Much, if not all attention regarding Apple has been focused on the iPhone. Apple’s recent $200 price reduction on the iPhone resulted in analysts, journalists, and investors debating the true demand for new device. Additionally, the effects of the price cut on Apple’s earnings has been a hot topic of discussion. Certainly the iPhone is relevant to Apple’s performance, but ostensibly it’s the Macintosh computers that will have the most impact. Specifically, Mac’s ability to run Windows natively has the potential to be a colossal catalyst for boosting Mac market share.
Apple released “Bootcamp”, which allows Mac users to install and run Windows just like one would on a PC. Apple’s new OS, OS X 10.5 “Leopard”, slated for release this November will include Bootcamp software. Additionally, third party software called “Parallels” allows users to run Windows and Mac OS simultaneously.
The Windows capability has not yet been aggressively publicized by Apple, and analysts and investors have been relatively quiet on this issue. Yet, for more than two decades, the lack of Windows compatibility has been the primary reason behind consumers’ decision to NOT purchase a Mac computer. Now that Windows can be installed on Macs, sales could really explode. I believe that this aspect of Apple should garner more attention, and I will explain why.
Macs are a perennial top award winner in consumer surveys and industry publications. Marketing research has suggested that for many PC buyers Macs were their first choice, yet they declined to purchase due to the need to run Windows software. Computer buyers employ what marketers refer to as a “non-compensatory” purchase decision model. For every product attribute evaluated and compared, supremacy in most categories cannot offset a deficiency for a particular attribute. Explicably, Macs may score higher in a consumer’s mind for every attribute, but the fact that it’s a non-Windows machine eliminates the purchase possibility from the buyer’s selection set of product alternatives.
Simply, consumers want a machine that runs the same operating system that 95%-99% of all other computers run. In most cases, consumers require a machine than runs windows due to work or school related factors. Alternatively, there is a significant risk in buying a computer that may become extinct or no longer supported by software developers. That was a real concern years ago, when Apple was against the ropes as market share had been estimated to fall as low 1%.
A popular statement: “I really want and prefer to buy a Mac, but I need a Windows machine since that is what we use at work.” The lack of Windows compatibility has been an insurmountable hurdle for Apple for decades even though significant demand for its machines exist.
Apple has certainly recovered since the days of old with market share currently estimated well above 5%. While still miniscule, Apple has delivered substantial progress. The bright side of the matter is the enormous room for potential growth from seizing share from the Windows PC makers- Dell et al.
In one aspect, Mac’s ability to install and run Windows OS makes them no different than Dell, HP, Gateway, etc., which there is little difference among those traditional PC devices. In essence, installing Windows on a Mac means that there are no longer grounds for consumers to eliminate Macs as a products choice on that reason. Thus, a consumer could just as well buy a Dell or Gateway or Mac. Think about it. The primary factor keeping buyers from purchasing a Mac for decades has been overcome. Plus, if that barrier hadn’t existed we know that Mac sales would have been significantly higher. The bottom line: pent-up Mac demand can come to fruition now.
Given that Macs now compete with Dells and HPs as product choice in buying a PC, Macs retain an edge. Macs provide all of the functionality as other PCs, yet the Mac OS serves as a bonus, if you will. Why would someone choose a Dell or Gateway when that can buy a Mac, and not lose Windows functionality, yet gain all the benefits of Mac OS? I think that is a very central question. Especially since Mac prices have become more competitive.
Despite the lack of publicity I think this is huge. We know that there are a significant number of consumers who would prefer to buy a Mac but can’t get past the Windows issue. Now that this is no longer an issue, how many Macs can Apple sell? I can envision some individuals buying a Mac to solely run Windows just because they prefer the aesthetics of Mac’s design.
We have seen a dramatic increase in Mac sales and market share, yet I perceive the general consumer is unaware of the Windows capability. I am confident that when a more aggressive publicity campaign occurs, Mac sales will react robustly. I think that it’s the PC savvy segment, aware of Bootcamp that has been snatching up Macs recently, not entirely the normal, less aware consumer. Just from anecdotal evidence, people I have surveyed exhibit little awareness. Eventually that will change with time, and the impact on Apple’s revenues will be much greater than the iPhone or iPod.
Running dual OS on a single machine allows the Windows to Mac OS migration process much easier. Previously, it has been either one or the other. Moving to Mac OS means turning off the light on Windows. That’s a very difficult process and extremely risky. Any migration works best under a dual, parallel operating environment since it doesn’t require choosing one over the other. Particular tasks can still be handled in the Windows environment if the Mac OS proves to be unsatisfactory. Apple experienced much difficulty in persuading users to abandon Windows for a Mac, now that is no longer an issue.
It’s seems that the only benefit in using Windows is the fact that nearly everyone else uses it too. It’s unstable, crashes frequently and susceptible to a host of viruses. That’s the antithesis of the Mac. Granted there is much more software available to Windows, that will surely change as Mac OS gains acceptance. As more and more software is developed for Mac OS, adoption will follow suit. And as Mac share has been increasing, we have witnessed already increased interest from software developers.
It’s not unreasonable to predict that Apple can progress to 10% share soon. Especially given the “Halo Effect.” Sales of iPhones and iPods will drive consumer interest in Mac computers, and when consumers become more aware of the Windows capability I believe market share can easily reach 30%. It’s not unrealistic to think that Macs could capture even more share. Why not? Apple’s iPod has 70-80% share, and why would a consumer purchase a Dell over a Mac? Price is the only reason that I can think, but for a higher price, the consumer receives more. I know I will never buy a traditional PC again.
i bought a MAC 2 yrs ago due to the design and wanna try MAC OS, however, unless MAC OS is capable for running all software or prgrams, otherwise, i wont use MAC again as not really convinient. I would use it unless MAC OS or machines are really really cheaper than Windows and Dell PC.
ReplyDeleteClovis,
ReplyDeleteWith the new Intel Macs, you can split your hard drive in two sections and install windows on one part and Mac OS on the other. Then when you start up the Mac, you can choose to run Windows or Mac OS. If you choose Windows, then it's basically the same thing if you were using a Dell or HP etc.
So, With Macs, you get the Windows PC and the Mac OS part too. Best of both worlds. Dell, HP, Gateway, etc. you just get the Windows portion, so why not buy a Mac and get both?
Question is who will really *need* to run windows on a mac. Software developers (maybe , not even a 'likely').
ReplyDeleteI have a buddy who has both - i have rarely seen him use it as he does not work with Microsoft development tools.
Definitely people who code in M$-ese have a potential to use bootcamp/xp.
But what about a non-geek user. I think just using OS X is the natural way to go.
So I dont see that as a mass selling point.
Well, the issue is that users would prefer to use a Mac but they are held hostage to Windows so due 95% Windows share. Thus, people don't want to completely abandon Windows and be the minority. Having the ability to run Windows gives those who switch piece of mind, and make it easier to decide on a Mac. Even if they never use windows again, they know that they can always install it, and not have to buy a Windows PC when they just bought a new Mac
ReplyDeleteThis is a great post which just happens to coincide with my looking into a Mac Pro computer specifically due to it's dual boot features. You see I am a hardcore video gamer who loves the simplicity and ease of use that comes with the Mac. But as most gamers know, Windows has the market cornered. Sure Mac has a few token games that run on it's OS, but nowhere near the number as Windows. This has been the sole reason I haven't bought a Mac in the past. Our family will love using OS X (because it rocks) and i'll be happy booting into Windows to play the upcoming Team Fortress 2 game. I am a long time Windows UI programmer who seriously believes Microsoft has shot themselves in the foot with Vista. With the iPod, iPhone and growing computer base it just makes me want to gobble up more Apple stock.
ReplyDeleteFYI - I'm long AAPL.
I say that I think you are wrong. For a multitude of reasons, check out "http://www.rinkworks.com/stupid/".
ReplyDeleteAnd to Turley, who says, "Well, the issue is that users would prefer to use a Mac but they are held hostage to Windows so due 95% Windows share." I say, if you must do what the majority of people do, consider being an insect. More is not better, its just more. However, easier is always easier!!
:-) e
Elder Norm
No, I have to disagree with Turley. Having to boot back and forth between 2 different operating systems is not double the value. There is the hassle factor or closing your work, stopping, starting, logging back in, and finally, starting new work. It is perhaps 10 percent more valuable.
ReplyDeleteWhat apple needs to really make their case is near native-speed hardware virtualization. When you can run both OSs with no performance penalty, the world will beat a path to their door. This is at best slightly interesting.
Heard of Parallels?
ReplyDeleteParallels software solves this issue. Windows and Mac OS can run side by side, simultaneously. No need to reboot. It;s not free as is Bootcamp, but its affordable.
From what I hear, the new VMware Fusion is expected to be very powerful.
Certainly if one plans to skip back and forth from Windows to Mac OS then then there wouldn't be much valued added.
I think you miss my point, for some consumers the risk is just to high yo switch to a Mac from a PC if they rely on Windows to a degree.
There is a risk to buying a computer with OS that may turn out to be the next BetaMax. That is not a concern now, but it was years ago when Apple was at is low-point.
I would hear it all the time- "don't biy a Mac, no one uses them, no software"
or "why do you want a Mac? are you a graphics designer? Movie editor?" Then you don;t need one.
Having the option and ability to still retain Windows functionality aids in the switching process. Users can become acclimated to Mac OS without the risk of a computer just stuck solely with Mac OS
Well said. My highly unscientific observations (conducted by walking around) lead me to believe the number of people using Mac laptops is increasing rapidly. I estimate - very conservatively - that at least 20% of all laptops I see in routine use bear the Apple logo. What's even more surprising to me is that every one of them is running OS X. Perhaps these users have chosen the new laptops for their ability to run Windows too, but they're not. Given a choice, users prefer OS X.
ReplyDeleteApple's share of the laptop market may not be 20%, but then where are all the Dells and HPs? One obvious answer is that they're packed away. People use Windows when they have to, people use OS X because it's just more pleasant.
Excellent post. The only thing you missed is the Vista factor. Boot Camp runs XP not Vista. Currently it is difficult to get a laptop or desktop from an OEM without Vista. A real problem for most users. I am a Windows Developer and to be honest Vista misses the mark. It does not allow for "Power Users" at all. XP with the Aero GUI and DX 10 would be a winner, but the rest of the Vista stuff makes it unworkable.
ReplyDeleteWith the Mac and bootcamp you can still get XP.