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"Market Share" "Installed Base" and Consumer Electronics
redrum writes "Analysts and reporters like to talk about market share statistics, but the conclusions they draw are often misleading, RDM reports. Market Share Myth 2007: iPod vs Zune and Mac vs PC takes a look at how numbers are used to paint grossly inaccurate portrayals of the market share of the Zune among iPods, and alternatively the Mac among PCs. A follow up article, Market Share vs Installed Base: iPod vs Zune, Mac vs PC demonstrates how the conventional wisdom of market share reporting can be turned upside down by simply comparing what vendors actually sell. An eye opening, in depth look at the real numbers behind PCs, music players, and console games."
During the 1980s, the computer trade press ran top-forty-like software sales ranking charts. About a year after the release of Lotus 1-2-3, it occupied #1 slot and did so, regularly as clockwork, month after month. It became a unchallenged truism that 1-2-3 was the best-selling software title, perhaps of all time.
Gradually, it transpired that this simply wasn't true. The best-selling software title was, in fact, AppleWorks, a spreadsheet/word processor/"database" for the Apple II line.
What had happened was very simple. Apple sold AppleWorks directly. The only place you could buy it off the shelf (which at that time was still an important sales channel) was at an Apple dealer. That AppleWorks outsold 1-2-3 should not have been much of a surprise, because it was much cheaper, and because Apple dealers frequently included in it attractively-priced bundles.
But of the published figures were based on sales by Corporate Software, Incorporated. Since AppleWorks was never sold by Corporate Software or any other third party, it was literally off the charts.
"How to Do Nothing," kids activities, back in print!
That AppleWorks outsold 1-2-3 should not have been much of a surprise, because it was much cheaper, and because Apple dealers frequently included in it attractively-priced bundles.
This qualifies AppleWorks as being one of the most distributed pieces of software, but doesn't really qualify it as being one of the most sold pieces of software. For something to be "sold", it must be "bought"; and for something to be "bought", there must be a deliberate action ("hey, I want that"), not just a grudging acceptance ("in order to get X, which I want, I have to agree to have Y and Z, which are utterly useless garbage").
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The most interesting part of both articles was:
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In the final quarter of 2007, Apple earned $7.1 billion in revenue, compared to Microsoft's $12.5 billion in total revenue. Yes, that's right, Apple brought in more than half as much money as Microsoft, despite Windows owning 98% of the PC market.
Even stripping Apple of its iPod revenues, which PC pundits love to do, the company still earned $4.4 billion on its Macintosh business, over a third as much Microsoft brought in from its entire Windows, Office, and server operations combined. Apple's 2% of the PC market doesn't seem so small anymore.
Of course, Microsoft actually lost a lot of money on all of its consumer electronics products, so looking at profits, Apple earned $1 billion compared to Microsoft's total $3.4 billion in profit.
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Now, I don't know why he chose only the fourth quarter, but it's going to make me go back and look at the numbers for 2004-2006, because if that's a trend it's a very interesting one.
Paul
http://www.pauldrobertson.com
That "however" doesn't just make any sense. In terms of marketshare of computers, Apple is tiny. How does saying that the PC market is a subset of a larger market have any impact on the truthfullness of the previous paragraph? All that means is that the Mac's tiny slice of the market looks even smaller when you incorporate consumer electronics into your definition of the market.
The only people this matters to are those on the "losing" side of the statistic. Articles like this help them sleep better at night, knowing they're secure in their choice because someone else validated it for them.
The author makes the mistake of thinking that HIS way of looking at the statistics is somehow more correct than anyone else's. It's just a different viewpoint. No more or less correct.
Come on, looking at the net income over the last 5 years is about as fair as looking at just the 4th quarter (Holiday season probably accounts for 1/2 of Apple's sales).
Notice that in 2001, we are talking pre-explosion of the iPod. The net income for Apple was -$37m. Last year's net income for Apple was $1989m. Look at the last couple years of income:
(FY2006) 1,989.00, 1,328.00, 266.00, 69.00, 65.00, (FY2001) -25.00
After the explosion of the iPod (FY2003), we have roughly exponential growth
The net income for Microsoft was $7346m in 2001 and $12599m in 2006. Here's the last couple years of income:
(FY2006) 12,599.00, 12,254.00, 8,168.00, 7,531.00, 5,355.00, (FY2001) 7,346.00
Slow, but steady growth.
If you were an investor, who do you put your money in? The company whose income increased about 20% / yr over the last 5 years, or the company whose income has been more than doubling for the last four years? It's two completely different kinds of investment: stable, mature company or hot, rising star?
(Yes, I have run roughshed over some of the math, but that's the general idea.)
The insults you made were interesting. Little substance, overly personal, contributed nothing to the point, and made the assumption of personal superiority based on decisions made in the consumer market. Very Apple fan.
Slashdot - where whining about luck is the new way to make the world you want.
Back then, many people still hated IBM, because it was the 'big monopoly' computer company that had reigned in power for decades. Plus, IBM introduced OS/2 along with the PS/2 line and Microchannel in such a way as to recapture the market and kill the cloners. Lots of us were very skeptical of IBM for that reason. Similar to the way that lots of people are skeptical of Microsoft (or Apple, or any other 'big company' pushing their product with hype and marketing fluff.)
Part of the reason OS/2 floundered while Microsoft's OS succeeded is that OEMs didn't want to bundle OS/2, and for good practical reasons. For ever unit sold with OS/2 on it, Compaq had to give a sizeable amount of the sale to IBM in the form of licensing for the software. IBM was a competitor of theirs in the hardware market. By going with Microsoft, they weren't required to hand off money for ever unit sold to a competitor, as Microsoft wasn't involved in the hardware market.
There are other factors, as well, in the success of Windoze over OS/2. But many of them are never mentioned, it's just 'big evile Microsoft against poor IBM' which is, frankly, a pathetic distortion of history.
Roughly Drafted has had a madman's war with the Zune since its announcement. Look through the archives of this blog, it's like an anti-Microsoft/pro-Apple Mein Kampf. Why do we keep treating this as fact? The Zune is just a (actually fairly-decent) MP3 player... why has it generated such a massive battery of fanatical FUD? The fact that the Zune had so much rambling consumer backlash from Apple-fans will actually help sell them to anti-scenesters.
Here's a viral/word-of-mouth marketing standpoint-
There's been a trend lately with teenage boys, high-schoolers, purchasing Zune's instead of iPod's. Why? Because they're more straight-forward functional and masculine, but have the same Scene-feeling. It doesn't take a marketing rocket scientist to figure out that iPod's are sort of effeminate. What Microsoft has is a solid product that will slowly ride into the mainstream on the shoulders of masculine insecurity. All it takes is a couple generations, focus, and patience. The Zune instantly gobbled up a chunk of the market share on pure 'wtf'- I imagine that as long as the Xbox camp is behind this product, they'll gain market share continuously over the next several years and product revisions.
My standpoint:
A couple weeks ago, I rode a train for a few hours, watching episodes of The Office on my Zune- I can even watch anime because the screens so clear I can read subtitles. I carry it with me every day and listen to it quite frequently on long walks and runs. The thought of getting an iPod instead never crosses my mind, especially since I make full use of the Zune Pass for subscription music- I couldn't afford it. I purchase all my music in non-DRM MP3 from Bleep.com and rent music from Zune. So, I guess that would make it a Consumer Product, not a satanic cancer.
This is because "design", unlike word processing and spreadsheets and whatever else PC users in business do, requires fast machines and actually gets a higher ROI when you aren't sitting around waiting for files to render. Thus, Macs in design are replaced way more often that PCs. This has nothing to do with the life cycle of Macs, it has to do with the type of work they are used for. Trying to compare the life cycle of Macs in design roles to PCs in accounting is like asking why you have to replace tires in the indy 500 every few laps when your camry at home can go 40k miles with the same tires. PCs in accounting can only go as fast as you can type, Macs in design can only go as fast as they can render/compress video/etc...
In the consumer space, this is quite different. Many people keep Macs 4 or 5 years and can run the new OS updates and applications because they are essentially just doing email/web/word processing/and syncing their ipod. My father has an old G4 tower that runs OSX 10.4 quite fine, and I think it even shipped with OS9 (it was the last of the G4s to do so). He's not making money off of FCP or Photoshop and he can't run Aperture on it, however. But I am sure it will run Leopard OK because OSX doesn't seem to get a whole lot slower when they rev it, and in many cases gets faster. At some point it will be "unsupported", but if you notice, Apple's most recent hardware "phase out" was machines that didn't ship with built in firewire and a G3 processor. Thats basically every machine back to the original iMac (or pretty close). Faster machines will be faster, but thats true in WinXP land too...
Another way to look at this is to look at the pace of software innovation by microsoft (or lack thereof). The reason you can run XP (which up until a month ago was the current MS OS) on a 5 year old machine is because XP is a 5 year old OS. Nothing has been added to XP as far as functionality that would demand a faster computer during that time. Likewise, no new graphics subsystems that provide increased functionality, etc... In that same period of time, Apple has revved their OS almost 5 times, each time adding fairly significant new functionality that took advantage of the new era hardware that was available at the time. 2k/XP are essentially the same exact OS, so there is no wonder you can get XP to run on a machine with 128MB of RAM and a 4GB HDD. XP doesn't have Quartz Extreme, CoreImage, CoreAudio, etc.. and applications that take advantage of them to use/abuse faster hardware...
This is just not true. First of all, define "support". Applecare supports Apple's hardware (meaning they stock replacement parts for service) for 5 years. Apple's warranty covers the machines for 1 year of out the box, with an available extension to 3 years. If you are a business or large enterprise, you can (as with other enterprise vendors) pay for enterprise support to cover all machines in your organization for a very long time, as well as sign yourself up to be a self servicing customer where your IT dept can order replacement parts directly from Apple, just as any retailer/service center would. Most agreements include guaranteed response time, and parts replacement. I'd say thats pretty normal "support" for a computer company, at least as far as hardware is concerned.
It is true that with OSX, Apple only patches 1 OS
Give me a greak. They bought Optiplex and Latitude systems which "barely" lasted 3 years? PLEASE. They all come with STANDARD 3 yr warranties. They ALWAYS last 3 years +. Meanwhile, the mac's come with 1 year warranties and most IT departments do not purchase the extended plan. (not at the price he is showing as the "average")
I'm sorry, but this article lost 100% total credibility by stating that dells can barely be supported for 3 years. If his so called "Dedicated IT Department" is having that many problems with the Dells, then they have some major competency problems. We deploy $4 million in dell client systems a year and around 1/2 million in apples in a managed environment. I can tell you for sure that the apples lifespan is around the same as any other brand. If anything, the apples cost the IT department more in labor per machine because their ASP certification process is more expensive and harder to maintain, and parts are not as available in the warranty realm as they are with Dell, which guarantees (and are the only one in the industry who comes through on it) overnighted parts on every optiplex and latitude sold.
The systems break equally as much at best, and if anything, more when you are dealing with gen1 apple products (gen1 macbook, gen1 macbook pro, gen1 intel iMac, gen1 PPC iMac (after the ilamp). When you are forced to deploy new motherboards to all your newly deployed gen1 macbooks, the labor costs tend to go up. The last time dell systems required major component replacements in a widespread environment was with the GX270 motherboard leaky capacitors (which did not cause substantial problems until most systems were out of the 3 year warranty). This issue is over 4 years old prior to it there were no other major issues. These types of major recalls are a regular occurrence from Apple with every gen1 product they ship. These aren't published recalls, they are ASP recalls. This means that the only people who know about them are the service providers and anyone they tell (like customers). Apple does not admit in the press that they are recalls, and it is against NDA for an ASP to.
If you have "read plenty of articles" stating that apples last longer then more power to you. But articles don't make facts. Real world events are facts. Articles are just articles. Most articles which state that apples last longer are not based on fact, but are based on the same personal experience of the author, who has had no extensive experience dealing with large scale deployments of PC hardware, or even mac hardware for that matter.
Your ignorance is infinitely greater than you realize.