Update: Apple ups the ante with Mac mini, iPod, and Xsan

Proprietary technology, company-owned brick and mortar stores, and fixed pricing are exactly what the market's looking for

A year ago, Apple CEO Steve Jobs cut Pixar's ties with Disney, opting to handle its own marketing and distribution. With that move, the animation shop that made a name for itself with a hopping lamp became its own studio, in control of everything from the rendered frame, to the prints shipped to theatres, to the timing and pricing of its DVDs.

Steve Jobs, speaking for Pixar, told Disney, "Thanks, Disney, Pixar will take it from here."

That's the same Steve Jobs who delivered his usual low-key, earnest infomercial for Apple's new products at Macworld Expo in San Francisco this week. His harmless little niche computer products outfit made a name for itself with a rainbow logo and idealistic counterculture marketing. Steve Jobs has put Apple in control of its manufacturing, its distribution and even its own economy. He's turned Apple into the equivalent of a sovereign state. Steve Jobs has sent the message to industry giants like Microsoft and Sony that they're the next Disneys. They’re holding Apple back. From now on, they may not tell Apple where it may or may not play. Thanks, guys. Apple will take it from here.

Steve Jobs summoned Sony President Kunitake Ando to his keynote stage to put a point on that message. Sony controls the high-end digital video market, and broadly speaking, Apple and its customers couldn't go anywhere that Sony wouldn't let them go. Mr. Ando declared that Sony is working very closely with Apple, and then in a nervous aside to Steve Jobs (who had a Sony HD camcorder pointed straight at Mr. Ando), asked Apple to stick to software. Please.

Apple's got a unique set of assets that will never run dry: Image, ingenuity, creativity, brand loyalty, nerve, and cash. Tech industry analysts that chuckled over the iPod company's efforts to rack up real market share in computers now have to deal with a well-heeled Apple minus the humility and projected timidity of old. Apple's $500 Mac mini is going to eat the lunch of low-end desktops. But not just that: Tricked out with accessories that are on the Macworld Expo show floor now, Mac mini is a DVR (think TiVo) without capacity limits, intrusive advertising, or phone-home reporting of users' viewing habits. It's a Playstation with a hard drive, USB, FireWire, Ethernet, expandable memory, a keyboard, and a mouse. Mac mini burns CDs, plays DVDs, and puts out composite, S-Video, VGA, or DVI (LCD flat panel) video. QuickTime 7 does that HD playback and editing thing, and the system's performance is on par with Apple's newest PowerBooks. It really is everything other Macs are, just smaller.

You may also wish to use Mac mini on your desk as a fast, sexy, and silent replacement for your boring PC. For your convenience, Apple made sure that PC keyboards, mice, and monitors will just plug right in. The fact that this box is just a little bigger than an adult's hand suggests that it can hop from the desk to the entertainment center. It's more likely that it will just stay put in the den, where an LCD or plasma display will do double duty as a computer display and a movie screen. Apple will undoubtedly make just the right display for this task.

This all has a very consumer-ish flavor to it, but Sony has a good reason to worry. A 400 GB FireWire drive is now the equivalent of a massive HD tape. PowerBook is an HD field editing unit, Power Mac is a production workstation and Mac mini is a digital delivery device. The pro-level digital video recorders and players, the $5,000 to $50,000 devices that are the soul of Sony's business, aren't part of this scenario. Steve Jobs' show on stage with the Sony camcorder was his way of saying, "This is the only part we'll leave to you." The cheap as dirt iLife, which is bundled with Mac mini, does world-class DVD authoring as well. Apple will own as much of the video market as it decides to take.

To watch this play out on a smaller scale, keep an eye on the fate of the dozens of companies that sell flash memory MP3 players. Apple’s $99 iPod Shuffle will automatically pick the songs you like best that fit in its memory. Apple targeted the flash music player market not to participate in it, but to wipe it out.

A rush briefing assembled the day before Macworld Expo showed that Microsoft gets that message, too. Office has always been Microsoft's way of taking a chunk out of every Mac client sale. Steve Jobs announced the Jan. 22 release of iWork, a package combining a new word processor cum page layout program called Pages and a reworking of Apple's presentation app, dubbed Keynote 2. Pages isn't Word and it isn't Quark, but it is enough and it makes everyone who uses it look like an artist. Keynote 2 isn't as extensive as PowerPoint, but with the addition of placeable, animated graphics, it covers the needs of most PowerPoint users.

The e-mail client in Tiger is much improved, easily strong enough to knock Microsoft's Entourage off most non-corporate systems. That leaves Microsoft stuck in the position of selling a spreadsheet to the bulk of the Mac market. Thanks, Microsoft. Apple will take it from here. And incidentally, Keynote 2 is also the simplest and most intuitive Flash authoring environment I've seen.

Apple seemed to steal its own thunder by releasing its IT news -- the delivery of 2.3 GHz Xserve G5, 5.6TB Xserve RAID, and Xsan  -- before Macworld Expo. But even that served a purpose. Before Sony took the stage, Apple rolled out a server product line that amounts to a one-stop collaborative digital video production and animation solution. And before Microsoft called its hurried press conference to announce that it's working closely with Apple, Apple dropped the hint that it can use the very same gear to make an aggressive run at the PC server and storage market. That is, if it chooses to. Maybe, maybe not. Ask again tomorrow.

Apple can't be assured of control of every market it targets, but it can be certain of one thing: No one else will control its participation in its chosen markets again. Wherever Apple chooses to go, it will go alone, and that should scare the hell out of any company that has to sell against it.