A theory on Apple’s ‘Mactel’ business model
Posted by Dennis Sellers
Aug 4, 2005 at 12:46am
As I noted in our Aug. 3 and July 25 musings, there’s a fairly common belief that Apple will eventually allow Mac OS X to run on all Intel-based hardware and evolve into a software company.
If Apple ever did actually allow other hardware manufacturers to offer Mac OS X on their systems, I still believe that the company would continue make stylish, cutting edge Macs. In fact, I believe the company has more, not less, hardware in mind for the months and years ahead—but that’s food for another column. However, Macsimum News reader Mark Hanley (a self-professed “Cocoa” fan and embedded software developer) offered some thoughts and a cool graphic I had to share with you:
Apple’s business model has always been “sell hardware.” They bundle software to make it more attractive, but sell hardware. iTunes is free—to sell iPods. When it comes to server apps, WebObjects and its ilk are free—to sell xServes. The Mac mini has more value in its bundled software than the hardware is worth. Hanley’s point: Apple’s business model gives it a unique advantage over its PC rivals: Microsoft doesn’t doesn’t sell PCs, and Dell and friends don’t write software.
“It costs Apple to write the software, but that’s all pre-tax expense, a decisive advantage,” Hanley says. “So what happens when Apple switches to Intel? Macs will still run Cocoa apps—that’s a no brainer, a simple recompile is all that takes. They will also run apps compiled for the PowerPC, thanks to Rosetta. Now here’s where the speculation starts, and the PC makers starts to squirm: just how hard will it be to make a Windows emulator that will allow .exe programs to run on Mac OS X on Intel?
“Consider this scenario: comparing apples to apples (please excuse the pun), Apple hardware today is a bit more expensive than Dell (feature to feature), but Apple doesn’t have to buy any software to include with the Mac (yeah, I know there are miscellaneous license fees for various IPs). So we have a picture that looks like this:”
![]()
“For about the same money, I can buy a Dell that runs Windows software, or a Mac that runs Cocoa apps and, if my hunch is correct, that same Windows software. Now the emulation might be a tad slow, although the Intel core will minimize that—no processor translation, but just how fast does the machine have to be to run Word and PowerPoint anyway? Not very. Audio/video editing you say? Apple software blows away Windows counterparts in that arena. Games? Maybe, although the speed in those apps comes from bypassing the Windows abstraction layers to get directly at the Intel core anyway, and you’ll always be able to dual boot the Mac, not so the Dell.
“I doubt Apple announced the processor switch without being certain they could protect their business model. The ability to run Windows apps on Mac hardware will make the iPod phenomenon seem tame.”
Thoughts? Write me at dsellers@macsimumnews.com
And don’t forget this week’s Macsimum poll. We’re asking, “Have you experienced iMac G5 problems?” With the first incarnation of the iMac G5, there were reports of problems with overheating, power supply bricks and logic board capacitor snafus. Now generation two of the iMac G5 is here. If you own or use an iMac G5, we’d appreciate it if you’d take a sec to participate in this week’s poll.
bbq Says:
Don’t forget with intel they stick DRM. Trusted Computing HA!
Posted on August 04, 2005
cousin IT Says:
Apple has been selling PC compatible hardware for years. Other than the actual computers, what was the last “Mac only” piece of hardware they released? Now they want to sell cumputers to PC users, too. Why not. All they need is to do is add the ability to do a soft partion to Disk Utility and they are in. Let users bring their own PC software and it’ll run native on the PC hardware in an Intel Mac.
No more complaining about game selection on the Mac.
Plus if even 5% of PC users choose a stylish, capable “PC” made by Apple, the company doubles its hardware sales.
Then, give the choice, many will start to use the Mac OS more and more, and Windows less and less.
Posted on August 04, 2005
damaded Says:
I think the fact that we’ll be able to install Windows on the new machines is what really matters.
Remember the original iMac...?
I know a lot of people that loved the machine, except for the fact it was a Mac. They were nagging about lack of software, compatibility with windows, their own software, etc, etc.
If those same people would have been able to install Windows (98/ME/XP) and their own applications on the iMac, things would have been totally different and sales could have been tenfold.
Apple is a hardware company, and there is no reason to believe that they would do worse than say Dell in selling Windows compatible computers.
So you buy this new iMac (looks really great, but is not available yet..!), go home and install your Windows and applications. And while you’re having the usual Windows troubles (virusses, Spyware, Trojans, etc), all of a sudden you remember that your computer came with OS X installed, so let’s give that a go.
And that is when they’ll get hooked on OS X..
It’s poison, I know…
Once they’re hooked on OS X, what will be the next computer they’’ll buy..? Yep, a Mac ‘cause it’s the only copmuter int town capable of running OS X. Add another switcher to the list…
At that point “all your ass are belong to us”, and Apple will be on it’s way to chase the non-believers out there that still buy Dell (or HP for that matter)…
Posted on August 04, 2005
Sam Says:
Ron Jon, your observations are several years out of date, and these days reality is pretty much the opposite of your first sentence.
bbq, FUD.
As for the article: “Games? Maybe, although the speed in those apps comes from bypassing the Windows abstraction layers to get directly at the Intel core anyway”
Nothing bypasses Windows anymore. You’re thinking of Windows 98/ME. In Windows XP, like MacOS X, you don’t access hardware directly. The speed in those apps comes from the fact that Microsoft has a very capable game API in their “Direct” APIs to which OpenGL and MacOS X are constantly playing catch-up. Until WINE or someone else can replicate those APIs, you’ll need Windows or a port to run those games.
VirtualPC should run at near-native speed, but it will still cost the money for a full Windows license to buy, adding to the customer’s cost if they want to run those apps and adding the “Microsoft $” square on top of the Apple column. WINE is a possibility, but without more serious work it won’t be popular for mission-critical uses. And by the time the WINE folks catch up to XP, Vista will be out with new APIs.
I’m all for the Intel switch-- I like the idea of a fast PowerBook for once-- but let’s not get crazy.
Posted on August 04, 2005
Assumptions Says:
Asumptions, assumptions.
We don’t know what Apple has up its sleeve. Stop wasting so much spit on luke warm assertions.
The analysis above by Sellers and a reader is so blipping incomplete.
If Apple opens OSX to ALL modern Intel/AMD iron, along with its suite of base apps, a HUGE number of converts will be born.
Before that, Apple will leverage its OSX exclusivity to better its hardware position, post-Intel adoption.
Apple will continue making hardware, from laptops, desktops, workstations, and servers--all in addition to the consumer products.
Steve has indicated he wants to “stick it” to Microsoft on many occasions. Defeating LonghornVista in the MARKETPLACE is the way to do it. Sticking it means the operating system.
The only tricky matter will be what MS does to limit programs opening Office formats, and its potential to withdraw Mac support, which it might do if it can close up Word, Excel, and PP formats.
I suspect January will bring Intel Powerbooks. Why the ‘press’ is too shy or slow to recognize the need for Apple to redo the PowerBooks is hard to understand.
The start won’t be in Mac minis. it’s all about the notebooks.
Posted on August 04, 2005
thej Says:
People, people...dual booting is not neccessary. There are better ways to use two environments.
The first is an emulation environment such as Virtual PC or QEMU. In the case of Mactel’s, it really wouldn’t be emulating anything since the Windows (..linix or whatever..) environment would be running on the same processor it was originally written for. This is really called VIRTUALIZATION since processor emulation is not actually occuring. Virtualization is a big deal! Intel and several other groups are working hard to develop Virtualization technology (Xen). These environments run the OS (Windows) and the apps within itself.
Even better are projects like DarWine which will allow you to run Windows apps in Mac OS X WITHOUT WINDOWS!! QEMU can do this too but I don’t think its completely working yet. This is the ideal situation ! Mac OS X running Mac S X apps and Unix apps and Windows apps simultaineously, WITHOUT running any other OS !
Who in their right mind would want Windows now ??!!??
Check out these sites!!
http://qemu.org/
http://www.iemulator.com/ (uses QEMU)
http://www.virtualization.info/
http://en.wikipedia.org/wiki/Xen_(virtual_machine_monitor)
Posted on August 04, 2005
ADeweyan Says:
The same argument that led to demise of the hardware “PC Compatibility” solutions offered by Apple still applies.
If you make it too easy to run Windows applications on a Mac, then many software developers will simple cease making Mac versions of their software.
Right now many developers are shipping buggy, slow ports of their Windows counterparts (Macromedia comes to mind). Why bother when the same customers can use zippy, more reliable applications in the “Windows Compatibility Environment” (whatever that turns out to be)?
Follow the trend, and the Mac OS eventually becomes irrelevant. Actually it’s not that clear. Either Apple is able to drive radical growth in the OS X marketshare, or (with robust, convenient Windows compatibility) the OS becomes irrelevant.
This isn’t an argument saying the Mac OS is doomed, I’m just saying it’s not all sunshine and lollipops should the Intel Macs make running Windows applications too easy.
Posted on August 04, 2005
ken2 Says:
I believe the first thing you have to realize is that a Mac will continue to be a Mac, regardless of the chip inside. I personally dread the thought of a dual boot and hope that there will be alternatives - including VPC.
I have to demo a Windows only app so I have the newest version of VPC and XP Pro SP2. The key is that I turned off VPC access to the internet so XP is running in a sterilized environment. No chance that malware is going to get near my virtual PC.
I do believe that MS is working very hard to build a significantly improved VPC for Mactels, and Apple will providing them with a lot of support - for ALL apps for OS X, including Office. I think the Mactel will allow MS to cut a lot of code out of VPC and take out some current barriers, like the 512 max memory limit. Since the current VPC on my 1.5 PB is fine for the limited work I use it for a reworked VPC should perform as fast as a lot of under $1,000 PC on the market today.
MS makes too much money off of Macs to kill the MBU. They understands that a lot of kids heading to college will get Macs in one form or another and they want to sell them Office. Maybe even VPC. They also know that dropping Office for Macs opens up a huge can legal worms as well as giving open source a really big boost.
The major change I see can be directly tied to Apple spending around half a billion dollars a year on R&D;. In the past Moto and IBM have held them back. Intel, I think, will be very different - they will want to push the limits on new processor designs with Apple because they know the other PC companies will follow in a year or two. Most important, we will, at last, be able to see what Apple can do with half a billion R&D;dollars a year in an environment where the chip maker can actually keep up with them.
Posted on August 04, 2005
cpuFanboy Says:
RISC to the end!!!
Posted on August 04, 2005
Bill Says:
I think Apple and MS are working together on this. MS loses more money supporting windoze than they earn selling it. They would love to have someone else write the OS (a talent they seem to have lost, if they ever had it) so they can concentrate on the applications like Office, their hardware, and their game machines, which actually do make them money.
So, in 2007, MS announces that Vista is dead and Windoze is dead; buy your computer/OS from Apple and we’ll sell you the office productivity apps.
Best of both worlds?
Posted on August 04, 2005
Rob Moir Says:
“Follow the trend, and the Mac OS eventually becomes irrelevant. Actually it’s not that clear. Either Apple is able to drive radical growth in the OS X marketshare, or (with robust, convenient Windows compatibility) the OS becomes irrelevant. “
The OS is irrelevant to the vast majority of people. Us “geeks” might well be interested in OS technology, but a few small exceptions aside your company’s CEO doesn’t invest in IT because computers are cool, especially operating systems. No way. They want to solve their business problems, and the OS is simply part of the platform upon which the solutions to those problems are built.
I’ve supported, designed, built, specified no end of networks for various people around the place in my time and nobody outside the IT department has ever asked about the OS. “How do I get my email”, and “How do I load my accountancy package” is far more important to most people.
Posted on August 05, 2005
ADeweyan Says:
“The OS is irrelevant to the vast majority of people. Us “geeks” might well be interested in OS technology, but a few small exceptions”
Of course it is. That’s not what I’m saying. The Mac OS becomes completely irrelevant when you have to run Windows (or an emulator, or...?) in order to do any of these things the end user wants to do.
The potential problem is that if developers only write for Windows knowing that even those using Macs can use the software, then the Mac OS becomes irrelevant even to those of us who care about it. Except for the Apple-produced applications (and even then, excepting iTunes and Quicktime), you have to run Windows to get anything done on your Mac anyway—so why bother running the Mac OS at all?
Posted on August 05, 2005
Article Information
Comment on this Article Print this Article Email this Article Digg This
Contributor
Dennis Sellers
Dennis has been a newspaper editor/reporter (seven years) and teacher (seven years). He has over 4,000 magazine, newspaper and online articles to his credit. He has also covered the Mac and tech industries for over a decade for such online publications as MacCentral, MacMinute and now MacsimumNews.







Ron Jon Says:
Apple should have stayed on the PowerPC its faster, more efficient, uses less watts an actually runs cooler considering its a smaller chip than any X86 out there. I use Mac OS X because I don’t wnat to use Windows. Period.
You wanna play games? Look at Nintendo or Sony. I want a modern architecture (aka PowerPC), not some ancient X86 architecture thats has unnecessary bloatware so its compatible with DOS.
Posted on August 04, 2005