Minority Report: The legend of the Headless Mac

On dark and windy nights PC support technicians tell their children terrifying tales of a mythical desktop that threatens to eradicate support staff altogether.

"Where its monitor should be, there's nothing. It doesn't need much maintenance, it doesn't need to have its printer drivers installed three times and, what's more, it doesn't need its antivirus software updated everyday. In fact, it doesn't need you... at all."

(Cue lightning flash and Danny Elfman music.)

Meanwhile, with the San Francisco Macworld Expo just days away, speculation on Mac rumor sites is reaching a frenzied crescendo with talk of the existence of the very same creature.

The mythical machine, which is both the subject of multi-threaded debates and PC support ghost stories, is a monitor-less, entry-level Apple computer known as the Headless Mac.

The Headless Mac has been a mainstay of Apple discussion on the internet for the last two years, with a broad range of theories circulating on its configuration, pricing and form factor.

No one's ever seen one of these machines, of course. Like all good scary movies films you don't get to see the beastie until late into the movie.

However, according to reports last week by rumor site Think Secret, the machine is about to emerge from the wings during Steve Jobs' traditional keynote speech on 11 January.

The rumor site alleges the Headless Mac is essentially a "bare bones", entry-level computer with the ageing G4 processor, a paltry amount of RAM, a smallish hard drive and no monitor. The result is that the low cost and ability to use an existing monitor will attract potential Apple customers previously put off by the company's high prices.

This time the myth has received some support from analysts who believe that market conditions are ripe for Apple to unveil such a strategy.

Gene Munster, a senior research analyst at investment firm Piper Jaffrey, recently told silicon.com sister site CNET News.com that he believes the strategy makes sense and it's all thanks to the iPod phenomenon. Apple's brand awareness is high and its stock price is soaring thanks to the sales of the music player.

A report by Munster in November 2004 revealed that a small but significant number of iPod users claim they have already or are intending to ditch their PC for a Mac.

The argument goes that this is Apple's opportunity to let traditional PC users experience the much-lauded usability of the OS X operating system versus Windows. The fact that it coincides with a time when Microsoft software is being battered by malware and the relentless pace of security update cycles is a further motivating factor.

Traditionally, many arguments in favor of the Headless Mac speculated on its introduction as an entry-level PC replacement for the corporate space rather than a consumer-driven machine.

Apple is clearly striving to make inroads into the corporate market and its main barrier to success is in hardware rather than software.

The current range has nothing for the business desktop user. While Apple's workhorse G5 PowerMac range is a solid performer in the company's strong graphics and video publishing markets, the machines are over-engineered and over-priced for everyday office use.

An entry-level Mac that uses PC-standard components and allows users to keep existing monitors would be more than adequate for the humdrum office use--so long as there's a suitably humdrum price tag to match it. The attraction of having far fewer security and maintenance concerns is another tempting factor.

The presence of such a machine in the product line will inevitably mean the company risks losing out on sales of its higher end, profitable computers--effectively taking a potentially serious hit on its traditional sales base.

After all, Apple is one of the few computer makers to be making a profit on its machines--and the margins on the Headless Mac will be minimal if non-existent.

However, the most intriguing argument behind the introduction of the Headless Mac is as a highly ambitious loss-leader.

In the same way that the success of the iTunes Music Store is not music sales (of which Apple makes little or no money) but in the resultant sales of iPods, so the Headless Mac could prove a longer-term loss-leader aimed at growing market share at the cost of short-term sales.

With the profile of Apple on a high it's an opportunity for the company to tempt potential customers with a bargain-basement, no-frills option in the hope they'll switch to one of the more traditional and more profitable product lines later and be hooked for life.

But therein lies one of the biggest doubts about the viability of such a machine. Apple is a company that prides itself on the design of its premium product ranges and the bitterest pill to swallow for Steve Jobs may have to renege on his axiom of not compromising.

At a time when the company has a genuine opportunity of attracting significant numbers of users to its existing Mac range, does the company really want to make concessions with its design aesthetic?

The PT Barnum-esque Apple CEO will definitely have something up his sleeve for his inevitable "just one more thing..." routine on Tuesday. Cautious punters may wish to wager money on a flash-based iPod, a re-vamp of the ageing eMac or--as predicted in late 2004 by investment house Merrill Lynch--a mega-storage home entertainment device. They all present lower-risk strategies for Apple than the Headless Mac.

The latest twist in the tale came earlier this week as Apple's fearsome legal department swooped on the founder of the Think Secret website like oh-so-many brushed-metal Valkyries.

In a civil lawsuit filed in California, Apple accused Think Secret's founder of posting stories containing Apple trade secrets. Specific mention of these "trade secrets" suggest that elements of the various reports are pretty close to home, including one which alludes to the 'iWorks' office productivity suite.

Most intriguing of all was a reference to the report about a "G4-based iMac without display". Apple claims the rumor site "disclosed numerous confidential details regarding the technical capabilities of Apple's unreleased computer product as well as Apple's confidential marketing plans".

Whether Apple is taking action over something due to be unveiled next week, next month, or later this year, or whether it's just happy to drive up a little publicity ahead of next week's show isn't certain.

What is certain is that, come next Tuesday, the legend of the Headless Mac rumors is unlikely to be banished--even if it does turn out to be a ghost of a machine.