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iMac, iPod, iConquered
Not-So-Big Mac
Interestingly, Apple actually sold slightly fewer Mac units in the fourth quarter than it did in the previous quarter. Apple chief Steve Jobs "blames a shortage of G5 computer chips, which hindered sales of PowerMacs and delayed the release of the new iMac, which was released in late September," USA Today reported.
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But the iPod could wind up boosting the computer line. Apple CFO Peter Oppenheimer "said the results also reflected strong sales of Apple's iBook and PowerBook notebook computers, as well as 95 per cent rise in the group's retail store business. The company attributed the increase in computer and retail sales to a 'halo effect' in which consumers drawn to the iPod are discovering other Apple products. Analysts had been waiting for signs that iPod's surging popularity would spur growth in sales of the company's personal computers," the Financial Times reported.
• The Financial Times: iPod Sales Surge Boosts Apple
Apple Seeds
Wall Street was clearly happy with Apple's fourth-quarter report, sending shares up sharply in early Thursday trading.
Jobs Report
The latest issue of Business Week has a Q-and-A with Steve Jobs about innovation. When asked about what can be learned from Apple's struggle to innovate before Jobs returned to the company in 1997, the Apple chief gave an answer that has iPod written all over it: "You need a very product-oriented culture, even in a technology company. Lots of companies have tons of great engineers and smart people. But ultimately, there needs to be some gravitational force that pulls it all together. Otherwise, you can get great pieces of technology all floating around the universe. But it doesn't add up to much. That's what was missing at Apple for a while. There were bits and pieces of interesting things floating around, but not that gravitational pull."
When asked if it Apple will try to expand its consumer electronics business to become like Sony or Samsung, Jobs said: "I've always wanted to own and control the primary technology in everything we do. Take audio. For years, the primary technology was the [marking mechanism] inside a CD or a DVD player. But we became convinced that software was going to be the primary technology, and we're a pretty good software company. So we developed iTunes [Apple's music jukebox software that later morphed into the iTunes Music Store]. We're a good hardware company, too, but we're really good at software. So that led us to believe that we had a chance to reinvent the music business, and we did."
• Business Week: The Seed of Apple's Innovation
Dell Tunes In
Dell, another PC maker-cum-consumer-electronics player, is coming out of the gates with its own plasma-screen TV and other tech gadgets. The company is debuting today "a tiny version of its digital-music player and a photoprinter with built-in display for previewing images," the Wall Street Journal reported. "Dell has parlayed its position as the world's largest personal-computer brand into a new stake in consumer electronics. Market watcher Retail Forward Inc. recently ranked the company as the fourth-largest U.S. seller of consumer electronics, behind Best Buy Co., Wal-Mart Stores Inc. and Circuit City Stores Inc. Unlike its rivals, Dell doesn't operate stores. Instead, it peddles its flat-screen TVs, digital-music players and cameras over the phone, mail-order catalogs and Web sites. John Hamlin, senior vice president of Dell's U.S. consumer business, said the consumer-product launch is an outgrowth of its home-PC customers' interest in video and music."
• The Wall Street Journal: Dell Unveils Plasma TVs And Mini Music Players, In Push Beyond PCs (Subscription required)
USA Today also reported on Dell's consumer electronics news: "The new gizmos aren't expected to be substantially different from others on the market and will face stiff competition. But they could have a big impact because they are backed by behemoth Dell. Once competitors establish a market, Dell enters 'with equal features and performance and a killer price,' says PC analyst Roger Kay with researcher IDC." CNET noted in its coverage that "The new DJ music players and plasma TVs are only one aspect of a broader effort begun last year by Dell, which aims to gain a position in the so-called digital home market. There consumers are beginning to use technology to share multimedia such as music and movies between PCs and more traditional electronic devices such as televisions and stereos. PC makers such as Dell aim to compete with traditional CE brands such as Sony for a piece of the digital home."
• USA Today: Dell Rides the Wave to Consumer Gadgets
• CNET's News.com: Dell Grapples With Apple In Mini Arena
Not Just Burning Your Tongue
Starbucks long ago added lots of non-coffee merchandise to its retail outlets around the country, and now the Seattle-based company is getting in on the digital-music scene with the introduction of CD-burning bars at some of its stores. "The coffee chain will announce today that it is installing in its shops in Seattle and Austin, Texas, so-called Hear Music media bars that offer customers nearly 200,000 songs to burn onto compact discs. Starbucks is one of a handful of companies betting that CD burning is on the verge of becoming a major retail business. Big music sellers, including MTS Inc.'s Tower Records, Virgin Group Ltd.'s Virgin Megastores and Trans World Entertainment Corp.'s FYE are preparing to install kiosks on a trial basis this fall," the Wall Street Journal reported.
• The Wall Street Journal: In Latest Music Move, Starbucks Will Blend Hot Java, CD Burning (Subscription required)
ComputerWeekly.com had more details: "The Hear Music media bars will feature the necessary hardware and software, provided by Hewlett-Packard, for customers to search Starbucks' digital song library, choose and listen to tracks and burn them to a CD. CDs whose song lists are compiled by customers will cost $8.99 for the first seven tracks and $0.99 per additional track."
• ComputerWeekly.com: Starbucks Serves Up In-Store Digital Music Service
SOS For the Venerable Disk Drive?
Disk drive makers are in a battle to rescue profits, the Wall Street Journal reports in a front-page article today. "The TiVo video recorder, the iPod music player and the Xbox game machine all owe their existence to the same high-tech innovation: smaller, denser, cheaper disk drives. For nearly 50 years the disk-drive industry has driven advances in computers and gadgets by supplying new ways to store data. But there's one thing drive makers can't produce: sustainable profits. Even during the tech boom, when makers of other high-tech innards like software and chips feasted, drive makers collectively lost money in 1998 and 1999. More losses followed during the bust." According to the article, "[a]ll three of the main independent suppliers have been suffering. Net income at No. 3 Western Digital Corp. fell 17% in the fiscal year ended June 30. For the quarter ended that same date, Seagate Technology, the No. 1 maker, and No. 2 Maxtor Corp. each posted losses and laid off workers. Shares of the three companies are down an average of 51% from a year ago, while the Nasdaq Composite Index is down less than 1%."
• The Wall Street Journal: Behind TiVo, iPod and Xbox: An Industry Struggles for Profits (Subscription required)
Don't Bend This Like Beckham
If you get an e-mail inviting you to take a peek at pictures of British soccer star David Beckham, beware. "Virus writers are attempting to take over computer users' PCs by enticing them to click on a malicious program masquerading as lurid photos" of Beckham, according to British security firm Sophos, Reuters reported. "According to Sophos Plc., thousands of messages have been posted to Internet message boards in the past week claiming the married soccer star has been photographed with a Spanish prostitute. The message instructs the curious to click on a Web link to see the revealing snapshots. But clicking the link will download a program known as a 'Trojan horse' -- so named for its ability to sneak onto a PC and take control of the machine."
• Reuters: Fake Beckham Pics Flood The Net In New Virus Scare