Is Apple Still A Computing Company?

Posted by: Arik Hesseldahl on December 23, 2005

Of course it is. But asking that question is a good way to start a discussion about what Apple’s intensions actually are in the living room. We’ll soon find out, as Steve Jobs’ keynote at the Macworld Expo in San Franciso is now only weeks away. But analyst David Bailey at Goldman Sachs had an interesting research note out this week that addressed the subject.

In it he said something that has caught a good deal of attention because its provacative: “If early indications from suppliers prove correct, Apple is likely to move further from its Mac core in 2006, leveraging its brand and building on the consumer success of iPod.” He says Apple is on the cusp of entering the “digital entertainment hub market in the form of an updated Mac mini” that will include a remote control, and the Front Row software for watching DVDs and listening to music. He also figures that the long-awaited iTunes phone — this one actually an Apple-branded phone — could appear on the market by the end of 2006. (The more I hear this rumor, the more I wish it it would fade into woodwork and turn out to be untrue, but I don’t quite understand why I feel that way.)

Bailey then throws a little cold water on the issue: “It’s dangerous to underestimate Apple’s potential success in these two new markets, but to make serious headway, Apple will have to take on set-top box suppliers Motorola and Scientific Atlanta (pending acquisition by Cisco) and sidestep the cable companies in its digital entertainment hub initiative while going head-to-head with Motorola and Nokia in cell phones.”

These aren’t small tasks, but the answer is straight out of the Apple playbook: Marketing. When was the last time you paid attention to a TV ad for a Motorola or Nokia mobile phone airing during your favorite prime-time TV show? Ask the same time about your Scientific Atlanta set top box, which you didn’t ask for, but which simply showed up during the cable guy’s last visit.

Apple can create a buzz like no other company in media. Apple more than any other company is one of technology not just integrating with lifestyle but becoming central to it. And it can straddle the computing and lifestyle worlds better than any other company in the world. Can you think of another?

Sony tried to be both a great consumer electronics and computing concern, and now for a variety of reasons is arguably neither. Microsoft controls so much about computing that its hard for anyone else to be great, and its attempts to break into entertainment run into consumer resistance amid superior solutions from others including Apple. If there is another company so ambidextrous as Apple in regards to computing and entertainment, I've not heard of it. Both Sony and Microsoft are two companies who should be sweating about Steve's next speech more than ever before. It's doing what they can't.

TrackBack URL for this entry: http://blogs.businessweek.com/mt/mt-tb.cgi/