Can Apple take Microsoft in the battle for the desktop?

Apple Store“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

37 Comments

  1. 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.

  2. 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…

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