“The future success of Apple, Dell and Intel lies with a licensing deal between Steve Jobs’ company and the PC maker according to analyst Gartner,” Andrew Donoghue reports for ZDNet UK.
“Increasing component costs and pressure to cut its prices mean Apple’s best bet for long-term success is to quit the hardware business and license the Mac to Dell, analyst firm Gartner claimed on Tuesday,” Donoghue reports.
Donoghue reports, “In a surprisingly ambitious report, called Apple Should License the Mac to Dell, Gartner says Apple should concentrate on what it does best — create software — and make use of Dell’s production and distribution infrastructure. ‘Apple should leverage its close relationship with Intel and team up with Intel’s closest ally, Dell,’ the report states. ‘We recognise that this move would surprise and even shock many. We are aware that Steve Jobs cancelled previous Mac licences when he took over at Apple and that he guards the Apple brand zealously.'”
“Apple increased its share of the PC market to around 4.6 percent in July this year, according to analyst figures,” Donoghue reports. “Gartner claims that with the right partners, distribution channels and a more affordable price, computers running the Mac OS could eventually account for 20 percent of the total PC market.”
“Apple will not be able to substantially increase this growth on its own because of increasing pricing pressure, Gartner warns,” Donoghue reports. “Apple’s margins for its Mac business, currently around 40 percent, are only sustainable because component makers such as Intel choose to prop up the business, Gartner claimed.”
Full article here.
MacDailyNews Take: Wow. “Surprisingly ambitious report?” More like “Surprisingly asinine report.” Nice to see that Gartner is finally realizing that Windows isn’t good enough, though. About two hours ago, Apple announced they had sold the largest quarterly number of Mac units in the company’s history. Dell is floundering. They jumped off the Intel Secretariat and onto the AMD glue horse at precisely the wrong time. Dell is not executing. Dell has no strategy. Apple became number one in Western Europe education earlier this year, pushing Dell down into second place. Dell has nothing of unique value. If Dell disappeared today, nobody but Dell employees would care and even they wouldn’t care after they found new jobs.
Comparable Macs cost less than Dell PCs already and Apple isn’t going to sell cut-rate Macs like Dell does with its loss-leader junk PCs. Dell is a commodity box assembler and a non-innovator. Dell PCs are, in short, mass-produced garbage with a badly faked, upside-down, and backwards Mac wannabe OS from Mafiasoft.
We have a better idea: Apple should continue to grow their hardware business, open more and more Apple Retail Stores worldwide, show the world Mac OS X for a change, license Mac OS X to nobody and, if they did license to select partners, never, ever license to beleaguered Dell. Dell should be left Mac OS X-less to flounder and wither and eventually die. What would we do with Dell? We’d shut it down and give the money back to the shareholders.
Related articles:
Apple Q4 earnings results: $546M net profit on $4.84B revenue, sold 1.61M Macs, 8.729M iPods – October 18, 2006
Dell feels the heat from Apple – October 04, 2006
Down, dumb Dell – September 25, 2006
Beleaguered Dell’s OS-limited PC sales ‘declining rapidly below expectations’ – analyst – September 21, 2006
Fortune compares Mac vs. Dell: ‘you’ll get more for your money with Apple’ – September 11, 2006
PC box assemblers like Dell and others wish Apple would license Mac OS X – August 31, 2006
AP: Time to think different, Apple Mac beats Dell on price, software compatibility, and more – August 23, 2006
Dell profit falls almost in half; announces informal SEC probe – August 18, 2006
Bear Stearns: Apple’s new Mac Pro, Xserve pricing well below comparable Dell systems – August 09, 2006
Dell warns of earnings miss; shares plunge 15% – July 21, 2006
Survey shows big jump in consumer interest in buying Apple Mac; Dell takes steep slide – July 06, 2006
The Channel Insider: Dell is no Apple – May 31, 2006
Dell warns 1Q earnings will miss mark; shares tumble – May 08, 2006
Apple passes Dell in market value – May 02, 2006
InformationWeek: Apple Mac run Mac OS X, Windows, and Linux; Dell and HP should be concerned – May 01, 2006
Dell shares fall as Citigroup cuts rating two full notches from ‘buy’ to ‘sell’ – April 21, 2006
Dude, you got a Dell? What are you, stupid? Only Apple Macs run both Mac OS X and Windows! – April 05, 2006
Dell acquires PC maker Alienware in bid to corner market on gaudy case designs – March 23, 2006
Apple Mac is #1 in European education market, pushes Dell down into second place – February 03, 2006
Fortune columnist doubts Apple CEO Jobs will let Michael Dell sell OS X anytime soon – June 23, 2005
Michael Dell say’s he’d be happy to sell Apple’s Mac OS X if Steve Jobs decides to license – June 16, 2005
“In a surprisingly ambitious report, called Apple Should License the Mac to Dell. . . .”
Wow. It sure is ambitious. There are no flies on Gartner!
“We recognise that this move would surprise and even shock many.”
It certainly shocked me — and Gartner recognized that it would! I’ve never heard it before! What a concept! Let’s hope Steve Jobs reads this. I’m sure he’d appreciate the idea.
Keep up the good work, Gartner. I hear you signed up Larry Bodine as a computer-industry writer.
Me in LA,
You’re welcome.
I think this guy means the best thing for Dell’s long term sustainability, not Apple’s.
I have a better suggestion: Dell starts reselling Macs. They’ll be Apple branded, designed by Apple and in all ways be identical to Macs that Apple sells. Essentially Dell will become an authorized reseller for the Mac and iPod.
Win-Win situation for everyone.
MDN, you guys are awesome – right on the money!
Dude, you got a Dell! … I feel so sorry for you. 🙁
Dear Steve:
I’m sorry what I said. Please, license OS X so I can sell more PC’s. I know Vista sucks and there’s nothing on the horizon to substitute it except five year Windows XP built on archaic NT architecture. I grovel before you, I lick your shoes.
Sincerely.
Mike Dell
Apple doesn’t need to license OS X to others in order to get Macs made in larger numbers.
Most of the parts that Macs are made from are standard parts. The PC clones are made in Chinese factories. In essence, all Apple needs to do is to buy more parts and commission more factory capacity to make them. As the PC clone manufacturers aren’t doing too well, that shouldn’t be too much of a problem.
The bigger problem for Apple would be distributing and supporting them, but things are looking better on those fronts too.
There is not much of an argument for opening OS X to other manufacturers and pulling out of hardware production, but there could be an argument for allowing some very carefully selected manufacturers to licence OSX-compatible motherboards, to be fitted into Apple-approved models. Apple could take a licence fee that would be comparable to the profit of actually making a Mac, but wouldn’t have the inconvenience of actually having to build, ship and support them.
To those who like to argue about whether Apple is a software or a hardware company, I would suggest that Apple is actually a solutions company. The best solution usually involves a combination of hardware, software and other aspects too.
OSX soiled by crappy Dell hardware and awful support, no way.
Apple won’t dump their hardware unless their about to take their last breath. Not anytime soon.
What I believe is more likely is that if Apple reaches a critical level of overall market based on their current strategy, they will do what Steve said Apple should have done through the 90s: “go for market share.” That’s the ipOd strategy and they’ve shown that they know what to do.
They have a number of options available for how to lower the prices of their stuff, but as it’s always been, Apple thrives because people WANT their stuff. If that critical level of market share is met, they could bank on their popularity and ease of use to essentially out-Dell Dell. A cheap box, not a cheap OS. I know the mini already fits the bill pretty much, but sadly, Apple is still not in the running for most peoples’ PC purchases. But, give it time.
When people make a leap to buy something that they’re unfamiliar with, it’s because they trust the one they’re listening to. If you’re a Mac geek, even if you’re a saint, you’re still seen as a geek and therefore suspect. But, if you’re one of the unwashed masses and you say something is insanely great, you’re more real and likely to be believed. If Apple starts to hit 7%, 10% market share… there’s momentum there. Each one of those owners starts to spread the word in ways we geeks can’t.
Gartner’s a dork. He sees the world as if M$ dominance is the truth or the end of the fight. He’s wrong. Big time.
MDN “once” as in “Once upon a dream…”
When did Dell buy Gartner?
How about this. Instead of Apple licensing its OS X to Dell, why doesn’t Dell get out of the direct-to-customer business, and become a contract manufacturer of Apple-designed macs for Apple, just like those factories in China?
All they’re good for is assembly. Why not do what they do best for the best computer company on the planet?
Sigh. This again?
Okay, let’s do some seat-of-the-pants math based upon Apple’s just announced numbers.
Apple shipped 529,000 desktops and made $705 million doing so. So Apple made, on average, $1332.70 per desktop sale. Apple shipped 798,000 portables and made $1.161 billion. That means Apple made $1454.89 on each portable sale. In total, Apple made $1.866 Billion selling Macintoshes. With me so far?
In the second quarter of 2006–which is the best I can find for Dell–Dell shipped 9.73 million PCs. HP shipped 8.107 million PCs. Lenovo shipped 3.994 PCs. Acer shipped 2.836 million PCs and Toshiba shipped 1.906 PCs. So, in all, the Top 5 PC manufacturers shipped 26.573 million PCs (out of 54 million total PCs shipped–a little less than half). Still with me?
Okay. So, Apple made 1.866 Billion selling Macintoshes. Let’s say Apple gets out of the hardware business and licenses Mac OS X to Dell for $100 per PC, just to make the math easy. To have a quarter like we just had, Dell would have to sell 18,660,000 PCs with Mac OS X. Considering that, last quarter, it sold 9,730,000, it would have to sell twice as many PCs as it usually does–with Mac OS X!
Let’s say that Apple teams up with the top 5 PC makers. 70% of their sales would have to be Mac OS X for Apple to make the same amount of money they made this quarter. We’re not talking more money! We’re talking the same amount! If they sold it through all PC makers, they’d still have to get almost 34% of the market to make the same amount of money!
So, in other words, Gartner’s theory that Apple would end up with about 20% of the market would mean that Apple would make less money than they made this quarter!
And this assumes that Apple would be able to get $100 for Mac OS X. If Apple did this, Microsoft would drop it’s price for Windows (which, as I remember from the trial, is around $100). It’d be a race to the bottom and Apple would lose that race–Microsoft has four times the money of Apple in the bank. They could give away Windows and outlast Apple.
Damn misha bawa!
Get many women with those lines?
I bet you got some great home movies…
What a crock of shit. Because of Apple’s deal Dell will be gone. There is no future for Dell unless Apple would make a stupid move like that.
Title should be:
Gartner: Only future for Dell – Apple licenses Mac OS X
Awesome, Peter.
MDN, may I offer the opinion to splurge for a new server whenever you can? Mighty slow…
A Mac-Only dealer scribbled:
“Or perhaps they could partner up with their longtime Mac-only resellers rather than trying to put us out of business. Who was there in the bad times selling and promoting Apple products? Apple dealers were.”
After Steve returned to the company, he brought out the first iMacs. I watched them for a while, looked like they were doing good things. When the second generation came out (the Indigo, if you remember) I walked into what was the largest Mac-only shop in Oregon, and asked to buy one.
That independent, Mac-only dealer refused to sell me one! They told me that they wouldn’t stock the Indigo, because it was a low-end machine that they couldn’t afford to sell.
Since then, I’ve given my expanding Macintosh purchases to such diverse entities as the Apple company stores and CompUSA – but I’ll never set foot in one of those dreary independent dealers again.
You can rot in he** for all I care!
Gartner has head up ass. It’s dark in there, hard to see. Becoming dillusional from bad air.
I think Apple should do exactly what they are doing now, which is show the people that there is a better way to do things. But don’t get me wrong, and mark my words people after Apple gets too about 10% market share possibly higher, the other PC manufacturer’s will file an anti-trust law suite, sighting that they can’t compete without access to Mac OS X. And I think when this happens that’s when Apple will license out Mac OS X to other vendors and secure there dominance over Microsoft, that is to who ever is left in the PC manufacturing market by then.
“Who was there in the bad times selling and promoting
Apple products? Apple dealers were.”
A Mac-only dealer speaks the truth. Before there were Apple Stores, before the internet existed, it was the Apple dealers who made it possible for us to enter the Mac world. They certainly deserve better than to be pushed out of their own territory by the maker of the products they sell.
Petrouchka:
Why you use this fuzzy maths? In my country, PC is best. We listens to folk song and watch, what you say, sexy moviefilms, yes. You know, Bill Gates is much famous man. He is also from Kazakhstan. When Vista make release, look out. Windows is number one in my country. Gartner is much respected by science mens in university, yes.
Noticed that this Gartner Report was regurgitated yesterday. Wonder how that CROW tastes today. What a couple of morons.
That would be a sad day when the only hardware available would be made by peecee makers.
no more sexy computers 🙁
Madcow is still in the UK. We have proof now!
Borat = Sputnik
It’s a sad situation– being beholden to a failed system and being loyal, or striking new ground. Businesses are meant to make money…