Don't Back Down

So it looks like the rumors are finally true. Apple is moving to Intel processors, beginning in 2006. Cringely thinks this is an attempt to dethrone Microsoft. Tim Beyers at The Motley Fool thinks Intel is not the target, but Dell is in the crosshairs.

While I think Cringely is a good read, I might have to take the other side of this argument. Why? Because I recall something I read a while back that made loads of sense. I'd say that it was Cringely that said it, but I couldn't find it when I looked. And that is that Apple makes a load more money from selling the iPod than they do from selling tunes, and probably with a whole lot less effort. Sure, the music is what makes the iPod useful. But that's not where the money is in this equation.

And it won't be any different in the future - the thing Apple has going for them at this point is their incredible line of devices. Sure, the media (and by extension, the software that makes the media possible) is nice, but let's face it - much of that is almost given away, and only a few cents per song make it to Apple's pockets. I doubt that the media moguls will want to change that - Apple is a middleman in that market and nothing more. The profits are for someone else.

Meanwhile, their hardware generates much more profit than iTunes ever could. So it makes sense for Apple to continue in that direction - this brings them closer to the Dell model than Microsoft. But it's a model with the Apple brand behind it - a commodity with style, and that's the difference.

Either way, it could be a compelling story to watch. We'll just have to see how it turns out.