What do you consider Apple's biggest threat?

[Cerebrus' Maw]

I have no idea what you mean by that. Apple is one of about two profitable manufacturers of computer CPUs. The company generates about 48% of industry revenue in laptops. No matter how you slice it, dice it, or purée it, that is major.

Then when you look at the company's contribution to the development of new products, innovative software, and the development and contributions to new industry standards, Apple looks like the Colossus that bestrides the industry.

When did this happen???

Apple biggest threat? I would guess market pricing. With the current trend of electronics, will it be possible for Apple to justify such a large profit margin, when more and more startup companies are evolving in the cut throat lower end market. The current version of netbooks might be a current pointer towards this.

Of course, there is nothing stopping Apple from adopting a new business model, and perhaps their current strength in terms of their financial funds will massively aid them.

 

[KingYaba]

Apple's biggest threat? If we're going to single out a company I would say Google is their biggest threat. There's no telling what Google will do over the next ten years. Desktop OS and hardware? Improve the Android? Compete with an Apple tablet? I know Google is doing a lot of digitizing. What if they release an e-book device? Free access to thousands of books with the purchase of the Google Bookreaderthingy.

 

[daxomni]

Texas: illegally acquired; universally admired.

Just like Apple, the biggest threat to Texas are Texans themselves. Let's all follow our brain dead governor and secede from the union just to prove how self-absorbed we are. I doubt they'd let us leave on good terms, but even if they did how long do you think it would be before we became Mexico's gang-ravaged illicit distribution center? I can only wonder who would be admiring us then.

 

[Plutonius]

The European Union and China.

 

[mingoglia]

I think the biggest threat to apple is when OSX running on clones becomes more mainstream. Apple is a hardware company that hasn't kept up (or kept down) with the price cuts other manufacturers have passed on to the consumers due to component costs dropping. I think they're getting a bit better, and some products such as the Mac Mini are a pretty good value. Moving into the Intel world is a double edge sword though. If you're going to compete here you can only charge a hardware premium for so long. What's allowing them to charge a hardware premium? OSX is.

Despite the fact that some will argue that the hardware is superior the simple fact is they're using the same hardware as any other brand PC. In fact they tend to be a bit slower at adopting some of the newest technology and even slower at dropping the price. What they do have is what every other brand name manufacturer has, they have components that have sufficient burn in and track record to play nice together. Everyone has that. The only advantage they DO currently STILL have is their stuff is aesthetically pleasing.... and of course like I previously said, OSX

So in summary, Apple has the following:
A superior operating system.
Cool looking hardware.
Almost a cult level following.

As we all know, Apple is a hardware company and their business model more or less gives away the operating system for not much more than the cost of media. This has worked for a long time and no one as said much since the demand for the Apple operating system has been a relatively small subset of the computer industry. That was until OSX. OSX has changed things. The market share is increasing every day. This too can be a double edge sword as the increase in market share is going to open the eyes of the legal system AND big name manufacturers that have equally deep pockets to follow through with a lawsuit that claims Apple is using unfair business tactics by not allowing their software to be run on non-Apple hardware. We've seen a glimpse of this on the current lawsuit with that clone company, but that clone company's pockets are only so deep. Get IBM/HP/Dell in a class action against Apple and things could get interesting. Back when their software ran on a platform (PowerPC) which was more or less unique to their platform this could fly... but the fact that the new Mac's are really not very different hardware wise that excuse is only going to fly so long. When that happens, Apple's successful business model is going to have to change. If you move from a niche market into the mainstream (PowerPC to x86) the rules of play change a bit.

My predictions: I predict Apple's EULA will be deemed "unfair", and will have to allow the software to be installed on other comparable systems (hardware wise). This is going to drive up the cost of OSX to be in line with Microsoft. At this point Apple is going to be a software AND hardware company. For a short while OSX will not be available by the big manufacturers, it will only be available shrink wrap. Eventually the manufacturers will be allowed to install OSX as an option, against Apple's wishes of course. Other manufacturers are going to continue to emulate the look and feel of Apple's products. This, combined with the fact that they're no longer able to force customers to use their hardware is going to drive down the price of their (Apple's) hardware. This reduced price unfortunately is likely to reduce innovation as it will no longer be as lucrative due to the shrinking margins.

This is my take. I'd be real curious to see this thread next year and see how much of it came true.

Mike

 

[ArrowSmith]

What goes around, comes around. When you all applauded the courts stepping in and punishing MSFT, it will happen to Apple too. You should have just let the free market work.

 

[MorphingDragon]

Apple's biggest threat is America.

 

[KingYaba]

The European Union and China.

Apple's biggest threat is America.

Care to explain why?

 

[localoid]

Asteroid impacts and genetically engineered dinosaurs.

 

[MisterMe]

....

As we all know, Apple is a hardware company and their business model more or less gives away the operating system for not much more than the cost of media. This has worked for a long time and no one as said much since the demand for the Apple operating system has been a relatively small subset of the computer industry. That was until OSX. OSX has changed things. The market share is increasing every day. This too can be a double edge sword as the increase in market share is going to open the eyes of the legal system AND big name manufacturers that have equally deep pockets to follow through with a lawsuit that claims Apple is using unfair business tactics by not allowing their software to be run on non-Apple hardware. We've seen a glimpse of this on the current lawsuit with that clone company, but that clone company's pockets are only so deep. Get IBM/HP/Dell in a class action against Apple and things could get interesting. Back when their software ran on a platform (PowerPC) which was more or less unique to their platform this could fly... but the fact that the new Mac's are really not very different hardware wise that excuse is only going to fly so long. When that happens, Apple's successful business model is going to have to change. If you move from a niche market into the mainstream (PowerPC to x86) the rules of play change a bit.

My predictions: I predict Apple's EULA will be deemed "unfair", and will have to allow the software to be installed on other comparable systems (hardware wise). This is going to drive up the cost of OSX to be in line with Microsoft. At this point Apple is going to be a software AND hardware company. For a short while OSX will not be available by the big manufacturers, it will only be available shrink wrap. Eventually the manufacturers will be allowed to install OSX as an option, against Apple's wishes of course. Other manufacturers are going to continue to emulate the look and feel of Apple's products. This, combined with the fact that they're no longer able to force customers to use their hardware is going to drive down the price of their (Apple's) hardware. This reduced price unfortunately is likely to reduce innovation as it will no longer be as lucrative due to the shrinking margins.

This is my take. I'd be real curious to see this thread next year and see how much of it came true.

Mike

Let's get a couple of things straight. The Law of Supply and Demand says that as demand goes up, that the price also goes up until supply is brought back into equilibrium with demand. No court in this land is going to demand that Apple lower its prices in response to higher demand.

The other thing—Microsoft's monopoly position with Windows was ruled illegal because Microsoft used Windows, a product that it produced, to control Intel-based computer hardware, products that it did not produce. As long as Apple restricts its operating system to its own hardware, MacOS X will remain in the clear.

 

[mingoglia]

Let's get a couple of things straight. The Law of Supply and Demand says that as demand goes up, that the price also goes up until supply is brought back into equilibrium with demand. No court in this land is going to demand that Apple lower its prices in response to higher demand.

I didn't say that. I said that the price would be driven down by the market once Apple is forced to revise it's EULA. When the demand for OSX is spread among many hardware manufacturers it will drive down the price of Apple hardware.

The other thing—Microsoft's monopoly position with Windows was ruled illegal because Microsoft used Windows, a product that it produced, to control Intel-based computer hardware, products that it did not produce. As long as Apple restricts its operating system to its own hardware, MacOS X will remain in the clear.

That's not all of it. To further your point, it wasn't to control intel based hardware, yeah it ran on Intel, it had to do with Internet Explorer. It was determined that Microsoft having the majority of the desktop operating system market had an unfair advantage when it offered Internet Explorer with the operating system. The argument was basically why would anyone use another browser (ie Netscape) when IE was already bundled in. It effectively killed any potential for competition. It's very similar to Mac. Mac has Safari built in. The very same argument can be made as Apple's doing EXACTLY the same thing. What's the difference? The difference is Apple has a small subset of the market and therefore Safari being part of OSX doesn't matter as much. Nobody cares. Like I said in my earlier post the game changes as soon as you become the big dog. If one day 90% of the computers are Apple I guarantee other browser makers (if that day came Microsoft would be one of them with IE) are going to complain that they'll no longer be able to compete since most computers are preloaded with Safari. On this day Apple would be the new Microsoft. If this day comes, I guarantee it'll be argued that existing hardware manufacturers who have been around for for years and years (IBM, HP, Dell, etc) can't compete with Apple because the predominote operating system cannot run on their hardware even though their hardware components are more or less identical and for all intents and purposes be able to run the Apple OS if it wasn't for Apple's EULA that restricts such use.

 

[xlii]

Their biggest enemy is themselves at the moment. It's their prize to lose.

The first reply... the most correct answer. I worked 26 years at Digital Equipment Corporation (aka DEC). At one time it was the 2nd largest computer maker in the world (after IBM). You should have seen some of the cool stuff we were designing in engineering. Somewhere DEC made mistakes... lost their focus... lost the drive that took them up back in the 60's and 70's. The way down took a long long time... layoffs every quarter... still the products were top notch... VMS, VaxClusters (that's some of my design work), 64 bit computing back when no one else was doing it... Alpha Servers (where I finally joined the elephant's graveyard).

In the end just another tech dinosaur on the slow walk to the tar pits...

 

[ChrisA]

Apple biggest threat in the future might be that they can't keep their price model. Eventually hardware will be so cheap that even with Apple's 30% markups, those markups can not longer suport their software development.

Apple uses hardware sales to fund software. Some day this will stop working and they will have to charge more for the software or but less effort into software. Doing the later would ruin the company as software is the only reason people pay the premium prices for the hardware. Likely they will adapt somehow.

 

[MisterMe]

I didn't say that. I said that the price would be driven down by the market once Apple is forced to revise it's EULA. When the demand for OSX is spread among many hardware manufacturers it will drive down the price of Apple hardware.

Complete nonsense. Absent a loss in its defense against a legal complaint, Apple will not be forced to change its EULA. The most recent attempt to beat Apple's EULA in court resulted in the plaintiff, Psystar, being forced to pay Apple.

The Law of Averages does not obtain in legal cases of this sort. Here, each Apple victory means that Apple will be more likely to prevail in the next case.

That's not all of it. To further your point, it wasn't to control intel based hardware, yeah it ran on Intel, it had to do with Internet Explorer. It was determined that Microsoft having the majority of the desktop operating system market had an unfair advantage when it offered Internet Explorer with the operating system. The argument was basically why would anyone use another browser (ie Netscape) when IE was already bundled in. It effectively killed any potential for competition. It's very similar to Mac. Mac has Safari built in. The very same argument can be made as Apple's doing EXACTLY the same thing. What's the difference? The difference is Apple has a small subset of the market and therefore Safari being part of OSX doesn't matter as much. Nobody cares. Like I said in my earlier post the game changes as soon as you become the big dog. If one day 90% of the computers are Apple I guarantee other browser makers (if that day came Microsoft would be one of them with IE) are going to complain that they'll no longer be able to compete since most computers are preloaded with Safari. On this day Apple would be the new Microsoft. If this day comes, I guarantee it'll be argued that existing hardware manufacturers who have been around for for years and years (IBM, HP, Dell, etc) can't compete with Apple because the predominote operating system cannot run on their hardware even though their hardware components are more or less identical and for all intents and purposes be able to run the Apple OS if it wasn't for Apple's EULA that restricts such use.

By bringing-up this part of the complaint against Microsoft, you betray the fact that you really did not pay attention to the Microsoft antitrust case. The Internet Explorer issue is huge to the European Union. In the US Federal case, it had the perverse effect of precipitating the rescue of Microsoft from being dismantled. Apple handles Safari fundamentally differently than Microsoft handles Internet Explorer.

Microsoft claimed that Internet Explorer was inextricably integrated with Windows and that it could not be removed. Apple makes no such claim with Safari. To the contrary, Apple provides a pop-up menu within Safari that allows the user to select any other MacOS X web browser as the default browser. Apple also provides Safari's WebKit foundation opensource which allows it to be used as the basis of other browsers such as Google's Chrome.

No browser is more W3C standards-compliant than Safari. It receives a perfect 100% score on the Acid3 test. Safari is not the only browser that receives a perfect score, but it does receive the perfect score. By contrast, Internet Explorer is the least standards-compliant browser on the market today.

During its antitrust trial, Microsoft offered false testimony about the integration of Internet Explorer with Windows. In response to this behavior, trial judge Penfield Jackson made some injudicious comments after he ordered the company to be split into two. Microsoft was able to leverage the Judge's comments into salvation from being dismantled. However, the European Union also took Microsoft to court. The Redmond Monopoly tried to thumb its nose at the EU—essentially daring the Court to fine it. The EU did not blink. The Redmond Monopoly paid €1 millions in fines. Microsoft now must also give European customers the opportunity to choose their preferred browser.

The thing that you don't get, my Windows-loving friend, is that Microsoft has been judged to be an illegal monopoly [in Intel-based computers]. Apple has not been. Apple will not be judged to be an illegal monopoly because it has not been determined to be a monopoly. Furthermore, its behavior is fundamentally different than Microsoft's.

This thread is about predictions relative to Apple for the decade beginning January 1, 2010. Antitrust issues do not threatened Apple as much as you may want them to. If they did, then it might take 10 years for them to percolate up to the Courts. Come back in 2019 and resubmit your prediction.

 

[ArrowSmith]

Apple biggest threat in the future might be that they can't keep their price model. Eventually hardware will be so cheap that even with Apple's 30% markups, those markups can not longer suport their software development.

Apple uses hardware sales to fund software. Some day this will stop working and they will have to charge more for the software or but less effort into software. Doing the later would ruin the company as software is the only reason people pay the premium prices for the hardware. Likely they will adapt somehow.

This. If the Wintel can up their quality and current price points that will exert big pressure on Apple prices. However that will take a minimum of 2 more years. in the mean time Apple will accrue another $15 billion to their cash pile. So in the end, achieving parity with the competition is hardly fatal.

Also even if it takes to 2019 for Apple to run into antitrust problems, that's another $50 billion on the cash pile. Apple with $70-$80 billion in cash probably could simple buy the judiciary.

 

[mingoglia]

Complete nonsense. Absent a loss in its defense against a legal complaint, Apple will not be forced to change its EULA. The most recent attempt to beat Apple's EULA in court resulted in the plaintiff, Psystar, being forced to pay Apple.

Not exactly true. A big part of the psystar complain was that it was stealing Mac OSX by way of installing unlicensed copies. Like I said earlier though having Psystar sitting in the court room as a small start up taking on Apple and having IBM, Dell, and HP in the room across the isle from Apple are two different things. If Microsoft falters due to OSX's superiority and OSX now flip flops and becomes the predominate operating system I guarantee you the big hardware manufacturers are going to try to do something about it. As we know from OJ Simpson, deep pockets will bring you a long way in the court room. If that day comes I could see the court ruling that Apple needs to split up into Apple Software Corporation and Apple Hardware Corporation and allow the other large manufacturers of x86 hardware compete with the hardware company. This in turn would force the software company to change it's business model to a model in which they can profit off of software. Again, this is my prediction. You're right though, it won't happen within a year. I do believe at some point it will either happen... or at the minimum we'll see some sort of change in Apple's business model.

 

[MisterMe]

Not exactly true. ...

Exactly true. What you want is for what Psystar did to be legal. Keep wanting. Until the law changes, Apple will stay in the clear. Its EULA will remain intact. The law will not change simply because Apple is successful.

I've got an idea. Instead of clamoring for Apple to surrender control of its OS, why hasn't someone else developed a better OS?

 

[bossxii]

I have to go with the "they are their own biggest enemy" train of thought. Apple has changed the smart phone market, damn near dominated the mobile gaming market without even trying and with every new gadget puts the competition even further behind.

MS hasn't been the same since Bill stepped away, not that he was blazing a trail of new products but SB's idea of innovation, if copying Apple stores and having a 10' screen to play Xbox on? oh really... how original ?

Archos has been making media players for a while now but from the looks of their entry into the tablet pc arena, the "Archos 9" looks to be rejected even by their own fanboys. It looks decent, slim form factor, some nice features but total trash performance. Youtube and Hulu run at a blazing 2 or 3 FPS, more like a slide show, the touch interface is slow, jerky and lags from the time someone touches the screen till it actually reacts. Top that off with imo the worst support in the tech industry I've ever dealt with. Not a factor.

Dell, HP and the other PC makers come out with competitive products such as the Dell Adamo less spec's, 50% more cost. The all in ones, touch screens etc... simply don't get much press and based on what I've seen in stores it's not like there is a line of people waiting to mess with em.

When I go to the local Apple stores, pretty much anytime, day or night they are busy, and not just window shoppers, people walking out with computers. When I see Apple employee's standing around and can walk into a store and not wait to check out, I'll begin to think something is going on.

 

[haiggy]

Apple's biggest threat is losing Steve Jobs

 

[mysterytramp]

Human nature pretty much dictates that we worry about the institutions we care about the most. So on the one hand, this angst about the future of Apple makes a certain amount of sense. But on the other hand, there's little evidence that the company is going to have many problems, at least in the near future.

For all its issues, the one overriding fact is that Apple still makes some pretty damn good stuff. You can bitch about issues with Snow Leopard (and I'm joining the chorus about dropped wifi signals) but by and large, it's pretty solid. You can bitch about the cost of their products, but people still buy them.

And as far as innovation goes, I present to you the iPod nano. The gearheads that help drive popular tech opinion have completely overlooked this little device and they've completely missed probably the most impressive bit of technology from 2009. A music player with speaker, video recorder, FM radio, pedometer ... No one anywhere has an MP3 player that comes close. No one anywhere has a bit of tech that small that does so much. That tells me there are at least a few engineers at Apple that know what they're doing. (If only those guys worked on Apple TV.)

That isn't to say Apple has a lock on innovation. Some other company could come along and blow our minds. But since no such company seems to be on the horizon, my guess is, Apple's biggest threat doesn't exist.

mt