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Apple can dominate appliance biz – Ellison

Another of Sir Larry's self-styled 'fantasies'?

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Larry Ellison has been waxing lyrical on Apple again. The Oracle CEO, Apple board member and self-styled "best friend" of Apple CEO Steve Jobs, reckons the Mac maker's future lies in digital appliances and that Sony will be its biggest competitor.

Speaking at the BusinessWeek-sponsored 'Captain's of Industry' conference, Ellison said: "I think Apple can be the greatest provider of digital appliances in this market... I think Apple's biggest competitor is going to be Sony."

Given Ellison's closeness to Jobs, it's worth taking note of his comments. Equally, given his tendency to toss his orb around in public - at the conference, he did admit: "It's all well and good for me to have my fantasies on how the world is going to be five years from now..." - it's important not to push them too far.

So what about this "digital appliances" stuff? Apple has been rumoured to be looking at this before, most notably last spring when Merrill Lynch analyst Steve Fortuna claimed to have been told by senior Apple staffers that the company might be looking at the appliance market.

But while that project may have resulted in a few mock-ups, maybe even a prototype or two, Jobs' official line has always been that the iMac is the best kind of appliance the company can produce.

In any case, going for the appliance/set-top box business rather contradicts Apple's strategy of positioning the Mac as the hub around which the digital home will revolve. The plan is to leverage the desktop's power to provide systems that link appliances together, not to produce those appliances in the first place.

But what does Ellison mean by "provider"? It doesn't have to be 'maker' - it can equally mean 'seller'. The online AppleStore already offers a number of digital devices, such as MP3 players, cameras and the like, and Apple is busily building links into its applications and systems software that connects users straight to the company's Web shop.

So just downloaded iTunes? Run it, and an AppleStore sub-site offering CD-R discs for burning custom CDs, stylish desktop speaker rigs and portable MP3 units is just as click away. Expect external CD drives and more to be added as Apple adds the relevant drivers to iTunes and its CD Burner utility.

It's not hard to see Apple extending this, building in as many opportunities to flog digital kit to Mac users as it can. ®

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