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Can Apple Take Microsoft on the Desktop?
An anonymous reader writes "RDM asks Can Apple Take Microsoft on the Desktop?, a comparison of recent sales and profits and the future outlook for Macs and PCs. It's the opinion of the article's author that Apple doesn't have to take a majority share of the desktop market to win. The key is to take the most valuable segments of the market. They show via a few quick financial numbers that even though Apple is selling fewer machines, they're making more money per machine than your Dells or your Gateways. Not being beholden to Microsoft gives them a big advantage when competing with traditional PC sellers. Once Apple is positioned, Microsoft will be forced to choose whether it wants to battle Mac OS X for control of the slick consumer desktop, or repurpose Windows as a cheaper, mass market alternative to Linux in corporate sales. If it doesn't make a choice, the company will face difficult battles on two fronts.""
"It coudl cause a push for some companies to adopt cheap Macs on the desktop. Maybe if Apple can bring the price of the Mini back down."
It is not a question of cost. Mac are quite competitive compared to equivalent machine. The problem is the range of available machine. You have a *very* limited subset of hardware you can choose from Apple, and all of them are designed either for home ( cheap one ) or for very top of the range professional ( MacBook Pro, MacPro )
There is no average common machine. Example: The mac mini is slightly underspec for a developer ( mainly: harddisk sucks, only 2 GB memory max ) and the design is completely irrelevant: we have all plenty of lost space under the desk. My company buys beige ibm/dell boxes with the same spec as the mini and roughly the same price, but the fact that the dell/ibm come with standard disk in a standard ugly box is seen as a benefit, unlike in my livingroom.
Off course, there is the mac pro, but it is completely overkill, both in cost and performance. ( Again, not saying it is not competitive against similar spec machine, but that's the equivalent of 'if a knife is not good enough for hunting, we also sell machine guns' )
Instead taking an Apple computer, and then trying to configure a PC to be similar, turn it the other way. Take a bunch of random PC's, and try to get an Apple computer with the same features. Due to Apple's limited selection of hardware, almost always, the Apple computer is going to be more expensive (though you will end up with features the PC doesn't have, that doesn't mean I want to pay for them). This is especially due to the fact that you have to move up pretty far into Apple's line up to get features found on basic and mid-range PCs, like a 3.5" harddrives, expansion slots, and non-integrated graphics.
The consumer market is 40-50 percent of the total PC market.
You think that Apple is mostly selling to consumers? You're wrong.
"Apple's Macs are primarily targeted at three core markets: consumer segment (25% of Apple's PC business), education (33%), and SMB with a strong focus on creative professionals." (Deutsche Bank report citing IDC figures)
Apple is selling hundred thousands of Macs in the education sector, in this earnings call transcript Tim Cook mentions two large contracts totaling 50,000 units and this is not an uncommon occurrence.
"Ten percent of the Company's net sales in 2006 were through its U.S. education channel, including sales to elementary and secondary schools, higher education institutions, and individual customers." (Annual annual report 2006)
Apple is also doing well outside of the U.S., last year a Gartner analyst told Macworld: "For the first time, Apple is number one in the EMEA education market with 11.6 per cent of the market in Q3/2006 against 9.6 per cent in Q3/2005."
Apple is gaining market share in the consumer segment, in Q2 2005 Apple's share increased to 5.5 percent in the U.S. and 3.1 percent worldwide (Deutsche Bank report citing IDC figures). It must be higher by now, but nowhere near 33 percent!