Apple - What A Difference Eight Years Can Make

conq writes "It's been eight years since Michael Dell was asked after a speech at a Gartner conference in Orlando what he would do if he were in charge of Apple Computer. His answer: Shut the company down and give the money back to shareholders. BusinessWeek in its new Byte of The Apple Blog looks at how the tables have turned since then. For example, over the last four quarters Dell has been coming in with a net profit margin of about 6.5%. Meanwhile Apple just finished its fiscal 2005 with a profit margin just shy of 9.6%."

Comments

Apples to Apples

[erick99]

Micheal Dell would have been smarter had he reserved judgement. Arrogance can sure come back 'round and bite you in the ass. In terms of profit margin one has to consider that Dell is bringing in revenue of around 14 billion a quarter versus Apple's 4 billion so I am not sure how to judge the differences in profit margin given the difference in revenue. Dell probably has a great deal more infrastructure. Oh, well. Just saying we should make sure we are comparing Apples to Apples (funny, huh?).

Re:Apples to Apples

[TimmyDee]

True, but in terms of a financial future, Apple's is certainly brighter in spite of their smaller market cap. Dell's business model inherently undercuts its financial stability. In order to stay competitive, they need to continue to cut costs. Pretty soon, cutting costs comes at the expense of things like customer service, R&D, and other things that are required to maintain a viable, growing business.

Apple has certainly come a long way since then. I think it's safe to say that we are comparing Apples to Apples in this case, since Apple was on the track to commoditization in the mid to late 1990s. However, when Jobs took over, they made a conscious decision to move away from commoditization and towards innovation as their primary driving force. What I think we're seeing here is the results of that decision. Had Apple continued down the path they had set out during Spindler/Amelio, they would have ended up like Dell -- perhaps a larger market share in the short term, but a much more dismal future outlook. Instead, they are a vibrant company that has great promise to grow its market share in a far more sustainable fashion.

Re:Apples to Apples

[TGK]

I think you're using the term "Commoditization" in a different way than I would.

While I ponder what you mean by the word, let me interject my views here. Yes, Apple has turned down a path of trying to sell innovation... but only sort of. Apple is more in the buisness of selling "little and cute."

I don't mean that in a derogitory fassion. Little and Cute seems to be making them buckets of money. I think that Apple's revenue stream comes from a fundamentally different viewpoint on the same basic idea. Apple sells brand name consumer electronics. They have a look and feel to them that says "I'm an Apple." Like many consumer electronics, they do exactly what they're billed as doing and little else. In the case of the iPod line is this restrictive, but appropriate.

In the case of the G4 line, this is less restrictive (though still somewhat limiting for those who don't fall into the Unix poweruser category). Fundamentally though, I think that Apple's success stems more from their successfull attempts to brand their systems as more of a appliance than a tool. There is a fine line that they are walking with the desktop/laptop products they make, but even in that case, there is definately a feel to them as being less generalized than a pc.

Apple has definately hit on something here, but they have to keep running. The question for the next eight years will be this. Can Apple summon the willpower to keep running?

Re:Apples to Apples

[MECC]

"cutting costs comes at the expense of things like customer service, R&D"

Dell does R&D? To them it must mean 'ruin and destroy'. We haven't had a dell server that hasen't had some kind of hardware problem - out of dozens. Our Apple servers haven't had any problem at all.

I guess by 'shut it down', he meant what would happen if he ran a company that had to make good hardware to stay afloat....

Re:Apples to Apples

[SydShamino]

Pretty soon, cutting costs comes at the expense of things like customer service, R&D, and other things that are required to maintain a viable, growing business.

Pretty soon? R&D is the first thing they cut when things go bad. Heck, I even watched a television show about Dell that explained precisely this as their corporate strategy.

I was offered an R&D job at Dell when I graduated from college years back. I am so glad I didn't take it; I would have been layed off in less than a year when the 2001 recession took effect. Instead I work for a company that invested in R&D through the recession and is now reaping those benefits.

Re:Apples to Apples

[Mr. Underbridge]

Dell's business model inherently undercuts its financial stability. In order to stay competitive, they need to continue to cut costs. Pretty soon, cutting costs comes at the expense of things like customer service, R&D, and other things that are required to maintain a viable, growing business.

Yeah, that's working out terrible for both Dell and Walmart. There will always be a market for the cheapest major vendor for any product. Always has been.

In general, I'd say Dell's future is at least more stable because the market for computers is stable and certain. Apple's fortunes are completely tied to the iPod right now, and that's a market that's less certain. For Apple to maintain their fortunes, they need to either hit another home run, and/or keep up their 75% market share in the portable player market. Both are tough, though not impossible.

Re:Apples to Apples

[Wellspring]

Dell moved in the direction of building a commodity product-- that is, he wanted what economists call "perfect competition" where products are interchangable and people are cost-sensitive. Then his excellent supply chain let him undercut everyone on price and still make a tidy profit.

In a perfect competition game, low costs are EVERYTHING. You stick to open standards and off the shelf components. With high volume from having the best price, you get the volume you need to improve your costs even further through economies of scale. Not alot of profit per box, but LOTS of boxes.

Apple's strategy has been what economists call "monopolistic competition", where products are imperfect substitutes for one another, and buyers are willing to pay a premium to buy a product that better suits their needs. Apple's high quality, feature-rich, very fashionable product is a luxury item.

Apple's costs are high, but their prices are even higher-- giving them those very nice profit margins. In a luxury item game, your only challenge is when others try to imitate you at the top end of the market-- something that Apple's proprietary software helps protect them from. You don't need alot of market share to win at that game.

I'm a big fan of Gil Amelio-- his reforms helped get apple back on track, and I think Jobs took much of the credit because he was around when Amelio's reforms started to pay off. But Jobs and Jobs alone deserves credit for building the boutique business that took Apple from "no longer in danger of collapse" to "no longer in danger of mediocrity".

R&D

[BWJones]

Fundamentally, Apple Computer has invested in research and development and has come out with revolutionary products that functionally make things easier while Dell has simply operated as a reseller and box builder. Where is the innovation coming out of Dell?

Although I just yesterday placed an order for two $379 commodity boxes from Dell that I will run headless behind OS X boxes for security reasons, almost all of our purchases have been going to Apple. From the Mac Mini to iMacs to dual G5s with 30in Cinema Displays, Apple has been building systems around an operating system, OS X that meets our needs. In addition, the security issues make them easier to administrate, freeing up time to get work done that we are actually interested in.

Re:R&D

[brkello]

You know, there are different types of innovation. I just attended MILCOM and one of the guest speakers was talking about innovation and they listed both Apple and Dell. What did Dell do? They innovated the process of purchasing and distributing a PC. They are able to offer lower prices and make PCs accessible to a greater number of people. You may not think that type of innovation is as important as Apple's...but really, Apple didn't do anything technically innovative. They are innovative in design and user interfaces that appeal to the masses.

Comparing Apple to Dell is comparing apples to oranges. Saying one company is more innovative than another is just plain silly. They have totally different business models. Then trying to back up your opinion by saying your organization is buying more Apples than Dells is totally irrelevant. Who cares? I really don't get the emotional attachment to tools. Apple systems are a tool. PCs are a tool. Just like any tool, there is a right tool for the job.

Re:R&D

[rsborg]

I just attended MILCOM and one of the guest speakers was talking about innovation and they listed both Apple and Dell. What did Dell do? They innovated the process of purchasing and distributing a PC.

Problem is, Dell's innovation wasn't something they could patent and protect, whereas, with Apple, some of their innovation is very protected (OSX UI, iPod interface, iTunes, iTMS exclusive contracts, etc).

Taking a look at Apple's supply times and online ordering capabilities, they have not only copied Dell's direct-to-customer innovation, but even gotten some of Dell's efficiencies of scale in effect. Problem is, Dell relied on:

• Microsoft to push the (software) innovation angle
• Intel to push the hardware innovation

Leaving them to really innovate in the supply chain area...

However, now that both MS and Intel are no longer the innovation leaders, and they have their own troubles to deal with, Dell is stuck without any way to push those companies to do that innovation. It remains to be seen whether this will mark a slow decline in Dell's fortunes, or they make a bold move to re-establish themselves as not only a market leader, but innovative and interesting.

Michael Dell is really crying

[Reality Master 101]

For example, over the last four quarters Dell has been coming in with a net profit margin of about 6.5%. Meanwhile Apple just finished its fiscal 2005 with a profit margin just shy of 9.6%."

As a wise man once said to me about allowing investors in my company, "Would your rather have all of a grape or a slice of watermelon?"

Apple is dying!

[Generic Guy]

With Dell's recent quarters slipping and Apple's recent quarters showing growth there can only be one conclusion:

Apple is dying!

Re:Apple is dying!

[macrom]

Apple is dying!

Don't you mean beleaguered ?

Which would you rather?

[tkrotchko]

I'd rather have 6% of a huge number than 9% of a large number.

No seriously, Dell is an amazing company when you consider they are competing in one of the most cutthroat market segments in high tech. IBM sold the last bits of their PC business a few months ago. Gateway is now pretty much irrelevant... even the Japanese titans can't compete with Dell.

Re:Which would you rather?

[DarkBlackFox]

..And as a result of all it's cost cutting and cut-throat business tactics, Dell may eventually implode under itself. I'm not saying it will happen overnight, but like many here on Slashdot, I work "in the industry." I work for a small computer sales/service retailer, and over the past 2-3 years I've experienced a sharp increase in the number of Dell computers coming in for service, relative to the number of other brands. Granted, many were for virus/spyware infections, and the large number may be more because of larger market share. Beyond viruses though, I have seen more than enough Dell components fail, particularly the lower end/bargain models, both Desktops and Laptops. Ordinarily that wouldn't bother me, but I've heard from customers how bad Dell support is now, with the call centers moved offshore. I've had to fix Dell computers still covered under warranty because the owners got so fed up with trying to get help from the support lines.

A number of years ago, Dell built it's business up on quality parts and service- winning numerous awards for customer service, and were recommended all around. The beige box Dells in particular, which went for over $1500, were pretty solid machines. Back when profit margins were high enough to cover the costs of quality support. Now the conditions of the market have changed, and Dell has to trim the fat off what's already become an anorexic business model to stay competative. People who once came in to my shop swearing by Dell now swear AT Dell, and promise to never buy anything Dell again, after their 6 month old Inspiron 1150's LCD inverter burnt out, and Dell refused to replace it, even though it had a year warranty. Despite numerous calls, all the call center would say is insert the recovery CD and reinstall the operating system.

Bottom line- Dell became the bohemoth it is now based on reputation of quality machines. Take the quality out, and they are just another retailer. They still enjoy brand recognition, and the higher end systems aren't too bad. But they grow marketshare by offering $299 PCs, and $699 laptops to anyone who thinks any Dell is a good Dell, even if on the cheap (without understanding that You Get What You Pay For). As a result, it's userbase will slowly erode away.

He may have been right anyway.

[Jerry Coffin]

It may sound arrogant, but it's entirely possible that Mr. Dell really had it right -- Apple's making 9.6% profit margins today, but certainly hasn't for that entire eight years. The real question isn't "how well is Apple doing right now?", but "would the stockholders be better off if they'd invested elsewhere?"

At the same time, the fact is that most stockholders are reasonably intelligent adults, and (IMO) it's perfectly fine that it's been left up to them to decide to keep their money there instead of investing elsewhere. If the investors had all agreed with Michael Dell, Apple would simply be gone -- or perhaps, like SGI, being de-listed for having too low of a stock price.

--
The universe is a figment of its own imagination.

Re:He may have been right anyway.

[MasonMcD]

It may sound arrogant, but it's entirely possible that Mr. Dell really had it right -- Apple's making 9.6% profit margins today, but certainly hasn't for that entire eight years. The real question isn't "how well is Apple doing right now?", but "would the stockholders be better off if they'd invested elsewhere?"

Actually, if you look at any period in comparing their stock up to today, unless you bought Dell nine years ago or earlier, Apple's stock has performed better. Plug in whatever time period you like.

http://money.cnn.com/quote/chart/chart.html?showna v=true&pg=ch&symb=AAPL&time=8yr&compidx=aaaaa~0&co mp=DELL&ma=0&maval=60&freq=1dy&type=2&uf=0&lf=1&in d_compind=

http://money.cnn.com/quote/chart/chart.html?showna v=true&pg=ch&symb=AAPL&time=7yr&compidx=aaaaa~0&co mp=DELL&ma=0&maval=60&freq=1dy&type=2&uf=0&lf=1&in d_compind=

etc.

Re:Could have been lucid advice at the time..

[drhamad]

If everyone followed what something looks like at the time, because of their fiscal or market share position, all the PC companies should have shut down in the face of IBM, or even before that IBM should have not started a PC division because Apple ruled that world. TWA should have sold out to Pan Am. Torvalds should have joined Microsoft. T-Mobil would fold up in the face of Verizon. The Bell's would never have formed Cingular.
etc etc.

If "lucid advice" just means /;the company looks like it's doing badly," we'd never have half the innovations or companies of the world.

Stock market is flawed

[imag0]

If you think about it, the stock market does not award companies for doing well, maintaining a good fiscal outlook and treating it's employees good, it awards companies that grow. What happens whenever a company has utterly grown itself so large that there's really no room to go anywhere (ala Microsoft)?

Sure, it's a treadmill that everyone wants to get on, but it wears down and kills all but the strongest. Not to be outdone, it drives competing companies against one another to the point that now, a little over a hundred years later, companies are little more than rabid beasts. Clawing and looking for any way to get a little larger piece of the pie. If they slip in the slightest they are injured. If they slip a few more times they can be ripped apart by other competing companies- broken apart by others more ruthless.

Anyone wonder why the laws and regulations are changing so much in favor of the big corporations?

They might not be able to get off the treadmill, but it doesn't stop them from coercing others to come to their aid.

Does that make sense?

Re:Profit Margins

[2nd Post!]

You can't conceive that perhaps Apple isn't over-charging, but that Apple offers more value (that is consequently worth more money) than Dell?

Case in point: A soda costs $0.05 at Taco Bell. It costs you $0.99.

Yet how much value is there for you in:
1) Lugging around syrup
2) CO2 canisters
3) Mixing equipment

Myself, I drink water, but the point stands: If Apple offers more value, Apple can effectively price higher and not be over-charging.

Another example would be the $0.99 burger at Wendy's. In raw part it would cost you only $0.25
Do you want to lug around a fridge, fresh lettuce, a package of buns, a grill, ground beef, and cheese whenever you feel like eating a burger for lunch?

Check out their stock performance

[Cr0w T. Trollbot]

Here's a comparison of Apple's stock vs. Dell's stock over the past five years.

Buying Apple five years ago would have netted you a 450% profit. Buying Dell five years ago would have netted you...a small loss.

Crow T. Trollbot

Re:Check out their stock performance

[DECS]

No it tells the same tale:

Dell's performance has passed - five years back.

Dell is now in the position of trying to find new markets for the same old PCs. They rely upon Microsoft to for OS software innovation, and have no real software development efforts that will spur new hardware sales. They rely on MS' WMA to run their mobile music products, and WMA has failed dramatically. PocketPC has also done poorly, as have tablet PCs and everything else MS has offered its licensees lately.

If MS scores big with the XBox, it may turn into strong competition for gamer PCs, which comprise a significant chunk of Dell's high end PC sales. Dell can't be happy to have MS competing with its bread and butter while they rely on MS for their OS.

Apple grew PC sales of ~43% vs Dells ~17% this last quarter, and made higher margins on each sale. Plus, Apple's hardware sells new copies of OS X, and Apple software: low end iLife, and pro apps ($500-$1000 apps) like Logic, FCP, Soundtrack Pro and Aperture, which in turn sell 30" displays. iPods sell Macs, Macs sell iPods. iPods sell iTMS music tracks. Macs sell .Mac subscriptions.

All of Apple's software/services add profits that Dell will never see, because Dell sells no software. And that software buys customer loyalty.

Dell is in a huge pinch because anyone who buys a Dell does so because the price is OK. If HP or CompUSA offers a cheaper PC 3 years down the road, that customer has no reason to stick with Dell.

Apple customers, three years down the road, would have to find replacements for all their software in order to buy a PC from another vendor. Plus their stuff wouldn't work swimmingly together as it does now. Dell customers have loyalty as long as Dell is cheap.

Dell's drive into new markets has involved disposable printers with proprietary toner carts, and home theater. But who wants a Dell home theater? They have massive competition in the TV space, and its difficult to differentiate in that market. Dell is competing in price with Apple in the large flat panel display space, but there's nothing but TV to drive PC sales of 22 to 30" displays. Apple has an entire new wing of Pro apps that take advantage of dual 30" displays.

Dell:
no obvious growth markets
beholden to Microsoft to supply its vision and leadership into new markets
competing with major PC vendors and retail outlets selling commodity PCs, and home built parts PCs
competing with cutthroat TV / home theater makers
competing with cutthroat printer makers

Apple:
obvious growth markets:
  - owns 75% of music downloads, music players, owns podcasts, and poised to take over portable video
  - owns UNIX on the desktop (promising markets in higher ed, biotech, super computing servers, film)
controls its own vision and leadership in developing new markets
isolated from competition
  - owns its own PC designs, its own OS, its own web development and software dev)
  - mostly sells premium hardware (powermacs, powerbooks, xserves)
  - popular hardware for Linux users
  - great reputation for quality and reliability, good service
owns its own growing fleet of high fashion retail stores
owns the youth market with the iPod, and sells them the popular iMac / iBooks / Mac minis

So yes, you're right. The story is that the tables have turned: Dell was selling lots of PCs while they took over the market, but now Dell is in trouble and Apple is just getting started.

Low profit margins intentional

[G4from128k]

Dell does NOT maximize profits -- I've heard several Dell executives speak (including Micheal Dell) and their pricing strategy is more subtle that just maximizing the short-term revenue minus costs bottom line. In fact, they said that they will actually penalize sales divisions that create too high a profit margin.

The reason is that the higher the profit margin, the higher the price. The higher the price, the lower the market-share. Dell is more interested in gaining market-share than in maximizing price. For a commodity such as PCs, the way to achieve long-term success is high volume with a more modest profit margin. Undercutting competitors is more valuable than earning more on each sale.

The key is that total profits are a second-order curve as a function of price. Too low a price results in too low a total profit. To high a price means lower sales volume and lower total profit. The optimum price foregoes some profits per PC, but makes it up in volume.

Perhaps the big lesson is that Dell and Apple are NOT in the same business. Dell is just one more PC maker that sells a commodity that is strongly subject to price competition (Dell is very good at competing on this). Apple is a sole-source for an intrinsically valued product. Sure, some people do avoid Apple because of price, but many buy Apple (and don't even consider buying a PC) because of the unique value provided by Apple.

Re:Low profit margins intentional

[coult]

Of course they are maximizing profits...what about your description is not maximizing profits? They are simply choosing to use different model for their profit than just "next quarter" or "next year," and choosing to maximize total profit rather than profit margin as a percentage of cost. You seem to think that maximizing profit means maximizing profit margin as a percentage, which of course it does not.

More importantly...

[Winterblink]

... we can also focused on what hasn't changed: Michael Dell is still an asshole.

Re:Profit Margins

[argent]

Which would you rather have?

Depends on who I am. If I'm Michael Dell, probably the 6.5%. If I'm a stockholder or an employee, who has the same absolute amount of income or stock riding both percentages? I'll take the 9.5% thanks.

Re:Got some bad news for you Mr. Dell...

[SquadBoy]

Only if you consider some random store brand of tool to be comparable to Dewalt. Granted you *can* and I have and do build high end PCs that a pro would be proud to have for a tool. You can also buy Macs (12" iBook in my case) that will take your breath away and make you glad to compute again.

Pros have *always* been willing to pay for their tools and to reject the low end. I have a hard time understading why so many people working with computers have a hard time with this concept. But clearly I'm serious about my tools. This is why a mix of high end PC gear and Macs are my tools of choice.

Apple is the Dewalt of the computing world.

Re:Not Apple Computers

[eqkivaro]

Actually, I'm going to take my comment back. It's not that the apple computers aren't selling well. The point I wanted to make is the turnaround in company performance has MORE to do with the iPod peformance. Not just from a sales standpoint, but an image standpoint.

FWIW, from the latest 10-Q, sales this quarter compared to the same quarter last year show that desktop sales increased 65%, laptop sales increased 8%, and iPod sales increased 616%(!!).

link to the 10-Q: http://media.corporate-ir.net/media_files/irol/10/ 107357/reports/10QQ3FY05.pdf

Re:Its against the Geneva convention

[happyemoticon]

Well, I'm pretty sure he's actually right there. Properly speaking, administrate is an erroneous back-formation. However, it's used so often that it's gaining acceptance.

See here:

noun : verb
calucation : calculate
articulation : articulate
demonstration : demonstrate

even the hideous
dissertation:dissertate

is technically correct.

However, this stuff isn't:

administration : administrate - wrong, administer
amplification : amplificate - wrong, amplify
multiplication : multiplicate - wrong, multiply
indemnification : indemnificate - wrong, indemnify

The only difference is that words like "multiplicate" are totally hilarious, whereas most people think of administrate as a an accepted part of the language. I wouldn't get out my red pen if I saw administrate, personally, though I to avoid using it in official materials.

To hell with Dell

[Quattro Vezina]

Anyone still remember all the "to hell with Dell" banners and stuff eight years ago, when Michael Dell first made those comments?

Corporate Market?

[SpasticThinker]

Apple may be doing well in the home computer market. But if you're going to compare the two of these companies, consider the corporate market as well.

Dell can afford to sell its home computer stuff so cheap because it's making more money on the high-end stuff. Don't forget, Dell produces (or at least brands) backup systems, storage solutions, servers, racks, etc. You name it, Dell makes it for your business. They have captured a ton of that market, and their sales structure for businesses of all sizes makes it easier to buy there again.

So I think financially, Dell is doing very well...when you consider that solid corporate market.

Re:Got some bad news for you Mr. Dell...

[Jeremi]

Apple is just as evil as Microsoft, just not as successful.

Microsoft is very successful at aggressively marketing poor quality products. Apple markets high quality products to a niche market (whether they do so successfully or not is a matter for debate).

Therefore, if we are to define "evil" as proportional to the amount of pain a company inflicts on the world through its products and practices, Microsoft wins hands down.

I think where you are going wrong is that you are attempting to define evilness by guessing at the companies' intentions -- but intentions are impossible to ever really know; you can only infer intention by looking at the companies' actions and statements, and those are always open to interpretation and thus endless, pointless debate.

Failure to learn from VHS vs. Betamax

[tm2b]

People really like to repeat that VHS vs. Betamax canard, while completely missing the important lesson.

The thing that really killed Betamax wasn't so much the licensing issues as the fact that you for early US models, you couldn't put a 2 hour movie on a betamax tape, but you could on a VHS.

That's huge. Being able to ship movies on a single VHS tape is what estabilshed the distirbution channels for those tapes and is what encouraged people to buy in to the VHS technology, in turn creating the demand for more VHS tapes, and so on.

And that's the big lesson lurking behind it all: pay attention to what your customers actually need, and what aspects of the technology will support the distribution and consumption models. It doesn't matter if your product will do a thousand things more cheaply than the other product, if most people can't easily get it to do the one thing they really buy it for. That's why the iPod has been so successful, even though there are tons of cheaper, more feature-rich products out there.

R&D???

[LWATCDR]

Dell doesn't do R&D. They use Intel CPUs and usually Intel chipsets. I believe even the motherboards are Intel reference designs. Dell assembles parts into boxes. Apple is frankly going the same route at least when you are talking about hardware. They will use Intel cpus and chipsets. That is the whole point of Apple going to Intel. They can buy solutions. At least Apple does it's own OS.

Re:It's not going to last...

[nine-times]

Why is this insightful?

in the end it only does one thing -- play music (and videos now -- poorly).

Uhhh... what should it do? I mean, besides play music, video, store contact info, calendars, photos, play games, work as a stopwatch, and work as an external hard drive, what is the iPod supposed to do?

The cost of entry to use a *nice* Apple is just too damned high

$500? Geeze...

There will be an iPod killer at some point -- when the iPod isn't as 'cool' as it is now.

Sure, *eventually* people won't be buying iPods, but when is that going to happen? Who's to say Apple won't be prepared? And what product won't become old and obsolete at some point? I'm sure Apple is shaking in their boots that the iPod won't be so trendy in 20 years.

The day Apple decides to put OS X onto a DVD and let you install it on your whitebox built computer is the day the grave is dug for Microsoft.

Maybe, but it's also the day their current business model is ruined. Apple is basically a hardware company that also makes the software to run their hardware. That's kind of how they work-- selling the whole package. I'm not saying being a software company, selling OSX, couldn't be a profitable business, but it would damage their hardware sales, which is, right now, their bread and butter.

Re:It's not going to last...

[pauljlucas]

The day Apple decides to put OS X onto a DVD and let you install it on your whitebox built computer...

For the millionth time, this will never happen. Aside from the fact that Apple is a hardware company and the $99 price of OS X is enormously subsidized by the sales of hardware, OS X isn't (and never will be) developed for and tested on the myriad of PC boxes having various motherboards, video cards, sound cards, etc.

One of the reasons OS X works so well is because Apple knows exactly what hardware it will run on -- their own. Apple doesn't want to deal with the nightmare of having to support OS X on a generic PC box. Besides, what kind of support do you expect for $99? Do you really expect that a Mac Genius at an Apple Store is going to spend time diagnosing OS X on your PC?

The cost of entry to use a *nice* Apple is just too damned high

Not really if you compare it to a comparable PC. That aside, apparently Apple doesn't care that some people can't afford their computers just like BMW doesn't care that some people can't afford their cars. Yet you don't hear people bitching about the price of BMWs. A Mac is simply better (not to mention more stylish) hardware that "just works" with a killer OS. Better things tend to cost more. Get used to it.

Dell was right.

[hey!]

Just because he was proven wrong doesn't mean that what he said wasn't justified. I have friends who were Apple fanatics who in those days had stock in the company for sentimental reasons. They've done way better than they had any reasonable right to expect.

Apple makes money by doing everything that is supposed to be suicidally stupid. It sells hardware and software tied to each other. It tries to do many things well instead of concentrating on one area of strength. But it breaks the rules because it sees the opportunity created by others following the rules, which is that things built by this kind of cross corporate ecosystem just don't work that well together. But even seeing this possibility is a long way from taking advantage of it: there are plenty of contrarian schemes that sound good on paper but never succeed. You need actual leadership which is connected to realities of consumer behavior.

I detest Steve Jobs' personality. I think he's a self-centered, manipulative bully. But he's also got the brains to match -- I'm just grateful he's not in politics. Bastards who think they're geniuses are common enough, but bastards who are geniuses, who are way out on the right hand of the bell curve on both scales, those are rare. If Apple didn't have Jobs or somebody alike to him as two peas in a pod, they'd have been bought out by some far east PC manufacturer by now.

Re:Got some bad news for you Mr. Dell...

[Jesus_666]

mac has always been about people who dont care enough about computers to want to swap around parts, or learn how they work.

I do. I would never buy an Intel box because I prefer building it from the parts myself. But I like Macs. Not only do they have style (which by itself is not a reason to buy them), they also come with an extremely great operating system. On the desktop I'd probably pick the Intel box, simply because of the computer's easy upgradability, but I'd never buy an Intel notebook. Most of them are heavy, loud, huge and ugly - not to forget the lousy *nix compatibility. The ones that aren't are expensive. iBooks are pretty cheap and come with a Unix with a great window manager. And it's as modifiable as many Intel notebooks - hardly.

Re:Scoreboard, tough guy

[ultranova]

The legal obligation of these public companies is to do everything they can to make their line go up over the X axis, not necessarily to impress Joe Slashdot.

Actually, no. The legal obligation of a company is to do its best to obey the wises of its owners. Those owners usually want the company to concentrate on increasing its share price; however, no law whatsoever forces them to. For example, if the majority of shareholders agreed that the companys number one priority was to provide humanitarian help to catastrophe zones, then that would be the companys number one priority.