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Apple Trips on Mac Mini

January 27th, 2005

Apple Computers’ founder Steve Jobs has a way about him. He has a halo, or a blessing, or something that makes it so that whatever he does gets eaten up by the Mac community. And often they’ll have a second helping. And sometimes even a third.

In fact, Jobs’ charisma is such that a recent joke about an unannounced product had certain Mac enthusiasts sadly enthusiastic. “The iProduct is an as yet unidentified product that we won’t tell you anything about – but you’ll buy it anyways” says the satirical webpage.

As such, it comes as no real surprise that last week’s product announcements were met with surprise, enthusiasm and even a little bit of glee. Both the Mac Mini and the iPod Shuffle were hailed as “innovative”, “industry redefining” and “a massive repositioning” by various news organizations around the country.

Personally, I fail to see how a smaller, cheaper, less powerful Mac and iPod are innovative or in any way good for anything but Apple’s short-term bottom line.

This isn’t to say that Apple doesn’t make good products, nor is it to say that the iPod and Mac platforms aren’t great platforms. However the only time, historically, that companies who had previously competed on style and brand awareness have begun competing on price is when they believe their product lines are about to collapse.

Both IBM and HP tried to compete on price instead of brand throughout the late 90s and through to today. Both, however, have had to ultimately make up the slim margins in the PC business by selling extended services to customers and – more than anything – enterprises around the world. If either company had to rely solely on their platform to drive sales, both would be dead in the water today.

And there’s the rub: until 2005, Apple had always positioned itself as the luxury computer maker for the discerning, stylish and upwardly mobile of the world. Apple had, until just last week, told the world, its competitors and – more than anyone else – its users that to buy an Apple was to buy quality, image and style.

Until last week.

Apple’s new positioning of the Mac and iPod lines concerns me deeply on 2 fronts. First, competing on price isn’t a long term strategy that Apple can win because eventually they’ll have to start competing with the likes of Dell and such. And few expect anyone to compete with Dell on price and win.

Beyond price, though, I’m concerned about Apple’s overall product lines. With the iPod Shuffle and the Mac Mini, Apple is creating a second tier of products. It is a tier which is admittedly designed to make it palatable for those wanting to switch but not wanting to spend thousands of dollars – but also a tier which hopes that users won’t ask “are the other product lines worth the money?”

My biggest problem with the move is that it puts a whole group of users in a price-conscious mode, which isn’t anything Apple has ever truly tried before. Relying on the “Stylish Consumer” was easy: all you had to do was be more stylish than your competitors – something Apple is incredibly good at.

However this newest move pins the future of the company on the “Fickle Consumer” – the one who looks for price, features, value and customer service above how cool, hip or well designed a product is.

These are the consumers who buy vehicles based on gas mileage, buy houses because interest rates are low and wait until Christmas to buy computers because that’s when the best deals are.

If Apple can keep these consumers properly entertained, empowered and happy then they may have a business model. Maybe they’ll even convince some of these users to “upgrade” to the “real” Mac and iPod product lines. However if they don’t, they may be putting their company in a worse position than simply relying on two niche products to drive the future.

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