Can Apple Put a Hurting On Microsoft?
If you’ve spent much time jumping around the ‘net reading computer news and views you could be forgiven for making the assumption that Microsoft will be hanging a largish sign in front of the main office saying “Going out of business! Used Office Furniture CHEAP!” any day now. That is just how bad the recent press has been. Whether people are predicting that iTunes will kill Explorer or that Tiger is so far ahead of anything Microsoft could ever produce they might as well give up altogether, the news for Microsoft is uniformly bad.
Surely some of this is just rooting for the underdog, people always like to see the little guy succeed (unless they have a large wager on the big guy of course) but some of the articles make persuasive arguments and present scenarios which seem imminently plausible. That said let us first let us dismiss the notion that Microsoft will simply keel over anytime soon if for no other reason than the corporation has incredibly large cash reserves. To put a finer point on it Microsoft raked in 9.62 billion in revenue last quarter (not exactly a skip the hamburger in Hamburger Helper number) and has a room for growth. On the other hand just because things look rosy for the moment doesn’t mean the complete picture will always be painted on hundred dollar bills.
So how does a dominant company go from master of the market to irrelevant niche player? The example generally proffered at this point is Ford and GM. At one time Ford owned the American car market yet a scant few years later Ford found themselves looking up at GM. It is an interesting an enlightening exercise but not the most relevant to the world of computers. Hence a look at other companies that were once dominant then marginalized is obviously in order. A great place to start is with, well, Apple Computer.
Apple Computer never enjoyed the dominance that Microsoft currently does but in 1981 with their Apple // they did command a respectable 15% of the market. And that percentage, while impressive, is not indicative of Apple’s true command of the market. It must be noted that the percentage includes computers like the TRS-80 (wish I had one) and the Atari 400/800. Apple really wasn’t competing with those brands, Apple was competing for the business users and high-end home users. Not only was Apple competing Apple was winning. So what cost Apple their lofty perch in the world of personal computing? Here some people will point to the transition to the Mac (a switch which did cost Apple dearly) but the thing that really got Apple was IBM deciding to enter the PC market. IBM entering the market meant computers were here to stay and hence legitimized the technology for businesses everywhere. This is one case where there wasn’t much Apple could have done to hold onto their lead short of passing out free computers. Unfortunately Microsoft is the big dog on the block so there is no conceivable chance of this occurring again in the PC arena. It is, however, interesting to note that much the same thing happened when Apple introduced the iPod. Digital music players were suddenly legitimate and Apple took the market by storm, what a difference 23 years make.
Besides the near impossibility of the above scenario the argument also lacks in another area: it is comparing two hardware makers. Microsoft is primarily a software company so an inspection of a once giant, now nearly failed, software company is in order. There is no better example for this case than Wordperfect. At one time Wordperfect was synonymous with word processing, they made a reasonably good product and had a great name but now your are lucky to stumble across anyone who actually remembers using the once ubiquitous program let alone find someone who still uses the now venerable application. So were did Wordperfect go wrong? The app missed the Windows boat. When Microsoft Word was on Version 2 Word Perfect was just limping over to Windows. Lateness was not the only problem facing Wordperfect, they also had to contend with the fact that the key combinations that worked so well in DOS didn’t work as flawlessly in Windows. As more and more people switched to Microsoft Word Wordperfect began a slow spiral to obscurity. Expecting Microsoft to make mistakes of the same magnitude of the makers of Wordperfect is a bit of stretch. You’d have to imagine things like an incredibly late version of Windows, one that was not only late but a release that didn’t offer any real incentive to upgrade and, further, failed to deliver on many of the promised features while the competition keeps churning out ever better products…. Wait a minute… Apple might be on to something here!
Of course it is not enough for Vista to be horrendously late and terribly named (Apple and Microsoft are almost dead even in the bad names of OS releases department, though you have to give the edge to Apple for hitting the bad name thing so consistently) it is going to take Microsoft eschewing something demonstrably better for the sake of preserving their existing business. Obviously that would be corporate suicide, no company would ever knowingly turn their back on innovation simply to preserve an aging business model would they? Oddly enough that is precisely what happened in the case of vacuum tubes and transistors. Western Electric was big into vacuum tubes, a substantial portion of their revenue was derived from the sales of the constantly failing tubes. When presented with the opportunity to jump into the clearly superior realm of transistors Western Electric balked and licensed their transistor technology to a smallish company for a mere $25,0000. While you might not be too familiar with Western Electric (their web page still features a vacuum tube prominently displayed) you might have heard of the company they licensed their technology to: Sony. How can this possibly apply to Apple? There are a number of very smart people who earnestly believe that Intel has a plethora of technological advances they are unable to implement because of Microsoft’s overarching desire for backwards compatibility.
Of course noting that something has happened before and expecting it to happen again are two markedly different prospects. It is doubtful that Microsoft will take one of the catastrophic falls outlined above, their competitive advantage is too large to be so easily overcome. On the other hand such a fall is not out the realm of possibility. Microsoft will likely not be relegated to the role of equal player for decades to come (unless, of course, Linux gets everything just right) and imaging Microsoft as just another moderately successful software developer any time soon seems like a stretch worthy of Mr. Fantastic. Still for the “Apple must grow” crowd there are reasons to hope.
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It was a preconceived and malicious plan of MS using their advantage as the developer of both the OS and the software, to wipe out their competitors.
Do you think Apple’s witholding of its ITMS DRM technology from competing portable mp3 players will have the same effect? It seems to be keeping other players from getting a foothold, that’s for sure.
This kind of thing, which all companies do, makes me skeptical of the idea that an Apple monopoly on the OS would really be any better.
Totally agree, Beeb. Apple would be a much worse monoplist than MS!
Gosh Beeb, an apple monopoly would surely be leagues better, think of the decreased eyestrain! I kid (of course). It seems to be a constant theme that if Apple ruled the computing world everything would be oh so groovy. I find that notion suspect. Would security be better” Likely yes. Would the overall user exerience be better? Likely yes. Would a monopoly by Apple be any better in the long run for innovation? No way.
warezdog isn’t very smart. 5k for an Apple machine?! HAH. Mac minis are $500 and you can just use your PC monitor and keyboard with it (assuming it’s USB). You are predicting Apple’s demise much to early, people have been doing that for years and years. As long as Apple keeps it’s insanely devoted user base, they will stay afloat for a long time to come. God help Apple if they alienate their devoted fans, but that’s doubtful, they’ve had them for 20 years.
I would also like to say that the article said that Windows and OS X have equally bad names, I don’t think so. Vista sounds vague and distant. Tiger sounds powerful and percise. Apple has it right.
I’m suprised that no one has brought up one of the best things Apple has going for it: the coolness factor. Apple ownes Microsoft in coolness, which is very very important. Look at the iPod. I believe that the iPod was popular because it was 1) simple and easy to use, and 2) it was cool. You’d see celebrities with iPod, not Nomad-piece-of-crap-Jukeboxes. And with all the cool ads that Apple has, they have the branding down to a dime.
I predict that Apple will use what it’s learned with the iPod to make Macintosh popular…. it’ll be harder since the iPod didn’t really have any competitors, like the Mac does. But I think with Mac going to Intels, they will be faster and cheaper and that’ll boost Apple sales .. I don’t know about the corporate empires with their special windows systems, but I think that Apple makes a better product for the common man. In fact I just read a good article from CIO Today about how Apple caters to the comman man better than Microsoft.
http://www.cio-today.com/story.xhtml?story_id=13100002X8L7
God help Apple if they alienate their devoted fans, but that’s doubtful, they’ve had them for 20 years.
I’ve come to the conclusion that this is pretty much impossible. Steve Jobs could piss in your lemonade and you’d tell me how “that’s really the best way to do it.”
I’m suprised that no one has brought up one of the best things Apple has going for it: the coolness factor.
The coolness factor is important for Ipods, not nearly so much for computers. People don’t buy computers to be cool just like they don’t buy toasters to be cool. They buy them because they serve a function, and most of the time that’s some sort of business software.
But I think with Mac going to Intels, they will be faster and cheaper and that’ll boost Apple sales
Intels are faster? I thought that was “myth.”
And you’re dreaming if you think Macs are going to be any cheaper than they are now. Mac pricing is not based on the cost of the hardware. If that were the case, Macintels would actually be more expensive, since the chips are going to cost Apple more than PPC chips. Jobs’s philosophy is that you can charge a premium if you make a superior product. That philosophy isn’t going to change any time soon.
From the Random House Dictionary of the English Language:
vista - 1. a view or prospect, esp. one seen through a long, narrow avenue or passage as between rows of trees or houses.
2. such an avenue or passage, esp. when formally planned
3. a far-reaching mental view; vistas of the future
In my humble, English Major vocabulary, Microsoft has appropriately named their new operating system.
In the meantime, I am enjoying the presence of Tiger on my desktop and wish that I could convince my enterprise IT people to at least take a good hard look at the system.
Memory has it that Microsoft deliberately withheld the Windows 95 APIs from competitors for as long as they could until Word and Excel had been able to make significant inroads.
Lotus 123 suffered the same fate.
I don’t mean to be a big “Microsoft defender” since I hate them, but in the interest of accuracy, I must correct…
Word and Excel took a significant portion of their market share in the early 90’s, when Windows 3.1 was the big thing. This immediately negates the argument that it was Win95 APIs since that wasn’t for some years later.
The fact is, WordPerfect didn’t see the future in Windows and didn’t migrate early enough (and when WPWin finally did come out, it was a horrendous buggy piece of software.. I know we complain about MS, but believe me WPWin was a joke)... simply because they never understood how to design a Windows application in regards to the user interface. They pretty much took the DOS version and gave it a clunky toolbar.
Winword 2 and later Winword 6 (still running on Window 3.1 in 1994) took the marketshare from WP. Also, this was the time that MS combined the apps into Office, which is probably the move that helped bring Excel into the mainstream more than anything else. You bought the word processor and got the spreadsheet. No other company was doing that at that point. (Lotus tried by tying Ami Pro in and creating an office competitor with 123, but that was later and too late in the marketplace.)
WP was also bleeding money because of the free 1-800 phone support, which was long a staple of phone tech support but something they had to abandon (in 94 I believe).
The thing people forget with 20/20 hindsight is that in the 1993-1994 time period, lots of companies were still debating about converting to Windows. DOS was still popular and running on cheap hardware. DR-DOS was still in business, competing with MS, remember? (Companies asking “Why spend money to upgrade just to get a fancy interface and run the same old applications?”) There were no Windows games (except for Solitaire) to speak of—no game manufacturer was making anything for Windows. And lots of companies took a wait-and-see attitude and it killed them.
Microsoft did, ironically, what Apple is doing now—they wrote their own applications for all these markets to have something to run natively on Windows. Windows wasn’t dominant enough to abuse their monopoly position at that point—that came later, post Win95.
Kris:
One thing is missing from your history lesson. It is the fact that Microsoft learned how to program in a GUI environment by being an early Mac developer. Jobs invited the fox into the hen house because he knew that he would need some software to run on his neat little appliance designed for the rest of us.
Excel and Word were actually available on the Mac before Windows 3.1 even came out. Microsoft developers were gathering user feedback and learning about GUI’s while WP programmers were figuring out trickier key combinations.
I think there was a bit of a falling out between Jobs and Gates when MS decided to copy the look and feel of the Mac and call it Windows. They did that a lot faster than expected.
The main point of the Apple suit of Microsoft was that the application developers that got a good look at the Mac more than a year before it was released to the public liked what they saw and shamelessly copied it in violation of their agreement as developers.
This kind of thing, which all companies do, makes me skeptical of the idea that an Apple monopoly on the OS would really be any better
Case in point: Their treatment of HP over the iPod, which HP have now dropped because Apple stole their client (Radio Shack)
This topic has been getting more press than it used to. Not too long ago everyone assumed Apple would die (sooner rather than later). Today, if you find any stories predicting the death of an OS, it is Windows. That in it of itself to me signifies the change in attitude of the market.
Windows is developing Vista while Apple is switching to Intel. Most of the press regarding Vista has to do with its delays, failings, and lack of new features. Most of the press regarding Apple’s switch to Intel instead has to do with what can be done and the myriad of possiblities and paths that can be taken. Windows can’t do what it should because of its desire to be backwards compatible with previous OS’s. Apple does not have this limitation and has a lot more leeway in planning what it wants to do, so supposing it plays its cards right, it should be able to gain more market share on Windows, although just how much remains to be seen.
There is thus nothing but positive press with regards to Apple, as analysts fantasize about what the future of computing will be. If Apple is able to deliver and the good press continues and market share rises, this will only lead to more good press and good word-of-mouth that will inevitably lead to more sales, with the cycle only continuing until Apple screws up (or MSFT delivers something amazing).
Apple has done a lot of things right in the past few years, and I doubt they will screw up something as crucial as a switch to Intel. On the other hand, there are so many people that just don’t care enough about computers to get themselves the better OS (much less learn it), so unfortunately Windows will almost certainly stay the dominant player, at least for the next few years.
Windows can’t do what it should because of its desire to be backwards compatible with previous OS’s. Apple does not have this limitation and has a lot more leeway in planning what it wants to do
As I mentioned earlier, it’s Windows market share that forces them to deal with backwards compatibility. Apple doesn’t have this limitation precisely because so few people use it.
As Apple gains market share, however, they will be less and less able to make the kinds of major switches they’ve made in the past, like the move to a completely new OS and the move to a completely new processor architecture.
Mac fanatics may put up with it, but the vast majority of the new users, if OS X ever gets into the double digits, won’t be nearly so pliant.
“Do you think Apple’s witholding of its ITMS DRM technology from competing portable mp3 players will have the same effect?”
Dude, it’s not the iTMS DRM that made the iPod huge, it’s the iPod being huge that made the iTMS viable at all.
Now, why do you suppose you can’t use any of the other stores on the Mac? Is it because of Apple? It’s not Apple that’s preventing Windows DRM from running on the Mac right now, it’s Microsoft. Why doesn’t Windows Media Player for the Mac support WMA fully? I think it’s because Apple doesn’t support all of Windows heavy DRM restrictions, like IRM (Intellectual Rights Management) and the early stages of PMP (Protected Media Path).
Bill Gates is playing chicken with Steve Jobs over this: right now, if you could download protected WMA files to your Mac and play them, you could run WMP10 on your Mac and intercept the audio stream from WMP while it was still digital and strip the DRM off like *that*. There’s nothing WMP could do to prevent that, because OS X doesn’t have a mechanism for WMP to say “Hey, is someone intercepting my output? They are? Hey, are you recording this music? I DON’T THINK SO…”.
Even if Apple wanted to implement this kind of Big Brother arrangement (and the nudge-nudge-wink-wink DRM that is FairPlay makes that hard to believe), you could just take the copy of the IOKit source Apple released in Darwin and link that in with your Mac OS X kernel, and tell WMP “Sure, you’ve got a clean media path (snicker)”.
I find it funny that Windows fanboys are still predicting the imminent death of Apple.
Note that the majority of Apple fanboys here are not predicting the death of Microsoft, but are more accurately speculating that the mis-steps of MS are leaving opportunities for the Mac OS and Linux to pick up marketshare. Apple has had some failure in this area in the past, but Jobs appears to know how to capitalize this time around.
One thing I note about the commentary here is that poeple are of the opinion that Windows can’t react quickly because of the size of the installed base—bullocks.
Remember the Win 16 to Win 32-bit executable conversion? The reason Windows users don’t want a major infrastructure change is that they remember how badly Microsoft did it the last time… From DOS to Windows and then from Win 16 to Win 32. Microsoft’s “backward compatibility” was pitiful at best even before Windows 95 gained the kind of marketshare is has now. It has little to do with installed base and more to do with the user’s faith that the company can “do it right”. MS has shown in the past and with Vista’s delays and dropped features that MS can’t “do it right” on a quick time table.
The reason why analysts aren’t sweating Apple’s architecture change is that history has shown that Apple *has* done it right twice before with 68k to PPC and OS 9 to OS X. It has nothing to do with Apple’s relative marketshare… They’d still be able to execute as well with a larger user base.
I won’t say Apple’s engineers are smarter than MS’s, but they sure seem to plan better. Imagine the foresight it took to think, “Hey, you never know when we might have to change chip architecture, so let’s make sure we have a version of OS X that runs on the Intel platforms and can emulate Power PC code at a reasonable speed.”
Give credit where it’s due. Apple makes a lot of bad management decisions, but their technology group is freakin’ genius.
explain why sales of Apple PC’s have slowed every year since 1995
Warezdog… You must be 1 c00l 1337 hAx0r phr33k.
Perhaps you’d better go back and check your numbers again. Apple sales have not slowed every year, and only a trolling fool would say something that lame. $5000 for a Mac? What color is the sky in your universe? And no, you’re not allowed to include the cost of the 30 inch LCD as part of the “base price”. Try using some facts next time.
Part of the problem with Apple ever overtaking Microsoft is the OS and cost of systems. Yes, the Mac Mini is a step into the affordable for people to start getting an awesome machine, but as is the case with Internet Explorer, far too many people are accustomed to seeing that MS-Windows OS and the MS-Windows OS is far too prolific in PC vendors.
If Apple would begin marketing their Mac Mini elsewhere than magazines, their website, and the Apple Stores, and took the Mac Mini into “mainstream USA” much like they’ve moved the iPod, then I could see them begin to threaten Microsoft.