John C Dvorak of suggests in this article that Apple is ready to ditch the Mac. Is this realistic? The idea that the Mac is a problem for Apple is something I have suggested in conversation on several occasions, so there are a least two observers, and from different perspectives, seeing that Mac products no longer fit well within the Apple portfolio. The two perspectives:
- the messages from apple marketing signal end of the Mac (Dvorak)
- the mac is at odds with Apple revenue strategy and new customer base (Me)
For background on the marketing signals, see the Dvorak article. Here are my additions.
Mac Revenue: Poor Cousin to iPad Revenues
Apple gains a better profit per unit on iPad Pro vs MacBook. Every iPad or iPhone continues to earn Apple revenue once it is sold, but the MacBook sale is much more a one off. Computers run application programs. With the iPad all of those application programs must be purchased through Apple, while with the Macbook, they can be purchased direct whoever produces the software. Wish to add an Adobe application? For the iPad, Apple will earn revenue but for the Macbook, the purchase can be direct from adobe. The same for every application, and this mounts up. While a MacBook can initially be more expensive, and thus the initial sale generate more revenue, the iPad wins over time. Remember the initial revenue is only a percentage margin. Apple has to do a lot of work for that revenue and has high costs. If there is a cost overrun the margin is reduced. But with that commission on a sale of Adobe Photoshop, Apple has basically no cost, and the revenue is all profit.
This means that for Apple, the MacBook can be a competitor to the iPad Pro, and every sale of a MacBook can result in a loss of revenue in comparison with an iPad sale.
Apple New Customer Base
Part 2….coming soon
