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Convergence through Desire, Redux

How can I remark on digital convergence without remarking on the forthcoming "headless iMac"?

More to the point, what the hell does a "headless Mac" have to do with digital convergence?

I'll explain. Gizmodo facilitated leaking a bunch of really convincing (to me) product unpacking shots of a device called "iHome", which has a buttload of ports on the back and a CD-ROM slot on the front. Alas, there's lots of smoke and steam on the Apple rumor forums to the effect that these must be fake, because the box is just so ugly. Apple's legendary industrial design staff surely couldn't have produced something so "fugly". (Um...right. Something about this presentation really offends Mac-heads, as is clear from the Engadget comments, but I'm not sure what.) But consider that any box unveiled now is most likely not a production version, and might well be camoflaged the way Detroit camoflages their long-range test models.

Be that as it may, and leaving aside the authenticity of the photos, the name would tell us volumes about how Apple sees the market-positioning of this device, and I belive they do not see it the way that 'Bob Cringely' sees it:

.... The price for that box is supposed to be $499, which would give customers a box with processor, disk, memory, and OS into which you plug your current display, keyboard, and mouse. Given that this sounds a lot like AMD's new Personal Internet Communicator, which will sell for $185, there is probably plenty of profit left for Apple in a $499 price. But what if they priced it at $399 or even $349? Now make it $249, where I calculate they'd be losing $100 per unit. At $100 per unit, how many little Macs could they sell if Jobs is willing to spend $1 billion? TEN MILLION and Apple suddenly becomes the world's number one PC company. Think of it as a non-mobile iPod with computing capability. Think of the music sales it could spawn. Think of the iPod sales it would hurt (zero, because of the lack of mobility). Think of the more expensive Mac sales it would hurt (zero, because a Mac loyalist would only be interested in using this box as an EXTRA computer they would otherwise not have bought). Think of the extra application sales it would generate and especially the OS upgrade sales, which alone could pay back that $100. Think of the impact it would have on Windows sales (minus 10 million units). And if it doesn't work, Steve will still have $5 billion in cash with no measurable negative impact on the company. I think he'll do it.

I see it different[ly].

Nobody's talking yet about what the iHome actually does have. Rumors abound, and they mostly assume it's basically an iBook without a display. I don't buy it.

The very name of the device indicates to me that iHome is not intended to be used as a general purpose computer in any really sophisticated way. It's intended as a media hub, and any other functions it fulfills are incidental, and what's more, Apple won't be enthusiastic about helping it fulfill those other uses: It will most likely be a mediocre platform for applications work. It will be somewhat more than a set-top box, only because it would cost more to dumb it down. (If I'm proven wrong, I'll certainly be taking a look at iHomes for my own use, but I don't think I'm wrong here. We'll see in a few days.)

I think it will be somehow substantially crippled, and I think I know how: It will have limited display capability, ouputting by S-Video and composite only (and the latter through an extra-cost converter from S-Video); and it will not have expandable RAM. Both decisions will be defended on the basis of price, but they'll really have been taken to prevent cannibalizing iBook, iMac and eMac sales. By the way, I essentially agree with Cringely's analysis of the market impact of a fully-capable and cheap iHome, but I think he's applying a much too rational (and charitable) thought process to Apple's senior management.

I think Jobs doesn't know what to do with iTunes. It's a juggernaut he doesn't know how to stop; it's prompting people at his company to actually think about ideas that could shake up the personal computing marketplace, like, say, a genuinely cheap computer with a powerful OS and operating environment. Baseline Macs are built with remarkably inexpensive electronic components: Many still use relatively slow and old versions of the PowerPC chip (the "G4" generation), which by virtue of their vintage are dirt cheap; the "G5" models mostly use relatively slow versions of that chip, and below the most expensive levels, they all use graphics subsystems that are last year's news on PCs. Macs are cheap, cheap, cheap to build. And yet, they're hideously expensive on a bang:buck basis.

If Jobs wanted to really go big, he could have done it years ago. Opportunities like the one that Cringely describes are always there for Apple, all the time. And they never take them. Why? The only answer that's compelling to me is that Steve Jobs does not want Apple to be successful, because that would mean that Apple was no longer about him. Sure, the cult of personality would flourish for a while, but I think he understands that part of his bizarre public loveability is the fact that his exposure is limited. He'll never be as much of a self-charicature as Steve Ballmer or Larry Ellison, but the tarnish would settle pretty quickly and Apple would quickly become beset by the woes of any company that moves beyond a customer base comprised primarily of true believers.

So Cringely's right, I think, about the opportunity, and he's right about what iHome is, but I think he's wrong about what Apple will do with it. And though I predict that Jobs will be accused of not taking these steps out of greed, I think his motivation will be darker: Ego. Though I suppose the Dark Steve's flavor of ego could be cast as a kind of greed....

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