Is John C. Dvorak is trying to cement his position as the worst industry “analyst” of all-time? It’s entirely possible because Dvorak’s latest article for PC Mag is one of the most peculiar and inane pieces we’ve seen from the man who in 1984 famously predicted that no one would want to use a mouse and who, in 2007, boldly predicted that the original iPhone would amount to nothing more than an embarrassing flop.
And now Dvorak is back again with a kindly suggestion for Apple: spin-out the company’s Mac business into an entirely separate company. Usually, boneheaded ideas like this are reserved for message boards, not a featured spot in PC Mag of all places. But so it goes in the world of tech where the ability to formulate a well-reasoned opinion piece is clearly not a prerequisite for participation.
Let’s dive into Dvorak’s madness, shall we?
First things first, Dvorak’s idea to spin out Apple’s Mac division as a separate company stems from the fact that it just recently renamed OS X to macOS.
Putting this elementary leap in logic aside, Dvorak goes on to lay out the “obvious” reasons why his business plan for the Mac makes perfect sense.
The reasons to do this are obvious and simple. PC sales are flagging. While the market for desktop computers and laptops is still enormous, it’s seen as dead. You can see it in all the worldwide tech reporting. It’s become a boring replacement market as people keep their systems longer and longer.
This means the computer division of Apple will eventually become a genuine albatross around the company’s neck. So it’s better off as a standalone company focused on computers, pretty much like it was pre-2001 when the iPod showed up.
PC sales have been on the decline, to be sure, but it’s anything but a dead market. Besides, sales of the Mac have proven to be more resilient against a downturn market than PCs. Furthermore, it’s important to remember that Apple enjoys extremely healthy margins on Mac sales. During the company’s most recent quarter, revenue from the Mac actually surpassed revenue from the iPad.
So to declare that Apple’s Mac division will become something of a noose around the company’s neck is bizarre and unfounded, to say the least.
By Dvorak’s logic, any division within Apple experiencing a downturn should be spun out into a new company. And as for the market for Macs, rumors of an exciting new MacBook Pro refresh might turn things around sooner rather than later.
Now as for any perceived benefits resulting from spinning out Apple’s Mac business as a standalone entity, Dvorak explains:
The new Mac company would be assured success by contracting with Apple for access to the Apple stores for its primary sales channel. It could also contract with Apple for the use of its industrial design team. If Apple maintained the majority of the shares of the new company, it could roll out an IPO and add the value of its shares as an asset while writing off the loss of the division.
Maintaining majority ownership would prevent any third party such as Google or Microsoft from acquiring the company. Thus the current Mac mavens, who hate any alternative, would see almost no change in the milieu.
This take is so asinine and demonstrates such a fundamental lack of knowledge regarding Apple’s development process that it’s hard to even know where to begin.
Over the years, Apple executives have said that they don’t keep profit and loss balance sheets for each division within the company. The reason? Apple focuses on the bigger picture and wants each of its “divisions” to concern themselves with innovation rather than profitability.
More importantly, one of the reasons Apple is so successful is because it has an entire product ecosystem where the strength of one product can be leveraged to improve the user experience across other products. One of the upcoming macOS Sierra features, for example, allows users to seamlessly unlock their MacBooks via the Apple Watch. This is only possible because Apple’s varied OS teams are able to work together in an environment of cross-collaborative innovation. Similarly, other features such as universal copy and paste would effectively be non-starters if Apple’s Mac division was spun out as a separate company likely governed by different priorities.
In short, Dvorak’s advice would undermine one of Apple’s longstanding advantages — vertical integration. One of the benefits of owning a Mac is that it’s so well integrated with other Apple products and services. From various continuity features to the ability to use iMessage on the Mac, Dvorak’s embarrassing master plan would serve to make Apple products less useful.
Years ago, IBM pulled a similar stunt with its extremely popular ThinkPad laptops, selling the division to Lenovo. Such a drastic move from Apple, though, would upset the community. Instead, it should look to IBM’s successful spin-offs, like Lexmark. This is the kind of thing that mature companies do, and I’m guessing that it’s something Apple may be planning…because it’s a good idea.
No, it’s a bad idea unsupported by any cogent arguments whatsoever. Essentially, Dvorak argues that it’s a good idea simply because he thinks it’s a good idea.