Friday, June 10, 2005

Bits in the news: Linux, Apple, Sony, Dell...

I was struck today by three bits...

In the first, a statement from a senior Sony executive that the PlayStation 3 will have a hard drive and a linux operating system.
SONY COMPUTER Entertainment boss Ken Kutaragi has suggested the upcoming Playstation 3 will come equipped with a hard disk. And the hard disk may come with Linux pre-installed.

Kutaragi is miffed that the likes of Nintendo and Microsoft won't call their consoles computers. Nintendo, he complains to Japanese site Impress PC Watch, "keeps telling the world their consoles are 'toys'," while Microsoft keeps calling the Xbox a "game machine".

"We're positioning the PS3 as a supercomputer", he says, "But people won't recognize it as a computer unless we call it a computer, so we're going to run an OS on it. In fact, the Cell can run multiple OSes. In order to run the OSes, we need a hard disk. So in order to declare that the PS3 is a computer, I think we'll have [the hard disk] preinstalled with Linux as a bonus.
And, in the second bit, Michael Robertson, the owner of Linspire, a high-end Linux distribution, takes a whack at Apple Computer.
I was disappointed with Apple's actual announcement on Monday, which revealed not a bold strategy embracing the openness movement but confirmation that Apple is still a company locked in the time warp of the go-it-alone '70s. Apple agreed to switch from processors made by IBM to special processors made from Intel over the next two years - that's it. This is only slightly more significant than Apple choosing to change the hard disk or memory supplier it puts into its computers....

I'm sure Jobs remembers a failed experiment in the '90s when Apple embraced a more open strategy. During that time, other companies were permitted to build Mac clones. Those companies targeted the most lucrative customers, siphoning off the high-end users who wanted the fastest machines. Apple depends on those customers to pay top dollar and uses those profits to fund their significant research and development costs. Losing them was a painful experience and Jobs shut down the clone business when he returned to the corner office at One Infinite Loop.

A more open strategy could perform differently this time if Apple put as much ingenuity to its structure as they put into their elegant software and hardware. Imagine a world where Apple encourages clone manufacturers to grow the middle- and low-end markets while keeping high-end products for themselves. Perhaps they limit clone products to a certain speed? Or maybe offer variable pricing so that computer builders would pay a percentage of the computer price for the operating system, meaning Apple would make much more if a top-of-the-line Mac clone was sold. This could significantly grow the Apple market share because price-conscious clone manufactures could attack Microsoft and grow new markets. If these clone makers did poach existing customers, it would be Apple's least profitable ones or they would have to pay handsomely. You may be perplexed why I am inviting Apple to compete with Linspire in the PC-compatible world. I believe another threat to Microsoft would divide its counter-operative forces, and desktop Linux would continue to compete well with Apple on cost and software variety - two critical components for any platform.
And the third note is from the Motley Fool:
Apple isn't a software company; it is, and always has been, a device company. What defines Apple? The iPod, iMac, and PowerBook. AppleWorks, Final Cut Pro, and iPhoto are cool add-ons that help sell the hardware. And that's all.

Apple's real enemy is Dell, plain and simple. The Intel deal aims to lure those buying computers from Dell -- or Gateway, or Acer, or even iPod partner Hewlett-Packard -- into trying a Mac. Everything else is a distraction.
Do I see a pattern here?

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