Letting a market segment go - even if it is not the most profitable segment - poses risks for Apple.
Not. You have it backwards. The customers aren't buying. It isn't Apple letting the market go it is in part the market shifting to products that Apple doesn't sell. If there is a market shift tweaking the Mac Pro isn't necessarily going to bring them back. In fact, it is more risky to chase those folks with the wrong product line than to just walk away.
I am not saying Apple shouldn't ship a new Mac Pro, but if updated and it doesn't sell that is highly indicative of a market shift. Not Apple ignoring the market.
Sometimes the market changes and companies have to walk away from products. It is a huge mistake to not walk away when all the indicators are pointing at a collapse and just ignore it until profits go negative.
"It is still profitable" isn't a salient point. There is no reason to get to the state where taking loses to exit. If it is not profitable
and growing the product is on the cut list for additional R&D. Don't think so. Look at the iPods. The touch got what? A color. The ipod shuffle and mini ... basically nothing last Fall.
Apple might treat the Mac Pro like the 30" Display. Just keep selling it for as long as "enough" people buy it. But it wouldn't get R&D. The risk they are evaluating is whether the R&D invested shows a return on investment that is as high as that money being spent on a variety of other problems. The $100B in cash just means they can take bigger bets on gambles that have
very high returns on growths and profits. Not that they can blow money on a wider number of R&D projects. That money isn't Apple's. That is the stockholders money. If they don't show high returns on those investments the stockholders will take it away. None of the execs want that because it also helps them reduce risks.
From a marketing perspective, no computer user should ever have a reason to leave Apple's operating system for Windows.
From HP's and Dell's pattern of running a PC business but it isn't Apple's. Apple knows they lost the PC War. It is over. Windows won. Apple only needs to hold onto a profitable small fraction of the market to be successful. ( less than 10% is OK. ).
The Mac Pro folks are probably somewhere in the vicinity of 1-3% of the Mac base. If that 1-3% goes out and 1-3% of the overall PC market comes into Mac then that is a net
gain for Apple. ( 3% of Apple's 8% share is smaller that 1% of Windows' 90% share. )
Apple's market strategy is to sell the right
subset of profitable
and growing products in the overall PC market. This will maximize the time in which they have a profitable subset of the industry. They walk away from the parts that aren't profitable or growing fast enough. Those are the parts of the market were most of the PC vendors in trouble financially suffer from.
If Apple wants its operating system to be the gold standard, it cannot be letting go of a customer base it already holds unless it is hemorrhaging cash.
One quick way to hemorrhage cash is the chase customers who don't want your product (discount coupons , "fire sales" , etc. ) Not the other way around.
If Apple really wanted to "kill off" the pro market it already holds, it would make much more financial sense to spin it off into a separate business.
Apple doesn't want to. If customers vote "no" by not buying the result is on them. Not Apple.
Spinning off Mac Pro is just re-invoking the "clone vendor" argument. That too is a dead and buried option. It is an extremely dubious move. iOS and OS X are too tightly coupled to have 3rd party vendors mucking around in there. The Lion - Mountain Lion trend is that they will only get more tightly coupled.
If HP finds it profitable to develop high-end prosumer machines,
LOL. HP
needs high margin workstations to offset the loss-leader boxes on the low end. On the whole HP's PC business has about 5-10% margins. (that's is exactly why there was thought of spinning of off when it was at 4%). Apple's Mac business has 25-30+% margins. Why on Earth would Apple abandon their strategy that has generated billions in freely allocated cash from operations to pick up HP's strategy which has not?
Notice how going higher up into HP's and Dell's workstation offerings Apple's solutions are actually under their prices? That because Apple doesn't have to "rob Peter to pay Paul". All the Mac products are profitable with healthy margin so there is not need for one subset to offset the costs of the other. They all stand on their own (or not ... discontinued ).
So Apple is unlikely to abandon high-end machines, as giving up that market segment means turning a slice of its customers back to Windows.
Dropping the XServe and XRaid really tanked Apple's bottom line over the last several years....... not!
This is the standard hand waving argument. "the 1 percenters" market is special. Apple will implode if they don't sell these machines. Sorry but that is a self centered, myopic , and deeply flawed position.
Apple may eventually kill off the product line, but chances are it will be because something better is in the pipeline, not because they want to give up their pro user market share.
The core flaw here is the the "pro user market share" is 100% correlated with the Mac Pro. It isn't. There are already "pro" folks transitioning to other Mac products. The skewed argument here is that Apple has to wait until that transition goes to the point that 100% of the folks have left or bolted for Windows before turning off the product. It doesn't.
There has
always been products in the pipeline that are not "Mac Pro tower class" boxes in the works that could do the current workload targeted to those machines. That is the whole computer market.
Minicomputer ate a significant fraction of Mainframe workload.
PCs/Workstations ate a significant fraction of Minicomputer workload.
Laptops are eating a significant fradction of Desktop workload.
Smartphones/Tablets are eating PC workload.
There is nothing new here. Well only thing new are a new set of folks yelping about how their workload "can't possibly move down a tier". Frankly, most of these arguments are all old-as-dirt. Just "substitute" "minicomputer" and "PC" for "Mac Pro" and "iToys" and it is the same handwaving from 20 years ago.