavily modify a 3rd party embedded OS or write one from scratch. Now the embedded people, if they need a performance tweak, can just ask the OS-X group for the tweak instead of having to do it themselves or ask someone like VxWorks to add a new optimization just for the iPod (bwahaha! as if).

And performance tweaks to reduce memory footprint or improve performance for the iPod will also likely reduce memory footprint or improve performance for the iMac. It's a win-win all around.
post #29 of 30
Quote:
Originally Posted by badtux View Post

Now the embedded people, if they need a performance tweak, can just ask the OS-X group for the tweak instead of having to do it themselves or ask someone like VxWorks to add a new optimization just for the iPod (bwahaha! as if).

And performance tweaks to reduce memory footprint or improve performance for the iPod will also likely reduce memory footprint or improve performance for the iMac. It's a win-win all around.

The 6G iPod surely can get OS X with similar ARM and RAM levels as the iPhone , but I don't see the Nano getting this OS upgrade until the CPU and RAM capabilities are greatly increased. Something that doesn't seem possible with its current minute dimensions. The Shuffle, or course, will still remain with the same OS.
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post #30 of 30
Quote:
Originally Posted by badtux View Post

There are many, many embedded systems using a FreeBSD or Linux core and ARM processor. My D-Link cable router at home, for example, all $39 worth of it, in a tiny grey box not much larger than an iPhone, is actually a Linux core running on an ARM for example. The actual Unix core (the low-level OS API) is actually quite lightweight, since it was originally designed to run on a PDP-11 minicomputer with a whole 256K bytes of memory and far less CPU power than an ARM.

It doesn't surprise me that Apple wants to migrate all of its appliances from using whatever embedded OS they were previously using to the FreeBSD/Mach core that is the OS-X core. That gives them 100% ownership of the product and provides better functionality in multi-tasking type environments (such as running the front panel buttons while displaying videos coming in over a WiFi network) while requiring less OS core maintenance for the appliance guys, since they are now no longer required to heavily modify a 3rd party embedded OS or write one from scratch. Now the embedded people, if they need a performance tweak, can just ask the OS-X group for the tweak instead of having to do it themselves or ask someone like VxWorks to add a new optimization just for the iPod (bwahaha! as if).

And performance tweaks to reduce memory footprint or improve performance for the iPod will also likely reduce memory footprint or improve performance for the iMac. It's a win-win all around.

So, does that system use Unix or Linux? They are not the same. I think it's doubtful it uses Unix.
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