Apple finally made official what many of us have suspected for sometime. They cancelled the Cube, the little G4 that couldn’t. I was amazed by the Cube when it was first released, and I still think it is a beautiful machine with a role as a niche product. But in its goal to expand its user base through new models and retail locations, Apple cannot afford to cater to a niche market. It costs money to maintain a product line and sometimes it is better just to suck up the development costs and kill a slow product than to let it go on draining the treasury.
Apple finally made official what many of us have suspected for sometime. They cancelled the Cube, the little G4 that couldn’t. I was amazed by the Cube when it was first released, and I still think it is a beautiful machine with a role as a niche product. But in its goal to expand its user base through new models and retail locations, Apple cannot afford to cater to a niche market. It costs money to maintain a product line and sometimes it is better just to suck up the development costs and kill a slow product than to let it go on draining the treasury.
So what now? Apple is going to revert back to a four-corner product strategy. This was the keystone of the Apple Computer that Steve Jobs rebuilt when he returned as an interim CEO. When he took the CEO job full time, his vision became a little clouded. He saw the beautiful Cube in mock-ups and had to produce it. But it violated the four-corner strategy, was never successfully integrated into the market and had to be removed. So now we will have two lines: consumer and professional. Each line will have two models, a desktop and a portable. For the pro user, the G4 tower and PowerBook. For the consumer, the G3 iMac and iBook.
But wait, what about all the rumors we have been hearing about a new portable from Apple, what about the long rumored iMac with a 17-inch screen? How will these fit into a four-corner strategy? Easily! Just as the pro line has variations in a single product, so will the consumer line. Sure, the iMac came in different chip speeds and even different hard drive sizes, with more or less RAM. It even came in different colors. But those variations aren’t enough to fill the price and feature gap between the best of the consumer line and the cheapest of the professional line.
The answer is offering real options. The iBook will come in two sizes, the smaller has been released and a slightly larger model will sport the 14.1-inch screen size of the old Pismo. Viola, the Son of Pismo concept becomes an iBook option that helps fill in the price gap between the US$1799 combo drive iBook and the US$2699 PowerBook G4 400 MHz. If it is dressed classily, like the current iBook, it can sell well in the business market as well, an area Apple is trying to expand.
The iMac will be released with a smaller, less expensive LCD, at 14 or 15-inches and a slightly larger model will fill the gap with a 17-inch LCD. Think about it, if Apple can offer a 17-inch LCD monitor at US$999 and they can offer an iMac at US$899 they can put the two together and sell it for US$1899 or perhaps even less. This is the original price of the Cube and could be marketed to that same segment. And unlike the original Cube, which required another US$500 investment in a monitor, this new, larger iMac would have the LCD screen there already. The turnkey package also means less maintenance and inventory tracking issues for companies and schools. Thus it caters to markets Apple is trying to develop.
Think about the advantages to this four-corner strategy versus having 6 distinct products in three lines (consumer, business, pro). Marketing would only have to spend money advertising four models. The Apple store can offer a consumer and professional area of their store with all the variations displayed under four broad product banners. Apple can offer a computer from US$900 up to US$4,000, to fit every need. And there would not be any more work to do on inventory than there is today. Make all the drive options, hard drive sizes and RAM amounts build to order; only stock different sizes of screen and speed of processor in the channel. With retail locations, Apple can quickly swap out a drive or RAM module to fit the customer’s specific needs, offer more variations in price and features and cut inventory problems.
Is this what is going to happen? One can only speculate, but I would not be surprised to see the professional line go though a similar change, although the professional desktop, without built in monitor, would not be affected. However, if Apple does go with this strategy of different screen sizes as a main distinction on iMac and iBook lines, look for it in the next revision of the PowerBook as well. There could be a lightweight model with a smaller screen introduced, or a heavier model with faster processor, dual processor and even larger screen. But as a way to sell computers it makes a lot more sense than stocking three different optical drives, different RAM allotments and different hard drive sizes. It is a difference people can see and something that matters more in the consumer line than 10 GB of drive space or 20 GB.
