Friday, June 17, 2005

Stevie (J) Wonder

No, not the guy the guy with the shades, I'm talking about Steve Jobs. First off, he's seems like an egomaniac prick from everything I've read and from all I've heard from ex-Apple people. Second, this guy is both a genius and insanely lucky. Pixar and their conquest of Disney was simply brilliant, reviving Apple with new boxes and gadgets was brilliant as well. Now Steve has cosied up to Intel as part of his next party trick.

So what exactly is he up to? Since day one, Apple has depended on profit margins from their hardware to subsidize their low unit volumes. This is the BMW business model, even with more affordable models, they still miss the Walmart/Dell price points. This year when Steve released the mini-Mac at a near-Dell price point, he threw everyone for a loop. He's within striking distance of a price point that Dell/Microsoft can't reach without eating major margins which really hurts.

These days Steve has 50% of his revenue and profit coming in effortlessly from iPods so he can take some serious risks with the old computer business and not have to sweat too much. He can even afford to make it a loss leader altogether to pull his next hat trick.

What's he up to? My guess would be that he's being egged on by Larry Ellison who's an old friend that always told him that the Internet will kill off personal computers as we know it. I'd say that Steve will drop the price of x86 Macs to $299 and give a few million away to seed the market. He'll take his lessons from iTunes and make his own office suite run on distant Cupertino servers. He'll tie his own Internet servers in to the $299 boxes to rent you storage and community space you need to share with your friends in the office and around the world. He'll pull more and more functionality onto the back end and make the front end boxes cheaper, cooler and disposable. And he'll do it well.

To what end?

Apple/Google/Oracle all want the same thing, all do things the same way and should eventually merge/partner/fight to become the next BIG thing. No dominant empire has lasted forever, not the Romans, not the Greeks, not the Huns, not the British, not the Spanish, not GM, not IBM, and certainly not Microsoft.

My wildest guess would be that Apple and Oracle would merge and take over Google. However there are way too many alpha males in those tribes for this to ever happen smoothly.

Let's see how this goes. And for the record, I hate using OS/X and still think the iPod is gay. My left brain was likely misplaced at some afterhours party in '92.

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