What Apple should do next

Following Microsoft’s lackluster set of announcements at CES (no big news, just an extension of the Digital Media Anywhere announcements from October), and a Bill Gates demo in which a PC game bluescreened and a Media Center PC remote locked up while he tried to view pictures , everybody’s wondering one thing:

What’s Apple going to do next week at MacWorld?

Sure, the iPod’s great, it’s kicking Microsoft’s and Sony’s asses all over the place, it probably sold 5 million in Q4. But now it’s last year’s news. What can Apple do to top it? How can they turn iPod’s success into broader success? Rumors are circulating about a $500 monitorless Mac, which is the right price point to upsell at retail–“would you like a computer with your iPod, sir?”–but not particularly innovative.

Or so I thought, until a couple of the geniuses (no joke) who I work with came up with an amazing twist: What about a thin-client Mac that uses the iPod as its hard drive? Basically, you’ve got a shell with just enough hard drive space to store your OS, initialization files for a few standard apps (not sure how this works in OS X, but one of the smart developer guys here told me it could easily be done), a TCP/IP stack and Safari. Then you build in a docking cradle for the iPod. In effect, your iPod becomes your computer–you store all your data on it, you launch certain apps (iTunes, maybe a contact manager) from it, and you use a standard set of hosted services (.Mac) for everything else. Dock it in any compatible Mac, enter a password for authentication, and you’re in.

Imagine: all your music, pictures, contact information, documents, and other data, completely portable and usable from any Mac in the world. Because OS X is based on Unix, there’s no D: drives or duplicate “My” folders to worry about–the iPod would be mapped into the directory structure and all your stuff would always appear in the “Users” directory under your name. (Again, this is according to a smarter person than me…I don’t claim to know crap about how Unix works.)

Brand name: iMac Mini.

What else is Apple going to do as hard drive space continues to get cheaper and cheaper? The iPod Photo has 60GB of space. Now, Toshiba’s creating an 80GB hard drive of the same size–obviously, that’s the next iPod. But most people can fit their entire CD collection in about 20GB, and need only a few more for digital photos. So what can all that space possibly be used for? Higher-quality audio? No–most consumers aren’t willing to pay for sound quality (look how poorly SACDs and DVD-As are selling). Video? No–there’s simply not enough content available becuase Hollywood’s so worried about piracy and the TV networks are worried about time-shifting and advertising dollars (this is why Microsoft’s Portable Media Center will fail). And who really wants to watch video on the run anyway? It’s not a natural low-attention function like listening to music.

(McLuhan would orobably have something to say here, but I can never remember exactly what “hot” and “cold” media are.)

Oh, yeah, and the profit margin on a $450 headless Mac would be insane–even better than iPod. Hell, you could probably even throw a cheap monitor on there and sell it for $400.

Anyway, such a machine might not be announced this year, but I’m willing to bet that some very smart people at Apple are having very similar conversations right now.

The other thing I’d love to see is a wireless iPod with 802.11 broadcasting ability or that could download material over public networks. But others have already gone on at length about those types of scenarios.

(For the record, that hot chick is my wife.)