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

13 years ago

“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.]