Should Apple REALLY think different and stop making Apple-branded Macs? How does a Lenovo Mac sound to you? However before you brand me a lunatic (and quite frankly I couldn’t blame), hear me out.

First some boring financials: 2011 Q3 results for Apple’s computers

1.2 Million desktops
2.8 million laptops (both rounded up to the nearest whole number)
20 million iPhones
9.2 million iPads

Total revenue for Macs: Roughly 5.1 Billion dollars which is about 18% of Apple’s overall revenue of 28.6 billion for the quarter. Macs made up about 1/5 of total revenue for the company. The big difference between the first two quarters and 2011 Q3 is the HUGE increase in iPad and iPhone revenues. All numbers represent comparative Q3 sales between 2010 and 2011. The iPod also generated healthy profits in hardware sales but has been in a steady decline for some time now and those numbers should not be considered.

Mac revenue: 2010 = 4.4 billion/ 2011 = 5.1 billion – Revenue Difference = +16%
iPad revenue: 2010 = 2.2 billion/ 2011 = 6 billion – Revenue Difference = +179%
iPhone revenue: 2010 = 5.3 billion/ 2011 = 13.3 billion – Revenue difference = +150%

This is total revenue for each segment which does not show what the actual profit was which is really the numbers to talk about. There’s all kinds of numbers I’ve found to show this, but for the sake of keeping this argument simple, let’s say it’s roughly 30%. Also this does not take into account peripheral, software, or iTunes content sales for any of the platforms, just hardware sales.

Mac estimated profits = 1.53 billion
iPad estimated profits = 1.8 billion
iPhone estimated profits = 4 billion

Macs sales account for a little more than 25% of Apple’s overall profits while the lion’s (heh, Lion) share is being generated by iOS devices. Yes Macs are still a significant revenue stream for Apple but it’s becoming less important (as far as hardware sales go) not from year to year, but from quarter to quarter. 10 years ago, Mac sales made up almost all of Apple’s revenue and profits. Now it’s barely a quarter or less of that. At what point does Macintosh become more of a drag (in which research and development for future Macs and their enclosures) on the company than it’s worth? Maybe it’s time for Apple to REALLY think different and stop making Macs.

With the switch to Intel processors, Apple’s Macintosh computers are more like their PC counterparts than ever before. Get down to the guts of it and there’s not much of a difference between them as there used to be. So go the next step and let the Dells and Lenovos and so forth make Macs. Design specific motherboards for each segment. Low, middle, and high end for laptops and desktops with each manufacturer having to submit their designs for Apple to approve. These would include some kind of chip that would be needed to install OS X to prevent every one and their brother from making Macs. The guts stay the same for each maker making servicing less of an issue. Still allow people to bring in their Macs (regardless of who makes it) into Apple Stores for service and repairs. The difference would be that instead of going to an Apple service center, they would go to service center (for US-based Macs, one in the US. Have one in each region for other areas) for each maker to repair. This would require PC makers interested in making Macs to have a significant investment of their own money before being allowed to make and sell OS X-based computers. Apple makes their money from licensing not just the OS, but the motherboard and so on as designed by Apple. Apple’s profit per machine most likely would not be as high as when an Apple-branded Mac was sold, but more Macs would be sold overall (most likely, the future of course is never certain) with most of the design and manufacturing headaches being assumed by other PC makers. Quality would remain high since Apple would have to approve of each new PC design.

The tradeoff? They wouldn’t be as pretty.

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6 Responses to Is it time for Apple to consider Mac Clones again?

  1. Hmm. I don’t see it happening. The PC makers ruin everything. I think it was Harry McCracken on the last Macworld podcast talking about a Lenovo he’d upgraded to Windows 7 VS. on that shipped with Windows 7. The one that shipped with it had nagware and other junk that slowed it down and made it generally more annoying. It was all added by Lenovo. I don’t see any of these companies toting the line for Apple just to make a few sales to a very small percentage of the computer market.

    Apple already has to develop OS X anyway, even if they outsource the hardware. The OS is probably far more resource and time intensive to develop than the hardware, especially if Apple just start making conservative changes to the hardware.

    I don’t think it saves them a lot. I think they’ll just quit making Macs entirely before letting them be made by design losers (sorry) like Dell and Lenovo.

  2. dwaggoner says:

    Interesting. However, I don’t think Apple needs to stop making and selling Macs. But, I think it would be a good idea to allow other hardware makers to sell computers with Mac OS X installed on them. The important thing for Apple would be to not have to support those other users, the other manufacturers would need to be responsible for having compatible hardware and drivers and updating those drivers when OS updates occur. One of the benefits of Apple’s closed architecture is that they don’t have to worry about backward compatability issues with third party hardware. I don’t think Mac sales would drop as much as overall market share for OS X would increase. Most people buy Apple products for the overall experience, not just because they happen to like OS X better than Windows.

    • Guy Serle says:

      One of the problems with the last time Apple allowed others to make Macs was that they believed the clone makers would stick to the low-end and leave the juicy high-end to Apple. A bizarre belief that turned out to be completely untrue. The better clone makers (in the US that was mostly PowerComputing and Umax) jumped right into the high end with faster machines than Apple’s at lower prices. Apple won’t make the same mistake twice. They’ll either stick it out and only sell Macs themselves (what will most likely happen) and get out of it all together other than quality control

  3. Tom Schmidt says:

    To quote Mr. T: “You crazy, fool!”

  4. Yeah, I’m sure Apple won’t mind loosing $1.53 Billion Dollars. Chump change. I’m also sure that the PC makers out there are more than capable of making desktop and laptop computers that equal Apple’s quality and design.

    Oh, wait…

    • Guy Serle says:

      In many ways, yes it is to a company that’s very different today than they were ten years ago. Back then the Mac was everything, now it’s practically a sideshow for their mobile devices and services. The Mac Pros haven’t been updated (even a speed boost) in almost a year. Yes most Macs get updates only once a year, but in some cases the design itself is so good there’s barely any need except to make it a bit faster. The Mac Pro is such a computer.

      Apple has already killed the XServe. They’ve done little to make the Mac Minis more affordable. They’ve killed the basic MacBook, looking to make the MacBook Air the entry level portable, but a lack of affordable SSD drives with anything resembling decent storage capacities make that a no go for many families looking for a good laptop.

      As far as other computer makers go, not everything they make is crap. Certainly the low-end stuff is less than appealing, but the more upscale models can be every bit as good in both looks (not talking about their all-in-ones) and performance. All they need to be better is a better OS. If Apple has the final say, quality CAN be maintained.

      Do I honestly think this will happen anytime soon? No, not really, but Apple is changing in ways we once thought impossible not that long ago. Who would have guessed that they’d switch to Intel processors or go with more commodity hardware as they’ve done? Heck, Jobs even demoed Intel OS X on a plain vanilla PC.

      Apple IS change, They do what they think is best for the company and the company’s bottom line. This is why they’ve made the changes they have over the years. From 68xxx to PPC to Intel. From OS 9 to OS X. From their own factories to asian ones that also crank out other PC maker’s equipment.

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