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Jul 18, 08 - 12:33 pm Comment from: Jubei

Guys, its nice to get excited about Apple succeeding, but lets not forget the biggest obstacle of all. Microsoft Monopoly in the business world. As long as that is allowed to exist, Apple can only get ahead by so much. Look how many Vista ( downgraded to XP ) were shipped/sold/moved/registered.... 180 Million. If they release another crappy OS, it will still ship/sell/move/register 200 Million the next time.

Jul 18, 08 - 12:34 pm Comment from: kirkgray

Microsoft's real problem: Microsoft

Microsoft sold a version of Office for the Mac. Higher Mac sales means higher growth for Office in general. Microsoft makes a nice tidy sum on Office for Mac -- that's why they keep making it.

Blodget also asserts the old line that Microsoft once "saved" Apple buy becoming a shareholder.

Somehow, though, he still manages to read the writing on the wall and see that Microsoft is in trouble.

In the short term, Apple has already won the "cool" war.

I don't think it is Apple's strategy to "beat" Microsoft, if the metric is just sales. Basically, as the sole seller of Macs, Apple is structurally limited to no more than 20% or so of the market. But that still leaves a lot of room for growth.

On the other hand, iPhone is a whole new platform and it is clear that Apple intends to use it to redefine smartphones and own that market. The consequences of that are HUGE.

I doubt that most Macs won't be running Office as the author claims. Office is still very important in the business world, and Pages simply isn't able to translate Word docs completely.

That said, with no significantly different version of Windows being releAsed for several years if not a decade, Apple has a golden opportunity to take back a large amount of market share.

Micro$oft’s real problem: Steve Ballmer !!!!

Just for some perspective from an older person that followed all this history as it happened ...

When Simon said that Steve Jobs wants to "win the battle" against Gates, it's not about market domination or how many folks use Office. It *is* personal.

From the very beginning there were always two main, competing, computer visionaries Steve Jobs and Bill Gates. Steve had the better product, and was there "first" with most of the main innovations like mice, graphical interfaces, USB and a bunch of other things. Bill Gates, for some unknown reason, gets all the glory and is looked at as sort of the "father of the desktop computer" when in fact he never had a good idea in his life.

This pisses off Steve Jobs (rightly so) and has for years. He will not quit until he has "bested" Gates, and by that I mean when you read the history books in 2100 it will be Steve Jobs and Apple that you will be reading about, and it will be "Bill Who?" and "Micro-what?" if you mention anything else.

That's what Steve Jobs wants before he bows out because he actually deserves it. He will get it too.

Jul 18, 08 - 12:56 pm Comment from: flappo

and OUr solution

will be when Microsoft really FEELS the fear and starts to flail even more wildly and inefficiently, ruining (and failing to launch) their own products in ever more random ways like a bull in a china shop.

We've already seen their best. Heaven help us when they start cranking out the rest.

And long live Linux, so that there remains some semblance of competition for Apple in 10 years.

What will happen when Apples market share gets to, lets say 25%? Will they be forced to license their OS? Anyone with any views on this?

Jubei,

yes, but when Apple starts going into double figures and cloud computing becomes more widespread, Microsoft's bottom line is going to start to hurt.

Nobody's talking about overthrowing MS . . . not just yet.
When a company is completely dominant it looks impregnable; take IBM for example. Not many people thought 'Big Blue' would decline so rapidly.
I think MS is going to decline even faster than IBM did.

I hope Apple will one day return the favor and invest $150 million in MS.

Jul 18, 08 - 01:07 pm Comment from: HMCIV

The best fights are not personal. The best fights are lopsided blowouts starting with a sucker punch and ending with a sledge hammer to the face.

Billy Martin, Buddy Ryan and Mark Twain would all back me up on this. B-)

I posted you proper math on the article. Jst FYI though, it's not Blodget's math that's faulty, they simply get the blame for not knowing basic math and checking well. SAI's Dan Frommer is the one lacking basic math skills.

Jul 18, 08 - 01:17 pm Comment from: Harvey

@Troy

You said, "What will happen when Apples market share gets to, lets say 25%? Will they be forced to license their OS?"

It is not illegal to have a monopoly. It is illegal to abuse it. Apple won't get in trouble in your scenario for two reasons. 1) 25% market share is not a monopoly. 2) Apple uses open source and standard formats and protocols. They do not unfairly constrain competition. Apple doesn't prevent anyone from making compatible hardware or interoperable software. Anyone can take the open-source code and build a company that competes with them.

People see the corporate secrecy and the vertical integration and think that Apple is something like the Borg, but it is not. Apple does nothing to prevent others from competing fairly.

Jul 18, 08 - 01:18 pm Comment from: Jubei

@The Muffin Man

Nothing would make me happier. Still working with so many businesses, it seems impossible as MS is the standard, default deployment platform. Even if you have one CEO using a Mac, the rest gets the standard. One Mac license to 1000 Windows licenses.

In a way it's meta-personal - for me it's about ethics. I won't get into Apples and ethics, but knowing what I do about Microsoft, I could not bring myself to purchase any of their products in the last 7 years and counting. I'll admit, sometimes this is very difficult if not being naive and silly, to not use MS Office on my macbook pro. But I have taken my stance.
I have downloaded the free trial copy of iWork, and it didn't work for me, sadly, and OpenOffice has been a difficult ride. One of these days, I may have to bite the bullet and purchase the iWork '08 and not wait for '09, $70 just for pages is still a decent bargain, maybe.

The Microsoft business franchise is MUCH more fragile than anyone realises..

Given the choice staff in every business would not choose Office or even Windows. The next item coming up on MDN demonstrates this point very well. The pilot at the Telegraph using Google apps rsulted in: "Overwhelmingly, the feedback was positive and there would have been uproar if we had said we were turning it off." So, no more Office or Exchange at the Telegraph where the only IT feedback to staff was that their only feedback was that their exchange email boxes were full again...

Then look at the largest German newspaper group - Axel Springer - it switched entirely to Mac, 12,000 of them.

So, please don't let anyone tell you that Microsoft has anything other a very tenuous, and increasingly so, grip on the business community. Just wait for the word from those who have switched to those that haven't.

I don't care what anyone says, but no-one will turn down a more productive and satisfying life...

Jul 18, 08 - 01:49 pm Comment from: Not Bill

iCon is a really good read for anyone facinated by Steve Jobs. Steve, I understand, did not like it. It shows him as a human being with flaws and strengths. It caused me to love him all the more. It is his courage that really stands out. That and the lessons he has learned along the way. Great book IMHO.

Microsoft only makes office for Mac because they have to in order to avoid more anti-trust monopoly suits. It has nothing to do with sales. That is only a some what pleasing side effect. They would rather not offer it in order to force people to Windows.

I agree with kirkgrey; microsoft's problem is itself. It has a ton of $, talented personnel, windows and office have a lock on the industry. To many regular people, MS is computers and regular folk don't know alternatives exist. MS is NOT going away anytime soon but as long as MS is run by bean-counters and marketers they'll continue to focus on making $ and not as much on great products.

Jul 18, 08 - 01:51 pm Comment from: ron

@addashofflair, " may have to bite the bullet and purchase the iWork '08 and not wait for '09, $70 just for pages is still a decent bargain, maybe."

It is, but you also get Keynote, (which I use often) and Numbers.

By default, I always take anything from Henry Blodgett with a grain of salt. Never forget that he was a failed novelist, a failed Wall Street analyst who cost investors millions in the dot-bomb scandall, whose actions have banned him from working on Wall Street for life. I have often found that his e-rag, Silicon Alley Insider, might be rife with conflicts of interest with hedge funds. And more often than not, I think the guy is a complete self-important twit. After all, he's the chowderhead who unleashed Sarah Lacey on the world.

That said, I might be inclined to give Mr. Blodgett a nod here. Frankly, I find his points of interest. One might argue with the specifics of his metrics, but some trends are pretty clear. My takeaways:

1. The iPod Halo Effect is definitely working. Sometimes, it takes a while for a trend to manifest itself, but there's little doubt that the iPod, especially when it went cross-platform, opened many people's eyes to what Apple is about, and gave them cause to take a hard look at the Mac OS. Going to Intel processors and adding Boot Camp/Parallels capabilities didn't hurt either. In fact, if you conducted a poll of new Apple customers, I think this might be a big factor.

2. Vista is a bomb. Just look at the negative impact it has had on sales. PCs are not selling the pace you might expect. Microsoft's growth has flattened, and its stock has grown only 2 percent in the last several years. People are so turned off with Vista that they are either continuing to use the PCs that they have, or looking for a better alternative - the Mac. Once they fell in love with their iPod and iPhone, taking a hard look at the Mac was only a matter of time.

The lion still has its claws. We can expect a Microsoft backlash soon. But the giant battleship has definitely lost momentum, and it's hard to stop and turn a battleship, especially when your opponent has a smaller but more nimble boat. And those guys in the boat might have a shoulder-fired missile that can punch a nasty hole in your hull.

What Jubei said above has a ring of truth. It will be hard to dislodge Microsoft from the business enterprise, and they have a faithful corps of developers and IT Nazis whose vested interest is in the status quo. They'll resolutely sing the song that Apples are toys, and not real business tools. They're wrong of course, but they are a large choir, like it or not. A question to ask is, does Apple seriously want to get into that business? Does it want to offer low-margin commoditized computers just to win market share? Does it want to play the WinTel enterprise game? It might not. That's a business decision.

Then there is international sales. It's a problem or an opportunity, depending on your point of view. Last week's launch of the iPhone worldwide (with more countries to come) may be the dawn of Halo Effect 2, the iPhone addition. Like the iPod Halo effect, this might be the catalyst to increase Apple's penetration in other countries and continents. But this will take some time. And the economies and cultures of other parts of the world may want a commoditized computer at a price lower than Apple wants to sell. Again, is this the business that Apple wants to be in?

Still, there is no doubt that Apple is doing great things. The company's sales and market share continue to grow. It's a sign that Apple has done many things well, and that Microsoft has stumbled badly. What Microsoft must do next is pretty clear. Whether they will is up to Microsoft. But what Apple must do is equally clear: the company must continue to execute and innovate. The past week's stumble with MobileMe is something that must be addressed immediately. I think this is far worse than anything that happened at last Friday's launch of the iPhone, and one that could leave a bad taste in the mouths of new and long-time Apple customers.

But I am an optimist. And despite what may be a strange short-term decline in Apple's stock price in the next month (which will be completely at odds with Apple's sales and earnings growth, which makes absolutely no sense, but that's Wall Street and its twisted logic), in the long term, as long as Apple continues to execute, the company's prospects will be amazing.

Revel in this time, fellow Apple fans. To look back 11 years ago, conventional wisdom would have dictated that what we see now would not have happened. The day that Steve Jobs returned to Apple is the day the earth moved. It just takes longer for some people to realize that. You do. They're just starting to comprehend that we're at an inflection point.

Jul 18, 08 - 02:18 pm Comment from: Lilochris

Dells move to compete is to sell in Walmart? Not really working.


I bet their next move is those Kiosks in the middle of Mall hallways. Those mini stores that we all tend to ignore.

Jul 18, 08 - 02:20 pm Comment from: ken1w

Microsoft fails because of Windows and Office. As long as the monopoly money keeps coming in, they keep squandering it as if it is "Monopoly" money. Microsoft no longer knows how to be competitive, and the money flow will slow and stop eventually.

And some of that "paltry 1.9%" was Linux.

Did Microsoft really loose market share? That Vista gift keeps on giving.

The best way to burn a house down is to start small fires all around the perimeter of the structure, then let the flames burn INTO the structure. There's no place left to hide, and the house collapses on itself.

This sure looks like what Apple is doing to Microshaft. With Gates retiring, it only speeds up the process. (Hence, Apple isn't going after the business clients first. That will happen all by itself towards the end. Always start with the users first.)

Microshaft will figure it out when its way, way too late.

@Anita Ficks

Great write-up and I agree. I think one more important point to mention in regard to Microsoft's stronghold on the Enterprise market - a lot of people stare at a Windows machine all day at work. When they get home, and want to check email, surf or play games, they don't want to be looking at another Windows machine. That's another point in Apple's favor, although it won't help them to gain overall market share.

Full disclosure: I'm one of those "IT Nazis". I hold an MCSE and bunch of other useless certifications, but am no Microsoft fan (I was an Amiga guy back in the day). One of the greatest things about the Mac for me, is that after a long day of babysitting crack-baby Windows desktops and servers, I want a machine that "just works". I don't want to scan for malware, I don't want to install countless updates and reboot my machine umpteen times. I don't want to have to defrag.... I just want to do the things that I've always enjoyed doing on a computer. To me, a Windows machine is now the antithesis of all the things that I enjoy about computers - and I'm sure I'm not the only one who feels that way. In a way, I sort of hope that Apple doesn't ever had that kind of presence in the Enterprise market, although I'm sure support issues would be much fewer and less frequent.

You mark my words... Microsoft will be there for a long time, but soon it'll take Bill Gates to come back from retirement...

Who needs Office? I bought the last version of Office in 2004.

Bill Gate's secret dream is to run Apple after Jobs retires.

@ MDN

THIS “COMPARISON” FROM THIS GUY IS COMPLETE BULLSHIT:-

“ 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 (4.17 million total) than it did during Q2 2007 (3.94 million). Dell outsold HP and maintained its top U.S. market share; it shipped 5.25 million PCs last quarter, up 557,000 units/11.9% year-over-year…”

The comparison above is meaningless, dishonest and stupid, more so because in the very next paragraph he compares Apple’s share to Microsoft’s in “Apple still has small market share (8.5% US, much less globally), so Microsoft is not going to fold up the tent overnight".

The fact is (and a simple fact at that) Apple sold HUNDRED AND TWO THOUSAND MORE COMPUTERS THAN THE COMPETITION, I.E., PC VENDORS/WINDOWS AND LINUX VENDORS/MICROSOFT PARTNERS.

Another way of looking at is this: Mac sales grew by 386,000 computers year-over-year, Windows plus Linux based computers grew by 284,000 computers year-over-year, meaning Apple sold 102,000 more computers that all PC vendors combined!
Making the FISHY comparison by this guy look like propaganda from Microsoft.

We always compared Mac to PCs. Leopard to Vista/XP or whatever crap Microsoft/Microsoft Partners is/are selling. While a Dell - HP comparison makes sense for Windows based computers, an Apple - Dell or HP comparison is FAKE, it makes no fucking sense. It is meant to obfuscates rather than illuminate. So, whenever Microsoft Enthusiasts throw this soft ball we need to be alert, because they always do that when hiding unpleasant news.

His Steveness is eating Monkey Boys lunch right now and besting Bill right now, I mean - what is Microsoft’s answer to the iPhone/iTunes/App Store/Leopard/MobileMe/iPod/iPod Touch? None, nada, nothing, zilch! There is no need to wait for 2020 or 2100 (@ Jeremy). And at this rate Apple will have a quarter (25%) of the U.S. market in about three years. A conservative estimate of mine is that Apple will sell well over 50,000,000 (50 million) iPhones in the next calendar year (2009), if his Steveness wants, Apple will sell well over 150,000,000 (150 million) iPhones by end December 2009!

@@last time i checked...

Actually I think MS is challenged by an extreme lack of focus. They are squandering billions on things like the Zune while things are rotting in their most important business. That is NOT putting profits first... it is putting ego first.

It's a huge contrast vis a vis Apple which is actually getting more focus by combining their device business and their Mac business by using variants of the same OS.

Just occurred to me: it's an exact flip from the 90s. Then MS was working to focus all it's businesses around its new OS (NT), while Apple spawned Taligent, Kaleida, and a ton of slightly different hardware lines.

Now you may not like Windows NT, but it was good enough and that focus killed alot of competitors and made MS very profitable. Even 95 and 98 had the same UI and API. And Office became Office because it was 100% focused on Windows while competitors were fragmented, and lost in translation from DOS and still drinking the OS/2 kool-aid.

Jul 18, 08 - 06:50 pm Comment from: Jubei

Perhaps their betting all their marbles on the Zune success!! LOL

Apple is not Microsoft's problem. Microsoft's problem is incompetent management.

-jcr

Jul 18, 08 - 08:48 pm Comment from: Roberto

Great take, MDN. Way to crunch those numbers!

In your honor I am going to enjoy a Crunch® bar later.

Jul 18, 08 - 10:01 pm Comment from: bobchr

@@Lastime I checked
What kind of nonsense is that, since when does a recognized monolopy have to make a product for a competing platform to prevent antitrust assertions? People tend to forget that MicroSoft developed it's entire office suite for the Macintosh when DOS was still it's major and only product. Anybody remember Windows 1...yeah I thought so , you wanna talk about a toys? And not even a good one at that. Then there was a multiyear law suit from Apple; and it was not until Apple lost that landmark case about patenting the look and feel of it's operating system that Windows 3.1 started to take off .

By that time MicroSoft had finally made it's own version of the office suite for it's own operating system. MicroSoft then began to displace the Visicalcls , Wordperfects and Lotuses of the world, the only thing that saved Lotus was IBM. Hell by your logic why would MicroSoft stop making Explorer for the Mac? If not for the fact that Most mac users had to use PC's on their jobs at some point, industry support for Macs being what it was if you wanted to do work at home you really had no choice 10 years ago but to buy MS Office suite for the Mac. Because the Mac had a sterangle hold on the education market, educators and students needed some compatibility with the business world. Money is the only reason MicroSoft make it's products for the Mac otherwise it would just stop so don't kid yourself.

What they should do is have the Machintosh Business Unit make their next operating system and give them carte blanche to cut the legacy ties. Perhaps a novel approach like making a decent GUI users interface with something open source like Linux as the underpinnings.

Have to agree. With Apple's recent cock-ups Apple is out-Microsofting Microsoft, apparently effortlessly.

It's easier to go from 5% to 10% than it is to go from 40% to 80%. Paradoxically, it's relatively easy to go from 90% to 10%. It starts with a pinprick - and it's obvioous who's sticking the pin and who's the prick.

Apple's real problem, Apple.

"20 times" an insignificant number of computer sold yields another insignificant number of computer sold.

Congratulations, Apple, you have leaped from paltry to puny, or should I say, Zuny.

Jul 19, 08 - 11:47 am Comment from: AAPLguy

Poor sad pathetic troll. Let's all pity the troll. Ahhhhhhh.

Pin the tail on the prick.

Pin the responsibility on the monkeys - the retired one and his dancing spoor.

Jul 19, 08 - 02:50 pm Comment from: Mr. Peabody

Who can resist a good conspiracy thoery: In true MS fashion I think BG is trying to copy the SJ comeback.

On another note, I think the straw that broke Steve's camel's back was the movie, The Pirates of Silicone Valley, from whence all of the blah blah blah about having a better product does not garuantee that you'll win came from.

With iWork '08 and OpenOffice aqua, I have yet to find an anything I need Office or Windows for.

Bill Gates is just a chicken. That's what big bullies are.

He sees the writing on the wall. Knows that there's no way that his Microsoft can survive the onslaught.

Coward that he is he resigns at just the right time to try and keep his image intact. So when Microsoft does fall, he and everyone else can blame it on poor Steve Ballmer who wasn't smart enough to figure out he's the fall guy for Bill Gates.

Think about it. Why would Bill Gates want to suddenly retire and put as much distance between him and Microsoft so quickly?

Stand up and fight like a MAN Bill!

Hey adashofflair:
I did the same thing.
I vowed never to let Micros**t ever get another penny of my money for any reason.
Mac fans: I would challenge you to do the same thing.

bobchr: Your logic is as bad as your English.

Jul 21, 08 - 02:14 am Comment from: PT

Note to editor: Gates doesn't work at Microsoft anymore...