Apple's marketshare is irrevalent


Cedric pointed me towards an article that responds to an interview given by Steve Jobs. Why you might ask? Because Cedric loves Microsoft and since I switched to a Mac he continually sends me this stuff, although he is not nearly as infantile as Cameron.

To make a long story short, Apple's "marketshare", i.e. the amount of revenue it does relative to PC vendors is small, only 1.88% if you believe the IDC, which for the sake of argument I'll believe is correct. Basically, I don't think that it matters. Mac users need only 3 things to survive with their superior hardware and software. They are Apple's solvency (if they wish to continue to upgrade), a healthy software ecosystem, and interoperability. All of these things are currently true, and from what I see happening with developers, will continue to be true into the future for as long as my machines will be useful at the least. Let's look at each of these factors:

1) Apple's Solvency

Currently Apple is trading at a P/E ratio of 60. That is extremely high. That type of ratio is reserved for those stocks that people believe may have extremely high growth in the future. If you look at other companies in the hardware+software space you can compare:

Dell: 36.09
HP: 30.52
IBM: 22.56
Intel: 37.35

Other companies, like Sun, don't have earnings for the most recent quarter so you can't even speculate on them. Anyway, from a stock market point of view, they seem to be doing alright. Combining this with their 4.8B in cash and we can presume that they are not going out of business for the forceable future.

2) Healthy software ecosystem

This is very important. Developers have to be writing programs that can run on Apple hardware so that you can use the computer. People won't buy computers with no software. Apple here has an advantage because some of the best programs in the world come bundled on the system and are written by Apple or were acquired by Apple to ensure their further development. It is conceivable that a consumer that buys an Apple computer never needs to buy any software at all. On the other hand, the more advanced users, that are switching to the Mac, want more than Apple can give on their own. Fortunately, Mac OS X is based on Unix so you basically get all of the software ever written for Linux as well. This is no exaggeration. It ships with X11 if you want to run a crummy UI on your machine and you can even run KDE and Gnome based apps with that. Who would do this, I don't know, as I somewhat consider running these applications the equivalent of running VirtualPC and Windows apps on your Mac. Mostly because they are so inferior to the software that runs natively. Additionally the Mac has one of the best implementations of the Swing API so Java programs that run on the Mac run a lot like native applications and I use several as part of my normal suite of programs.
In addition to these sources of applications there is and always has been a large number of purely Mac developers that build software. When you buy a Mac the development tools needed to write real applications comes included with the operating system. Everything from a project builder (Xcode) to the best interface designer (Interface Builder). As anyone that ever developer for the NeXT, these tools are top notch and you get them for free.

3) Interoperability

No one wants to be the guy with the computer that doesn't work with other peoples computers. There is sufficient out of the box interoperability with Windows applications and servers that you don't need to worry about this. Everything from browsing the network neighborhood, to printing to a Windows printer, to editing Word documents, to domain logon, even the base Mail application has Exchange support is built in. More likely than not a Mac will be more interoperable than a random Windows box because of the number of different operating systems that may be running on the Windows box (older Windows OS's have varying support for those features). About the only thing that your Mac won't run are the viruses that flood everyones email box.

I don't even want to get into the fact that a Mac is just better. That argument is subjective and I'm sure there are those people that actually prefer a Windows box given the choice. All I am saying is that attacking Apple for low market share numbers is just not interesting. It might have been a problem when they were running the much more proprietary Mac OS 9, but now that they have embraced interoperability and cross-platform goodness they are basically just another PC vendor with superior hardware and software.

Posted: Sun - January 25, 2004 at 01:02 PM           |

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