Facing nimble, innovative competiton from all sides, Microsoft and Dell stumble, while Apple grows diversified product line to record sales, record profits.
Is this the beginning of the end for PC giants in the US? Or the beginning of a new ‘Apple Era’ for computer users? Or both?
Jay Palmer of Barron’s says Dell has lost its ‘mojo.’ Microsoft lost all mojo years ago.
Both the giant computer box maker and the equally giant software maker are struggling.
Meanwhile, back at the Cupertino, CA ranch, Apple Computer, written off more times than Ann Nicole wrote off her late husband, continues to thrive. Why?
First, Apple’s record revenue and profit growth, as well as record product unit sales, is the direct result of a few gambles, nifty product marketing, and the pay off that comes with building a better widget (pun intended).
The huge gamble was Apple’s move from Mac OS 9.x (the previous ‘classic’ version) to OS X, the unix-like version.
After Steve Jobs and his NeXT cohorts took over Apple in 1997, they embarked on an ambitious plan to create the next Mac OS X using all the tools and knowledge and experience gained from years toiling in near obscurity.
What was launched in 2001 was Mac OS X and the cat generations; Cheetah, Puma, Jaguar, Panther, Tiger, and perhaps next year, Leopard (there’s gotta be something about a Leopard changing ‘spots’ in there).
Mac OS X matured and became dependable and secure. Two things which Microsoft couldn’t boast to the same degree with Windows XP.
While Microsoft was building animosity with customers and their security problems with Windows, Apple was building increased sales, media kudos, and fanatical fans. Again.
Meanwhile, Dell computer continued to blast through revenue and profit records by cranking out PC boxes faster, cheaper than anyone on the planet.
Then, along came portable music. Apple didn’t invent it. They just made it work with a typical Apple-like combination of iTunes, iPod, iTunes Music Store, then ported the whole shebang to Windows so the rest of the world could enjoy the flavor of Apple made.
They did. By the millions Windows users bought and continue to buy iPods and accessories and music from Apple.
Along the way, Microsoft stumbled badly by not being able to repair (sufficient for customers to remain happy) Windows XP’s spyware, adware, malware, and virus problems. Mac OS X literally glistened in comparison.
Worse, Microsoft became years late in launching the next generation Windows; code named Longhorn (stillborn, to some), and changed the name to Windows Vista, now ‘scheduled’ for launch late in 2006.
During these increasingly dark times for Microsoft, millions of customers bought iPods and created the so-called ‘iPod halo effect.’ Windows users liked iPods so much, they also bought Macs.
They bought iMacs, eMacs, Mac mini, iBooks, PowerBooks, and Apple software and they loved every minute of it. Apple’s sales surged on all fronts.
While Microsoft and Dell are nowhere near to running out of money, they both did something that they never did before. They began to miss both revenue and profit targets.
Wall Street loves consistency, and Dell and Microsoft are consistent, but not improved. Wall Street loves improvement. Both have had their stock prices go nowhere for a few years. Apple’s stock? Record price. Again and again.
Apple’s sales are approaching $16-billion, while Dell’s now exceed $60-billion. Both Microsoft and Dell, like Apple, are highly profitable. Only one is a Wall Street darling. Why?
Dell can’t keep up the growth because there is no product innovation, and the company has missed revenue and profits targets twice this year and warns of future shortfalls.
Only a 10-percent growth each year means Dell needs a new $6-billion in revenue this year. And it won’t happen. Apple is growing at over 30-percent this year from last year’s 30-percent growth (I rounded the numbers to protect my innocent lack of detailed memory).
Microsoft, worth about $250-billion on the stock market, continues to miss quarterly targets, too. What’s wrong? Dell and Microsoft combined account for most of the PC industry in the US. They have more money in the bank than God.
Microsoft and Dell are lost. It’s the beginning of the end. And the beginning of a new era. This change of the guard won’t happen over night, as in a military battlefield. But it will happen before your very eyes.
Competition from Chinese PC maker Lenovo will continue to dampen Dell’s revenue and profit picture for years to come. Microsoft will continue to stumble with a patchwork of hurry-up products that further alienate customer affection; revenue and profits.
The new era is here with Apple leading the charge. How? An amazing string of new product launches; each better than the last. iPods, iMacs, Mac mini’s, PowerMac and PowerBook. Look for new products in 2006 as the switch to low-power-usage, high power Intel chips begins.
That’s just hardware. Unlike Dell and Lenovo, Apple also produces award winning software. From Mac OS X to the iLife suite, iWork, Final Cut Pro, Motion, SoundTrack, DVD Studio, Aperture, Logic, Logic Express, and many others.
The new Apple era has just begun. Watch closely. What goes around, comes around. Microsoft and Dell have lost their mojo.
Jack, you’re so melodramtic. Apple is on a roll and Microsoft and Dell are stumbling. That won’t last forever and certainly won’t be an ‘era’ as you describe. Apple has proven again that mojo can be regained.
I’m with you, Jack. I see the handwriting on the wall for Redmond’s giant software maker, and Austin’s box pushers. Watch for revenue and profits to continue to fall with market share. They ruled too long anyway.