Microsoft vs. Apple's "Thunder"

jaymzter writes "Cnet has an interesting article on Microsoft's attempt to steal the thunder from the upcoming Macworld show, and also to slap Apple down for not showing enough gratitude. What's really interesting, is that Microsoft supposedly helped Apple 'fix' Mac OS X, and that Microsoft doesn't think Apple is pushing Mac OS X hard enough. Oh, the tangled webs we weave." Strange story. Basically its a battle of PR.

Comments

Re:Microsoft supposedly helped Apple 'fix' OSX ?

[whee]

I believe Microsoft helped Apple fix OS X bugs in the same manner any developer would. Microsoft, in their development of Office v.X and IE for Mac, discovered problems that were not created by their code; Apple's problems. Microsoft notifies Apple, Apple fixes bugs in their OS.

The main problem Microsoft has is that they feel their Mac division is somewhat wasted; Apple isn't advertising their products enough to justify the expense of creating and maintaining Office/IE and whatever else they may be doing.

That Microsoft cares is interesting

[Infonaut]

I find it curious that MS is taking the effort to spread some FUD on the eve of Apple's Macworld announcements. In years past, they wouldn't have even bothered to do so, because they essentially wrote off Apple as a competitor.

Could this be a sign that MS is getting a bit nervous about OS X and its potential to infiltrate their corporate and home markets?

Re:Hard time believing

[mandie]

I was a testing intern in MacBU (Macintosh Business Unit) last summer. We found lots of OS X bugs and spent a good deal of time pin-pointing them. I spoke with Apple developers about what I'd found a couple of times. If OS X had significant problems, Office v.X sales would be hurt, simple as that.
MacBU is a small (~150 employees, $50 million in expenses) but profitable ($100 million+ in sales in FY2000 or 2001, as I recall) division that is also good publicity. One of the nicer parts of MS to work in, from what I saw that summer.

Re:I can't imagine...

[jgalun]

Macs have 20% market share? Right. Let's see, according to the newest IDC report (http://maccentral.macworld.com/news/0207/03.marke tshare.php) Macs have a 3.48% market share in the US and 2.4% worldwide. Apple's Middle Eastern division recently claimed 5-6% worldwide market share, again, going off IDC numbers (http://maccentral.macworld.com/news/0207/03.apple me.php).

But, you say, IDC numbers are grossly undercounting Macs. First of all, you claim, IDC ignores sales through the Apple stores and through small retailers, focusing instead on the number of Macs that pass through wholesalers. Well, where do you think the small Mac stores get their Macs from if not from wholesalers or from Apple directly? And why do you think that IDC can't get numbers on the Apple stores and Apple's online store. The approximate percentage of Apple's sales that goes through the Apple store online is well known even to the general public, and the number of Macs sold a quarter is known to the general public as well. I see no reason why IDC cannot get those numbers, or why Apple wouldn't make them available to IDC - particularly given that IDC does rank Dell, which does a much higher percentage of sales direct than does Apple. If IDC were incapable of taking direct sales into account, then Gateway and Dell would not show up in IDC's list - and they do.

Your other reason why Macs have more market share than people realize is that Macs "last a lot longer in use than PCs- at least twice as long." I have heard this bandied around a lot by the Mac community, but I don't think this is nearly as prominent an effect as they make it out to be. First of all, I would like to see statistics backing up the "twice as long" claim. Secondly, I have a hard time believing that Macs have had much of an advantage over PCs in the last three or four years. I owned an iMac, and that definitely was too slow and limited in hard drive space to use for more than a couple years. Now that MacOS X is out, forget about it - there are lots of complaints about how MacOS X has been slow on older machines. On the other hand, all the PC owners I have known are still happy with the 400 Mhz machines they've had for the last four years, unless they are hard-core gamers. Finally, even if it is true that people use Macs for longer than they use PCs, I believe that the percentage of Mac owners that own multiple machines is much higher than the percentage of PC owners than own multiple PCs, and this will mitigate the market-share effect of Macs being in use for longer, since a person with 5 Macs all still in use will still only buy one copy of Photoshop and one copy of Office.

Jobs is not being ironic when he talks about the "other 95 percent." What reason does he have to be ironic? To make an in joke to the Mac community? I don't think so. Jobs has one basic goal as head of Apple: to make a profit. The way he'll make a profit is by raising market share while keeping prices high (Apple has very good margins on its computers). It will keep prices high because it is selling a differentiated product. A simple econ textbook will show you why Apple will never sell Macs for as cheap as PCs, and why Apple will never take the whole market. This is not necessarily bad for Apple - if it can find the sweet point where it's getting the right number of sales at the right profit margin, it can be extremely profitable. It just won't ever take over the world that way. Jobs understands that, and that's why he's been positioning Apple as the computer for the fashionable elite - because he doesn't need lots of sales at Walmarts, he needs a decent number of sales at 27% margins.

The problem is, you need to have a large enough market share to woo software developers and hardware developers, and you also need to convince your stockholders that you are selling as many machines as you can at the high margins. The "other 95 percent" campaign fits these needs perfectly. It makes consumers understand that they don't need to fear Macs just because it has small market share, because after all, BMW and Mercedes Benz have small market share too. And it tells stockholders and developers that there's lots of potential for growth, and that Apple intends to enlarge the Mac market.

If your arguments were correct, there would be no reason for Apple not to use the 20% number. Because 20% would make developers happier, would encourage more consumers to buy Macs (since they'd see a larger community already existing), and would keep stockholder expectations realistic. After all, if Apple raises stockholder expectations by saying "we only have 5% market share, it'll be so easy to expand it by going after the other 95%," and then fails, management will be held responsible. On the other hand, if it says to stockholders, "We have 20%, it's just that Macs last longer, but we are slowly growing this community and steadily strengthening the company," they'd be hailed as doing a good job.

But that 20% is just not correct. Otherwise, why does Google show a 4% browser share for Macs? Why do software developers see such small sales for Macs?

I don't understand why Mac fans refuse to accept that Macs have a small user base now. It's not a value-judgment on the computer, it just means that Apple needs to do a better job selling the things. And I think Apple has been doing a much better job selling Macs over the last couple years, and I think they will continue to improve and gain more market share. But lying about the situation doesn't change it.

Re:what apple needs to do

[Elwood P Dowd]

MS sells an office suite. They leverage their monopoly in OSes to allow them to make a huge margin on their office suite.

Apple has does not share this uncommon ability to generate huge revenue through selling OSes and office suite software. They would not be able to support their OS developement costs. Not even close.

Fortunately, right now, they have huge margins on their higher end machines. This does allow them to burn money developing their operating system.