Yes it is. Market share does matter. It matters tremendously. It matters to software vendors, it matters to shareholders (well, maybe all of them except you), it matters to Microsoft, and it matters to Apple. If Apple went from selling 5 million to 10 million computers in a year, but their market share dropped from 10% to 3% in that same year, Microsoft would rejoice, and Apple would not. However, if Apple's market share increased from 3% to 10%, Microsoft would immediately begin their unholy crusade to drive Apple into the ground. Or at least back down to their safe corner of the market where they are unthreatening and largely harmless, like where they're at now. Market share is everything. Apple is probably starting to introduce new applications at a price point the average user can afford (Final Cut Express, Keynote, iLife) partly to diversify their revenue base so they don't have to depend so much on hardware sales. This will free them up to reduce their margins on new machines while not hurting their overall profitability because as a percentage the importance of hardware will decline somewhat.
Doubtless this will fail to convince you, but I did a quick Google search and came up with this article right away. Granted it's from 2001, but it clearly says Apple's retail stores are part of its drive to increase market share. Hell, it even quotes Steve Jobs saying as much. "5 down, 95 to go" I believe the slogan is.
A personal finance program, a la Quicken? You bet there's a strong market for that; you'll sell millions of copies to Mac owners.
I used Quicken on the Mac, and it lacks lots of features that the Windows version has (particularly in the online area), and is horribly buggy. I use Dreamweaver extensively on a PC at work and on a Mac at home, and the Mac version is buggier. You will doubtless deny this, but even if it is not the case, as the PC share of Dreamweaver users increases, Macromedia will shift more of their focus to the PC market. Yes, many core Dreamweaver users use it on a Mac, and the absolute numbers of Mac users may increase, but as a proportion they are declining. Which version came out first, the PC or the Mac? And as you correctly point out it is especially true for games. Almost all of the games come out for PCs first, and many never make it to the Mac. If they do, they simply do not get the performance tweaks, game balancing adjustments, etc. the PC version gets because even if they sell millions of titles to Mac users, it still only ads up to a tiny fraction of their total sales. Corporate managers notice that, and they go where the money is.
Stop and think about what you're saying. See, everything is percentages. Companies choose to support platforms or not based on the percentage of their total revenue they can gain from it. So many more applications are available for Windows only because the percentage of Windows users is so much larger than the percentage of Mac users. Even if there are 5 billion Mac users, why waste your money when there are 95 billion people you can nab in one shot? I can't believe I have to explain this. The large number in absolute terms of Mac users only means that the Mac platform is not ignored entirely. It does not mean it gets an equal seat at the table with the Windows version of the product in the vast majority of cases (not every app, but most). I can see the (admittedly oversimplified) conversation in the boardroom now. "Bob, our PC user base has increased from 75% to 93% over the last 3 years. As a result, our revenue generated from the PC section similarly increased from 75% to 93%. However, while the Mac user base plummeted as a percentage, in absolute terms they increased somewhat." Now, as a result of this conversation, do you believe this company will:
a.) shift development effort from the Windows version to the Mac version
b.) keep everything equal
c.) shift development effort from the Mac version to the Windows version as their user base moves in that direction.
I will leave answering this question as an excercise to the reader.
I don't mean to be insulting, but if you can't understand this you are simply not trying. I guarantee you that Steve Jobs and every other business owner and middle manager in the world understands this. And as far as Oracle and Sybase are concerned, if Apple fails to make a dent in terms of market share in the server space that support won't last. Right now their server OS is creating a bit of a critical mass and gaining some excitement, but we'll see if it lasts.
Now, at the end of the day you could say that Apple is like Rolex or Mercedes or whatever, and that they're content selling their products to the tiny segment of the market that can afford them. But I don't believe this is what Apple wants to do. Their market share has slipped almost every quarter consistently for years. They cannot afford to allow that trend to continue. They are getting pushed out of the education market, and they are getting pushed out of the high end graphics and audio market. I believe they want this to stop. I believe that they want their Mercedes to sit in the same dealer's lot as the Pinto and sell.
I will finish my involvement in this thread with one final point. At my job, one by one each Unix developer bought Macs, including myself. We sucked it up and paid the price because it was worth it to have a very usable, graphically appealing, non-Microsoft & Unix-based OS and access to commercial apps. But there are still some people who haven't made the move, and they've done it because they don't want to spend the money. This is Apple's prime market because they know what a good computer is and they have the money to spend. It's a tired argument that's been beaten to death (isn't that how this thread started?), but they look at what you can buy on a PC and what you can buy on a Mac, and they can't justify buying the Mac. It's not like they want to buy the PC, but they just can't bring themselves to cross that threshold and spend what seems to be too much money on too little computer. Since PCs are 95% of the market, they define what customers expect when they shop for a computer. People expect fast performance for very low prices. Apple is beginning to realise this through interviews with PC users that come into their stores. It's opening their eyes on what the customers they're trying to attract are looking for in a computer. Apple is adjusting itself accordingly.
Okay point granted. But I contend then that including this antenna is useless because no one knows about it, and even if they do I highly doubt it's a compelling reason to shell out the price premium for a Mac.
First, market share is irrelevant. Has been for years. Nobody cares what the ratio is of Macs to PC's in the world.
Unless your name is Steve Jobs or Bill Gates. Apple's Switch campaign, plus their recent efforts to increase specs and lower prices (at the cost of profit margin) is directly targeted toward increasing market share. They are trying to hit 5%. Market share matters, my friend. If Apple's market share continues to decline, they are going to have trouble convincing vendors to write apps for their platform. The Mac versions of many popular programs are known to have less features, cost more, come out later, and have more bugs than their Windows counterparts. Patches are also released less often. There is a direct correlation between market share and vendor support for your platform.
Second, and more important, Apple's market share continues to fall because more people buy PC's than Macs.
This is true, the total pie of computer owners is getting bigger, but as Mac's share of that pie gets smaller, their relevance declines along with it.
This demonstrates that people are not price-shopping when they buy Macs.
Everyone price-shops when they buy anything. I would have loved to get the DP 1.25 Ghz machine with a 23" Cinema display, but I got the one I did because it was within my budget.
Which, as a shareholder, makes me very, very happy.
The answer is obvious. High profit margins are the key to corporate health.
This is patently false. How does Dell make money? Their margins are crap. How do any of the thousands of companies with thin margins make money? They leverage economies of scale. Taking the previous example of the extra memory, if Apple makes $20 less per computer they sell, but the machine now has 256 MB of memory, they would end up making more money because at the end of the day they've sold more machines. I think part of the reason Apple's margin are so high is because they can't afford not to charge those margins because they don't move enough units.
High margins means Apple can afford to spend money on their OS and their bundled-- and unbundled-- applications
Making a profit means they can afford to do this, and they have reported losses the last two quarters.
Apple doesn't build low-end machines. Every machine they ship, for example, includes a built-in AirPort antenna.
Wrong. I own the dual G4 PowerMac for $1700 and did not get an AirPort card in it. Not only that, but you don't get AirPort in a PowerBook until you spend at least $2799.99. That is a joke.
Apple really doesn't care about the low-end market. They care about selling high-end machine for good profit margins.
This is a highly debatable point. But assuming you're correct, this is precisely the reason Apple's market share continues to fall. As the article points out, Apple has to refrain from "its policy of keeping prices high to boost margins." Apple's cheapest machine with a DVD burner is $1299. Sony's is $799. The article further states that Sony's machine "is priced at the sweet spot of the market, which at retail is around $750 right now."
PC companies like Dell sell their computers to consumers with tiny margins; they make their money with add-ons and warranties. Apple sells computers to consumers with a 20% profit margin. If you do that, people who buy your machines will get less computer while paying more money. Thus less people will buy your products. It's not rocket science.
I want Apple to succeed. I love the platform and would love to see their market share hit 5%. But they will not do that as long as they continue to charge too much for their hardware, especially in this economy.
> Has anyone here tried running Jag with 256mb?
You mean Jaguar? Yes. It runs just fine. If you run too many memory-hungry programs at once, you'll start swapping, but that's to be expected.
You completely missed his point. What he was trying to say was instead of offering up low end machines with only 128 MB of memory, why doesn't Apple just take a negligible ($20 I believe was the price quoted) hit on their inflated profit margins and sell the computer with 256 MB of memory. This way they make the machine more attractive, and in the process actually make their OS usable. At least that's what I think he was trying to say.
Re:This scares the s*** out of me...
on
Giant Sucking Noise
·
· Score: 3, Insightful
So now that your job is being threatened we should stop the outsourcing rush? When we outsourced clothing, manufacturing, etc. was that ok? The world didn't end? The average American benefitted from this, the workers in those industries were retrained and now provide more economic output than before.
Wrong. The blue collar standard of living in this country is under considerable assault. People who once had good job security and whose job afforded them access to a middle class lifestyle have seen massive downward pressure on both their wages and their standard of living. Blue collar workers in the U.S. in the post-war decades lived better than white collar workers in Europe. Now they live worse than blue collar workers in Europe. While the wealthy have seen orders of magnitudes of increases in their income & wealth levels, the middle class have seen only marginal gains (10% for the average family in the last 30 or 40 years). That 10% has come at the expense of wives going to work, children being raised in day care, less job security, etc. The average blue collar worker (individual, not family just cited) has actually seen their wages decline or hold even over the same time period, depending on who you ask. It was high paying manufacturing jobs after World War II that gave this country a true middle class society in the first place. We are now at a crossroads where we must decide whether that society is the model for the future, or a historical anomoly of a few decades shortly to give way to a more stratisfied, less equal one.
Look at what has happened in Mexico. Immediately after Nafta, the northern border region of Mexico expierienced a boom as U.S. firms moved their manufacturing facilities there to take advantage of Mexico's third-world low wage, low regulation economy and corrupt political system. Shanty towns were erected around these factories where people lived in squander. But slowly wages rose slightly, living standards improved, but alas corporate profits fell. Those companies have begun relocating their Mexican factories to China, where labor is still cheaper and the authoritarian governmnet keeps the labor pool more docile. So much for globalization benefiting Mexico. It is a race to the bottom, pure and simple. Jack Welch once said his favorite kind of factory is one on a barge where he can move it from shore to shore, wherever labor costs are lowest. I expect no more from him than this; he is a businessman. But my government should not be his agent to accomplish this. Moreover, these companies get to be so massive in the first place because of the economic system, rule of law, and infrastructure my government provides and my tax dollars pay for. I am buying something with that money, and it is not the right for G.E. to fire me and replace me with three Mexican day laborers the first chance they get.
Now, if the current trends prove sustaining, the same will happen to white collar workers. Meanwhile, the rich have retired to gated communities and private schools while public schools and other infrastructure crumbles. They control the government through big money donations, thus the never ending flood of legislation favoring their goals.
One final point. The Scandinavian countries tend to have the highest standards of living in the world, and they are also the most "socialist" in Europe. Also, because of the way the U.S. calculates its unemployment rate, it leaves out key groups that Europe does not (for example, people who want a job but have stopped looking because they cannot find one - the number of these people in the U.S. has gone up rapidly in the last few years). If you take into account these groups, our unemployment rate is actually about the same as much of Europe's.
Remember, you do not have to sacrifice all on the alter of capitalism.
I think you need to lower your blood pressure there and get a reality check. Capitalism is a *means*, not an ends in itself. It is a means to provide Americans a decent standard of living. If it can't do that, what good is it? Period.
I am all for free trade amongst first-world countries, but I am not in favor of a rush-to-the-bottom strategy of maximizing corporate profits at the expense of my standard of living.
Slashdot Mirror
It's not about market share.
Yes it is. Market share does matter. It matters tremendously. It matters to software vendors, it matters to shareholders (well, maybe all of them except you), it matters to Microsoft, and it matters to Apple. If Apple went from selling 5 million to 10 million computers in a year, but their market share dropped from 10% to 3% in that same year, Microsoft would rejoice, and Apple would not. However, if Apple's market share increased from 3% to 10%, Microsoft would immediately begin their unholy crusade to drive Apple into the ground. Or at least back down to their safe corner of the market where they are unthreatening and largely harmless, like where they're at now. Market share is everything. Apple is probably starting to introduce new applications at a price point the average user can afford (Final Cut Express, Keynote, iLife) partly to diversify their revenue base so they don't have to depend so much on hardware sales. This will free them up to reduce their margins on new machines while not hurting their overall profitability because as a percentage the importance of hardware will decline somewhat.
Doubtless this will fail to convince you, but I did a quick Google search and came up with this article right away. Granted it's from 2001, but it clearly says Apple's retail stores are part of its drive to increase market share. Hell, it even quotes Steve Jobs saying as much. "5 down, 95 to go" I believe the slogan is.
A personal finance program, a la Quicken? You bet there's a strong market for that; you'll sell millions of copies to Mac owners.
I used Quicken on the Mac, and it lacks lots of features that the Windows version has (particularly in the online area), and is horribly buggy. I use Dreamweaver extensively on a PC at work and on a Mac at home, and the Mac version is buggier. You will doubtless deny this, but even if it is not the case, as the PC share of Dreamweaver users increases, Macromedia will shift more of their focus to the PC market. Yes, many core Dreamweaver users use it on a Mac, and the absolute numbers of Mac users may increase, but as a proportion they are declining. Which version came out first, the PC or the Mac? And as you correctly point out it is especially true for games. Almost all of the games come out for PCs first, and many never make it to the Mac. If they do, they simply do not get the performance tweaks, game balancing adjustments, etc. the PC version gets because even if they sell millions of titles to Mac users, it still only ads up to a tiny fraction of their total sales. Corporate managers notice that, and they go where the money is.
Stop and think about what you're saying. See, everything is percentages. Companies choose to support platforms or not based on the percentage of their total revenue they can gain from it. So many more applications are available for Windows only because the percentage of Windows users is so much larger than the percentage of Mac users. Even if there are 5 billion Mac users, why waste your money when there are 95 billion people you can nab in one shot? I can't believe I have to explain this. The large number in absolute terms of Mac users only means that the Mac platform is not ignored entirely. It does not mean it gets an equal seat at the table with the Windows version of the product in the vast majority of cases (not every app, but most). I can see the (admittedly oversimplified) conversation in the boardroom now. "Bob, our PC user base has increased from 75% to 93% over the last 3 years. As a result, our revenue generated from the PC section similarly increased from 75% to 93%. However, while the Mac user base plummeted as a percentage, in absolute terms they increased somewhat." Now, as a result of this conversation, do you believe this company will:
a.) shift development effort from the Windows version to the Mac version
b.) keep everything equal
c.) shift development effort from the Mac version to the Windows version as their user base moves in that direction.
I will leave answering this question as an excercise to the reader.
I don't mean to be insulting, but if you can't understand this you are simply not trying. I guarantee you that Steve Jobs and every other business owner and middle manager in the world understands this. And as far as Oracle and Sybase are concerned, if Apple fails to make a dent in terms of market share in the server space that support won't last. Right now their server OS is creating a bit of a critical mass and gaining some excitement, but we'll see if it lasts.
Now, at the end of the day you could say that Apple is like Rolex or Mercedes or whatever, and that they're content selling their products to the tiny segment of the market that can afford them. But I don't believe this is what Apple wants to do. Their market share has slipped almost every quarter consistently for years. They cannot afford to allow that trend to continue. They are getting pushed out of the education market, and they are getting pushed out of the high end graphics and audio market. I believe they want this to stop. I believe that they want their Mercedes to sit in the same dealer's lot as the Pinto and sell.
I will finish my involvement in this thread with one final point. At my job, one by one each Unix developer bought Macs, including myself. We sucked it up and paid the price because it was worth it to have a very usable, graphically appealing, non-Microsoft & Unix-based OS and access to commercial apps. But there are still some people who haven't made the move, and they've done it because they don't want to spend the money. This is Apple's prime market because they know what a good computer is and they have the money to spend. It's a tired argument that's been beaten to death (isn't that how this thread started?), but they look at what you can buy on a PC and what you can buy on a Mac, and they can't justify buying the Mac. It's not like they want to buy the PC, but they just can't bring themselves to cross that threshold and spend what seems to be too much money on too little computer. Since PCs are 95% of the market, they define what customers expect when they shop for a computer. People expect fast performance for very low prices. Apple is beginning to realise this through interviews with PC users that come into their stores. It's opening their eyes on what the customers they're trying to attract are looking for in a computer. Apple is adjusting itself accordingly.
AirPort antenna, dude, AirPort antenna.
;)
Okay point granted. But I contend then that including this antenna is useless because no one knows about it, and even if they do I highly doubt it's a compelling reason to shell out the price premium for a Mac.
First, market share is irrelevant. Has been for years. Nobody cares what the ratio is of Macs to PC's in the world.
Unless your name is Steve Jobs or Bill Gates. Apple's Switch campaign, plus their recent efforts to increase specs and lower prices (at the cost of profit margin) is directly targeted toward increasing market share. They are trying to hit 5%. Market share matters, my friend. If Apple's market share continues to decline, they are going to have trouble convincing vendors to write apps for their platform. The Mac versions of many popular programs are known to have less features, cost more, come out later, and have more bugs than their Windows counterparts. Patches are also released less often. There is a direct correlation between market share and vendor support for your platform.
Second, and more important, Apple's market share continues to fall because more people buy PC's than Macs.
This is true, the total pie of computer owners is getting bigger, but as Mac's share of that pie gets smaller, their relevance declines along with it.
This demonstrates that people are not price-shopping when they buy Macs.
Everyone price-shops when they buy anything. I would have loved to get the DP 1.25 Ghz machine with a 23" Cinema display, but I got the one I did because it was within my budget.
Which, as a shareholder, makes me very, very happy.
Didn't Merill Lynch just recommend you sell your Apple shares?
The answer is obvious. High profit margins are the key to corporate health.
This is patently false. How does Dell make money? Their margins are crap. How do any of the thousands of companies with thin margins make money? They leverage economies of scale. Taking the previous example of the extra memory, if Apple makes $20 less per computer they sell, but the machine now has 256 MB of memory, they would end up making more money because at the end of the day they've sold more machines. I think part of the reason Apple's margin are so high is because they can't afford not to charge those margins because they don't move enough units.
High margins means Apple can afford to spend money on their OS and their bundled-- and unbundled-- applications
Making a profit means they can afford to do this, and they have reported losses the last two quarters.
Apple doesn't build low-end machines. Every machine they ship, for example, includes a built-in AirPort antenna.
Wrong. I own the dual G4 PowerMac for $1700 and did not get an AirPort card in it. Not only that, but you don't get AirPort in a PowerBook until you spend at least $2799.99. That is a joke.
Apple really doesn't care about the low-end market. They care about selling high-end machine for good profit margins.
This is a highly debatable point. But assuming you're correct, this is precisely the reason Apple's market share continues to fall. As the article points out, Apple has to refrain from "its policy of keeping prices high to boost margins." Apple's cheapest machine with a DVD burner is $1299. Sony's is $799. The article further states that Sony's machine "is priced at the sweet spot of the market, which at retail is around $750 right now."
PC companies like Dell sell their computers to consumers with tiny margins; they make their money with add-ons and warranties. Apple sells computers to consumers with a 20% profit margin. If you do that, people who buy your machines will get less computer while paying more money. Thus less people will buy your products. It's not rocket science.
I want Apple to succeed. I love the platform and would love to see their market share hit 5%. But they will not do that as long as they continue to charge too much for their hardware, especially in this economy.
> Has anyone here tried running Jag with 256mb?
You mean Jaguar? Yes. It runs just fine. If you run too many memory-hungry programs at once, you'll start swapping, but that's to be expected.
You completely missed his point. What he was trying to say was instead of offering up low end machines with only 128 MB of memory, why doesn't Apple just take a negligible ($20 I believe was the price quoted) hit on their inflated profit margins and sell the computer with 256 MB of memory. This way they make the machine more attractive, and in the process actually make their OS usable. At least that's what I think he was trying to say.
So now that your job is being threatened we should stop the outsourcing rush? When we outsourced clothing, manufacturing, etc. was that ok? The world didn't end? The average American benefitted from this, the workers in those industries were retrained and now provide more economic output than before.
Wrong. The blue collar standard of living in this country is under considerable assault. People who once had good job security and whose job afforded them access to a middle class lifestyle have seen massive downward pressure on both their wages and their standard of living. Blue collar workers in the U.S. in the post-war decades lived better than white collar workers in Europe. Now they live worse than blue collar workers in Europe. While the wealthy have seen orders of magnitudes of increases in their income & wealth levels, the middle class have seen only marginal gains (10% for the average family in the last 30 or 40 years). That 10% has come at the expense of wives going to work, children being raised in day care, less job security, etc. The average blue collar worker (individual, not family just cited) has actually seen their wages decline or hold even over the same time period, depending on who you ask. It was high paying manufacturing jobs after World War II that gave this country a true middle class society in the first place. We are now at a crossroads where we must decide whether that society is the model for the future, or a historical anomoly of a few decades shortly to give way to a more stratisfied, less equal one.
Look at what has happened in Mexico. Immediately after Nafta, the northern border region of Mexico expierienced a boom as U.S. firms moved their manufacturing facilities there to take advantage of Mexico's third-world low wage, low regulation economy and corrupt political system. Shanty towns were erected around these factories where people lived in squander. But slowly wages rose slightly, living standards improved, but alas corporate profits fell. Those companies have begun relocating their Mexican factories to China, where labor is still cheaper and the authoritarian governmnet keeps the labor pool more docile. So much for globalization benefiting Mexico. It is a race to the bottom, pure and simple. Jack Welch once said his favorite kind of factory is one on a barge where he can move it from shore to shore, wherever labor costs are lowest. I expect no more from him than this; he is a businessman. But my government should not be his agent to accomplish this. Moreover, these companies get to be so massive in the first place because of the economic system, rule of law, and infrastructure my government provides and my tax dollars pay for. I am buying something with that money, and it is not the right for G.E. to fire me and replace me with three Mexican day laborers the first chance they get.
Now, if the current trends prove sustaining, the same will happen to white collar workers. Meanwhile, the rich have retired to gated communities and private schools while public schools and other infrastructure crumbles. They control the government through big money donations, thus the never ending flood of legislation favoring their goals.
One final point. The Scandinavian countries tend to have the highest standards of living in the world, and they are also the most "socialist" in Europe. Also, because of the way the U.S. calculates its unemployment rate, it leaves out key groups that Europe does not (for example, people who want a job but have stopped looking because they cannot find one - the number of these people in the U.S. has gone up rapidly in the last few years). If you take into account these groups, our unemployment rate is actually about the same as much of Europe's.
Remember, you do not have to sacrifice all on the alter of capitalism.
I think you need to lower your blood pressure there and get a reality check. Capitalism is a *means*, not an ends in itself. It is a means to provide Americans a decent standard of living. If it can't do that, what good is it? Period. I am all for free trade amongst first-world countries, but I am not in favor of a rush-to-the-bottom strategy of maximizing corporate profits at the expense of my standard of living.