Apple's surprise weapon: Computers
The iPod and iPhone are hits, but they're not the company's hottest line, says Fortune's Brent Schlender. — (Fortune Magazine) — Last January, when Steve Jobs rechristened his company by ostentatiously excising the word "Computer" and leaving it as simply …
Context & Ripple Effects
Brent Schlender's argument lands one step into a deliberate repositioning: in January 2007 Steve Jobs dropped 'Computer' from the company name, framing Apple around devices rather than PCs. Yet the reporting here flips that framing — the Mac line, not the iPod or iPhone, is Apple's hottest seller. The groundwork was visible a year earlier, when Apple's earnings were already bolstered by iPod and notebook sales, and by the chip overhaul Newsweek covered in early 2006.
The irony matters because the iPhone launch has absorbed all the oxygen: within days of this story Apple was selling refurbished iPhones at roughly $100 off and pushing rapid software updates through iTunes, while locking European carriers into revenue-sharing deals for exclusive rights. Against that noise, Schlender's claim that plain computers are out-selling the gadgets reframes how the post-rename Apple should be valued.
First-order effects
- Apple's valuation narrative shifts: analysts weighing the company on iPod and iPhone momentum have to account for a Mac business that is, per Schlender, the fastest-growing line.
- The January rename reads differently — dropping 'Computer' from the name while computers remain the hottest line suggests Jobs positioned Apple for where he wants growth, not where it currently is.
Second-order effects
- With iPhone demand being managed through discounted refurbished units and exclusive carrier deals in Europe, Apple can lean on Mac sales to fund the phone's international rollout without straining either line.
- Rival PC makers face an Apple whose core computer business competes on design rather than price — the same fashion-led positioning that made the iPod and iPhone cultural hits.
Third-order effects
- If the pattern holds, the boundary between 'computer companies' and 'consumer electronics companies' keeps dissolving: Apple's structure — one design-led hardware pipeline spanning laptops, music players, and phones — becomes the template other manufacturers are pushed toward.
The trend: Computing hardware is becoming a fashion category, where the same design-led brand sells laptops alongside phones and music players — the shift Jobs signaled when he excised 'Computer' from the name.