Can Apple Take Microsoft on the Desktop?

An anonymous reader writes "RDM asks Can Apple Take Microsoft on the Desktop?, a comparison of recent sales and profits and the future outlook for Macs and PCs. It's the opinion of the article's author that Apple doesn't have to take a majority share of the desktop market to win. The key is to take the most valuable segments of the market. They show via a few quick financial numbers that even though Apple is selling fewer machines, they're making more money per machine than your Dells or your Gateways. Not being beholden to Microsoft gives them a big advantage when competing with traditional PC sellers. Once Apple is positioned, Microsoft will be forced to choose whether it wants to battle Mac OS X for control of the slick consumer desktop, or repurpose Windows as a cheaper, mass market alternative to Linux in corporate sales. If it doesn't make a choice, the company will face difficult battles on two fronts.""

Yes

If Microsoft bends over the desk. (Come on, this was the expected joke - the title was phrased this way on purpose)

Re:Yes

I don't know... even with a condom, I don't think the Mac would want to take PC.

Too high a chance of getting a virus.

Re:Yes

The Mac/PC ad concept just got very interesting...

Re:In any case

Selling retail versions of operating systems has never worked. Not once. NeXT couldn't do it. Be couldn't do it. Hell, even IBM couldn't do it. And actually, Microsoft can't do it either, if you check out retail sales of Vista. Even if the OS is essentially free, most people don't want it, see Linux.

PC owners would not buy OS X even if they could. The only people who would buy this (apart from us geeks) are current Mac owners which want to buy hardware from other manufacturers than Apple. And guess what, Apple makes more money if it sells these people hardware.

Apple would essentially cannibalize its own hardware sales without being able to make it up due to a higher volume of software sales.

Here's a fun fact: Most people don't buy Apple's stuff due to the marketing. They buy Apple's stuff because it works and because it's easy to use. Guess what, installing a third-party OS on a generic PC quite often doesn't work and never ends up being easy to use. Macs work because Apple controls the software as well as the hardware. Apple is able to leapfrog Microsoft with a comparably tiny budget because they don't have to be compatible with DOS software or include drivers for 10-years-old hardware and hundreds of different computer manufacturers.

No

Of course not, since 2007 if finally going to be the year of the Linux Desktop.

Re:No

Yes! And Duke Nukem Forever will be preinstalled on it!

Re:Yes - THE HOME DESKTOP MARKET

Well, there is the potential for Apple to take over the home market.

According to Intel and IDC, the HOME pc market is only 10% of the total PC market... if apple has 3-4% marketshare and we know they dont sell much to the business market.... they might have at least a 1/3 or more right now of the home market.

If they get to the 5% range, then they could start to approach even being the #1 home computer.

Re:Yes - THE HOME DESKTOP MARKET

According to Intel and IDC, the HOME pc market is only 10% of the total PC market...

The consumer market is 40-50 percent of the total PC market [idctracker.org].

if apple has 3-4% marketshare and we know they dont sell much to the business market.

You think that Apple is mostly selling to consumers? You're wrong.

"Apple's Macs are primarily targeted at three core markets: consumer segment (25% of Apple's PC business), education (33%), and SMB with a strong focus on creative professionals." (Deutsche Bank report citing IDC figures [paisdigital.org])

Apple is selling hundred thousands of Macs in the education sector, in this earnings call transcript [seekingalpha.com] Tim Cook mentions two large contracts totaling 50,000 units and this is not an uncommon occurrence.

"Ten percent of the Company's net sales in 2006 were through its U.S. education channel, including sales to elementary and secondary schools, higher education institutions, and individual customers." (Annual annual report 2006 [corporate-ir.net])

Apple is also doing well outside of the U.S., last year a Gartner analyst told Macworld: "For the first time, Apple is number one in the EMEA education market with 11.6 per cent of the market in Q3/2006 against 9.6 per cent in Q3/2005."

they might have at least a 1/3 or more right now of the home market.

Apple is gaining market share in the consumer segment, in Q2 2005 Apple's share increased to 5.5 percent in the U.S. and 3.1 percent worldwide (Deutsche Bank report citing IDC figures [paisdigital.org]). It must be higher by now, but nowhere near 33 percent!

Re:Yes

It'd be nice to see Microsoft bent over the desk for once. They've had customers bent over the desk for years.

incorrect title

RDM asks Can Apple Take Microsoft on the Desktop? ... They show via a few quick financial numbers that even though Apple is selling fewer machines, they're making more money per machine than your Dells or your Gateways.

So then the proper title should be "Can Apple take Dell or Gateway on the Desktop". With the release of bootcamp, Apple's competing against Dell and Gateway in the Premium consumer hardware space (which Dell/Gateway suck at anyway) so it's no wonder Apple's winning.

The flip side of that is that as commodity beigeboxes, Dell and Gateway do great in the corporate world, which is a space Apple has yet to penetrate to any large degree, because the customer doesn't fit their product space.

Re:incorrect title

The flip side of that is that as commodity beigeboxes, Dell and Gateway do great in the corporate world, which is a space Apple has yet to penetrate to any large degree, because the customer doesn't fit their product space.

While I agree that Apple doesn't necessarily fit the generic corp desktop, I wonder if it might just be a matter of grabbing the executives who are always in the market for premium computing hardware. A decked out MacBook Pro is nothing to scoff at and it may just be a matter of getting execs to try them. It coudl cause a push for some companies to adopt cheap Macs on the desktop. Maybe if Apple can bring the price of the Mini back down. Ultimately, I think it simply comes down to breaking the Windows addiction. Paralells is great and all, but does it really make sense for companies to run BOTH OS X and Windows on each desktop? Because you know they're still going to be using some Windows/DOS app that they just can't get rid of..

-matthew

 

Re:incorrect title

Absolutely. It's the lack of Exchange integration that keeps Macs out of most offices. Apple's upcoming open source calendar server [apple.com] might change that. If Apple can make a compelling case for replacing Exchange with iCal Server in an all-Windows environment, then the door starts to open for Macs on the corporate desktop.

Re:incorrect title

"It coudl cause a push for some companies to adopt cheap Macs on the desktop. Maybe if Apple can bring the price of the Mini back down."

It is not a question of cost. Mac are quite competitive compared to equivalent machine. The problem is the range of available machine. You have a *very* limited subset of hardware you can choose from Apple, and all of them are designed either for home ( cheap one ) or for very top of the range professional ( MacBook Pro, MacPro )

There is no average common machine. Example: The mac mini is slightly underspec for a developer ( mainly: harddisk sucks, only 2 GB memory max ) and the design is completely irrelevant: we have all plenty of lost space under the desk. My company buys beige ibm/dell boxes with the same spec as the mini and roughly the same price, but the fact that the dell/ibm come with standard disk in a standard ugly box is seen as a benefit, unlike in my livingroom.
Off course, there is the mac pro, but it is completely overkill, both in cost and performance. ( Again, not saying it is not competitive against similar spec machine, but that's the equivalent of 'if a knife is not good enough for hunting, we also sell machine guns' )

Re:incorrect title

Also, it's occasionally argued that it's good for developers to have underpowered machines, forcing them to avoid bloat.

Design is also relevant in corporate setting

I disagree that the design is "completely irrelevant" for developers. I have three machines in my workspace: 2 macs (PPC and Intel) and one generic PC (for Linux and Windows). The two macs together make less noise than the one PC. Moreover, with two towers under my desk the room there is getting rather limited, so if the third machine hadn't been an iMac I would have had to throw one machine out.

Having three machines may be rather rare, but even with one machine it is really nice if it has a low noise level and a small footprint. It is indeed much more of an issue at home, but in the office it's definitely relevant too.

Re:incorrect title

I think you're right in a lot of ways. I work for a software consulting company. We go in to big corporations and write custom apps to do internal process things - like workflow management. We write everything as an online app, and the entire office codes on Linux and OSX. Nevertheless, I'd say about 99% of the machines at our customer's places (especially for running things like shipping/inventory) are desktops that were cheap 5 years ago. But they run the one app they need to (and it happens to be a Windows app) and there's no need to replace them with even a $500 machine, no matter who makes it.

And while some exec might get a MacBookPro and just love it, the tech guy (who's made a living the last 10 years) will push back just as hard, even harder, because he doesn't know how to / is biased against supporting Macs. And who do you think they're going to listen to on a tech decision? The tech guy. Upper management makes bad suggestions on technology all the time. Tech guys rein them back in. That's their job. Otherwise the whole office would be "Grape" ;)

Re:incorrect title

Rest assured that Mac OS X won't be selling on the shelf for PCs.

Windows XP wasn't sold on the shelf! 80% of Microsoft's revenues come from OEM licensing, despite the fact than an OEM license costs ~$30 in volume, while a full version has been priced around $300-400. Microsoft's retail sales are low, partly because nobody needs to buy it (its on every PC), and partly because its overpriced.

Nobody else has ever been able to sell an aftermarket PC OS: not IBM, not NeXT, not Be. Linux can't seem to give away its OS on the desktop. Why not? All are competing against the bundled Windows. It's the Windows Price Paradox [roughlydrafted.com]: nobody can compete with a product that appears to be free--while actually being massively overpriced.

Apple is not going to trade its booming hardware sales for the chance at being the first company to ever be able to sell an OS at retail against the "free" Windows that was purchased for ~$30 by the OEM.

Apple has absolutely no reason to be even slightly interested in replacing Windows on other maker's PCs. It wants to replace those PCs with Macs. Sales have jumped from a steady ~800k per quarter to 1600k per quarter in the last year, earning Apple a billion last quarter. With that kind of hardware growth, a retail version of Mac OS X is never going to happen.

Re:incorrect title

The flip side of that is that as commodity beigeboxes, Dell and Gateway do great in the corporate world, which is a space Apple has yet to penetrate to any large degree, because the customer doesn't fit their product space.

It gets scant mention in the article, but a valid point is made that, as far as the corporate world is concerned Linux is increasingly looking like a good option. When you don't have to worry about the latest webcams working, and have an IT staff to manage everything Linux on the desktop is very feasible. Indeed Novell and Redhat are making inroads in this area. What this means is that Microsoft could find itself getting squeezed if Dell and Gateway start co-operating with Novell, Redhat, and/or Canonical on desktop Linux for the corporate world and MacOS X takes over the home user market. The fact that, relatively speaking, Mac and Linux play nicely with each other (compared to Windows and Mac, or Windows and Linux) only makes such a scenario more interesting. In practice, of course, MS still has quite the stranglehold on the corporate desktop. Linux is, these days, good enough to take on MS toe to toe in market, but MS started with a massive advantage and aren't about to give an inch. It will take a long time before Linux makes enough of a dent in the corporate desktop market for ny of this to really matter.

APPLE HAS NO MID-END HEAD LESS DESKTOPS!

they need to fix this real fast! the mini has laptop parts, is not that easy to open and has POS gma 950.
The Mac pro is nice but the cost is high apple could add quad-core cpus at the top end and drop the price of the low end dual-cores as well as lower the video card prices.
The I-macs have laptop parts and don't work that well for people that have good screens. Also they force you to get a bigger screen if you want a better video, faster cpu, or bigger HD.

Article makes no sense

So the article is saying that because Apple charges more for their computers, resulting in higher profit margins, MS is doomed? The article tries to make it sound like Apple is making more because they arent paying license fees to MS, but in reality they are charging a HUGE premium for their operating system. Compare the price differential of a mac with an equivalent hardware dell, its quite large.

There are so many things in this article that make no sense.

The author claims that the ipod and iphone are going to be major factors in killing the windows monopoly.

The author actually claims that consumers are willing to pay more for laptops because of resale value. I reread that like 5 times to make sure I wasnt reading it wrong.

This sounds like just another fanboy who wants to see Apple win and is grasping at straws for reasons why it will happen.

Re:Apple and Dell have the exact same pricing

The E1505 is a completely different class of machine. It's a full pound heaver, a third of an inch thicker, an inch and a quarter wider, and an inch and a half deeper.

In the laptop market, the price of the machine isn't just proportional to the specifications, but to the size, weight, and build materials. Smaller machines cost more to build, and they sell for more. The E1505 is bigger, heavier, and (from direct experience), more cheaply built. No surprise that its cheaper. Indeed, its no surprise that its cheaper than Dell's own Latitude, which is more expensive than the E1505 precisely because its smaller and better-built.

The MacBook's closest competitors, from the point of view of specifications and form-factor, are the Vaio C series, ThinkPad T 14.1", the Latitude D620, and Asus's 13.3" model. Relative to the Vaio, the MacBook has more features for the same price and similar build quality. Relative to the ThinkPad, it is heavier and a bit less sturdy, but with a better screen and more features at a slightly lower price. Relative to the D620 its better built and has a better screen for a slightly higher price. And its almost identical to the Asus model at the same price.

When I bought my MacBook, I did some comparison shopping. In its size/weight category, its really hard to find a better notebook at the price. You can get bigger features by going to a bigger form-factor, but lugging around a 15" laptop is a PITA. You can also save money by going with less performance (in particular, dropping the dual core or going to an AMD chip will save you a lot of money). However, if you want a fast dual-core machine in a mid-sized form-factor, the MB is a great choice.

Re:Apple and Dell have the exact same pricing

The thing is with Apple you only have one supplier, Apple, and one price, what they say is what you pay, you can't shop around at all. With PC's you have dozens of supplier to choose from. So finding a PC maker that is selling a system at a similar price to a similar Apple system is not difficult. However it is also not difficult to find PC makers selling systems at a lower price than Apple, it's called shopping around, something you are unable to do when buying from Apple.

So yes, you can show me plenty of examples of expensive PC's and say Apple is on par with pricing. But I can reply right back; I just bought an Acer Aspire 5102: dual-core AMD processor, 1 gig of ram, 120 gig harddrive, 15.4" screen, dvd-burner, built in webcam and ati graphics. All of it for 675 bucks, delivered to my door, for just an hour or two shopping around on the internet. Show me an Apple laptop even close to that configuration for that price and I'll eat my hat.

Re:Apple and Dell have the exact same pricing

Instead taking an Apple computer, and then trying to configure a PC to be similar, turn it the other way. Take a bunch of random PC's, and try to get an Apple computer with the same features. Due to Apple's limited selection of hardware, almost always, the Apple computer is going to be more expensive (though you will end up with features the PC doesn't have, that doesn't mean I want to pay for them). This is especially due to the fact that you have to move up pretty far into Apple's line up to get features found on basic and mid-range PCs, like a 3.5" harddrives, expansion slots, and non-integrated graphics.

Re:Article makes no sense

I've got Karma to burn, so I'll say it...

As someone who has used a mac daily for 20 years and liked it, I'd also like to see Apple gain significant ground. But it isn't going to happen until some changes are made. At a fundamental level Apple culture is in opposition to what the mass market and corporations need. Frankly OS X is not as polished as XP in many important area's. Certainly OS X has groovy features, but a surprising amount of really basic stuff is problematic. Today alone I bumped up against window management inconsistency, finder cock-ups, and plain old reproducible bugs. I'm not talking matters of taste, I'm specifically talking about fuck-ups. Windows certainly has it's share of bugs, but here is a key difference...

Microsoft documents problems, workarounds and limitations in their "knowledge base". It's not perfect, it doesn't get everything right but it's a sight better than posting manuals on the support web site and calling the job done. Refusing to talk about failure does not make you a success any more than wearing a merkin cures syphilis. Apple would have you believe that they are the panacea while ignoring buggy/broken features between major releases. As if to say "Our software is perfect until we charge you for a perfecter version".

On the Other hand

We have these PC vs Mac Spoof videos [lauriemcguinness.com]

all have some humor, and some have a point.

nicely done.

MS Office

From TFA:

Apple is competing against Microsoft's offerings, but it's not a retail software battle. Apple is using its integrated software to eat up the prime portions of the PC hardware market.

Nonsense. If they are chasing the corporate market, the key is MS Office, not one OS or the other. The minute that Office for the Mac starts to slip significantly behind in compatibility with the Windows version there will be few corporations that will chose Macs over PCs.

Regardless of what the fanboys believe there's nothing in the Mac's "integrated software" that's a make or break Corporate feature.

(ps - comment written on a G4 Powerbook)

Shallow research...

First of all, Apple is in the entertainment business as well, so the profits need to be spread over more than just computers; although they do make more per machine than most PC manufacturers.

But even if Vista stumbles - as the author points out - users stay with an existing MS OS rather than dump MS altogether as Apple owners did when the ][ line dies (I was one to the bitter end) or when Apple failed to keep pace. What Apple has to overcome (as does Linux) is the huge installed base and apps that run on it. The switch to x86 architecture made it even tougher to move to the Mac given the lack of native binary apps for it; such as Photoshop whose CS2 is a bit slow on the newer Macs (CS3 is nice but not yet out).
iPhone - that looks to be a questionable product; given Apple has apparently hobbled it from the get go.

And this is my perspective as a Mac (and Windows) user.

People are switching

For the past 12 years or so I work for a company providing IT support for Macs. For 11 and a half years the Mac world of our customer base this: Mac users bought more Macs and in some unfortunate cases switched to PC's (mostly because of corporate decisions high up in the company's hierarchy).

Lately something strange is happening.

Firstly for the first time in these 12 years I have to help customers switch over from PC's to Macs.

Secondly I've had PC customers buy Macs for their looks and running Windows XP natively as if they were PC's.

The first is happening mostly with small companies and home users, the latter also in bigger companies.

So, Apple in the latter case does seem to gain on the desktop but not necessarily taking on Microsoft.

Very strange.

I think so, in a few years.

I think Apple's in a good position for the next generation of end-user computing. Once all the "fat client" applications migrate fully online, it won't matter what the user interface on the desktop is like. As long as a web browser is there, it shouldn't matter. Right now, they have a lot of work to do. There's a whole generation of software developers who are used to the Windows platform, and the majority of businesses use Windows as their core desktop computing environment.

Once people sit down and poke around with a Mac, they're usually happy with it. The interface isn't as much of a stretch from Windows, and the OS is designed to keep the user unaware of what's going on under the hood.

Desktop PCs are going away, and eventually full laptops might follow. The only things that remain to be solved are: (1) Web applications need a user interface that's as fast as a desktop one, and (2) Either people have to give up their privacy and let third parties hold all their data, or local storage needs to be merged with these connected apps.

I'd love to use Macs at work, but our industry uses custom Windows applications that won't be ported in the near future. Getting people to develop for MacOS would be a big step toward business acceptance. Virtualization is great, but it needs to be simple. MacOS did this by placing "Classic" (Mac OS 9) apps in a seamless virtual environment. Users didn't even need to think about it, and that was important. There were _a lot_ of classic apps that needed to be emulated. It would be cool to do that for Windows apps, but I doubt it's ever going to happen.

Re:I certainly hope not

Great assertion. Nothing to back it up, no shred of logic behind the claim, but hey! It's great to fling stuff like this about!

Apple also grind up live puppies to make iPods. Microsoft shred kittens to make those new Vista boxes, and many Linux kernels are built using slave labour from China.