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.


  1. 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…

  2. “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.

  3. 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… 😉

  4. If “We” win then Mac users loose. The Mac platform has acted as a filter of sorts. The quality of customer service has historically been high. That will change since the need for massive numbers of support people will have to reach in to segments of the population that Apple previously avoided. Even now when I call Apple I occasionally get some ghetto slop mouth. The problem w/ Apple is that they are hell bent on the consumer market and graphics people. But technical areas like manufacturing, aviation and many more are stuck w/ Microsoft. I’d rather they focus on quality and technical areas so I don’t have to bang my head on a Windows machine all day.

    1. Well you’re right. I’ve been telling them that for over 20 years. They won’t listen. They all think it’s some war to win and be dominant and they have no clue that it will just be EXACTLY the same as if it were Microsoft. In fact it could be lesser since their service isn’t that great. Microsoft has done a WONDERFUL job supporting as many people as it has and kept problems to a minimal. But there are more grade-school-mentality type people out there who think it’s funny to over exaggerate and say bad things about them. If Apple ever gets more OS’s installed that Windows, they will do what they are ALREADY DOING. That is rolling out SECURITY PATCHES. Only with ONE difference. They will be doing it at more than TEN times the level. By then it will no longer be like Apple. And apple is not really doing anything “magical” here. They are just being a niche market. When they get big, they will no longer be niche. But alas, most apple fans simply can not seem to understand this. HEY, there is not a thing wrong with having a windows machine. I run my recording studio with it. However, again, apple likely do roughly the same as microsoft if they got much bigger. Why are apple fans so blind to this? Also blind to the recent malware macs have been getting? And blind to the fact that many employees of microsoft work at apple, and vice versa? And blind to the fact that apps like quicktime have software written inside them BY MICROSOFT to aid the codecs in playing windows files? They say they don’t want any windows code etc, but then they adopt a machine running apple code that has microsoft code inside it!!!

      And then they load up Microsoft Word, and other Microsoft apps, and then luanch windows anyway. Again, it’s all so silly to me.

    2. Destroying hegemony is not the same thing as obtaining dominance. After a great deal of work all Apple can hope for is perhaps 30% of the market given their unwillingness to compete at certain price points.

      Their are many benefits to consumers in breaking the absolute dominance of Microsoft’s OS Eco-system. De facto standards benefitting only Microsoft could be de jure standards where companies compete on their implementations of the standard.

      While differentiation based on price has benefited the consumer it has also stalled innovation in the OS space. You simply can’t do what MS doesn’t want to do and remain in their ecosystem.

      I’d also like to see a de jure standard to replace certain file types like Word and Excel. I’m excited about where this will go for the first time in 20 years.

  5. This is a bit longer, but it’s what I’ve observed, and real life isn’t always explained in a simple comment. In fact this post doesn’t even begin to cover everything – What’s amazing is that most people don’t understand why apple had such a turn around. They see it as some incredible triumph/victory. But in reality it’s a triumph for apple. Not necessarily the people. First ask why it didn’t iMac and OSX do well to begin with? It was a horrible deal and aimed at a niche market fo those who responded to brain washing ads that made you believe if you were a creative type, you needed a mac. However anyone with a brain could figure out that you could do anything under the rainbow, recording, music, art, video editing, recording studio etc on a PC and do it faster, and at a lower price.

    So why did apple eventually start catching up? Is it because their computers got way better? Nope. They’ve always trailed behind PC’s in many aspects. However apple advertising never gave up as they have been advertised as being the center of “innovation” for eons. Most people were not savvy enough to figure out that apple also shipped stale hardware that was not only slow, but lagged behind PC’s. But what did they do? Make fun of the PC’s processor as well. Also they’d blame PC for copying Mac and for some reason people would believe apple, the SAME people selling it.

    Well that was until roughly 2007 when they realized the Mac was so slow it would never keep up. Then apple decided to copy PC and put in intels CPU, albeit the slower mid-grade, cheaper version and at a higher price. But apple kept it’s stance of attacking and making fun of it’s competitor because it’s credulous target demographic (mostly teens and young twentysomethings) tend to be immature and would help apple to make fun in news groups and comment sections. It worked! In fact since 2007, they are now using mid-grade PC hardware not matching the TOP PC hardware sold and that can be had for about $700. In fact some mac users would hackintosh PCs because the PC hardware was superior to mac. You’d think they’d see the light.

    So why then did apple start to do better with sales and how did it “destroy” anything? The answer lies in the marketing. People usually do not want to believe that the only difference is marketing, but it’s in fact the sad truth. 99% of the population are not computer experts. They respond ONLY to marketing and following what the next person does. They want the computer and devices that make them feel sexy, or cool or rich. The 2000’s is no longer about selling the better computer. It’s about marketing to people’s emotions. And apple’s was also very deceptive, misleading and tended to over exaggerate (by miles) every point it drove home. Also when the ipod was born. There was nothing better about it, but it came in shiny colors and was hip and cool, and appealed at first to college age students, HS, teens etc. I know nothing better was about it. I’m an audio engineer, run a studio and am a computer programmer, and I love to collect gadgets including music players. And the itunes store came LATER, as did the app store on the iphone. The ipod/iphone money helped to give apple it’s clout. NOT the iMac sales.

    Believe it or not, the masses were most impressed and convinced seeing how many people had ipods, kind of like Sony Walkman’s hit of the 1980’s, then iphones, then ipads. So they begin to buy Macs, not even worrying if they’d be compatible, slower, more costly or whatnot. So yes, Apple sales grew and makes apple CEO’s very happy.. But from a consumers point of view, this is nothing to gloat about. It’s something to be ashamed of. Ignorance, stupidity and being sheep in a herd isn’t something we should be proud of. And fighting back against people telling you that isn’t wise either. It may however make you feel momentarily feel better…

    So no. It’s not that Apple just destroyed Windows sales. Instead they destroyed a huge eco-system. In the end Apple duped most of society with it’s brainwashing ads, keynotes speeches and lies from the ever deceptive steve jobs. He was no hero or guru, nor did he invent the ipod, iphone, imac or any of those. The smell in the air tells you steve jobs did, but trace it down in history and you will find out he is a marketer and he LIED to everyone and attacked his competitors with LIES. Ask your self this question. IF Apple, Steve Jobs and the Mac were so wonderful, why couldn’t people see it? Why did they wait all the way up until 2007 for the scales to tip? Did the Mac suddenly get way better? NOPE! people perception shifted due to phony advertising. If it was so great, it would have been a hit in the 80’s! And if your argument is that people aren’t smart enough to see a good thing, then why do they suddenly see it in 2007? Successful marketing and LIES are the answer. So WHOOPIE! Yay! Did Apple finally win? Win what? Why should we as people care what a billion dollar company wins? Why don’t we root for the CEO of Dyson vacs too? All apple did is mess up society. It’s OK with the iphone, ipad and ipods. But if the next step is no more windows and it’s all mac, they royally messed us up. Apple is very greedy and if they get 100% control they will not care about you or me, the little people. Also lately, Mac Malware is on the rise even though apple acts like it’s malware free. And FYI, THAT was the original sales pitch of having a mac. But now, not only are they slower, more costly, but they are getting viruses. Google – “My Mac has a virus!” “My Mac Crashed” “Mac Defender” “Mac Flashback”

    And THAT is why apple got so popular. And no, “quality” and “It just works” BS is just that. Sure Apple stuff works, but those are marketing slogans they pushed out in their ads. Think about it and it will become more clear to you.. That said, if in the end windows gets harmed, that’s a shame. But hey. People are stupid. They get what they deserve and it shows that any company can rule if they can only trick the uneducated masses.

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