The Mac Experience in Business & Home: Help, Tips, Discussion & Radio Show Notes

It’s been about a week since the announcement that Apple Computer will be switching all of its systems from IBM to the Intel chip set by some time in 2007. On Wednesday night’s radio show ( http://wgnradio.com/shows/steve_johnnie/cyber.htm ) we discussed the issue and I weighed in, this is a recap of the opinions expressed then. I’m going to note my opinions before watching the keynote presentation by Steve Jobs when he made the announcement, and then review it with you to see if his delivery alters my perspective.

Before viewing the keynote:

Some analysts and journalists have criticized Apple for its planned move to the Intel chip, and their short-sighted arguments are most often based on the alleged uncertainty that this move introduces, potentially dissuading prospective buyers from considering the Mac platform, whether as switchers or upgraders. Then there are those who feel that a switch to Intel threatens Apple’s “cool” factor. Both of these arguments miss the point.

Apple has proven time and time again its commitment to delivering a state-of-the-art computing experience, in terms of ease-of-use and raw power. It has remade its entire operating system during the move from OS 9 to the modern OS X (something Microsoft has yet to do). It has moved from an OS-focused company into an iLife-focused company. It has moved from Motorola to IBM’s 64-bit chips. Each transformation demonstrating the strength one of the most material keys to Apple’s extraordinarily consistent success as a top innovator: Courage.

Apple has the Courage to look at its past investments as sunk costs, pursue the path Today that offers its shareholders and customers the highest probability of producing not only good products, but also great ones supported by great service such as that delivered by AppleCare, Apple Retail ( http://www.apple.com/retail ) and the nascent Apple Consultants Network (ACN: http://consultants.apple.com ). The marketplace isn’t used to Courage, it’s used to risk-management strategies that reward minor improvements in the marketing of products and services. It’s no wonder that most American business’ idea of innovation is to purchase smaller companies. Innovation is by nature risky, and when you’re as big as Apple Computer, most companies are more focused on minimizing risk, as taught by MBA schools across the country, than in maximizing the probability of producing the best products. Apple has managed to institutionalize innovation, delivering product after market-leading product for more than twenty years, and proving their expertise by raising the bar even for technical services, surprising and delighting customers at the phenomenally successful Apple Retail stores, where people who think different, shop different.

Furthermore, the move to Intel should come as no surprise, and the move should not be considered definitive. Why should we be surprised that Apple has been co-developing for the Intel platform? Periodically Apple has had to negotiate pricing with IBM, Apple could not have maintained a strong bargaining position if in the room there were not OS X and iLife running on the Intel chips. And it’s certainly no surprise to those former employees of Next, Steve Jobs’ former company, according to one whose operating system was simultaneously running on as many as five different chip sets. Consider also that IBM failed to deliver a 3GHz version of its chips, how that promise broken probably highlighted whatever other positives Intel brings to the table at least as much as it did whatever other negatives of the IBM relationship. If anything, we have learned by now and accept that Apple will make changes, significant changes, to adopt promising technologies, and that nothing is certain except that Apple has not only the Courage to Change, but also the experience and management will-power to execute material changes successfully.

The point is the move to Intel is consistent with Apple’s past actions, and instead of uncertainty, should create *market certainty* that Apple will continue to pursue the best available technology and parts to manage costs and deliver innovative product excellence today, and in the future, again and again securing its reputation as one of the most consistently innovative companies in the world.

After viewing the keynote:

The keynote largely supports my opinions. Importantly, Steve said that Intel offers “a better roadmap” for Apple. I interpret this as a key piece of evidence suggesting that there are future improvements about which Apple knows that will put Intel ahead of IBM in its ability to serve Apple and its customers. Based on what the evidence they have, they’re putting their bets on a different pony. One of the things that differentiates Apple is the skill they demonstrate in switching horses, even in midstream. Considering all that I don’t know, and all that we must assume Apple knows, it seems foolish in the extreme to bet against them.

IBM should muster an impressive response to this announcement, and we may find that the announcement itself was enough to stimulate the competition, the winning spirit, the ambition that’s necessary to innovate, challenge Apple’s declaration that Intel has the better roadmap for Apple’s customers. If it doesn’t inspire IBM, it will inspire disappointment. While it would be too much to expect that the announcement was made simply to prod IBM, the result may be a display of focused energy that will benefit Apple, and we shouldn’t be surprised at some point to learn that Apple’s OS runs on multiple chips, based on the needs and budgets of Apple customers.

This entry was posted on Saturday, June 11th, 2005 at 1:49 pm and is filed under Opinions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.