I got a fair amount of negative reaction from Apple fans to my post yesterday about the irrationally high profit margins they're reaping on their Macs. This gets to be touchy emotional terrain for some people, so I want to be clear. I bought an iPhone the first week it was released. I own an iPhone 5 and an iPad 3 and a MacBook Air and a Thunderbolt Display and an Apple Wireless Keyboard and an Apple Wireless Trackpad. I'm not an Apple-basher and I don't want the company to "be like Dell" or "be like Samsung." But one of the oddities of the increasingly partisan tech commentary world is that somehow Apple's customers have become cheerleaders for high prices and giant profits. That's odd. As a fan of Apple products, I'd like them to be cheaper so I can buy more!
At any rate—strategy. Running a company isn't like some kind of board game where the firm with the largest stockpile of cash wins. The idea of making a profit is to do something with it. Do what? I don't know. Earn returns for your shareholders. Pay yourself a lot. Upgrade your corporate jet. Invest it in world-changing products. Retain flexibility to make strategic aquisitions as needed. Ensure that the firm itself can survive hard times and live forever. I can't tell you or Tim Cook or anyone else what his goal in life ought to be.
But my point from yesterday was that Apple already has an awful lot of cash. Getting even more cash is not particularly useful for any goal at this point (diminishing marginal utility). So they ought to do something. One smart thing to do would be to make a strategic investment in Mac OS market share since with its current rather small market share Mac profits are not a particularly important part of overall Apple profits, but Mac could and should be an important part of Apple strategy. Right now Microsoft is very strong in the PC marketplace but very weak on Mobile. Google is strong on mobile but very weak in PCs. Apple is strong on mobile, and sort of in-between on PCs. That Apple can ship desktops and laptops that sell in substantial numbers at high profit margins show that Apple has strong products in the PC game. But they're still a very small share of the overall market. By slashing margins to gain market share, Apple would become the onlly strong player to bridge the mobile/desktop divide and gain a useful strategic edge. How useful? I'm not sure. But it just has to be useful enough to clear the "more useful than even more money in the bank" bar which is pretty low at this point.
TODAY IN SLATE
Slate Plus Early Read: The Self-Made Man
The story of America’s most pliable, pernicious, irrepressible myth.
Rehtaeh Parsons Was the Most Famous Victim in Canada. Now, Journalists Can’t Even Say Her Name.
Mitt Romney May Be Weighing a 2016 Run. That Would Be a Big Mistake.
Amazing Photos From Hong Kong’s Umbrella Revolution
Transparent Is the Fall’s Only Great New Show
Rehtaeh Parsons Was the Most Famous Victim in Canada
Now, journalists can't even say her name.
Lena Dunham, the Book
More shtick than honesty in Not That Kind of Girl.