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BW: Apple's OS Edge is a Threat to Microsoft
by , 12:45 PM EDT, April 11th, 2008
The incremental improvements to Mac OS X, virtualization and the iPhone SDK show that Apple is positioning itself to challenge Microsoft for computing dominance, according to BusinessWeek on Friday. In contrast, Microsoft has clung to a bloated OS that has saddled Vista users with an average computer.
Gary Morgenthaler believes that Apple's strategy is based on what may appear to be unrelated moves, but which actually create a broad, full-fledged strategy aimed at Microsoft. He believes broader battle lines are forming.
There is no longer any doubt that the Windows code base is too big and too difficult to change or innovate with. [Yesterday, it was reported that Gartner said exactly that.]
The modern, small sized core of Mac OS X and the nimbleness of Apple has allowed Apple to come out with multitouch in the iPhone and then quickly move it to their notebook line. Apple can target new markets faster than Microsoft with this approach.
Given Apple's advantages, Mr. Morgenthaler wrote, Apple can expect to expand its business market with Leopard Server and take the business mobile computing and smartphone market by storm. Echoing and amplifying the Gartner conclusion, the author concluded: "It's Apple's growing customer acceptance vs. Microsoft's rising customer pain. By failing to modernize its operating system in a timely way, Microsoft has left its flank wide open for an all-out assault from a once-vanquished rival."
Observer Comments
Fri Apr 11, 2008 3:24 pm Subject: I can't wait...
QuoteAnonymous wrote:
I still can't rationalize such predictions with the fact that 90% of all apps and games are Win-type -- not Mac-type. Virtualization allows Win apps/games to run on Macs, but not visa-versa. So we might well end up running our 'Mac' computers with only Win software -- except Apple iApps.
Apple had 2 recourses: Have Xcode create Win apps (Too Little?) and/or License Mac OS to HP and Dell (Too Late?).
Curmudgeon
A little lesson from history. In the 1960s, GM had nearly 50% market share in the US. In 2007, that had dropped to about 23%. For most of the last century, GM was the world's biggest car maker. As of early this year, it may have lost that position to Toyota.
Were (are) Toyotas cheaper than Chevys or Saturns? No, in fact, GM competes primarily by keeping prices down. From that US News article, "Toyota has achieved remarkable profitability—its net income was $14 billion in the latest fiscal year—driven largely by aggressive growth worldwide. That's because Toyota has been building the kinds of cars people want, at plants that are the most efficient in the world."
That should sound familiar.
QuoteGuest wrote:
Windows may be very limited, but in 2012 it will sell ~600 million copies to Apple's 60M. When Microsoft opened its OS to the world 25 years ago, that sealed the fate of the personal computer. Jobs, a far greater visionary, unfortunately did not open up the Mac OS all those years ago because of his obsessive possessiveness and controlling instinct. Gates was more in tune with the society that wanted an open environment that would work on all sorts of computers at the time. Though far superior, the Mac OS was not adopted as the world standard. Windows has 95% or more market share.
If Apple is not careful, the same things could happen in two or three years with the IPhone vs. Windows Mobile or other OSs for the Smartphone. Whoever has the most open environment wins long-term in this market.
Wrong, wrong, wrong! In fact Microsoft is the only significant example where 'openness' won out. And it won not because it was open, it won because of two things: IBM chose DOS and then Sculley (Not Jobs!) insisted on the strategy of insanely high pricing for the MacIntosh.
When the IBM PC came out, the 'Apple' brand did not yet have the gravitas that it has today. No matter what Apple did in 1981 no Fortune 500 corporation was going to pick them over IBM. It just wasn't going to happen. A CTO would have been laughed out of the boardroom if he proposed choosing upstart Apple over Big Blue.
Then, when Apple had the chance to be a significant player with the MacIntosh, Sculley squandered this opportunity by sacrificing market share for short term profit. Jobs wanted to lower Mac prices, and though that was not the main reason Sculley and Jobs clashed, Jobs' departure certainly cemented the policy of insanely high Mac prices.
One more thing, if IBM had not been outmaneuvered by Gates and was able to get an airtight exclusive license on DOS (or bought it outright), IBM would be the ultra-dominant PC manufacturer today and with a closed system at that.
And really, if 'openness' is the magic bullet to industry dominance, why is Linux languishing in the desktop and laptop markets?
Sat Apr 12, 2008 2:39 am Subject: Microsoft will not die.
It's not a question of Apple's OS killing off Windows.
MS's cash cow is Windows. Fine, they have a large legacy market. Apple's cash cows (and legendary profit margins) are Mac desktops, laptops, Servers, Apple-TV and third part hardware (drives, etc.);OS X Operating System plus other Apple software; 30% third-party mobile software through iTunes; Music, Movies and other content and synchronization through iTunes; iPods; iPhones, plus service contracts.
A big happy family of high-profit-margin cash cows. Ever heard of synergy?...or maybe Halo effect?
Sat Apr 12, 2008 1:34 pm Subject: Re: History ?
QuoteAnonymous wrote:
Another history lesson. IBM created OS2 -- technically superior to Windows OS. In addition to OS2-type apps, OS2 evolved to run Win-type apps "better than Windows". Where is OS2 today?
IBM created OS/2 in partnership with Microsoft. When MS pulled out (because Windows 3.0 was becoming successful), OS/2 faded a bit. IBM worked on it until about 2005. However, it still exists as eCommStation.
Sun Apr 13, 2008 1:16 am Subject:
Sun Apr 13, 2008 9:59 am Subject: history....
MS succeeded, as stated above, because IBM picked them and failed to own the OS. Further, IBMs PC were built on nonproprietary, off-the shelf, hardware. This allowed MS to license their OS to anybody (eg. Dell, Compaq) that wanted to build an IBM clone. IBM, as a PC manufacturer, even then were destined to failure since the IBM-PC had a poorer warranty and higher cost than the clones. It may have taken some time, but MS succeeded due to its ability to leverage its entry into the OS space into other areas as well (Office, IE etc.)
However, none of this would have been possible if MS had not been able to gain credibility due tto its association with IBM.
For MS, the market has changed and they have failed to recognize the dramatic shifts that have taken place. Further, MS's business strategy is based on the ability to dominate and control (monopolize) markets. None of the new markets they have entered (Zune, Xbox, Windows Mobile) have been profitable nor dominant.
Bill Gates in the early 80's said that the computer industry tended to have a natural OS monopoly. Gates made the moves to create that monopoly.
If everything goes right Apple might get OS market share to 10 % in the US and up to 6 % worldwide but I think that is as high as it can go.
Windows has a monopoly with government and big business PCs, and there is not much that Apple can do with getting into that market.
BB
Sun Apr 13, 2008 4:01 pm Subject:
Quotebb-15 wrote:
If everything goes right Apple might get OS market share to 10 % in the US and up to 6 % worldwide but I think that is as high as it can go.
Windows has a monopoly with government and big business PCs, and there is not much that Apple can do with getting into that market.
BB
I respectfully disagree. Many governments are tending away from Microsoft (more specifically Windows and/or Office). DoD is now urging the adoption of open source technologies that are cross-platform, and are recommending more heterogeneous networks over the homogeneous Windows networks that are currently being run. Does this mean that Apple will suddenly get a huge boost? Not necessarily. However, it does open the door more, being a certified UNIX distro now.
Switching over to the UNIX platform of OSX was probably the smartest thing Apple has done in years.
Sun Apr 13, 2008 10:13 pm Subject:
Apple tried that during the clone years. It almost killed the company. Keep in mind that Apple is a hardware company. They spend a great deal of money on R&D for their designs. Some (not all) of the companies you mention don't do much in the way of research and design, which is why they can sell at bottom dollar. Those would seriously undercut Apple. That is what happened in the 90's, before Jobs killed the clone program.
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