Conspiracy or Stupidity?

[Phil Hoppes]

Guys, you are all missing the point and taking this far too personal.

This is neither stupidity nor conspiracy. This is a very well thought out strategy that, if you stop and look how Apple has consistently performed as a company, makes perfect sense.

1) Apple and in particular, Steve Jobs, knows that the way you maintain profit and dominate market share in any business is you first have to be willing to create new markets and be willing, if necessary, to “eat your own” in order to make the next leap in volume sales.

2) No business is successful trying to be all things to all people.

3) Creating the best product possible in a shrinking niche market is the antithesis to point 1 above.

This is all about business not about keeping everyone in an existing customer base happy. Three to four years ago, (not the 2 being thrown around) I would be willing to bet that Jobs, Randy and I’m sure others got together and answered the following questions:

1) Where is the market going for video editing?
2) In particular what will be the largest segment of that market?
3) How can Apple best serve that largest segment?

We all know the answer to those three questions is:

1) DLSR and lower cost HD h.264 video recording right down to cell phones (that we make and dominate with BTW)
2) consumer/prosumer
3) Create a low cost killer NLE that is very fast and very easy to use.

FCPX is EXACTLY that product. All of the short falls that everyone on this page have been lathering about are all of the things that fall off the plate when you specify that your target market and objective is to make the BEST product to serve the needs described above.

What did Apple give up? They gave up a shrinking, very demanding, lower volume, higher support/installed seat user base of tens of thousands. I know…. Randy states the FCP user base of 2 million. Please stop for a second and segment that market of 2 million into just how many are bleeding edge needs vs more moderate needs. The bleeding edge user base is 10’s of thousands not millions. Did it piss off customers? Of course? Will it hurt Apple’s business? Short term, a little, long term it won’t even be noticed.

What did Apple gain? The opportunity to be the single most dominate supplier of low cost NLE video editing software using Apple’s propitiatory hardware in the market serving a fast growing market of millions. This is millions and millions that will clamor to buy more Apple hardware and plunk down an additional $300 to $400 for FCPX and additional packages. That is gravy margin icing on the cake.

Apple has chosen, as they have done in the past (iPod sales are dropping every quarter. Why? Because they are losing market share to iPhones) to “Eat their Own”. Unfortunately for all of the very high end NLE editors out there who use FCP as their mainstay, you just became lunch.

Keep in mind too, I would almost absolutely guarantee it, MacPro are the next to die. Why? There is no need for the product. Products are made and sold for one reason only. They fill a need. When that need no longer exists, the product dies. To the above, the shrinking need of high end NLE requirements has been killed to support the growing need of mid-range consumer NLE market. With Thunderbolt, FCPX’s speed and more than adequate graphics cards that will fit inside an iMac and a MacBook or MacBook Pro there is no need for a MacPro. All of the requirements that drove the need for a high end workstation with expandable slots was just killed, therefor the product is dead. QED.

[Steve Connor]

I think that about sums it up

Steve Connor
Adrenalin Television

Have you tried “Search Posts”? Enlightenment may be there.

[Clayton Burkhart]

I don’t like viewing this as a “conspiracy” either. I prefer to say “strategy”.
However, there is nothing that precludes giving consumers/prosumers this NLE and not keeping FCS 3 on the market for pros. There is nothing in the developement needs of the pros that would require the kind of resources to be anything near a business deficit. Further, if Adobe can do it a relatively painless way more than a year ago, Apple could have done it better and quicker a long time ago.

There is absolutely nothing in marketing strategy that says you have to alienate this particular base of your buying public (pros) in order to move your other apps forward.

Further, you don’t hold a NAB style meeting to present a pro product with the intention of disappointing that audience by creating false expectations and a backlash on the day of the release.

I think this was quite simply a strategy and a miscalculation.

[Paul Dickin]

[Phil Hoppes] “Will it hurt Apple’s business? Short term, a little, long term it won’t even be noticed.”
Hi
Good summary, most likely spot on.

The defection to Avid or Adobe will only make an impact if all the defectors move to Windows and sell their Mac Pros to people who otherwise would have bought a new Mac or iMac. That would hit Apple’s bottom line.
If they stay with the Mac platform its win/win to Apple.

Most likely OS X 10.7.? or 10.8 is going to break FCS 3 and/or QuickTime 7. So the only way forward is to freeze the status quo for FCS workstations at this pre-Lion moment – which is what Apple has done.

[Phil Hoppes]

While it may be argued they could have “done it” better I think killing FCP7 is Apple actually telling you all to move on, we arn’t going there. The NAB thing was simply Apple’s ego showing.

It does, never cease to amaze me, that people actually expect truth when it comes to discussion of a product that has not been released. An officer of a public company (aka Jobs) can say almost nothing about a new product or business without getting in real hot water with the SEC. A sales or marketing person is only going to tell you what they want you to hear as well as treading a thin line for a product preannouncement. They are not, by law, allowed to say too much.

I never listen to what a company says. I look at what a company does. That is what speaks volumes. My goodness, did anyone seriously think Jobs is going to say publicly, before a product is delivered “Ah you high end editors are going to have a fit because we cut all the knobs and dials you need so we could make an easier to use product!” Come on……

[Phil Hoppes]

Yes, and I believe people here are seriously over estimating what their market contributes to Apple’s bottom line. Apple is a 100B/year company and growing. MacPro sales and FCP sales COMBINED on an annual basis don’t account for more that 0.25% to 0.5% of that total annual revenue.

FCPX sales combined with what it could spur with iMac sales very quickly dwarf any numbers you could come up with for FCP7 and MacPro sales. It is not even a competition.

[Clayton Burkhart]

There is a difference between letting everyone know it is time to move on, and actually setting up false expectations and later disappointment.

The latter is never good for any business.

[Richard Cardonna]

Apple statement recomending automatic Duck and not devloping its owm solution makes me think that Apple is relying on developers to make the pro addons to fcpx. This sounds great at first but then when you think about it the cost can ad up into the thousands to have fcpx function like a pro app.

rcardonna

[Phil Hoppes]

Again, they don’t want to bare the cost of catering to the very high end needs. If you have higher end requirements than what they support, you either work with a cobbled environment or go elsewhere.

[Clayton Burkhart]

There is a paradigm in the fashion industry.

Haute couture ceased to be a viable business activity many years ago. However, without high fashion the sales of ready-to-wear dwindle quite quickly. The prestige value is infinitly more valuable than the physical sales of the product.

If Apple ceases to be the product of choice in the upper echelons of media creation, it will not be very long before the public moves on as well. In many ways Apple is first and foremost a design company afterall.