Why Microsoft Should Fear Apple

jcatcw writes "Computerworld's Scot Finnie says that Microsoft should be afraid because Apple has gotten smarter about how it competes. He says that it's the Parallels Desktop software that has been truly transformational for the Mac. Finnie did a simple three-month trial of the Mac last in the fall and realized four months later that he wasn't going back. Since then he's received hundreds of messages from readers who've also made the switch. 'In the end, this is about perception. It isn't about Apple's market share or even its quarterly sales numbers. (Apple's notebook computer sales for the fourth quarter were 4.1% of all portable computer sales, according to DisplaySearch.) What this is about is that Apple is reaching the right people with its product, winning new converts, Windows user by Windows user -- and creating buzz. How do you measure buzz? You don't. It's something that experienced people in this industry can just feel. And that's the condition Microsoft should fear. Because buzz can turn into something much harder to combat than sheer numbers.'"

Wedge

[kadema]

Look around at any codefest, hack day or industry conference and you'll see a great many macbooks. This is the leading wedge in a sea change for Apple that could translate into market share in the enterprise over time. The real question is - can Apple master the enterprise sales challenge toe-to-toe with Microsoft.

Re:Microsoft should worry until...

[UnknowingFool]

Microsoft shouldn't be too worried until Apple begins to sell OS X for installation on hardware besides theirs. When OS X can be put on all kinds of hardware, I will gladly purchase it and I'm sure many others will as well.

Others have detailed the practical and financial reasons why Apple will not do that. Namely, they make money on hardware not software. One of Microsoft's problems is to attract developers, Windows supports a wide range of hardware with a minimum of requirements. Unfortunately that has meant that the quality of third party drivers has been less than desirable. That combined with MS 40,0000 (not including undocumented) APIs have made turning solving this issue difficult.

Re:Microsoft should worry until...

[tomz16]

FYI, a friend of mind was looking for a laptop a month or two ago. Based on prior experience, I would have bet that the apples would be more expensive. It turns out that for all the configurations we tried, Macbooks and Thinkpads were pretty much neck and neck when it came to price/specs. Still a far cry in price from your cheapo budget Dells with stackable coupons, but I'd say that the build quality of macs and thinkpads is on the same level.

-Tom

Not MS, OEM

[fermion]

People tend to confuse the software with the machine. As long as most machines runs MS Windows, it does not matter if they run it on an Apple machines, or Dell machine, or HP machine. In all cases, if the user has a copy of MS Windows or MS Office, MS rakes in the cash. In fact, MS probably does better selling an Apple user MS Windows because they get the full price, and it will likely use less customer service because the machines are not made from whatever fell off the back of a truck.

Now, the concern is for the OEMs. I have been saying for a long time that by concentrating on price, they are playing the MS game, which is to maximize profit at MS and minimize profit on the hardware. For example, the Apple switch to Intel is not so interesting for Apple, but does indicate that Intel learned that MS has no interest in hardware profits, and that if Intel continued to focus on MS, it would continue to be has been chip maker.

So, MS is stemming the flow that will hurt it's business in the near term, namely there are no fully compatible OS products, and only allowing virtualization of premium priced products. In the long term, who knows. At some point there has to be a competitive compatible OS. Apple would do well to create the OS and run it as layer in the next Apple OS. But the only danger to MS is that the hardware vendors will wise up and stop cutting their own throats so that MS can make a profit.

Indeed, we have seen many OEMs go away as they can no longer make cheap enough boxen. We are really going to be down to Dell, HP, Lenova and Sony. The later two are more or less premium manufacturers. HP has the experience with HP/UX to rebrand it's PC as *nix workstations, but Dell will continue to be at the mercy of MS, and I feel sorry for them as Apple continues to earn 20% per machine, while squeezing Dell's margin to zero, especially now that the Intel kickbacks seem to be a thing of the past.

Re:Microsoft should worry until...

[guruevi]

The difference between Microsoft and Apple is that Microsoft is mainly a software company (Windows, Office, ...) while Apple is mainly a hardware company (Mac's, iPod's) and recently also a multimedia distributor.

Re:Microsoft should worry until...

[nine-times]

I've done various price comparisons at various times in the past few years, and I would say that generally the price of Apple hardware is comparable to similar hardware from other companies.

What I mean is this: if you pick an Apple laptop model, and then you go to Dell and price out a similar model to have all the same features, the price will usually be pretty close. Sometimes Apple was even a little cheaper, usually slightly more expensive, but close.

I'm sure there are loads of people who will claim I'm full of it, but those people usually aren't doing what I described in the last paragraph. For example, they'll point out that you can get a Dell laptop for $600 while the cheapest Apple laptop is $1100. However, the Dell laptop they're citing will be much thicker and heavier. The Dell won't have a CD-R drive or a built-in camera. The Dell won't be as fast or have a good-quality screen.

When you price out a machine with the same quality of parts, the same features, and the same form-factor, you generally find that Apple is competitive with all the major players (Sony, Dell, HP, IBM, Toshiba). However, Apple doesn't offer el-cheapo machines. They just don't have a $300 machine where they've cut every corner to bring it to market at cheaply as possible. They don't offer a $600 laptop. They also don't offer a general mid-grade mini-tower or micro-tower. The only machine that you can really expect to be upgrading is a Mac Pro, and as the name suggests, it's an high-end workstation more than a general desktop PC.

So that's why I was talking about market segmentation. Apple might be able to expand their market into these areas, but it seems like they don't want to. I'm not sure why not, but I have some theories.

Making The Switch

[lazarus]

I recently switched my wife [wikipedia.org] back from OS X to Windows (Vista). She is a language geek and works as an editor and occasional writer in the financial sector. The experience of having her as a Mac user was completely maddening, something you wouldn't expect given her profession. She lasted almost two full months as a Mac user. There were two deciding factors to the switch back:

• Microsoft Word was not fast enough on the Mac
• Microsoft Word was not 100% completely compatible with Microsoft Word on the PC

Let me tackle each of these in turn (put down your flamethrowers right now).

The current version of Word on the Mac is compiled for the PPC and runs through Rosetta. While most people report that Word runs "just fine" through Rosetta, the fact is, it doesn't for people who work like my wife does. Fast. Demanding. Has a lot of work and isn't going to wait around patiently for her last action to complete. Yes, I did all of the tweaks to speed up her Mac (the best MacBook Pro money could buy (2.33GHz Core 2 Duo, 2GB RAM, 160GB disk)). Yes, I even allocated more RAM for Rosetta.

And before you ask, yes, I ran Word 2003 in Parallels. Yes, I ran it under VMware Fusion. And yes, I ran in under Crossover for Mac. The sad, but obvious fact is that Word runs fastest natively under Windows on a PC (in this case a brand new Vaio which I had to buy to replace the MacBook Pro). Both of these computers had exactly the same specs.

As for the second problem, it cannot be over-emphasized. You cannot submit a report back to a client which looks like trash in *their* version of Word. Word 2003 is *not* Word 2004. And the upcoming Word 2008 will *not* be Word 2007. Any alteration in a document which is advising investors to spend billions on a particular equity is not acceptable. No, she couldn't use Open Office. Or anything else. And yes, she also tried to save the document using compatibility mode.

RANT: ON
We both hated to go back. She loved the Mac. Anybody who thinks that Microsoft should be really worried about Apple is a little delusional. Microsoft doesn't make software, they make money (which explains why their software sucks - ask me about this sometime). They've also invested heavily in Apple (when Apple makes money, Microsoft makes money). And they are releasing and continuing to develop Office for the Mac, because it is profitable for them. And will continue to be. Sure, Microsoft would like to own every single aspect of the computing market, because that would make them the most money. But when they can't, they hedge their bets (Corel, Apple, most recently Novel).
RANT: OFF

By the way, moving from Microsoft Entourage to Microsoft Outlook is a total pain. You would think this would be straightforward, but no. And if you're one of those who think Micosoft tries to make it hard to move from the PC to Mac on purpose, just try moving back. It's even worse. Ultimately I just set her up with IMAP and had her re-create all her folders (she had hundreds) and copy her mail up to one of my mail servers. Mail is better that way anyway...

As for the MacBook Pro, I'm downloading FC6 right now :-)

Re:Microsoft should worry until...

[DDLKermit007]

Thats only really relevant if your talking about a Mac Mini. iMacs allow for graphics card upgrading via MXM, and Mac Pros are standard desktops with a crap load of processing power. As for motherboards with different features? Theres not really any features a Mac doesn't have already I've been able to really see on a normal x86 board (with the same form factor) that I wanted. That kind of hardware nitpicking only really matters when your dealing with choosing between a Via & ASUS board kind of deal. Apple puts quite a bit more in their systems than PC manufacturers do.

Defining and measuring buzz

[xxxJonBoyxxx]

What this is about is that Apple is reaching...and creating buzz. How do you measure buzz? You don't.

Looks like the newbie stick has been smacking SlashDot authors again.

First, "buzz" is a marketing issue, and it's been pretty well defined for several decades. Look up the phrase "AIDA" (attention, interest, desire and action). "Buzz" is roughly equivalent to "interest": people are interested in the product, but don't necessarily desire the project yet.

Second, measuring levels of attention, interest, desire and action is extremely EASY to do. In addition to decades of university-level research that contribute to our understanding, there are hundreds of marketing and polling firms that can monitor these levels of interest in commercial products fairly accurately.

(If you don't think Apple is employing marketing firms to generate and monitor AIDA, including "buzz", I'd like to sell you something too.)

Re:Amen?

[iroll]

Your pops bought an Apple II in 1984? Man, what a sucker. Of course, you neglect to mention that there was still active commercial software development for your Dad's Apple II TEN YEARS LATER. Oh, and that new models of the Apple II were still sold for the NEXT 8 YEARS.

Yep, sounds like he really got screwed, by buying a seven year old computer design that had at least seven more years of life. I would be so pissed, too.

Re:Microsoft should worry until...

[Achromatic1978]

Do they? Or do they require Xbox for the hardware? The two aren't the same.

Re:But You Don't Need An Install Disk

[tres]

Replying to myself since I didn't put the link:

Parallels Transporter [parallels.com]

Re:Microsoft should worry until...

[HUADPE]

The Mac mini is a bit lightweight for a serious game machine, and unfortunately there isn't something between a Mac mini and a Mac Pro

There is, it's called the iMac. They've been shipping them since about '97. I'm using one right now and it's very nice. I game on it regularly and I have never pushed the hardware to where I felt it being sluggish.

Re:No way.

[jetxee]

Ha-ha! Definitely BMW is just a bunch of losers. They have profits and cannot increase the market share. What a shame!

FYI, in fact BMW's market share is increasing [bmweducation.co.uk].

Re:Java isn't going to lead the way...

[heinousjay]

Core 2 Duos have the 64 bit extensions. Don't believe what people in the Apple Store tell you. Even though they call them geniuses, they're just techs with a knowledge born from proprietary manuals.

Re:Same story, different decade

[sjf]

Well said. It's nothing to do with image for me. "It just works" pretty much sums up the Apple experience. How many Mac users here remember their first Bluetooth phone ? My Mac already had BT built in...my address book was synced with the phone within minutes of unpacking the phone. No software to install, no data to copy into a new application, it just worked.

Re:I'll give you a real world non techie perspecti

[p0tat03]

Some evidence:

MacBook 2.0GHz:
Intel Core 2 Duo 2.0GHz
1GB DDR2-667
80GB HDD
Dual-layer burner
13.3 glossy widescreen
Integrated 802.11 a/b/g/n
Bluetooth 1.3 + EDR
Integrated webcam
Magnetic power cord
Intel GMA950 graphics
Total: $1299

Dell XPS M1210
Intel Core 2 Duo 2.0GHz
1GB DDR2-667
80GB HDD
Dual-layer burner
12.1" glossy widescreen
Integrated 802.11 a/b/g
NO bluetooth available as upgrade
Integrated webcam
NO magnetic power cord
Intel GMA950 graphics
Total: $1493

I chose the XPS M1210 because of the form factor. Dell's closest performer to the MacBook in question is a 15.4", and from my experience talking to MacBook owners, most feel that 15.4" is too large and immobile for their tastes (though I personally use a 15.4" MacBook Pro). Many PC users complain when I make the magnetic power cord as a bullet point, but I think it's valid. I've known multiple Dell users who have, in college environments, libraries and whatnot, trashed their laptops by someone tripping over the cord and yanking pins off the motherboard internally. There is a mini-industry repairing these things in my college for those not covered under warranty. I know personally that the MagSafe has saved this laptop at least twice since I got it.

Allow me to price out the alternative...

Dell Latitude D620 (look in the small business section)
Intel Core 2 Duo 2.0GHz
1GB DDR2-533
80GB HDD
Dual-layer burner
14.1" glossy widescreen
Integrated 802.11 g only (no a/b/n)
Integrated bluetooth 1.3 + EDR
NO webcam
NO magnetic power cord

The above machine runs XP SP2, since it won't let me configure a Vista machine with bluetooth options (driver issues still?)

I've tried to be as objective as possible with this comparison. From this I think it's clear that the Macs are very competitive. I usually get a lot of people complaining that you can buy a cheapo Dell for $600 but can't do so for a Mac... but that's not really an issue with Macs being too expensive, more of one with Apple not servicing your particular demographic.

Intel GMA950 graphics
Total: $1268

Re:Microsoft should worry until...

[Trumpet of Doom]

Really. Somebody needs to tell these people [finalemusic.com]... they write the standard to which all music notation software is held, and it runs on the Mac.