If you ever needed more proof that statistics are about as bendable as a string of cotton, here it is. While various Mac websites report that Mac sales in this quarter ‘may beat estimates‘, eWeek reports that ‘a dip in Mac sales [is] on the horizon‘. Turns out they are both right, as analysts expect sales to be 5-10% short of expectations. eWeek just interprets them differently. Elsewhere, Mossberg has the first review of the Apple TV.
plan and simple….
unless apples starts selling dell like clones running vista, at commodity prices… and stops inivating…. stops being different…. stops reinventing the personal computer…. stops breaking all the rules…
they are just doomed!
I’ve heard no-one say that for 7 or 8 years now, and it seems unlikely.
What seems more likely about their present business model in the PC market would be something like this: the model limits their market share to niche proportions, which is probably the safest way for Apple. The big risk in trying to break out of the niche, say over 10-15% share, would be of getting into the dangerous area in the middle where you are neither the low cost producer nor meaningfully different.
The interesting threat, is to this differentiation. Its critical to the model that they be able to prevent OSX from running on other hardware. It is this that allows them to be really different to users, by being the only hardware which will run OSX. But the only difference between Apple hardware and anyone elses hardware (looks apart) now is the bios or EFI.
So at some point, there have to be retail copies of OSX for Intel on the market, don’t there? At that point how do they stop people buying it and running it on non-Apple hardware, and if they cannot stop that, what is the differentiation? One cannot imagine that EFI is going to be an effective barrier, assuming retail copies sold on the open market, and people who really want to buy and install them.
It is not to say that they are doomed – but there are going to be some interesting issues coming up as they move forwards. There are plenty of icebergs out there in the North Atlantic for them, and in one way or another, including the iTunes ones, they all have the label “DRM” on them. It is going to be interesting to see how they skirt around them. If they do. If they even realize they need to.
Edited 2007-03-21 17:39
What seems more likely about their present business model in the PC market would be something like this: the model limits their market share to niche proportions, which is probably the safest way for Apple. The big risk in trying to break out of the niche, say over 10-15% share, would be of getting into the dangerous area in the middle where you are neither the low cost producer nor meaningfully different.
Not correct, their ‘model’ doesn’t limit their ability to grow, but their pricing and business policies to ultimately affect how things turn out.
For example, Dell routinely reduces their prices, has ‘bargin basement’ specials and the like – which is how Dell gains market share, where as Apple maintains a constant price, with maybe a revision to update the specs, possibly reduce the cost, but the price tends to stay static.
Is Dell models superior? depends on what the ultimate aim of your business is; the fact is that software and hardware vendors (third party), not only look at the size of the market, but the quality of the composition of those who exist within that market.
If a market has 100million users, but 99% of them will never buy your product, isn’t it better to then cater for the 10 million and find that 50% of that market is willing and able to purchase your products?
Edited 2007-03-21 23:06
“One cannot imagine that EFI is going to be an effective barrier”
my friend, is already possible to install mac os x on non apple machines … search for osx86 on google.
*LOL* (Another round of Alcibiades’ crusade against Apple ..)
But the only difference between Apple hardware and anyone elses hardware (looks apart) now is the bios or EFI.
I don’t believe so. “PC people” tend to neglect differences in HW far too much, only looking at raw specs (I call that the “spec sheet syndrome”).
However, HW is not something uniform. There are things like quality, support of HW in the OS, HW engineering and design (which goes way beyond “looks” and includes things like integration, functinality, ease of use, security, ..), additional features, HW support, etc.
E. g. two LCD displays may have the same resolution (the raw specs), but one might be unusable in sunlight while the other is not. One might have more defective pixels than the other, one might have useful HW features while the other has not, etc..
If the only difference between Apple hardware and anyone elses hardware (looks apart) now is the bios or EFI I wonder how e. g. Sony differentiates their VAIOs from other PC laptops since VAIOs are not even different when it comes to BIOS and OS (yet Sony somehow manages to sell them)..
Edited 2007-03-22 02:57
No, its not a crusade against Apple. Its a sober account of a very interesting business strategy problem.
The hardware issue is that at a component level, the components are identical. A Seagate drive is a Seagate drive. Samsung memory is Samsung memory. This is not a reproach, but its an issue since it makes the strategy of locking the OS to the hardware increasingly difficult. As OSX86 shows. And as the retail release of Leopard for Macintel may also show.
It is true that at the moment as kaiwai says, Apple is targetting a small percentage of the overall PC market. The business question is whether this is sustainable with the tools they are currently using, and perhaps equally interestingly, if not, what tools it will take to sustain it.
Or, will they change the strategy?
If you think about it in terms of the difference, up to the move to Intel, the difference was unassailable. The machines were based on different processors, there was no way that you could take MacOS and run it on any but an Apple machine. Well, you could get PPC main boards and copy the rom, but there was no point, it was ridiculously expensive and difficult. So the strategy of differentiation by selling the only hardware that would run OSX was very robust.
However, it ran headlong into price/performance issues. These forced the move to Intel. At that point, the robustness of the lock became sharply lower, as OSX86 showed. But it didn’t vanish, because there were no retail copies of OSX for MacIntel available anywhere, and because EFI equipped machines are not available anyplace off the shelf except for Apple.
The strategy works so far. It keeps price points high and margins high, and it is classic in the sense of picking low market share/high margins with differentiation. Whether we like Apple or Macs is not the point. It does work.
However, you can see from the history that the technical basis of the differentiation is decreasing every year. I have no idea what will happen with Leopard, but I do think its going to be fascinating. At least as fascinating as the last time this issue presented itself to them, which was with the move to Intel. Then they dealt with it brilliantly in their own terms, at least for a few years. We watch with interest what they will do to deal with the Leopard problem.
I have a real question about whether the strategy is the right one, though there are enormous risks in changing it. But that’s not really the interest at the moment. The interest at the moment is just watching the story work itself out to a conclusion. Its a bit like a classic but risky military campaign. Can they really bring it off, you keep asking. We should see this year.
Sure…they’ve been doomed since the 80s.
Doomed to make money maybe.
Are you part of that same crowd that said Apple was doomed in the 90’s?, just because you was wrong dont mean you can make a arse of yourself again.
I’m pretty sure your sarcasm detector needs a tuneup
That said, if you didn’t think Apple was doomed in the 1990s, you were hopelessly optimistic. By the miracle of Job’s return, Apple survived and indeed prospered, but in 1995, predicting Apple’s demise was the smart, logical conclusion.
“…as analysts expect sales to be 5-10% short of expectations.”
How the hell can expectations be short of expectations?!
Hehe.. I think they meant to imply “..as analysts expect sales to be 5-10% short of PREVIOUS expectations.”
>”…as analysts expect sales to be 5-10% short of expectations.”
>
>How the hell can expectations be short of expectations?!
The only way this can be true is if apple has made zero sales. Best sell Apple now.
How the hell can expectations be short of expectations?!
Easy, because at the beginning of each quarter the company will announce the financials of their last quarter, volume moved, inventory and so forth.
At the end of the conference call they give and out look for the next quarter, and in some cases, for the rest of the year – but normally done in the most broadest of terms, and generally speaking, they emphasise that it is estimation and shouldn’t be taken as gospel.
Analysts then track the sales through surveying those in Apples sales channels (retailers, distributors etc) as the quarter progresses, something as simple as a warm winder might effect a sales boost that might have otherwise occured during a colder winter.
This can also take into account sales that have not be finalised yet – for example, if Apple is in negotiations with a number of school BOT’s (Board of Trustee’s) over the sale of computers, since it hasn’t been finalsed before the end quarter, it will be included as part of the estimation for the following quarter.
Refreshes of the most popular models are expected :
( http://buyersguide.macrumors.com/ )
“Product : iMac
Recommendation: Don’t Buy – Updates soon
Last Release : September 06, 2006
Product : Mac mini
Recommendation: Don’t Buy – Updates soon
Last Release : September 06, 2006”
People are just waiting for the new models to be released. Apple customers are much more sensitive to this – just check any Apple board.
Thats the hardware side, but you forgot the OS too. Leopard is coming out soon. Why buy now when you can buy in a couple of months and get Leopard included.
Analysts will anlyze. New models anticipated and Leopard may cause a brief hesitance among some buyers.
News like this will likely cause more folks to seriously look at switching:
http://www.downloadsquad.com/2007/03/20/adobe-says-no-way-to-vista-…
Things look interesting all over.
…could it be that the sales are slowing down because there is a new OS on the horizon?
I’ve gone on to the apple site and chatted with a rep asking if Apple ever does anything like dell does with Windows upgrades when they are 3 or 4 months out where you get XP now, but it includes a free upgrade to Vista. They said no. So I said, fine…I’ll wait. I would imagine others would be doing the same thing.
I’ve been itching to get a laptop for a little while now. I want something that can run Windows and Linux flawlessly. Because macbooks are somewhat standard I can rely on the people on the internet who have it working with Windows, Linux, and OSX. If I went with a dell, gateway, hp, toshiba, I don’t have that kind of reassurance, with them its more like one guy on some forum that almost got it to work, but something like the display shutting off when you close the screen, or the wireless didn’t work.
I’ve looked around and the apple macbook actually seems decently priced. I’ve seen 12.1″ displays with 1280×800 and they’re beautiful. On a 15.4″ display 1280×800 looks completely aweful, so the 13.1 that the macbook has is in the middle of the road.
So with me doing that research, the ONLY thing keeping me from buying one now is the fact that there will be a new OS that I can get included with a new laptop if I just wait a little bit.
Hopefully, they’ll upgrade their product line a litte bit too.
I believe you’re partly correct since Leopard is to be released soon by Apple. Since you’re considering holding off on your purchase keep in mind that there are authorized Apple resellers such as Simply Computing http://simply.ca/ that take Apple system trade-ins to lower cost on purchasing either a new or refurbished system. Leopard will also be released for those that wish to upgrade from Tiger, Intel processors are upgradable on current Apple systems. Also the mobile graphics used in the MacBook Pro is using PCI-Express which is upgradable though requires taking apart the laptop preferrably by a certified technician.
For the first time I had the chance to fiddle around with Vista: Vista will be the biggest driving force for the upsurge in Mac sales!
By the way the first quarter after the holiday season is traditional the weakest quarter.
The dark ages are over.
With Apple I believe the only dip will be in regards to pricing as the company becomes more competitive as the company attracts more customers. As a long time Linux user and even longer Windows user I finally took the dip by buying a MacBook Pro recently. While the laptop (17″ high resolution display, Core 2 Duo 2.33 GHz, 2 GB RAM, ATI X1600 256 mb PCI-Express) cost more than a HP Pavilion dv9000T I’m satisfied with the purchase. Some reasons are I’ve completely lost faith in Microsoft to produce a secure OS that uses resources logically such as Vista requiring a minimum 1 GB RAM and nearly sucking up all 2 GB RAM on the system I tested. With OS X I have similar security found in Linux while at the same time it’s speedy, offers nice graphics and works with more hardware than I had with Linux. The service in an Apple store is definitely more enjoyable and the staff appear more knowledgeble especially when dealing with questions directly related to film, animation and graphic design. Questions asked in the store by the sales reps were directed to my needs not what the sales reps wanted to make for a commission. The extended AppleCare 3 year warranty coverage not only cost less it also exceeded what even BestBuy and FutureShop could offer on a Windows based laptop. I could keep going on but I’m sure you can tell I’m impressed and can see Apple expanding their market share. The two things I would like to see are 1. More Apple stores in Canada. and 2. Financing available directly through Apple not just by Apple resellers.
The reason why sales are down is you don’t need to buy an apple any more to run OS/X. You can easily run a patched
version on an AMD64 or an Intel 64bit box. Either way I prefer my IBM 970MP based PowerPC over a mac pro. Apple should have released a new design based on IBM’s P6, that
would have been a killer machine.
Instead I run OS/X and Linux on my powermac.
Hopefully the nvidia revere engineering code will be done soon so that 3D will be support on Linux in OS/X.
Blender is fast on my box.
“The reason why sales are down is you don’t need to buy an apple any more to run OS/X. You can easily run a patche version on an AMD64 or an Intel 64bit box.”
You’re referring a pirated version of OS X not authorized by Apple and not sold through resellers. While I don’t agree with Apple’s policy on not selling OS X to consumers to be used on non-Apple sold systems I also don’t agree with piracy.
“Either way I prefer my IBM 970MP based PowerPC over a mac pro. Apple should have released a new design based on IBM’s P6, that
would have been a killer machine.”
IBM makes a great processor but unfortunately they couldn’t keep up with Apple customer sales and failed continually on promises such as producing a power effecient 64-bit mobile processor 65 nm die. Intel beat both AMD and IBM by meeting Apple’s needs including lower priced processors. Another key point for studios is that highend software such as Maya and Mental Ray performed better in benchmarks on Intel processors than on IBM’s Power architecture.
“Instead I run OS/X and Linux on my powermac.”
Yellow Dog Linux is a great distribution to use on a Mac. The company currently ports to Power PC but are also working on an Intel port.
“Hopefully the nvidia reverse engineering code will be done soon so that 3D will be support on Linux in OS/X.”
I don’t understand this comment. 3D drivers have long een offered by NVIDIA for both Linux and OSX.
What I would like to see is NVIDIA sell their low end (Geforce) and highend (Quadro) mobile PCI-Express (MXM) graphics cards directly from the company website. That way it would allow laptop users to purchase alternative NVIDIA graphics cards for their laptops that are sometimes using lower end graphics but have a very stylish design and highend processors such as the HP Pavilion DV9000T and MacBook Pro.
Here in Estonia I hear more and more from my friends that their next computer will be Apple Mac. Mac user base here is less than 1% BTW- this is due to extensive piracy of microsoft products in not so distant past. Now with more choices and more racket like behaviour from BSA more companies are ready to migrate to something less distracting. They had enough of MS Windows bugs, spyware and viruses and eager to migrate to something more stable, user-friendly and useful. Every day my clients who buy new computer with Vista request removal of this crap and want some other operating system- Windows XP (sic), Linux or PC-BSD. Sadly most buyers count money short term and don’t think about TCO of cheap hardware/software (high cost of keeping system clen from spyware). It is almost impossible to buy computer without Microsoft tax, so we won’t count it anyway.