iLounge

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http://www.pbs.org/cringely/pulpit/pulpit20040520.html

The news, broken Wednesday by the New York Times, was that Apple was creating a separate iPod division because the little music players are such a huge success. Conventional business school wisdom also says that starting a separate division is a way of isolating startup costs, making them more obvious to Wall Street and thus minimizing negative impacts because of course, even Apple has to spend money to make money. Or, like 3Com did with Palm Computing (and even Apple once did with Claris before changing its mind), you can structure a division to spin-off or have a separate IPO. This all makes sense on the surface, but then I recalled something I was told more than 20 years ago by a much younger Steve Jobs. Back then Apple had three divisions – Apple II, Lisa, and Macintosh. Why have separate divisions? “Because it’s easier to shut one down,” said Steve.

Something is stirring at Apple. The company just had yet another big layoff at its Sacramento manufacturing plant. In an effort to further lower costs, Apple is essentially getting out of the business of making its own products.

Posted by Cringely on May 24, 2004 at 1:47 PM (PST)