Apple has destroyed the Windows hegemony

“When the Macintosh was launched in 1984… ‘PCs’ [were] outselling the Mac by a factor of nearly 6 [2 million/yr. vs. 372,000/yr.],” Horace Dediu reports for Asymco.

“The ratio reached 56 in 2004 when 182.5 million PCs were sold vs. 3.25 million Macs,” Dediu reports.

“During the second half of the 90s it was already clear that Windows won the PC platform war,” Dediu reports. “Windows had an advantage that seemed unsurmountable.”

MacDailyNews Take: You can’t win a war when the other side never surrenders and continues to fight.

When we wrote the following 7 1/2 years ago, a lot of people laughed:

As we have always said, even as many short-sightedly waved (and continue to wave) the white flag, the war is not over. And, yes, we shall prevail… No company is invincible. Not even Microsoft.MacDailyNews Take, January 10, 2005

Dediu reports, “Then, in 2004, something happened… Although PC volumes continued to grow, they did so more slowly and the Mac grew faster… The ratio of Windows to Mac units shipped fell to below 20, a level that was last reached before Windows 95 launched… This was an amazing turnaround for the Mac. But the story does not end there.”

“If we consider all the devices Apple sells, the whittling becomes even more significant and the multiple drops to below 2,” Dediu reports. “Considering the near future, it’s safe to expect a ‘parity’ of iOS+OS X vs. Windows within one or two years… The consequences are dire for Microsoft. Windows will have to compete not only for users, but for developer talent, investment by enterprises and the implicit goodwill it has had for more than a decade. It will, most importantly, have a psychological effect. Realizing that Windows is not a hegemony will unleash market forces that nobody can predict.”

You have to see the excellent graphs in the full article – highly recommended – here.

39 Comments

    1. The scimitar shall be wrested from the usurpers’ weakened grasp, and held to their own throats. Their armies shall be decimated, their fleets destroyed, and their lands ravaged. And the righteous shall prevail.

    2. Again it always has baffled me to see CONSUMERS helping any billion dollar company simply get richer, as if it’s a war, and for no logical reason. Sad really.

  1. Wow. Just, wow. I posted the link before I read the article. “We shall overcome” will quickly shift to “We have overcome.” And what then? What of those powerful market forces the article describes in the last paragraph? What will happen then?

  2. Steve Jobs did a tactical feign when he came back to Apple. It’s classic Sun Tsu’s Art of War tactic to make the enemy thinks that it is winning the war. Steve Job did a counterattack not by directly destroying Window but through a new maneuver of using new proxies such as the iPod, the iPhone and iPad to fix the Windows’ wagon. As the satellites or proxies of the Windows’ empire (HP, Dell, etc) were taken out one by one, the dominant power, Microsoft was left strategically exposed.

    1. And you could say Steve Jobs did a Captain Kirk style Kobayashi Maru by simply changing the terms of the game. It never was a no-win scenario as it is turning out. Changing the game to the next tech paradigm – mobile – changed everything again and put everyone again on equal footing to excel or not based on new offerings. Helped too they did it forward thinking 2-3 years ahead of Microsoft with super high quality products people couldn’t resist. All I have for Microsoft is a gigantic cruel chuckle – BWAHAHAHAHA!!! Couldn’t happen to a more clueless company or one more ill-equipped to handle anything beyond it’s traditional comfort zone with current leadershit.

    2. @vsp, showing that if you can not beat windows logically (since everyone knew mac was a bad deal), brain wash people by sending out lots of little products. Yes, you get it. This is what I said below, but in many different words. Again, while it’s something to be proud of FOR apple CEO’s and THEIR sales, it’s not something YOU as a consumer and individual should care about. Not saying you are, but it seems many people are as if steve jobs is their father. And that’s another thing. …

  3. Microsoft is doomed for three reasons, none of which is Ballmer.

    1. Microsoft’s main method of expanding their product line is by acquiring companies. That results in a massive corporate culture clash, an organizational nightmare, and destructive office politics. Since Microsoft is not in the habit of actually developing new products, it results in a deteriorating product line descending into incoherence.

    2. If Microsoft sells something to a customer who is not satisfied with it, that’s okay with them. Customer satisfaction wasn’t a priority back when they were the only show in town. Even unhappy customers had to come back and buy more stuff. However, now there is competition, and they can’t win the race because their customer-satisfaction pants have fallen to their ankles.

    3. Microsoft is a software company with low margins. Apple is a hardware company with high margins. Microsoft has to charge for its operating system. Apple could give theirs away for free without much effect on its bottom line. This is why Microsoft is trying to get into hardware. However, they can’t make the transition fast enough to avoid falling off the tightrope in the middle.

    Microsoft needs to make three major changes that are intrinsically difficult. Under the best of conditions, with the greatest skill, and with the strongest resolve, they can’t be done in time.

    Microsoft will end up being a smaller, more specialized company in the future. It will recapitulate IBM’s history.

    1. I’d change one thing in your statement. Microsoft used to be a software company with high margins. But they drove their OEM partners into a race toward the bottom and gave them no opportunity to differentiate themselves in any appreciable way. Eventually the price for hardware was so low that Microsoft could no longer command the margins they once did. This is even more true today as we learn the upgrade price for Windows is $40.

      1. The stage was set for the race for the bottom when IBM put out its IBM PC. Because of IBM’s prestige, it wasn’t possible to compete with them on any basis other than price. Dozens of start-up companies manufactured and sold IBM PC knockoffs at lower prices.

        The actual downward spiral began when IBM went out of the PC business, taking with it the reference point for everyone else’s pricing. Instead of offering their products at a lower price than IBM, the clone makers had to offer them at a lower price than each other.

        IBM took the premium brand off the market, leaving only the knock-offs.

        Microsoft was unaffected by the race to the bottom, since they sold to everyone. Until Apple rose from the grave and took over the vacant role of premium brand. Apple doesn’t need Microsoft’s operating system, so Microsoft’s immunity is over.

        1. @Ken “vacant role of premium brand.”

          Thank you sir. You are a prime example of why apple is coming back from the grave. That and that Microsoft saved them from bankruptsy. You are in a segment of the population that finds no problem in listening to the advertising from the people selling you things to tell you they are premium. If Mac were truly premium, I would not have been able to buy an i7 based PC nearly 2 years before apple decided to finally release an i7 version iMac. I could easily render video editing projects faster while running rings around Mac users who had to WAIT for the SLOW, OVER PRICED iMacs to do the same thing on old core2duo tech. Apple simply waits as long as it can before it’s customer base catches on that something is wrong. Right now PC is on the 3rd generation of i7, where is Mac? 1st gen. And YES, how fast my computer is, IS IMPORTANT and I DO NOT LIKE TO WAIT! If I’m going to pay for a “premium” brand by paying ONE THOUSAND TWO HUNDRED, $1200 more than a $700 PC, I expect it to be premium! Not OLD technology. As for the operating system, Windows 7 is a total gem and feedback shows this. It’s a bit superior to OSX and with it’s task in task bar, show live programs running thing, apple will have to work to catch up if they want something like this. However, apple fans, don’t work this way. They are told that apple is premium, and they just, for some reason, believe it. Apple may win in the end, but they will win by lying to a credulous target demographic of people who don’t check facts.

      2. I think it’s fair to say that MS’s margins are big in perentage terms, but small in absolute terms in comparison to the Apple juggernaut. The reason is that they can extract about $50 for windows from a new PC buyer, which is pretty damned good until you compare to Apple who can extract a couple of hundred dollars profit from an iPhone.

    2. Agreed, but Ballmer figures in. Drastically changing the mission and business model would seem to require better understanding of engineering, economics, and marketing than this sales guy has demonstrated.

      Furthermore, Ballmer is anti-charismatic. Microsoft partners, thralls, and even insiders are alarmed at his crazy, lame, and clownish antics. Only Bill Gates comes across as more delusional. Forbes named him the worst CEO of any publicly-traded company.

      1. Someone who knows Ballmer personally told me that he is actually a soft-spoken personable guy and a good manager. Look at how fast he turned Vista into WIndows 7. His attempts to fake charisma make him look like a buffoon because he’s out of character. There’s no one in Microsoft with the guts to tell the emperor he had no clothes. Ballmer’s antics are not the way he runs Microsoft.

        His antics notwithstanding, he can’t rescue Microsoft because absolutely no one can rescue Microsoft. Not even the greatest genius in the world can make a buggy-whip company relevant in an automotive world.

        1. I’m sure there are a few buggy whip companies around who saw the handwriting on the wall and started selling them to adults only shops and boutiques…. Which has nothing to do with our topic here, errr excuse me, please…

  4. “The consequences are dire for Microsoft,” because for each of those “iOS+OS X” sales, Apple makes a very healthy profit, because it’s a hardware device sale. For each “Windows” computer sale, Microsoft just makes the OEM licensing fee. And even that licensing fee is not all profit.

    Even worse, the Windows computer makers mostly compete with each other based on price, so they make relatively little profit (on average) per computer sale, especially with expense of the licensing fee paid to Microsoft for Windows. At least Microsoft is making a small, but reliable, licensing fee per sale.

    Therefore, Apple’s portion of the overall profit for the entire tech industry will continue to grow every year. The collective “Windows” competition will just stagnate.

  5. Windows will have to compete not only for users, but for developer talent, <- What developer talent? Mac has consistently had only the best developers. Sorry!

    …investment by enterprises <- Already whittling away! Sorry!

    and the implicit goodwill it has had for more than a decade. <- Microsoft lost the goodwill of all but the most trenchant of TechTard journalists YEARS ago. Sorry!

    It's the slippery slope for Microsoft. We have only to wait…

    1. try again!

      Windows will have to compete not only for users, but for developer talent <- What developer talent? Mac has consistently had only the best developers. Sorry!

      …investment by enterprises <- Already whittling away! Sorry!

      and the implicit goodwill it has had for more than a decade. <- Microsoft lost the goodwill of all but the most trenchant of TechTard journalists YEARS ago. Sorry!

      It's the slippery slope for Microsoft. We have only to wait… 😉

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