Paul Thurrott comes to another sad realization: Nobody can touch Apple

“Microsoft has confirmed the broad strokes of a report that it is dropping the licensing cost for Windows. But it’s only doing so for PCs and devices that retail for less than $250. To be clear, there is currently no market for such devices,” Paul Thurrott writes for WindowsITPro (a domain name with a limited future if there ever was one – MDN Ed. 😉 ). “So Microsoft isn’t so much lowering the licensing cost of Windows as it is making it feasible for hardware makers to use Windows with a new category of super-cheap PCs and devices.”

“There’s an ugly side effect to this licensing change that hasn’t been highlighted enough. Those PCs and devices that do qualify for the cheaper licensing—$15 per unit compared with about $50 per unit on more expensive PCs—will be cheap in literally every way,” Thurrott writes. “Hardware makers won’t need to undergo a Windows logo certification process. This means that these cheap devices will often be very unreliable out of the box and can’t be made more reliable through automatic driver updates on Windows Update.”

“The problem for Microsoft is that lowering costs is the only strategy that makes sense, given how the market is changing. This decision was forced by competitors of the company: Unable to compete with Apple at the high end, Microsoft will now take on Android and Chrome OS for the masses instead,” Thurrott writes. “On the high end, all we see is Apple. This is the firm that makes the most expensive products in every conceivable category. A company that makes laptops that start at $1,000 and go up from there, even though the average selling price of a PC laptop is in the $400-$500 range. A company that makes high-res mini-tablets that start at $400 and go up from there, even though its competition is selling comparable devices that start at $230. A company that makes high-res full-sized tablets that start at $500 and go (dramatically) up from there, to as much as $930 for a fully equipped version, where its competition is playing in the $380 to $450 range, to start.”

“Apple is unique, for sure. Its margins dwarf any other player in technology. Apple’s customers are willing to pay more, and buy more frequently. They perceive a quality there, and it’s not entirely unwarranted,” Thurrott writes. “They see Apple as the BMW of the technology world, also not entirely unwarranted. Whatever the reason, Apple exists in a bubble and it’s a market no other player can touch. There is no Mercedes or Audi to Apple’s BMW. There’s just Apple.”

MacDailyNews Take: That’s right, bitch.

(Even a broken clock…)

Thurrott continues, “Windows Phone suffers from the same issue. Unable to create a single hit product at the high end… Windows Phone has only seen success in one place: The cheapest, third-worldiest part of the market. The Lumia 520 and its siblings dominate the sales and usage charts. Just not in America, where the Apple-crazed population, somewhat uniquely in the world, still thinks iPhones are something special.”

MacDailyNews Take: Bzzzt. Right back to the wrong answer parade we go!

Japan, the world’s second largest developed economy:
• Apple iPhones are the top 9 selling smartphones in Japan – December 8, 2013
• Not a typo: Apple’s iPhone 5s and 5c took 76% of new smartphone sales in Japan in October – November 27, 2013

You see, wherever there’s money and quality customers with brains and money and the proven will to spend it, Apple dominates. Apple takes the lion’s share of the customers that matter and leaves the rest – the confused, the clueless, the cheapskates – to Android, Windows and whatever other consumer-grade, Apple knockoff crap is being peddled to the ignorati today.

Thurrott writes, “Am I worried about this trend? Obviously… Certainly, there’s a part of my personality that prefers any product that shoots for the masses and not the elite. That’s part of my knee-jerk reaction to everything Apple does: They’re so smug and condescending to normal people and their silly, average income levels. In addition, I’m a big fan of what I think of as ‘just enough’ computing, and I think it’s easy to overdo it with technology purchases. Somewhat alone among Americans, I’m always trying to downsize.”

MacDailyNews Take: People who buy Apple products certainly aren’t “normal.” In fact, they’re such crazy ones that they can see right past the sticker prices to the TCO. We Apple users generally spend a bit more upfront, far less over time, and gain far more enjoyment and productivity overall. That’s not overdoing anything. That’s simply the smart play. Because Apple product users are smarter than “normal.”

• Test proves Apple iPhone users are smarter than those who settle for other handsets – January 2, 2014
• Android users poorer, shorter, unhealthier, less educated, far less charitable than Apple iPhone users – November 13, 2013
• CIRP: Apple iPhone users are younger, richer, and better educated than those who settle for Samsung knockoff phones – August 19, 2013
• iPhone users smarter, richer than Android phone users – August 16, 2011
• Study: Apple iPhone users richer, younger, more productive than other so-called ‘smartphone’ users – June 12, 2009
• More evidence that Mac users are smarter than Windows users – July 16, 2004
Those who surf the Web using a Mac tend to be better educated and make more money than their PC-using counterparts – July 12, 2002

I’m worried that this race for the bottom is exactly what it sounds like, a zero sum game in which Microsoft and its partners are shooting for big numbers (unit sales) but ultimately end up with little or nothing in the way of actual profits because the only big growth will be in a part of the market where profit is difficult. When PC prices steadily plummet, as they did with the netbook, there’s no rebound. You can’t convince customers to suddenly start spending more on these things… When you look at markets in which the products sell for next to nothing and keep going down, you have to worry for the future on the Microsoft side. You just have to.”

Read more in the full article here.

MacDailyNews Take: When even Paul Thurrott can read the writing on the wall, it’s all over but the shouting.

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

Here’s to an avalanche of sad realizations for Paul. Hoist!

[Thanks to MacDailyNews Reader “Chuck” for the heads up.]

Related articles:
Paul Thurrott comes to a sad realization: ‘Windows 8 is a disaster. Period.’ – February 10, 2014
Milestone: Apple computers outsold Windows PCs in Q4 2013 – February 12, 2014
Chart shows Apple has beaten Microsoft’s Windows monopoly – January 8, 2014
Steve Jobs’ revenge: Latest PC market forecast projects historic 10% downturn – December 3, 2013


    1. By knifing the cash cow known as Windows and giving Office away for free with RT devices, MS is finally acknowledging that Windows + Office + Intel chips will never be their automatic ticket to mobile Nerdvanna.

      BIG problem–MS has no other cash cows.

    2. What some don’t understand is that [very] good quality products that work is normal. There’s no such thing as Apple produces “high end” products, it just happens that all others are very very poor quality or “low end”.

      As Mr Cook said “we don’t know how to make a $500 PC that is not a piece of junk”.

    1. With the demise of Microsoft the livelihoods of the Thurrotts and Dvoraks of the world are in jeopardy. Or maybe they’ll just start leeching off the tit of Samsung instead.

      1. What an interesting concept: A parasite leeching off a parasite leeching off a prime species. How’d you like to be the parasite that has to suck off a parasite to survive? That’s sicker than sick. I wonder if such a thing exists in nature. I’ve never heard of it.

  1. You know, even in the early 90’s when I made just above minimum wage I saved up to buy a used Performa, rather than settle on a PC. With so many Apple customers buying the latest and newest there is a pretty good after market of quality high end mac, and iOS devices. I think it’s a WAY better deal to get a iPhone 4S cheap, or a 2008 MacBook Pro, then a similarly priced brand new Wintel machine.

    1. I’m typing this on a unibody 2008 Macbook that I bought as “Refurbished” for about $900. I recently maxed out the memory (8 GB) for an additional $100 or so. It’s running on Mavericks. It does everything I want it to do, and will do so for a few more years. Just this year, next month, Apple will finally vintage this model and no longer support it. So I probably will have gotten something like 8 years of use out of this laptop for about $1000. That’s about $125 per year. Does a $500 Windows laptop last 5 years ($125 per year) with basically no degradation in its function?

      1. Oh, and did I mention that’s 8 years without a virus or other malware, a hardware failure, driver issues, networking issues, or any other response to my requests aside from cheerful compliance.

      2. additionally Zeke you did not have to get soaked to “upgrade” software in order to actually get it to do something useful, and on the mac your not constantly plagued with security issues and protection renewals nor are you on the phone with tech supper trying to write custom ell’s for your particular hardware situation . windows is the equivalent of using the bathroom at the port of authority bus station in new york . wwwwwww!!!!!

      3. Paul is a compulsive bargain hunter. His enjoyment comes from finding a cheaper and albeit harder way to do something. He sees no value to his time, because he needs to buy something to realize enjoyment, not from using something, not from uncovering little hidden gems that make your life easier. He just doesn’t get it. Never will.

      4. I have the same late ’08 Macbook…what a workhorse. Also upgraded the RAM to 8GB. By far the best upgrade was an OWC Data Doubler. You pull the optical drive (easy with video) and replace it with your hard drive using the data doubler bracket. Then put an SSD in the hard drive bay. I have the OS, applications and documents on the SSD and everything else on a hard drive. For an old computer, it’s amazingly snappy.

    2. Same for me! At present my income’s rather low, and I’m running a 4 year old Mac mini, an iPhone 3GS, and an iPad 1. With a 2nd hand copy of Adobe Creative Suite 3, I publish minority language books, ebooks, podcasts and other e-media.

      It all works fine, touch wood, and I don’t plan on upgrading anytime soon. And, honestly, if someone offered to replace them with the latest Wintel PC, phone and tablet, I would refuse. I’ve never owned any hardware running MS WIndows, having spent many years supporting such crap at work.

      At home? No thanks!

  2. “most expensive products in every conceivable category”
    Obviously, this guy has never wear a Hugo Boss suit or drive a lexus, one thing is to be expensive and another very different to be VALUABLE.

  3. “Certainly, there’s a part of my personality that prefers any product that shoots for the masses and not the elite.”

    So, he’s trying to paint himself as the People’s tech writer?
    I wonder if he drives a Wartburg.

    1. “Certainly, there’s a part of my personality that prefers any product that shoots for the masses and not the elite.”

      Hey, Paul, did ya mean “…the huddled masses yearning to be free…”?

      Yeah. Get a Mac.

      1. Clearly he’s painting himself as an anti-elitist. That self-serving characterisation doesn’t play quite so well these days, when Apple products are popular with the masses and not just a hipster snob clique, as he could claim years ago.

  4. Is someone going to come along and simply make Linux into a high end supported OS on their higher end PCs?

    Given the continual problems of Windows with legacy code and constant bugs, some manufacturer has got to say enough is enough.

  5. Ah Paul Turdott, brings out the plethora of iCals with this guy, he’s badmouthed Apple for years, still takes a swipe a them.

    “When you look at markets in which the products sell for next to nothing and keep going down, you have to worry for the future on the Microsoft side. You just have to.”

    Sorry Paul, I don’t worry, it’s karma. Had to deal with you and Inyourear crap for years of badmouthing Mac. Just desserts Paul, you’ve made your bed, now it’s becoming a grave. Sleep well.

      1. Thanks, I take it you’ve had to endure the drivel that he’s posted over the years. Gosh what arrogance, don’t you just love this:

        “Certainly, there’s a part of my personality that prefers any product that shoots for the masses and not the elite. That’s part of my knee-jerk reaction to everything Apple does: They’re so smug and condescending to normal people and their silly, average income levels.”

        Apple’s products shoot for excellence, not mediocrity. The masses make up their own mind. If Paul wants to look at smug and condescending people he need look no further than the myriad of IT professionals who convinced so many of the masses to go for a product that required constant maintenance and security updates and were so smug, condescending and arrogant as they touted their mantras of “it’s just a toy” and piled on the FUD ad nauseum.

  6. Microsoft stupidity on display. Windows 8 forces PC makers to produce more expensive PCs because they need to have a touch screen to be fully functional. And now, Microsoft is trying to encourage their “partners” to produce and sell more low-cost junk PCs that retail for under $250?

    An alternative is for Microsoft to allow installation of Windows 7, but Windows 7 is already an OS that is more than four years old. Might as well keep XP going.

  7. “Obviously… Certainly, there’s a part of my personality that prefers any product that shoots for the masses and not the elite”

    There’s nothing ‘elite’ about getting a phone for free on contract (eg. iPhone 4S). Look around. Everyone in the Developed world has a Smartphone.


  8. Paul had great fun beating up on Apple circa 1997, so it is sweet, sweet karma to see his meal ticket company on the ropes with a very uncertain future. He’s an asshat who deserves it.

  9. After all these years of hating Microsoft and hoping and praying that Apple would win the computer war, I now find myself feeling sorry for Microsoft. What’s up with that!

    In the 90s, Microsoft needed Apple to allow customers an alternative, albeit an alternative only used by 2-3% of the population. Apple kept the anti-trust forces off Microsoft’s back and Apple kept pushing the technology envelope which forced Microsoft to improve it’s products.

    I worry that if Microsoft dies, Apple may become complacent. Apple may rest of its laurels and slow down its innovation. Even a company like Apple needs someone nipping at its heals to keep getting better. Maybe Google will be that mad little Chihuahua forcing Apple to keep improving, but I fear the demise of Microsoft.

    I cannot believe I’m saying this stuff. I feel like I’m standing over the grave of the Godfather, wishing he were still alive.

    1. No worries, other competitors like Google will keep Apple on their feet. There will be no shortage of motivation for Apple to continue to be “insanely great.” Still, at this wonderful juncture in changing tech history I sure wish Steve Jobs were here to enjoy it with us.

    2. I think Apple quit competing with Microsoft when SJ came back. He was really honest about that. SJ took Apple in an entirely different direction.

      I think Apple most heated competition is Google and Samsung and I think they know it. It’s a two pronged approach of hardware and software.

      I really really wish Apple would partner with Yahoo!. I think they would be a very good business partner and could build a search advertising Juggernaut to compete with Google / Samdung.

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