The Market Share issue (or "why Apple is getting stuck in the boutique business")

Posted:
in General Discussion edited January 2014
So pretty much everyone who isn't a Mac enthusiast thinks that Macs are for the idle rich and specific professions. You'll see this comment again and again and it is a barrier to sales. I'm just saying this for the record, and I'm not trolling.



Apple was doing a very good job for a couple of years at addressing this issue and now seems to be floundering. I'm afraid they've just decided to do the high-end PC market only (I don't blame them for ignoring the low-end, but they should really make a serious play for the mid-range).



The current product range seems to miss the concept of value for the dollar.



iMac: While I agree that the new 17" iMac is a good value for the dollar it has 2 big problems. FIrst is that you spend hundreds of dollars on a beautiful 17" LCD *that you can never use again*. Generally this is a problem when you use expensive, high quality displays in all-in-one computers. If you're going to make a consumer level desktop, with very little expandability, then make it a cube-type form factor. People will happily shell out for a good display once every 5 years, but they need a new iMac every 2-3 years, expecially given the lack of upgradability to video cards, etc.



The greatest advantage PC users have (God knows it isnt'the OS) is that they can buy the best display they can afford and promise themselves (and their wives ) that they will get many years use out of it. When I'm done with my Rev. A iMac (very, very soon now) I'm going to be giving away an excellent 15" CRT display along with the antiquated system, and will have to buy a new display. I would have bought a new Mac last year if I hadn't had to include the price of a display in with it. Heck I would have bought a Dalmation iMac if the same system specs came in Cube form and I didn't have to pay for another 15" display.



So basically If you want to keep up-to-date with modern software, you need to spend $1200-$2000 US on a new i or eMac every 2 years, with somewhere between $250 and $600 of that being a new display every two years *even if you're satisfied with the display you have*. That's not "for the rest of us". That's for people with money to burn, and it isn't competing even with higher-end PCs on value-over-time (since we're trying to get those people to switch I think that matters).



PowerMac: Good expandability. Way too expensive. Period. And as I mentionned before, the only significant discounts recently have been if you buy a new, expensive LCD. They should give up the low-end of the PM line to a Cube-type consumer system that has no PCI slots, but has an upgradeable AGP slot. That'd get gamers and prolly some pro-sumers that are currently should switch from Wintel.



I'm not going to comment on the portable end. They're pretty good systems from what I hear, aside from the paint issues with the TiBook and the bus/G3 issues with the iBook.



The other thing that is getting Apple even more stuck in the "boutique" category is the 'digital hub' strategy. As I understood today's keynote, if I really wanted to enjoy my "digital lifestyle" I need to buy a new cell phone, a digital camera, a digital camcorder, and an iPod.



Steve, most of us can't afford "the digital lifestyle". I've had the same PDA two years, I'm lusting after a digital camera but it'll have to wait 1-2 years, I just got a new cell and won't be buying one with Bluetooth for at least 2 years, and I'll probably never be able to buy a DV camcorder if I want my kids to go to a good college/university. So most of the software you announced today won't do me any good (except iCal, which I'll love when/if I get a machine that'll run Jaguar).



I want a good, relatively powerful micro-tower that is somewhat upgradeable (or not at all if it's affordable enough) and I want to be able to keep using one display until I choose to upgrade my display. I don't need to "bake" Photoshop. I want to surf, game, email, file-share, generate and edit documents. I know that's what a lot of potential PC switchers that I know want, and I'm pretty sure there's a lot of iMac early adopters like me that feel the same way 4 years later.



If Apple can't do something sustainable with this section of the market (make it possible for us to spend $1200 to $1700 US every two years without wasting a display) then they're gonna be stuck in the boutique business, with a small entrenched customer base and they'll go the way of the Amiga. Eeek. That's a spooky thought.



Oh, and P.S. .Mac won't help make Wintel folks "switch" if they feel that to really use new, expensive Apple hardware almost requires another $100 US per year indefinitley. This will certainly be a psychological barrier to Wintel users who are used to getting software and services free.



It's not that I disagree with .Mac. The whole industry is going this way and M$ is working to make sure that eventually Windows users will have to pay for every second of use. But Apple shouldn't *charging* for basic iTools services before M$ starts robbing their people blind with .Net. Let M$ look like the greedy ba$tards they are and then announce that you "had to" start charging because everyone else was. Otherwise, yet again Apple is stuck looking overpriced at a time when they're trying to increase market share. That's not good business sense.

Comments

  • Reply 1 of 12
    hmurchisonhmurchison Posts: 12,419member
    [quote]People will happily shell out for a good display once every 5 years, but they need a new iMac every 2-3 years, expecially given the lack of upgradability to video cards, etc.

    <hr></blockquote>

    People generally buy whole new machines every 3-5 years including a monitor. I've never actually heard someone say "geez I wish I could make use of this iMac monitor. They simply sell it if it's still working and repurchase.



    [quote] So basically If you want to keep up-to-date with modern software, you need to spend $1200-$2000 US on a new i or eMac every 2 years, with somewhere between $250 and $600 of that being a new display every two years <hr></blockquote>



    Not really an issue with the majority. 3 years later the Technology is better and cheaper. My first 17" cost me $460 at cost. Now that buys me a 21". LCD's are big sellers because people are not afraid to repurchase. Some do but at todays prices your old monitor is simply not worth keeping around in many cases.





    [quote] PowerMac: Good expandability. Way too expensive. Period. And as I mentionned before, the only significant discounts recently have been if you buy a new, expensive LCD. They should give up the low-end of the PM line to a Cube-type consumer system that has no PCI slots, but has an upgradeable AGP slot. That'd get gamers and prolly some pro-sumers that are currently should switch from Wintel. <hr></blockquote>



    Expensive is a subjective thing. Apple tried the Cube and found that people weren't interested in the design at the price. Could it be done again cheaper? Of course but many people tend to second guess themselves especially concerning expandability which is IMO highly overrated with the current Integrated Motherboard trend.





    [quote] Steve, most of us can't afford "the digital lifestyle". <hr></blockquote>



    Actually you can't afford NOT to. Time is money and anything that keeps you organized..prepared and focused will put you ahead in the long run. If you must justify your purchases...make sure they enrich your life in some ways. I've heard of Engineers that were spurred to their career because of Erector Sets(old lego like thing) and other small things. you never know what will make an impact in your life. Forget the money ...it's the experience.



    [quote] Oh, and P.S. .Mac won't help make Wintel folks "switch" if they feel that to really use new, expensive Apple hardware almost requires another $100 US per year indefinitley. This will certainly be a psychological barrier to Wintel users who are used to getting software and services free. <hr></blockquote>



    Apple rarely requires you use a paid service to access the basic and funamental tasks of a computer. If you want more functionality ..it's there for a price. I honestly think Wintel switchers will be coming over in droves. XP requires you link to the Internet to register your computer and eventually Wintel users will have to do the same to play media files. The heyday of getting stuff for free on a PC is sunsetting.



    [quote] Otherwise, yet again Apple is stuck looking overpriced at a time when they're trying to increase market share. That's not good business sense. <hr></blockquote>



    What's amazing about Apple is the because they have such good attention to detail for a Computer Company. Because they put care into their programs and hardware. The advangtage aren't always readily evident. When the iPod first came out all I heard was how expensive it was and that it would never sell. Look at today...less than a year later we have 3 iPods and excitement is just as high. Apple must contnue to push the envelope. Who better to offer Web Services than Apple. We know Microsoft cares about dominating certain facets of software but how often do you hear them say "We did it for YOU". What I hear is PC users who seek solace in Bus Speeds in benchmarks and Megahertz. I see no loyalty, in many cases the cheapest company wins.



    I think a majority of us mac users like our "niche" or "boutique" status. I like deciding on the computer that's best for ME and not worrying about what everyone has. If a PC users has made this choice and decided to stick on the PC then I wish'em luck. I've made my choice.
  • Reply 2 of 12
    First off, an excellent and well thought out reply. I'll argue with you on two point though.



    [quote] Expensive is a subjective thing. <hr></blockquote>



    1. Cost matters. I can afford (ie. my budget will let me) spend about $600 US a year. So that allows me to upgrade to a eMac with no upgrades except RAM every two years, an iMac 17" every 3 to 3.5 years. So paying for that screen every time matters to me. As a Mac user, mabe a pro user, you're maybe used to and can maybe afford a new screen regularly. The PC users I've been bugging to switch for the last 4 years have the same monitor they had in 1998 or 1999 and don't see the need for a new one yet. They do, however, spend hundreds and sometimes thousands of dollars every year on upgrades and new systems. These are the people we want to switch. I know of no serious PC users who spend their own money on a new display with every system upgrade. The people we want to switch to Mac are the mid-to-high end PC users, like gamers and professionals. The low-end PC crowd will never switch because they will never be willing to pay the premium for Apple products.





    [quote] I like deciding on the computer that's best for ME and not worrying about what everyone has <hr></blockquote>



    2. The thing is, Apple doesn't let you decide what *computer* is best for you, you're really just deciding on the OS and then they give you a *very* limited set of hardware options to be able to use that OS.



    [quote] I think a majority of us mac users like our "niche" or "boutique" status. I like deciding on the computer that's best for ME and not worrying about what everyone has. If a PC users has made this choice and decided to stick on the PC then I wish'em luck. I've made my choice. <hr></blockquote>



    3. I know it feels good to be one of the few, the proud, the Macusers. But the reasons for the "Switch" campaign and the iMac line was to make us "the *many*, the proud". Apple's marketshare is too small to be sustainable long term. Steve is doing an awesome job keeping it afloat, but that's part quality, part RDF and part our pride opening up our wallets. If we want to be able to buy new Macs 20 years from now, something's got to change.



    [ 07-18-2002: Message edited by: WilsonStark ]</p>
  • Reply 3 of 12
    hmurchisonhmurchison Posts: 12,419member
    I agree. I think Apple realizes that they need to grow, to become more self reliant. There's a shift going on right now in the industry. Consolidation is happening within the industry which is changing the playing field. Apple knows they must remain profitable...and pluck users from the Wintel side because the computer boom is in a down cycle.



    Microsoft realizes that it's been under attack for a while and it must leverage the Goose and the Golden Egg which is the Windows Desktop. Hence, you see them tightening up on their EULA's forcing companies to upgrade quicker and they have actually rebuked Open standards like Java and OpenGL in favor of C# and DirectX.



    The battle lines are clear. Apple will at all costs try to employ Open standards and foster interoperability while Microsoft will attemtp to "guard the Castle from the Seige of Apple, Linux, Sun and anyone else".



    Consumers need to think long term. It's not about what's best for Apple and Microsoft ..it's about what's best for us. That strategy benefits Apple because they are more intune with what their customers want.
  • Reply 4 of 12
    reynardreynard Posts: 160member
    Good posts, gentlemen. Or ladies. You both have good points. Here is my worry. Jobs seems to have the old Mercedes-Benz attitude: Its so cool that people will have to have it. Don't tell me it's expensive--you just don't understand. People will pay to have the best. All the while he's drooling over the Cube(or iPod or iMac...)

    There is a place that, selling the best and/or most unique and commanding a big profit margin.

    This worked for years when Macs were really superior in many ways. I just worry now that Wintel has surpassed Macs in so many ways. Now what do we do? Merecedes has become more price competitive, by the way. It seems that it is going to get harder to justify the price. Just recall the past 3 years. From the super-computer days to the currently embarrassing Powermac. And we certainly can't compete on the low end. It seems that our niche is getting a little too "nichey".

    Here's how I know Ive changed over the last 5 years: I used to argue with someone if he/she planned on purchasing a non-Mac. I don't now. I don't think I could sound very sincere.

    Another MacWorld and another step behind. Maybe we just don't have the resources to compete with MS, Intel and AMD, and their legions of software support.

    I have a question. Ive heard it said that Bill Gates needs Apple to survive to help him fight the monopoly charges. Is there any truth to that? (Not that I relish that role, just curious.)
  • Reply 5 of 12
    <strong>



    The PC users I've been bugging to switch for the last 4 years have the same monitor they had in 1998 or 1999 and don't see the need for a new one yet. They do, however, spend hundreds and sometimes thousands of dollars every year on upgrades and new systems. These are the people we want to switch. I know of no serious PC users who spend their own money on a new display with every system upgrade. The people we want to switch to Mac are the mid-to-high end PC users, like gamers and professionals. The low-end PC crowd will never switch because they will never be willing to pay the premium for Apple products.

    </strong>



    The gamers/upgraders I'm friends with own the same screen for 1-2 years TOPS, grumblimg a good half the time they do have their monitor b/c it's not the coolest dot pitch, isn't flat enough, isn't an LCD, isn't as big, the costs have dropped WAY off, etc etc. I have some old Computer Shoppers from 95 back in Ohio...back in the days when that magazine was a HUGE thing each month and weighed like 5 pounds...and prices are unreal compared with today. Technology changes quickly and while monitor tech has moved more slowly than other things, it still moves fast enough that many users change frequently. I just haven't been able to upgrade from my old Pentium 200 w/15" display and Ive bitched about it for 3 of the 4 years Ive owned the system



    [QB]



    From watching events in the past few years, I think Apple is going to drop a big jump with the new Powermacs *hopefully in early August if Think Secret is right* and they'll ship with 10.2 and have impressive stats to boot like DDR400, USB 2 and Firewire 2, built in 5.1, SOI or HT, and proc speeds of 1.4-1.6 in dual configs in the top machine. Oh yeah, next gen radeon or NVidia chips too. THIS would be amachine that would make people turn around and consider the pro line.

    Not a machine to help out with the low or mid range market, but if they made the new low end 1GHz and kept the same price points with the other improvements, the low end would rocket out of Apple.
  • Reply 6 of 12
    thresherthresher Posts: 35member
    I build and maintain my own PCs. I also am the recent purchaser of a PowerBook, so I now live in both worlds.



    I am a hardcore gamer, this is why I still own the PCS. I can tell you, without a doubt, that PC users do not get new monitors every 2 years. I've had my 21" for 4. Prior to that, I had a 19" monitor for 3 years.



    I am a member of a PC enthusiasts club (I'm trying to find a MUG, but the pickings are kind of slim in Central Illinois). Monitors are the LAST thing we upgrade. They are expensive, but usually work for 4+ years. Unless someone is going to a larger size, there is usually no reason to buy a new monitor. PC enthusiasts would rather buy the newest graphics card or motherboard, not a monitor.



    In the same period of time that I've had that monitor, I've gone from a Dell to a homebuilt computer, three different motherboards, two different video cards, 2 different CPUs and swapped out several different harddrives, DVD/CD-R drives, etc. These are the things that PC guys swap, not monitors. PC users tend to cannibalize their old computers to use in their new ones, this includes monitors.



    The originator of this post makes a good point and it's why I bought a Powerbook over an iMac. A 17" LCD monitor costs $800-900 at most computer stores. If you buy an iMac and replace it in a couple of years, you are throwing away your money for that portion of the overall cost. I figured if I was going to have to have an attached monitor, it might as well be something I can lug around with me. Give me some way to seperate that monitor and put it on a new iMac and I'm there.



    [ 07-18-2002: Message edited by: Thresher ]</p>
  • Reply 7 of 12
    If Apple wants to grow, they must sell the best hardware and software.



    For the software, it's OK with OS X (thanks God).

    For hardware, it's not the best. And I think if yesterday he introduced G5 PMac and Pbook (or power 4 and 5) at 1.5, 2 and 2.5 GHz, with DDR 333Mhz, high speed bus, nforce 2, serial ATA, the store will received 1000000 orders since end of august (if they sale at the same time as Jaguar on August 24th). And I will be an ordering iMan.



    If Steve wants people to switch he needs serious argument (especially for companies). He has the OS so just add the hardware.



    Regarding iApps and iDevice, maybe they are the coolest but I have graphic converter and palm desktop (don't need iTunes). I won't order an iPod or an iPhone... I won't subscribe an .Mac account.

    Sorry, Steve you won't make money with me with these stuffs.



    So, Steve, the COOLEST thing you can give us is THE BEST HARDWARE. Or give us OS X on Intel/AMD.



    <img src="graemlins/oyvey.gif" border="0" alt="[No]" />
  • Reply 8 of 12
    hobbeshobbes Posts: 1,252member
    Great point about the conflict between the all-in-one concept and a (relatively) expensive LCD display.



    Apple currently loves the all-in-one, but I hope they understand its limitations as well as its lure.
  • Reply 9 of 12
    rodukroduk Posts: 706member
    [quote]Originally posted by Hobbes:

    <strong>Great point about the conflict between the all-in-one concept and a (relatively) expensive LCD display.



    Apple currently loves the all-in-one, but I hope they understand its limitations as well as its lure.</strong><hr></blockquote>



    I totally agree. When the (CRT) iMacs occupied the lower end, they were in some ways disposable machines. I bought one, accepting the fact that in a couple of years I'd be replacing the entire computer, monitor and all. Now the (LCD) iMacs occupy the mid range, its no longer economically viable to do this. The main reason I recently bought a PowerMac rather than an LCD iMac was because of the separate LCD display. If Apple had launched the Cube now as the new iMac, rather than when it did,I wonder if it will have sold alot better.



    [ 07-18-2002: Message edited by: RodUK ]



    [ 07-18-2002: Message edited by: RodUK ]</p>
  • Reply 10 of 12
    hmurchisonhmurchison Posts: 12,419member
    [quote]I am a hardcore gamer, this is why I still own the PCS. I can tell you, without a doubt, that PC users do not get new monitors every 2 years. I've had my 21" for 4. Prior to that, I had a 19" monitor for 3 years. <hr></blockquote>



    That also explains the differences in Mac vet philosphy. For years PC's came, and in many cases still do, with substandard quality monitors if we were to compare against Macs at the time. I used to be totally amazed at how low monitors ranked to the avg pc users. Mac users have demanded Trinitrons for years and were cognizant of the changes in Mtr tech and wanted it. PC users ...as you say were more interested in other periphery. However today mtrs are much cheaper and I think you will see that trend change somewhat.



    BTW you CAN use a iMac as a monitor..pop off the case and unplug the D-Sub connector from the MB.



    [quote] For the software, it's OK with OS X (thanks God).

    <hr></blockquote>



    That's good because most people don't realize that Hardware is easier to make than software. HW never takes thousands of Man Hours to created...just a team of skilled engineers. The very fact that people acknowledge Apple's software to be up to par and even industry leading is a GREAT sign. HW is the easy part.



    [quote] For the software, it's OK with OS X (thanks God).

    For hardware, it's not the best. And I think if yesterday he introduced G5 PMac and Pbook (or power 4 and 5) at 1.5, 2 and 2.5 GHz, with DDR 333Mhz, high speed bus, nforce 2, serial ATA, the store will received 1000000 orders since end of august (if they sale at the same time as Jaguar on August 24th). And I will be an ordering iMan. <hr></blockquote>



    Mac users have been sliding down a slippery slope. I find that even the avg PC user doesn't fully understand how MB subsystem and busses interact. For instance nForce advertises HUGE memory bandwidth..that generally only applies to the fairly slow Integrated MX card. The rest of the MB won't be able to utilize this bandwidth...yet it makes for a great bragging tool. Processors are totally mistaken..despite the best attempts to diminish Megahertz it's still the common denominator that users point to....I guess it's easier that way. I've followed the P4 since it's incarnation and it's a good but not great processor. Intel knew they'd wow people with mhz. Remember the initial G4's had a 4 stage pipline and hit a wall at 500mhz..they revised the processor adding 3 more stages to 7 and instantly hit 733Mhz. That's a 50% increase attributable to the increase in Piplines. Now to compare Intel P4's have roughly 22 pipelines. They SHOULD be 2.4Ghz is my point. Ahhhh Bah!
  • Reply 11 of 12
    eskimoeskimo Posts: 474member
    Q2 Market Share numbers for those too lazy (like me ) to calculate for themselves. Apple reported shipping 808,000 units. Worldwide PC shipments for Q2 totaled 31.1 Million. 808,000/31,100,000 = 2.6%.
  • Reply 12 of 12
    [quote]Originally posted by reynard:

    I have a question. Ive heard it said that Bill Gates needs Apple to survive to help him fight the monopoly charges. Is there any truth to that? (Not that I relish that role, just curious.)[/QB]<hr></blockquote>



    Yes, it was a time. Bill Gates own 20% of Apple Stock at this moment without any decision right (i don't know the term).

    Microsoft need Apple and Apple need Office. :-) Buziness story. :-)

    By now, the diffusion of Linux must be sufficient. M$ fight against Linux rather than Apple for some time.



    My feelings about Apple Market share: Apple do never made superior computer in marketing term. Since the 1st Mac they target nich market with a differenciation strategy.

    The first IBM-PC with his ridiculous CPU power and his Text mode only display could connect with existing computer or be used as a terminal for existing computer. This was a business computer.

    Not the Mac wich was a more peowerfull computer with a graphic interface, a desktop and a mouse.

    Dos4 permit "massive" networking with Novell OS.

    Under XP who can still use your Dos software. They're many other features than made Wintel PC business computer.



    Idem for home use, the prior application is game.

    Game are on Wintel platform.



    Apple needs about 5% of computer market to be profitable.





    Currently Apple lost one of its market user who need top-of-the-art creative tools. This user need CPU power. They never buy computer but most powerfull computer. Today Wintel computer are widely more powerfull than Mac. And i don't see how Motorola and IBM could compete with Intel/AMD with 3% of the market as hope for return on investment.

    In Q2 results sales of PowerMac drop to 165M.



    I think they try to compensate this lost of earning by providing software (ie purchase of spruce ,astarte, emagic etc...) , offers all-in-one solution and trying to conquer other market that not tradiotionnaly Apple market.



    Apple dont' seem specialy well-armed to conquer this market.



    Maybe Xserve and Emac were adapt to edu market but edu market is in relationship with business market.

    They don't have structure for business market and IT, software and more have not Apple culture.



    Wintel home users? What the key advantages of OSX vs XP?



    An other handicap is developement under OSX is Apple specific. Windows or Unix are relatively similar use industry standard and code is easily portable between this 2 OS. OSX requires a lot of specific code, not the Darwin part of OSX but the Quartz/Cocoa/Carbon/Aqua.
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