Technologizer

Apple’s Phil Schiller on the State of the Mac

Apple's marketing honcho talks about the company's strategy of offering better features, not more features -- and why it ignored pundits who said it had to introduce cheap Macs.

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Noah Berger / Bloomberg via Getty Images

Philip Schiller, senior vice president of worldwide marketing at Apple Inc., discusses the iMac during an event in San Jose, Calif., on Oct. 23, 2012.

With Tuesday’s unveiling of the iPad Mini and a fourth-generation full-sized iPad, this has been a major week for the iPad. On Friday, Windows 8 goes on sale — making it an even bigger week for Windows PCs.

But this newsiest of tech news weeks also turns out to be a reasonably significant one for the Mac. Much of Apple’s Tuesday event was devoted to new models, including a substantial overhaul of the 13″ MacBook Pro with a Retina display, two absurdly thin new iMacs and an updated Mac Mini.

The profusion of new models was good news for Mac fans who have been known to fret that the Mac is being neglected as the iPhone and iPad become ever more important to Apple’s bottom line and future.

As usual, Apple teed off its announcements with happy recent stats. I was aware that the Mac has outpaced the rest of the PC industry in sales growth for years, but I didn’t know that the MacBook is the best-selling notebook line in the U.S., and the iMac is the best-selling desktop. Those achievements are more evidence that Apple’s Mac strategy — build premium machines, sell them profitably and don’t obsess over market share — doesn’t mean that it can’t end up with impressive market share anyhow.

Phil Schiller with new iMac

Getty Images

After the Tuesday presentation, I sat down with Apple Senior VP of Worldwide Marketing Phil Schiller, who did the presenting of new models on Tuesday, and chatted with him about today’s Macs, and how they got that way.

I began by asking him about the streamlining of Mac hardware that’s been going on for years now. Apple has put its computers into unibody cases, sealed in the batteries, removed the optical drives, dumped hard disks when possible and either shrunk or eliminated many once-standard connectors. Rather than adding new features with abandon, as tech companies usually do, it’s whittled the Mac down to its elegant essence.

Many of these changes have been controversial, at least briefly, at least among some observers. But they don’t seem to have hurt Mac sales. What was the overarching strategy, I asked?

“This is what Apple has always been about, and the Mac has been about, from the first Mac and first iMac,” Schiller said. “It’s always been about making the best Mac we know how. Among the many benefits are making it easy to use and affordable, with great features. This high level of integration is part of delivering on that.”

Schiller pointed out some of the downsides of the technologies it’s removed or downplayed: rotating hard disks, for instance, use more power and are more likely to have reliability issues than solid-state storage.

“These old technologies are holding us back,” he said. “They’re anchors on where we want to go.”

“We find the things that have outlived their useful purpose. Our competitors are afraid to remove them. We try to find better solutions — our customers have given us a lot of trust.”

Apple began removing DVD burners from portable computers, where weight and thinness are paramount — at least to Apple — years ago. But the new iMacs are the first ones without optical drives. I asked Schiller if that was a more difficult decision.

“It actually comes from similar thinking as with the portables,” Schiller said. “In general, it’s a good idea to remove these rotating medias from our computers and other devices. They have inherent issues — they’re mechanical and sometimes break, they use power and are large. We can create products that are smaller, lighter and consume less power.”

Schiller pointed out that one major application for optical drives, software distribution, has gone largely digital. As for video, he said that “Blu-ray has come with issues unrelated to the actual quality of the movie that make [it] a complex and not-great technology…So for a whole plethora of reasons, it makes a lot of sense to get rid of optical discs in desktops and notebooks.”

His preferred Blu-ray alternative? iTunes, of course, which lets you buy a movie and then watch it on all your Apple devices.

Once upon a time, people assumed that Macs’ lack of Blu-ray was a delay, not a permanent decision to fast-forward past it. I told Schiller that I imagined folks don’t ask about it much these days. “Correct,” he said.

I noted that for years, pundits thought Apple would, or at least should, start making much cheaper Macs. I said that drumbeat seems to have come and gone, and asked Schiller if everyone finally understood that Apple was content with its strategy of sticking with the high end of the market.

“Our approach at Apple has always been to make products we’re proud to own and use ourselves,” he told me. “…We wouldn’t make something cheap or low quality. When the economy is difficult, people care a great deal about the things they spend their money on. Customers have come to understand that Apple’s products aren’t priced high — they’re priced on the value of what we build into them.”

“There’s something that happened in the industry…that made that topic meaningless. There were these products being created called netbooks. People said they were the future. We rejected them because we thought they were poor. Even if the market was going there, we weren’t going to chase everybody downhill.”

Netbooks eventually turned out to be a fad. And of course, Apple was working on a lower-cost computing device. “The iPad became our answer to the $500 computer. Time has proved us right on that point. And now 100 million people agree that the iPad is a great computer.”

Oh yeah: I wouldn’t be an inquiring reporter if I hadn’t asked Schiller for his take on Windows 8 and Microsoft’s strategy of building one operating system for both conventional PCs and tablets. He politely declined comment: “Primarily, we think about what we’re doing, not what others do.” At least I tried.

22 comments
trajan2448
trajan2448

I think Apple is making a mistake by not producing a high end 17" macbook pro with every bell and whistle. It might take a while, but abandoning the high end power user historically has always led to a decline eventually. These are the MOST loyal customers who spend the MOST per purchase and the halo effect is tangible.

ScriptedPixels
ScriptedPixels

With regards to the new iPads, this may seen a little out of context  :

I'm Surprised at all these comparisons without any real hands on reviews. One thing I've learned from Apple and the iPhone5 is that they undersold it.

The 5 was getting laughed at on launch because it had less cores and less RAM - effectively making it a weak contender. Reviews were then posted and it  went and blew the competition out of the water with it's Dual Core and 2, or 3, core, GPU.

It's the slimmest and fastest phone out right now. The other devices have higher specs but they fail to harness the power. Apple's providing innovation on a tech level right now - that's some exciting stuff and I hope to see this with the iPad Mini and 4th Gen.

orytek
orytek

It would have been more interesting to hear something about what's planned for the pro segment rather than trying to get him to say something about  Microsoft. Apple did say several months ago a solution for Mac Pro users was coming sometime in 2013, but seems in recent Months the media would rather ask questions unrelated to Apple's future roadmap.

MatteoRodrigo
MatteoRodrigo

Its funny to hear him thinks hes making affordable products.  Over $2000 for a laptop is not affordable for most middle class people...when they could buy 4PCs for the whole family.  

As for optical drives, I understand how most dont use it for software.  But I know I routinely use it to upload music.  If someone (or the library) has a CD I want to copy, I just put it in the disc and upload it.  Guess that wouldnt be possible otherwise.  ANd lots of  people and families I assume have tons of photos and videos theyve stored on CDs...So what happens to all that?  They have to go to a store and get them all converted to a portable drive

One thing I hope someone can explain, I dont understand these computers with no hard storage so instead of 500GB storage they have like 128 flash storage.  If you dont keep stuff in the cloud, how does that work?  I dont understand, can you no longer PHYSICALLY store your photos, videos, documents, and everything else on your computer?  Ive never understood how this works.

I wish Apple and the press would do a better job of explaining this to us lay people

KevinK
KevinK

 iPad mini starts at $330, iPad starts at $500, and MacBook Air starts at $999. far from the "over $2000" figure you mentioned.

if you absolutely have to use a drive, just buy the optional SuperDrive and plug it into the iMac. it's just not part of the default option anymore, but that doesn't mean it's not available.if you have more than 128GB of storage, you might want to just get an external USB drive.hope this helps,

david23
david23

@KevinK Ipad and macbook air are hardly viable computers and do not in any way compare to a typically powered computer for avg work.   These things are toys.   The original poster's point is very valid.  A viable apple computer costs $2000 which is way out of range for most people.   Ergo macs very low market share.

SamuelSatter
SamuelSatter

I might have given up on the iphone, but I will always be loyal to Apple computers!

www.is-privacy.tk

ScottBotkins
ScottBotkins

There will always be a place for desktop computers for web designers such as myself. The work place will always need them too. Perhaps I'm in the minority, but browsing the web on a mobile device is boring and designing for it is even more boring.

doug.daulton
doug.daulton

Next time, ask him directly about the 2013 Mac Pro. Inquiring minds want to know :D

harrymccracken
harrymccracken

@doug.daulton Mea culpa, I should have asked him. I will next time (unless it's after an event at which new Mac Pros are announced).

GaryMcCray
GaryMcCray like.author.displayName 1 Like

Seems to me that along with not chasing Netbooks, they have also decided not to chase the 7" tablets.

Mini pricing made that pretty clear.

Of course, the 7" market seems to be succeeding spectacularly.

And the Mini is old technology with a low display resolution and it doesn't even seem to compete convincingly with Apple's own full sized "Even Newer" IPad.

DanAndersen
DanAndersen like.author.displayName 1 Like

@GaryMcCray: I wouldn't say that the 7" market is succeeding "spectacularly," Gary. In fact, it's barely succeeding at all, not only in overall units but especially in profitability. The question is, how much longer will Apple's would-be rivals be willing to spin their wheels with no resulting benefit.

I loved your comment regarding the iPad mini. I presume you were being facetious. That "old" technology beats the pants off other offerings in every way.

GaryMcCray
GaryMcCray

@DanAndersen @GaryMcCray 

I also totally disagree with you that the "Old" IPad 2 technology with its low resolution display "Beats the pants off of" the competition.

It doesn't. The Fire HD with its higher resolution 16 x 9 screen offers much better HD playback than the Mini / IPad 2 and the integration with Amazon Prime and free books and video is unmatched by IPad offerings. The Open Android Google Nexus 7 is also much higher resolution and provides a much more open and lower cost set of Apps and entertainment than is available for IPad.

They both cost much less and give you more consumer desirable stuff for considerably less money than Apple.

That having been said, the now "Even Newer" full size IPad with it's "Retina" display and much faster processor does represent the peak of tablet experience. The most expensive, but admittedly the best.

GaryMcCray
GaryMcCray

@DanAndersen 

If you want a tablet and if cost is no object, buy a full sized 4th Gen IPad, other wise get a much more cost effective Nexus 7 or Fire HD in 32 gb.

Don't waste your money on the Mini.

Apple only built it because they felt pressured into it and they have done as bad a job of it as they possibly could to fully demonstrate their total level of disinterest in it.

GaryMcCray
GaryMcCray

@DanAndersen @GaryMcCray 

Although 7" tablets are being sold near cost, the Companies supporting them are gaining profitability from the sales of Apps, entertainment and other goods that are accessed with them and this Christmas promises huge new sales in this market from which those that supply them will be able to reap huge rewards ofver the next years.

Apple also reaps huge rewards from its on line sales from it's tablets, but it demands also to get maximum profit from the sales of the tablet itself. That bit of greed has cost it far more in lost revenue from IStore and ITunes sales than the increased profitability on each Mini which they will now not be selling. 

admiralpumpkin
admiralpumpkin

@GaryMcCray

"Gaining profitability" like Amazon's most recent quarter? No.

Google and Amazon are trying to slow the iPad juggernaut before it's too late. They don't make real money off of hardware so they have no problem tying to commoditize the hardware. This is a gamble on their part. If consumers don't bite, they will have to write down inventory (see RIM).

Competition is obviously good. I'm not sure this is the kind of competition that will benefit consumers in the long run. We will see.

GaryMcCray
GaryMcCray

@kawika @GaryMcCray @DanAndersen 

I agree that hard numbers are hard to come by.

Apple, Google and Amazon all have their necks stuck out on this one and Amnazon and Google really need to realize significant revenues not only from tablet sales but from tablet use to recoup their costs.

Apple has a lot of other products than the Mini, so they will probably do OK even if the Mini doesn't.

My guess is that this information will be a lot clearer next year.

kawika
kawika

@GaryMcCray @DanAndersen, I'd love to know how many tablets Google, Amazon and Samsung have sold previously — or will sell this quarter. Microsoft just started selling today, but no one other than Apple seems to provide actual numbers. It would certainly help settle some arguments about popularity and at least perception of value to the customer.