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Apple: Does Denying a Rumor Only Validate It?

By Mark Christiansen | April 20, 2008

According to a highly reliable source, Apple emphatically denied in an NAB press meeting earlier this week any truth to the rumor that the Pro Apps are for sale.

Now, even if Apple sold Final Cut Studio and its brethren, I hardly imagine the buyer (and who might that be? Avid?) would do much to mess with its success, at least in the short term - but here is a company with a firm policy of not responding to rumors that is apparently issuing an emphatic denial and, well, one can't help but think of analogous situations that have occurred in the recent past.

One thing that is certain, from speaking with a former Apple employee, is that the development team, once housed inside 1 Infinite Loop and very much on the radar, is now located far from the action. If you don't think that matters, keep in mind that this is a company whose important decisions are all made by one guy. In that building. It may simply be that Pro Apps were important to Apple back when they needed to show that the Mac was not an inferior platform for high-performance, high-profile entertainment work, but that job has now been done, the app is mature and in no danger of leaving the platform, and the company has found other areas to, ahem, shake up. Like the multi-billion dollar mobile telecommunications industry, or the multi-billion dollar entertainment industry.

Anyhow that's all just speculation. Beyond the denial, all I know for sure is that a) Final Cut Server looks great and b) attending NAB after losing my iPhone in the powder at Sugar Bowl was like living in L.A. without a car.

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Comments

Scott Gentry: | April, 20, 2008

When I try to imagine what the business model of pro apps like FCP, Premiere Pro, looks like, I wonder how much money there is in version upgrades?  What percentage of Apple’s business is new pro software vs. upgrades, and what the expense base looks like?  Since I know none of these things I cannot make even an uneducated guess.

It is very interesting to speculate however.  From Apple’s perspective, saving the millions of dollars by not attending NAB is likely a very wise move.  There was no introduction or upgrade, and NAB is literally millions in expenses. 

A few years back we sat with a few different companies and off the record we asked about the ROI from an exhibitor perspective to attend NAB.  None of the folks we spoke to could quantify it enough beyond, “you need to be there”. 

Apple has signed a contract to begin advertising on PVC and frankly I haven’t seen any real ads for their pro apps anywhere else for some time.  That would be suggestive to me that FCP is not for sale.  However, the ads haven’t started yet, and I don’t know whether they would be hardware or software related.

Before apple agreed to begin advertising here, I was of the school that perhaps they were going to sell FCP Studio.  Now I tend to think it’s unlikely.  Who knows?  Steve certainly keeps us, and everyone else talking about Apple and Apple’s products.  Maybe that’s the real marketing genius!

Scott Simmons: | April, 20, 2008

I talked to a couple of software developers at NAB (not Apple folks) who said they have heard many of the same things from within Apple, Pro Apps developers moved off of the pro apps to other projects. iMovie and Aperture being mentioned. I’ve written about these rumors myself but while I wouldn’t be surprised if they sold the pro apps I don’t think they will anymore. I think the more likely scenario is they just don’t get the attention they once got and Apple is much more likely to buy innovations (Shake, Proximity) rather than invent them at home. They still get buzz and they still sell hardware so it seems like the still kind of need them around. Just not as much as they used to.

Chris Meyer: | April, 20, 2008

It seems that the action is in having a large user base that buys upgrades. You can see this from the speculation and financial reporting that surrounds major software releases from both Adobe and Apple (we have shares in both).

Companies turn over engineers all the time. Star engineers and marketing people are often reassigned to hopefully work their magic with other products and product lines.

Dan Katz: | April, 20, 2008

A couple questions:

1) Is there any history of Apple actually selling one of their products to another company?

2) Why would they sell it? What’s the point? It’s not like they’re lacking cash flow.

I don’t think bailing on NAB is enough of a signal to indicate FCP is for sale. Apply the same thinking to Avid. Are they selling the line? Perhaps Apple (and Avid) will return when they have something more significant in terms of an upgrade. Or maybe they feel other marketing approaches will be appropriate and more worthwhile.

Additionally, I would imagine selling FCP would send such a negative message on the confidence of it’s viability in the market, that it would be essentially killing it. In other words, “We’re Selling It equals We Don’t Want It equals Neither Should You.” It would be such an F-U to the community and industry that nobody would want to buy it: Not a competitor, or a user. When has Apple ever sent one of their own down the river? There’s got to be lower-hanging, less generating fruit on the Apple tree. Logic? Aperture?

I just don’t think there’s enough evidence to support this rumor.

Jerry Hofmann: | April, 20, 2008

When in Apple’s history did they sell any technology? Well we can point to one… File Maker Pro. They “sold” it to a wholly owned subsidiary.

Apple doesn’t sell anything. They trash it. Why would they want to trash something that makes them millions in and of itself? Sells the Pro Machines like crazy? It’s not as if they are in debt and need to restructure or something along those lines. It’s a big feather in their cap when the academy award for best picture was edited on Final Cut Pro… let’s take a serious look at reality here.

Jerry Hofmann

Alex Shaykevich: | April, 20, 2008

As a developer who’s wresteled with Quicktime(the core API underlying FCP), I’d say this is potentially disastrous news.  If true, and I’m not saying it is, I don’t think FCP will survive in the long run.  Why?  QT is such a complex framework and Apple such an opaque company that if development is taken out of house, the technical barriers may become insurmountable or just not worth it in the long run.  While dev has all been under the one roof, it seems like the information has gotten where it needs to go, but once it’s out of the cage…  I’m not optimistic.  That being said, I think Jerry is on the money, literally, Apple doesn’t sell off lines and the thought of them abandoning FCP, which is the only reason most people buy Mac Pros at twice the premium for the same hardware would be suicidal.

garret linn: | April, 20, 2008

who would buy it?
maybe Red? - or someone who wants to control the Red marketplace…. think of a post production tool maybe in the 3-D market - who wants to move to the compositing space or the production market space… in other words don’t thing in terms of the end consumer base - think in terms of how someone would want to surround a new market space…. Large installations are still looking for soup to nuts solutions.. Sony. Canon.. in all it bodes well to see these rumors as it pushes the FCP into a more professional space and away from the consumer space..

Kevin Thomas: | April, 20, 2008

IF Apple decided to sell the pro apps, I hope it would go to AJA or Blackmagic. Companies that have a vested interest in seeing it thrive.

Bubba-Mac: | April, 21, 2008

I’m sorry, but this kind of report (with absolutely no information to support its claims) seems like a clear PR ploy…

Apple has made tens, if not hundreds, of millions of dollars on the pro apps. They report 1 million users for FCS. If even ten percent of that is the number of actual licenses, then they’ve made a ton of money just from SW sales (enough to “break even” on development, support, and marketing/sales costs, if this is all only to generate HW sales)...

The reason engineers have moved around to other projects is because the core OS has gained the vast majority of the “media” functionality used by most pro apps (and other apps too). So, the most knowledgeable people in that regard are most likely the engineers who work on FCS and other pro apps. It’s knowledge-sharing.

Take a look at Quartz Composer. It’s a Shake-lite (if not more), and its functionality is part of the OS itself. You’d be hard-pressed to find such tight integration between SW and HW on any other platform.

Yes, QuickTime is kind of a convoluted mess. I’m sure Apple is well-aware of that. As time goes on, with all of the media functionality being part of the OS itself now (“Core XXX”), Apple can (and already has, most likely) begin to recast all of the applications to directly use the “Core” technologies directly. With some exceptions, the pro apps will become the “front-ends” or GUIs to the functionality built into the OS.

Apple also said that half of all industry-wide editing SW suite purchases are going to FCS now. Why would you get rid of something that successful?

Mark Christiansen: | April, 21, 2008

Wow, a stunningly nuanced and restrained set of comments, given the subject. A few thoughts:

Apple is making great money on FCS, but it’s a drop in the bucket, not the cornerstone of revenue that it might be for the software company that might acquire it.

Obviously we users want to see this product continue to be innovated. No-show at NAB seems to have corresponded with a more modest (although nevertheless positive) product announcement from Apple.

A Claris type solution could be ideal - get software into the hands of a CEO focused on it. However I don’t know that this model was seen as a success, and it was not part of the Jobs era (1 or !!).

Clearly, Apple is a company focused on, and doing its greatest work in lifestyle electronics (consumer hardware and software). Whether the professional line can thrive in a secondary, or perhaps supporting role will become evident over the next several years.

Vincent Rice: | April, 21, 2008

A straight denial about anything from Apple is unusual and should probably be taken at face value. Lets not forget that the next upgrades to FCP Shake/Motion etc have to be pretty momentous ~ fully Cocoa, 64 bit, new QT base never mind the fact that if Apple are on the ball (and they usually are)  the next generation of editing software needs to be very different from the present.

I doubt we will hear a peep out of Apple about the Pro Video apps until they have a clue of whether they have a hope in hitting NAB next year.

dd: | May, 01, 2008

another confirmation from apple that final cut to stay on board:
http://www.macnn.com/articles/08/05/01/1m.fcp.licenses.sold/
hopefully they’re hard at work for 64bit next-gen suite smile

Mark Christiansen: | May, 02, 2008

Right back atcha with speculation to the contrary from the not-always-reliable but often fascinating Robert Cringely:

http://www.pbs.org/cringely/pulpit/2008/pulpit_20080502_004815.html

Scott Gentry: | May, 02, 2008

Well, I’m personally on the fence as to whether or not they’ll sell.  I’m thinking more and more that they won’t.  However, to address Vincent’s comments about “straight denial is unusual”... In the old days, straight denial was unusual and a sure sign to believe what they say.  Now however, take a look at Job’s recent actions.  “No we won’t make a phone or a video iPod”.  Well we know where that ended up. 

Of course, had I been in his shoes, knowing I was developing a market-changing phone, I’d have fibbed a tad myself.

Perhaps I would have fibbed like this: Is PVC going to be offering some new things and new sister sites in the coming months?  “Emphatically not”, said Scott with a Jobs-like twinkle in his eye…

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