MacWorld 2005: The Good, The Bad, and The Ugly

Twice a year, Apple fans like me take the first half of the workday off to watch the semi-annual ritual that is Steve Jobs’ MacWorld Expo keynote speech. When Apple is nice, they provide a live Quicktime feed for us to get our drool on. When they are cruel, they provide no video and force us to watch text-based accounts provided by the nice folks at MacNN, Engadget, MacMinute, and others. Either way though, we eventually get what we’re after: a first glance at what’s coming out of Cupertino this year.

UPDATE: The archived keynote is now available here.

I thought this year’s announcements were quite good and filled with several things to be excited about, but at the same time, I feel Apple is still behind the game with regards to a few lines of business they should be in. Let’s talk about the good, the bad, and the ugly.

First, the good

The Mac Mini

What a diminutive little piece of genius. I was telling some friends a couple of weeks ago that I thought the new headless iMac would be the second-coming of the G4 Cube, and looking at the Mac Mini, it does sort of remind me of the Cube. It’s noticeably smaller than a traditional computer, it’s very quiet, it’s not as fast as other Macs, and it’s extremely well-designed. The key differences, however, are market-segment and price. The only real complaint people had about the Cube was something along the lines of “Why would I spend $1600 on this when I can get a PowerMac for the same price?” Well, that concern is completely out the window with the Mac Mini’s $499 price tag. It’s dramatically cheaper than any other Mac in Apple’s product line (even the eMac) and it’s clearly aimed at people who aren’t already using iMacs or PowerMacs.

Part of the genius of this machine is that I don’t want one. I’m a professional designer and lifelong Mac user and I’m perfectly fine with my 12″ PowerBook and 20″ iMac. And if I did a lot of video work, I’d be fine with a PowerMac. In other words, this extremely low-margin Mac Mini should not eat up any profits from higher-end Mac sales that were already going to happen. This Mac is aimed at potential OS switchers, and we all know how many of those are out there. How many times have you heard someone say something to the effect of “I love my iPod but I just don’t want to plunk down a grand or two to switch operating systems.” Part of Apple’s goal in getting the iPod and iTunes interface in front of Windows users was to get them comfortable with Apple’s interfaces. The next logical step is to get them comfortable with Apple’s prices, and the Mac Mini accomplishes exactly this.

Some people will question Apple’s decision not to include a monitor, mouse, and keyboard, but it’s the sticker that talks, folks. The full-page ads in the New York Times and Newsweek magazine need that big “$499″ number or else they lose their effectiveness. Most people already have monitors they can re-use. Same thing with keyboards. And as for the mouse, were you really going to use that piece-of-shit one-button job anyway?

The bottomline is that this is a great product with a very low margin. It will not directly boost Apple’s profits much, but it should have a noticeably positive effect on their market share.

The iPod Shuffle

Finally, an iPod I could see myself buying. The original iPod and iPod Mini are great little devices, as is evidenced by their sales and cult status, but I simply never needed one because I play all my music on my Treo 600. The Treo is about the same size as an iPod and provides me 1000 times more functionality, so there really was never a single compelling reason for me to carry two devices. Additionally, with removable 1 GB SD cards, my supply of music for the Treo is endless.

The one thing I can’t do with my Treo is strap it to my shoulder and go jogging with it. Well, I actually could do that but I’d look like a fool. I am already a bit foolish looking when I jog, so the Treo is pretty much out of the question. But a tiny iPod that looks and feels like a stick of gum? Gangbusters! Sign me up.

Unlike the Mac Mini, however, I do see the iPod Shuffle stealing away some sales from the existing product line. But you know what? Apple does not make a whole lot of money selling iPods. It is one of their lowest-margin products, in fact. For Apple, the iPod is all about mindshare. Do they make a couple of bucks off it? Sure. But it’s more about getting people comfortable with the Apple brand and getting them onto OS X and the iTunes Music Store. So I’d say if Apple is making $10-$20 off each iPod shuffle they sell, they won’t be worried about lost iPod and iPod Mini sales. It’s total sales they care about now (both with iPods and Macs), so in that regard, this product will be a boon.

For me, the iPod Shuffle is important in that it’s so small that it can’t and shouldn’t be integrated with a PDA/phone… whereas the iPod and iPod Mini should (and will be). With a phone or PDA, you necessarily must have a certain amount of space with which to interact with the device. With a music player, you need only a few buttons.

iWork

There’s not a lot to talk about here until I actually use the product, but Apple appears to have put the one thing in this product that they’ve been missing since the beginning of time: Microsoft Word compatibility.

Simply put, any office productivity tool is not worth its weight in silicon if it can’t play nice with Word. “Pages” which is the word-processing part of iWork claims to be 100% compatible with Word, and for this reason, I will give it a fair shot. I want it to work. I actually think Mac Office is the best piece of software Microsoft has ever designed, but hey, if Apple can eliminate the 90% of things in Mac Office which I don’t use with the benefit of making it simpler, I’m all for it. “Pages” appears to also have some Pagemaker-like abilities, but I’m not holding my breath. It’s certainly not going to be strong enough to fit into a professional design workflow but could it help your dad put together his Fraternal Order of the Elks newsletter? Possibly.

The other piece of iWork is an updated version of Keynote. I’ve never been a big fan of using presentation aids like PowerPoint and Keynote, but I did give the first version of Keynote a try, and although it was slick, it definitely felt like a 1.0 product. Severely lacking in functionality. This version seems to address the functionality gap.

The Apple/Motorola iTunes Phone

A lot of people would put this in the “Bad” section, but I wouldn’t. While I agree with Russell Beattie that this isn’t the iPhone, it’s clearly a major step towards it. Am I underwhelmed at the “Appleness” of this first device? Absolutely. But if you told me a year ago that Apple would be getting their software onto mobile phones, I’d have been ecstatic. I’ve been on record since July (before any Motorola partnership was announced) saying that Apple is developing their own mobile communications device, and this Motorola/iTunes phone is just an evolutionary step towards that device. Apple is learning about phone interfaces, cellular standards like GSM and CDMA, and what it takes to make the ultimate personal communicator. It won’t be long now until companies like Samsung and Sony will be offering phones with high capacity music players built-in, and Apple knows that this will dry up the standalone iPod market pretty quickly. For more views and opinions on Apple’s foray into the phone market, check out my original post “All Hail the iPhone”.

iLife

Not much to say here, but the new iDVD is an improvement. Apple has proclaimed 2005 to be “The Year of High Def” so they’ve built HD capabilities into even their low-end software. This is a good thing.

OS X 10.4 – Tiger

Best. OS. Ever. Period.

And now, the bad

QuickTime

QuickTime has been around longer than any other major video architecture and yet it’s improved the least in the last five years. What used to be the industry-standard for movie trailers and just about every other video clip on the web has now been marginalized into a niche player. It’s great for video compositing and that’s about it these days. Windows Media 9 provides better quality at web-level bitrates and Flash provides more ubiquity. I personally don’t encode any video for the web in Quicktime format anymore because there’s really no reason to.

Apple touted Quicktime 7’s new support for 24 channels of sound. Are people actually asking for that? 24 channels? How about concentrating instead on the area where Windows Media is whooping the competition’s ass: digital rights management. I know nobody likes DRM but the fact is that content developers are beginning to make encoding decisions based largely on DRM issues. For instance, if Disney wanted to release a full-length movie for digital download, it wouldn’t even be possible with Quicktime because we couldn’t protect it. Windows Media 9 offers content protection through DRM, and hence, it’s the only game in town. Love it or hate it, video DRM is a very important issue right now in the content space, and Apple doesn’t seem to have paid a lot of attention to it yet. Maybe they are working on it… I don’t know. One thing I do know is that I can’t remember the last time I was truly impressed with a QuickTime update.

PowerBooks

It seems the rumors of speedbumped PowerBooks turned out not to be true. This is obviously a bad thing, but I’m sure new models are close at hand.

And finally, the ugly

Lack of a Media Center strategy

When the fake photos of the iHome surfaced late last week, I had a brief moment of ecstasy. It was the same sort of feeling you get when you open the perfect present during the holidays. Upon a few minutes of inspection, however, it was easy to tell the iHome photos were not real, and I sunk back to earth. I love Steve Jobs because he loves computers. I hate Steve Jobs because he hates TV. While Microsoft is investing a small amount of their cashpile in developing the rapidly-improving Media Center platform, Apple has steadfastly refused to even acknowledge that there can be a valuable connection between the television and the computer.

I’ve had a DirecTivo for over two years and I absolutely love it. It’s one of the best pieces of technology I’ve ever purchased, and given my addiction to reality TV, it’s as big a part of my “digital lifestyle” as any Mac I’ve ever owned. I thought I’d be using my Tivo forever, but then Media Center 2005 came out. Boy is it nice. Wait, it’s from Microsoft. Let me repeat: boy is it nice. The interface is slick, I can rip shows to disk with one click, it supports HD, and it’s fully expandable.

HELLO APPLE, WHEREFORE ARTE THOU?!?!?!

You say you are the “digital lifestyle company” and yet you won’t address one of my primary digital lifestyle needs? You force me to consider invasive hacks like this just to record HD on my Mac? I have $1500 sitting in my pocket waiting to spend on a Media Mac… come take it… please. I know you think TV is evil, but porn is allegedly evil too, and your computers help people watch it. Get over your religious disregard for television and fill the obvious market need for what I’m proposing.

My vision for the Media Mac is as follows:

  • Stackable stereo component form-factor
  • Two HD tuners and two SD tuners
  • 10-foot interface built on top of OS X but separate from OS X’s 2-foot UI
  • Apps are limited to the guide, 10-foot iTunes, and 10-foot iPhoto
  • Unit would act as your PVR, your digital music jukebox, and your photo album
  • Sling-like functionality to beam your TV signal over IP to any location

Is that so difficult? It’s all already being done… just not by Apple. When you have 6 billion dollars in the bank, I’d argue that it is your responsibility to investors to be researching and developing in areas such as this. Might it fail? Sure. But the opportunity is huge, and by not even attempting to capitalize on it, you are failing already. If worst comes to worst, just purchase a controlling interest in Tivo… 51% of the company would only cost you $170 million as of today’s closing price. Two great brands… both technology leaders, both on the PowerPC/Unix platform. What am I missing here?

* By the way, for those of you reading this site from apple.com domains: If you’re already working on this product and cursing the fact that I am cursing about it, please accept my apologies… and keep working! :)

No licensing of FairPlay

Apple appears to be making the same mistake with iPods as they did with Macs in the ’80s. They have a huge market share lead on the hardware side, and instead of leveraging that advantage into a software lead, they are concentrating on gaining a 100% hardware market share. Here is a quote from the speech via Engadget:

“iPod market share is at 65 percent, Flash-based player share is at 29%, and wannabes are at 6 percent. We’d like to go after the remaining 29%.”

It doesn’t get any clearer than that. Why oh why does Apple think that every music player in the world will be manufactured by them? We saw with the rise of Wintel in the ’80s and ’90s that even if you have the best hardware, you’re not necessarily going to win that race. With Microsoft’s emerging “Plays for Sure” initiative and the thousands of upcoming devices that will support WMA, I think Apple is living a dream if they think the iPod’s market share isn’t due for a steep decline. The smart (dare I say “Microsoft”) thing to do would be to dominate the software and commerce side of things instead. License FairPlay DRM to any device manufacturer who wanted to support it, and collect a few bucks for every device sold. Continue to push the iTunes Music Store as the preferred way to get music. Continue to sell iPods. As long as the iPod is still the best device out there, people will continue to buy it. And you know what? Even if they buy another device, Apple still makes money.

I sure hope Apple is working such a strategy, but I’m just not getting that vibe. I feel like the iPod is the source of a lot of blinding cockiness in Cupertino right now, and I can only hope that someone wakes up before it’s too late.

In closing….

Thanks, Apple, for another great Expo which has made us applaud you and second-guess you at the same time. Only time will tell how good the Expo really was, but it sure was entertaining.

As always.

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36 Responses:

  1. Powerbook prices seem low at the moment; I’ve heard rumours they’ll be hiked back up to their previous levels soon enough.

    Has anyone got any information on this? I’d love a 1.67GHz Powerbook, but paying an extra couple of hundred for it doesn’t make a lot of sense to me.

  2. garoo says:

    I’m not sure about the Fairplay licensing.
    Apple isn’t able, or ready, to make an iPhone, so they license FairPlay to Motorola (and I’d expect the deal _not_ to be exclusive). Apple makes the best music players on the market, so they don’t license FairPlay to other manufacturers.
    iTunes draws people to iTMS, iTMS draws people to iPod, iPod draws people to iTunes and, to a lesser extent, the Mac… it’s all tied together in a virtuous circle.
    I agree it’s quite a risky strategy, and it can fail if MS-compatible players or stores really manage to be as appealing as the iPod and iTunes, but it’s not necessarily doomed, it can succeed. It’s a gamble, but not a suicide.
    I don’t think “Plays for sure” is quite ready to compete with the iPod just yet, and the nice thing about not licensing FairPlay is that it keeps users captive. As long as the iPod is one of the best players, and not too bad a bargain , why switch if you have ever bought from iTMS?

  3. Mike D. says:

    Garoo: I’m not sure about the best way to work out FairPlay licensing either and I agree with you that it’s a gamble and not necessarily a suicide… but it certainly reeks of the past. Trends come and go. The trend right now is to have an iPod. The lasting behavior is to have a music player. The two are different.

    By tying yourself to the software side at the expense of loosening your grip on the hardware side, you insulate yourself against changing trends in devices.

    The optimist in me hopes you’re right about the iPod/iTMS combo being so good that people will never want to leave, but the realist in me remembers that people just don’t always go for what’s best (see: Windows). They go with what’s cheapest, nearest to them, and what others around them are using. If the majority of iPod users’ music actually came from the iTMS, then I think the staying power would be a bit stronger, but I bet the average percentage of music on a typical iPod that is iTMS-related is well under 5%.

  4. Mike-

    I was going to post a nice lengthly commentary on the MacWorld Expo, but you’ve literally said everything exactly as I would have said it. Thanks. Now I can just link you and go to bed. :)

  5. Mike -

    Your definition of a Mac Media Center is right on. It’s funny that I’m dying for Apple to release something that will directly replace my favorite piece of technology in the world – my DirecTivos.

    I’d be first in line to fund your dream device.

    Digital Lifestyle = Music + Photos + Movies + Television

    With the HD codec for quicktime, what component are we missing? None that I can see.

    Thanks again for a well-informed opinion piece.

  6. Robert says:

    Even after I saw the fake “iHome” photos, the excitement wore off in a matter of minutes. Does Apple really want to get into this arena?, I thought. I wondered what Apple could bring to the table that would set them apart, aside from the product and UI design. In the case of your dream device, it’d have to do a whole lot more than that to get me on board.

  7. Fairplay – Basically, you’re right. But until Louis Vuitton stops making designer handbags tailored for your day-queen wife’s half-dozen iPod minis, I think Apple figures they’ve got it in the bag.

    Notice how those Dell Jukebox ads always show the player in somebody’s pocket? It’s the illusion of the iPod. You can show off a little white to make it look like you’re representin’, but really you know if you pull the POS out of your pocket you’ll be laughed out of town by the cool kids.

    “You bought a Dell player? What up wid you?”

    As long as Apple forsees contuation of this status, my guess is that we won’t see Fairplay licensing.

  8. Apple’s foray into the phone market, check out my original post “All Hail the iPhone”.

    Apple’s foray into the phone market, check out my original post on your “iPhone Update”.

    Told ya so! :P

    Anyway, if America finally switches over GSM (meaning over 95% market share, and full coverage), Apple might release a device that’d actually be good enough to quallify as an iPhone.

    However, I don’t know what the market is like in the US, if pre-paids are as big over there as over here (in Europe), if abbo’s are packaged in with enormously subsidised phones, or something completely different.

    I ask this, because I hear people talking about their (for example) Verizon T-600, not their Sony-Ericsson T-600. If replacement branding is that bad to get your phone sold, I can’t see Apple selling a phone that’ll be known as the ‘Cingular i550′ for example.

    Another doubt I have is that Apple doesn’t have a small company to buy for Apple to get the technology it needs. Phone’s aren’t about 1.45Ghz/256mb/combo, they’re about features. Now features aren’t the only thing, as most people will go for the most reasonble looking phone with the most reasonble deal (i.e. not a 25$ / month abbo). That’s something Apple can’t trully control, so if they can work around that, they’re set to go.

  9. Nick Newlin says:

    Please Pleas Please Apple – Give us the Media Center Device, exactly as described, pay extra special attention to making it look like a stereo component, let it serve the music library via iTunes sharing, and let me control it a la airport express or ARD, but also with a “10-foot” interface through my tv…. please!!!

  10. Apple does not make a whole lot of money selling iPods. It is one of their lowest-margin products, in fact.

    Uhh, you couldn’t be further from the truth. Apple makes upwards of $100 on the iPod mini. The iPod Photo and the higher-end iPods make more – while costing only $500 or so – than the iMacs, PowerBooks, etc.

    (Editor’s Note: Erik: From everything I’ve read, iPod net margins are anywhere from 1% to 4% depending on if you include intangibles and expenses not directly related to sales. That’s not a high-margin product in my book and it’s certainly a lot less than the net margin of Macs. There’s more information here if you’d like to read up on it.)

  11. I got to tell you the iPod shuffle looks great, size, style, function. But I think they made a serious flaw in one tiny, tiny little thing. The placement of the earphone jack. I think that if they had just slid the usb bit over just a tad and wired the head phone jack in right beside it they could have opened up so much more possibilities for the add ons even in the simple lanyard.

    Think about it, they could have wired the head phones into the lanyard and had the jack right in the cap and the people in the commercial wouldn’t have looked like they were being attacked by some alien creature with yards of tentacles.

    Also the dock or potential car units or third party speaker docks like Bose could have had it slide right on, though I suppose thats really moot since they use usb anyway, but I digress.If for no other reason than the lanyard they should have combined them on the one end of the device. It’s nitpicking I know but I like when form follows function and vice versa and as tight as this little unit is that just seems like an oversight to me.

    Of course I’m just a monday morning product engineer.

    Just a thought.
    J.

  12. Philippe says:

    Media center – I guess Apple is testing the waters on that. If you look at the accessories page, second row, item on the left

  13. Do you know whether the Mac Mini can be run without display, keyboard, and mouse? I want to run one as a home server but haven’t seen if its possible.

    Presumably I’d be able to use startup items to specify which services I want started, and crontab entries to restart any crashed processes I need.

  14. Quicktime: I hope they finally fixed the MPEG-2 transcoding problem. Right now they only transcode video with no audio track and they claim it is a QT architecture problem.

    Media Center: The software needed for this will take time. It would be nice if they came out with it for the desktop machines first.

    Apple Phone: As long as phones are bundled with service this is going to be a problem market for Apple.

    Licensing Fairplay: They are not sure if letting the genie out of the bottle will destroy them or not. Since they can’t put it back, they must be careful. My guess is that if they sense weakness in the market for the iPod they will do it.

    Mac Mini Booting: My Powermac G4 boots up fine without keyboard, mouse or monitor.

  15. gb says:

    Just an interesting aside on the idea of Microsoft owning the DRM realm: Virus writers are using the WMP DRM to install their malicous code. (nod to Dave Shea on that one)

  16. Mike, I think that writer at Fool.com pulled those margins out of his butt. Apple is making very nice margins on the iPod. I don’t think they’re as high as their typical margins on Mac hardware, but they’re much higher than the typical margins in the consumer electronics industry.

    Here’s proof. This week Apple announced their most recent quarterly financial results: profit of $295M, compared to a profit of $63M in the same quarter one year ago. Mac sales are up 26 percent year-over-year, which is nice. iPod sales are up 525 percent, which is just unbelievable.

    This means Apple made at least $200M in profits on the iPod. Probably more, really. They sold 4.5M iPods in the quarter, so that means they made at least $45 in profit per iPod.

    Do you really think any of these other cut-rate gadget companies are going to play Apple licensing fees for FairPlay — or even for the iPod OS — that come close to $45/unit?

  17. Mike D. says:

    John: It’s possible that analysts’ estimates of iPod margins are incorrect and it’s also possible it’s a question of net margins vs. gross margins, but either way, the iPod is a lower margin product than most of the rest of what Apple sells (or is it??? see below). In either case, your math sounds quite reasonable to me so let’s say they make $45 per iPod.

    I’m not saying it’s a bad thing to sell millions of iPods today and make $45 from each one of them. It’s a good thing. A great thing. A thing that Wall Street rewards with a stock price of $69.80. The Street cares about what you’re doing quarter to quarter, and right now clearly Apple is doing no wrong with regards to sales. My argument, however, is that if their long-term plan is to rely on heavy margins for a mass-marketed electronic device, they are in for a big fall. Right now Apple is enjoying a period of time when the digital music player is not a commodity from a feature standpoint or a saturation standpoint. This will change the same way it does with all electronic devices. So I guess what I’m saying is, if Apple is hatching a plan to rely less on iPod hardware sales, great. If they are planning to rely more on iPod hardware sales, I see bad times coming. Maybe not in a month, but just give the Microsoft commodity-making machine a few cycles to wreak its havoc, and you’ll start to notice the effect.

    You correctly point out that no one is going to license FairPlay or the iPod OS for $45. But what about when that margin is down to about $10?

  18. Mike D. says:

    I’m just running the numbers here, and somebody please correct me if I’m missing something (which I probably am), but this is what I come up with:

    Apple’s latest quarterly profit: $295,000,000
    iPods sold in that time: 4,580,000
    Macs sold in that time: 1,050,000

    So if we assume a $45 profit per iPod, that’s $206,100,000 in profit directly related to iPods… which leaves $88,900,000 in profit from Macs.

    But we also know Apple sold 1,050,000 Macs in the quarter for an average price of $1529. If we’re going to meet the $88,900,000 profit number above, that means we’re saying Apple is only making $84.66 per Mac sold… a profit margin of only 5.5%. But since we know think Macs have greater margins than iPods, how can that be? Some even suggest that margins on Macs are in the 20-25% range.

    * Note: I have a feeling I’m drastically oversimplifying the situation here as we’re not considering other revenues and expenses which aren’t directly related to either Macs or iPods, but I’m just throwing this out there. I also think that the issue of net-margin vs. gross-margin is important here because there is often a huge difference. When you talk about a company’s bottom line or financials, you are generally talking about net-margin, but when you talk about incremental sales projections, gross-margins matter more.

  19. Mike D. says:

    Hmm, and now one more thing just struck me as I re-read the SEC filing for the third time: There was a huge change in the overall product and revenue mix and yet the relationship of net sales to COGS stayed pretty steady. Net sales were up 73% while cost of goods sold were up 69%. This would strongly suggest that overall margins in an iPod-dominated mix are similar and even a little higher than in a Mac-dominated mix. Total iPod revenue doesn’t eclipse Mac revenue yet, but it easily could this year.

    So then, if we assume margins are roughly equal on both products, that gives us $1.211 billion in iPod sales times an .0845 margin divided by 4,580,000 units sold, for a grand total of…

    $22.34 an iPod (and $129.20 a Mac).

    Throw in a sloppy correction for the 73% vs. 69% thing above and you have something in the mid to upper 20s maybe.

    But again, I could be missing something obvious here. If there are any accountants in the crowd, feel free to beat me down.

  20. The Minimac, er I mean Mac Mini looks totally cool. I just thought how it’s ideal for people switching from Windows, as they can just unplug their peripherals and use the Mac Mini instead! Otherwise, switching to Apple means doing away with your awesome monitor, super multi-function keyboard and multi-button mouse.

    I am not sure about the claims Apple make on their website for it though:

    “You won’t have to install extra drivers when you add hardware to your system.”

    Either that’s common with Apples (I don’t know as I use Windows XP) or they’re telling porkies. Say a new piece of hardware is developed – surely it will need drivers?

    One other difference between this machine and a PC is this:

    ” You can also choose up to 1GB RAM and increase the 40GB hard drive to 80GB. Some of these options must be installed by Apple at the factory; the rest can be added in-store at an Apple Store or an Apple authorized reseller.”

    PC users are used to doing things themselves. If a bigger hard drive comes out, or a faster graphics card, it can be easily added to the machine. One problem with Macs and similar custom-shaped computers is that you can’t do that unless the hardware will fit in the case. Small cases are all very fine, but there’s a reason PC cases have lots of room in them.

    One last thing:

    “OS X 10.4 – Tiger. Best. OS. Ever. Period.”

    Any reasons why, for people like me in the dark?

  21. The feature I find most interesting in upcoming Tiger is VoiceOver, a spoken English interface to OSX, plus screen reader. If it’s good, it could be fantastic aid to accessibility for the sight-impaired.

    http://www.apple.com/macosx/tiger/voiceover.html

    Has anyone had a chance to review it? I haven’t seen anything yet. I do know that screen-reading software on PCs is very expensive, so this could be great for Apple. Of course, that’s because Apple slid on accessibility issues for years, so they are actually just catching up.

  22. Tim says:

    According to the Q1 2005 conference call with the CFO, wrt Apple’s margins on the iPod: “…gross margins on the new iPod shuffle and Mac mini are below Apple’s average and equivalent to the eMac. iPod margins were close to 20% for quarter, while iPod shuffle margins will be below 20%”

    Sounds pretty healthy.

    Tim

  23. Let’s look at the Mac Mini from a PC user’s point of view:

    a) The price is amazing. You can even buy a switcher to keep using your existing keyboard, mouse and monitor with your existing PC.

    p) The noise level is said to be very quiet. My PC sounds like an airplane taxiing on the runway, due to all the fans it needs to keep cool.

    p) But where do you plug in your PS2-socket keyboard? My mouse is USB, so I’d have to get a new keyboard or adapter.

    l) There are only two USB sockets (plus 1 Firewire). So a USB-hub would be essential. (I have 5 USB cables already in my PC, with spare ones for connecting a digital camera.) If you put in a keyboard and mouse, where does the USB printer go? Or scanner? Or pocket flash drive? Etc.

    e) The modem’s only 56K, though it also has an Ethernet port. Now I have tried to figure out the details from Apple’s website, but need some help. How would I connect to ADSL broadband? Would I need the Airport device and a wireless modem? At present, my modem is an internal PC card. If I bought an external modem would it connect to the Ethernet port, or is that just for LANs?

    Well, this is definitely gonna be the device to make many PC users switch to Apple, if you ask me. Even if you just use it to test your website in Safari.

    My only gripe would be the low memory specs. I’ve heard 256Mb RAM isn’t enough to run OSX properly. And the Radeon 9200 graphics card only has 32Mb! That’s years out of date – I’ve had a Radeon 9600 Pro with 128Mb for over a year. 256Mb is also common with PCs. And my card is not top of the range. I guess this isn’t a games machine.

  24. Chris –

    The Mac mini isn’t for people like us who really, really use our computers, but rather for the average user who only uses their computer for internet, email, chatting, listening to music, and managing pictures from a digital camera… which is a very large number of people.

    That being the target market, this Mac is perfect for my sister, my in-laws, my mom, most of my friends, many of my co-workers, etc.

    Although 256MB isn’t a lot for us, it’s enough for those who just want to do normal stuff.

  25. Matt Bailey says:

    In agreement with the last commenter, why does apple insist on extorting exorbitant prices from their users to get descent performance! Most macs now at least come standard with combo drives which makes sense. When you remove any other internal drive, the one left should at least write to something. And my 3 year old iMac 800 Mhz has 32Mb of VRAM and it was shamefull then! COME ON! Stop it Apple why must you punish us for loving you so. 512 VRAM should be standard or at least 128. Get serious about performance or at least match these $500 PC’s you want to replace so desperately.

    128 is enough to run OS X but not really anything on top of it at the same time. You will not be multi tasking or doing anything with video on 128 ram. Not that it matters since you only have 32 megs of non-upgradable VRAM to deal with anyway.

    ADSL uses an external modem provided by your ISP and that modem connects into your 10/100 port or into your router that then connects into all your other PC’s.

    Yes, you would need a PS/2 keyboard adapter. For that matter, maybe even some new keys since you’ll be looking at the windows key wondering what it does under OS X and there won’t be any  (apple/command/clover) key on the keyboard further confusing the windows switcher when someone tries to kelp the poor soul or they want to start using the abundant keyboard shortcuts found in OS X.

    The mini and for that matter the i/eMac lines have all the right ports. Just not enough of them. Case in point, my set up includes:

    Firewire
    1. iPod
    2. 250gb External HD
    3. Camcorder
    [3 devices, 2 ports]

    USB 1.1
    1. iSub
    2. hp psc 1210v printer/scanner/copier
    3. Keyboard
    4. MS wheel mouse
    [4 devices, 3 rear ports]

    The 2 available ports on the keyboard prove indispensable for photo cameras, and JumpDrives and stuff that does not stay connected all the time. But you loose these 2 ports if you have a bluetooth keyboard and apple placed them in an awkward area on their new USB keyboards. Apple, the company you love & hate or the company you love to hate.

  26. Forgive me, I should have been comparing the new Mac to a cheap PC, which like Apple’s website says, would have a built-in Intel graphics chip (ie: naff).

    I read up on ADSL modems and routers last night, learning that the Mac way is usually via an Ethernet port, but you can also use USB! Whereas PC is usually a small phone lead, or again USB. I also discovered you can buy a router that has both types of sockets, which would be ideal for sharing between a PC and a Mac.

    Now I need to know 2 things:

    P) Does the new Mac use USB 2?

    C) How come it is not called the iMac Mini? Am I missing something here?

  27. Do you really want it to replace your DirecTiVo? I’ve been thinking a lot about this, and I don’t. I don’t think I will ever purchase another DVR that isn’t integrated with the video (cable, satellite) service. Imagine you get what you want – dual tuners for HD and SD, and you want to hook that up to a DirecTV system. Since the HD/SD tuners won’t be able to tune satellite directly (unless they have the access card and encoding information), you’d have to hook up your HD DirecTV receiver to the inputs on your Mac. Of course, a DirecTV receiver (other than the DirecTiVo) can only tune one channel at a time, so you’d need another one if you wanted to use both tuners on your MediaMac. No, now if the cable and sat companies were working with Apple/MS to make a system where you could plug the coax cable right into your computer, that’d be another story. All I want is a way to 1) Rip CDs, 2) Rip DVDs (will _never_ happen legally, I don’t think), 3) listen to music, 4) watch movies, 5) watch picture slideshows. I would pay $500 for that, with out any PVR functions…

  28. Andrew says:

    I think the new Mini Mac has great potential. 1gigabyte of ram stinks in this day and age however. And I wonder if it’ll be able to keep up with changes for more than 2-3 upgrade cycles. Even then it’d probably run slowly. Nevertheless. My budget makes mini mac mine. :)

  29. benny says:

    hi kim

  30. iCrap

    With Apple’s announcement today that a new Mac mini will be available for under $500 ($499), we PC users are supposed to be compelled to run to the local Apple store and pledge our allegiance to OS X.What’s that? You’re…

  31. Macworld San Francisco 2005 Roundup

    This year’s Macworld San Francisco was, if the deluge of blogosphere responses is any indication, extremely important. Apple introduced three very significant brand-new products and updated six others, in addition to more demoing of Mac OS X Tiger &mda…

  32. MiniMac in stores Jan 22

    “People who are thinking of switching will have no more excuses,” Jobs said. “It’s the newest and most affordable Mac ever.” mHmmm. Thank you Mr. Steve Jobs but I just bought my Toshiba Satellite in the Summer of 2004. It’s…

  33. Apple has my money

    After reading Mike Davidson’s breakdown of Apple’s Macworld 2005 announcements, I started wondering about that “iHome” hoax that appeared last week. Even after I saw the fake photos, the excitement wore off in a matter of minutes. While the “media cent…

  34. Apple has my money

    After reading Mike Davidson’s breakdown of Apple’s Macworld 2005 announcements, I started wondering about that “iHome” hoax that appeared last week. Even after I saw the fake photos, the excitement wore off in a matter of minutes. While the “media cent…

  35. Melanie Blakeman says:

    It’s really interesting to read the comments in retrospect:))

  36. Melanie Blakeman says:

    hint, hint, would love to see 2011 appraisal:))

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