Is Apple viable over the long term?

Discussion in 'General Mac Discussion' started by Gabriel, Feb 9, 2004.

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  1. Gabriel macrumors member

    Sep 22, 2003
    Okay - don't flame me based on the title, I'm as much of a Mac geek as anyone here and I'm not predicting doom and gloom for Apple. I did, however read an interesting interview with a guy from Harvard Business school who follows Apple His argument was that Apple hasn't succeeded in growing its Mac market share despite the switch campaign and everything else. Steve argues that that's okay because Apple is the BMW or the Mercedes of the computer industry, but unlike Mercedes, Apple can't sell its products at 4x the price of a company like Ford because they have to stay competitive with professionals. So if the Mac business isn't going to grow over time Apple could be in really bad shape if they have a string of products that don't do well. Surely as the head of a movie studio Steve knows what this is like. So, is Apple viable over the long term? Apple is selling themselves as cool - but can they make that last forever? Will they turn into a consumer electronics company in order to have a steady, reliable income? Will they dump Mac OS X and become a high-priced chic Windows reseller? Is this guy just an idiot who doesn't know what he's talking about? I don't know, but I'm curious what people think.
  2. coolsoldier macrumors 6502

    Jan 7, 2003
    The 909
    Apple is pretty perceptive of the state of the market, I think. Right now, they do focus on being a high-end computer marketer and chic consumer electronics company, but they have changed that focus a couple of times. Right now, the slim margins of the low-end PC industry means it doesn't make sense to get into it. I think if that piece of the market becomes profitable, Apple might change their model a little. So, no, Apple's current model probably won't work forever, but when it does stop working, they will be in a much stronger position to adapt to the market than their larger competitors. With a smaller marketshare, Apple has more flexibility to change when necessary.
    Look at the change from OS 9 to OS X. Apple's smaller market presence gave them the flexibility to basically break compatibility with every existing program in order to put out new technologies, while if, say, Microsoft were to do the same thing, they would be throwing away the very thing that drives the use of their products (i.e. compatibility).
  3. strider42 macrumors 65816


    Feb 1, 2002
    I think one of the things missed in the talk about apple's market share is that market share staying the same or even shrinking doesn't mean apple isn't expanding necessarily. For instance, as more and more people have gotten computers, a lot of come in the low end market, where apple just doesn't compete. Apple could double the amount of computers it sells and still lose market share in that scenario.

    On the other ahnd, market share is important in keeping developers around to make products for your machine. Which explains to some extent why apple has been making more and more programs themselves (there are plenty of other reasons why they do this as well).

    Apple is making strides in making themselves more competative on terms other than being just "cool". And I do think selling more consumer electronics is going to be a big part of what they do. I've actually been surprised at how slow they've gotten into it to a degree. But this isn't in place of selling computers,its horizontal integration that just makes sense.

    Worst case scenario, one far in the future IF it ever happens (and I don't think it will, so no one start flaming about how it will never happen, because I rather agree with you), si that apple switches to x86 and keeps a proprietary mac OS, not windows. Hopefully IBM gets their chips up to the same clock speeds as x86 and the argument just goes away. The day apple switches to becoming a windows reseller is probably the day they die, since very few windows PC manufacturers are actually profitable.

    In short, the guy in the article isn't an idiot, apple faces challenges in the coming years in making themselves a stronger company, but they've got some good fundamentals in some key areas that give them a good chance to succeed I think.
  4. jefhatfield Retired


    Jul 9, 2000
    great article

    it basically says what most of us know, that apple has better products than business models/strategies

    but for us, it's great that apple cares about the quality of its products
  5. varmit macrumors 68000


    Aug 5, 2003
    Market Share

    Will people stop judging the Mac by Market Share. Hell, Apple is the only computer company that sells the Mac, and there are like 5 major PC sellers, along with a bunch of smaller PC sellers. Of course the market share is going to go down, but line up Apple with any of those PC sellers on their own, and Apple wont be doing that bad compared to going against all of them. Everyday, I know friends switching, or wanting, saving, to switch because they love my Mac so much. My best friend at home switched after playing with it a couple of times. My roommate this year switched because of my Mac. My roommate 2 years ago when I went to a different campus switched to the Mac. My roommate's friend this year is switching too. If all these people are switching, and I don't know or hear of anyone switching back to the PC. Why do people still think Apple is doing horrible just because they only listen to market share.
  6. SiliconAddict macrumors 603


    Jun 19, 2003
    Chicago, IL
    Re: Market Share

    *shakes head* You just don't get it. It doesn't matter how many units Apple sells. A few dozen here and a few dozen there don't make a difference when the competition is selling *shrugs* What? 80 to 1? 200 to 1, 1000 to 1 ratio?
    It’s the perception of the amount of the market that they own is what makes a company and/or a developer consider a platform. Even if Apple's unit sales skyrocketed to 10% more then last year and yet they still only account for 2% of the market it doesn't make sense for a developer to cater to 2% when they can get a much larger user base on 90%. That is probably why Palm is no longer supporting Apple in their next Palm OS release. The development costs are probably not worth the money.
    Go watch the movie Pirates of Silicon Valley. I don't know if the quote really occurred but in it Steve said to Bill "We are better then you". Bill's response? "That doesn't matter"

    The perception of market share is what matters. If nothing else industry support for Windows is WAY broader then anything Apple has because of that 90%.
    Sorry but market share DOES matters!
  7. MacsRgr8 macrumors 604


    Sep 8, 2002
    The Netherlands
    Re: Re: Market Share

    Yes it does.

    But so does volume. Or market share in certain areas of that market.
    (for Apple) most negative "relative" PC market share: gaming
    (for Apple) least negative "relative" PC market share: designers, video editors, etc.

    If it were that many home-built gaming PCs are sold in a particlar quarter, Windows market share rises, and Apple's will fall. But so will HP's, Dell's etc. But the volume of Mac OS X Pro-customers has remained the same. Adobe will still be able to predict their sales for Mac.

    It all depends on which facts & figures applies to your specific needs.

    But, okay, is short: Apple's market share should stay even. Switching should mean: market share rise. But it seems to drop.

    But, hey, on the other hand:
    Apple has suffered severe performance issues with the G4, and has made a transition from Mac OS 9 to Mac OS X which comes with problems.
    I hope (and expect) that the G5 + a good stable OS (X) on which many developers are developing software are the ingredients for a rise in overall marketshare.
    Suddenly there are really good reasons for buying a Mac! Gr8 hardware (finally), and even better software!

    Just my € 0.02
  8. snickelfritz macrumors 65816


    Oct 24, 2003
    Tucson AZ
    If Apple had to improve their market-share, they could simply produce a line of Windows-compatible Athlon64 PC's using the G5 form factor.

    I'm guessing there would be a fairly large demand for Apple 3D/animation workstations with Quadro cards installed.
  9. SiliconAddict macrumors 603


    Jun 19, 2003
    Chicago, IL
    I think I can speak for Jobs on this one when I say cold day in hell. I really think Jobs would drive the company into the ground before he would release a PC.
  10. Gabriel thread starter macrumors member

    Sep 22, 2003
    I think Steve has learned a lot in the past twenty years. He may be an idealist but he's responsible to the shareholders and employees of Apple. Ideals are important, but hopefully Steve cares more about the engineer who's going to be out of a job or the pension holder whose investment is going to shrink than the operating system on Apple's computers.

    I don't think Apple will ever ship a Windows PC, but they'll do what they have to in order to survive. Steve could have testified at the Microsoft Anti-trust trials, but he didn't because he knew he needed Microsoft. He could have told Bill Gates to take his investment and shove it up his ass in 1997, but he didn't because Apple needed Microsoft. He could have kept the iPod and iTunes Music Store Mac only, but he didn't.

    The day Apple ships a Windows PC will probably be the day I buy a Dell (or more likely the day I become a hermit in the Nepalese Himalayas), but Steve has about 10,000 employees - not to mention everyone who makes Mac software and uses Apple products and owns Apple stock to think about and if the survival of the company is in question he'll do what he has to do and I'll applaud him for it (after I finish screaming in agony)
  11. mikepctp macrumors member

    Nov 17, 2003
    just north of Toronto, Canada
    I didn't go to Harvard... only been near it once by accident but my years in business tell me that when the US economy is JUST climbing out of it's worst 3 years in recent memory... Apple keeping market share the same is pretty darn promising for the future; simply based on the past.

    Sometimes in economic life, holding one's own (in the market and in the boardroom) is worth tenfold to investors. Unfortunately, when you talk to a bean counter... one plus one is two... and then there was the scandal with Arthur Anderson... ooops... a big bean firm... business is not accounting... they never ever meet. Business is marketing and selling... two things accountants have no understanding of.

    Recently, in corporate value; Dell's went down, Gateway (cough, cough) is near bankruptcy and compaq / HP don't know who owns who. Apple is PROFITING in a bad economy and poised to excel in a better one. The future?... hold on.

  12. IJ Reilly macrumors P6

    IJ Reilly

    Jul 16, 2002
    Possibly the wrong question has been posed. The issue isn't so much the long-term viability of Apple as it is the long-term viability of the Mac, or any other operating system other than Windows. It's pretty clear that Apple could do fairly well as a consumer products company, and that's why Steve has been pushing the company so hard in that direction.

    Yes, market share does matter, and for the reasons already stated. It's fine to say that Apple is profitable when so many if not most of the PC companies are losing money, but that's only half of the question. The other half is what happens when, say, the Mac market share drops below 2%. Who, aside from Apple, will develop for the platform at that level? Apple will be forced to take over more and more of the development of basic applications for the platform, and their ability to make a profit diminishes accordingly. Eventually, the Mac hits the wall, and won't any longer be regarded as a viable alternative to Windows, even by those of us who've stuck by the platform though thick and thin (mainly the latter).

    I suspect Steve knows and understands this. He's shown in the past that he's got the nerve to bet the company's future on something different, when the going gets really tough. If the Mac platform is going to survive beyond the next few years, he's going to have to do something dramatic, and he's going to have to do it soon.
  13. ingenious macrumors 68000


    Jan 13, 2004
    Washington, D.C.
    (Off Topic, sorry) Palm not supporting Mac?

    Hey, sorry that this is off topic, but could you tell me where you got the info about palm not supporting mac with os 6.0? That seems ridiculous, but hey, maybe they're dumb!
  14. IJ Reilly macrumors P6

    IJ Reilly

    Jul 16, 2002
    It's not entirely off-topic. This story can be found on the front page of MOSR. The same story was posted on Macintouch.
  15. Opteron macrumors 6502

    Feb 10, 2004
    South Australia
    Re: Is Apple viable over the long term?

    Answer: Only the G5

    Every thing else at this point in time is stuck in late 1999, early 2000.
  16. jefhatfield Retired


    Jul 9, 2000
    Re: Re: Is Apple viable over the long term?

    when motorola first started making the G4, it was nearly competitive with the fastest PCs, but then motorola got stuck at 500 mhz for 18 months and that put apple inc behind for years

    some good features that the mac laptops have are their use of usb 2, bluetooth, and the 17 inch screen on the top of the line powerbook is still very cool by any standards

    i think apple will start cracking once they get the G5 in all of their machines and at that point, they will be comparable in speed to amd's 64 bit chips and intel's very best pentium 4s...the only question that remains is, "will apple get the G5 into the other models quickly enough to catch up with the pc world?"

    even though speed is not the number one issue, a lot of consumers are put off by what they consider slow macs outside of the G5 and whether that is true or not, it affects sales
  17. LethalWolfe macrumors G3


    Jan 11, 2002
    Los Angeles
    Sense we are talking about Apple from a business stand point wouldn't it be more relevent to compare Apple's marketshare to that of other businesses instead of other platforms? Who cares what the entire x86 platform marketshare is? What's Dell's marketshare? What's HP/Compaq's? What's Alienwares? What's IBM's?

    Extreme example to show my point. If there were 98 x86-based PC companies each w/1% marketshare and Apple had the other 2% Apple would have twice the marketshare of any of it's competitors but still only have 2% marketshare based on platform.

    It's not like all the PC makers are working together, sharing profits, and trying to put Apple out of business. Dell, Gateway, IBM, Sony, Toshiba, HP/Compaq, Apple, etc... they are all competing against each other.

  18. sixteen macrumors newbie


    Feb 5, 2004
    Of course Apple isn't viable over the long term.

    They've been going out of business since 1977. The filing's been just around the corner, yeah just over that next hill, for closing in on three decades.

    We'll get there any time now.

    Market share, and the perception of market share is all that matters; the profitability of the Macintosh market, hardware and software, is nowhere near as important as the perception of profit.

    You can make all the money you want, but if you can't perceive the money in the pretend store, how you gonna spend it?

    I'm certain capitalists are EXACTLY that stupid.

    If they can make money on the Mac market, but they don't perceive marketshare, they'll just piss on it and let it go away.

    They have enough money already, don't you think? It's not like they'd want more money if there was low hanging fruit around.

    They're doing fine. They don't want to hassle, they don't want information, perceptions will do it for them. That's how they got to be capitalists.

    That's why really succesful software vendors, like Microsoft and Adobe, aren't making Mac software.

  19. caveman_uk Guest


    Feb 17, 2003
    Hitchin, Herts, UK
    Re: Re: Is Apple viable over the long term?

    You're the re-incarnated manitoublack aren't you? You've had so many names in the last couple of months you must be having a bit of an identity crisis :D
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