I just read this article that says about a million people switched from Windows to Macs because of the iPod this year. My first response was, "People are really dumb and sheep-like in their consumer trends." But when I started writing my angry, cynical tirade of a post I came up with... almost nothing. My point was going to be that you can't do everything you need to on Macs unless you don't do anything real or are an A/V person, and that smart consumers should take the good parts from every company (you can use iTunes and an iPod in Windows, for example). But then I looked at the desktop of my trusty laptop and asked, "what do I do on a regular basis that I can't do on a Mac? What would a Mac keep me -- arguably in the computer elite as I work on my Master's in computer science -- from doing that I want to do?" And the answer I came up with is : nothing. Right now I'm using Firefox, iTunes, Google Desktop, Google Talk, and internet explorer (for school email). I can use all of those things on a Mac. Later in the day I will probably use JBuilder to work on some Java code, and I often use an SSH client to connect to my school's Linux servers to work on my other programs. I also have an X-11 emulator so I can use emacs ;). Basically I'm a big geek, and still I could do everything I want on a Mac. Furthermore, Macs are prettier, easier to use, and more stable than a Windows environment. The only software that Microsoft has to offer for which Apple has no comparable alternative are the Microsoft Office applications (Mac has some similar things, but they aren't as nice. Probably because Apple hasn't made it one of their main money-making avenues over the last 10-12 years like Microsoft has). But Microsoft makes a Mac version of office, so, using my logic from before, the smart consumer would take the best from every company and get a Mac and buy Microsoft Office. There are still drawbacks to Macs -- they're nearly impossible to upgrade or fix on a hardware level, they're really expensive, you have to work a little to get used to the environment, etc. Of course the sensible alternative to all of this is just to use Linux, but that might be asking too much from the average user.
So what has caused this shift in the market? What could make a computer geek like me say that it actually makes sense to switch to a Mac (other than ingrained hatred for Microsoft found in most of us "computer elites")? One thing -- highspeed Internet access. If you notice, almost every application I use on a daily basis is tied to the web. My Google applications, obviously. Email, blogging, news. I would never use iTunes or JBuilder if they weren't freely and easily available over the web. And of course connecting to Linux servers at school uses the Internet. The rise of the internet and fast access, allowing for quick product dispersal, has shifted the average user away from standalone proprietary applications that they buy and use in an isolated environment to web-based applications that they expect to work no matter where they go and they expect them to work in conjunction with other users no matter what platform they are on. As it stands, the only significant application for Windows that no other platform can offer is gaming. And with the advent of the XBox 360 and PS3 that claim to out perform most computer gaming capabilities (personally I don't think you'll ever make a console FPS as good as one where you can use a mouse and keyboard, but maybe Nintendo's new controller will change that), Windows may be losing it market dominance quickly. Additionally, Microsoft only markets software, not hardware. More and more OSs are becoming freely available due to the open source movement (all Linux distros, Sun's new OS that is supposed to come out soon, etc.). Even if they have to give their OS away for free, Apple will continue to survive because they make cool hardware and gadgets, like the iPod, that no one else can. Microsoft, on the other hand, will see their profits plummet if there is no longer a market for expensive OSs. We may very well be on the verge of a new era in the computing industry where Bill Gates sits his uncreative, non-innovative butt back in a lazy boy and enjoys his billions while the rest of the world moves on to bigger and better things that don't cost $200 a license and aren't full of security holes that bored teenagers can exploit to ruin my life for fun. I might not ever buy a Mac, but I may never buy a Microsoft OS again, either.
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I agree with most of that, but I contest a few key points related to Microsoft. I'm not going to sit here and argue that Windows is better than other operating systems, but Microsoft is a sweet company.
One of the best things about Microsoft is that they are predominantly a software maker, and not a hardware one. Making hardware is an extremely tough way to turn consistent profits due to the commoditization of technology. Look at Dell for example, they kicked ass initially but they are now finding that they are now longer unique in their advantage (direct sales), and their product isn't fundamentally different than others (Gateway, HP, Sony, etc...).
Plus, Microsoft has tons of cash and devotes more of it to research and development than just about any other company, some of their stuff might be on the way out now, but they will find a way to make money and stay competitive in the future.
I wouldn't go shorting their stock anytime soon...
"Making hardware is an extremely tough way to turn consistent profits due to the commoditization of technology"
Unless you're Apple, because that is exactly what they have done. Of course, they mostly got lucky, but they consistently offer what no one else does. Thats where most of their money is coming from, not their software.
"Microsoft has tons of cash and devotes more of it to research and development than just about any other company"
Except of course Google who doesn't use their money for much else. But Google doesn't make their money from software sales, so they are more competitve than Microsoft and really are a legitimate threat.
"I wouldn't go shorting their stock anytime soon"
Maybe not, but that doesn't mean that they are going to be a valuable contributor to the future of computing ever again. They may, but for the last 10 or so years they've been playing the "wait until a competitor makes something innovative and then use our resources to mimic it and crush them" game. Turning that around into something that creative is going to take a very large change on a company-wide scale.
Ok...
However, Mac hardware is fundamentally different, whereas Microsoft hardware would be made to run Windows and therefore compete with a number of other companies, eliminating competitive advantage.
Apple has only been making substantial profits for around a year and a half, which is extremely short term. In '01-'03, Apple averaged a profit of 33 million each year (compared to 70 million for Google and over 8 billion! a year for MSFT), which isn't very good for a company with a market cap (worth) of $50 billion. Also, if the Apple OS really became mainstream, you are telling me that there wouldn't be other companies that could make boxes to run it for half the price of Apple? A lot of Apple's profit (not Ipod-wise) comes from the fact that they have a monopoly on a small market niche and can charge whatever they want without competitors. A lot of the I-Pod's success has to do with I-tunes also, not just the hardware. Give the competition a year or two and the margin between Apple's product and the rest won't be so wide.
Comparing Google and Microsoft is like comparing an X-Wing to a Star Destroyer. Sure it's more nimble and sexy, but it isn't really in the same class. For every billion dollars Google makes, Microsoft makes 12. For every dollar of sales, Google makes 25 cents and Microsoft makes 32. They may have a lock on targeted advertising, but if Microsoft decides to take the gloves off they'll do ok.
Look, I'm not saying Microsoft is the greatest company ever, or that the next few years won't be a little leaner than the last. I'm just saying it is a little early to sign the death certificate. Our generation was raised on Windows, and Microsoft isn't going to lose the lead in market share any time soon...
Apparently Bill Gates and I think alike:
http://www.businessweek.com/ap/financialnews/D8DOVUVO0.htm?campaign_id=apn_tech_down&chan=tc
Microsoft may find some way to stick around, but I think that if Windows loses dominance then Microsoft does too.
Mac hardware is not made to run its OS, and Microsoft hardware wouldn't be made to run Windows, per se. Hardware is mostly decoupled from software at this point. Right now Macs do use a processor that is incompatible with Windows and vice versa, but that doesn't mean you have to run Mac OS. Mac OS X is essentially a Linux distribution at this point anyway, and there are plenty of other Linux OSs you could install on Mac hardware.
However, the point is valid that Mac has the corner on a small market. However, most people don't buy Macs because of the software, they buy them because they are cool. So, knock-offs that aren't as good wouldn't sell at all -- if I put Mac OS on Dell hardware no one would buy it. Okay, few people would buy it. And that means that Apple will never be as big as Microsoft, because most people are okay with an ugly computer and not-as-cool hardware, so Apple will not dominate like Microsoft does. However, I think they can keep the market that they have as long as no one else is willing to spend the money to make really cool computers and they can keep the advertising edge with iPods. That probably won't happen though, because pretty soon everyone will have an MP3 player in their phone and Apple will only make money from iTunes sales -- which is to say not much at all.
The bottom line, though, is that computing has changed fundamentally. It is no longer true that Windows affords you possibilities that others don't. That fact does not fit well with Microsoft's current business model. Although they certainly have the resources to adapt to a new market, I don't believe that they will ever be the dominant force that they have been again. Or at least I hope that the competition sticks by their guns long enough to knock that giant down a few notches.
First, while 1 million is a big number, it's nothing compared to the number of people who still use windows. It's not enough to start heralding the downfall of windows.
Bret also told me that some google apps are not available on the mac. I think google talk is one of them. Google talk never works on my laptop, though, so it wouldn't make a difference to me ("could not authenticate to server"...wtf?!?)
Microsoft's huge cash reserve also makes it fairly agile for such a huge company, and they've got their fingers in everything. They'll move with the industry, and until net based apps and open source, which truly un-do their core philosophy, take over, which they won't, MS is going to be fine.
I'd totally buy a mac. I think they're sweet. They improve my computer-using experience in every way possible by making it more aesthetically pleasing, easier to use, and never dying like windows tends to. But I don't have the money, and I don't want to be marginalized on software, so I don't care enough to get one. So there.
A couple of analogies (both involving cars)...
First, saying Apple is going to take over computing is like saying Mercedes is going to take over automoting (consider it verbed). Think about it, it is perfect.
Second, saying that Microsoft won't find a way to make money on net apps and open source is like saying that (non-American) car companies won't be able to make money when we run out of gas. Maybe, but unlikely, they'll find a way to adapt.
Lastly, I think the windows reliability issue is a key selling point. I mean, when was the last time a student wasn't extended a couple of extra days on a paper using the blue screen of death excuse? Having a computer that always works is like having a car (there it is again) that always runs. Sure it's convienent, but it takes all the excitement out of life...
Incidentally, my confirmation word is DBCLZ, which I believe is a new, open source OS, which, while being vastly superior to everything else available, will only be adopted by a few guys who can't get dates on Friday night. I believe its stats are: +5 speed, -3 charisma, and a small spellcasting bonus... (Was that too long for a throwaway confirmation word joke?)
“There are still drawbacks to Macs -- they're nearly impossible to upgrade or fix on a hardware level”
So what?
a) They don’t need to be upgraded in the same way/with the same frequency as PCs. I have a friend who runs OS 9 on an Apple PowerBook that he bought in 1997 and has no problems at all. It runs fast and stable for him.
b) They don’t break, so repair costs/complications don’t matter.
“they're really expensive”
a) An average Apple is equivolent in cost to an average PC. Check out the Mac mini sometime.
b) They are cheaper than a PC if you are comparing performance.
c) Apple gives massive discounts to students at universities that have contracts. My wife and I bought a G4 iBook last year for about $700 less than a comparably-performing ThinkPad.
“you have to work a little to get used to the environment”
That takes about 8 minutes for a chimp, 6 minutes for a woman, and 2 minutes for a man... only switch the chimp and the woman.
I never said that Mac was going to take over the market. In fact, I never meant to imply that Mac was going to be emerging as anthing besides what it already is. My point is this: 5 years ago I couldn't do most things on a Mac that I used my PC for. Today, mostly beacause of highspeed Internet access, I can. To go with the car analogy this is like living in the 1930's and saying "The market is changing, Ford isn't going to dominate for much longer." Ford didn't disappear and no one else ever got huge like Ford was for awhile, but the market did change and Ford lost its dominance. I suppose that the computer world will probably be similar -- things are changing, Microsoft is going to lose its dominance. But Microsoft will not go away and no one will take their place, we'll just have a more widespread adoption of the viable alternatives.
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