Apple Insider, just a year ago Apple's share of the computer market was close to 2%. Now MacWorld and CNet are reporting that - according to NDP research - Apple's Desktops have crossed 10% and the MacBooks now closing on 15% of the laptop market. This puts MacBooks in 4th place behind HP, Toshiba and Gateway. The figures are likely to increase in the 3rd quarter, which is traditionally strong for Apple, because of the back-to-school sales.According to
The above stats are backed up by my own experiences. When I walked into the BestBuy store recently, something was very different. It took me a second to realize that among the usual scenery, I was also looking at a big section featuring Macs. So Apple is back with a vengeance and has re-ignited the PC war. Despite dropping the word computer from its name, Apple still desperately wants to win the PC market.
But why? Surely Steve Job's spite and ego play a role, but more importantly, desktops and laptops still hold the lion's share of profitability in the computing industry. The computer is becoming, if it has not already become, the personal media center. Laptops are literally everywhere and it is likely to remain the same way for at least a decade. So Apple is fighting as hard as it can to fix its mistake of the past - letting Redmond win the personal computing market.
The Wonderful World of Apple Computers
At a glance Apple has got it all - a better product, die hard fans, top-notch marketing, funny commercials and an amazing set of companion products. Since Steve Jobs returned in 1997, the company has been on an impeccable comeback run. The stock charts below clearly reflect the fact that Apple executes quickly and correctly, while Microsoft has been having problems lately.
Apple's marketing machine is crisp, elegant and always to the point. The latest installment of ads is a direct attack on the PC and a call to action. These commercials make us laugh and cry, because for so many years we have put up with computers that do not work, come with things we do not need and constantly break.
Beautiful Hardware and Software
Let's step back and analyze why Apple's market share is increasing. Apple's endless passion for speed, elegance and simplicity runs through their entire product line. In the last few years, Apple has created a line of iMacs with gorgeous displays. They also basically made the hard drive fit into the display, released the Mac mini, ported to Intel - just to mention some of the Mac changes (for the complete history of the evolution of Mac products, check this document).
Perhaps more impressive than Apple's hardware is the company's software. From the operating system to individual applications, Mac's software wins fans with its stunning graphical experience and nature-like beauty. Apple continuously reinvents interfaces and brings in new, better metaphors for interacting with computers. In the latest version of its OS, Leopard, Apple is bringing in its innovative cover flow (first released in iTunes) as a new navigation paradigm for files. The 3D stacks of Vista simply pale in comparison, both visually and functionally.
Enter The iPod
And finally, we can not possibly omit mentioning iPod. This groundbreaking device has put Apple back on the map. Now the solid market leader in the personal music player space, Apple did not even blink when the iPod rival Zune showed up to the party - maybe because it was about five years too late. But even iPod does not seem to be able to help the Mac displace PC. So just how much of the market has Apple win over the past few years?
Why Is It So Hard For Apple To Win?
Despite the fact that Macs are on the rise and iPods rule already, one can't help but wonder: why are people still using PCs if Macs are so great? One reason is of course cost - Apple computers are usually more expensive than PCs. But another reason is Inertia. When it comes to switch, the cost is not just measured in dollars - it is measured in time and brain power. Of course Macs are simple, but they are different. And anything different, particularly when it comes to technology, does not get learned instantly. It requires effort, willingness and time.
In addition to cost and learning barriers, there are big corporate barriers as well. Obviously, the cost of switching for large companies is huge, as they need to port a large array of software ranging from administrative scripts to in-house written systems. In short, a large corporate switch is not going to happen any time soon. And this has an impact on the personal market as well.
A lot of consumers do not want to deal with two separate systems - one at work and another one at home. There is still a lot of software and formats that are either not compatible, or do not work the same way. Even seemingly minor differences, like keyboard layout and a different mouse, matter when it comes to switching.
And then there are yet more subtle things when it comes to power users. For example, Andy Sack decided that however simple Apple's software was, it still required too much of his time to learn it. And yet more troubling from Apple's point of view is this post from Brad Feld, who, after a 30-day head-to-head trial, decided that Windows Vista and Microsoft Office delivered better performance and smoother experience. Apple can not afford to lose match-ups like this, so they better look closely as to went wrong there.
What Else Can Apple Do To Win?
Lower the prices. Cheaper goods beat more expensive when it comes to mass market. The problem is that this has never been one of Apple's tactics. Because Apple's products are so good, the company stuck with the motto that people should pay for what they get. Still, we can't help but wonder if a few hundred bucks can make a difference here.
Make support cheap (or free!) It is important that people who do switch to the Mac do not switch back. Apple's products and marketing are amazing, but support is still expensive. Again, Apple's products are very simple, but there is always a learning curve. Helping users through the first week or so, to make that transition smooth, is critical. The problem is that support is not a trivial matter. You need to have qualified technicians and the whole infrastructure to do it right. Doing support is not cheap and perhaps Apple just can not make it any cheaper.
Widen the Network
In the beginning of the article we mentioned that BestBuy now carries Macs. Looking at the map below, we can tell that Apple has room to grow in the US:
Perhaps making more deals with existing stores is the way to go. What nationwide electronics store would not want to carry Macs? Obviously with the right margin, they all would. But here again lies a problem for Apple, because for years the company has been creating end-to-end holistic shopping experiences, which is carefully scripted all the way back from Cupertino. Alas, this has to give if Apple is to resell the Macs through other stores. It worked well for iPods, perhaps it will be fine for Macs as well.
Beyond geography, it seems that there are still opportunities to target other verticals. For example, Macs would be perfect for the older, retiring population - i.e. baby boomers. They are no longer tied to the corporate PC world and free to choose a simpler computer. A campaign that targets them specifically could be interesting. And then possibly there is a play for Apple in the corporate world. Just not in America, but China and India are experiencing enormous growth. So perhaps Apple can convince businesses in those countries that with its Unix core, support for Microsoft Office and overall unmatched user experience, that it should be the corporate choice.
Steve Jobs is a patient, determined and altogether brilliant business man. He is responsible for computer, music and movie revolutions. So could it be that his long term pain of losing the first war to Microsoft can be healed? It is hard to say for sure, but it seems that it is not impossible at this point. Given Apple's spectacular growth in other areas and the recent rise in the computer market share, Apple just might win this time. If this happens, many would agree that the victory would be well deserved.
What do you think are Apple's chances of pulling it off? Have you switched to a Mac? If not, what is stopping you? Please share your thoughts on this subject with us.