Steve Jobs, Where’s the Blu-Ray?

My friend was getting a new Mac laptop. As we looked at all of the new models, something struck me as odd. None of the new Macs have Blu-Ray capability. I asked the ‘Hi, I’m a Mac’ representative about this oddity. He confirmed that Blu-Ray was absolutely not available. It is still not available. Of course computer makers can use whatever hardware they prefer, but there was something much more puzzling about this scenario.

Disney was the main proponent and advocate of the Blu-Ray standard. There was much hoopla regarding the Blu-Ray versus the HD-DVD format wars. Toshiba versus Sony. Winner takes all. Disney had vehemently supported Blu-Ray from the beginning. Disney has a large investment and interest in the high definition format of the future. So what? While most people know Apple and its products, everyone knows Disney and its products, yet very few people on Main Street know that the largest shareholder of Disney stock is none other than Steve Jobs. That’s right, Steve owned over 50% of Pixar, who was bought by Disney, making Steve the largest owner in the world of Disney stock. Steve owns around 7% of Disney stock which is definitely worth more than $3 billion dollars.

Here is the question that made my brain itch for two months or so: If Steve Jobs is Apple Computers (AAPL) and is by far and large the main owner of Disney (DIS), then why are there no Blu-Ray drives in his computers? And why does no one care?

The answer came to me in class months later in Dr. Shivakumar’s econ class. I believe the answer lies in incremental revenue. While Steve could shoehorn svelte Blu-ray drives in an iPhone if he so desired, he did not want people to use Blu-Ray. He needs us to use iTunes. Last June Apple stated that they sold or rent 50,000 movies a day. While it’s hard to put a dollar sign on profits from iTunes from movies, I guarantee that this figure is greater than the shareholder value of Disney Blu-Ray movies sold and used on a Mac computer. I have heard that in the newer models of Mac computers will feature Blu-Ray, I wonder how many iPod/iPhone/iTV consumers have already learned the ease and convince of using iTunes from nearly any couch in America. My hats off to Mr. Jobs, you are truly brilliant.