View Full Version : Putting lipstick on Microsoft’s pigs

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Aug 7, 2009, 09:40 AM

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Link: Putting lipstick on Microsoft’s pigs (http://www.macbytes.com/link.php?sid=20090807104002)

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killerrobot

Aug 7, 2009, 02:31 PM

Yawn...

How many times can the same article be written?

MisterMe

Aug 7, 2009, 08:09 PM

Yawn...

How many times can the same article be written?There may have been other articles that made the same point. However, this is the first that I have seen that includes that dramatic graph showing the number of switchers. Read it and weep.

BongoBanger

Aug 8, 2009, 04:04 AM

There may have been other articles that made the same point. However, this is the first that I have seen that includes that dramatic graph showing the number of switchers. Read it and weep.

Sure. 14 million sales over 5 years as opposed to the billion or so PCs sold over that period. They must be worried.

Silly article is silly.

MisterMe

Aug 8, 2009, 08:18 AM

Sure. ... They must be worried.

...Yes, they are.

clevin

Aug 8, 2009, 09:17 AM

yeah, 1% over 5 years, MS has...25 years before it loses 5%? and thats assuming linear extrapolation.

worry? how about be honest for a change?

cwt1nospam

Aug 8, 2009, 10:47 AM

yeah, 1% over 5 years, MS has...25 years before it loses 5%? and thats assuming linear extrapolation.

worry? how about be honest for a change?

LOL! You're making a huge assumption. Linear is not the way business works. Things tend to start slow and then build exponentially. It happens when things take off, like with the iPod, and when they fail, like with gas guzzling SUVs. Microsoft is at the beginning of a downward trend and they're reacting as if it is just a temporary glitch. That's what GM did when their gas guzzlers first showed signs of weakening sales.

rdowns

Aug 8, 2009, 10:53 AM

Don't kid yourself. If you think Microsoft isn't worried about their products that are taking a beating from Apple (Zune, Msft. Mobile) and don't want in on a piece of the iTunes pie, you're delusional. If they're not worried, why the Laptop Hunters ads or why does Balmer mention Apple a lot?

A whole generation is walking around with iPods and iPhones, use iTunes, buy their music and media from Apple and are buying Macs in increasing numbers. I bet they buy more Macs when they are older and can more likely afford them. This is not a battle over the OS, it's a battle over mindshare.

cwt1nospam

Aug 8, 2009, 10:55 AM

Sure. 14 million sales over 5 years as opposed to the billion or so PCs sold over that period. They must be worried.

Silly article is silly.

You're not understanding the difference between quality sales and quantity of sales.

Maybe this will make it clear:

Would you rather sell billions of candy bars at a few cents profit each, or millions of cars at thousands of dollars profit each?

1,000,000,000 X .01 = $10,000,000 profit

1,000,000 X 1,000 = $1,000,000,000 profit

NoSmokingBandit

Aug 8, 2009, 11:34 AM

You're not understanding the difference between quality sales and quantity of sales.

Maybe this will make it clear:

Would you rather sell billions of candy bars at a few cents profit each, or millions of cars at thousands of dollars profit each?

1,000,000,000 X .01 = $10,000,000 profit

1,000,000 X 1,000 = $1,000,000,000 profit

Way to skew the comparison. No way apple makes 100,000 times the profit a pc makes. Try using something even remotely comparable next time.

clevin

Aug 8, 2009, 11:49 AM

LOL! You're making a huge assumption. Linear is not the way business works.

lol, what tells you exponential is the way business works?

last time I checked, firefox stays at 20-25% forever.

BongoBanger

Aug 8, 2009, 12:27 PM

You're not understanding the difference between quality sales and quantity of sales.

Maybe this will make it clear:

Would you rather sell billions of candy bars at a few cents profit each, or millions of cars at thousands of dollars profit each?

1,000,000,000 X .01 = $10,000,000 profit

1,000,000 X 1,000 = $1,000,000,000 profit

And?

Yes, they are.

Concerned maybe. I doubt they're worried that Apple will ever get a significant global market share.

cwt1nospam

Aug 8, 2009, 12:33 PM

Way to skew the comparison. No way apple makes 100,000 times the profit a pc makes. Try using something even remotely comparable next time.

Sheesh! It was an example to demonstrate the concept to some one who obviously was not aware of it, not a comparison of one company versus another.

cwt1nospam

Aug 8, 2009, 12:36 PM

lol, what tells you exponential is the way business works?

last time I checked, firefox stays at 20-25% forever.

You've missed it completely. Just a few years ago, IE had over 90% of the browser market. Today, it's around 60% and dropping like a stone. And?

And if you don't understand the implications, I can't help you.

I doubt they're worried that Apple will ever get a significant global market share.

That's because it's too late to start worrying about that!

BongoBanger

Aug 8, 2009, 01:00 PM

And if you don't understand the implications, I can't help you.

No, seriously. What does the price of the product have to do with its market share. Aside from making Apple pots of cash which we all know that they do?

That's because it's too late to start worrying about that!

What with Mac sales broadly flattening you mean?

Doubt it.

cwt1nospam

Aug 8, 2009, 01:19 PM

No, seriously. What does the price of the product have to do with its market share. Aside from making Apple pots of cash which we all know that they do?

:rolleyes:

See, in business, the goal is to make money. Selling fewer widgets and making more money per is the preferred way to do it because there is lower risk as well as lower costs.

Once again, you've got it completely backwards. The real question is, what does market share have to do with the health of a company? Answer: little to none. Profitability and customer satisfaction are what matters. Good profitability with poor customer satisfaction means future profits are in danger. Good profitability with good customer satisfaction is where you want to be, and where Apple has been for a long time now. Microsoft has had good profitability and lousy customer satisfaction (outside of IT departments) and it's starting to cost them profits.

What with Mac sales broadly flattening you mean?

Doubt it.

Are you a Republican? You can't just make stuff up like they do:

http://seekingalpha.com/article/150185-apple-strong-mac-sales-reported

And this in a poor economy where PC makers are suffering low sales and abysmal profits or losses!

killerrobot

Aug 8, 2009, 01:34 PM

There may have been other articles that made the same point. However, this is the first that I have seen that includes that dramatic graph showing the number of switchers. Read it and weep.

Since the article nor the graph defines what a "switcher" constitutes it's kind of hard to tell what the graph actually means. Are they a switcher if they still run Windows on the Mac? What does "installed base" really mean? Are they a switcher if they still have a PC?

Since you like to look at "dramatic" graphs here's another one for you. Read it and weep. :rolleyes:

http://www.systemshootouts.org/images/mac_sales_market_share_lg.gif

clevin

Aug 8, 2009, 04:50 PM

You've missed it completely. Just a few years ago, IE had over 90% of the browser market. Today, it's around 60% and dropping like a stone.

do any regression and show me a exponential change please.

http://www.systemshootouts.org/images/mac_sales_market_share_lg.gif

http://upload.wikimedia.org/wikipedia/commons/2/28/Usage_share_of_web_browsers_from_2000_to_2009_%28Source_TheCounter.com%29.gif

jive turkey

Aug 8, 2009, 08:12 PM

:rolleyes:

See, in business, the goal is to make money. Selling fewer widgets and making more money per is the preferred way to do it because there is lower risk as well as lower costs.

Once again, you've got it completely backwards. The real question is, what does market share have to do with the health of a company? Answer: little to none. Profitability and customer satisfaction are what matters. Good profitability with poor customer satisfaction means future profits are in danger. Good profitability with good customer satisfaction is where you want to be, and where Apple has been for a long time now. Microsoft has had good profitability and lousy customer satisfaction (outside of IT departments) and it's starting to cost them profits.

Are you a Republican? You can't just make stuff up like they do:

http://seekingalpha.com/article/150185-apple-strong-mac-sales-reported

And this in a poor economy where PC makers are suffering low sales and abysmal profits or losses!

Apparently, you are a Democrat because you have no clue about business.

The "preferred" way is NOT to sell fewer widgets at a higher profit per sale. No, the preferred way to so sell MORE widgets at a higher profit per sale. I will gladly sell a million widgets at 1 cent profit per and you can sell your 20 widgets $100 profit per.

Customer satisfaction and sales are not exclusive of each other. Companies with poor customer satisfaction will gradually lose market share and profit only when a comparable product and price point enters into the equation. The truth is Apple and Microsoft cater to two different crowds. MS goes after the frugal, low spender and the gal who wants to be with the crowd (in addition to businesses). Apple goes after people who want higher quality and are willing to pay for it. The bottom line is, Microsoft customer service can totally blow chunks and Windows can be the worse OS ever, but until something comes along in a similar price range, they will continue to sell like crazy.

If Wendys was the only fast food place in town and they totally stunk, do you think the woman who visits Wendys 3 times a week would suddenly get her meals from Red Lobster? No, she would keep eating the rotten Wendys food, or else go hungry. Wendys would dominate until a comparably priced alternative came along.

Market share and saturation is critical to any business. Why do you think mega companies like Pepsi and McDonald's run ads all over the place? Because they like throwing away hundreds of millions of dollars a year on advertising? Why do you think you can feed a small horse at Taco Bell for under $7? Why do you think Walmart is the #1 retail chain in the universe? It isn't because they are trying to maximize profit off of each sale. It is because they are trying to maximize total profit, and there is more than one way to skin a cat.

It all depends on your target consumer, and the real key to being a successful business to find the price balance. Here is a little business 101 for you: COMPANIES DON'T SET PRICES. The market (i.e., your customer base) sets prices.

At least until your messiah takes control of them all.

BongoBanger

Aug 9, 2009, 07:36 AM

:rolleyes:

See, in business, the goal is to make money. Selling fewer widgets and making more money per is the preferred way to do it because there is lower risk as well as lower costs.

Absolutely and already acknowledged. What does that have to do with market share though?

Once again, you've got it completely backwards. The real question is, what does market share have to do with the health of a company?

*Looks at Microsoft's revenues and profits"

Quite a lot apparently.

Are you a Republican?

No, I'm British. You do realise that politics and economics aren't the same thing though?

Keep going. This is fascinating in a train wreck kind of way.

Tallest Skil

Aug 9, 2009, 07:40 AM

*Looks at Microsoft's revenues and profits"

Because for the past two years they've sold 2 cent disks with an alpha OS on them.

clevin

Aug 9, 2009, 07:44 AM

Because for the past two years they've sold 2 cent disks with an alpha OS on them.

if u are calling vista an alpha OS, then OSX isn't far into beta neither.

Lets be real here. just pure bashing with exaggerated expression doesn't do just to anything.

EmperorDarius

Aug 9, 2009, 07:47 AM

if u are calling vista an alpha OS, then OSX isn't far into beta neither.

Lets be real here. just pure bashing with exaggerated expression doesn't do just to anything.

That is really stupid. How can you compare Vista, the world's worst OS to date after Windows ME with Leopard (OR Tiger)?

Vista was a mistake. Even the biggest Windows fanboys should be able to accept it. In fact, it's better to ignore it and just pretend that it never existed, that Microsoft actually took 7 years to develop an OS which really has improvements over the previous version.

Lixivial

Aug 9, 2009, 10:39 AM

Yawn...

How many times can the same article be written?

It'll continue to be written for as long as people view choice of software as a lifestyle choice -- something which defines who they are. It generates the same flame-bait-over-emotional arguments over and over again, generating hits and continuing the cycle.

Mayhaps it's time for a slight addition to that old adage about religion and politics.

cwt1nospam

Aug 9, 2009, 10:55 AM

Absolutely and already acknowledged. What does that have to do with market share though?

Once again, wrong question. What does market share have to do with anything?

do any regression and show me a exponential change please.

Look at your own graph! Look at the curve for IE, then flip it upside down and you have the growth of IE's competitors. They're at the beginning of an exponential rise, which is why MS is now suddenly interested in adhering to web standards. They want to stop the upcoming landslide of web sites that refuse to work with IE.

The "preferred" way is NOT to sell fewer widgets at a higher profit per sale. No, the preferred way to so sell MORE widgets at a higher profit per sale. I will gladly sell a million widgets at 1 cent profit per and you can sell your 20 widgets $100 profit per. Tell that to all the low profit PC makers who are struggling to survive, or the many that have died. They'd kill to have Apple's profitability, but they can't do it. It's not their choice to try to make profits by selling more. They can only go for volume because they can't differentiate themselves from the crowd.

Market share and saturation is critical to any business. Why do you think mega companies like Pepsi and McDonald's run ads all over the place?Because they sell commodity items. There's not real difference between them and their competition, so all they have in their arsenal is marketing and volume. You can't compare them to BMW, Apple, etc.

It all depends on your target consumer, and the real key to being a successful business to find the price balance. Here is a little business 101 for you: COMPANIES DON'T SET PRICES. The market (i.e., your customer base) sets prices.

Have you been sleeping for the last 8 years??? Don't you remember Enron or any of the other multitude of scandals? They were about price fixing. You sound like you think we've had a free market, but the reality is that we haven't. Large corporations price fix all the time, and during the Bush administration they had free reign to do it. Microsoft has been one of the worst offenders, using their OS monopoly in the enterprise to crush innovative small competitors. They're a one trick pony whose one trick is losing its luster.

clevin

Aug 9, 2009, 11:25 AM

Look at your own graph! Look at the curve for IE, then flip it upside down and you have the growth of IE's competitors. They're at the beginning of an exponential rise, which is why MS is now suddenly interested in adhering to web standards. They want to stop the upcoming landslide of web sites that refuse to work with IE.

i guess you need to reread what exponential is.

BongoBanger

Aug 9, 2009, 11:59 AM

Once again, wrong question. What does market share have to do with anything?

Since the article deals with switchers pretty much everything I'd say.

I think we're done here.

As fro Vista... it's a good OS. It was not always so.

MisterMe

Aug 9, 2009, 01:11 PM

i guess you need to reread what exponential is.Exponential increase is governed by the differential equation:

dy/dt = ky where k > 0.

That graph of Windows Switchers to Mac in Philip Elmer-DeWitt's piece certainly looks to me like exponential increase. Certainly, it is curving up. You may not see it through your Gates-colored glasses, but that does not change the facts.

cwt1nospam

Aug 9, 2009, 02:07 PM

You may not see it through your Gates-colored glasses, but that does not change the facts.

You've hit the nail on the head!

xIGmanIx

Aug 9, 2009, 02:19 PM

the is just a graph to churn up hits and to fuel the fan boy fires. at the end of the day, both OS's get the job done. all the talk about vista being crap etc etc, people forget one of the major reasons vista had issues with the initial launch was due to shoddy drivers from third parties. did it have its issues? yes, has microsoft gotten back on track? yes.

killerrobot

Aug 9, 2009, 04:32 PM

Exponential increase is governed by the differential equation:

dy/dt = ky where k > 0.

When actually solving for k*, instead of assuming that k>0, (using estimates of the chart since precise numbers aren't given), x0(2005/1)=400,000 x18(2009/3)=14,000,000, t=18 quarters

14000000=400000e^k18

14000000/400000=e^k18

ln(14000000/400000)=k18

ln(14000000/400000)/18=k

.19751933674912=k

Therefore 0<k<1, and the growth is not exponential.

Even the DeWitt's editor agrees it isn't exponential

To support that last point, Wolf offers the following chart. It shows the exponential growth of former Windows customers now using Macs.

Obviously there is an increase, but there would've had to have been a five fold increase of switchers (totaling 60 M not 14 M) in Q3 of 2009 to be an exponential growth over the given time period.

*Please note I'm not a mathematician, so if there are mistakes with my calculations please let me know.

You've hit the nail on the head!

The blind leading the blind.:rolleyes:

cwt1nospam

Aug 9, 2009, 05:37 PM

*Please note I'm not a mathematician, so if there are mistakes with my calculations please let me know.

Correct. You are not.

I hope we can all agree that y = x^2 is exponential. Its acceleration is given by: y' = 2x, which means that the rate of change increases with x, for x > 0 and is very small for small values of x. So it is obviously possible, even likely, to have a small rate of change at the beginning of an exponential curve.

Click here if you'd like to see more exponential curves. (http://www.google.com/search?hl=en&site=&q=exponential+curve&btnG=Search)

killerrobot

Aug 9, 2009, 07:50 PM

Correct. You are not.

Yeah, there was some flawed logic on my part about k having to be greater than one. Whoops.:o

But if it is exponential, shouldn't solving for k give the same results no matter what time changes are used?

When solving for k, with t=5 (from 2005/1 to 2006/3), 400,000 switchers to 2,000,000 switchers, k=0.321887582487. (Again rude estimates based on the graph)

Had k kept constant, then the number of switchers in Q3 of 2009 (t=18) would have been 131,326,390. That's a far cry from the actual 14,000,000.

So the question is, is it still an exponential equation if k is not a constant, and gets smaller and smaller the more data you gather?

MisterMe

Aug 9, 2009, 09:21 PM

...

*Please note I'm not a mathematician, so if there are mistakes with my calculations please let me know.

...I applaud you for your admission because you are clearly not a mathematician, scientist, engineer, statistician, economist, or any other professional or student of a mathematical discipline. And yes, you calculations are wrong--woefully so.

Correct. You are not.

I hope we can all agree that y = x^2 is exponential. ...This is not an exponential curve; it is a quadratic curve.

A quadratic equation, such as those that govern free fall are governed by constant second derivative:

d^2y/dt^2 = a, where y is the dependent variable, t is the independent variable, and a is the acceleration.

If a is constant, then the result is a quadratic.

In the case of exponential growth, the first derivative is proportional the the dependent variable:

dy/dt = ky where k is a positive constant.

In certain well-behaved systems such rodents breeding in the wild, this equation predicts the results almost exactly. Unless there is something to mediate it, any system experiencing positive exponential growth will blow-up, either figuratively or literally.

In the case of less well-behaved systems such as certain economic systems, there may be scatter in the data. However, the equation still describes the overall trend fairly well.

cwt1nospam

Aug 9, 2009, 10:38 PM

This is not an exponential curve; it is a quadratic curve.

Whoops!

Same effect for this discussion though. A^x grows slowly to start, too. ;)

BongoBanger

Aug 10, 2009, 04:31 AM

This is not an exponential curve; it is a quadratic curve.

Is it? I'd be interested to see your correlation and regression data that show this. I'm assuming you do have the mathematical knowledge to do this.

MisterMe

Aug 10, 2009, 09:04 AM

Whoops!

Same effect for this discussion though. A^x grows slowly to start, too. ;)This is an exponential curve. The relationship between your A and my k is as follows:

k = ln(A)

Is it? I'd be interested to see your correlation and regression data that show this. I'm assuming you do have the mathematical knowledge to do this.The quadratic equation under discussion here is:

y = x^2

The general solution to my second-order differential equation is:

y = 1/2at^2 + v0t + y0 where v0 and y0 are the initial velocity and position, respectively.

This is a theoretical function. It is not a statistical fit to empirical data. As such, there are no data and there is no regression.

Do you want to digitize the switcher graph and to do exponential and polynomial regressions on the resulting data?

killerrobot

Aug 10, 2009, 09:16 AM

And yes, you calculations are wrong--woefully so.

Is it? I'd be interested to see your correlation and regression data that show this. I'm assuming you do have the mathematical knowledge to do this.

I would love to see your calculations as well using the data collected in the graph of switchers.

In certain well-behaved systems such rodents breeding in the wild, this equation predicts the results almost exactly. Unless there is something to mediate it, any system experiencing positive exponential growth will blow-up, either figuratively or literally.

In the case of less well-behaved systems such as certain economic systems, there may be scatter in the data. However, the equation still describes the overall trend fairly well.

Yes, the real world presents less than perfect conditions, and using the data as a scatter plot I could also create one linear equation, or two or three to describe the growth as well, and state where it falls below the graphed line that external forces impeded the growth.

From my calculations (again I'd love to see your math), if k where .32, that "exponential growth" explosion would have happened happened a long time ago. If k is closer to .1975, then that "exponential growth" explosion starts within the next year (estimating x0=400,000):

x19=Q4 of 2009=15 M

x20=Q1 of 2010=20.7 M

x21=Q2 of 2010=25.3 M

x22=Q3 of 2010=30.8 M

x23=Q4 of 2010=37.5 M

x24=Q1 of 2011=45.7 M

etc.

BongoBanger

Aug 10, 2009, 10:35 AM

I kind of agree - this looks broadly linear with a step change.

MisterMe

Aug 11, 2009, 01:53 AM

I would love to see your calculations as well using the data collected in the graph of switchers.

....The curve can be fit very will to a standard quadratic:

y = ax^2 + bx + c where

a = 560.32 ± 34.326

b = 441.43 ± 168.31

c = 476.37 ± 172.81

and x is the year past 2005.125 (middle of first quarter of FY2005)

The Pearson's R regression coefficient is R = 0.99862.

The data can be fitted to an exponential is a shift in the baseline is accounted for:

y = y0 + Ce^(kx) where

y0 = -3738.4 ± 843.03

C = 3773.6 ± 680.73

k = 0.34232 ± 0.03101

with x the same as above and R = 0.99749.

Generally, polynomial fits are used as look-up tables. Except for the case of constant force, polynomials do not give insight into the phenomenon being studied. OTOH, exponential functions can give insight into the phenomenon at issue. There is a contention that the number of switchers from Windows to Mac is in its early stages. The excellent fit of the switcher data to an exponential function supports this contention.

killerrobot

Aug 11, 2009, 11:12 AM

and x is the year past 2005.125 (middle of first quarter of FY2005)

Thanks for taking some time and showing some work.

A big question though, is the time (x) only every year - so x=1 at 2006.125 , x=2 at 2007.125 etc?

MisterMe

Aug 11, 2009, 01:14 PM

Thanks for taking some time and showing some work.

A big question though, is the time (x) only every year - so x=1 at 2006.125 , x=2 at 2007.125 etc?Yes.

killerrobot

Aug 11, 2009, 05:16 PM

The data can be fitted to an exponential is a shift in the baseline is accounted for:

y = y0 + Ce^(kx) where

y0 = -3738.4 ± 843.03

C = 3773.6 ± 680.73

k = 0.34232 ± 0.03101

By making x=1,2 etc at the year marks, aren't you reducing the data to only 4 points?

Also, why is y0 = -3738.4 ± 843.03?

Using your equation at the initial time x=0, leaves y=-3738.4+3773.6(e^0 x .34232=-3738.4+3773.6=35.2

That's 3738.4 short of where the actual collected data value starts. Is that for your shift in the baseline? Why did you choose to have a baseline shift?

MisterMe

Aug 12, 2009, 12:50 AM

http://www.arizona-software.ch/graphclick/By making x=1,2 etc at the year marks, aren't you reducing the data to only 4 points?

Also, why is y0 = -3738.4 ± 843.03?

Using your equation at the initial time x=0, leaves y=-3738.4+3773.6(e^0 x .34232=-3738.4+3773.6=35.2

That's 3738.4 short of where the actual collected data value starts. Is that for your shift in the baseline? Why did you choose to have a baseline shift?The baseline shift dramatically improves the curve fit. It is as simple as that. I used every single point as indicated by the yellow triangles. There are 18 data points in total.

Your other questions are motivated by the confusion of a couple of principles. First, let me say that I did not have access to the original data. I had to reproduce it by digitizing the 72 dpi graph from a webpage. I used digitizing app called GraphClick (http://www.arizona-software.ch/graphclick/).

The original data has scatter. This means that the data exhibits random variations from a smooth curve. The digitized data add small [hopefully random] errors on top of that. Curve fits are smooth curves that are intended to analyze trends in the data and to predict future trends in the system. It is not required and you cannot expect any single data point to coincide with the value predicted by the fitted curve.

This stuff is extremely fascinating. It is also mathematically intensive. Unfortunately, this forum does not provide the tools to convey the mathematics with the clarity that it needs. If you would like to know more about curve fitting, then I would suggest that you do some personal reading. A really good place to start is this American Institute of Physics webpage (http://www.aip.org/tip/INPHFA/vol-9/iss-2/p24.html).

killerrobot

Aug 12, 2009, 10:13 AM

Thanks MisterMe.