If any of you follow Slashdot, there have been a lot of threads over there lately about how Microsoft has been getting its *** kicked with this new licensing scheme. Linux is making some serious inroads in schools, which probably worries Apple as much as it does Microsoft.
The 1 license thing is a great idea. It will hit Microsoft right where it hurts, and the one-two punch with the XServe puts them very well positioned to recapture education and make a decent entrance into business.
Times are changing. Microsoft (although they have $40 billion in the bank) is starting to look cornered in their key market segment. Now if we could only do something about MS Office...
On the digital camera side, I would like to see Apple reenter this market. Nobody is doing it right yet (Firewire, GB harddrive). Most digital cameras out there these days have serious storage limitations.
I think they should use the new 20 GB drive (slightly larger form factor, but that's okay for a camera) as it will give them the ability to store 5000 photos and several hours of MPEG4 video. It doesn't just connect to iPhoto, it connects to iMovie and iDVD. Sure, it costs $1000 or so, but this thing is huge. We're talking about the other part of the digital hub. Steve keeps talking about the ability for people to create video. This would be a hugely important piece of that puzzle.
They should use the new Foveon (sp?) chip set. Incredible technology, much higher megapixel counts at much lower prices. That's a company I would invest in if they were public for sure.
btw, for those thinking that there's no way apple would make "lucida," please remember the feeling youhad when you first heard about the "ipod" the day before release...
lemme guess... something along the lines of "an mp3 player?!? why would apple do that??? that makes no sense with all the other mp3 players out there. and ipod? what the hell kinda name is 'ipod'?!?"
remember that? well, don't put ANYthing past apple anymore...
Underwater camera design isn't a small engineering task. It isn't the hardest task but it isn't a small one. I'd be more inclined to say Apple set out to create a durable digital device than target an "explosive" market like diving. Even having come from Australia I have to say that isn't a huge market.</strong><hr></blockquote>
There were stories to that effect on /. and Mac/ earlier this month.
<strong>People Unlimited Licenses are Licenses to access the Server and do not necessarily denote an entire OS. Think about it this way sure you could purchase and XServe with Unlimited CL's but that doesn't mean your legion of Beige G3's have OSX running on them. This is very significant and I applaud Apple for not following MicroSiths moneygrubbing ways!</strong><hr></blockquote>
Correct me if I'm wrong, but doesn't MacOS X Server allow net-booting? Wouldn't this mean that, in theory, the unlimited license that comes with XServe would net-boot an unlimited number of macs?
<strong>btw, for those thinking that there's no way apple would make "lucida," please remember the feeling youhad when you first heard about the "ipod" the day before release... </strong><hr></blockquote>
Absolutely! And don't forget the big pro camera to follow, codenamed Lucida Grande.
SkullMac: From what I gather, the number of clients an XServe can NetBoot should be limited only by the capabilities of the hardware and the bandwidth of the network.
First on "Glove". Let's just understand this. It's actually pretty meaningless to most consumers as they only own one computer. It's also pretty low risk to Apple, because they just need to make sure that the software upgrade requires upgraded hardware, so they only lose out on the very newest machines out in the marketplace in large installations. The pitch itself is great to schools and corporations though.
I don't think Glove is too expensive, but I also don't think it makes eunuchs (prounounced unix) out of MS either.
Now, Lucinda we have a little less info about. However, I'll buy tomorrow any combination high quality digital video/digital still camera with firewire for still image transfer and large storage capability, whether its submersible or not. If this thing plugs into the kind of home theatre devices rumoured at The Register as well we'll start to really recognize that Apple is not only a hardware company, but a hardware company that specializes in hardware that works well together.
If I recall correctly Educational institutions are actually required to purchase XP licenses for every piece of hardware. That is to say if you have 500 Macs and 500 PCs you have to purchase 1000 licenses.
[quote]granted, be could be lying about it, but if i had inside info and was worried about being "tracked" i think my screen name would be somehting like, oh, i don't know Stroszek? <hr></blockquote>
Conversely, if his name is "Stroszek," it makes sense for a plainer name. <img src="graemlins/bugeye.gif" border="0" alt="[Skeptical]" />
Glove would certainly make sys-admins in an all-mac shop/school, etc. very happy. It simplifies things greatly if all machines are running the exact same OS version. If by upgrading even only one machine, they can get the latest OS and legally install it on all the machines without buying licences for every one, that would be great. It could also lead to a shift in way of thinking in many large companies. Many companies now upgrade all machines and OSs at essentially the same time. With Glove there would be much less hesitation to upgrade machines in particular departments as the upgrade is justifiable.
The only problem I see with Glove is that while it would increase marketshare, I think that they would make this a limited-time scheme. It only pays for itself as long as market share continues to increase. So, while it could initially lead to a, say, doubling in market share and pay for itself (and then some) in hardware sales, once this growth in sales starts to level off, it will no longer pay for itself.
So, as a short term strategy, I see it as very viable and probably a great idea.
Actually, OS sales aren't that big a peice of Apple's pie, relative to hardware sales. Giving up a few million dollars in OS sales, would make sense long term if it could help generate hardware sales enough to at least balance the lost OS revenue. Getting people/corporations to buy and install the hardware is Apple's biggest challenge and their final goal. So, even if Glove only results in enough of an increase in hardware sales to make up for the lost OS sales, it is worth it to get the hardware in the door. Once a beachhead is established, it can be advanced. Personnaly, I think it would result in hardware sales increases that would more than make up for lost OS revenue, would would be a benefit all on it's own.</strong><hr></blockquote>
While software sales only constituted about 9% of their revenue stream in their <a href="http://a1200.g.akamai.net/7/1200/51/a647ad6c62f01b/www.apple.com/pr/pdf/q202data_sum.pdf"; target="_blank">Q2 2001, Q1 2002, Q2 2002 financial summary</a>, software is much, much higher margin than hardware. Established software often has around 85% margins, whereas even Apple's high-margin hardware probably has margins of around 15% on average. Their high end products have higher margins but don't sell nearly as well going by the average price in their summary: PowerMacs averaged $1815, PowerBooks were $2224, iBooks were $1276.60 [iMacs include G3 and G4, so the $1204 figure is a bit misleading]. So while software is a small part of their revenues, it is probably near half of their profit stream as 15% margin on hardware and 85% of software gives software 54% of total profits. Regardless of the percentage, if you take away software sales Apple would have had a loss of ninety-three million dollars instead of a profit of forty million dollars.
I'm not saying that I don't see Apple moving towards a "glove" strategy, I'm only saying to not underestimate the importance of their software sales to them. They will most likely never make the OS free. If they do, they will have added much more additional software to their line up. Based solely off of their financial statements and standard assumptions about margins if Apple were to go one way or the other, they would be better off going with software instead of hardware. One can reasonably estimate that they receive a third to just over a half of their profits from software while requiring a substantially smaller capitol investment. Remember when Apple lost a billion dollars one year? That was not from software being stuck in the sales channels, I assure you. Nothing like an interesting rumor to get me writing on some tangential information.
As for the camera, well, unless it's got the features of an XL-1 at a lesser price I'm not too interested. There's still nothing in the digital realm for the same price that beats a single good Swiss or German lens shining light on film.
Actually, according to the last financial conference call, margins are currently around 27% for hardware.
And since consumers are still the *major* factor in Apple's customer base, with 1-2 computers each, the 'losses' due to this would be minimal until the number of installed machines at large (>100) institutions vastly outnumbered the consumer base.
In the meantime, the hardware sales would *MORE* than make up for it.
Edit: Further looking at the numbers...
133M$ from software and 'other'. This 'other' is going to include a lot of non-OS sales, but for now we'll assume it is all inclusive.
1209M$ from hardware.
27% * 1209M$ = 363.43M$
85% * 133M$ = 113.05M$
So even if your 85% is correct (and I think it's way high), software only accounts for 113.05/476.48 = 23.7% of profits, not 54% as you claimed.
Besides, assume Apple sells 100 machines that they otherwise would not have, at an average price of $1630, given your above numbers. That's 27% * 100 * 1630 = 44.01k$.
Upgrade for them, normally, would be 0.85 * 100 * 100 = 8.5k$. Instead, it's $100.
They 'lose' 8.4k$, but *gain* an initial 44k$. Net result: 35.6k$ for every 100 units sold, on average. Granted, these are assuming new sales to institutions that otherwise wouldn't have bought them, but I think that averaging $356 on every machine sold is better than $0, don't you? And, given the current OS upgrade cycles, that's going to come to two years worth of Macs being used. Two to three years is a good upgrade cycle for *hardware* in many places... so repeat. (Even if they wait a year, it's still $256 per machine sold, net.)
Be nice if they included Appleworks in that too (including AW for Windows), at least for education. That'd be a way at least elementary schools to keep MS out of the classroom. If MS Office is installed on all the Macs the district's more likely to go for one of those crazy licensing deals the reg talked about. And once your paying for Windows for the machine anyway the bottom line impact of Apple giving away OS upgrades becomes less apparent.
One thing I wonder bout is how the antitrust case plays into this. One of the remedies on the table is requiring MS to make Office for Mac and Linux for a set period of time. If MS is hobbled from smacking back would that make Apple more willing to take a bold step like this?
percolate, your software #s include sales of FCP, DVD studio pro and other software IN ADDITION to OSX... (QT pro, apple works, etc...) so cutting ALL of the software revenue would not even be close to accurate... I would assume that less then 30% of their software revenue stream is from OSX...
Buck all that 'software revenue loss' talk. Think about it like this: Apple could just increase the price of the hardware to compensate. Imagine: if Apple introduced new hardware for 3499 instead of the as of late pricing of 2999, would we really complain? No, because it's new hardware and we're used to those prices anyways. So, what I'm saying is: they can raise the price of the hardware to compensate and we'd never know the difference; we'd just be excited that the 'Glove' rumor came true AND we had new hardware to play with.
OK. Take this rumor, Darwin x86, and x86 OS X nVidia drivers, mix in a little Jaguar, and add a dash of "we want marketshare."
I've always believed that OS X x86 existed, but I always thought it was "just in case." This makes it seem possible that Apple might release an x86 OS X!
</strong><hr></blockquote>
Hmmm...I actually think exactly the opposite now. I mean if Apple is really going to this kind of licensing scheme...then ported to commodity (non-Apple) hardware...they'd be out of business in about 6 months.
unless of course the liscensing scheme only applied to OS X on PPC and people had to pay through the nose for 86X OS X.... :eek:
but regardless this is NEVER going to happen...</strong><hr></blockquote>
and just slightly more of topic... any development for x86 doesn't even mean it will run on a home built PC. They could still use a proprietary logic board, etc. If it did exist it would only be for inside research.
Comments
The 1 license thing is a great idea. It will hit Microsoft right where it hurts, and the one-two punch with the XServe puts them very well positioned to recapture education and make a decent entrance into business.
Times are changing. Microsoft (although they have $40 billion in the bank) is starting to look cornered in their key market segment. Now if we could only do something about MS Office...
On the digital camera side, I would like to see Apple reenter this market. Nobody is doing it right yet (Firewire, GB harddrive). Most digital cameras out there these days have serious storage limitations.
I think they should use the new 20 GB drive (slightly larger form factor, but that's okay for a camera) as it will give them the ability to store 5000 photos and several hours of MPEG4 video. It doesn't just connect to iPhoto, it connects to iMovie and iDVD. Sure, it costs $1000 or so, but this thing is huge. We're talking about the other part of the digital hub. Steve keeps talking about the ability for people to create video. This would be a hugely important piece of that puzzle.
They should use the new Foveon (sp?) chip set. Incredible technology, much higher megapixel counts at much lower prices. That's a company I would invest in if they were public for sure.
Both rumours are extremely exciting. Go AAPL!
:-)
lemme guess... something along the lines of "an mp3 player?!? why would apple do that??? that makes no sense with all the other mp3 players out there. and ipod? what the hell kinda name is 'ipod'?!?"
remember that? well, don't put ANYthing past apple anymore...
<strong>
Underwater camera design isn't a small engineering task. It isn't the hardest task but it isn't a small one. I'd be more inclined to say Apple set out to create a durable digital device than target an "explosive" market like diving. Even having come from Australia I have to say that isn't a huge market.</strong><hr></blockquote>
There were stories to that effect on /. and Mac/ earlier this month.
<strong>People Unlimited Licenses are Licenses to access the Server and do not necessarily denote an entire OS. Think about it this way sure you could purchase and XServe with Unlimited CL's but that doesn't mean your legion of Beige G3's have OSX running on them. This is very significant and I applaud Apple for not following MicroSiths moneygrubbing ways!</strong><hr></blockquote>
Correct me if I'm wrong, but doesn't MacOS X Server allow net-booting? Wouldn't this mean that, in theory, the unlimited license that comes with XServe would net-boot an unlimited number of macs?
<strong>btw, for those thinking that there's no way apple would make "lucida," please remember the feeling youhad when you first heard about the "ipod" the day before release... </strong><hr></blockquote>
Absolutely! And don't forget the big pro camera to follow, codenamed Lucida Grande.
SkullMac: From what I gather, the number of clients an XServe can NetBoot should be limited only by the capabilities of the hardware and the bandwidth of the network.
This would be especially useful to counter the slowness and the latency in a camera based around a HDD...
<strong>If I were to make a camera, I would include a 128 MB or larger RAM cache so I could snap ten large six megapixel photos in a one second.
This would be especially useful to counter the slowness and the latency in a camera based around a HDD...</strong><hr></blockquote>
that's a great idea.
First on "Glove". Let's just understand this. It's actually pretty meaningless to most consumers as they only own one computer. It's also pretty low risk to Apple, because they just need to make sure that the software upgrade requires upgraded hardware, so they only lose out on the very newest machines out in the marketplace in large installations. The pitch itself is great to schools and corporations though.
I don't think Glove is too expensive, but I also don't think it makes eunuchs (prounounced unix) out of MS either.
Now, Lucinda we have a little less info about. However, I'll buy tomorrow any combination high quality digital video/digital still camera with firewire for still image transfer and large storage capability, whether its submersible or not. If this thing plugs into the kind of home theatre devices rumoured at The Register as well we'll start to really recognize that Apple is not only a hardware company, but a hardware company that specializes in hardware that works well together.
If I recall correctly Educational institutions are actually required to purchase XP licenses for every piece of hardware. That is to say if you have 500 Macs and 500 PCs you have to purchase 1000 licenses.
Can't remember where I saw that now.
<hr></blockquote>
Maybe you're thinking of
<a href="http://www.theregister.co.uk/content/59/25179.html"; target="_blank">this article at The Register</a> about wacky Windows licensing.
Conversely, if his name is "Stroszek," it makes sense for a plainer name. <img src="graemlins/bugeye.gif" border="0" alt="[Skeptical]" />
The only problem I see with Glove is that while it would increase marketshare, I think that they would make this a limited-time scheme. It only pays for itself as long as market share continues to increase. So, while it could initially lead to a, say, doubling in market share and pay for itself (and then some) in hardware sales, once this growth in sales starts to level off, it will no longer pay for itself.
So, as a short term strategy, I see it as very viable and probably a great idea.
<strong>
Actually, OS sales aren't that big a peice of Apple's pie, relative to hardware sales. Giving up a few million dollars in OS sales, would make sense long term if it could help generate hardware sales enough to at least balance the lost OS revenue. Getting people/corporations to buy and install the hardware is Apple's biggest challenge and their final goal. So, even if Glove only results in enough of an increase in hardware sales to make up for the lost OS sales, it is worth it to get the hardware in the door. Once a beachhead is established, it can be advanced. Personnaly, I think it would result in hardware sales increases that would more than make up for lost OS revenue, would would be a benefit all on it's own.</strong><hr></blockquote>
While software sales only constituted about 9% of their revenue stream in their <a href="http://a1200.g.akamai.net/7/1200/51/a647ad6c62f01b/www.apple.com/pr/pdf/q202data_sum.pdf"; target="_blank">Q2 2001, Q1 2002, Q2 2002 financial summary</a>, software is much, much higher margin than hardware. Established software often has around 85% margins, whereas even Apple's high-margin hardware probably has margins of around 15% on average. Their high end products have higher margins but don't sell nearly as well going by the average price in their summary: PowerMacs averaged $1815, PowerBooks were $2224, iBooks were $1276.60 [iMacs include G3 and G4, so the $1204 figure is a bit misleading]. So while software is a small part of their revenues, it is probably near half of their profit stream as 15% margin on hardware and 85% of software gives software 54% of total profits. Regardless of the percentage, if you take away software sales Apple would have had a loss of ninety-three million dollars instead of a profit of forty million dollars.
I'm not saying that I don't see Apple moving towards a "glove" strategy, I'm only saying to not underestimate the importance of their software sales to them. They will most likely never make the OS free. If they do, they will have added much more additional software to their line up. Based solely off of their financial statements and standard assumptions about margins if Apple were to go one way or the other, they would be better off going with software instead of hardware. One can reasonably estimate that they receive a third to just over a half of their profits from software while requiring a substantially smaller capitol investment. Remember when Apple lost a billion dollars one year? That was not from software being stuck in the sales channels, I assure you. Nothing like an interesting rumor to get me writing on some tangential information.
As for the camera, well, unless it's got the features of an XL-1 at a lesser price I'm not too interested. There's still nothing in the digital realm for the same price that beats a single good Swiss or German lens shining light on film.
[ 05-24-2002: Message edited by: percolate ]</p>
And since consumers are still the *major* factor in Apple's customer base, with 1-2 computers each, the 'losses' due to this would be minimal until the number of installed machines at large (>100) institutions vastly outnumbered the consumer base.
In the meantime, the hardware sales would *MORE* than make up for it.
Edit: Further looking at the numbers...
133M$ from software and 'other'. This 'other' is going to include a lot of non-OS sales, but for now we'll assume it is all inclusive.
1209M$ from hardware.
27% * 1209M$ = 363.43M$
85% * 133M$ = 113.05M$
So even if your 85% is correct (and I think it's way high), software only accounts for 113.05/476.48 = 23.7% of profits, not 54% as you claimed.
Besides, assume Apple sells 100 machines that they otherwise would not have, at an average price of $1630, given your above numbers. That's 27% * 100 * 1630 = 44.01k$.
Upgrade for them, normally, would be 0.85 * 100 * 100 = 8.5k$. Instead, it's $100.
They 'lose' 8.4k$, but *gain* an initial 44k$. Net result: 35.6k$ for every 100 units sold, on average. Granted, these are assuming new sales to institutions that otherwise wouldn't have bought them, but I think that averaging $356 on every machine sold is better than $0, don't you? And, given the current OS upgrade cycles, that's going to come to two years worth of Macs being used. Two to three years is a good upgrade cycle for *hardware* in many places... so repeat. (Even if they wait a year, it's still $256 per machine sold, net.)
I fail to see the problem.
[ 05-24-2002: Message edited by: Kickaha ]</p>
One thing I wonder bout is how the antitrust case plays into this. One of the remedies on the table is requiring MS to make Office for Mac and Linux for a set period of time. If MS is hobbled from smacking back would that make Apple more willing to take a bold step like this?
<strong>
OK. Take this rumor, Darwin x86, and x86 OS X nVidia drivers, mix in a little Jaguar, and add a dash of "we want marketshare."
I've always believed that OS X x86 existed, but I always thought it was "just in case." This makes it seem possible that Apple might release an x86 OS X!
</strong><hr></blockquote>
Hmmm...I actually think exactly the opposite now. I mean if Apple is really going to this kind of licensing scheme...then ported to commodity (non-Apple) hardware...they'd be out of business in about 6 months.
Just my $0.02.
<strong>they'd be out of business in about 6 months.</strong><hr></blockquote>
unless of course the liscensing scheme only applied to OS X on PPC and people had to pay through the nose for x86 OS X.... :eek:
but regardless this is NEVER going to happen...
[ 05-24-2002: Message edited by: Paul ]</p>
<strong>
unless of course the liscensing scheme only applied to OS X on PPC and people had to pay through the nose for 86X OS X.... :eek:
but regardless this is NEVER going to happen...</strong><hr></blockquote>
and just slightly more of topic... any development for x86 doesn't even mean it will run on a home built PC. They could still use a proprietary logic board, etc. If it did exist it would only be for inside research.
If it did exist....