Commentary: Apple's missed opportunity

By Paul Jackson, senior analyst

With its new iMac G5, Apple Computer has once again come up with a unique package of design, power and ease of use. But will it be enough?

No. Apple has missed the opportunity to stay way ahead of its PC manufacturing competitors by not including Wi-Fi as standard and by failing to catch the early-adopter personal video recorder wave by including a TV tuner card.

		related story Apple puts the squeeze on new iMac All of new iMac G5 fits inside "enchanting" flat-screen display.

Gone are the angle poise arm and spherical base station; in comes the world's thinnest all-in-one desktop PC, mounted on an aluminum standard similar to the new Apple Cinema Displays. This brand-new design aims to build on the success of the previous iterations--which have sold 7.5 million units over the past six years--and draw in the emerging iPod generation.

The three new iMac G5 models have these points in their favor:

• They're the world's most minimal-looking home computers. By integrating all of the PC components, ports, media drives and even speakers into the 2-inch-thick display unit, Apple has created a design so simple that adding accessories like external hard disks and broadband modems risks ruining the smooth lines. By borrowing design elements from the iPod--Jonathan Ives designed both--these machines are designed to sit in a living room and be admired.

• They benefit from a considerable increase in processor power. By using 1.6GHz and 1.8GHz G5 processors, Apple engineers have created a machine capable of coping with demanding digital hub tasks, such as tackling consumers' increasing usage of digital audio, photo and video content. (U.S. broadband households are three times more likely than U.S. dial-up households to download music or videos or listen to streaming audio.)

• They're not as expensive as you might imagine. Starting at $1,299, the respectably equipped entry model of the new iMac range is considerably cheaper than the older 17-inch G4 machine, which was priced at about $1,799. This puts the machine more on a par with tricked-out Windows home PCs.

Where Apple stopped short
This iMac is not as genre-defining as previous iterations have been--in fact, it misses a couple of the tricks Media Center PCs can already do.

• Where is the connectivity to support bottom-up home networking? While Apple does great business in selling AirPort cards and AirPort Extreme Wi-Fi base stations, this should not have stopped it from building Wi-Fi directly into every new iMac--even Bluetooth would have been a start.

Better still would have been a software option to turn this machine into a full Wi-Fi access point: Intel's Grantsdale chipset already promises this functionality for PC owners. The lack of this connectivity means that Apple has missed an opportunity to build on its AirPort Express foundations and rule the roost in bottom-up networking.

• Would including a TV tuner card have broken the bank? Digital video recorder functionality is becoming increasingly interesting to technology-literate consumers; TiVo in the United States and Sky+ in the United Kingdom are redefining how people consume TV programming.

Furthermore, Microsoft is forging ahead with its Windows XP Media Center Edition, looking to build on lessons from the past year. In the new iMac, Apple presents us with a fabulous living-room-compatible unit with an excellent display and lots of storage designed for digital media--but doesn't allow for connectivity to the broadcast network.

Sure, you can add an inexpensive box to do this, but you then ruin the sleek all-in-one design, which is what makes this machine so desirable.

© 2004, Forrester Research, Inc. All rights reserved. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.