Apple’s Mac OS X Leopard vs. Microsoft’s Windows Vista: a ‘Risk’ strategy

“PC enthusiasts like to scoff at the market share of Macs in comparison to worldwide computer sales. They view the worldwide PC market like a simple board game of Risk, where market leaders Dell and HP have more armies scattered over more territories, and Apple only has armies placed in a few,” Daniel Eran writes for RoughlyDrafted.

Eran writes, “The strategic positioning of Apple compared to other PC makers figures into the comparison of Leopard and Vista because of The Indirect Choice: the market won’t be picking an operating system, but rather a hardware maker. PCs from Apple can run both, while PCs from everyone else will only run Windows.”

“While Apple could focus its efforts on capturing wide swaths of the game board, the company’s strategy so far has been to identify the best territories to hold, and defend them from being taken,” Eran writes. “This strategy is familiar to anyone who’s played Risk, and knows how easy it is to thinly spread armies all over the board game, only to subsequently lose them all to other players.”

“Similarly, rather than spreading itself thin by shipping high volume, low profit boxes to inflate its market share numbers, Apple only sells premium PCs it can earn a sustainable profit on, and specifically targets customers who benefit most from the company’s tightly integrated product line,” Eran writes. “Not only are Macs eating up the most valuable segments of the PC market, but they are tenaciously holding on to growth in ways commodity PC makers can’t.”

Full article here.

Related articles:
Apple’s Mac OS X Leopard vs. Microsoft’s Windows Vista: prerelease marketing – November 14, 2006
Dude, you got a Dell? What are you, stupid? Only Apple Macs run both Mac OS X and Windows! – April 05, 2006
Why buy a Dell when Apple’s Intel-based computers will run both Mac OS X and Windows? – June 08, 2005

39 Comments

  1. I like the marketshare just the way it is. I’ve already found paradise, why should I let more people in, they’ll just bring viruses.
    PCusers are suckers anyway for sticking with windows this long so why bother with them? Let the infidels burn!

  2. I like what he say’s,

    Mac is growing market share in the high end , quality machines, where one makes a profit,

    Let the others keep the low end loss leader market, why sell something if you are not going to be profitable

  3. Each 1% of PC share that Apple gobbles up extends revenue by another $2 Billion. What’s important about that extra $2 Billion is that Apple makes more profit on it than Dell does on $3 Billion, if they make any at all.

    I question Dell’s profit because it appears that they have been cooking their books to show a profit, while in fact they have been losing money for the past 4 years. A examination of Dell’s Balance Sheet indicates declining shareholder equity, which isn’t possible considering the way they treat their share buyback program, coupled with their income statements all reflecting profits.

    Could this be the reason for the SEC “formal” investigation of Dell’s accounting practises? it could be one of them.

  4. In terms of “user” share, I think Apple already has a “substantial” portion. Macs stay useful and valuable longer than Windows PCs, thanks to Mac OS X. Just look at eBay’s Macintosh area or the used/refurbished Mac vendors, and the Mac upgrade companies. A substantial number of “new” and “long-time” Mac users are buying second-hand Mac hardware to save money. If Apple’s customers were compelled to replace their current Macs with brand new Macs as often as Windows PC users, Apple would sell even more Macs.

    But the good news is, that’s what IS happening right now. Long time Mac users are replacing their PowerPC Macs with new Intel models. This trend will continue for 2-3 years, and it will accelerate because (1) the introduction of Leopard which will no doubt have Intel-only features, (2) the continued performance upgrades to the second generation “Core” CPUs from Intel, and (3) the eventual release of Universal versions for the remaining “pro” apps (mostly from Adobe).

    Add in the “iPod halo effect” customers, and Apple will be at a “substantial” marketshare number much sooner than most people expect.

    [Despite the recent rise in stock price, I thinks it’s time to buy some more AAPL. Most analysts are still clueless about Apple’s potential.]

  5. Sorry to say, some windoze people never learn. I’ve managed to switch 5 people to the Mac platform with a two week free tutorial on using the Mac. After the two week period, I rarely get calls from these people about needing any help.

    I had one failure in trying to switch someone. They fell for the $399 Dell which balooned to $700 on checkout. Recently this person came to me and asked me if I know how to fix her computer because it had some error about not reading the usb drives. I gave her the I told you so look, but not in a bad way. She conceded that she should have just paid the extra cash and got the Macbook I had suggested. Now she is in for a world of hurt.

    Moral of the story is that market share is coming but it will take awhile until some windows people learn from their mistakes.

  6. Do you know what everyone misses ?
    Market share is purely baed on sales

    Now installer base is a different kettle of fish

    where Market share or sales of PC’s a year being a more accurate name tends to favour Windows Boxes because Windows PC users get rid of their systems way quicker than Mac owners.
    Often on 1-2 years basis where as Macs are replaced on an average of 4 -5 years.

    Current user install base figures in the US for Mac’s is well over the 10%.. some say as high as 14%. Sounds a little optimistic to me at that level so it is probably somewhere inbetween.

    You see the Market share figures are really for the manufacturers benefit. thats the only figure they are interested in.

  7. @Mac4life

    I got a better story, a lady friend of mine was asking my opinion about computers.

    I told her to get a Mac and happened to have a used one all ready to go for $900.

    She thought that was too high for a used machine, but I told her it’s because it’s reliable and actually cheaper becasue she wouldn’t need to pay for anti-malware etc. Would last for years and lower TCO.

    Well she bought some no-name offbrand closeout PC off of QVC (TV shopping channel) for $1200. Two weeks after purchase the cheaply built machines power port self destructed and she was out of a machine. No returns from QVC.

    Attempting to trace the maker found it was out of buisness and not availalbe.

    Next time she bought a Mac laptop used for $800 from somebody, she pulls up next to me in traffic and flashes the Mac laptop and professes to tell me she’s in love with her little Mac, how well it works and how easy it is to use.

    True story.

  8. True. I’m still using my Dual 800 G4 from 2001. It’s really getting tired, and it’s nowhere near as snappy as my G5 at work, but it gets the job done.
    A little more upward movement from AAPL and I can finally get that 24″ iMac. That will be the 5th machine they have bought for me.

    STRATEGO!

    (oh wait, we were playing RISK..)

    -c

    MW: ‘stop’ (being so damn sexxie)

  9. Thats a good point i guess, that pc buyers dont have a choice.

    I would like to think that pc users could switch to linux but linux just isnt built for the main stream.

    One thing to remember is that the apple apps are now “Universal”

    Which means at anytime they can inject the powerpc chips back into the market and can not mix and match as they see fit. The whole idea of “Universal” applications is actually mind blowing.

    DOnt most linux apps port over to the mac os? All based off that Unix set of rules?

    Some one more tech minded then me elaborate how this all works, but from my view it seems that Windoze would soon be isolated for not being part of the “Social”

  10. Just got back from class. The professor was going on about his computer problems – he is afflicted with the malware dujour. The one other Mac user in class and I just rolled our eyes!

  11. I find Daniel Eran’s writing to be intelligent, insightful, and thought-provoking. His blog, roughly drafted, should be required reading for all IT personnel and university computer science students.

    I am writing this on a 2002 G4 17″ 800 MHz flat-panel iMac. Even now, as it begins its 5th year on my home desktop, I am loathe to think of getting rid of it, of even giving it away to a family member.

    I don’t know any PC users who are attached to their PCs the way Mac users love their Macs. If they haven’t replaced their PCs every 1-2 years, it’s usually because of perceived financial reasons, not because they enjoy their computers so much.

  12. Well said MacSmiley, I completely endorse everything you say. Let me say that, while we still have, and use, a G3 iMac, you have much pleasuyre in store when you move to the latest wizardry.

    I alternate between wanting Apple Mac to continue to be it’s profitable niche and wanting it to grow exponentially and take down Windows, which has to have been a costly mistake by anyones standards. However, it is the case that large business, with entrenched IT management, won’t switch overnight, and you wonder sometimes, if ever. But for individuals, the tipping point is on us, and there are now so many new switchers telling rabbits, friends and relations about what they have discovered, that Mac sales are going to rise ridiculously fast over the foreseeable future.

    Those sales are going to be enhanced by the release of Vista, which is going to prompt the statement: “you’re not considering upgrading to Vista are you? You’ll be much better off with a Mac, and anyway it runs Vista too if you need it”.

    The future of Apple at this moment in time is truly extraordinary, and I believe it is just starting to hit its stride. It is so ruthless in executing incredibly bright ideas, products, and new concepts that it is in a realm of its own. I don’t think there is another company anywhere that compares.

    And what’s more, I am prepared to put my money where my mouth is. I have moved two thirds of my pension into Apple shares this year (though pity I didn’t when I last considered doing it in 2002).

    And a lot of why I believe all this is that the vehemence of the attacks from the zealots from the Windows side of the fence are such that it can only mean that they are feeling highly, highly threatened.

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