Apple (Nasdaq: AAPL)
has been enjoying a seemingly endless day in the sun with the success of its consumer-oriented iPod, iTunes and iLife products. However, there was a time not so long ago when the company made no secret of its aspirations to become a major enterprise player -- only to get a cool, if not cold, shoulder.
It may be that Apple is now less determined to sell businesses on the value of its Xserve, storage and networking products. Or it may be that the company is not quite ready to give up the enterprise ghost.
If that is the case, the recent switch to Intel (Nasdaq: INTC)
chips may have been pivotal.
Unmet Needs
Apple required a chip with more power than the IBM (NYSE: IBM)
and Freescale Semiconductor processors it had been using in its G4/G5 iMacs to nudge the company further in the enterprise
direction. However, IBM was slow to respond to its needs.
Meanwhile, "Intel [was] making investments in higher power processors and performance with lower power consumption," Ben Bajarin, an analyst with Creative Strategies, told MacNewsWorld.
Apple naturally gravitated to Intel.
Apple was having problems with the IBM chip in its notebook computer lines as well. "They had a clear technology problem with laptops. They didn't have -- and IBM couldn't seem to make -- a good G5 mobile part, and that problem wasn't going away," observes Rob Enderle, principal analyst with the Enderle Group.
In addition, Apple was wrestling with economy-of-scale issues that were nonexistent in Intel-based computers.
Another problem was that Apple's relatively small software market kept the conservative enterprise sector from making big investments in Macs.
Apple, being a marketing intensive company, typically spent a great deal of money to advertise its unique products. Companies using Intel's chip could rely on Intel's extensive co-marketing program, but Apple simply did not have that advantage.
Its new partnership with Intel definitely can serve to reduce Apple's marketing
costs as a direct result. These savings, in turn, may result in lower hardware prices or more profit for Apple, assuming the company continues to use its current pricing strategy.
"The switch to Intel simply reduces or eliminates a series of unique costs Apple [incurred] over companies like Dell (Nasdaq: DELL)
, which should make Apple more attractive and more profitable over time," Enderle told MacNewsWorld.
Last Barrier to Adoption Down?
It is clear that Apple has not abandoned its relatively modest enterprise goals in favor of hauling in cash from consumer product sales
. For example, it appears to be committed to working with Microsoft (Nasdaq: MSFT)
on the continuing development of Office, Bajarin points out.
Businesses may be less reluctant to adopt Apple products for their work environments now that Intel is inside. Naturally, a conversion would take time, as IT managers typically plan their purchases well in advance. Still, the Intel-based Mac platform does have more of a chance of being adopted by enterprise than the Macs containing the G4/G5 chips.
"Intel-powered Macs present an interesting proposition to tomorrow's IT client-PC roadmap," explains Carmi Levy, a senior research analyst with the Info-Tech Research Group.
"They remove one of the last remaining barriers to adoption by traditionally conservative IT managers. The prospect of Unix-based Mac OS X on standardized Intel hardware can offer multi-platform advantages for administrators and developers alike. The shift toward slow growth in business-focused Mac adoption has begun," Levy told MacNewsWorld.
IPod's Shine May Rub Off
Focusing on consumer products right now may actually help Apple's enterprise presence in the future. Many happy iPod owners are now purchasing Macs -- or at least considering them -- to anchor their home media centers.
"Even after the Windows version of iTunes was released, Apple continued to use iPods to lure consumers into its stores, where they would often bring home a Mac as well," Levy notes. "The Mac Mini tested the waters and proved that a small, silent, inexpensive box could serve as a makeshift media hub in the living room."
If the adoption of Macs for home use becomes a trend, it is likely to spill over into the enterprise world at some point.
"In many respects, the consumer market has been leading the corporate one for at least the past 15 years," comments Levy. "The introduction of the first multimedia-capable PCs with CD-ROM drives and sound cards was largely a consumer phenomenon. Regular folks brought these computers home so that their kids could play increasingly capable games. It took a couple of years for enterprise to identify the business need for multimedia applications."
Since iPods and other Apple consumer products are extremely popular with the younger demographic, this preference may extend to choosing Mac in workplaces of the future.
"For now, [Apple is] focusing where the money is, but [this] may in fact benefit their enterprise future," claims Bajarin.
Crack in Windows?
In years to come, computers may be more reliant on Web services and depend less on traditional operating systems. As such, the current industry standard, Microsoft Windows, may play less of an important role in the corporate environment .
"The days of a Windows-or-nothing end-user market are numbered," predicts Levy, "especially given the fact that so many applications are now executable through a browser that can run on literally any box running any operating system. If Apple can drive a lower total cost of ownership message to the heart of enterprise IT decision makers before this culture shift completes, we may yet see more fresh fruit on corporate desktops."
