Columnist: Apple should focus on the digital frontier

Columnist: Apple should focus on the digital frontier By Dennis Sellers

The “next frontier” for Apple will be integrating its hardware and software products into an emerging generation of consumer electronics, Charles Haddad writes in his latest Byte of the Apple column for Business Week Online .

Though Apple has a small percentage of the overall computer market, the columnist thinks this may actually turn out to be a “blessing.” Why? Total unit sales for the personal computer market overall fell 4.6 percent in 2001. Margins are falling, as well.

” I think Apple CEO Steve Jobs sees this, too,” he adds. “That’s why he has steered clear of refighting lost battles or focusing on gaining share in a maturing market. Microsoft and Intel conquered the desktop PC. Neither Apple, Sun, nor Linux is going to win back more than a few yards here and there of lost ground.”

However, digital technology keeps opening up new fronts, including handheld computers, camcorders, cameras, MP3 players and TV set-top boxes — none of these areas are dominated by Microsoft, Haddad says. In the realm of consumer electronics, “of which PCs are but one small part,” Apple could well play a major role “given the worldwide recognition of its brand ” in wiring all these devices through one platform, he says. Haddad thinks the key to this strategy are tools like QuickTime, iMovie, iTunes, iDVD, and iPhoto, which are turning the Mac into a “digital warehouse and routing station.”

“These programs exemplify what Apple is really selling: ease of use,” he explains. “No computer company is better at hiding the inherent complexity of electronic devices under a fun and easy-to-understand interface. And without such an interface, no consumer-electronics device will succeed in the mass market.”

He thinks that Apple’s challenge is to move this strategy beyond the Mac. The company could turn iTunes and iMovie into software usable on any platform, for example.

“The promise is huge. Powered by iTunes, Apple’s iPod digital-music player sold 125,000 units in the first two weeks after its release,” Haddad says. “Imagine what the iPod could do if it worked with PCs? Apple’s 30 percent margins would be a sure thing — and the envy of the PC world.”