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Apple's Mac market share slipped during Dec. quarter - report

post #1 of 199
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Citing preliminary data from market research firm IDC, an analyst for PiperJaffray said Thursday that Apple's worldwide share of the personal computer market fell to 2.4 percent during the three-month period ending December, down from a 2.8 percent share two quarters earlier.

"While Apple gained share year-over-year (from 2.1 percent to 2.4 percent), it lost share sequentially," analyst Gene Munster wrote in a note to clients. "Mac market share is generally higher in September quarters, due to strong education-related sales."

The analyst said he expects Apple's market share will "bounce back" following the release of Adobe Creative Suite 3.0 in the April timeframe. "We estimate 15 percent of Apple's installed base are pro Adobe users, waiting for CS3 to be released before buying a new Mac," he told clients.

Munster, in his note, went on to say that a Mac unit sensitivity analysis suggests that if Mac market share averages 3.5 percent throughout the 2007 calendar year, his fiscal 2007 earnings-per-share (EPS) estimate of $2.59 would be $0.44 or 14 percent too low.

As a result, the analyst increased his fiscal 2007 EPS estimate to $3.03 and also upped his price target on shares of Apple to $124 from $99.

"The Mac number was respectable, profitability is at record levels, and the iPod number increased Apple's footprint by 29 percent," he said of the company's fiscal first quarter results released Wednesday. "More iPod users result in future sales of related products including Mac, iPhone, and AppleTV."
post #2 of 199
Apple has officially become a media/infotainment company with computers on the side, folks! Maybe the claim that "people are switching in droves" is a bit of drinking of one's own kool-aid.
post #3 of 199
I know analysts will continue to do these Mac v PC market share statistics from now till Hell freezes over... However, I think it is time Mac sales were simply seen as numbers that stand on there own.

To compare the number of Macs to the number of boxes that can run anything but OS X is a mathematical waste of time these days. If China was to start turning out cheap PCs for every kid in China next week the percentage of Macs out there would be 0.1% overnight (OK, I am making these numbers up of course but you get my point).

Many years ago I watched Steve Jobs on stage refer to BMW as a role model. He said something along these lines ... Does BMW worry how many Fords are out there and measure its success as a percentage market share relative to Ford sales? I think not. They make a great product at a higher margin and have a loyal following and sell more each year and increase profits. That's what counts.

Plus the market saturation level is very low for all things Mac (maybe not iPod) so the opportunities are almost endless. What's not to be optimistic about?
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post #4 of 199
Blah@the BMW analogy again.
Quote:
Originally Posted by digitalclips View Post

I know analysts will continue to do these Mac v PC market share statistics from now till Hell freezes over... However, I think it is time Mac sales were simply seen as numbers that stand on there own.

To compare the number of Macs to the number of boxes that can run anything but OS X is a mathematical waste of time these days. If China was to start turning out cheap PCs for every kid in China next week the percentage of Macs out there would be 0.1% overnight (OK, I am making these numbers up of course but you get my point).

Many years ago I watched Steve Jobs on stage refer to BMW as a role model. He said something along these lines ... Does BMW worry how many Fords are out there and measure its success as a percentage market share relative to Ford sales? I think not. They make a great product at a higher margin and have a loyal following and sell more each year and increase profits. That's what counts.

Plus the market saturation level is very low for all things Mac (maybe not iPod) so the opportunities are almost endless. What's not to be optimistic about?
post #5 of 199
Quote:
Originally Posted by anantksundaram View Post

Apple has officially become a media/infotainment company with computers on the side, folks! Maybe the claim that "people are switching in droves" is a bit of drinking of one's own kool-aid.

OK, so this is your mental picture is it...?

Scene: Apple HQ :

Steve: "Bad news guys, the millions of people who had PCs before but recently bought a MacBook or a MacBook Pro just vaporized. No trace. The profits from the sales just got erased from our bank account and they have no memory of ever owning a Mac and realizing how much better than a PC with Windows they were"

Phill: "How can that be Steve?"

Steve: "Well Phil, journalists just calculated our over all market percentage fell by a whole half a percentage point, that's millions of users, so they must have ... right?"
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post #6 of 199
Quote:
Originally Posted by digitalclips View Post

I know analysts will continue to do these Mac v PC market share statistics from now till Hell freezes over... However, I think it is time Mac sales were simply seen as numbers that stand on there own.

To compare the number of Macs to the number of boxes that can run anything but OS X is a mathematical waste of time these days. If China was to start turning out cheap PCs for every kid in China next week the percentage of Macs out there would be 0.1% overnight (OK, I am making these numbers up of course but you get my point).

Many years ago I watched Steve Jobs on stage refer to BMW as a role model. He said something along these lines ... Does BMW worry how many Fords are out there and measure its success as a percentage market share relative to Ford sales? I think not. They make a great product at a higher margin and have a loyal following and sell more each year and increase profits. That's what counts.

Plus the market saturation level is very low for all things Mac (maybe not iPod) so the opportunities are almost endless. What's not to be optimistic about?


'cept there are some dumb developers out there that look at relative numbers as opposed to absolute numbers. Instead of going "Hey, we'd be developing in a fairly competition-free market for about 30 million rich bastards", they go "No way, man - no way we're developing for 0.1% of the market" without even considering that this 0.1% probably have the money *and* the interest of buying compared to the "Chinese kids" that grab the least expensive PC out there and proceed to pirate the software they need. They *think* they're grabbing 99.9% of the market but in reality the numbers are divided 4-5 times because of competition and again because a lot of PCs out there belong to emerging countries full of people that aren't likely to buy any software.

Then again, those dumb developers probably should stay away from our platform. And not everyone can be smart...there's gotta be a balance between smart and dumb, right?
post #7 of 199
The keywords are: preliminary data, Piper Jaffrey, analyst. Who cares about that kind of stuff? ("Our research has shown 17,5 million ipods in the first quarter." )
post #8 of 199
So now it's 2.4% of the market that has a clue!

I very much doubt the value or accuracy of these market share claims given the lifetime of Mac systems. My 4 year old (at least) Mac is running 10.4.8 and is very happy doing so.

By the way, I recently toured a renowned lab in the US and noted two pieces of (high-tech) hardware being driven by Apple II computers, one of which was still using a monitor of the same generation.

It's interesting (to me at least) that we now have Apple Inc and Apple Corps, Apple and Apple with less distinction between names now that one of them has dropped the 'Computer' word. They must have patched things up!
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post #9 of 199
Quote:
Originally Posted by digitalclips View Post

I know analysts will continue to do these Mac v PC market share statistics from now till Hell freezes over... However, I think it is time Mac sales were simply seen as numbers that stand on there own.

To compare the number of Macs to the number of boxes that can run anything but OS X is a mathematical waste of time these days. If China was to start turning out cheap PCs for every kid in China next week the percentage of Macs out there would be 0.1% overnight (OK, I am making these numbers up of course but you get my point).

Many years ago I watched Steve Jobs on stage refer to BMW as a role model. He said something along these lines ... Does BMW worry how many Fords are out there and measure its success as a percentage market share relative to Ford sales? I think not. They make a great product at a higher margin and have a loyal following and sell more each year and increase profits. That's what counts.

Plus the market saturation level is very low for all things Mac (maybe not iPod) so the opportunities are almost endless. What's not to be optimistic about?

I know that some people refuse to admit that marketshare is important. But it is.

Computers are NOT cars, and I wish those stupid analogs would stop.

Computers need software, and software depends on computer platform. Developers, unless they work on a platform because of a preference, which most don't do, will go for marketshare.

It isn't just a matter of numbers, it's also a matter of percentage, and costs.

The costs for developing, supporting, and marketing to 5% of the possible user base can cost almost as much as doing the same for the other 90+%.

While some programs are used much more on Macs per capita, it may not make up for those costs.

Limited software limits computer sales, and the circle goes round and round.

As marketshare rises, so does available software (and hardware).

If the computer sales rise, but do so at the same speed as the larger market, the overall balance remains the same.

If, as had happened for too many years for Apple until recently, sales dropped slightly over the years, or remained about the same, while the rest of the market expanded, the marketshare dropped, from about 12% to 3%. We lost developers at an alarming rate.
post #10 of 199
It would appear to be correct analysis but with a caveat.

If the PC market as a whole has grown in the last quarter, then Apple's market share will have decreased because unit sales of Macs dipped slightly from 1,610,000 in Q4 to 1,606,000 in Q1 2007.

The Q4 figures were exceptionally high due to two sales of 50,000 Macs apparently as was noted in the results. If you take a longer term look at market share, over the year, or discount those exceptional sales, you get a much different picture.

I did a graph over in the other thread...

http://forums.appleinsider.com/showp...4&postcount=73

As you can see, sales have been ramping up quickly but flattened out in Q4/Q1. I don't have quarterly figures for the entire PC industry but they certainly haven't been ramping up like that.
post #11 of 199
Time for the xMac.

Who said that, ducks head runs for cover
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post #12 of 199
Quote:
Originally Posted by anantksundaram View Post

Apple has officially become a media/infotainment company with computers on the side, folks!

From the standpoint of both revenue and earnings, you're just plain wrong.

From AppleInsider's story earlier this week on the earnings conference call:

"Apple shipped a total of 1.606 million Macs during the quarter, representing 43 percent of the company's total revenue. This included sales of 969,000 notebooks and 637,000 desktop systems."

Apple is definitely plunging deeper in the consumer electronics business, and Apple's percentages of revenue and earnings from Mac sales will probably slide as the other areas grow faster, but don't confuse sizzle with steak.
post #13 of 199
Quote:
Originally Posted by melgross View Post

The costs for developing, supporting, and marketing to 5% of the possible user base can cost almost as much as doing the same for the other 90+%.

But that's user base, not marketshare. Market share is based on how many NEW computers have been sold, not how many people are using them.

If you've two products and one has a lifespan of 2 years before it falls apart and another 4 years then it's quite possible the longer living product has a larger user base but less market share.

It's also possible that user base isn't growing if you're not selling to new customers.

I'd guess that 2007 will see the PC market share increasing quite a lot as users are forced to upgrade to newer computers to just run Vista. That doesn't mean the user base will grow.

Apple on the other hand is at pains to point out that over half of it's sales go to new Mac users, so in the last quarter, the user base grew by 800,000 new Mac users by Apple's reckoning. I'd imagine many of those came from Windows so there's potential there for the Windows user base to actually be falling at a time when it's market share is much higher than the Mac. Then again, without Windows sales figures at hand, I'd guess the Windows user base is still increasing as 800,000 switchers would probably barely make a dent in it's growth.

Anyone got Windows sales figures? I wonder how many switchers it'd need to make the Windows user base decline.
post #14 of 199
Quote:
Originally Posted by aegisdesign View Post

Anyone got Windows sales figures? I wonder how many switchers it'd need to make the Windows user base decline.

Who cares?

So long as Mac base grows
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post #15 of 199
OK a bit of humor here ... Let's try this ... only compare Mac sales to those of PCs with legal OS and that ... wait for it, works flawlessly. That should even up the numbers.

Or another ... again just being silly here .. (well the stats are), how about the number of Mac users that 'love' their Mac v PC users that really 'love' their PC?
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post #16 of 199
The iPod works with the PC and is USB only, no more firewire. Appletv works with the PC. iTunes works on the PC. The marketshare numbers just isn't that important anymore, especially sice the Intel Macs run Windows via Parallels or boot camp.
post #17 of 199
The comment about China is spot on -- where worldwide market share of anything is concerned. Their middle-class is exploding at a time when ours is rapidly contracting.

As far as this report goes, I liken it to those who bitch because Apple didn't put a potato peeler or a blowtorch port on the newest model, which sends Apple investors running for the doors... for about five minutes.

It was not too far back in my memory banks that Apple was only shipping about .6-.7M computers each quarter. I'd say their growth is phenomenal.
post #18 of 199
Quote:
Originally Posted by jcatma61 View Post

The comment about China is spot on -- where worldwide market share of anything is concerned. Their middle-class is exploding at a time when ours is rapidly contracting.

As far as this report goes, I liken it to those who bitch because Apple didn't put a potato peeler or a blowtorch port on the newest model, which sends Apple investors running for the doors... for about five minutes.

It was not too far back in my memory banks that Apple was only shipping about .6-.7M computers each quarter. I'd say their growth is phenomenal.

Right on! I have a load od AAPL and bought at $32. I am holding for many years to come too. You ain't seen nothing yet! 8)
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post #19 of 199
I don't understand all the conflicting reports.

Apple says they grew at 28%, 3x the industry. That means that they grew marketshare, plane and simple. If they're growing faster than the industry they're gaining marketshare. How can an analyst say something different?

In the US is was much stronger, Apple said they grew 30+% in the US and the US market grew at 3%. That would be a huge market share gain.

I read another report this morning that said Apple market share was up to 4.7%. I don't remember the qualifiers. It was probably in the US market.

Still, any of these numbers contradict the notion that Apple is losing marketshare. Is this from the same people that said iTunes sales are down?
post #20 of 199
I don't understand all the conflicting reports.

Apple says they grew at 28%, 3x the industry. That means that they grew marketshare, plain and simple. If they're growing faster than the industry they're gaining marketshare. How can an analyst say something different?

In the US it was much stronger, Apple said they grew 30+% in the US and the US market grew at 3%. That would be a huge market share gain.

I read another report this morning that said Apple market share was up to 4.7%. I don't remember the qualifiers. It was probably in the US market.

Still, any of these numbers contradict the notion that Apple is losing marketshare. Is this from the same people that said iTunes sales are down?
post #21 of 199
Quote:
Originally Posted by aegisdesign View Post

But that's user base, not marketshare. Market share is based on how many NEW computers have been sold, not how many people are using them.

If you've two products and one has a lifespan of 2 years before it falls apart and another 4 years then it's quite possible the longer living product has a larger user base but less market share.

It's also possible that user base isn't growing if you're not selling to new customers.

I'd guess that 2007 will see the PC market share increasing quite a lot as users are forced to upgrade to newer computers to just run Vista. That doesn't mean the user base will grow.

Apple on the other hand is at pains to point out that over half of it's sales go to new Mac users, so in the last quarter, the user base grew by 800,000 new Mac users by Apple's reckoning. I'd imagine many of those came from Windows so there's potential there for the Windows user base to actually be falling at a time when it's market share is much higher than the Mac. Then again, without Windows sales figures at hand, I'd guess the Windows user base is still increasing as 800,000 switchers would probably barely make a dent in it's growth.

Anyone got Windows sales figures? I wonder how many switchers it'd need to make the Windows user base decline.

I know, we've gone through this before.

But, we still look to that 5 to 6%. If we had real evidence, rather than an assumption that Apple's actual userbase was significantly larger than the marketshare, the it would be different. But we don't.

Also, it's true, though I don't have the studies at my fingertips to back it up, that people just buying a computer buy most of the software at full, not upgrade prices. And, as we know wery well, not everyone buys upgrades after they buy that new software.

That's another reason why marketshare is so important, more so than userbase.

It's why Jobs, in interviews, keeps talking about marketshare. He knows.
post #22 of 199
When you're customer case mainly consists of creative professionals and affluent "I don't want to mess with it" types, you eventually hit the brick wall.
post #23 of 199
Quote:
Originally Posted by BenRoethig View Post

When you're customer case mainly consists of creative professionals and affluent "I don't want to mess with it" types, you eventually hit the brick wall.

Hey this is a miniscule sample I know but relevant to your once true comment. The five new MacBook users I know just locally (previously Windows users) just read e-mail and visit web sites... They just wanted to be free of all the constant problems they had. All now absolutely love using their Macs.

... and now want to 'play' with iLife apps!
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post #24 of 199
Quote:
Originally Posted by digitalclips View Post

Hey this is a miniscule sample I know but relevant to your once true comment. The five new MacBook users I know just locally (previously Windows users) just read e-mail and visit web sites... They just wanted to be free of all the constant problems they had. All now absolutely love using their Macs.

And... they are also the best PC's they've ever had!8)
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post #25 of 199
Quote:
Originally Posted by IQatEdo View Post

And... they are also the best PC's they've ever had!8)

Right! BUT you should have heard the comments when I pointed out the could still run Windoze
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post #26 of 199
Quote:
Originally Posted by digitalclips View Post

Right! BUT you should have heard the comments when I pointed out the could still run Windoze

Furthermore, their Windows using friends start having thoughts. Dangerous stuff - thoughts!
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post #27 of 199
Quote:
Originally Posted by IQatEdo View Post

Furthermore, their Windows using friends start having thoughts. Dangerous stuff - thoughts!

That's exactly why the original one is now 5 8)
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post #28 of 199
Repeat after me: Windows users dont buy software.

I sell an educational and printing utility both for OSX and Windows. Despite a fairly decent windows web presence, the Mac:PC ratios are 70:30 and 40:60 for the edu and printing one, respectively.

So much for the macc ratio being 5:95, huh?
post #29 of 199
Quote:
Originally Posted by melgross View Post

I know that some people refuse to admit that marketshare is important. But it is.

Computers are NOT cars, and I wish those stupid analogs would stop.

Computers need software, and software depends on computer platform. Developers, unless they work on a platform because of a preference, which most don't do, will go for marketshare.

It isn't just a matter of numbers, it's also a matter of percentage, and costs.

The costs for developing, supporting, and marketing to 5% of the possible user base can cost almost as much as doing the same for the other 90+%.

While some programs are used much more on Macs per capita, it may not make up for those costs.

Limited software limits computer sales, and the circle goes round and round.

As marketshare rises, so does available software (and hardware).

If the computer sales rise, but do so at the same speed as the larger market, the overall balance remains the same.

If, as had happened for too many years for Apple until recently, sales dropped slightly over the years, or remained about the same, while the rest of the market expanded, the marketshare dropped, from about 12% to 3%. We lost developers at an alarming rate.

Their share has been much lower and is generally increasing, and additionally, quarterly data are more volatile and less indicative of trends, so stop whining.
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post #30 of 199
Quote:
Originally Posted by MajorMatt View Post

Repeat after me: Windows users dont buy software.

I sell an educational and printing utility both for OSX and Windows. Despite a fairly decent windows web presence, the Mac:PC ratios are 70:30 and 40:60 for the edu and printing one, respectively.

So much for the macc ratio being 5:95, huh?

But you aren't a market research firm - so what would you know.

(That's a joke - hope you get it!)
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post #31 of 199
Quote:
Originally Posted by wtfk View Post

Their share has been much lower and is generally increasing, and additionally, quarterly data are more volatile and less indicative of trends, so stop whining.

Don't be an idiot! I'm not whining.

If you can't partake here, don't post drivel.
post #32 of 199
what i don't understand about this headline is this:

it's 28% year over year growth. Sequencial quarter growth is meaningless.

I think we'll all take 28% annual growth. What's that 65% in two years? doubling in less than 3?

Any market that is doubling in size every few years will start to bring in developers. What kills me is that apple doesn't make a little more of a push for marketshare on the mac side. Maybe sacrifice a bit of margin and bring out an xmac or lower the prices/specs on the macpros. Apple has the high and low ends covered, but the middle ground is weak.
post #33 of 199
I think Adobe Premiere coming back to the Mac should be a bigger indicator than a .4% slip in marketshare.
post #34 of 199
Please note in the following post, 'Q's refer to financial quarters, not calendar quarters. Apple's financial quarters are almost exactly three months ahead of the calendar - i.e. we are in calendar Q1 and Apple financial Q2.

Quote:
Originally Posted by freakboy View Post

it's 28% year over year growth. Sequencial quarter growth is meaningless.

I beg to differ. Comparing quarter-to-quarter units is pointless. Comparing quarter-to-quarter share is not. Do not forget that last year's Q1 quarter (the quarter we are comparing to to get 28% share growth), PPC Macs were all you could buy.

There was a lot of pent-up demand for Intel Macs, and the change to the ubiqutous x86 platform has also attracted a few more switchers due to negative perceptions they had of PPC performance, and being able to run Windows natively.

This meant that Q2 '06, Q3 '06, Q4 '06 and Q1 '07 all saw significant year-over-year growth due to the release of this pent up demand. Q2 '07 will be the first quarter where we get to compare two year-over-year quarters where Intel Macs were shipping. Even then, the whole line didn't go Intel until Q3 '06.

However, this result, that shows a sequential drop in market share, could indicate that there are still significant problems in making the platform more attractive to the market. It could be an indication that the pent-up demand in the installed user-base is pretty much spent, and that the platform isn't attracting as many switchers as originally hoped. It could be a sign that from next quarter onwards, we won't see anything like the year-over-year growth we saw in Q2 '06 through Q1 '07.
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post #35 of 199
Quote:
Originally Posted by dm3 View Post

I don't understand all the conflicting reports.

Apple says they grew at 28%, 3x the industry. That means that they grew marketshare, plane and simple. If they're growing faster than the industry they're gaining marketshare. How can an analyst say something different?

In the US is was much stronger, Apple said they grew 30+% in the US and the US market grew at 3%. That would be a huge market share gain.

I read another report this morning that said Apple market share was up to 4.7%. I don't remember the qualifiers. It was probably in the US market.

Still, any of these numbers contradict the notion that Apple is losing marketshare. Is this from the same people that said iTunes sales are down?

Macrumors just posted a similar story showing market share GAINS, not losses...
http://www.macrumors.com/pages/2007/...18132008.shtml
post #36 of 199
Quote:
Originally Posted by dm3 View Post

I don't understand all the conflicting reports.

Apple says they grew at 28%, 3x the industry. That means that they grew marketshare, plain and simple. If they're growing faster than the industry they're gaining marketshare. How can an analyst say something different?

In the US it was much stronger, Apple said they grew 30+% in the US and the US market grew at 3%. That would be a huge market share gain.

I read another report this morning that said Apple market share was up to 4.7%. I don't remember the qualifiers. It was probably in the US market.

Still, any of these numbers contradict the notion that Apple is losing marketshare. Is this from the same people that said iTunes sales are down?

1.606/0.024 = 66.92M
1.611/0.028 = 57.54M

66.92/57.54 - 1 = 16.3%

Some IDC mumbers;

2005 PC growth = 15.9%
2006 2nd quarter PC growth = 13%
2006 3rd quarter PC growth = 9.1%

So perhaps PiperJaffray market share numbers are rounded somewhat (to an even number), so for example;

1.606/0.0245 = 65.55M
1.611/0.0275 = 58.58M

65.55/58.58 - 1 = 11.3%

So, all in all, the PiperJaffray and IDC numbers are in rough agreement.

1.606M (Apple 1st Q 07)/ 1.254M (Apple 1st Q 06) -1 = 28%

28%/9.1% ~ factor of 3 (Apple placing their growth in the best possible light perhaps?)

66.92M - 57.54M = 9.38M incremental increase in total PC volume versus 1.606M - 1.611M = -0.005M in total Mac volume in successive quarters.

9.38M (incremental PC shipments) - 1.606M (Apple total shipments) /1.606 - 1 = 3.84 times the volume of Apple total shipments. Inotherwords incremental PC shipments were 3.84 times Apple's TOTAL shipments.

Anyway you cut it, these numbers are believable.
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post #37 of 199
Have the Q1 unit sales been released for Dell, HP and Gateway? As I recall, Apple was the 4th largest OEM of personal computers and poised to take Gateway out of 3rd place sometime this year.
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post #38 of 199
Quote:
Originally Posted by melgross View Post

Computers need software, and software depends on computer platform. Developers, unless they work on a platform because of a preference, which most don't do, will go for marketshare.

Are 20 mediocre software packages better than 1 good one?
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Android proves (as Windows & VHS did before it) that if you want to control people, give us choices and the belief we're capable of making them. We're all 'living' the American dream.
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post #39 of 199
Quote:
Originally Posted by McDave View Post

Are 20 mediocre software packages better than 1 good one?

Probably, if the initial cost is the only consideration (and IMHO it usually is).
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post #40 of 199
Some of the most significant percentage gains were actually in 2005/6 before and just after the Intel Switch was announced when Apple were still selling PPC hardware. I don't think most people actually care what CPU is in their computer.

Q3 2005, Q4 2005 and Q1 2006 were actually higher than Q2 2006 (ie. Spring last year) despite the first Intels not being released till Q2 2006. Back then the G5 was still up there with the best from Intel and G4 laptops were kind of ok against Pentium Ms. Sure, we'd be in trouble now if Apple hadn't switched most likely since there's been no new PPC chips that compete with Intel Core but back then it was roughly 'mano y mano'.

People were already switching in droves a long time before they could run Windows on the Mac and a long time before we got rid of those apparently 'slow PowerPCs'. Personally I think the growth is more to do with dissatisfaction with Windows (old, viruses, malware, no shiny) than Mac hardware. In 2005 people just got fed up and finally sought out something else.

That gives me pause for thought in 2007 now that Vista is finally coming out but I think Apple will still show great growth as they've got momentum now. Vista upgrades are going to be hell for some people to the point that they may just think about getting a whole new PC instead and some will be thinking they may as well go Mac instead of getting poked by the pointy Microsoft stick again.
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