“As Microsoft continues to waste time and resources figuring out how to win a sideline game it has already lost–Internet media–its shareholders have bigger things to worry about. Namely, the future of the Windows and Office cash cows,” Henry Blodget writes for Silicon Alley Insider.
Blodget writes, “It has been so long since Microsoft had anything real to worry about in these businesses that it’s easy to take their perpetual domination for granted. Don’t.”
Blodget reports, “SAI’s Dan Frommer recently noted a startling statistic: In personal computer sales in the US in Q2, Apple outgrew HP and Dell by a wide margin, continuing to regain market share it lost in the late 80s and early 90s. More surprisingly, Apple outgrew HP–the world’s largest PC vendor–on a unit basis as well:”
• Apple (AAPL) shipped 1.4 million computers in the US during Q2, representing 8.5% market share and 38% year-over-year growth. Mac shipments grew 9 times faster than the overall U.S. PC market (4.2%) in Q2.
MacDailyNews Note: Not 9 times, 20 times. You have to first remove Apple’s numbers from the PC market to make a proper comparison. (No, the PC market does not get to use Apple’s Mac numbers to prop up their faltering numbers.) The U.S. market as a whole (without Mac) in Q208 grew from 14,810 to 15,094 or approximately, or a paltry 1.9%. Mac grew from 1,011 to 1,397 or 38.2%. In other words: in Q208, Mac growth in the U.S. was more than twenty times (20x) that of the rest of the U.S. PC market. Contact:
• Q2 U.S. Mac sales grew by 386,000 computers year-over-year, handily beating no. 2 HP, which sold just 222,000 more computers in Q2 2008 (4.17 million total) than it did during Q2 2007 (3.94 million). Dell outsold HP and maintained its top U.S. market share; it shipped 5.25 million PCs last quarter, up 557,000 units/11.9% year-over-year, and representing 32% of the U.S. market. Meanwhile, HP (HPQ) maintained its no. 1 position worldwide
Blodget reports, “Looked at differently, the Big Three sold 1,165,000 more computers in the US in Q2 than they did last year…and Apple sold a third of these additional units. It is safe to say that the majority of these units won’t be running Windows. It’s also probably safe to say that most won’t be running Excel, Word, or Outlook, either.”
“Apple still has small market share (8.5% US, much less globally), so Microsoft is not going to fold up the tent overnight,” Blodget writes. “But at the rate Apple is gaining share, it won’t be long before Microsoft begins to feel a real bite. It is this threat, combined with the increasing attacks on its Office franchise, that Microsoft and its shareholders should really be worrying about.”
More in the full article here.
“There’s one more battle he wants to win. It has nothing to do with money, fame, or glory. Like all the best fights, this one is personal. Steve Jobs is going to best Bill Gates. This fight is Shakespearean, elemental, and emotional; watching it unfold should be the most fascinating business story of this young millennium,” Jeffrey S. Young and William L. Simon, co-authors of iCon Steve Jobs: The Greatest Second Act in the History of Business.
Microsoft fails because of Windows and Office. As long as the monopoly money keeps coming in, they keep squandering it as if it is “Monopoly” money. Microsoft no longer knows how to be competitive, and the money flow will slow and stop eventually.
And some of that “paltry 1.9%” was Linux.
Did Microsoft really loose market share? That Vista gift keeps on giving.
The best way to burn a house down is to start small fires all around the perimeter of the structure, then let the flames burn INTO the structure. There’s no place left to hide, and the house collapses on itself.
This sure looks like what Apple is doing to Microshaft. With Gates retiring, it only speeds up the process. (Hence, Apple isn’t going after the business clients first. That will happen all by itself towards the end. Always start with the users first.)
Microshaft will figure it out when its way, way too late.
The best way to burn a house down is to start small fires all around the perimeter of the structure, then let the flames burn INTO the structure. There’s no place left to hide, and the house collapses on itself.
This sure looks like what Apple is doing to Microshaft. With Gates retiring, it only speeds up the process. (Hence, Apple isn’t going after the business clients first. That will happen all by itself towards the end. Always start with the users first.)
Microshaft will figure it out when its way, way too late.
@Anita Ficks
Great write-up and I agree. I think one more important point to mention in regard to Microsoft’s stronghold on the Enterprise market – a lot of people stare at a Windows machine all day at work. When they get home, and want to check email, surf or play games, they don’t want to be looking at another Windows machine. That’s another point in Apple’s favor, although it won’t help them to gain overall market share.
Full disclosure: I’m one of those “IT Nazis”. I hold an MCSE and bunch of other useless certifications, but am no Microsoft fan (I was an Amiga guy back in the day). One of the greatest things about the Mac for me, is that after a long day of babysitting crack-baby Windows desktops and servers, I want a machine that “just works”. I don’t want to scan for malware, I don’t want to install countless updates and reboot my machine umpteen times. I don’t want to have to defrag…. I just want to do the things that I’ve always enjoyed doing on a computer. To me, a Windows machine is now the antithesis of all the things that I enjoy about computers – and I’m sure I’m not the only one who feels that way. In a way, I sort of hope that Apple doesn’t ever had that kind of presence in the Enterprise market, although I’m sure support issues would be much fewer and less frequent.
You mark my words… Microsoft will be there for a long time, but soon it’ll take Bill Gates to come back from retirement…
Who needs Office? I bought the last version of Office in 2004.
Bill Gate’s secret dream is to run Apple after Jobs retires.
@ MDN
THIS “COMPARISON” FROM THIS GUY IS COMPLETE BULLSHIT:-
“ Q2 U.S. Mac sales grew by 386,000 computers year-over-year, handily beating no. 2 HP, which sold just 222,000 more computers in Q2 2008 (4.17 million total) than it did during Q2 2007 (3.94 million). Dell outsold HP and maintained its top U.S. market share; it shipped 5.25 million PCs last quarter, up 557,000 units/11.9% year-over-year…”
The comparison above is meaningless, dishonest and stupid, more so because in the very next paragraph he compares Apple’s share to Microsoft’s in “Apple still has small market share (8.5% US, much less globally), so Microsoft is not going to fold up the tent overnight”.
The fact is (and a simple fact at that) Apple sold HUNDRED AND TWO THOUSAND MORE COMPUTERS THAN THE COMPETITION, I.E., PC VENDORS/WINDOWS AND LINUX VENDORS/MICROSOFT PARTNERS.
Another way of looking at is this: Mac sales grew by 386,000 computers year-over-year, Windows plus Linux based computers grew by 284,000 computers year-over-year, meaning Apple sold 102,000 more computers that all PC vendors combined!
Making the FISHY comparison by this guy look like propaganda from Microsoft.
We always compared Mac to PCs. Leopard to Vista/XP or whatever crap Microsoft/Microsoft Partners is/are selling. While a Dell – HP comparison makes sense for Windows based computers, an Apple – Dell or HP comparison is FAKE, it makes no fucking sense. It is meant to obfuscates rather than illuminate. So, whenever Microsoft Enthusiasts throw this soft ball we need to be alert, because they always do that when hiding unpleasant news.
His Steveness is eating Monkey Boys lunch right now and besting Bill right now, I mean – what is Microsoft’s answer to the iPhone/iTunes/App Store/Leopard/MobileMe/iPod/iPod Touch? None, nada, nothing, zilch! There is no need to wait for 2020 or 2100 (@ Jeremy). And at this rate Apple will have a quarter (25%) of the U.S. market in about three years. A conservative estimate of mine is that Apple will sell well over 50,000,000 (50 million) iPhones in the next calendar year (2009), if his Steveness wants, Apple will sell well over 150,000,000 (150 million) iPhones by end December 2009!
@@last time i checked…
Actually I think MS is challenged by an extreme lack of focus. They are squandering billions on things like the Zune while things are rotting in their most important business. That is NOT putting profits first… it is putting ego first.
It’s a huge contrast vis a vis Apple which is actually getting more focus by combining their device business and their Mac business by using variants of the same OS.
Just occurred to me: it’s an exact flip from the 90s. Then MS was working to focus all it’s businesses around its new OS (NT), while Apple spawned Taligent, Kaleida, and a ton of slightly different hardware lines.
Now you may not like Windows NT, but it was good enough and that focus killed alot of competitors and made MS very profitable. Even 95 and 98 had the same UI and API. And Office became Office because it was 100% focused on Windows while competitors were fragmented, and lost in translation from DOS and still drinking the OS/2 kool-aid.
Perhaps their betting all their marbles on the Zune success!! LOL
Apple is not Microsoft’s problem. Microsoft’s problem is incompetent management.
-jcr
Great take, MDN. Way to crunch those numbers!
In your honor I am going to enjoy a Crunch® bar later.
@@Lastime I checked
What kind of nonsense is that, since when does a recognized monolopy have to make a product for a competing platform to prevent antitrust assertions? People tend to forget that MicroSoft developed it’s entire office suite for the Macintosh when DOS was still it’s major and only product. Anybody remember Windows 1…yeah I thought so , you wanna talk about a toys? And not even a good one at that. Then there was a multiyear law suit from Apple; and it was not until Apple lost that landmark case about patenting the look and feel of it’s operating system that Windows 3.1 started to take off .
By that time MicroSoft had finally made it’s own version of the office suite for it’s own operating system. MicroSoft then began to displace the Visicalcls , Wordperfects and Lotuses of the world, the only thing that saved Lotus was IBM. Hell by your logic why would MicroSoft stop making Explorer for the Mac? If not for the fact that Most mac users had to use PC’s on their jobs at some point, industry support for Macs being what it was if you wanted to do work at home you really had no choice 10 years ago but to buy MS Office suite for the Mac. Because the Mac had a sterangle hold on the education market, educators and students needed some compatibility with the business world. Money is the only reason MicroSoft make it’s products for the Mac otherwise it would just stop so don’t kid yourself.
What they should do is have the Machintosh Business Unit make their next operating system and give them carte blanche to cut the legacy ties. Perhaps a novel approach like making a decent GUI users interface with something open source like Linux as the underpinnings.
Have to agree. With Apple’s recent cock-ups Apple is out-Microsofting Microsoft, apparently effortlessly.
It’s easier to go from 5% to 10% than it is to go from 40% to 80%. Paradoxically, it’s relatively easy to go from 90% to 10%. It starts with a pinprick – and it’s obvioous who’s sticking the pin and who’s the prick.
Apple’s real problem, Apple.
“20 times” an insignificant number of computer sold yields another insignificant number of computer sold.
Congratulations, Apple, you have leaped from paltry to puny, or should I say, Zuny.
Poor sad pathetic troll. Let’s all pity the troll. Ahhhhhhh.
Pin the tail on the prick.
Pin the responsibility on the monkeys – the retired one and his dancing spoor.
Who can resist a good conspiracy thoery: In true MS fashion I think BG is trying to copy the SJ comeback.
On another note, I think the straw that broke Steve’s camel’s back was the movie, The Pirates of Silicone Valley, from whence all of the blah blah blah about having a better product does not garuantee that you’ll win came from.
With iWork ’08 and OpenOffice aqua, I have yet to find an anything I need Office or Windows for.
Simon@thefreemac.com
Bill Gates is just a chicken. That’s what big bullies are.
He sees the writing on the wall. Knows that there’s no way that his Microsoft can survive the onslaught.
Coward that he is he resigns at just the right time to try and keep his image intact. So when Microsoft does fall, he and everyone else can blame it on poor Steve Ballmer who wasn’t smart enough to figure out he’s the fall guy for Bill Gates.
Think about it. Why would Bill Gates want to suddenly retire and put as much distance between him and Microsoft so quickly?
Stand up and fight like a MAN Bill!
Hey adashofflair:
I did the same thing.
I vowed never to let Micros**t ever get another penny of my money for any reason.
Mac fans: I would challenge you to do the same thing.
bobchr: Your logic is as bad as your English.