Red Herring Report: The Fate Of Apple's Macintosh Computers Remains Murky after Macworld

Not even a week has passed since the Macworld Expo and already reports that Apple is about to go out of business are appearing. One such pessimistic report comes from Red Herring, and details many reasons why Apple is not doing so well and how they could suddenly find themselves on the edge and falling down to a sudden demise.

Despite the public's interest and excitement over the new Intel based models, it seems that some are worried that they will not translate into a larger market share and increased revenue for the computer maker.

"The machines introduced at Macworld may not have what it takes to lift Apple's doldrums. Though Mr. Jobs touted them as between two and five times faster than current Macs, using Intel's low-power Core Duo chip, Mr. Stahlman said those speeds aren't actual measures of performance," Red Herring reports.

Furthermore, they are worried that Apple is relying too much on their 'cash cow' iPod and that it will prove to be a fatal mistake… "even Apple seems to realize that it must shift emphasis back to computers to survive."

Also, it would seem that Macintosh computers are slowly fading away. "Macintosh is not doing very well," said Caris & Company analyst Mark Stahlman. "Sales of Macs in December were a disappointing 1.2 million. … Expectations were well north of 1.5 million - 1.7 million would have been good."

This sort of comment is not very surprising. First it was the 'Osborne effect' that was going to kill Mac sales because of the announced Intel transition, this is, after all, just the confirmation of that. However, the exact number for the last quarter was 1.25 million Macs sold, according to Apple's 8-K filed on Jan. 10, 2006. So, if we were to look at the timeline: this quarter, 1.25 million Macs; last quarter, ended September 2005, 1.236 million Macs; the quarter that ended in June 2005, 1.182 million Macs; the quarter that ended in March 2005, 1.07 million Macs; the quarter that ended in December 2004: 1.046 million Macs; and in the quarter that ended in September 2004: 836,000 Macs sold. It might just be the numbers fooling us, but that looks like a clear, steady growth.

Then again, Mr. Stahlman is quite aware of the delicate situation Apple is in, since the shares have doubled in value in the ten months since he lowered his rating on Apple to 'Average' from 'Above Average', adding that rival Microsoft Corp. will soon reveal a new version of Windows that addresses the operating system's major security shortcomings. It must just be the numbers fooling us…

Red Herring then goes on to discuss how risky it is that Apple is using technology based on Trusted Platform Modules (TPMs), to ensure that the OS X operating system remains tied to their hardware.

" 'If you could pry software from hardware, it would be really bad', Mr. Roger Kay of Endpoint Technologies said. He added that he's pretty sure Apple's engineers have taken security steps. But the company refuses to discuss the matter because it does not want to attract hackers."

Then Mr. Kay goes on to talk about how Apple is becoming more vulnerable to piracy because they are adopting more standard architectures. It is strange how Apple's efforts to stop piracy are raising security concerns, although to whom such concerns are raised remains unclear, while at the same time their need to protect themselves from piracy is clearly stated.

In the end it all becomes abruptly clear with the following statement: ' "The one thing Apple brings to the table is design. They'll continue to do their own innovations," Mr. Kay said. "But I can see all that unique stuff becoming applications, not hardware. They'll start looking more and more like Microsoft." '

Indeed, when Apple chose to switch to Intel chips, they gave up on the "one thing" they ever brought to the table which was design. It is indeed obvious that the chip, which sits inside the computer, dictates all aspects of the final machine, starting with the shape and ending with the number of buttons on the mouse.

The conclusion, beautifully phrased by an old-time Mac user: "Apple Computers, going out of business for 30 years and counting."