Apple Creates New iPod Division

[MacRumors]

Reuters reports (http://www.reuters.com/newsArticle.jhtml?type=technologyNews&storyID=5198496) that Apple has spun off iPod development into its own division within the company.

The move was made in response to an internal company-wide email from Apple CEO Steve Jobs. The new division will be headed by Jon Rubenstein, current leader of hardware engineering efforts. The division also makes way for a "Macintosh" division to be headed by Timothy Cook, current head of Apple's worldwide sales and operations, according to Reuters.

Quoted from an Apple spokesperson:This organizational refinement will focus our talent and resources even more precisely on our industry-leading Macintosh computers and the wildly successful iPod.

Since its introduction in October 2001, more than 3 million iPods have been sold.

[nagromme]

Why not? Makes sense.

[insidedanshead]

reminds me of the old school "mac" vs "apple" interoffice competition. could this potentially be a bad thing?

[ingenious]

Good. Hopefully this quiets iPod/Mac arguements and brings on the updates!
:D Come on PowerBook G5!

[ingenious]

reminds me of the old school "mac" vs "apple" interoffice competition. could this potentially be a bad thing?


I'm seein' your point. What if this turns out to be a PalmSource/palmOne thing where the iPod/Mac gets spun off? I hope not. This is just bringing back horrid memories from the days when I actually liked PDAs. :rolleyes:

[jimsowden]

perhaps this means we will see some ipod minis in stores.

[MoparShaha]

I suppose this will be a good thing. It more clearly defines product development within the company. Should quiet all the whinners who keep saying Apple should start concentrating on computers instead of iPods (I'm probably one :) ). What might the negatives of this be though?

[bertagert]

Good move on Apple's part. This let the other divisions concentrate more on their projects. Plus, it will let the PM and PB engineers produce better machines faster. Woohoo!

[leftbanke7]

reminds me of the old school "mac" vs "apple" interoffice competition. could this potentially be a bad thing?

If the iPod and Mac were competing products, I would say yes but since they are two total seperate markets and actually compliment each other, I think this move is a great way to streamline production and R&D. I think both products will improve because of this.

[geerlingguy]

I was wondering if they would do this... The only logical next step would be to spin off the iPod & iTunes into another company (kind of like they did with Claris) if they keep becoming more and more popular.

It's REALLY nice being the king! :D

[jackieonasses]

as long as the ipods get less R&D then the powermacs....

[iBook]

(kind of like they did with Claris)

This is probably "off-topic," but one of the things I like about Web bulletin boards is the dynamic conversation they allow.

What happened to Claris? And, for that matter, Apple Works? Wasn't there a rumor at some point about something called iWrite and a pending announcement that Apple would be putting together an "Office" offering of its own?

[CRF]

I think this is great. Apple can now be in focus on their flagship products: Macintosh and iPod. Also may be we can get more updates in less time :) . Besides maybe they open up the iPod a little bit, so it can stay as leader in the mp3 market almost forever :D

[MarksEvilTwin]

Removed

[bbarnhart]

What happened to Claris? And, for that matter, Apple Works? Wasn't there a rumor at some point about something called iWrite and a pending announcement that Apple would be putting together an "Office" offering of its own?

Claris turned into FileMaker Inc and Apple controls AppleWorks. There is no Claris anymore.

In fact, FileMaker Inc owns the domain Claris.com, although, it didn't come up for me.

[Gus]

I don't understand the argument that this will bring about better Macs or faster updates. I'm sure that the engineers who were working on PBs and PMs were not involved in the iPod development. This seems to be something else. I wonder if this might be a way of leveraging both the Beatles' and Eminiem's lawsuits? Is there a legal loophole that would create a distinction between the iPod division and the Mac division now?

I guess I'm just a little worried after the 90's and the various spin-off divisions and the attempts at making them their own companies like the aforementioned Claris and Newton. Both of these were failures for differing reasons, but it was generally a lack of direction from those put in charge of the spin-offs. I know Jon Rubenstein is a smart man, but we'll see what happens now.

Regards,
Gus

[AD9]

I wonder how extensively the new division will be divided. I know some have thought the ipod has been the focus, and they are not thinking of macs, but really for the complexity of the ipod it has been developing slowly maybe it will really take off with a group of highly focused developers. I have thought from the begining when it was called the i"POD" rather than i(something musical) it was going to be used for much more than music and its been showing signs of expansion beyond since. Maybe this new division will let some of the new tricks out soon.

[t300]

I think that iTunes will stay with the iPod in development. You know they develop each side by side and they both work off of eachother...Hell, they share their own section on Apple.com... iPod + iTunes...I think it will be this way for a while.

[applemacdude]

But Apple stills makes profit our of the New Spun Off Company?

[michaelb]

Claris turned into FileMaker Inc and Apple controls AppleWorks. There is no Claris anymore.

In terms of control, FileMaker Inc is a wholly owned subsidiary of Apple. (Which means they're unlikely to axe the Mac version without Steve's go-ahead!)

As an example of the close ties, FileMaker was one of the first major apps to be Carbonized during the great Mac OS X transition.

Now I just wish they'd hurry up and release FileMaker Mobile 7...

[kansast]

This seems to be something else. I wonder if this might be a way of leveraging both the Beatles' and Eminiem's lawsuits? Is there a legal loophole that would create a distinction between the iPod division and the Mac division now?


So far... this seems to be the only take I've heard on this that makes any sense.. or maybe I've been watching too much t.v. :-)

[SiliconAddict]

But Apple stills makes profit our of the New Spun Off Company?


The ipod isn't being spun off as its own company. Its simply being consolidated into its own division. Its hard to really say anything about this. Could be good. Could be bad. Could be nothing at all.
If nothing else its probably something Apple has been planning for a while but hasn't gotten around to it til now. Competition and growing sales probably turned this into a priority. *shrugs* What bennifits do you get out of creating a division other then streamlining paperwork and "the books" :confused: :p

[michaelrjohnson]

well, it obviously made sense to streamline their r&d... i'm sure they've had separate "teams" working on their different products, but it just makes sense to split it up so they could focus.

overall, not earthshattering, however it does bring to light the fact that apple truly does see a future in the ipod, more than some other products in the past.

here's to the future!

[afields]

So is this gonna be like what lexus is to toyota?

[appleguy]

so when do we see www.ipodrumors.com start up?
someone owns it.

[alandail]

I think the angle here is that the iPod isn't macintosh specific. They want to aggressively go after windows users with the iPod/iTunes/iTunes music store. Also, I imagine the iPod division would be in charge of other potential consumer level products, such as the rumored iPod with video out via a special dock, the rumored Apple video projector, etc.

Jon Rubenstein's touch will be important in that market. My question on all of this is will the Macintosh miss his touch, or will he still have input on Macintosh industrial design as well.

[SeaFox]

I suppose this will be a good thing. It more clearly defines product development within the company. Should quiet all the whinners who keep saying Apple should start concentrating on computers instead of iPods (I'm probably one :) ). What might the negatives of this be though?

Let's see. You want Apple to concentrate on improving Macs rather than iPods, yet you just put the head of hardware on the iPod's team...

Meanwhile, you have a marketing guy heading a computer that has always been about quality rather than marketting to the mass consumer.

I see more advanced iPods in the coming years, along with cheaper Macs of inferior build quality rushed out of development to meet "buying seasons".


:(

[alandail]

also, why does anyone think this hurts either of the new divisions. Each will be profitable in it's own right. If anything, it will put added emphasis back on the macintosh division, which otherwise may have started to coast and let the iPod carry the company.

[Downdivx]

Makes sense to me, now a division to focus on each product instead of one trying to juggle two radically different types of hardware. One can focus on the ipod, one on computers. Certainly sounds good to me.

[macridah]

I hope they don't forget about .Mac. The recent upgrade is just a little tiny step forward. :(

[Nemesis]

Reuters reports (http://www.reuters.com/newsArticle.jhtml?type=technologyNews&storyID=5198496) Apple has spun off iPod development into it's own division within the company.
.

That's cute. Now bring us those new PowerMacs and iMacs .. PLEASE!!!
It's been A YEAR since the last update!!!
:mad:

[afields]

well, hopefully this means they concentrate on Powermac and imac updates.

[trptdude]

it'll be very interesting to see how this affects the Beatles lawsuit - could it be the groundwork for a settlement? just a thought -

[doogle]

One possible danger I see is if Steve gets his time between Apple and iPod confused...like where is Steve going to be hanging out more?

[gop007]

Apple is focusing on what works. IBM is really dropping the ball with the G5 chips so the future still looks to be in Music. There is enough of a base established to keep the company profitable, but Apple is once again having to rely on more products to keep it afloat. It was the iMac four years ago.

[Krizoitz]

That's cute. Now bring us those new PowerMacs and iMacs .. PLEASE!!!
It's been A YEAR since the last update!!!
:mad:

PowerMacs were updated in November of last year, thats only HALF a year, also thats when the iMac 20" was released. Its only been 9 months since iMacs were updated. Try and keep the complaints accurate. I'm sure that Apple will release updates as soon as humanly possible.

[virividox]

i think this is a good thing, allows the ipod to develop independently probably pushing on new technoligies faster into the product, i doubt there will be a compettion like mac v lisa since there is only 1 music player

[eazyway]

With ipod as the fastest growing sector within Apple this indicates their desire to keep it that way. It is very likely that the growth in the iPod sales will continue to sky rocket up. With the increase in small HD production , the HP deal , Apple had to make sure that they had a good person at the helm. It is easy to see them selling 5 M iPods in the current fiscal year
Q1 ... 733 K
Q2 ... 807 k
Q3 ... 1,300 k
Q4 ... 2,150 k
They add 100,000 selling locations with HP . 10 per location is 1M iPods. Maybe the Q4 number is low. The problem I see is production capacity.

Then the first Q of 2005 could be the real killer as they sell more iPods in one quarter than macs in one year.

This also brings our iTunes Music store with a few new contries coming on line open to a sell run rate of approaching 500M songs per year.

Bottom line for Apple
iTunes rev $500 M
iPod rev $1,500 M (lower than the current $/unit revenue)

Total of $2B in revenue for Apple. This would bring Apple back to a $10B company.

[Windowlicker]

I was wondering if they would do this... The only logical next step would be to spin off the iPod & iTunes into another company (kind of like they did with Claris) if they keep becoming more and more popular.

I don't see this happening.. Today the APPLE stamped on the products is the thing that sells them so well (is it not?).

[Diatribe]

One possible danger I see is if Steve gets his time between Apple and iPod confused...like where is Steve going to be hanging out more?

What's your point? First of all they're just divisions not companies that they created. Second, Steve is already CEO of two companies, being Pixar and Apple. He already devides his time. I don't think this will push things further than they are right now for Steve.

[Foocha]

I suspect this means a switch for a horizontal to vertical organisational structure within Apple. Where previously there was a software and hardware division, with iTunes & Mac OS X being handled by Software and iPod & Mac hardware handled by Hardware, they're now cutting the cake the other way, with one division responsible for all things iPod, and one for all things Mac.

In the event that the Beatles win their case, Apple may have no choice but to present iPod and iTunes under their own brand, but this still does not mean that they will have to spin it off as a separate company. Personal view - Apple will not under any circumstances choose to do this, so left with no other option, they'll settle with the Beatles once and for all with a huge pay-off.

The truth is, far from spinning of their first taste of NEW success in years, they need to captialise on it and add a couple more non-Mac runaway hits to their product portfolio. Sony did not spin of Walkman or PlayStation as soon as they became successful.

[broken_keyboard]

The iPod is just an MP3 player. Don't make a separate division, because a simple MP3 player doesn't justify a whole division. Don't try to make it more than an MP3 player, because then it will cease to have the simplicity and unity of purpose that makes it great. Make whole new gadgets, and have a gadget division. Maybe that is where they are heading.

[Nemesis]

PowerMacs were updated in November of last year, thats only HALF a year, also thats when the iMac 20" was released. Its only been 9 months since iMacs were updated. Try and keep the complaints accurate. I'm sure that Apple will release updates as soon as humanly possible.

By an "update" I mean putting a decent processor inside: G4 used in iMacs is, what?, 2 years old G4 model and those processors used in PowerMacs were all introduced a year ago.
So, my points are valid regarding this update.
I want Apple put NEW processors in an update, not playing games with us by light case interior updates and leaving us with same old pocessors. That's sick, especially when thinking about iMacs.
:mad:

[NOV]

I was wondering if they would do this... The only logical next step would be to spin off the iPod & iTunes into another company (kind of like they did with Claris) if they keep becoming more and more popular.

It's REALLY nice being the king! :D

As I indicated in another thread this seems logical to me, in order to prevent lawsuits from The Beatles/ Apple. In this way the new company can expand their musical horizon.

[MacFan26]

I was sort of surprised to hear this, even though, I suppose it's not that earth shattering. I was annoyed to see this comment on on the story at Yahoo though: "Face it, the Mac is an also ran product with only its niche market to support its margin." What is up with that? It made me think of all of the "Apple's going under" mid 90's. grr..

[kettle]

This seems to be something else. I wonder if this might be a way of leveraging both the Beatles' and Eminiem's lawsuits? Is there a legal loophole that would create a distinction between the iPod division and the Mac division now?

This could be the badger. :)

If the "Apple Records" only has a legal argument against another company being called Apple doing music, then there could be a valid reason why a division can be considered another company.

Is there a valid reason for this to be the case?

[Savage Henry]

This could be the badger. :)

If the "Apple Records" only has a legal argument against another company being called Apple doing music, then there could be a valid reason why a division can be considered another company.

Is there a valid reason for this to be the case?


I'm no legal monkey king, but would this only work if Apple Computers (with whom The Beatles have a problem) can clearly distinguish themselves entirely from "Apple Records"?

Jobs' legal team may have found a clause weakness in the agreement, but I can't think Apple Corps are going to call off the dogs just because a different change of attack.


But like I say, my knowledge of law is limited, but I certainly see this structure shift being directly related to the legal issues rather than the other suggestions this rumor is generating.

[autrefois]

As I indicated in another thread this seems logical to me, in order to prevent lawsuits from The Beatles/ Apple. In this way the new company can expand their musical horizon.

But it's still a division of Apple. I don't see how making it a separate division changes that situation. I assume the iPod will continue to have the Apple logo on it and will continue to be sold on Apple's website. And I assume Steve Jobs will continue to announce updates to it in his keynotes.

I think the iTunes store is more of a problem than the iPod is, considering Apple (Computer, that is) is not only selling music, but creating new compilations on the store: iTunes essentials. Apple is selling music and its own albums.

iTunes isn't included in the new iPod division. If they were trying to please Apple Corps, they would create a new company for iPod and iTunes under a different name, not have just the iPod as a division of Apple.

[macker]

I read in one of the business pages that analysts will start looking unfavourably on Apple if they DON'T spin off the ipod. As the market for hard drive players and Apple's share of it, is getting to it's peak then they will generate the most from an ipo if they do it sooner rather than later. The market would go nuts for an ipod ipo, was the general feeling. Apple could make a killing to secure the medium term future of the company. It's inevitable that it's market share in the music space will get eroded in the next 2-3 years.

[SLAPSHOTW]

I read in one of the business pages that analysts will start looking unfavourably on Apple if they DON'T spin off the ipod. As the market for hard drive players and Apple's share of it, is getting to it's peak then they will generate the most from an ipo if they do it sooner rather than later. The market would go nuts for an ipod ipo, was the general feeling. Apple could make a killing to secure the medium term future of the company. It's inevitable that it's market share in the music space will get eroded in the next 2-3 years.

You completely midunderstand this- iPod is a new DIVISION, not a new company. Like Mitsubishi sells cars, and they sell TVs. There is only one company called Mitsubishi, yet these two things are in different divisions.

You don't have an IPO for a new division.

[macker]

The first step to creating a new spin off company is to seperate it into its own division though, no?

I'm not saying this is a good idea and its not my understanding, its the analysts in Goldman Sachs et al that can see an opportunity for a successful ipo. What they have been saying to apple is that the high water mark has been reached. Ipod market share will not get any greater, it can only go down. Spin it off and sell it now, goes the argument, and the company will make a LOT of money.

To do that, you have to establish it as a division with its own management etc. They probably have a window of opportunity for this of about 12 months.

[whooleytoo]

Apple has spun off iPod development into its own division within the company.

The move was made in response to an internal company-wide email from Apple CEO Steve Jobs.

At great personal risk and expense, I have managed to acquire a copy of that email, to share with Macrumors readers. Opening it now...

"Hey Apple. Open an iPod division already!"

D'oh! :p

[clearly]

This is great news. It means that this site should now concentrate on Mac rumours (as its name suggests) and not on iPod rumours. Apple has made it crystal clear that the Mac and the iPod are so separate that they require different divisions. Perhaps this site will get back to discussing Mac topics and not digital music devices. (And I say this as an iPod owner who loves the little thing.)

Clearly

[Abstract]

As I indicated in another thread this seems logical to me, in order to prevent lawsuits from The Beatles/ Apple. In this way the new company can expand their musical horizon.

Unless Apple pulls off a Madonna and renames the "Apple iPod" to just "iPod", it really won't make a difference. Apple Music is bitter because Apple computers is associating itself with music using the same name and a very similar logo.

Since iPods are synonymous with portable music anyway, and since its so damn famous, it could easily be a stand-alone name and ditch the Apple part of the name. iTMS can do the same thing and clasp itself to the iPod name instead of the Apple name, because again, iPods are synonymous with portable music anyway, kinda like how mp3 is synonymous with digital music.

Anyway, this could be a bad thing if iPod and iTunes/Mac integration is compromised. If they didn't work seamlessly together like they used to because of this entire "separate division" business, it won't be good.

Also, I think they're doing this because they're about to enhance the iPod big-time very soon, which is why it's a separate division. Sony doesn't make a separate division in order to make a particular stereo system. They'll have very very wide range of stereos to offer. Apple's iPod division can offer iPod with 3 different HD sizes, but with the exact same looks, its really like 1 model. The iPod mini makes another product. That's 2 products, and you don't make another division to make 2 products. They're coming out with something else....something HUGE!, and they want the new iPod division to get it going.

[rdowns]

also, why does anyone think this hurts either of the new divisions. Each will be profitable in it's own right. If anything, it will put added emphasis back on the macintosh division, which otherwise may have started to coast and let the iPod carry the company.

This is a fallacy that keeps getting posted here. In terms of profits, the Macintosh and their billions in cash are carrying the company. One could argue that the iPod is carrying the company in terms of consumer mindshare.

[dstorey]

few interesting things about this:

1) It seems to be the iPod division and not a Digigal lifestyle device section. Does this suggest that Apple are going to just focus on the iPod and not other new devices, unless they use iPod as a brand name and you get the iPod music player, iPod DVR, iPod phone etc etc.

2) Does this suggest the splitting of focus for apple computer here, away from a computer company that does a music player, which happens t obe damn good, to a company where computers are just one division and thus less focus. iPod gets equal focuc, r&d, etc as the computer division

3) It's interesting the head harware guy, ruby is going to be in charge of iPod division. He seems one of the more 'houshold names' in Apple. It could be worrying that the Mac loses his talents. The guy taking over on the Mac side of the fence seems to not be as much of a hardware guy so it's a bit worring.. Anyone know anything about him?

[whw5]

I don't like the idea of doing this. It seems like it will create a rift between the company. I have a feeling somthing painful will come of this, like a break away.

[whooleytoo]

3) It's interesting the head harware guy, ruby is going to be in charge of iPod division. He seems one of the more 'houshold names' in Apple. It could be worrying that the Mac loses his talents. The guy taking over on the Mac side of the fence seems to not be as much of a hardware guy so it's a bit worring.. Anyone know anything about him?

This is the bit that worries me, Rubenstein (http://www.apple.com/pr/bios/rubinstein.html) is an out-and-out hardware engineering guy, while Tim Cook (http://www.apple.com/pr/bios/cook.html) is more of a manager.

Who knows, perhaps at that level of the company, management skills are more valuable than engineering knowledge? Personally, I wouldn't think so.

(To be forthright: I don't like Cook for personal reasons. He came to the Cork plant to give a long spiel on how great Apple was doing, and how safe we all were - only to be followed by hundreds of redundancies a few short weeks later. I understand full well why he had to do it, but I'll never appreciate being lied to.)

[sushi]

reminds me of the old school "mac" vs "apple" interoffice competition. could this potentially be a bad thing?
Understand your concern.

However, I don't think it will be an issue since the iPod and Macs compete for a different market. Unlike before when the Mac team was against the Apple IIGS team. In that case, Apple was producing competing products.

Also, as a separate enity, it will be able to focus more on cross platform issues I would think.

Sushi

[~Shard~]

Hopefully this will allow for moe concentrated efforts in parallel development. Although different teams have no doubt already been working on the iPods and Macs, (I doubt there has been substantial overlap), it seems like when updates come out, it's sort of one or the other - either iPod updates/announcements or Mac updates/announcements. I'm not sure how much exactly this will change things, but it is definitely good to have this departmental focus and mindset, so hopefully Apple will prosper from it. I guess only time will tell!

[ibjoshua]

You completely midunderstand this- iPod is a new DIVISION, not a new company. Like Mitsubishi sells cars, and they sell TVs. There is only one company called Mitsubishi, yet these two things are in different divisions.

You don't have an IPO for a new division.

Mitusbishi is a bad example. The big Japanese company groups are best described as 'families'. Mitsubishi Motors is a different company from Mitsubishi Electric and there are others. In fact Mitsubishi Electric owns lots of same brand companies many of which were born from seperate divisions.
For more info on Mitsubishi: mitsubishi.com (http://www.mitsubishi.com/e/group/about.html)


However you are correct, the formation of a new division which is essentially a department does not necessarily mean an IPO.

i_b_joshua

[dhdave]

I don't like the idea of doing this. It seems like it will create a rift between the company. I have a feeling somthing painful will come of this, like a break away.

On paper, it will allow the Mac team to focus on the Mac and the iPod team to focus on the iPod. Even in a large company like Apple there was bound to be a lot of overlap among departments. It may also allow for some growth now that each division will probably asses it's staffing needs independently. So far so good.

Replacing Rubenstein is Tim Bucher, another NeXT alumnus, who it says here (http://www.digitalhollywood.com/DHLA01/DHLAMondayFour.html) has a BS in electrical engineering and a Masters in computer architecture. His webTV background instrests me. While flawed, it was conceptually one of the ultimate "consumer" devices of the nineties. He owns a company on the side that manufactures a personal server (http://www.mirra.com/). I wonder if we won't see an even greater consumer oriented focus from the Mac unit.

-dh

[macker]

Mitusbishi is a bad example. The big Japanese company groups are best described as 'families'. Mitsubishi Motors is a different company from Mitsubishi Electric and there are others. In fact Mitsubishi Electric owns lots of same brand companies many of which were born from seperate divisions.
For more info on Mitsubishi: mitsubishi.com (http://www.mitsubishi.com/e/group/about.html)


However you are correct, the formation of a new division which is essentially a department does not necessarily mean an IPO.

i_b_joshua

I didn't say or claim there was going to be an imminent IPO. Using Japenese companies is a very bad comparison, due to the multiple layers of ownership and a whole host of other complications.

Apple are a US company. Their share price is very vulnerable to analyst's comments. Some analysts think that they should spin off and IPO the ipod before it's too late. I'm not saying it will happen, but this is an interesting development don't you think? Suddenly the Ipod has its own management, development strategy etc. Give it it's own accounting team, balance sheet, etc and then you can make it stand on it's own two feet. Then you can IPO it.

It's a long way from that, but don't underestimate the pressure that shareholders can exert, especially institutional ones.

[reaper]

The thing that worries me about this, is that Apple seems to be confirming what we have known for quite some time - to Apple the iPod is just as important, if not more so, than their entire line of computers.

I mean, when you think about it, they are putting the chief hardware engineer in charge of the iPod division and leaving the development of the computers to a marketing guy (as mentioned earlier). Furthermore, they are making a new division for the iPod in a company where the only two divisions used to be hardware and software. Think about it... the iPod is now on par with the all other hardware and all other software in the eyes of the company.

Possibly the R&D money will be better spent now, allocating it between two hardware divisions (instead of within one) so that the disparity between money spent on the iPod and mac can be clearly seen and remedied, but I forsee the possibility that this could even further the lack of imagination and innovation put into the mac line as Apple tries to leverage the iPod for all it's worth.

I don't necessarily know whether I think this is a bad thing or not. I like Apple because it is a computer company, not a digitial music company (although I do own an iPod). That being said, if they can make more money from the iPod and possible derivations of it down the road, then that makes more fiscal sense for them. I however, will stay with the Apple because of the mac line and I think a lot of other people feel the same way (hopefully they won't alienate all of us).

I think it's a given that one of Apple's strongest assets is its devotion to the integration of hardware and software. I only hope that they can keep this aspect of the mac line while trying to focus on another, completely different, product in the iPod. I realize that they have already been doing this to a certain extent, but updates to software and mac lines haven't been exactly stellar lately, have they?

I can only hope Apple figures out what type of company they are (computers or digital music) and follows that road. Hopefully, they won't lose sight of their roots of making better computers than the rest of the industry, for a short term gain in a market where innovation and resources will eventually dictate who wins.

- reaper

[singletrack]

I read in one of the business pages that analysts will start looking unfavourably on Apple if they DON'T spin off the ipod. As the market for hard drive players and Apple's share of it, is getting to it's peak then they will generate the most from an ipo if they do it sooner rather than later. The market would go nuts for an ipod ipo, was the general feeling. Apple could make a killing to secure the medium term future of the company. It's inevitable that it's market share in the music space will get eroded in the next 2-3 years.

Quite possible.

In other news, Napster UK launched today..

http://www.theregister.co.uk/2004/05/20/napster_uk_live/

And it was all over the lunchtime BBC news.

[mrkstu]

...
I mean, when you think about it, they are putting the chief hardware engineer in charge of the iPod division and leaving the development of the computers to a marketing guy (as mentioned earlier). Furthermore, they are making a new division for the iPod in a company where the only two divisions used to be hardware and software. Think about it... the iPod is now on par with the all other hardware and all other software in the eyes of the company.
...
- reaper

Actually, this is probably for the best. The Mac doesn't have technical problems- its R&D is proceeding well, new apps are appearing constantly (from Apple and others), and IBM will get its processor act straightened out. The problems with Macs are marketing decisions- so Cook is the right guy for the job.

The iPod on the other hand is a whole new kettle of fish- I can see why a hardware guy wants in on the "digital lifestyle" division. And it ain't just gonna be the iPod. You don't create a division for one or two devices- you create whole familes of devices. This is the expression of the Sony-fication of Apple- and it doesn't bother me in the least as long as those assigned to the Mac hardware and software divisions are doing there jobs. The one thing that Steve has believed in all along is spending money to make money, so I don't think any division is going to be starved for resources.

[agentmouthwash]

I have a feeling that Apple is going to spinoff iTunes and the Ipod into one company and of course be the majority shareholders for one simple reason:
APPLE CORPS the Beatles Music company.

Just to get them off their back.

[mrkstu]

I have a feeling that Apple is going to spinoff iTunes and the Ipod into one company and of course be the majority shareholders for one simple reason:
APPLE CORPS the Beatles Music company.

Just to get them off their back.

Only one problem with that - I think if you do a spin off and keep a significant stake you are hit with all kinds of nasty taxes- but if you spin off a 100% you are not... IANAIPOSOEAA (I Am Not An IPO Specialist Or Even An Accountant)

[Porchland]

I was wondering if they would do this... The only logical next step would be to spin off the iPod & iTunes into another company (kind of like they did with Claris) if they keep becoming more and more popular.


Whoa! Did you see the earnings last quarter? iPod IS the company. I hope that this is nothing more than a streamlining of responsibilities for P&L and R&D purposes.

Mac and iPod are NOT the functional equivalent of Proctor & Gamble having Tide and Crest. Mac and iPod are yin and yang, two product lines that should genuinely help each other the next few years. In particular, Apple should be lasered in on using iPod to help make Mac a more consumer-oriented product with greater market share. (And I know Mac is never going to be a 15-20 percent market share company, but going from 4 to 8 is double the Macs. That's a good thing.)

Mac and iPod have great brand identity right now, and I sincerely hope this demarcation of divisions will not distract Apple from the prize.

[iggyb]

I was wondering if they would do this... The only logical next step would be to spin off the iPod & iTunes into another company (kind of like they did with Claris) if they keep becoming more and more popular.

It's REALLY nice being the king! :D

That doesn't seem to work for Apple. They brought Claris back in to change ClarisWorks (which was a good program) to AppleWorks (the forgotten program). FileMaker is a spin-off of Apple, and (although they just released an update) they seem behind the curve as well.

[Porchland]

I think that iTunes will stay with the iPod in development. You know they develop each side by side and they both work off of eachother...Hell, they share their own section on Apple.com... iPod + iTunes...I think it will be this way for a while.

I think a logical progression -- maybe not the next one but sometime down the road -- is that iTunes will eventually become iMedia (or some other iContent-ish brand) and continue to be the engine for the iPod. With the addition of music videos and movie trailers to iTunes, I've got to think there's more content and video-oriented features for iTunes on the way.

Movies on your iPod seems to be a logical end point, but Steve-o continues to say no video on itsy-bitsy screens. An Apple branded portable video-player wouldn't surprise me, particularly since the portable DVD players have moved into the $300 range. And Apple could push content to push sales, just as with the iPod. New this Tuesday, last week's "Soprano's" for $3 or whatever.

Who knows.

[Lepton]

Speculation: iPod is taking more and more of a chunk of our time, especially with the development of the video iPod. So let's split it out. The new section can work on the iPod and video iPod hardware, iTunes music and music video sales, and getting the devices into non-Apple retail stores. It can also develop a new logo and brand as part of our settlement deal with Apple Music Corps. ;)

[Porchland]

But it's still a division of Apple. I don't see how making it a separate division changes that situation. I assume the iPod will continue to have the Apple logo on it and will continue to be sold on Apple's website. And I assume Steve Jobs will continue to announce updates to it in his keynotes.



I haven't really researched what the Apple-Beatles conflict comes down to -- trademark, breach of some use agreement, etc. -- but it wouldn't be unusual for a company to control another company that uses its brand. (Franchising is the classic example, but I'm talking about Company A controlling an A-branded Company B.)

Time Warner Entertainment, for example, used to be (is still?) owned by Time Warner and various minority owners. Sometimes it's a result of a complicated acquisition; sometimes it's the result of a financial decision to maximize profits by creating a controlled spinoff or "a kept house."

[pjkelnhofer]

There is no new company. Apple is simply reorganizing the way the look at things. I agree the person who said that the main reason could be that the iPod is cross-platform (maybe iTunes for Linux will be out soon :)).

It will simply allow the people who work on iPods to focus on iPods and the people who work on Macs to focus on Macs.

Could the iPod division someday become it's own company? Sure, but why would it make sense for Apple to spin off it's most profitable division into a seperate entity? Too make a large chunk of money at a one time IPO? Doesn't make sense to me.

Would Apple have turned a profit the last few quarters without the iPod?

[pjkelnhofer]

I haven't really researched what the Apple-Beatles conflict comes down to -- trademark, breach of some use agreement, etc. -- but it wouldn't be unusual for a company to control another company that uses its brand. (Franchising is the classic example, but I'm talking about Company A controlling an A-branded Company B.)

Time Warner Entertainment, for example, used to be (is still?) owned by Time Warner and various minority owners. Sometimes it's a result of a complicated acquisition; sometimes it's the result of a financial decision to maximize profits by creating a controlled spinoff or "a kept house."

I don't think it is odd at all for a company to control another company with a different brand. Usually though it takes place when a company buys another company and keeps the old brand name since consumers already have a connection with it (ie, Coca-Cola bought Minute Maid in the 1960's, but the Minute Maid brand name stills exists. If you read a carton of their OJ it has the Coca-Cola logo on it somewhere).

[Steven1621]

one could say that the huge increase in profit the ipod has brought apple called for a little more attention in the company scheme

[BoRegardless]

Apple may be preparing for moving all music operations to a corporation which does NOT have APPLE in its corporate name or product names.

Gotta know what to do when you fold-em.

[bar italia]

I'm not sure how much exactly this will change things, but it is definitely good to have this departmental focus and mindset, so hopefully Apple will prosper from it. I guess only time will tell!

Why would it make sense for Apple to spin off it's most profitable division into a seperate entity? Doesn't make sense to me.

[bar italia]

one could say that the huge increase in profit the ipod has brought apple called for a little more attention in the company scheme

One could say that...hmmmm. :eek:

[whooleytoo]

Could the iPod division someday become it's own company? Sure, but why would it make sense for Apple to spin off it's most profitable division into a seperate entity? Too make a large chunk of money at a one time IPO

The iPod's being IPO'd?? ;)

[SiliconAddict]

Why would it make sense for Apple to spin off it's most profitable division into a separate entity? Doesn't make sense to me.


*Sighs* Apple isn't spinning ANYTHING off. They are creating a new internal division for the iPod. Everything stays in-house. Everything is controlled by Apple. All profits remain Apple's. Nothing is changing other then Apple is doing some house cleaning to keep its business in order that and as others have said possibly to prep itself for the legal ramifications of Apple Music winning a lawsuit. Easier to spin-off a division into its own company then a product or in this case a series of products. Apple might be prepping for a worse case scenario. :confused:

[alandail]

some of the posts on here are surprising I think. Isn't it clear the iPod is very important to Apple? What is wrong with making money from the iPod? How does that hurt the Macintosh at all? Making more money is a good thing for Apple, right?

I see the split as good for both. It would have been easy to let the Mac just ride the iPod's coattails as the iPod was clearly boosting Apple's bottom line. Now the mac division has to stand on it's own, which is going to have to make it more aggressive. build market share, build more killer apps. I think putting the marketing guy in charge is a clear indication that they are finally going to try to grow market share. Now is the time - the transition to OS X is behind us (well, there are some people still using 9, but not the new customers), the app base for X is strong, the OS is mature, there is a multi-year window while Microsoft works on Longhorn, etc.

As for the iPod, I see this move as a clear indication that they are going to expand their product line (otherwise why is their industrial design guru in charge) and that they are going to be aggressive at keeping their 50-70% market share while the market itself grows.

[ClimbingTheLog]

Replacing Rubenstein is Tim Bucher, another NeXT alumnus, who it says here (http://www.digitalhollywood.com/DHLA01/DHLAMondayFour.html) has a BS in electrical engineering and a Masters in computer architecture. His webTV background instrests me. While flawed, it was conceptually one of the ultimate "consumer" devices of the nineties. He owns a company on the side that manufactures a personal server (http://www.mirra.com/).

Where did you get Tim Bucher? The press release said Tim Cook.

Tim Cook is a maketing guy at Apple and that has me very concerned.

Remember, it was the marketing people at Chrysler who were adamantly against the Caravan in the late 70's because none of their market research showed that anybody would want a minivan - noone was asking for it.

You need a visionary at the top to produce insanely great products. Marketing people produce Microsoft products.

[mklos]

Apple is focusing on what works. IBM is really dropping the ball with the G5 chips so the future still looks to be in Music. There is enough of a base established to keep the company profitable, but Apple is once again having to rely on more products to keep it afloat. It was the iMac four years ago.

Don't be so sure that Apple's future is the music. Apple is still cranking out good products, still producing profits, and has well just ok sales. Some things that Apple needs to do is get this new PowerMac and iMac released and keep the prices as low as they can possibly get them and still make a profit. We as mac fans all know why Macs are more expensive than PCs, but its getting to a point where as PC prices continue to fall, Apple's prices are staying the same. That will create a problem for Apple as people won't see the value in paying more for a computer. I also hope that IBM catches up with Intel with their clock speeds by the end of next year with the PPC980 (possibly called the G6?). Intel is kind stalled out right now and this is the perfect opportunity for IBM to really catch up with Intel.

[pjkelnhofer]

The iPod's being IPO'd?? ;)

I don't think it would ever happen, if Apple ever didn't spin the iPod division off into it's own company, it would probably be a wholly owned subsidiary own Apple Computers and exist mainly to take the Apple brand off iTunes and iPod so that Apple Records could stop suing them.

That way Apple keeps all the money and the Apple Records people cannot get their hands on it.

[SeaFox]

You need a visionary at the top to produce insanely great products. Marketing people produce Microsoft products.

Exactly! This is why this bothers me. With the iPod more a consumer product that the Mac (and already very technically advanced) should the heads have been set up the other way around?

[pjkelnhofer]

Where did you get Tim Bucher? The press release said Tim Cook.

Tim Cook is a maketing guy at Apple and that has me very concerned.

Tim Cook is in charge of the Mac division. Tim Bucher is in charge of Mac Hardware Engineering.

from the Reuter's story:
Timothy Cook, head of Apple's worldwide sales and operations, will lead a newly organized Macintosh division, Apple said. Tim Bucher, now in charge of Macintosh system development, will head up the Mac's hardware engineering.



You need a visionary at the top to produce insanely great products. Marketing people produce Microsoft products.

Or maybe the marketing guy will look at the PC marketplace and say, "We need a $500 option that lives up to the Mac name."
Enter the headless iMac!

[Bhennies]

I think it's probably a good thing. But by saying this I'm giving apple the benefit of the doubt. They are trying to separate their R&D and business models which will most likely lead to an increase in productivity for computers as well- I think we all know that their computer line has taken a hit due to the ipod and ipod mini's success (where are the g5's? LCD displays? imacg5 ? etc. etc.)

[mrsebastian]

this is a darn good thing! this will help different parts of the company keep focus on their specific products for apple. perhaps even some internal competition to see who can out do the other to make better apple products.

[cubist]

so when do we see www.ipodrumors.com start up?
someone owns it.

Hey, yeah! MacRumors can't carry iPod rumors anymore!

[SiliconAddict]

The iPod's being IPO'd?? ;)

I don't think it would ever happen, if Apple ever didn't spin the iPod division off into it's own company, it would probably be a wholly owned subsidiary own Apple Computers and exist mainly to take the Apple brand off iTunes and iPod so that Apple Records could stop suing them.

That way Apple keeps all the money and the Apple Records people cannot get their hands on it.

hu·mor (hyoomer)


The quality that makes something laughable or amusing; funniness: could not see the humor of the situation.
That which is intended to induce laughter or amusement: a writer skilled at crafting humor.
The ability to perceive, enjoy, or express what is amusing, comical, incongruous, or absurd. See Synonyms at wit1.
One of the four fluids of the body, blood, phlegm, choler, and black bile, whose relative proportions were thought in ancient and medieval physiology to determine a person's disposition and general health.


smart-ass (smärt as)

n. Slang

A smart aleck. See: SiliconAddict ;)

[whooleytoo]

I don't think it would ever happen, if Apple ever didn't spin the iPod division off into it's own company, it would probably be a wholly owned subsidiary own Apple Computers and exist mainly to take the Apple brand off iTunes and iPod so that Apple Records could stop suing them.

That way Apple keeps all the money and the Apple Records people cannot get their hands on it.

(aside from the fact that my original post was just a play on words/letters.. :) )

I doubt it's that simple. I doubt even spinning iPod/iTMS off now would stop the lawsuit, Apple Corps will still likely claim Apple Computers violated their previous agreement and continue the suit. It might strengthen Apple Computers' hand slightly, true.

[five04]

Let's see. You want Apple to concentrate on improving Macs rather than iPods, yet you just put the head of hardware on the iPod's team...

Meanwhile, you have a marketing guy heading a computer that has always been about quality rather than marketting to the mass consumer.

I see more advanced iPods in the coming years, along with cheaper Macs of inferior build quality rushed out of development to meet "buying seasons".


:(

exactly my thought. i've got a love/hate relationship with the ipod these days. it seems like all apple cares about is them. also the apple name is being associated with ipod instead of their computers. if you say apple to most poeple they'll think ipod long before they think computer. kind of sad.

[pjkelnhofer]

(aside from the fact that my original post was just a play on words/letters.. :) )

I doubt it's that simple. I doubt even spinning iPod/iTMS off now would stop the lawsuit, Apple Corps will still likely claim Apple Computers violated their previous agreement and continue the suit. It might strengthen Apple Computers' hand slightly, true.

Actually, I thought the pun aspect of the original post was quite funny, and I didn't mean to single you out, I was responding to the people who think they really are going to be buying iPod stock.

It would not help Apple Computers in the current lawsuit, but it would help prevent future lawsuits. Of course, it doesn't say anything about GarageBand, iTunes, etc. Which would still be likely sold under the Apple name and would be music related.

I actually don't think Apple would ever split off iPods into a seperate company. I suspect they will simply settle out of court (again) with Apple Records and then in about 10-15 they will introduce some new product that Apple Records thinks is infringing on the new agreement and we will go through this whole thing again.

Note there are many other record labels with Apple in the name they could after, but they are not dummies, they go after Apple Computers, because they have money to take.

[whooleytoo]

I actually don't think Apple would ever split off iPods into a seperate company. I suspect they will simply settle out of court (again) with Apple Records and then in about 10-15 they will introduce some new product that Apple Records thinks is infringing on the new agreement and we will go through this whole thing again.i]

You cynic.. ;)

Actually, I wouldn't be surprised if Apple decided to settle this issue once and for all - by trying to win in court; or a large once-off, out-of-court settlement; or just buying Apple Corps.

The music business is far too important for Apple now, to have a dispute still looming over their trading name, logo and business type.

[pjkelnhofer]

You cynic.. ;)

Actually, I wouldn't be surprised if Apple decided to settle this issue once and for all - by trying to win in court; or a large once-off, out-of-court settlement; or just buying Apple Corps.

The music business is far too important for Apple now, to have a dispute still looming over their trading name, logo and business type.

I know that Sony actually owns the Beatles music catalog (they bought it from Michael Jackson). Does anyone know who owns Apple Corp (I assume McCartney, Ringo, and the estates of Lennon and Harrison)? I know that the Beatles are one of the top selling artist's every year. I wonder how much Apple Corp. makes in a year.

[socbyset]

few interesting things about this:

snip
2) Does this suggest the splitting of focus for apple computer here, away from a computer company that does a music player, which happens t obe damn good, to a company where computers are just one division and thus less focus. iPod gets equal focuc, r&d, etc as the computer division



I think that with the huge success that the ipod has become it is inevitable that it would take some focus away from the mac division. I would argue that in terms of "focus" what they're doing now is the best solution. Each product line is important enough to need a dedicated organizational structure and seperate strategy.

As for R&D I think that the ipod is certainly profitable enough that it more than finances its own R&D.

The best thing about this, I think, is that this probably seperates out the finances much better that they were before. That way R&D, other expenses etc. aren't in one big pot, so it is easier to see exactly how profitable each line is.

[7on]

Where did you get Tim Bucher? The press release said Tim Cook.

Tim Cook is a maketing guy at Apple and that has me very concerned.

Remember, it was the marketing people at Chrysler who were adamantly against the Caravan in the late 70's because none of their market research showed that anybody would want a minivan - noone was asking for it.

You need a visionary at the top to produce insanely great products. Marketing people produce Microsoft products.

The way I see it, computer nerds run MS and marketing people run Apple.
Computer nerds, being that they don't know what the consumer wants and feel fine tweeking the OS to their delight
While marketing people look at something and try to make it easier to use. I've never thought of Steve Jobs as a computer person. I've always saw him as the sly marketing guy who could make ice cream sellable to eskimos. Hopefully this marketing guy will see what the consumer wants, and get Apple out there with the same recognition as Dell. Hell, turn a TV on and within 10 minutes you'll find a Dell commercial. It needs to be that way with Apple, and I don't mean iPods.

[tex210]

I'll have to read the rest of the posts when I get home... but the talk of a "rift" makes me think that the iPod o.s. is making a huge transition! I think it's the birth of a new era! Mobile computing is the future, but it needs to be smaller than a powerbook. You know, like an iPod!

[ClimbingTheLog]

The way I see it, computer nerds run MS and marketing people run Apple.
Computer nerds, being that they don't know what the consumer wants and feel fine tweeking the OS to their delight
While marketing people look at something and try to make it easier to use.

Wow, that's exactly the opposite of what people who work/have worked for Microsoft and Apple have related to me (I've worked for neither). At Microsoft the marketing people literally come up with lists of what's going to be in the next version and when it's going to ship. Microsoft Research isn't tied like that but they're not working on actual products.

At Apple the R&D lab (ATG) was disbanded. Each product group is responsible for doing some of it on their own. The developers have some freedom to be creative and make a system that they'd like to use. It's possible that Apple marketing came to R&D and asked for the Genie Effect on the Dock, but it's much more likely to me that a creative programmer thought it would be neat and others agreed. Noone in marketing said, "what would happen if we treated the entire screen raster as an OpenGL texture." But they came up with a name for it and sold it.

At Apple, Marketing comes down and says, "We need to support more printers" and "We need printer support that will scale to Enterprise workgroups" and R&D says, "OK, we'll switch to cups for Panther". Then the UI guys figure out how to make cups usable for Grandma. From the spec the programmers make it happen (but the programmers aren't forbidden from suggesting enhancements).

At Microsoft Marketing comes in with photoshopped mock-ups of what the screen is going to look like and hordes of contract and h1b programmers implement the spec. At least that's what I've been told. (The MacBU is somewhat immune from this treatment)

If Microsoft was indeed run by CS geeks, don't you think we'd have something a bit more solid by now? Linux is what you get when you follow that model.

What it really comes down to is corporate culture and the kind of people each culture attracts.

If I had to sum it up:
Microsoft - Marketing
Linux - Geeks
Apple - Collaboration

I'd like someone from inside either corporation to correct me, but this is how real employees have related it to me.

[bobringer]

Apple is going to spin off the iPod to protect itselft from Apple Corps?

Man, there must be some good drugs out there. Worst case scenario... Apple Corps gets everything they want (short of stopping Apple from leaving the music business)... there is NO WAY Apple will have to pay enough to make a dent in ONE QUARTER worth of iPod revenues.

I guess this is the "easy" topic to discuss? It hadn't even come to mind when I posted about it on my site (a longer post on my site will probably be posted tomorrow).


Who ever said Tim Cook was a marketing guy? He is NOT a marketing guy... Tim Cook is an OPERATIONS guy (who is also head of Sales at Apple for some reason, would have thought Schiller would have this role... I digress). Tim Cook is the guy that streamlined Apple's operations when they stole him from Compaq. Greatly increased their inventory turns, cut costs, improved quality, etc, etc, etc... I remember very well watching the operational changes that happened at Apple when he came on board. He is NOT a marketing guy. Look at his background.

Still, I would think his new position requires a technical visionary... which he is not. I mention this on my site too.

Bizarre...

[JOD8FY]

I think this is good new for Apple. Now that there is a division working only on the iPod, we will start to see some major improvements. Do you think that now Apple can focus more on its other machines and release product updates more frequently? This would be great!

One thing I'd like to see in an iPod is the ability to transfer songs via bluetooth back and forth between the iPod and iTunes. Of course, then there's the issue of transfer speeds, but Apple would come up with something, I'm sure.

Best wishes,
JOD8FY

[doogle]

I am going to blow my own trumpet a bit (forgive my indulgence).
Posted 02/25/04, Forum: Napster at 5 Million Songs

"Its all about music right now. I have suggested it in the past (and been laughed at - go ahead please - I like entertaining) it may not be an impossibility to see iTunes (iTMS) and iPod as a separate Apple company - break the Apple brand from the devices and software and place it under iTunes/iPod and you have a new business (just look at the lack of Apple logo in the Pepsi ad and Apple-less HPod)"

...its on the horizon!

[mvc]

This is very good news because Apple are recognising that their major future growth area for computing is in the handheld / portable /device arena.

Home PC's are a mature technology, but in fact they are due for replacement by a superior paradigm which has not yet emerged but will probably look more like appliances and furniture than your traditional PC.

The only reason we have stand alone home PC's at all is because the display and communications technology twenty years ago was NOT integrated wirelessly or running at a high enough quality. TV's were too low resolution to use for word processing, even though we did use them in the early days with commodore 64's etc for games. So instead we adopted business technology and tried to make it fit the home, but it has always been a poor fit.

Everthing with electricity running through it can and will be a computer soon, and will talk to everything else wirelessly, many already do, so why buy a stand alone desktop PC in 2010?

All you will need is your wireless keyboard/tablet/mouse/gamecontroller/voice control/gesture control or whatever and whichever screen/speaker combination is nearest to you will automatically display your data/game/video.

Computing will become even more of a commodity, and the devices will be like appliances, and will have to work together with other manufacturers devices like appliances do now. This will result in Apple Computer coming increasing to resemble Sony.

But in the area of portable devices, the needs are very different. They require far more engineering and interface panache, as the natural size and screen/power/weight limitations demand elegant solutions. This is the prime reason why the iPod is successful, and this has always been Apples strength.

They didn't brand it an iPod just to make music players, expect iPods to become a wide range of well designed portable computing/media/communications devices over the next 5 yrs

And expect the iMacs successor to resemble something more like a home theatre component. Then it really will be a headless iMac ;-)

[iMeowbot]

I don't see this happening.. Today the APPLE stamped on the products is the thing that sells them so well (is it not?).

I wonder about that. In two separate recent conversations with people that touched on that kind of stuff, the people I was talking to knew about or wanted iPods, but when I mentioned that I use Apple computers the response both times was along the lines of "wow, I remember Apple from a long time ago, are they still in business?"

True, two people don't make a trend, but I thought the disconnect was pretty interesting.

[applefans]

Reuters reports (http://www.reuters.com/newsArticle.jhtml?type=technologyNews&storyID=5198496) that Apple has spun off iPod development into its own division within the company.

The move was made in response to an internal company-wide email from Apple CEO Steve Jobs. The new division will be headed by Jon Rubenstein, current leader of hardware engineering efforts. The division also makes way for a "Macintosh" division to be headed by Timothy Cook, current head of Apple's worldwide sales and operations, according to Reuters.

Quoted from an Apple spokesperson:

Since its introduction in October 2001, more than 3 million iPods have been sold.

The next logical step is to spun off ipod and iTMS into a separate company that apple control, then, the guy from apple corp (a la Paul McCartney et al) may stop sueing Apple for breach of contract forever. Isn't that sound logical?

The new company may even have an IPO, I'm interested to invest, give me a chance! :D

[applefans]

You cynic.. ;)

Actually, I wouldn't be surprised if Apple decided to settle this issue once and for all - by trying to win in court; or a large once-off, out-of-court settlement; or just buying Apple Corps.

The music business is far too important for Apple now, to have a dispute still looming over their trading name, logo and business type.

The next step: IPO'd the ipod division, then use the money to buy Apple corp, and put the whole Beatles catalogue in iTMS and only iTMS :p

[Windowlicker]

I wonder about that. In two separate recent conversations with people that touched on that kind of stuff, the people I was talking to knew about or wanted iPods, but when I mentioned that I use Apple computers the response both times was along the lines of "wow, I remember Apple from a long time ago, are they still in business?"

True, two people don't make a trend, but I thought the disconnect was pretty interesting.

so it seems like I have to change my mind a little. still, if it comes to computers the apple logo is the thing. people will know they get easy-to-use quality when they see this logo. seems like its not quite the case with iPods.

[dontmatter]

so it seems like I have to change my mind a little. still, if it comes to computers the apple logo is the thing. people will know they get easy-to-use quality when they see this logo. seems like its not quite the case with iPods.

eh, who knows? we're mac fanatics we can't evaluate the real world. My experience is, yeah, a good portion of people go "mac? huh?" and a good portion of people go "yeah, mac. they got the whole hipster thing going, and good hardware and software...but, eh, not for me"

[SiliconAddict]

Apple is going to spin off the iPod to protect itselft from Apple Corps?

Man, there must be some good drugs out there. Worst case scenario... Apple Corps gets everything they want (short of stopping Apple from leaving the music business)... there is NO WAY Apple will have to pay enough to make a dent in ONE QUARTER worth of iPod revenues.


Dude you know nothing about what they would ask for. They may very well ask for a cease and desist as in:
"Yo Apple. We told you to not dink in the music industry. Stop it now."

Depends on how stupid they are about this. Spinning off iTunes and the iPod could very well succeed in distancing the products away from Apple to the point that Apple Corps wouldn't have a case against them.

Or what if Apple corps asks for 30% of Apple's iPod and iTunes earnings? Do you think 30% wouldn't hurt like hell?

This very well could be a strategic move on Apple's part. Not saying it is or it isn't but it’s a possibility.

[SiliconAddict]

The next logical step is to spun off ipod and iTMS into a separate company that apple control, then, the guy from apple corp (a la Paul McCartney et al) may stop sueing Apple for breach of contract forever. Isn't that sound logical?


Only if they spin off iTunes and iTMS with the iPod. Both of which are probably giving Apple Corps more of a fit then the iPod. iPod is simply a music player and portable hard drive. It could be argued that the Mac does the same functions as the iPod. iTunes and iTMS provides content and that is probably what is irking Apple Corps. Also correct me if I'm wrong on this but hadn't the iPod been out for a year and there wasn't any legal wrangling with Apple Corps? It wasn't until iTMS debuted when the talk of lawsuit occurred.

[socbyset]

Dude you know nothing about what they would ask for. They may very well ask for a cease and desist as in:
"Yo Apple. We told you to not dink in the music industry. Stop it now."

...

This seems unlikely to me. That would be assume that they would rather shut down itunes, basically out of spite, than settle for millions of dollars. My understanding is that the whole point of all this is to extract money from Apple. I mean, they aren't really losing anything from Apple being in the music business. They don't sell any "apple"-branded product or anything.

[whooleytoo]

Isn't it odd though, probably the top hardware engineer in Apple (Rubenstein), heading a division with just two products - iPod and iPod mini. Both of which are built mostly of off-the-shelf components with no ASICs from Apple (that I'm aware of).

Surely, this must be the clearest sign yet that Apple has plans for the iPod line beyond just music.

[iMeowbot]

Isn't it odd though, probably the top hardware engineer in Apple (Rubenstein), heading a division with just two products - iPod and iPod mini. Both of which are built mostly of off-the-shelf components with no ASICs from Apple (that I'm aware of).
If you look at the histories of Rubenstein and Cook, both have been operations executives over the years in a variety of roles. Cook ran the supply chain operations at Compaq, then went to head up ops at Apple before the marketing responsibility was added. Rubenstein was heading up overall ops at Firepower between his NeXT and Apple stints.

The assignments make some sense to me. Rubenstein comes from more of a startup culture, and that suggests a good fit with a young product line like iPod. Cook comes from more of a big company background, and has exactly the sort of experience the computer division needs to address one of its major weaknesses, getting product through the system and out the door.
Surely, this must be the clearest sign yet that Apple has plans for the iPod line beyond just music.
There's an opportunity for a better focus to go into both divisions here, which is great. Growing the two product categories more independently has been due for a while now.

[bar italia]

It hadn't even come to mind when I posted about it on my site (a longer post on my site will probably be posted tomorrow).

I'm giddy with anticipation!

[whooleytoo]

The assignments make some sense to me. Rubenstein comes from more of a startup culture, and that suggests a good fit with a young product line like iPod. Cook comes from more of a big company background, and has exactly the sort of experience the computer division needs to address one of its major weaknesses, getting product through the system and out the door.

I think that's a fair assessment of their roles. Rubenstein as the guy at the heart of new product development is fine - great for the iPod division! It's the Cook bit that worries me. He's more of a cost/job cutter than someone who's going to provide/inspire/create innovation from the Mac division.

[multifinder]

There's an interesting take on the reorg in this article:

http://www.pbs.org/cringely/pulpit/pulpit20040520.html

He's saying this could be a prelude to Apple getting out of the business of making Mac hardware--of course, in '97 things looked even worse and the demise of the Mac platform has been predicted (wrongly) a million times before, but he raises some good points. Why slug it out in a business where you have 3% of the market and in even your former strongholds (like education) cheaper Wintel hardware is eating your lunch? Why not become a high-end consumer electronics company, like Bose or a high-end profitable version of Sony, which is the direction the iPod is taking them? How much higher would Apple's P/E ratio be if it only sold iPods? Although with Steve's hatred of the clone years, I can't see them doing what Cringely mentions and scrapping h/w and just selling OS X for Intel.

The True Faithful will always buy Mac at any price, but dude, my wife is getting a Dell laptop because she needs to do work from home, too many websites "don't work right on Macs (meaning Safari)", and little things like hitting Command-C versus Control-C drive her nuts. For most people, the Mac vs. Windows difference isn't big enough anymore to justify the disadvantages of using one in an IE/Wintel centric world. I don't see Mac market share going anywhere but down no matter what new PowerMac or iMac revs they come out with, unless it's really something that appeals to the mass market, like a $999 headless iMac with a G5 that doesn't make you throw out your old monitor like the current crop of iMacs.

It's impossible to predict the future, but with PCs showing up in more and more formerly Mac-only niches and Linux poised to regalate the Mac to number 3 in the computer world, things don't look good...they'll take my PowerMac from my cold, dead hands, but here's hoping by the time it gives up the ghost I'll still be able to buy another Mac to replace it with.

[Doctor Q]

The True Faithful will always buy Mac at any price, but dude, my wife is getting a Dell laptop because she needs to do work from home, too many websites "don't work right on Macs (meaning Safari)", and little things like hitting Command-C versus Control-C drive her nuts.I wonder if some people who frequent PCs and are occasional Mac users would like to have a hack to reverse the Control and Command keys? But I shudder to think how confused a regular Mac user would get!

[pjkelnhofer]

There's an interesting take on the reorg in this article:

http://www.pbs.org/cringely/pulpit/pulpit20040520.html

He's saying this could be a prelude to Apple getting out of the business of making Mac hardware--of course, in '97 things looked even worse and the demise of the Mac platform has been predicted (wrongly) a million times before, but he raises some good points.

I was just about to post the same article. He really does have some good points, but I think he does miss one key thing about the iPod. It is the only truly crossplatfrom device (and software when including iTunes) that Apple makes. So why have it lumped into the Mac division when it needs to work equally well with Windows.

I also agree that it seems odd to have an entire division with two products (iPod and iPod mini). I would not be suprised to see some more high-end "digital lifestyle" products come from Apple. I am not even going to list any ideas as to what they may be (for fear of getting trashed).

As far as Cook being labelled a "marketing guy" by a lot of the posters here. That may be just what Apple needs. As good as the iPod TV commercials are, I do not really think that is what is fueling the popularity. It is simply the best digital music player on the market. While it may be pricey (I still can't justify $250 for a walkman), it is in line with the prices of similar devices.

Let's face it, the "switch" campaign failed to get switchers. Apple has what may be it's best operating system ever, fantastic hardware and still is losing market share because many people look at it as overpriced. Maybe the new Mac division will realize it is not enough to make a better computer. They need to make a better computer that cost the same as the Windows you can get at Dell, Compaq, etc. This means something at the $500 price point. Maybe that is something a former Compaq guy will bring to the table.

It could be a 1 GHz G4 with 128 MB of RAM, a 40 GB HD and no monitor, but it would get more people to at least look at the Mac (then they convince them to upgrade everything and they will end up spending the $800 they would have on the combo-drive eMac). However, if they never saw the (starting at) $499* sign, they would not have walked into the Applestore in the first place.

[pjkelnhofer]

I wonder if some people who frequent PCs and are occasional Mac users would like to have a hack to reverse the Control and Command keys? But I shudder to think how confused a regular Mac user would get!

I go between Mac's and PC's throughout the day, both at home and at work. I although I do occasionally mix up the two keys, 99.9% of the time, I have no problems.

[paulsecic]

Why not? Makes sense.
Hopefully this means more frequent computer updates.

[paulsecic]

This sounds like a great idea. I don't think, however, that the logical next step is for the music company to spin off entirely. I see this as more of internal office improvements, let the company get back to it's focus on computers, which seems to have fallen behind as of late, while still allowing for the iPod to move forward. They wouldn't spin off entirely because the apple name on the iPod is still a big strategy for PC->Mac switching.

One of the arguments i use with people whom i am trying to get to switch is i have them try out my iPod and iTunes (or they have it themselves already) and say, "If these are so easy yet so powerful, imagine the operating system. It's the same! Every program on the machine runs like itunes and ipod software, and every bit of the machine itself runs like an ipod: with form, fun, and function."

Mark
It does. Every program looks & feels the same, unlike Gate's slop!

[multifinder]

I go between Mac's and PC's throughout the day, both at home and at work. I although I do occasionally mix up the two keys, 99.9% of the time, I have no problems.

I don't either, and I have my work laptop literally right next to my Mac--but I think for people who spend a less equal amount of time on the two (lots of time on a PC at work, Mac at home for browsing/etc) it's a bigger deal. It'd be nice if Apple had thought a little less different in this case...I think the little differences like this aren't better or worse but are different from what PC people are used to drive away potential switchers. A "Windows compatibility mode" which would put close on the right instead of the left of the titlebar and Control and Command swapped might be good for people like that...(kind of like how MS Word used to have a "WordPerfect mode" with the same keyboard shortcuts and the white-on-blue text). I don't see it happening though, not from Apple at least...

[~Shard~]

I am going to blow my own trumpet a bit (forgive my indulgence).
Posted 02/25/04, Forum: Napster at 5 Million Songs

"Its all about music right now. I have suggested it in the past (and been laughed at - go ahead please - I like entertaining) it may not be an impossibility to see iTunes (iTMS) and iPod as a separate Apple company - break the Apple brand from the devices and software and place it under iTunes/iPod and you have a new business (just look at the lack of Apple logo in the Pepsi ad and Apple-less HPod)"

...its on the horizon!

So what do you want, a cookie? ;) :p :cool:

[weldon]

It's the Cook bit that worries me. He's more of a cost/job cutter than someone who's going to provide/inspire/create innovation from the Mac division.
And you think Apple's highest ranks needs another strong-willed, creative visionary that insists on putting his own personal stamp on the development of new products in the Mac division? ;)

I know that's not what you said, but I think it makes a lot more sense to put someone with some discipline and operational expertise in this post and let Jobs be the visionary that he wants to be. It sounds like Jobs has picked someone to watch over the bread-and-butter business of Apple that will complement his abilities and style.

[weldon]

Here's my take on the new division...

Apple is riding a huge wave of success with the iPod and iTMS. The future success of the product is going to be tied to further market penetration to people that have never had an MP3 player. The key to generating these new sales is going to be marketing and promotion partners like Pepsi, AOL, HP, the record companies, artists, etc. These heavyweight partners want to talk to an executive that can make things happen in a big dollar marketing agreement. The person in charge of iTunes and iTMS needs to be a Sr. VP and that person also needs the time to work on these relationships. Therefore, iPod needs to be its own division so that Sr. VP isn't splitting duties/time working on anything else.

I think the Apple Corp. lawsuit is a red herring. Apple will still be found in breach of contract even if they spin off iPod into a different brand because they have been operating for a couple years under the Apple name. Sure, they can spin it off as part of a settlement agreement or a court-ordered injunction to stop selling music under the Apple name. No need to take that step, or really prepare for that until forced to do so.

Of course, it would also be great if Apple announced that it was buying Roku Labs and folding that company into the new iPod division.

[bobringer]

Isn't it odd though, probably the top hardware engineer in Apple (Rubenstein), heading a division with just two products - iPod and iPod mini. Both of which are built mostly of off-the-shelf components with no ASICs from Apple (that I'm aware of).

Surely, this must be the clearest sign yet that Apple has plans for the iPod line beyond just music.

You got it...

That was the first thing I thought.

You didn't mention it but I saw a previous post where you mentioned personal reasons for disliking Tim Cook. I understand your position in your situation but knowing Apple, do you think Cook told you guys what he thought was correct at the time?

[doogle]

You got it...

That was the first thing I thought.

You didn't mention it but I saw a previous post where you mentioned personal reasons for disliking Tim Cook. I understand your position in your situation but knowing Apple, do you think Cook told you guys what he thought was correct at the time?

This is the interesting bit - the iPod has only a small percentage of Apple in it (strictly speaking) I am not even sure that Ives designed its look - I would not be surprised if he didn't (it does not have his touch visible)...this could mean more devices utilizing other manufacturers etc. and perhaps avoid some of that classic Apple rigidity in moving fast..:confused:

Don't forget the iPod and iTunes are the best Trojan Horses for infiltrating the Windows world and Steve still knows it.

[doogle]

As articles are stating* Sony is too big to move fast (and smart) enough to respond to the iPod - it could take them years!
Creating a separate iPod division is one way of avoiding the development of the iPod getting slow and caught up in developments with the OS etc. In fact iPod, if a dynamic little unit moving fast, could act a s a stimulus to Apple.
There are now two brands Apple and iPod - double the fun! :D :D


*Howard Stringer, 62, Sony's vice chairman and head of the company's U.S. divisions, says executives were so concerned about music piracy that they couldn't agree with designers on the kind of player to create.
.
"We didn't get there, and by that time, Steve Jobs was there," said Stringer, referring to Apple's CEO.