by Tom Foremski for SiliconValleyWatcher.com

I got into a discussion over on Cnet's News.com regarding Apple in response to Michael Kanellos' column today about Apple's focus on style, and that he himself might not fit into Apple's target market. "Macintosh: It's a Madison Avenue thing."

See who we watched at Macworld: Steve Jobs chatting with actor Robin Williams (middle), former vice president Al Gore (right) just leaves the scene.

I wrote that Apple is using "style" to make money within a commodity market. And that nobody gives Apple credit for being the most profitable PC company in an industry in which other PC company profit margins are at best miniscule (Dell) or non-existent. (I'm defining the term PC in its original, broader form, as a personal computer based on a microprocessor and operating system--not as just a Windows/Intel personal computer.)

Apple has figured out that style and design are a value-add that has very good margins. And having its own operating system, and developing its own unique application suite, such as iLife, is an additional cherry on the cake that is highly profitable and distinctive.

Since Apple is a niche player, it fits perfectly into a niche market for computer products for upscale/status/design/niche conscious customers. Apple has become the "Sharper Image" of the PC sector, with its own stores too.

I've used Windows and Mac machines over the last 20 years, but have mostly been using a Windows laptop for the past five years. I've found that both types of computers are familiar to all users and will do whatever you need to do, but the Mac generally does it with a few fewer clicks and far fewer compatibility problems.

You also get a stylish design, and you get some excellent software bundled with the system. And probably more importantly than ever these days, you don't get bothered by all the malware that constantly hit Windows systems. The Mac malware is a tiny fraction of the Windows malware. I've lost tons and tons of productivity through having to deal with viruses and spyware and the admin tasks that Windows requires.

And the new Mac Mini, at just $600 for a fully loaded, stylish desktop unit just 6.5 inches by 6.5 inches and 2 inches tall, is extremely tempting. The Mac Mini looks very portable and I can see a lot of uses for that kind of form factor. Here's one: combine it with a $1,000 digital projector (also very portable) and plug it into a sound system and you have a party in a box that you can set up anywhere.

And as far as the iPod goes, Apple is demonstrating yet again that proprietary technology continues to be the way to make money in the computer industry. Don't believe me? Then consider this: what was the reward for Windows PC makers in adopting a common PC platform? Microsoft and Intel sucked in most of the profits from the sector and the PC makers were forced to consolidate in a bid to eke out meager profit margins. (Intel this week reported $2.12bn of net income on fourth quarter revenues of $9.6bn)

This is exactly why the cell phone sector continues to use a lot of proprietary technologies--companies in that sector are fighting tooth and nail to avoid becoming a victim of Microsoft and Intel's commoditisation strategy.

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