Dueling Fools: Mac Rebuttal

"Before the iPod, the stock was trading for little more than the greenery on its balance sheet."
-- Rick Munarriz, five minutes ago

True enough. That's one of the reasons I thought of buying shares of Apple (Nasdaq: AAPL  ) back in 2004. (I still regret not pulling the trigger.)

Think differently about revisionist history
Still, it's not the iPod that saved Apple. Nope, that honor goes to Mac OS X, the Internet, and retail stores. Remove even one of those elements, and the iPod doesn't exist.

Think about it. Why were consumers eschewing the Mac back in the mid-to-late 90s? Microsoft (Nasdaq: MSFT  ) had cornered the market on all the great software by making it both convenient and profitable to write games and tools for Windows. And Apple? It was still struggling to figure out how to upgrade the Mac OS, which was ailing well before Steve Jobs returned in 1996.

Meanwhile, the Internet was still in its infancy as a consumer medium. Amazon.com (Nasdaq: AMZN  ) and eBay (Nasdaq: EBAY  ) were new ideas that early adopters craved, and that everyone else ignored.

All that began to change in March of 2001 with the introduction of the Internet-savvy Mac OS X. The original iTunes software would also be released at roughly the same time, sowing the seeds that would allow the iPod to blossom. But the iconic player really wouldn't take off for another two years, when the music store opened for business on Windows.

But again, all the catalysts came to the fore in 2001, while the iPod was still on the drawing board. In May of that year, for example, Apple opened its first retail stores in California and Virginia. They were an immediate success in selling Macs. Today, Apple counts more than 150 retail outlets worldwide. The iPod would still be a hit without the Apple stores, but the comfortably hip way you can try it out with a Mac at a retail location probably adds quite a few extra sales.

Consider also that exactly none of Apple's iPod rivals -- SanDisk (Nasdaq: SNDK  ) , Sony (NYSE: SNE  ) , Creative (Nasdaq: CREAF  ) , and, soon, Microsoft -- can offer the same experience.

Apple isn't about entertainment, Rick. Jobs and his company are aiming to make the digital life accessible for everyone. And they do that job better than anyone else, thanks to the impressive ecosystem built around the Mac. It's the Sun to the iPod's Earth, the pole to the iPod's flag, and the tracks to the iPod's increasingly rich gravy train. Ride on, Fool.

Think you're done with the Duel? You're not! Go back and read the other three arguments, and thenvote for a winner.

Have an opinion on whether the Mac or the iPod drive Apple's performance? Don't stop here! Share your views with our Foolish community in our new beta service, Motley Fool CAPS.

Microsoft is aMotley Fool Inside Valuepick, while Amazon and eBay areMotley Fool Stock Advisorselections. Whatever your investing style, the Fool has a newsletter for you.

Fool contributorTim Beyerssays you can have his MacBook Pro when you pry it out of his cold, dead hands. Tim also owns LEAP options in Apple. Get the skinny on all the stocks in his portfolio by checking Tim's Foolprofile.The Motley Fool'sdisclosure policyis like that smiling face that used to greet Tim each day from the screen of his old Mac LC.


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