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2 years ago
Published January 11, 2021 by

Beyond Intel: Steve Jobs' favorite creative director is enthralled by Apple Silicon

"In 2005, Apple moved to Intel to gain equality. In 2020, it’s moved away from Intel to gain superiority." — Veteran advertising executive Ken Segall

From "Apple's monolithic moment" posted Monday on Truth, Justice and Simplicity:

No question, Apple Silicon is a very big deal. But—it’s an even bigger deal in the context of Apple history. Monolithic even...

Just minutes after Steve stepped off the stage at the Intel announcement event, I jokingly said to him, “Please tell me you’re not putting an Intel Inside sticker on the Mac.” With a big grin, he replied, “No way—I made sure that was in the contract!”

As important as Intel processors were to Steve’s strategy, Intel could not overshadow the Apple brand.

Behind the scenes, this commandment played out in the box design for the first Intel-powered iMacs...

The team presented several box designs to Steve. On one, this Intel chip image appeared on the front, right alongside the large iMac image. Steve killed it in a nanosecond.

He chose the design that relegated the Intel chip to “feature” status on the side of the box, amongst the list of iMac’s other selling points. Intel was just one ingredient in the mix.

Something else Steve refused: Intel’s money.

Every year, Intel contributes obscene amounts of marketing dollars to PC makers around the world. But it comes with a catch—all ads must display an Intel Inside logo at a specific size, with a specified amount of white space surrounding it. TV commercials must feature the logo for a specified length of time along with the annoying Intel “bong” at ad’s end.

Steve never gave a thought to joining that mob. Apple would forever be the hero of the new partnership, not Intel.

My take: I like Segall's work, but I'm sparing you his 2001: A Space Odyssey references.

9 Comments

  1. Gregg Thurman said:
    “In 2005, Apple moved to Intel to gain equality. In 2020, it’s moved away from Intel to gain superiority.”

    I know Apple thinks far out into the future, but is that a 15 year road map I see?

    5
    January 11, 2021
  2. Robert Paul Leitao said:
    I remember when Apple announced the Intel agreement. Apple did refuse payments from Intel. A common thread through all of Apple’s partnerships and agreements is that Apple retains primary in the relationship with its customers. If one is selling commodity-grade product at razor-thin margins, having the Intel logo on the box or in ads might have given the customer some sense of surety as to what’s in the PC. Putting an Apple logo on a product is all the surety the vast majority of Apple customers need or desire.

    6
    January 11, 2021
    • Gregg Thurman said:
      Robert, any guess as to how long (if) Apple puts an “Apple Inside” (or equivalent message) logo on Macs? I can see it in Apple’s advertising, but don’t think it would mesh well with Apple’s sense of design.

      0
      January 11, 2021
      • Robert Paul Leitao said:
        Gregg: I view it as totally unnecessary. One Apple logo is enough. Apple rightly keeps things simple.

        4
        January 11, 2021
      • John Butt said:
        The word “inside” is Intel branding.

        0
        January 12, 2021
  3. Gregg Thurman said:
    I dislike focusing on units. Revenue and net income is far more important.

    But when I read something like this:

    https://www.patentlyapple.com/patently-apple/2021/01/idc-report-states-that-pc-sales-were-on-fire-in-q4-2020-with-apple-showing-the-highest-growth-in-the-industry.html

    I feel compelled to extrapolate it forward. For the purposes of comparing Apple and Dell’s growth I used the average growth rate of the top 3 vendors (#1 HP, #2 Lenovo and #3 Dell) to forecast Dell’s future growth rate. Dell’s actual growth rate (according to IDC) was 8.1%.

    Again, according to IDC, Apple grew computers at a 29.1% rate during C2020. Much of that growth was attributable to the COVID pandemic and the shift to work at home and home learning. I used a reduced growth rate of 20% going forward to project Mac units sold.

    In that hypothetical model Apple surpasses #3 Dell in computer units sold in 2029. I believe the Mx family of processors can sustain a Mac 20% growth rate and could cause Mac units to surpass Dell’s unit share before 2029. And then there is Mac’s much higher ASP to contend with. Revenue and net income will shine.

    It should be noted that in this exercise I increased Dell’s 2020 unit growth rate 13.5% above IDC’s estimated results, and reduced Apple’s 2020 growth rate by 31.3%.

    4
    January 11, 2021
    • Robert Paul Leitao said:
      Gregg: Only a small portion of Dell’s PC sales (or sales of any of the other PC vendors) overlap with Apple’s market. The vast majority of global PC sales is in units costing well under $1,000. Chromebooks can be purchased today for under $200. Unit sales don’t matter. Customer satisfaction is far more important than unit sales. Apple already has a commanding revenue share in the global PC market on single-digit market share worldwide.

      0
      January 11, 2021
  4. Gregg Thurman said:
    The vast majority of global PC sales is in units costing well under $1,000

    So what percentage of Wintel computers sells for >$900 (close enough to a Mac to tempt a Wintel user to switch)?

    20% of 210,000,000 (HP, Lenovo, Dell, Acer total shipments) = 42,000,000.

    15% of 210,000,000 (HP, Lenovo, Dell, Acer total shipments) = 31,500,000.

    10% of 210,000,000 (HP, Lenovo, Dell, Acer total shipments) = 21,000,000.

    5% of 210,000,000 (HP, Lenovo, Dell, Acer total shipments) = 10,500,000.

    Pick one then tell me what percentage of WINTEL’s high end market do you think may switch to Mac.

    0
    January 12, 2021
    • Robert Paul Leitao said:
      Gregg: Right motive, wrong approach. I can see Apple sustaining greater than 20% Mac revenue growth rates through the immediate pandemic period with YOY revenue growth rates moderating as the company enters FY2022. In my view, demand is being pulled forward and while there may be some shortening of the upgrade cycle over the next year due to work from home demand, I expect the PC market to begin to revert to its slow and steady decline as early as mid-CY2022 as other computing forms continue to displace the need for PCs. Particularly as students return to in-person instruction as early as this fall, the need for households to acquire new PCs or replace existing installations will be greatly diminished as well as the demand from districts that bought new devices to distribute to students for exclusive distance learning environments during the pandemic. This isn’t to say Apple won’t continue with single-digit YOY revenue growth rates for the Mac line after mid-CY2022, but the world has been competing with a pandemic. Apple doesn’t have a serious competitor for revenue share in the high-end of the PC market. Comparing Apple to other PC makers lacks relevancy.

      0
      January 12, 2021

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