Filed under: Analysis / Opinion, Hardware, Software, Apple
Read/Write Web wonders how Apple can win the PC battle
One phrase that sums up the American spirit is, 'If you're so smart, why aren't you rich?' While this phrase mistakenly equates intelligence with business acumen, it is still a powerful statement that seems to resonate with people. This phrase was brought to my mind thanks to this post over on Read/Write Web, which is a great blog all about webapps and the like, dealing with Apple's market-share. The thesis of the post seems to be, 'if Macs are so great, why isn't everyone using them?' It is true the post isn't as combative as that turn of phrase might suggest, but nonetheless it is a good summary of the post's main thrust.
The first half of the post deals with the rise of Apple, the cool new hardware and the software that powers it, not to mention the powerhouse that is the iPod. Given these data points, and the fact that Apple's market-share is rising, is it possible to assume that Apple will win the PC battle?
Read/Write lists some ways they think Apple will be able to win this battle. They trot out the old chestnut that Macs are more expensive than PCs. It is true you can get a PC for less dough than you can a Mac but that is really comparing Apples to cheap, crappy Oranges. It has been well established that a PC with the same feature set of a Mac will cost about the same, or slightly more...
The second R/W suggestion for Apple is make tech support free (or at least, cheaper). While I'm all for that (hey, who doesn't like to save money?), I don't think it'll really be a boon to Apple's numbers. The Genius Bar is free (though crowded) and I imagine it must cost Apple a pretty penny to keep going. AppleCare is pricey because support, in general, ain't cheap. You need call-centers, knowledgeable people, and an infrastructure to support all that. Lowered prices on AppleCare would mean more folks would sign up for it, which would mean Apple would need to invest more money into the infrastructure, which itself isn't bringing in as much money as it once did. I'm no MBA, but that doesn't seem like a good business strategy to me.
How do I think Apple can win the PC battle? They can't, but it doesn't matter. Why? There are two big reasons: the enterprise market and the embedded market. Fortune 500 companies buy lots and lots of computers and most of them are running Windows. As the R/W post points out switching to the Mac wholesale would be prohibitively expensive (as would switching to any other operating system for that matter, including newer versions of Windows! That's why most companies tend not to upgrade Windows but rather buy a new machine with the most recent version of Windows on it. It is cheaper). The embedded market is even more difficult to crack. Lots of cash registers, ATM machines, and other utility devices run specialized versions of Windows. I can't imagine Apple getting into the cash register business (but I bet it would be a really nice cash register), so I think Windows dominance in that market is pretty secure. Steve Jobs, and by extension Apple, is highly focused. Microsoft has lots of more money and resources to go off and enter different markets. Apple is a smaller company and must pick and choose its territory carefully.
Apple has always been a consumer company, and they are making a killing by selling great consumer devices (Macs, iPods, AppleTV, and iPhones) powered by industrial grade software with a delicious candycoating (OS X). You don't have to be number 1 to be incredibly successful, a statement that Apple and many other 'luxury brands' prove time and time again.
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Reader Comments (Page 1 of 1)
JohnPQ said 10:37PM on 7-17-2007
I'm sorry, but Apple will never win with iMac on the desktop side. It is the bottleneck in the Apple line and it prevents them from releasing headless Macs that would be more universally accepted. The iMac is and will always be a niche computer. They should have been expanding on the early success of the Mac mini. The laptop side is going great. I could see them doubling market share over the next year.
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AB said 10:37PM on 7-17-2007
I agree. Apple doesn't need to win anymore than BMW needs to win the car industry.
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jOe said 10:52PM on 7-17-2007
No one will ever "win."
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John said 11:09PM on 7-17-2007
In this debate it is easy to forget that the two companies have very different business models. This has been a choice Apple has made so it can cater to a "luxury" market. If it gave the right to install OSX on any piece of equipment one could cook up in one's garage from a parts bin, then the comparison would be more appropriate. Personally, I am happy to see Apple doing so well as it has expanded the choices for the consumer and sticking with the decision to control both software and hardware has allowed them to provide better products that are easier to use and less prone to incompatibilities for both software and hardware. If they were to change this model, I think it could just as easily lead to their demise as their success. As of late, what they have been doing is working. If it only suits a smaller market, so be it. I think MS should be more worried about Intel supporting open source projects, as they likely are evidenced by their recent legal posturing about patent violations in linux. At the rate new servers are going up, I am sure there are plenty of companies runing the numbers on what it would take to migrate their infrastructure, and I think a natural progression would be to go from the server room to the cubicle, rather then vice versa. Think about who makes the recommendations for the new machines when it comes time to replace them... usually the same organization that supports the servers. And as of yet, I have not seen ANY IT department installing Macs to run their back office.
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Chris said 11:49PM on 7-17-2007
It really has to do with business and markets. Apple will keep chipping away at the consumer side of computing while Microsoft is taking over the enterprise. I think many people underestimate how much Microsoft has invested into taking business away from companies like SAP, etc.
As a company, Microsoft can't do everything...they'll realize this sooner or later. Now that there's actually competition, I see the OS landscape becoming more specialized. As long as the machines can run the software and there are standards, I really think everyone wins. Besides, it's stupid to have the whole world on basically one operating system. That's just a huge security risk I don't care what OS. It's like everyone having the same locks on doors. One exploit and you don't have 50 million problems, you have over 250 million problems.....in hundreds of countries with many non-savvy computer users.
Sometimes when you win, you lose. Right?
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kdt said 12:10AM on 7-18-2007
"Why isn't Apple rich?"
Apple is rich in every sense of the word. Apple is second most profitable computer company in the world behind only HP and its market cap makes it the second most valuable computer company in the world -- behing only HP.
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Clayton said 12:39AM on 7-18-2007
Technically you can have a really expensive (though really cool looking) Apple Cash Reqister, sort of.
http://www.apple.com/business/solutions/pos/index.html
It basically just equates to installing POS software on a mac and getting the UPC scanner seperatley, but it's still technically a choice.
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Duscrom said 1:13AM on 7-18-2007
Apple dosen't want to Win the PC war.
Consider this. Apple becomes market share leader. Apple makes the hardware, Software, OS, and everything. Then you've got iTunes, the major media app, only working with iPods. You think Microsoft has anti-trust issues, Apple has it 10x worse. They would HAVE to open up FairPlay.. which is what keeps iTunes so big... since Apple feels that licencing FairPlay would subject it to getting hacked.
And from their as DoJ takes and makes Apple remove everything that might stop compitition (No iCal, no iWeb, no iDVD.. and so on).. as well as opening up hardware.
The big problem of Apple becoming dominant.. is that it WOULD be a true monopoly... and in all honestly.. destroy the computer industry.
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Bill Olson said 1:39AM on 7-18-2007
"As a company, Microsoft can't do everything..."
They don't have to. Their MAIN business is blocking distribution channels for other vendors from putting their products on the shelves.
Or if that doesn't work, make sure the other companies products are placed in a bad location.
Or if that doesn't work, give their product for free until the other company goes bankrupt and then sell their software for more than they started at.
If that doesn't work, announce vapor ware that will "far better than brand x is selling now." Followed up with, "No buddy that choose M$ products gets fire."
Followed by threatening to sue,
Followed by funding a 3rd party to sue.
Followed by sewing.
Their other business plan is stealing source code from successful companies by having plants that send them the code and then hide the fact that they have it until they get caught.
Once they get caught and maybe loose the just keep appealing until the other company goes bankrupt.
If that doesn't work announce vapor ware that is "much better than what brand x is" along with "we stopped using their code last version and this version no longer contains that code."
Follow by blocking distribution channels for 3rd party vendors.
Anything not sound familiar? All of it does? Then you either don't have your head in the sand or you've been working at M$ long enough to know the real business plan.
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samfish said 1:58AM on 7-18-2007
That oranges analogy, while pretty much correct, really is the reason why Apple can't and won't make ground in the PC market.
They simply don't offer a computer for people to just do simple things like surf the web, watch some movies and use things like Word and Excel cheaply.
The Mini is FAR to expensive for that still.
I almost had someone sold on buying a Mini, since he was/is sick of Windows. But when he saw he was spending over $600 bucks and not even getting a fucking keyboard and mouse, he walked away.
If Apple releases a $300-$400 dollar computer WITH a keyboard and mouse, they could probably make some huge gains.
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Jon said 2:44AM on 7-18-2007
It's the whole iPhone vs Windows Mobiles debate again. "What, I'm paying MORE for a phone that doesn't have 'basic' features that I never use?"
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Matteo said 3:13AM on 7-18-2007
I agree that I don't care if Mac wins the PC battle or not.
The only thing is that Macs have to be able to communicate with other PC over network (ethernet, Wi-Fi, Bluetooth, whatever). So that customers are able to freely choose which computer is best for them.
Personally I switched from Windows to Mac and discovered that a computer is much more than just disk capacity and clockspeed. A computer is something that helps me creating home movies, be productive at work, and enjoy multimedia content (web, movies, music, TV, whatever). Apple was a surprise because it combines everything right out of the box with no catches. Try to buy a Windows based PC (had a Sony Vaio before, not exactly the cheapest computer on the market!!) and start editing movies the day you bought it...
I don't care if the majority of people look only at the price tag and the disk space, clockspeed of CPU. I have all these things, plus much more. And, at the end of the day, Windows users are amazed by the movies I create, by the ANTIVIRUS that I don't have, by the ease to connect to almost any network... I stopped counting the times the asked me: "how much did you pay for all that extra software to do everything". I loooove the face they do when I answer "nothing".
You see, Macs are for everyone who is discerning enough to look beyond the mere price tag. Should everyone buy a Mac? I think not. But a lot more people compared to today should...
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Gandhi said 4:32AM on 7-18-2007
Quote: Steve Jobs, and by extension Apple, is highly focused. Microsoft has lots of more money and resources to go off and enter different markets. Apple is a smaller company and must pick and choose its territory carefully.
And as a stockholder in AAPL, I am so glad Apple is not following the Microsoft route. Outside of their cash-cows Windows OS/Server OS and Office suite, Microsoft has lost and is losing money on every venture it has tried is hand at. Look at their Home and Entertainment division - $6 billion and counting, and they just wrote off another $1 billion for failing XBox 360s!
Quote: Apple has always been a consumer company, and they are making a killing by selling great consumer devices (Macs, iPods, AppleTV, and iPhones) powered by industrial grade software with a delicious candycoating (OS X). You don't have to be number 1 to be incredibly successful, a statement that Apple and many other 'luxury brands' prove time and time again.
And again as an AAPL stockholder, their focus on great consumer devices has made both Apple, Inc. and my portfolio VERY rich.
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DanRobinson said 7:51AM on 7-18-2007
Simple.
Business are run by their IT departments. (The tail wagging the dog . . . right?)
If a company adopts the Apple platform, then they can trim people from the IT payroll. There is NO department head that will willingly allow that to happen. More payroll is more power!
A good illustration of that is the constant updates that require hundreds of man-hours and more personnel on the help desk. I've seen this at my local college when the latest version of Blackboard was rolled out. Buggy as all hell and practically non-functional.
There was absolutely NOTHING the matter with the old one.
--Dan
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Daniel said 10:04AM on 7-18-2007
Here is my opinoin:
Apple will eventualy win the battle over the laptop market IF they lower there prices a little! ON desktop, I think that the Mac Mini is the best space saving desktop on the market, and over the years, Apple will gain over 50% control over the market in both laptops, desktops, and soon to be, mobile devices and music devices! If anybody disagres, email me at daniel.brusilovsky@gmail.com!
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kirkaracha said 4:27PM on 7-18-2007
When has Apple ever claimed they wanted to "win the PC battle"? As others have pointed out, they're in a specific, limited market and are doing well there.
Steve Jobs has said, onstage at MacWorld, that he wanted Apple to own the MP3 player market, and they did that.
Criticizing them for not making a stated goal is one thing, but it's ridiculous to criticize them for not doing something they aren't trying to do.
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Benjamin Riordan said 7:45PM on 7-18-2007
"If whole, organic foods are so good for you, then why isn't eveyone eating them?"
"If California is so nice, then why doesn't everyone move there?"
etc...
How about, "If you're so rich, then why aren't you smart?" ;-)
Apple *is* rich, by any standard. Market share in the PC market is measured in $billions. Even small shops manage to stay afloat by catering to niche markets. Congratulations to Apple for their success. Apple doesn't need to WIN the 'PC battle', it simply needs to serve as competition. We all win when there are more choices, esp. re: innovative products and lower prices. I wouldn't necessarily want Apple (or any company) to dominate more than a certain percentage of any market.
-b
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Ralph Proodian said 12:08AM on 7-19-2007
Steve Jobs is the biggest Disney stockholder, and a member of the Disney board. It's likely sometime soon, Disney will have Macs on all its desks. They may well be mini macs connected to existing monitors and keyboard so it wouldn't expensive as new computers go. Soon thereafter I can see Disney customers with matching setups. That's an inroad, wouldn't you say. Also, since Disney needs Apple's computer expertise to maintain the software and hardware of Pixar, and Apple needs Disney for a library of films and music, They may well either merge or become one company with Apple taking over Disney -- paying mostly with Apple stock and some cash.
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John Knowles said 1:19PM on 7-19-2007
I've been to Disney; a lot of them are using Macs already but that's just part of the creative culture in the animation and design departments anyway. There's a fair amount of PCs on secretaries' desks and PC laptops and smartphones are around, and you'll have to pry the Linux boxes from ITs cold, dead fingers. It's mixed-format like most big offices and I don't see how they would be under any obligation to standardize just because one of their board members runs a computer company.
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JFBIII said 5:43PM on 7-26-2007
Apple isn't trying to win the PC battle. They're playing a different game with a different goal: profitability.
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