Apple Inc.: April 2007 Archives

In my last post about Apple, I put forth the idea that Apple's strategy of putting their advanced OS X operating system in all of their devices was going to enable them to surpass their competitors in a number of fields. In my post, I mainly talked about the advantages that Apple gained by adapting OS X to run on everything from the Apple TV to the iPhone. What I didn't talk about, were the disadvantages of this strategy.

Fortunately, shortly after I made my post, my friend Carl chimed in via the comments section, with one big negative that this strategy could possibly incur for Apple:

"I think Windows fell apart partly because of the number of combinations of devices it had to be able to support as it grew. Apple has limited this by controlling the core hardware, but I'm not sure they can limit it forever. Either way, the more platforms they have to keep going simultaneously with OS X, the harder it will be to get full test coverage."

While I had planned to respond to Carl's comment, my planned response has certainly changed, as of yesterday. Because it was yesterday that Apple announced that Mac OS X Leopard is going to ship 4 months late -- because Apple has been focusing on getting the iPhone out the door by "late June".

So, score one for Carl -- he identified a very real pain point that Apple is experiencing with their new OS X strategy. And while I think that Apple might need to beef up it's OS engineering in the mid to short term in order to deal with the new reality of OS X, yet like Carl, I don't think that's going to be enough. Unlike Carl though, I do think that there is a way for Apple to have OS X run on many different devices, yet still avoid Microsoft's fate.

How is Apple going to achieve this feat you ask, gentle reader? Why, with a trick, of course. Let me point you to an Ars Technica article from February, that didn't make many waves in the Mac blogosphere: "Intel's coming embedded play". The basic thrust of this article is that in the wake of Intel's sale of their XScale division, instead of exiting the embedded market, Intel might be coming at it from a different direction - namely building embedded chips that can execute the x86 ISA. For why this matters to Apple (especially in light of it's current predicament), I'll leave it to Jon "Hannibal" Stokes to explain:

"To put it another way, do you really think that Apple wants to pay programmers to work on an ARM port of Darwin? Me neither. But right now, ARM is what will fit in the iPhone. The minute that x86 fits in the iPhone, then the software cost equation changes for Apple in ways that may make x86 more attractive."

If this new CPU really does come to pass (and I think that it will -- the argument for it is certainly compelling), then Apple will find itself in a situation where they can write code for one ISA, and have it run everywhere. Because there will be x86-compatible chips in Apple's future phones, iPods, TV set top boxes, and Macintoshes. This will limit the amount of devices that the OS X team has to support, helping Apple get their economy-of-scale groove back on.

And now, do we see why Steve Jobs got Apple in bed with Intel, and not AMD?

:)

-Andy.

Technorati Tags: Apple, Macintosh, Steve Jobs, Intel, Analysis, Ars Technica, iPhone, Apple TV, Mac OS X, x86, Instruction Set Architecture

Yesterday, I wrote in support of the theory that Microsoft is no longer relevant in driving the computer industry forward. One of the points that I used to buffet my argument was "that in the age of web-based applications, the OS that you run is largely irrelevant". To put it another way, the idea of selling a computer operating system in a box for some sort of profit is an idea that is on it's way out.

I think that Apple has figured this out, and rather than trying to rest on their laurels and wring the maximum amount of profit out of their old business model, I believe that they are innovating instead.

As evidence, let's examine a not-related-to-Mac-OS-X bit of news that happened earlier this week. On Monday, Apple announced that they have sold over 100 Million iPods. While in and of itself, this announcement has many implications for the future of music and media (and of course the Zune, which is looking more and more screwed by the minute), I want to focus on something else that I noticed in the press release.

At the end of every Apple press release, they have some standard boilerplate text, which is meant toot Apple's horn about all of their great accomplishments. It is normally the same thing every time, and usually looks something like this:

"Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning desktop and notebook computers, OS X operating system, and iLife and professional applications. Apple is also spearheading the digital music revolution with its iPod portable music players and iTunes online music store." (emphasis mine, from "Apple Unveils New iMac with Intel Core Duo Processor")

In the 100 Million iPod press release, however, this boilerplate text was changed slightly, and now looks like this:

"Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and will enter the mobile phone market this year with its revolutionary iPhone." (emphasis mine)

The main change between these two passages that I wish to highlight isn't the iPhone, but rather the fact that in the newer passage, Apple has de-emphasized the Macintosh. It is a small change, but important nonetheless. I also want to highlight the fact that in all of Apple's press releases since July of 2004, they call their operating system "OS X", and not "Mac OS X". This change has been noted before (most recently during the iPhone announcement), but I find it interesting that Apple has been using the "OS X" moniker publicly since 2004.

What I think that these changes signify is that Apple is dealing with the commoditization of the operating system in a fairly novel way. Instead of divesting themselves from their OS, by either open sourcing it or selling it to a 3rd party, Apple is instead moving OS X into the core of the company. Even after the iPod became a huge success, the core of Apple was the Macintosh - that was at the core of the "digital hub". Yet, now we are seeing the Macintosh being de-emphasized, in favor of OS X.

I believe that Apple has had a very key insight into the future of digital devices. In the "old days", the way you made any digital device more capable than a stop watch was to start off with an embedded operating system. Something that was built from the start to be small and efficient, both in terms of memory utilization and CPU requirements. This is what Microsoft has done with Windows CE - which isn't really Windows at all - it has a totally separate kernel from the Windows NT line. However, when you start with a small OS that has limited features, so that it can run in a limited space - it is very hard to build a "next generation" digital device. I'm talking about a device that can play back media files (audio, video), multitask, and provide robust networking requirements.

Instead of playing the same game that Microsoft and others are playing (starting with a small OS, that you make bigger with newer functionality), they did the reverse -- they stared big, and got small. They "shrunk" OS X down to the point where it could run efficiently on an embedded device (which, if you know software engineering at all, then you know that this was a fairly amazing accomplishment). This means that Apple is going to be able to make digital devices that accomplish amazing things, all by leveraging their investment in OS X.

Going forward, Apple's product mix is going to look like this:

OS X at the center of Apple's world (also in PDF, OmniGraffle)

On the left-hand side of my diagram, we have the devices Apple is (or will be, come June) shipping that are powered by OS X. On the right-hand side, are all of the things that Apple could build, now that they have a sufficiently powerful embedded operating system.

What's in it for Apple? Not only do they get to continue to leverage their investment in OS X, but they will also be able to run circles around their competitors (Nokia, Motorola, Palm, RIM, Microsoft) - none of whom have such an advanced OS. In addition, as the market for personal computers levels off, Apple has found several new revenue streams for their OS division. Finally, by virtue of making OS X, as well as several of its premier applications (think iLife and their professional apps), Apple is sitting on the premier Cocoa development houses in the entire world. Going forward, they will be able to leverage that incredible engineering talent to make new and amazing applications for their embedded OS, extending the innovative hot streak that they have been on for the last decade.

Wow. Now, more than ever, I can't wait to see what the future holds for Apple.

-Andy.