Personal computers still at Apple's business core

Jack Minsky built a successful business by writing software for Apple 's Macintosh computers. So when Apple last week dropped the word "computer" from its name, and dedicated its annual Macworld trade show to noncomputer gadgets, Minsky might have felt concern for his company's future.
Not so. Minsky, president of SoftwareMacKiev Co. of Boston, thinks Apple Inc.'s new strategy is right on target. "We're excited as we can be about the way Apple is going," Minsky said. In his view, Apple chief Steve Jobs's decision to downplay Mac computers is part of a strategy that will make the machines more important than ever.
Despite the hoopla surrounding Apple's iPod music players, and the hype over upcoming Apple home entertainment servers and cellphones, the company still makes a lot of money on computers. During the fiscal year ended Sept. 30, Apple sold more than 39 million iPods, compared to just 5.3 million Macs. But the Macs brought in nearly as much revenue, $7.4 billion, as the $7.7 billion in iPod sales, and have a better profit margin. Besides, since the rise of iPod, Apple's computer business has been better than ever, with unit sales up 61 percent over the past two fiscal years.
Arnold Reinhold, an analyst at Hurwitz & Associates, a Waltham technology analysis firm, said that like automaker BMW, Apple has succeeded in "carving out a luxury niche in a commodity market."
Yet under their elegantly sculpted hoods, Macs are little different from their cheaper cousins running Microsoft Corp.'s Windows operating system. In 2005, Apple decided to abandon IBM Corp. processors and use the same Intel Corp. chips found inside Windows machines. Mac hardware performance used to lag behind Windows machine; now they're stride for stride. The switch lowered Apple's manufacturing costs, further shoring up margins.
It also enabled Mac computers to run Windows software.
"It was really the evolution of the Mac to the Intel architecture that opened new opportunities for our products," said Bill Portin, sales director for Parallels Inc. of Renton, Wash. Parallels' software lets Windows and Mac programs run side by side, removing the stigma of using Mac computers in corporate environments addicted to Windows.

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