Applepeels

Why should we pay more for a Mac than the cost of its parts?

I saw commentary today that reminded me of a presentation that I put together in the dark days when Apple almost did not survive.  At the time we were being beat up with magazine covers predicting the demise of Apple.  Many of the arguments centered around the relevance of a computer company that was hovering between two and three percent market share.

Today's commentary talked about how much cheaper Windows computers are with the same or better components than Macs and finished with a comment than hinted that Macs were never going to be the computer for the majority of computer users.

Actually the last point is probably correct.  In spite of a very good growth curve in computers sold, it is highly unlikely that Macs are going to challenge Windows for operating system supremacy.

Now I am one of the people writing about Apple who has made the point that market share is important.  However, over the years I have changed my thoughts on the subject.

If Apple breaks over ten percent worldwide market share, I would be very impressed.  I think it is a worthy goal for Apple, but it might be unachievable in Apple's current pricing model.

First I want to discuss market share and how it relates to why we should be willing to cough up more for a Mac than an even more impressively configured Windows box.

When I did my presentation back in the nineties when Apple was fighting for its survival, I took an interesting angle on the situation.  Our home in Roanoke, Va sits high on a very steep hill.  In the mid-nineties Roanoke went through some serious snow storms including one blizzard that put more than a couple of feet of snow on the ground at one time.

We were a fairly new subdivision then. People would move into the subdivision for the view of Roanoke.  They usually came with their rear drive or front wheel drive vehicles.  We would have our first storm of the season, and the new residents would be stuck a mile down at the foot of the hill or along the way in a ditch.  We gave many of them a ride up the hill in our Subaru or our Nissan AWD which we named Little Limo.  Little Limo had chains for all four wheels.

Soon after that first walk up our hill on snow and ice, a shiny new SUV or AWD of some type would show up in the driveways of our new residents.

One of the first slides of my presentation was one comparing the US market share of the top selling car which I believe at the time was the Ford Taurus with the market share of vehicles on our hill.  I do not remember the exact numbers, but I do remember there was only one Taurus on the hill, and of the thirty six cars on the hill something like 12 were Subarus.

I went on to make the point that if you needed something inexpensive to get around a flat town with a mild climate that a Taurus might make sense, but if you needed to get from point A to point B in a snowstorm and point B was up a hill, a Subaru and its higher cost might make a lot more sense than a Taurus.

In a sense the computer market still looks a lot like that.  If you want something inexpensive just to browse the web, read a few emails, and send a few pictures, you might as well buy a Windows machine and get a new one with security software every two or three years.  Would a Linux box be cheaper and better?  I suspect yes, but if anything went wrong, it would likely be worthless.  You can always find someone to fix a Windows box for a price, but finding someone to fix a Linux box is a different kettle of fish.

However, if you do more than just email and web browsing, in many cases a Mac makes a lot of sense especially if you are doing creative work which requires integration of more than one media type.

Can you do those things with a Windows or Linux box? Yes, it is possible. But is it as easy as it is on a Mac? The answer is no.  Since the fall of 2004, I have used Linux, Mac OS X, and both flavors of Windows on a daily basis.  Aside from some really high quality printing from Linux, I think that I have managed to figure out how to do every task that I need to do on each platform.  I check my email and browse the web on whatever machine happens to be in front of me.

I could use any platform that I want to get my job done, but aside from real estate forms, my platform of choice is Mac OS X on whatever machine is running it.  With that I mean that I am not above using my wife's white half moon iMac to do work if the need arises.

Macs get my work done every day without fail, and my newest Mac will turn three in June.

While it is impossible to measure, I think the Mac has a very respectable market share among people like me who do a very wide range of things on their computers.  We are not the majority of computer users, but I would make the case that we tend to get more out of our computers than most people.

Since I work in the real estate industry, I see a lot of people who struggle with their computers.  Many of them would never think of trying to do a tri-fold flyer or building a website or doing slide shows on the web.  Getting their email to work while accessing the websites they need to interact with is enough computer challenge for them.  There are a few who do similar things on their Windows machines that I do on my Mac, but they are so much the exception they hardly register on the scale.

The real market share question is whether or not the Mac can expand into that land of people who just want email and a browser.  I think the answer is yes but it will not be an area that Apple ends up owning with its current crop of computers.  They really are too pricy for most of that market especially outside the US.

So what does all this mean for Apple market share.  Well I actually would argue that it means little.  Apple's share will continue to grow, but it is a luxury brand for people whose computers are very basic tools.  

What is more important than Apple's share of low end computing is the willingness of a signnificant number of people to provide Apple with high margin computer sales.

I long ago said that Apple is a money machine, and in that respect it is very important that laptops and desktop computers remain very profitable for Apple on a single unit basis.  Only with a high profit will Apple stay in the computer business.  I do not know that Apple could survive as an iPod and iPhone only company, but I worry that the possibility is there.  Development of OS X is spread across far fewer systems than Windows products so even with Open Source I suspect OSX is more expensive to develop on a per unit cost.

Now as much I as I hate contributing to Apple's cash horde, I have tried the alternatives and come to the conclusion that living in the Windows or Linux world while possible and even practical is not necessarily the best use of my time.  I still consider all the rebooting that I do with Vista a huge productivity drain.  Then there are the endless security checks.  While I enjoy using Linux, I always have the feeling that I remain just one command away from trashing my whole system.

Takiing all that into consideration I will pay my Apple tariff grudingly, but only because I would rather pay than suffer the alternatives.  Windows 7 might be better, but for some of us "good enough" is just not enough.

So to me Apple's profit on its computers is now more important than taking market share from Vista.

Now that I have agreed to pay, what is it about Macs that makes them worth more than the sum of the costs of their mechanical parts and operating system?

That ends up being a very personal question and likely will generate a lot of different responses.

For me it boils down to just a few things gleaned from 25 years of Mac use.

1. I can count on my Mac to get the job done no matter what it is.
2. My Mac is instantly available to me. There is no waiting for it.
3. There is still enough user interface consistency that I can use almost any application.
4. Things typically just work, hard drives, cameras, mice, printers, etc.
5. Most of the software I need comes with the Mac, and the rest is reasonably priced.

I could go through a list of things that drive me crazy about Windows, but I doubt anyone who has lived in the Windows world for their computing life would have the same view.

While I would love to see Macs less expensive, I would rather pay a few hundred dollars extra and have Apple keep making them.  After all Macs seem to last a long time, and OSX has demonstrated a tendency to get better over time while Windows mostly gets more annoying.

With that settled and the weather warming, it is time for beach walks once again.  Soon it will be boating weather, and the only computer I will care about is my GPS.

Apple gets almost hidden compliment on OSX from Dvorak

As someone who recently flipped the first page of electronic geezerhood, I have followed John Dvorak columns from the days of early technology print to today's world of tweets. 

Mostly I have enjoyed his off the wall commentary which has ranged from deliberately agitating the Mac faithful to making us all scratch our heads when he suggested Apple pull the plug on the iPhone before it was introduced.

If you are unfamiliar with Dvorak, the Wikipedia article is pretty close to the mark.  Certainly Dvorak has not been a member of the Apple choir in recent memory. 

Another fascination of mine started in 2004 when I began using Linux regularly. Since then I have paid attention to popular press articles on Linux.  The year 2004 also happened to the year that I left Apple, and I bought my first Windows XP machine. Perhaps there is a pattern there.

Anyone who has read very many of my over 300 Applepeels will realize that I have come to terms with my need to use Apple products, but that I also use Windows and Linux.  I continue to use Macs in spite of knowing the difference between the shiny public image of Apple and the sometimes questionable internal practices at the 1 Infinite Loop kingdom.

So when I saw the article title, Dvorak Likes LInux, I was destined to read the article.  After briefly wondering how someone labeled a "Tech Guru" by many is just now touting the benefits of a LiveCD, much to my delight, I found this juicy Apple quote hiding in the Linux article.

I'm tired of dealing with Windows malware, patch Tuesday, and the never-ending deterioration of the OS as it clogs up like a drain in a greasy-spoon restaurant. I can't take it anymore.

And there's something else that always bugs me about Windows. I have an iMac that I use at the office, and a few times every month Apple has some patch that it sends out. With few exceptions, each time a patch is installed with the Mac OS, the performance of the machine improves. With Windows, the performance always declines.

I don't think Microsoft has ever sent out a patch that improved the performance of the machine. Ever.

I know Dvorak has used a Mac and said he basically liked it.  In the same article he said he would recommend Macs to people asking his advice on what computers to buy.

This latest comment, "I can't take it anymore," suggests Dvorak might be on the verge of giving up on Windows. Of course after all those years of Apple-baiting, there is not enough crow around that could be eaten to allow Dvorak to switch to a Mac.  In effect he quickly chooses Linux by the saying the following.

If I had a small or mid-size company, I'd probably use only Linux and open-source software, just to stay out of the way of the software police and their onerous "audits"—another abhorrent situation that, to me, is intolerable.

I actually dropped a note to an executive at Apple suggesting that they take advantage of Dvorak's nice compliment on OS X.  I hope they do.

It is nice for OSX to be recognized by almost everyone as the best OS out there.  Of course it takes hardware to run an OS, and Apple does not appear to be relenting in their efforts to build the largest cash horde on the planet.

While I am pleased somewhat with Apple's latest hardware,  I still think they could be more price competitive if they wanted to be.  If Apple wants to send me something to evaluate for six months to a year, I might change my opinion, but I will not hold my breath on that.

As someone who uses Linux, Vista, and Mac OSX Leopard every day, I have to say Mac OSX is the best operating system.  I doubt there is any question on that.   However, when I made my recent visit to Best Buy, they had twenty-seven laptops on display.  Twenty-six of them were priced under $1000, and one was priced at $1399.  It was a MacBook, and there were no Macs priced under $1,000.

Whether or not Apple's recent price trimming will help is something that only consumers can decide. 

I still think Apple is a little pricey, but they could fix it by giving each new Mac a one year guarantee of free upgrades for the operating system and other Apple software along with the first year of a MobileMe that works really well.

Of course I would also like to see world peace, but I will settle for a spring that warms up as quickly as possible.

Clouds are taking over the Crystal Coast as the weekend arrives for the Emerald Isle Saint Patrick's Day Festival.  I guess it will be harder to go driving into the sun.