Why Apple’s Mac platform fell into crisis

“Apple’s recent quarterly earnings report blew past all expectations. More importantly, dramatic unit sales growth shows the company is executing a working strategy for building the Mac platform,” Daniel Eran writes for RoughlyDrafted. “That raises the obvious question: why has Apple’s market share historically been so low, and why did Apple fail to make any progress in the 1990’s?”

“Here’s a look at why Apple’s platform fell into crisis, and why the solutions prescribed by analysts didn’t work,” Eran writes.

Eran takes a look at the following:
• Market share
• Apple’s premium PCs
• Creating and maintaining a functional Mac market
• Disasters in retail (Sears et al.)
• Mac clones disaster
• Disasters in direct sales
• No compelling reason to buy a Mac
• Delayed migration to NeXT/Mac OS X

Full article here.

42 Comments

  1. Heh, the clones.

    I remember the clone computers were so fast and cheap, with such rapid updates, that the Apple offerings were out of date and overpriced.

    Things may have changed with Jobs back at the helm, where the hardware makes competing offerings look cheap.

    But still, the marketshare would’ve been greater with clones and Apple hardware sales would’ve suffered almost to oblivion.

  2. This one is easy. Apple fell into crisis because it was led by a succession of “business” people. Apple was not, at it’s core, a “business” it was/is a collection of engineers/artists/creative minds in search of ways to change the world. It cannot be led by marketers and accountants and lawyers. It has happened to MANY companies especially in Silicon Valley. As soon as the company is handed over to people whose primary concern it is is to make as much money as possible, the creative force behind the company is lost and motivation falters, people leave, start other companies etc. It’s all very simple.

    Just like government, when taken over by the greedy and corrupt and inept… you have failure.

  3. agree with “me”

    and I’d like to point out, that really, appealing to businesspeople is easy. that part was easy, they had a low standard. it was named the ‘personal computer’ because it was a real paradigm shift to think that ‘normal people’ could ever have use for a computer.

    so when 1980’s windows PCs came about, were they user friendly and made for use in the home… ?

    uh, no…

    The Mac was, though.

    And the Mac ‘failed’ because the vast majority of sales were PC sales to businesses.

    Sooo… what has Apple done to ‘change’ it’s ‘mistake’..?

    It stopped being schizophrenic. Stop trying to be everything to everyone. Cater to humanity, not the world of ‘banks, cashiers and ATM machines’

    Once they found their target market, they could focus like a laser on appropriate willingness to pay, appropriate price points and appropriate software development.

    If you’re scratching your head at the development of iWork and iLife..it’s because you still think Apple wants the big business market. They don’t. They are targeting PEOPLE. HOME USERS.

    Remember that and every decision they make will make sense.

    “But what about creative professionals…”

    The creative professionals as a secondary market is a great move for Apple, but notice how they never actually advertise to them..? They only serve those markets because they CAN, it’s consistent with them being a home user company.

    So how did Apple fail? They picked the niche market from the get-go because they were idealists, not really after the big bucks. That’s your first mistake. By the time that market had matured, they were the only company with the components to properly serve the market. The iPod, admittedly, came out of left field. It’s incredible that they decided to make a music player. It affects the Mac only that it is a cash cow to allow the Mac lower prices and allows Apple higher visibility.

  4. who cares history? Is all past.

    You learn from history so you don’t repeat it.

    Apple made many mistakes, but one of the bigger ones was remaining a single premium, proprietary brand while commodity PCs ate Apple’s lunch.

    Sitting on Mac System 7 with no answer to Windows 3.1, Windows 95, and DOOM (how many PC’s got sold just to play that game?) didn’t help matters any.

    Things are different today, and Apple is SO close to the “tipping point”.

    MS is deeply entrenched but they aren’t invulnerable. VisiCalc, Lotus, IBM, and even Apple were all in that spot at one time too.

  5. The problems of Apple are all in the past. Mac marketshare is going to increase slowly but surely from now on. There is simply nothing to stop it – not Vista, not high prices, not incompatibility with Windows. Mac looks way better, works way better, costs only a teensy bit more, runs Windows natively if you want. No viruses, no spyware. Never again will Mac be at a hardware disadvantage, thanks to the x86 switch. Mac has the maturity and stability of Unix, combined with the commercial software availability more like Windows. If you want to play games not available for Mac OS X – just boot up in Windows. Bam. (Thanks, Steve Jobs)

  6. me –

    I’ve gotta disagree with ya’ there, buddy. It all sounds very ‘Oprah’ to have a benign kibbutz of altruistic creative minds who have no concern whatsoever for the bottom line of the company, but Apple is, in fact, a business. In the dark years, it was still an innovative, high-minded company – it just made a series of very poor business decisions. That’s what happens when there are no businessmen among the ‘creatives’.

    In addition, I guarantee that the primary focus of the current CFO of Apple is to “make as much money as possible”. It’s just that now, a wiser, more long-range, and more sweeping business strategy is underway. Your apparent disdain for the monetary motive is surprising, considering that Apple and most other innovative companies always seem to appear in capitalist countries.

    It’s the creative minds at Apple that make the mac superior. It’s the creative business people at Apple that are making the mac resurgent and, hopefully, dominant in the marketplace.

  7. babagamoosh: who cares history? Is all past. Future is Mac. Whole story.

    A story has a beginning, a middle, and an end. What we have here is a continuing saga and we’ll never live to see the outcome of Apple’s story, but our children’s children might. By then though, the computers we use today will seem to them, as charming as those early wooden telephones are to us now.

    History IS important and cannot be dismissed as the past, for without a well-documented history, people can say whatever they want to bolster the providence of their perspective!

    One need only listen to a conversation between PC users where Apple is the topic, to get an idea of just how profoundly fictitious their knowledge is about Apple Computer. Some of their comments make my teeth itch!

    Apple Computer has been swift-boated for years and unfortunately many of us were powerless to combat the outrageous beliefs held by millions of PC users and much of the blame can be laid at the feet of Apple’s leadership.

    Mike is right about Apple’s schizophrenia and as long as Apple continued to define itself by comparison to the PC market it would stagnate. Apple lost their way in the ’90s and the decline into chaos was lead by the very man Steve Jobs brought onboard to change the world; a sugar water salesman no less!

    Daniel Eran understands the matter completely and his perspective should be assimilated by us all but especially the zealots continue to foster the adversarial relationship. Far too many of them don’t even know what’s at stake, much less what the fight is all about. Like moths to flame-bait.

  8. It starts with leadership. Show me a caretaker CEO and I’ll show you a company that regrets it, given time. This is even more critical in certain markets such as high technology, the creative arts & media. Apple is at the very intersection of these markets and has been for a very long time.

    Sculley frittered away years of fat profits without taking the next step and the next one after that. Apple had a ton of people chasing their own tail, spending money, time and mind-power and came out with very little to show for it. No unifying vision. The same was true for his successors.

    The great things Steve Jobs has going for him are these:
    1- He has a clear vision for where he wants the company to go and what he wants to do.
    2- He, as founder and Silicon Valley Geek God, has the cache to attract and guide the people necessary to make the vision real.
    3- He has the drive to push and push to get it where he wants it. He doesn’t take ‘it can’t be done’ well.
    4- He has great faith in his gut and is willing to bet the farm to get it done. He spent most of his huge Apple fortune founding NeXT and transforming Pixar from a small project at ILM into a full-fledged animation studio. He then cleared out the chaff and bet Apple on the Mac platform when he returned.

    People like that are called leaders. Not by position, but by actions and results.

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