Minority Report: Apple as media company - and why that's good for Macs

With the launch of the iPod, iTunes and the Mac mini, Apple has begun the evolution from hardware and software maker to digital media mogul. While some Mac enthusiasts moan about the changes, Seb Janecek says it's all for the best.

Long-time Mac users who may have taken a wholly pastoral sojourn in the last 18 months would likely return to the technology landscape, take a quick look around and wonder just what the hell happened in 2004 and 2005.

Apple's strategy has taken an entirely new direction in recent times with the company treading unknown ground, making sweeping changes to its design ethos and taking risks that a couple of years ago would have been largely unthinkable.

The events of 2005 have been particularly alien to those who have followed the fortunes of the computer maker.

In January, it took the wraps off the long-rumoured 'Headless Mac' in the shape of the Mac mini - a monitor-less, keyboard-less bare-bones G4 Mac with an entry-level price. Despite the rampant pre-launch rumours, the release came as a surprise to many Apple commentators who argued that the low-end Mac would cannibalise sales of its traditionally high-end computers.

A few months later came the big surprise of 2005 - the company abandoned the PowerPC architecture and made the leap towards Intel processors, its third major platform migration, following the original move from 68K to PowerPC and then from Mac OS 9 to Mac OS X.

Less than 10 years after Apple's marketing department set the Pentium 'bunny' engineers on fire, the Apple CEO was dousing the flames and announcing a new roadmap of Intel-powered Macs, having lost patience with IBM's progress and the floundering G5 chip. The move sent shock waves through the Mac community.

Last month, there was the release of the so-called Mighty Mouse (an input device with a number of buttons). While it may not seem as seismic a shift for the company, the move was hugely significant to a large section of the Mac faithful. The device represented the fall of one of the final Mac interface elements - the one-button mouse - even if it had become somewhat of an anachronism.

However, it's with the iTunes Music Store and the iPod that Jobs has ushered in the single most significant culture change - a strategic shift that has altered the raison d'etre of the company irrevocably.

Apple's evolution into a global media company has been explosive and the company is likely to continue in that vein as it evolves beyond music with the expected move into videos and movies.

The company has done the really hard work in convincing record label executives to embrace the shift to selling music online, and has proven it is serious about digital rights management and protecting the intellectual property rights of electronic media with its FairPlay technology.

The growing threat to movie studios from online piracy will increasingly force the hand of execs to make money from movies online. Jobs' other existence as CEO of Oscar-winning animation company Pixar would no doubt help smooth any negotiations and add credibility to arguments for delivering movies and other video content through iTunes (if that brand is still appropriate for online video content).

As Apple assembled what recently became the iLife suite (iPhoto, iMovie, iDVD and iTunes) in the early part of the decade, it marketed the Mac as the digital hub. With paid for content, it's not the device that is the hub but the content itself. The company now sits in a strong position with both device and content.

So what role does the Mac play in Apple's plans? Many Mac users have become frustrated as the iPod and the iTunes music business rose to the ascendancy and computers seemed to become increasingly marginalised. However, Apple is one of the few computer makers making ground in a tough market.

Crossing the divide between content and computer could be an Apple media entertainment centre. Such a device has long been rumoured and may already be here in nascent format in the shape of the Mac mini.

The latest version of Apple's operating system, Tiger, heralded the arrival of QuickTime 7. Besides providing video support on iTunes, version 7 comes with the H.264 codec - a technology which allows users to watch high-definition video with lower bandwidth and storage overheads than on previous versions.

The initial ethos of the Mac mini, which took a step away from Apple's traditional high-margin computers with a low-price box, seemed to revolve around an attempt to tempt potential switchers and cash in on the 'halo effect' surrounding the iPod - the phenomenon whereby people buy an iPod first, then like it so much they buy a Mac desktop or laptop.

That may seem a little one dimensional unless the company plans to use the little box to form the basis of a new digital hub device to store and play video content. Furthermore, Intel chips inside the Mac mini will make it easier to turn into a low-cost home media player, experts believe, especially given the chip giant has developed companion chipsets that are tailor-made to fit into consumer digital entertainment devices.

The Mac line will benefit from Apple's emergence as a media company in other ways. The move to Intel proves the company is still committed to its computer business and has a long-term goal for the Mac.

The PowerPC had held back the Mac in recent times - at least in terms of losing the megahertz war, which many may justly argue is irrelevant but the argument is less convincing to the majority of consumers blinded by processor speeds. In addition, the heat of G5s currently precludes their use in laptops - a serious problem for a company that makes much of its revenue from its PowerBook and iBook ranges.

The platform switch represents a considerable risk for the company, a headache for developers, a leap of faith for some elements of the Mac fan base and could make investors and stakeholders jittery. As the Mac range begins its transition to Intel the company will need a strong alternative revenue stream to provide contingency for inevitable falling computer sales as users hang on for the faster Intel chips just around the corner.

Apple can make this leap now with less concern than formerly as it has now developed two 'core businesses' - building computers and pioneering digital content.

Even a Mac user who's never owned an iPod or downloaded a track from iTunes can appreciate the luxury afforded by the ever-growing revenues they generate which allow the computer business to move to a stronger platform.

Sales of iPods and related devices look likely to sustain the company for now. Furthermore, as I've mentioned in a previous column, it's the company's ability to surprise industry watchers and its fan base that have helped sustain its sales in recent years.

A further surprise may be about to be revealed. Apple has announced to analysts and journalists it will be making a major announcement on 7 September, dropping hints of something as critical to the company's future as the release of the original iPod in 2001.

The company sent an invitation to reporters on Monday morning for a "special event" being held in San Francisco on that date.

The invitation reads: "1,000 songs in your pocket changed everything", referring to the release of the first 5GB iPod nearly four years ago. "Here we go again," it adds.

Speculation online has predictably gone into overdrive with rumour sites and blogs saturated with feverish conjecture about iTunes mobiles, video iPods and updated iPod minis.

This additional element of anticipation in the company's alternative product offering will help sustain the Mac range as it makes the first steps on its difficult journey and consolidates itself, again. The future of the Mac may never have looked stronger.