Wu on Windows 7: "Headline risk" for Apple
Microsoft's (MSFT) new version of Windows is probably still a couple quarters away from official release, but Kaufman Bros. analyst Shaw Wu is already trying to measure its negative impact on Apple (AAPL).
"With the potential release of Windows 7 in either 3Q or 4Q of this year," he writes in a report to clients issued Thursday morning, "we believe we could finally have a Windows operating system worth upgrading to."
It may be hard for Mac users to appreciate how much this matters to IT managers. In the Mac world, an upgrade from say, Tiger to Leopard, is relatively painless as long as your computer has the horsepower to handle the new system.
Not so in the world of Windows. As Wu writes: "From a cost-benefit analysis, it has proven time and time again that it is cheaper for consumers and enterprises to purchase new hardware with the new operating system as opposed to buying the new OS and running on old hardware."
That's why Vista's tepid reception was such bad news for PC makers. Most IT departments stuck with Windows XP, skipped a generation of PC hardware, and are now managing networks of computers that are three to five years old.
"We believe Windows 7 may finally help spur an upgrade cycle," writes Wu.
The major beneficiary of this, he says, will be Hewlett-Packard (HPQ), the world's largest player in the PC market with broad geographical coverage. (HP is not a pure play, he notes; PCs now represent only 30% of its business.)
Dell (DELL) is a purer play. It also benefits if Windows 7 takes off as expected, and Wu estimates that some 80% of its business is PC related.
Which brings us to the largest U.S. manufacturer of non-Windows computers.
"For Apple," Wu writes, "we believe there is potential headline risk more than anything," by which he means that the stock could suffer more from negative press than from any actual technological disadvantage. He notes that Intel Macs can run Windows, citing evidence that many switchers are doing just that. Moreover, he adds, Apple has an ace up its sleeve:
"We believe AAPL will respond with Mac OS X Snow Leopard, its next-generation operating system with even better usability, 64-bit processing, better Intel (INTC) optimization, and better utilization of GPUs (graphics processing units), keeping it a step or two ahead of Windows 7."
Wu is sticking with "buy" recommendations for Apple and HP and a "hold" for Dell.
See also: Windows 7: Trouble on the upgrade path
Wu's analysis is shakey as usual. Microsoft will be expending most of it's Windows 7 energy trying to re-claim market share from XP and lost momentum and good will from Vista. The 1st question is, on the enterprise side, will customers upgrade in mass numbers? With Vista, the answer was a resounding "no." So if the enterprise does adopt Windows 7, this will only bring MS back to where they should have been within a year of Vista's launch.
The second question is, on the consumer side, will the low power desktops and netbooks which are now dominating PC sales be able to run Windows 7 without compromise, as they cannot with Vista? If yes, then, once again, this will only restore MS to the position they should have been in after Vista.
Because of these points, I don't see much changing for Apple after Windows 7 other than the fact that it may not provide quite as much fodder for the "I'm a Mac" campaign.
"Wu clearly doesn’t understand the PC market.
The big switch to Macs and Unix is on, so there is little Microsoft can do to stem this productivity based move to Apple products in the enterprise.
Macs are consistently faster, more stable and far cheaper to maintain. And now that Macs run ALL software made, getting a PC that is limited to Windows isn’t cost effective.
Apple is hard at work on Snow Leopard which from all reports, officially ends the PC OS wars in Apple’s favor. Snow Leopard will make Macs 24% faster than any PC running Windows 7 on the same hardware.
So while Windows 7 will appeal to people that don’t require a powerful PC, Apple machines will continue to dominate usage for hardcore business, developer and creative users"
Honestly, these comments are simply inane. Apple makes great stuff to be sure, but CLEARLY, save the niche verticals of the industry, the IT world runs on Unix (e.g. Solaris, HP UX and the like) and Windows OS's. This is simply a fact. To claim otherwise is simply factually incorrect.
Why is everybody still hating on Windows Vista? It is by far the most secure OS microsoft has ever released. Vista is not just a "pretty OS". Everything about it is secure, from UAC to Windows defender/firewall, and multilayer security architecture. I download a lot of videos/music/games and when I was using Windows Xp on my laptop, I got a virus about every month so I would have to reformat everytime. My current computer running Vista, I have not recovered it since I bought it (1.2 year ago) No viruses for that long. Now THATS a reason to get windows vista. Not only that, shut down time takes only 4 seconds while in xp on the same computer, it takes almost 30 seconds. If your computer cannot handle it vista, throw it away cause ancient computers are useless. All computers these days can handle vista very well.
"Eric, that’s the problem. You had to remove admin access to XP users to fix your support problems."
How about buy your own computer at home to do your freedom computing. At our business we are there to be productive so we control the systems and where users can visit on the web. Go hate the idea, but its company property and they have the right to make the systems run all day every day and that is exactly what we do. Mac, Windows, Linux, they all get locked down and thats how it is. Uptimes are top notch and my company appreicates the productivity gains since we have controlled users from looking at porn all day and downloading junk software that has some kind of payload. I would say get some patience, your setting policy without the knowledge of your ramifications. Good luck.
"Eric, that’s the problem. You had to remove admin access to XP users to fix your support problems."
How about buy your own computer at home to do your freedom computing. At our business we are there to be productive so we control the systems and where users can visit on the web. Go hate the idea, but its company property and they have the right to make the systems run all day every day and that is exactly what we do. Mac, Windows, Linux, they all get locked down and thats how it is. Uptimes are top notch and my company appreicates the productivity gains since we have controlled users from looking at porn all day and downloading junk software that has some kind of payload. I would say get some patience, your setting policy without the knowledge of your ramifications. Good luck.
Eric, that's the problem. You had to remove admin access to XP users to fix your support problems. Denying access to users because of an XP design flaw IS in itself a problem. I have no patience for IT personnel forcing their procedures down people's throats simply because it makes their job easier. That's why I do not allow IT in my company to have any policy-making capabilities. Their customers are the users they support. And if they can't work this way, they're history. The result is a plethora of macs and pc's with support for iPhones and Blackberries in a company of 500 users.
"I’ve learned from working in a large school system over the years that the purpose of Windows PC’s is as a cash cow for tech support, maintenance, service, and training. These people are the “experts” who recommend–surprise–Windows PC”s to hapless customers and taxpayers."
Dude I run a network for a medium company and I am not sure what excess maintenance we have. Windows XP had a design flaw and that was defaulting to administrator level access for users. No UAC to help protect critical files. So I remove admin from everyones user account. Guess what? No problems but hardware issues. which is not very common. Your school system just blew when it came to protecting systems. Vista and 7 change this and you are only elevated to admin if when the UAC pops up. Very stable OS hands down, but its the target and as we have seen Apple and Linux have more vulnerabilities and will become a target. Check with IBM X-force, they will prove what i just said.
I've learned from working in a large school system over the years that the purpose of Windows PC's is as a cash cow for tech support, maintenance, service, and training. These people are the "experts" who recommend–surprise–Windows PC"s to hapless customers and taxpayers. Apple doesn't succeed in every aspect, but they definitely try to innovate and be the best at everything they produce. It's two very different business philosophies, one where Mac users are decisively advantaged. Anyone (not all these phony Mac users who prefer PC's–Lol) who is honesty familiar with both platforms knows what I'm talking about.
Mrketing spin aside, Snow Leopard is a service pack getting rid of the legacy PPC code that's in Slow Leopard and upgrading the kernel for better multithreading with the Intel processors. In that regard, it's not getting a step or two ahead of Windows, it's catching up to Windows. Poor thread protection has been Apple's dirty little secret since the introduction of OSX.
Mrketing spin aside, Snow Leopard is a service pack getting rid of the legacy PPC code that's in Slow Leopard and upgrading the kernel for better multithreading with the Intel processors. In that regard, it's not getting a step or two ahead of Windows, it's catching up to Windows. Poor thread protection has been Apple's dirty little secret since the introduction of OSX.
Windows 7 a Headline Risk for Apple. Where have I heard that before?
Oh, yeah:
Windows Vista a Headline Risk for Apple.
Windows XP a Headline Risk for Apple.
Windows 2000 a Headline Risk for Apple.
Windows ME a Headline Risk for Apple.
Windows 98 a Headline Risk for Apple.
Windows 95 a Headline Risk for Apple.
Windows 3.1 a Headline Risk for Apple.
Windows 2 a Headline Risk for Apple.
Get the picture?
ex ped: Not really. Are you suggesting these are real headlines? A Google search came up blank.
For Something4U
If u spend 3K for browsing and watching a video then there must be something wrong. You can buy a netbook for that.
With regard to the lack of software, say that to a graphic designer or a video editing firm who will certainly spend 3K for a reliable and completely software supported Mac than for a bloated and ancient Windows Vista.
My friend, if Apple is selling at this rate we are either all a bunch of idiots or they do offer something unique.
It's not a monopoly and you are free to buy a PC, they guys at 90% market share on OS are not on Cupertino!
its funny seeing all the MST haters and the Apple elitist in here. Although Wu has some points that do not seem valid, the shear fact that Apple sells a you Hyundi rapped in a Ferrari body. Before I go any further, I own both a new MAC and a New Vista based PC. I hate to rain on all you Apple lovers but 3k for a compuetr that surfs the net and play video is a complete waste… The productivity software is still not there, the graphics software is, but now you get can get the same on a regular PC. not to mention that Adobe, AutoDesk and others have been taking full advantage of the GPU for a number of years now, where has Apple been in all this? The software for Apple is not there, yes a pretty OS, but with out productivity software its useless.
As for MS, Vista is bloated like a 10 day old dead cow and runs like a herd of sloths. If all recall, people made the some comments about Windows95 regarding how much hardware was needed and the requirements. Yes Vista should have been better, but MS shoved it out the door and yes for the guy somewhere in the comments, it was rushed. missing a few components it was suppose to ship with. If you haven't ran Windows7 keep your uneducated comments to yourself, because you look foolish. As for me running Windows7, running it in a VM and works quite well. Even in x64 it is more streamed and uses less resources than Vista. Windows7 is what Vista7 should have been.. and for all you Apple people saying MS is done and Apple is taking over… look at the corporate world, MS dominates.. and as for you Linux lovers saying same.. yes Linux has much stronger, but it is still limited to mostly Web and DB servers.
"I’ve had the opportunity to test Windows 7 and it is truly a great improvement over Vista. Cosmetically it is also a big improvement over XP.
Unfortunately in another respect it is the same old problematic system. Spyware and viruses appear to hold their own in this new product.
The reason many of us left Windows was we were exhausted from this continual battle against all kinds of malware. Absent fundamental changes preventing these issues,it is too late for me – I don’t want to babysit my OS when it should be preventing malware from doing damage to my system and files."
Hate to break it to you, but no OS is gonna prevent a user from clicking "yes" to the UAC or typing a password for the program to gain access to your system. Its called social engineering and it is the most common form of compromise out there today. If you turned off the UAC you have no more security than XP. Keep the UAC on and if it pops up when you are not expecting it to(like installing something) then you need to click "no". Go read the X-force report from IBM's research group and you will see that Windows actually has less vulnerabilities than both linux and Mac. I found the link for you and your friends. And one last few words, STOP GOING TO PORN SITES AND LOOKING FOR FREE PORN AND STOP DOWNLOADING MUSIC FROM LIMEWIRE FOR FREE WITHOUT ANY PROTECTION IN PLACE. FREE IS NOT REALLY FREE. THEY LOVE YOU KIND OF PEOPLE.
www-935.ibm.com/services/us/iss/xforce/trendreports/xforce-2008-annual-report.pdf
Man reading some of these comments is great for a good laugh.
"24% faster than any PC running Windows 7 on the same hardware." Where did you come up with that number? Speed difference between systems is nearly neglible as it is unless you use synthetic benchmarks.
"Check out what Apple introduced on Tuesday, these machines can’t be beat for 3 times the price in the Windows PC market." That's the funniest thing i've read all day.
I'm no Apple hater. In fact I love my iPhone 3G. But I'm also a realist who isn't suckered into the Reality Distortion Field. I know what I want and it's nothing that Jobs thinks it is…where's the Copy and Paste for the iPhone Mr Jobs?
Was Vista what it should have been? No, but it's not nearly the headache people claim it is. I've been a happy Vista user since it's debut and I'm using Windows 7 now as well. It's worlds beyond what Vista was. But that's to be expected.
To prove a point about hardware costs, apple.ca quotes $1200 to upgrade from 4GB to 8GB DDR3 RAM for an iMac…..that is not worth it at all, you can get a Dell with the latest Intel i7 processors and 8GB of DDR3 RAM for $1200….plus add the cost of the iMAC and you are close to $3000. Whereas the same hardware in a PC can be had for around $1800 or so including a seperate monitor.
Apple makes a solid product and everybody knows though some Mac users don't like to admit that Apple computers are over priced for the hardware you get, is the OS worth hundreds of dollars more? People with Macs don't like to admit they encounter problems too because they were drawn in by the idea of Macs not having problems. I like Apple design but it isn't worth hundreds of dollars more.
Apple makes a solid product and everybody knows though some Mac users don't like to admit that Apple computers are over priced for the hardware you get, is the OS worth hundreds of dollars more? People with Macs don't like to admit they encounter problems too because they were drawn in by the idea of Macs not having problems. I like Apple design but it isn't worth hundreds of dollars more.
I am not sure…. would businesses upgrade the PC just to get the prettier UI?
Business applications usually don't need that processing power. They don't use eye candies. For example, why would BofA upgrade the teller's machine? Even 500mhz is fine for most biz applications.
Vista smashed sales records only because Microsoft compels vendors to ship a copy with all new systems. A large fraction of users installed XP instead.
Wu clearly doesn't understand the PC market.
The big switch to Macs and Unix is on, so there is little Microsoft can do to stem this productivity based move to Apple products in the enterprise.
Macs are consistently faster, more stable and far cheaper to maintain. And now that Macs run ALL software made, getting a PC that is limited to Windows isn't cost effective.
Apple is hard at work on Snow Leopard which from all reports, officially ends the PC OS wars in Apple's favor. Snow Leopard will make Macs 24% faster than any PC running Windows 7 on the same hardware.
So while Windows 7 will appeal to people that don't require a powerful PC, Apple machines will continue to dominate usage for hardcore business, developer and creative users.
Check out what Apple introduced on Tuesday, these machines can't be beat for 3 times the price in the Windows PC market.
—
I've had the opportunity to test Windows 7 and it is truly a great improvement over Vista. Cosmetically it is also a big improvement over XP.
Unfortunately in another respect it is the same old problematic system. Spyware and viruses appear to hold their own in this new product.
The reason many of us left Windows was we were exhausted from this continual battle against all kinds of malware. Absent fundamental changes preventing these issues,it is too late for me – I don't want to babysit my OS when it should be preventing malware from doing damage to my system and files.
I've had the opportunity to test Windows 7 and it is truly a great improvement over Vista. Cosmetically it is also a big improvement over XP.
Unfortunately in another respect it is the same old problematic system. Spyware and viruses appear to hold their own in this new product.
The reason many of us left Windows was we were exhausted from this continual battle against all kinds of malware. Absent fundamental changes preventing these issues,it is too late for me – I don't want to babysit my OS when it should be preventing malware from doing damage to my system and files.
Yep, I am running windows 7 on an old dell laptop and it runs better than XP ever did. The resource footprint is much lower and a more simplistic GUI in some parts that confused Vista users. Stability is great, even better than XP, but about the same as Vista as I never have stability issue with it. Vista is a good operating system if you are looking for stability, but performance is lacking a little in some areas, but mostly good all around. I have talked to many about 7 and haven't had any negative thoughts on it besides something cosmetic. I will be looking to upgrade my systems here once it is released. More security and same performance as XP, so its kind of a no brainer.
I didn't see the "rushed vista" comment HAHAHA
rainbow brain ( roy g biv is an acronym for the colors of the rainbow) must be chewing on some blotter if he believes what he wrote ( must work for softie in the disinformation dep.)
Peter Smith says : "The beta of Windows 7 is proving that it is a mere cosmetic improvement to Vista and not in any respect the true upgrade that Longhorn (the beta of Vista) was originally planned to be."
Obviously you have not used the product, and are just bashing to bash. Windows 7 is a significant improvement, and what Vista should have been. With huge speed improvements, a 'lighter' feel, and a lot more ease of use, Windows 7 is a marked improvement over the sluggish, and bloated Vista. Yes MSFT dropped the ball with Vista; the have a great chance to pick it back up with Windows 7.
After using the beta, there is no way I could go back to Vista, and will gladly buy Windows 7 when it comes out.
(From my desktop, running Windows 7.)
Peter Smith says : "The beta of Windows 7 is proving that it is a mere cosmetic improvement to Vista and not in any respect the true upgrade that Longhorn (the beta of Vista) was originally planned to be."
Obviously you have not used the product, and are just bashing to bash. Windows 7 is a significant improvement, and what Vista should have been. With huge speed improvements, a 'lighter' feel, and a lot more ease of use, Windows 7 is a marked improvement over the sluggish, and bloated Vista. Yes MSFT dropped the ball with Vista; the have a great chance to pick it back up with Windows 7.
After using the beta, there is no way I could go back to Vista, and will gladly buy Windows 7 when it comes out.
(From my desktop, running Windows 7.)
WU you FOO,
Can you get anything right Too?
Your no upgrades till June at the earliest shows your knowledge.
Windows 7 – A Headline risk for Apple??? Are you really as much an idiot as this article shows you to be???
Since when is Apple at risk from anything Microsoft- let alone Windows???
Only risk to ANYONE and EVERYONE is actually upgrading to this yet again problematic and compromising version of a sad run down and obsolete os.
You'd think that the IT costs of mopping up the problems it creates is enough to stop any corporate upgrading and walk away from Windows foever…
The headline risk to Apple is minimal.
The beta of Windows 7 is proving that it is a mere cosmetic improvement to Vista and not in any respect the true upgrade that Longhorn (the beta of Vista) was originally planned to be.
Unable to get a real upgrade to market, Microsoft is, again, going for marketing over substance and pushing out WinNT version 7. Unfortunately for it, its customer base is now wise to this strategy.
Apple's Snow Leopard, in making a dramatic shift in power by leveraging the GPU, will make a big splash when it arrives, driving strong demand for Apple's quality hardware. Everyone from gamers to number crunchers will be salivating for a new Mac running Snow Leopard later this summer.
Windows 7 will be one more nail for Redmond. The tide has turned for the foreseeable future.
consumers were willing to pay extra for a "down upgrade" to xp ( extra problems) so bragging about the 450 million "sales" loses some luster from the "spin"
Microsoft's track record of tacking on poorly designed icons on lousy code will continue. until they as apple did ask themselves "what is this person most likely to want to do here" and configure the system to do exactly that ( with out annoying sales pitches weird warnings required updates that attempt to sell you everything under the sun windows will be what it always has been a public toilet of hucksters trying to exploit the unwary. Someday Microsoft will understand that i buy a computer for the benefit of my job not theirs on that day Apple might need to worry till then you can pry my cold dead fingers off my mac.
"they rushed Vista (w/o the Win 7 features)"
Really ? They rushed Vista ? I thought it was several years late to begin with.. Also, do you understand who caused the security crisis you're reffering to ? Maybe "the browser as part of the OS" had something to do with that ? Express anyone ?
The "beta" of Windows 7 has gotten high approval for it's speed and simplicity, but the long delay before release will give Microsoft bureaucrats plenty of time to justify their employment by making their contribution in bloatware, making it slower and buggier, just like Vista. Apple has nothing to worry about.
Poor Microsoft has done so poorly with Vista. Only 450 million will be sold by the end of 2009. Yes, it is somewhat weak, but it is smashing all sales records. By the way, Windows 7 is built completely on the framework of Vista. It is because all of the drivers were upgraded for Vista, that Win 7 is made possible. Also, they rushed Vista (w/o the Win 7 features) because at the time there was a security crisis in the computer world akin to the current financial crisis. Microsoft had to get out a security-oriented system fast in order to prevent the collapse of the Internet and PCs through viruses. Hence, Vista was "bad." In actuality, we should be grateful to Microsoft for bringing out Vista as it did considering circumstance – and stemmed a lurking disaster, even if the interface was lacking in improvement (and inferior to Mac). In essence, what I am saying is Win 7 is Vista 2.0.
ex ped: Perhaps, Roy. But Wu's point that most people skipped the Vista upgrade is borne out by Net Applications' data, which shows more than 63% of the computers on the Web today running XP and less than 23% running Vista. (Of course, the Mac OS has less than a 10% slice of this pie.)
I would have to disagree with Wu on the effect Windows 7 will have in "spurring an upgrade cycle". In the present economic situation companies are cutting back on spending across the board including large scale hardware refresh "cycles". Many companies are starting to realize that the need for hardware "upgrades" every 3 years does not have a high ROI as compared to servicing and replacing the systems that they own. I do not see a large scale run on system refreshes after Windows 7 is released. Companies are just starting to look at "beta" versions of Windows 7 but true testing and adoption will take 6-12 months, minimum, after the "final" release from MSFT. Even if a company starts to utilize Windows 7 on newer machines I do not see widespread refreshes but systematic replacements based off of need for job requirement based upgrades or hardware failure with non failure based systems being "recycled" within the company.
The article is simply a space-filler without any useful content, and worse, does not show Wu's personal holdings of Apple, HP and Dell.
ex ped: Sorry you feel that way about the post's calorie count, Don. As for Wu, he hasn't disclosed his personal holdings (nor, do I believe, is he required to), but I can quote from his and Kauffman Bros.' disclaimers:
I, Shaw Wu, hereby certify that the views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers referred to in this document. Furthermore, no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendation or views expressed in this report.
Kaufman Bros., L.P. makes a market in AAPL.
Kaufman Bros., L.P. makes a market in DELL.
Wu's analysis is shakey as usual. Microsoft will be expending most of it's Windows 7 energy trying to re-claim market share from XP and lost momentum and good will from Vista. The 1st question is, on the enterprise side, will customers upgrade in mass numbers? With Vista, the answer was a resounding "no." So if the enterprise does adopt Windows 7, this will only bring MS back to where they should have been within a year of Vista's launch.
The second question is, on the consumer side, will the low power desktops and netbooks which are now dominating PC sales be able to run Windows 7 without compromise, as they cannot with Vista? If yes, then, once again, this will only restore MS to the position they should have been in after Vista.
Because of these points, I don't see much changing for Apple after Windows 7 other than the fact that it may not provide quite as much fodder for the "I'm a Mac" campaign.