Battles are won and lost in the high tech business, but war rages on. Didn’t Steve Jobs tell us that Microsoft won the desktop wars?
Guess what? Steve lied to us again. The war isn’t over, and Apple is winning more battles against Microsoft for the hearts and minds of computer users.
What happened? Back in 1997, when Steve Jobs returned to run Apple, he declared the desktop wars were officially over and said that Microsoft won, so it was time to move on to the next great thing.
He was half right. Apple moved on to the next great thing, again, and again. Mac OS X, iLife, iPods, Intel Inside, the iPhone. How about that war against Microsoft for the computer?
It must have been a 1997 version of Steve’s famous Reality Distortion Field™ because here we are, 10 years later, and not only does the war rage, guess who’s winning, who has the upper hand, who’s winning more and more battles?
Apple is worth about $120-billion on the market. The Mac maker’s closest PC competitor, in terms of units sold, is Gateway which was just sold to Acer for a measly $710-million.
Apple’s whole approach to conducting business isn’t just keeping the company afloat, it’s letting Apple fly. Macs are flying off the shelves, and the latest reports show Apple with a market share of about 6-percent. Big deal, right? More than you may think.
Apple goes for that side of the market share beef with the most fat. For the most part, the Mac doesn’t play in the sub-$1000 PC market (Mac mini not withstanding) which makes up about half of all PCs sold.
That means the Mac’s real market share is closer to 12-percent in the more lucrative above-$1000 segment.
Mac notebooks fare even better, with one recent report stating that MacBooks and MacBook Pro models make up about 17-percent of the notebook market. Again, half the notebooks sold in the US are less than $1000, so Apple’s Mac share of the above-$1000 segment is closer to 30-percent.
Numbers may change here and there but the trend is unmistakable. Apple is winning battle after battle on the desktop against PC makers and Microsoft.
Look what’s happened to the market in the past five years. Compaq? A formidable competitor is swallowed by HP and relegated to the low end brand. Gateway? Bought by Acer? IBM’s vaunted PC industry? Gone to Lenovo. Packard-Bell? Swallowed up. Gone. Mighty Dell? Not so mighty after all.
Meanwhile, Mac OS X is the darling of anyone and everyone who uses it, including media pundits, hard core Windows techno pundits, even Microsoft employees.
Microsoft won many, major desktop OS battles, and Windows market share of about 90-percent is proof of that. But the battle rages on. PC makers are consolidating. Since Apple sells hardware, isn’t 6-percent or even 12-percent miniscule compared to some competitors? Hardware is different than software.
Dell and HP hold the lion’s share for units of PCs sold, but not the profit segment. It’s arguable that Apple profits more on the Mac than either Dell or HP on PCs. Compare Apple’s over 30-percent gross margins vs. the PC industry average of 10-percent or less.
Looking back to 1997 when Steve Jobs declared the desktop wars over, and anointed Microsoft as the winner, I can’t help but believe he merely provided a diversion. What has Apple done in the past 10 years or 5 years that indicates Microsoft won? Go down the list. Mac OS X. iLife. iPods. Intel Inside. iPhones.
Apple is doing everything Microsoft has struggled to do, include present shareholders with true value in the company stock. Granted, the tech business is a bare-knuckled fist fight, a modern-day equivalent of the Shootout at the OK Corral. From where I sit, Apple’s got plenty of ammunition, fewer wounds, and better aim.
It’s ain’t over ‘till the fat lady sings. And she ain’t singing in Redmond, WA.