“Some analysts are nostalgic for the days when they could appear intelligent merely by gushing about everything from Microsoft. They felt safe in recommending everything the company released, knowing that there were no real alternatives, and that anything the company could deliver would more or less have to be purchased,” Daniel Eran writes for RoughlyDrafted.
“All their advice and analysis helped to create the general illusion that Microsoft was divinely fated to succeed, and that no rival could ever hope to challenge the company. That illusion helped to reinforce the real power wielded by Microsoft as the dominant vendor of PC desktop operating systems,” Eran writes. “Maintaining that illusion was as important to Microsoft as a properly running propaganda machine is to a banana republic dictator.”
Eran writes, “Now that Windows Vista has finally shipped, critics are panning it as being an overpriced, unnecessary upgrade. Customers who have been waiting for Vista to ship have taken the opportunity to investigate the Mac, which not only offers a better product now than Vista, but also promises a further leap beyond Vista later this year with the release of Mac OS X Leopard.”
“Windows enthusiasts like to recount Apple’s long static 2% share of the worldwide market for all computer systems. However, Apple is no Dell or HP. Apple sells systems targeted at profitable portions of the PC market… Conspicuously missing from that lineup is anything like the volume loss leader PCs sold by HP, Dell, and no-name PC makers: the $600 systems that are stripped down to include just the core components needed to run Windows,” Eran writes.
“Microsoft makes no premium from sales of higher quality PC hardware; it supports HP and Dell in their crusade to profit from selling more units of e-waste more often… While Apple is cited by Gartner and IDC as selling around 5% of all the computers in the US, it isn’t obvious that Apple’s 5% share is the cream of the market; it’s actually worth more than the same or larger percentage shares held by rivals,” Eran writes.
“In the forth quarter of last year, HP and Dell combined sold 10 times as many PCs as Apple in the US, earned 5.5 times as much revenue as Apple, but together only ended up with 2.2 times as much net income as Apple,” Eran writes. “In other words, Apple earned nearly half as much net income with its 5% share the market as HP and Dell together, with their combined 55% share of the US PC market: $1 billion for Apple vs $2.2 billion for HP and Dell together!”
Much more in the entertaining full article here.
[Thanks to MacDailyNews Reader “Viridian” for the heads up.]
MacDailyNews Note: As we noted last Friday, last quarter it took Dell $14.4 billion in revenue to generate just $673 million in profit. By contrast, last quarter Apple generated $1 billion in profit on slightly less than half of Dell’s revenue ($7.1 billion). BTW, software developers, peripheral makers, etc. would do well for themselves to remember that people who are fixated on sticker prices and buy cut-rate PCs most likely do not buy software in any manner resembling the way Mac users buy software. Apple’s X% share of the PC market is worth much more than of any other PC maker’s X% share.
Related article:
Apple CEO Steve Jobs’ ultimate goal: ‘to take back the computer business from Microsoft’ – June 16, 2005
now, that is some good reading right there.
first!
3 days old, but still decent article.
Excellent article.
Moo!
Old article as I go the site every couple of days. Great read none the less.
As my dear old dad used to say….”too true”.
Hey Moo,
It is actually MooF!
I think the real point here is that Apple commands 100% of the premium desktop computer market.
And yet maybe…
These figures should be adjusted if we are going to talk about and compare “PC market share” vs net income.
This is because HP sells printers and other stuff that are not PCs (I understand that almost half of its sales comes from printers). And Apple itself sells also iPods, which account for something like 40% of total sales.
last quarter it took Dell $14.4 billion in revenue to generate just $673 million in profit. By contrast, last quarter Apple generated $1 billion in profit on slightly less than half of Dell’s revenue ($7.1 billion).
This means Apple as products too expensive, and that he is stealing consumers.
And guess wat?
You like it…
MBP,
Are BMWs too expensive?
The last two paragraphs of the excerpt are a spot-on perspective of the way things really are. Well stated.
Oh, and the answer to the article title is… Yes!
@MBP,
You know, if you could formulate a complete sentence, you might be taken seriously.
Mouth breather.
As stated on
Slashdot :
Can Apple Take Microsoft on the Desktop?
If Microsoft bends over the desk.
I don’t know… even with a condom, I don’t think the Mac would want to take PC.
Daniel Eran’s articles are REALLY good. I really recommend his blog.
How bad does Vista suck? Let me count the ways (or just the number of posts saying it does).
http://aspnetresources.com/blog/vista_sucks.aspx
MBP,
Apple products are cheaper than ‘equivalent’ Dell products.
I use ‘equivalent’ very loosely. The hardware is almost the same quality, CPU’s, Video Cards, Hard Drives, Optical Drives, et cetera, the Mac’s fit and finish is much better.
The software cannot be compared. Vista is at least 3 years behind Tiger and Leopard is right around the corner. The iLife apps are far superior to the Microsoft add ons. The security software, in Apple’s case non existent, is virtually useless on both systems. Macs don’t need it and Microsoft’s offering does not work very well.
Macs are by far the better buy.
The breathers that think Macs are too expensive have never bothered to build and then compare a PC with similar quality components and performance to a Mac.
If they had the brains required to make this simple comparison rather than regurgitating decades old propaganda, they may be surprised to learn that Macs are actually less expensive than a “comparable” PC.
It is a fact that Mac users are better educated and more successful than Windows users. Whenever you see one of the trolls posts on here from the latter, that fact becomes so obvious.
Frankly, Apple computers are not obsolete as fast as Windblows PC’s. And, better build quality.
I work with a lot of both. I pay a small premium up front for Apple units, but the maintenance costs on the Windblow PC’s is higher than all the articles I’ve read. I know; I pay the consultants; way too much and way too frequent.
I think the a sizeable portion of the new generation (early to late 20’s) are going for Apple, as it’s harder to BS them with B_llsh_t, and most often they want something that works, not something they have to fix (which is never-ending expensive and time consuming with Windblows).
Just my 2 cents, and over 25 years of experience.
OS X is incredible but it has a looooong way before it has 25% marketshare of all computers sold. Apple products are ‘premium’ products. The branding is premium, well made, well designed. Therefore, Apple products will always be a minority in the PC ecosystem. But that’s OK. As long as Apple continues to produce great products and services, i’ll keep buying them.Yes, iPod has considerable marketshare but OS X and computers are still at the core of everything Apple does.
Moof!
-C
“forth”?
That’s a bridge in Scotland isn’t it?!
Great reading!!
MBP,
I am willing to pay for the quality of Apple products. I guess you are not. Apple computers are cheap for how well they work and what they can do.
It’s a pretty good article. There are some glaring errors like comparing Apple’s profits with HP’s and Dell’s *without* discussing iPods? It’s so obvious it comes across as dishonest.
Also, often he comes to the right conclusion for the wrong reason, for example: “More Macs sold to consumers also means less demand for Microsoft-only solutions in general, such as websites that only work correctly in the Internet Explorer web browser.”
But that doesn’t make any sense since there is essentially NO demand for “Microsoft-only solutions” in the marketplace (nobody DEMANDS that somebody ELSE not be able to run it). It’s forced upon us, and not demanded at all. Obviously, demand for lock-in is already zero so it can’t decrease. What can happen is that demand for removing that lock-in could increase. This is so simple I feel like I’m talking to a child explaining this, like I shouldn’t have to, y’know?
FBER,
So true on your first point! However, on your other point I think if you reread the sentence he says, “means less demand for Microsucks-only solutions.” That’s not the same as someone demanding something be done a certain way. He’s only saying that it will be much harder to ignore 10% or 20% of computer users than it is to ignore 5% (or whatever number you want to use for non-Winblows users).
As the Macintosh platform grows in its installed base, anyone involved in web or software development will need to take Mac compatibility into account. The Linux folks are helping by demanding platform agnostic solutions, as well.
Had you actually read the article, you’d notice that in the immediate context of comparing profitability, it also pointed out that iPods were part of that success, but that both HP and Dell had tried and failed to introduce similar products.
HP’s PDAs (and earlier stint selling the iPod) and Dell’s DJ players were both unsuccessful ventures. Apple’s iPod is also bringing attention to the Mac, so its not like its some unrealated factor that needs to be peeled out.
HP and Dell also have other side businesses: printers with cartridges that can only be bought from them, big screen TVs, and other products that have been attempted to reduce their dependance upon the declining market for cheap desktop PCs. All those efforts combined have not been able to keep up with Apple, which has ventured into a series of profitable new product categories: Apple TV, the iPhone, and of course, software.
“Are BMWs too expensive?”
Oh yes, oh yes… ALL PC’s are “junky” and all Apple’s are “BMW’s”!!!!!!
Let see, for $600 I can buy a “junky” PC with a 100 gig harddrive, 1 gig of RAM (that I can easily add more cheap ram to), A DVD Player/Writer, and have the ability to change video cards and audio cards anytime I wish to upgrade. I also get a monitor, keyboard, and mouse..
Or I can buy a “BMW” MAC Mini, with a 80 Gig HDD, a half a gig of memory, and integrated graphics and audio.. Oh, Yeah, I also don’t get a monitor, keyboard, or mouse… And I have to pay EXTRA for something called a “Superdrive” to allow me to burn DVD’s (Something the Non-BMW’s all have as standard)… If I want to upgrade my RAM, I just throw away my existing RAM and go buy some more for about twice what ram costs for everyone else (and I can put it in myself with a putty knife, a set of screwdrivers, and a few hours of watching online videos)… Video, of course, can not be upgraded…
WOOOO HOOOO, It’s a BMW!!!! And I’m getting a BMW cause I’m a fanboy!!
It’s a Mac, not a MAC, bottom-feeder.
“Had you actually read the article, you’d notice that in the immediate context of comparing profitability, it also pointed out that iPods were part of that success, but that both HP and Dell had tried and failed to introduce similar products.”
But this is irrelevant to the article’s argued conclusion, which is “Apple’s portion of the market is way more profitable than HP’s and Dell’s”, and NOT “Apple’s non-computer product launches were smarter than HP’s and Dell’s”. We all know that, but this doesn’t prove any characterisations about the COMPUTER side of the marketplace. If you want to prove that Mac customers are way more valuable than PC customers, then don’t include figures from iPods, otherwise you blew the whole comparison. End of story.
My favorite post from http://aspnetresources.com/blog/vista_sucks.aspx :
“I too found this site by typing (searching for) “Vista sucks”.
“I haven’t tried Vista yet, but I’m looking at a new computer. I went to apple and configured the machine I want. It seemed expensive. Indeed, it’s expensive. So I thought, I wonder how much a similar Dell would cost?
“So off I go to Dell. I spend an hour online configuring my system, and at the end it says “Vista doesn’t support the 30″ monitor”. I think, this can’t be right. So I talk to tech support. Sure enough, their high-end graphics machine does not support the 30″ monitor with Vista. but XP isn’t an option in the “Home division”. The only way to get XP is to go to the small business division of Dell. But why would I buy a brand new machine running an already obsolete OS? That doesn’t make sense.
“Not only that, I had a hell of a time trying to figure out which version of Vista I should buy. But the monitor issue made it easy to figure out which version of Vista to buy – I’ll get OSX. Simple. More expensive, but simple. And the only upgrading I’ll do to that machine over the years is to add more RAM when the price comes down. Besides, after all I’ve read, I’ll be damned if I’m going to hook it up to a $5000 high-end printer and a $3000 high-end scanner to find out they don’t work with Vista. My time is worth more than that. Looks like I’ll be making the switch to MAC.”
Heh…
MBP,
I have a 13 year old BMW motorcycle and a G5 iMac. The BMW is so comfortable and tours like a dream…and it goes and goes. The iMac will do everything I throw at it. I don’t think either are too expensive. I’ll pay for reliability and consistency any time any where. However, if you get anything that’s too cheap then they usually end up being cheap and nasty. And besides, Dell’s profits and market share are going down and Apple’s are going up. Maybe you won’t say it but I will; increasingly people are sick and tired of rubbish computers and flaky operating systems.
For some reason another article (http://www.roughlydrafted.com/RD/RDM.Tech.Q1.07/EFDF04D6-8FE9-49E2-878C-B15FA27F1CCA.html) — which is linked to the above article — doesn’t appear on Daniel’s main page.
Click the MS/1984-lookalike graphic. It’s the link. As are the words ‘four paid updates’.
Good read.
Apple was failing to turn a profit before the iPod (it would sneak into the black with one-time asset sales). It’d be interesting to see if that was still the case today.
I’ve been browsing some “Vista Sucks” sites, like http://aspnetresources.com/blog/vista_sucks.aspx .
Maybe Apple should consider printing some of these sites up, and posting them on the Apple Store windows. . . . I suppose this isn’t a great idea, because they would have to use very small print, and would still use a tremendous amount of ink and paper. Even then, very little outside light could make it through to the store interior.
What a mess!
Even a- degree -won’t help you with this stuff!
Good point, but most corporate suits seem to think that what makes a company successful is volume, volume, volume, and never mind if we lose money on every unit sold because we’ll make it up in volume.
Which of course is completely irrational, but it’s what Wall Street likes.
It’s a rare breed of company that is willing to focus on profitability at the expense of market share. And these companies usually get the shaft in the stock market because investors aren’t looking for solid, long-term investments. They want get-rich-quick scams.
Most of Apple’s current stock price lift is not because they’re turning nice profits. It’s because they’re selling a gazillion iPods and dominating that market in volume.
Last quarter, it took Dell $14.4 billion to generate $673 mil in profit.
Last quarter, it took Apple $7.1 billion to generate $1 billion in profit.
It doesn’t take an efficiency expert to tell you which one is better.