Apple’s plan to reposition the Mac as a “hub” for a “digital lifestyle” could work, according to a
Business Journal analysis.
Macworld San Francisco keynote, Apple CEO Steve Jobs said that the personal computer is on the threshold of entering its third great age, the Age of the Digital Lifestyle.
“This age is spawned by the proliferation of digital devices everywhere: CD players, MP3 players, cell phones, handheld organizers, digital cameras, digital camcorders, and more,” Job said. “We’re confident that the Mac can be the hub of this new digital lifestyle by adding value to these other devices.”
Why? Because the Mac can run complex applications, sport a big screen for better user interfaces, burn disks, offer inexpensive storage, and get on the Internet at every conceivable speed. These are things that the other digital devices can’t go, Jobs said.
The Business Journal article, by Ken Spencer Brown, said “Apple’s ability to broadcast a single, consistent message linking the Macintosh with music and video — what Mr. Jobs calls the “digital lifestyle” — could give it a leg up on Microsoft and the dozens of PC-makers emphasizing different aspects of Windows machines.” However, the company would “do well” to bolster the strategy with an Apple-branded consumer device such as a stereo system component, Chris LeTocq, an analyst for the market research firm, said.
“It’s a place they have to be,” he told Business Journal.
Meanwhile, other priorities for Apple include fine-tuning the company’s new internal sales force for the education market, thinning out stuffed inventory channels and securing commitments from outside developers for the company’s new OS X upgrade. Analysts say it will take solid execution on all three fronts — plus some luck on the sluggish consumer demand side — to meet executives’ predictions of profitability by the next quarter, reports Business Journal.
“They have very strong operations and internal controls,” David Baily, an analyst with Brokerage Gerald Klauer Mattison, which is forecasting earnings of about $1.4 billion for the next quarter, told the Journal. “It’s going to be difficult to increase demand in current economic conditions, but there are operational things they can control.”
The analyst added that it could take the company’s internal sales force a few more quarters to regain momentum. But even then, Apple likely will have a hard time wooing back schools that migrated to the Windows platform, he said.
“The Cupertino company probably will have an easier time reducing inventory levels, and, in fact, is already near its goal of having no more than about five weeks’ worth of product in the supply chain at any given time,” Business Journal said. “That’s a notable achievement, considering Apple distributors were stuck with 11 weeks’ worth of inventory only a few months ago.”
Another big variable in Apple’s fortunes is OS X. LeTocq told Business Journal that Apple will need OS X versions of the top 20 applications to ensure a successful transition. Apple has most big-name developers on board, including Microsoft.