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

PR vs. Manipulation

[intermodal]

PR is relations with the public. Manipulation is when something is falsely influenced or pushed. This is manipulation. Making OSX seem strong makes Microsoft look less like a monopoly, without actually having to take on the real competition publicly (read real competition as "BSD, Linux, (and maybe OpenBeOS someday)") which would make the public actually aware of these options.

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.

I can't imagine...

[ultramk]

...why MS would feel even slightly threatened by this.

The Mac has 5 percent of the market. What's there to be afraid of? True, it's a lucrative 5 percent, and OSX has mindshare far beyond its marketshare, but still. Do they really see it as this much of a threat?

What do they want, a monopoly?

Re:I can't imagine...

[BitGeek]

Apples market share is about %20.

The "%5" figure comes form "computers sold this year" and does not include computers sold thru the Apple store, small local apple dealers and apple retail stores. That %5 is the percentage that Ingram and tech data sell that are Macintoshes, ignoring the huge numbers of machines sold thru apple's online stores and other retail locations.

Or, put another way, Apple has %5 of the NEW IBM PC market, not %5 of the PERSONAL COMPUTER market.

Also, since Macintoshes last a lot longer in use than PCs- at least twice as long- at any point in time, the number of Macs out there to sell into are going to be a lot more than the percentage of machines recently sold.

This is a serious problem because marketing dweebs everywhere are underestimating the installed Mac base by %75.

Just like there are far more Linux boxes than there are computers sold with linux pre-installed in the market.

Note that this under reporting of Linux and MacOS both helps Windows, and of course the companise doing this under reporint- IDC and Dataquest are doing so under contract from microsoft to do "market research".

The funny thing is that when Jobs talks about getting the "other 95 percent" he's being ironic, but nobody seems to realize it.

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.

Love this quote ...

[SirSlud]

> "What does $150 million buy you? It doesn't buy you eternal gratitude."

Shit, thats a great quote. Especially considering MS poured the money in for purely (mostly, whatever) selfish reasons - we can assume the DOJ trial would look much different today had MS not participated in the 'wonton act of goodwill for which Apple should have eternal gratitude'. ;)

Catch-22

[mcwetboy]

1. Apple doesn't promote Mac OS X enough. Fewer people shift to the platform than Microsoft would like. Microsoft Office for OS X doesn't sell as many copies as they wanted. Microsoft is pissed.
2. Apple puts considerable effort into the next version of OS X, code-named Jaguar. New features are added that make competition-obsessed Microsoft nervous. Microsoft is pissed.

Microsoft is pissed if Apple doesn't promote OS X enough. Microsoft is pissed if Apple develops OS X too much or advertises the platform too aggressively. (And what flavour of nuts will Microsoft go if Apple launches an OS-specific ad campaign?) Apple can't win, so they have nothing to lose.

Re:Catch-22

[ivan256]

I think it's more likely that Microsoft is trying to get Apple to divert it's marketing budget away from the current compaign encouraging users to ditch windows, and instead spend those advertising dollars to get the existing apple user base to upgrade to MacOS X. I'm sure that they're selling more then enough copies (1.2 millon in the first 6 months, did it say?) to justify having developed Office X, but what they really want is for Apple to stop going after their core business.

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:Microsoft supposedly helped Apple 'fix' OSX ?

[dhovis]

Actually, I think it had more to do with the Carbon APIs. Microsoft refused to rewrite Office in Cocoa, but it wanted to use some of the features from Cocoa. That is why the feature sets of Carbon and Cocoa have been converging.

Besides, when it came out, Office v.X was the most complex Carbon program to date. I'm sure Microsoft's Mac programmers found lots of bugs in the APIs and reported them back to Apple. Office v.X came out shortly after 10.1, and required 10.1 because it fixed a ton of bugs overall, but particularly with the Carbon API.

I think that is probably what Microsoft's contribution to OS X was.

Anyway, if Office v.X is not selling well, it is probably due to the OUTRAGEOUS price. $500? I bought it at the educational discount and that was still $200. I only paid $1500 for my iBook, I'm certainly not going to pay 1/3 of that again for Office.

Re:My other computer is a mac...

[aftk2]

It's funny that you mention standards, and then deride the Macintosh version of Internet Explorer, which is a far more W3C-standards-compliant (here's a breakdown of CSS capabilities for most modern browsers) than IE 5, 5.x, and 6 for Windows. Netscape 6/Mozilla's even better.

I thought I'd take some time to address the claim of Windows Internet Explorer dominance (even if off-topic), since I see it often.

It's been my experience that Microsoft's Macintosh projects are far better than their Windows counterparts.

Switch

[weefle]

Well, I can see how Microsoft might be getting a little anxious, what with Apple pushing hard for people to switch from Windows to a Mac, coming out with a 17" version of the LCD iMac, making Mac OS users' default homepages Netscape instead of Microsoft pages, and designing iChat to use AIM and not MSN.

As for Microsoft's opinion that Apple isn't pushing Mac OS X hard enough? Well, that just sounds like a software company's opinion of a hardware company. Apple's shipping machines with Mac OS X as the default OS and has made plenty of announcements about the sunsetting of Classic Mac OS. Apple's money comes from selling machines, so that's all they need to do.

And how does Microsoft intend to "steal Apple's thunder?" By simply by making announcements of its own versions of what Apple has been doing with tremendous success for years. Movie trailers will continue to be in QuickTime format, MPEG-4 is still QuickTime, and Apple will continue to sell 802.11b harware in addition to their robust and easy-to-use software.

If Bill thinks he's going to lead the game, he'd better try to get out in front on a thing or two.

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.

Questions to ask that weren't

[ddtstudio]

-- office xp sales have deen dismal. is this the fault of windows xp's slow adoption rate?

-- ms has split office v.x into a number of baffling skus, such as an entourage/word combo, a word/excel combo and so on. were sales of these packages counted in the single number they're tossing around?

-- is the soho/home productivity market saturated?

-- has the sudden stop on hardware upgrade sales affected sales of os x, new macs (which all ship with os x as a default boot) and office?

-- is office v.x just not that great of a product? either in enticing sales or enticing upgraders?

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.