Microsoft's Real Problem: The Second Coming of Apple | Hacker News Reader

Microsoft's Real Problem: The Second Coming of Apple

alleyinsider.com

18 pointsnickb16 comments

> "Apple (AAPL) shipped 1.4 million computers in the US during Q2, representing 8.5% market share and 38% year-over-year growth. Mac shipments grew 9 times faster than the overall U.S. PC market (4.2%) in Q2."

Is basic mathematical literacy too much to ask for? When your market share is small, it's easy to grow faster. Apple can cut in to a tiny fraction of Microsoft's market, and growth is huge. But even if Microsoft converts all Apple customers to PCs, the percentage growth will be small. When your market share is 90%, it's impossible for your market share to grow more than 11%, and pretty difficult for your sales to grow at 38% (unless people buy new PCs every 6 months, or you find a big new market). While it's true that Apple's growth is faster, it's hardly as surprising as the article makes it out to be.

My company's computer shipments grew over 10x faster than Apple's -- so about 90 TIMES faster than the overall market. I increased by sales 400% by selling computers to 5 of my friends, since I only sold 1 computer last year. Get my point?

Yes, Apple's growing, but this whole "9 times faster", while true, is misleading, meaningless hype.

> "But at the rate Apple is gaining share, it won't be long before Microsoft begins to feel a real bite."

Yes, but as Apple grows, they can't keep growing at that rate!

For example, MSN/Live search market share grew about 27% from May to June (http://seekingalpha.com/article/85321-msn-live-only-major-se...). But you don't see anyone making a big deal about this, because it's impossible to expect Google to grow at that rate. This situation is no different.

Actually, the article did explicitly distinguish between unit growth and percentage growth, noting that:

> More surprisingly, Apple outgrew HP--the world's largest PC vendor--on a unit basis as well:

...

> Q2 U.S. Mac sales grew by 386,000 computers year-over-year, handily beating no. 2 HP, which sold just 222,000 more computers in Q2 2008

...

> Looked at differently, the Big Three sold 1,165,000 more computers in the US in Q2 than they did last year...and Apple sold a third of these additional units.

Agreed, but that's not my point. The article claims amazing percentage growth, and then uses that to say that if Apple keeps growing at this rate, Microsoft should be scared. It's ridiculous to expect long-term growth at this rate. Maybe the next couple quarters, but not the next couple years.

Sure, but don't you think Microsoft should be scared long before Apple starts to hit saturation limits? I mean, major growth is still possible when you have about a third of the market, but I doubt Microsoft wants to see Apple holding 33% of the OS market share...

I love Apple. I've used Apples since grade 2 (first computer ever touched was a IIc). I went through the whole gamut of Macs - LCs, Performas, Quadras, PowerMacs, iMacs, G3s, G4s, MacBook Pro. Apple is going to grow in business, but they aren't going to threaten Microsoft.

Why? Many reasons. Companies don't like being beholden to a single provider. With Windows, at least for the computer, they get Dell, HP, and many others to buy from. There is a huge ecosystem around Windows. I work at an office that uses Exchange for email/cal. Entourage always has little weird anomalies. We have constituent management software that only runs on Windows and we're not going to switch because we have too much data (and it's a terrible, proprietary format).

Plus, the biggest thing, businesses like ABI stability. It's why MS has done so well. While others would break compatibility on both the ABI and API level, MS has kept it stable for over a decade for the most part. It's made Windows cludgy, sure, but customers like it (mostly). Often, when Apple releases a new OS X, there are little things that need changing in programs. Apple seems to have put this more in the past and I'm really excited about Snow Leopard. However, if Apple goes the MS route and demands forever backward compatibility, it's likely that OS X's advantage disappears.

Apple is poised to make inroads, but part of MS' problem is also its greatest feature - backward compatibility. Should Apple follow suit, the pace of development would slow and OS X would get more cludgy. And if Apple ever displaced MS, MS would have the option of breaking compatibility and then leapfrogging Apple like Apple has done to them.

Part of the reason I love the Mac is that Apple is willing to break compatibility to make things better/more stable/more lovable. OS X is at a really great place right now and I'm also glad Apple is going for more stability than in the past, but businesses really want MS-style ABI stability. I definitely see Apple displacing a good amount of MS in the home, but businesses can be more conservative.

I guess I'll see what happens. As someone who was in the fold during the darkest times, I'm just glad to know the company is stable, profitable and growing.

"However, if Apple goes the MS route and demands forever backward compatibility, it's likely that OS X's advantage disappears."

Apple doesn't have MS's infinitely hard task of dealing with n variants and combinations of PC hardware and drivers. They also already dealt with major issues of backward compatibility through emulation.

"It's also probably safe to say that most won't be running Excel, Word, or Outlook, either."

Umm, no. The fact that Office programs are written for Mac is one of the prime reasons Apple is able to make inroads into corporate.

Very true. But the quality of Apple's own replacements (like Keynote) and the ease with which they can interoperate with Microsoft Office (Keynote is a better Powerpoint than Powerpoint) makes the transition very easy. Add competitive pricing to this and Microsoft has a real problem even here.

I would think free alternatives like Google Docs/Zoho probably scare MS more in the long term. I'm still skeptical anything will replace MS office in the foreseeable future (that's just my nature I guess) but I imagine if anything does, it will be something free.

The challenge of iWorks for Microsoft is that Microsoft can no longer hold a gun to Apple's head, threatening the removal of Office from the Mac platform if Apple doesn't play ball in other areas (licensing Exchange for the iPhone, for example). Or rather, they still can at the moment (iWorks is not a perfect drop in replacement for Office... yet!) but as time goes by, that threat becomes less and less impressive.

Of course, Google Docs/Open Office also have a role to play here. Microsoft is slowly but surely losing it's hegemony.

Is it? Apple went ahead and implemented exchange for the iPhone, not because they have a gun to their head, but because businesses can't live without it.

It's easy to point at all of the new Office competitors and say MS is doomed, but none of them have any significant market share yet. OOO has been around forever, and even Google Docs and Zoho are past the stage where we'd call them new.

When Apple implemented Exchange support for the iPhone, you will have noticed that they introduced at the same time another way of getting push email to the iPhone - they explicitly created an escape route if people want to leave Windows. Apple will ot fall into the trap of depending on Microsoft again in a hurry.

As for the various office productivity packages - sure, they've been around for quite some time now without really making much of an impact, but things starting to change. Firstly, Microsoft dropped the ball on the Mac platform by dropping VBA support for the Mac. If you want to use VBA on the Mac now, the best option is OpenOffice, not MS Office.

Secondly, those packages have been steadily improving - for me, it's only really been in the last year or so that OOO has got to the point that it could be considered a serious competitor to MS. You have surely noticed the massive discounts that MS has had to give for Office to keep it installed in large organisations recently - there have been plenty of examples in the press.

Google, Yahoo, Amazon, and other web-based services companies offering functionality and apps for free that Microsoft currently charges a boatload for.

What are they smoking? What exactly do Yahoo and Amazon offer that equals to Windows or Office?

And no, Microsoft does not charge anything for Wordpad (equivalent of Google Docs). In fact, Wordpad is open source - it's been shipping as "RichEdit control code sample" since Visual Studio 4.0 (1996 if I'm not mistaken).

How many years need to pass for people to realize that no, a browser isn't an OS, and no, browsers don't represent any "paradigm shift", simply because winword.exe can learn to do HTTP much easier than browser can learn an equivalent of Win32 API.

I don't think Microsoft even agrees with your statements.

"with the rise of cloud computing, Google Apps, and cloud-based email and IM, choosing Mac is an ever more viable alternative"

I can't see much of a link here. Most businesses I've worked for over the last five years are still wedded to PCs and Windows, and wouldn't ever change -- too much risk, too much potential expense, etc. I would guess that most of the growth in Apple's sales are to home users or very small businesses, not corporate.

I'm a Mac enthusiast, I'm a Linux enthusiast, but I wouldn't recommend most businesses switching to those platforms (on the desktop, at least) except in a very limited set of circumstances.

No, MS's real problem is not fixing Windows from the ground up, instead of just giving people crappy patches to bloated software. Apple wouldn't be a problem if they kept their past promises with Longhorn.

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