How Apple is gaining on Microsoft
Both companies beat expectations last week, but only one of them was growing
Click to enlarge. Source: Company reports, Oct. 2009.
A year ago we ran a bar graph similar to the one at right. It showed that Apple (AAPL), despite the Mac's tiny market share compared with Microsoft (MSFT) Windows, was gaining on the software giant. The main reason: revenue pouring in from the iPhone but hidden as deferred earnings in Apple's balance sheet. (That chart is posted below the fold.)
Last week Apple and Microsoft once again reported quarterly earnings — and enjoyed nice pops on the stock market. But their growth rates turn out to be very different.
This quarter, deferred iPhone revenue isn't as big a deal for Apple as it was last year (non-GAAP earnings actually grew more slowly than GAAP; see here for why). Ironically, it was Microsoft that had to use deferred revenue from Windows 7 to show any growth at all. Otherwise, Microsoft's revenue for the third quarter was down 14% year over year and its earnings down 17%.
Apple's revenue, meanwhile, grew 25% and its income 46.6%.
Apple's war chest, in terms of cash and cash equivalents, is larger than Microsoft's, $34 billion to $33 billion, taking long-term debt into account (Apple has none).
And as far as market share, that depends what market you're looking at.
The bar graph above shows the Mac's share of the U.S. personal computer market, which has inched up to 9.4%, according to IDC.
Meanwhile, the iPhone's share of the worldwide smartphone market has grown from 2.8% to 13.3%, according to Gartner, while Windows Mobile has been relegated to "Others." And the iPod continues to command roughly 70% of the MP3 player market; Zune's share hovers around 2%.
The consensus on Wall Street is that Microsoft has turned a corner, and both Apple and Microsoft rallied last week. But over the past year — since we last did this exercise — Apple's shares have grown four times faster.
Below, as promised, last year's version of the bar chart:
Date: Oct. 26, 2008
Click on the chart to see last year's post.
Thanks to reader Mark Taylor for the suggestion.
[Follow Philip Elmer-DeWitt on Twitter @philiped]
"…smell the fear of aging IT guys.."
And gals Ron, women work IT too you know. Also, we're not all old. 
"The days of building your own crappy box full of jumpers just to save a couple bucks are in the rearview mirror."
Is that so? Then why is newegg still doing good business? Plenty of people prefer to build their own computers, myself being one of them.
"People just want stuff that works."
Yes, since before you were born. What's your point though? Someone should tell the people that no matter what, something WILL go wrong with their technological "stuff".
"Mac vs PC won't even be a conversation 5 years from now. No one will care."
I call shenanigans on this. This debate will live on as long as both Apple and Microsoft exist. Sad, but true.
Fun Fact: My college just started supporting Macs this year.
They apparently break quite often.
There's always a small stack of them at the Help Desk getting worked on.
I worked with Macs for 2 of my 4 years in college, OS9 and OSX. Both, to me, were nothing special. It was still prone to locking up at the worst of times.
I wouldn't mind trying a decent Mac out, but I can't bring myself to pay such a large amount of money for a machine that won't really perform where I want it to.
I do more than just web browsing and checking email.
I enjoy gaming, and I enjoy photo editing and graphic arts in general.
Sure I can pay $3000 or more for a current Mac Pro, but for the same performance I could probably build or even purchase a cheaper computer.
@ Cliff
"…I simply don't know a single PC user that can say they have that kind of equipment track record for 5 straight years."
I've had 3 laptops and 3 desktops in the past 7 years, each time I had Windows. Zero problems. I plan on getting 7 this weekend.
But hey it really doesn't matter what anyone here says, get whatever you want, right?
Pasted from the apple support forums.
Using Mac OS X Leopard
564,914 views
Topics/Msgs: 41,106 / 208,961
And for Joshua in Niagara Falls…
Consider yourself lucky among your DVD burning brethren…
"Cannot Burn DVDs even with Snow Leopard": 4,207 views.
I need not post anything from a PC vendor's site as we already know how highly publicized the issues are.
Point being, were you expecting to see few if any posts at discussions.apple dot com?, some topics have over half a million views (likely over time)
As a repair tech for Apple, I have seen equally messed up machines from both camps. If you have a machine that hasn't acted up in 5 years, you're simply not using your machine the way a vast majority of folks do. THEY ALL BREAK, THEY ALL CRASH, THEY ALL NEED A RE-INSTALL at some point.
When I need a computer, I look for something with Firefox…oops, did I open a can of worms here?
Lets not get started on rewritten OS/software stolen from… The entire idea of "user-friendly" Windows OS is based on stolen/rewritten code from Apple, from back with Mac and Apple were two different products.
It would be nice to write a hack to get in to those pesky iPhones… naa don't bother I have nothing you want on my iPhone. 
I am tired of people who have never used a mac voice their opinion and likewise the other way around.
I have 2 macs and 2 pcs. Actually that would be 2 windows computers because they are all "personal computers".
I have upgraded all 4 of them with more ram, better video cards, new hard drives, wireless cards, ect.. All 4 of them upgrade the same way. Turn it off, plug it in, turn it on, install driver.
All 4 of them have the Adobe Suite, MS Office, browsers, email, chat, development software, and games.
When you buy a mac, you are buying an upgraded windows computer. I do wish mac would offer a more stripped down model that could compete in price with the stripped down $400 windows computer, but what happens when you buy that cheap stripped down computer..? You spend the money upgrading it, making the whole issue null if you would have just spent the money on a pre-upgraded windows computer or a floor model mac. Same price, same features.
That really just virus susceptibility and ease of use.
I have to agree with “Ron, PHX, AZ”. Is the argument really that there in not one hacker out there in the world that would love to squash this argument by implementing the first viral mac takedown? Seems like a stretch to me. “Nobody writes a mac virus because there just isn’t as many” doesn’t seem to compare with “Ha ha, look, mac can get viruses too..”
This leaves the last argument of ease-of-use. Only time will tell with windows7, but if you are to compare mainstream vista & XP with Mac OSX, there is no comparison. The mac takes care of itself where you can find yourself searching forever for that one stupid driver that you need to re-install because the mouse I just bought makes my printer not work anymore.
After 23 years in PC's, I converted from XP to a Mac Pro last fall (my Dell XPS was on its 4th motherboard, third I/O panel and 3rd hard drive). I do web browsing, photo editing, email, nothing fancy but I wish I had converted to a Mac many years ago. I run XP SP3 in a virtual environment only for Quicken and wish I didn't have to do even that. I'll never go back, even if Windows copies Mac's "look and feel." PC's are crap.
"The only reason why there is more news about viruses on Microsoft computers is because there is over %80 who use them. Why would someone create malware for the few?"
This is an incorrect and tired statement.
OK, if Apache web server runs on 90% o nthe internet, then why is it more used and sercure than ISS? Just because your product is almost an ubiquitous computing platform doesn't have ANYTHING to do with platform/program security.
Any other ideas?
Every one here talks about how bad PCs are and how Macs are the greatest things on the planet. Well I ask you why does Macs now all of a sudden are using PC hardware and software fudging it over and calling it a "Mac", all Macs are PCs now! Macs lost their meaning ever since they stopped using Motorola\IBM PowerPC processors and OS9. And as far as the software is concerned it is all Linux based, a stolen poorly written copy of BSD Linux. Which Apple was in a lawsuit over.
Apple Macintosh the new PC here now!! for 2x the price!!
Apple I give it to you GOOD MARKETING!!
So all you new Mac users enjoy your new PC..
Macs and PCs are different tools for different situations. If you are on a corporate network exchanging/editing text/data files with trained tech designing functionality and support, a PC will give you the best bang for the buck.
A home computer for basic web browsing, where family photos are downloaded, school homework project are and Christmas cards are created (self supported) – cost wise between hardware, software and technical time/frustrations, the Mac wins hands down.
No need to address gamers, you'll pay anything for that slight advantage.
i usually never comment on these types of things because this Mac vs PC thing is getting so outta hand. whenever i see these posts, (and i think i may speak for most mac users)…i kind of sigh, and say these people really dont get how apple works. then i move to other news. im a tech kinda guy, i love my macs, i dont use HP or any others, but i do use windows, on my mac, sometimes, if i have to.
the point is, the position apple has worked hard to be in right now, is right where everyone wants to be. even microsoft.
Regarding the "Mac users are dumb" argument: I was the last DOS holdout, believing that anyone that needed a GUI was an idiot, dumbing down computers for the rest of us. Eventually I went to Windows 3 because DOS programs were disappearing. Fast forward to 2004, when I bought a Macbook running OSX. It immediately became apparent that Apple has the best integration of hardware and software. If you intend to use a computer as a productivity platform rather than a hobby, you will find the Mac to be far superior. Take it from a die-hard DOS fan.
@joshua from Niagra Falls New York: Mac Pro=$1200, $1700, or $2500 HP laptop that you bought…betcha it was less than a grand…matter of fact, probably under 800 bucks…outdated gpu on mac pros now, i can buy a better cpu for 1 grand vs the 2500 mac.
All I'll say is this: I'm a graphic designer & Mac user and have never once had a hardware or software problem in over 5 years of owning a Mac. If I had, I'd have switched back, no problem or qualms about it. I'm not part of the "Apple cult", nor do I think PC users are stupid or wrong, but I simply don't know a single PC user that can say they have that kind of equipment track record for 5 straight years.
I'm also a former Apple stockholder. I say 'former' because I bought my stock a year and a half ago, and just sold it for a 40% profit, and used part of the profit for, you guessed it, a new iMac.
So, like I said, I make a strong effort to be objective, but the computers themselves have always proven reliable, and just for parking a little money with Apple for a while, I essentially got a free computer out of it. So in the end, for me, it's not an issue of taking sides or being some techie snob. For me, as a user and investor, it's a simple case of reliable computer + profitable company = satisfied customer. Period.
My goodness, how these discussions bring out the incoherent, the jerky of knee and the ignorant. There are more than a few well-reasoned comments, too, more than the average similar discussion on other fora.
Whether you buy a Mac, a Windows PC or a PC running GNU/Linux/BSD depends on (1) what you need to do with it and (2) your values about security, open standards, price, etc. As long as the computer does what you need it to do, there is no wrong decision. If all you need to do is surf the Web and check e-mails, then any one of these systems would work fine.
I like simplicity and a reasonable assurance of trouble-free operation, so I use a Mac. I bought my first Mac in 1986 and am now on my 4th Mac (which is four years old).
I have many friends who use Windows; their computers work fine and get the jobs done they need to do.
I've got a few friends who use GNU/Linux. They've got a harder path to follow due to hardware compatibility issues but this has improved exponentially in the past few years. Their computers boot within seconds and are highly reliable.
There is no clear "winner" in the computer sweepstakes. It just depends whether the computer does what you need it to do.
"Dan the Man" claimed that Macs don't get viruses because OS X has a microkernel. One third of his statement is true, but the majority is false.
1) "Macs don't get viruses". I'll give this a "true". Macs, like all other Unix systems, don't have any viruses "in the wild". That is, there have been proofs of concept, but nothing that actually spread.
2) "Macs don't get viruses because OS X has a microkernel architecture." This is false. A microkernel prevents device drivers from crashing the entire system by running them as user-space processes. This might help prevent malicious code (such as a virus) from being executed as the kernel (which has full system privileges), but that's not the intent of a microkernel and it doesn't do a very good job of it. If you want a system with isolated layers of security, what you want is not Mach, but NSA's SELinux. (Of course, if you try SELinux, you may find that security is inversely proportional to usability.)
3. "Mac OS X uses a microkernel". This statement is blatantly false. Apple took parts of Mach and put them into the FreeBSD monolithic kernel to make Darwin. In particular, device drivers are now within the kernel and have no better protection from viruses than any other system. The most that could be said for the Darwin kernel is that it is a "hybrid kernel", in that it is monolithic, but looks kind of microkernel-esque. Of course, Windows (ever since NT) also has a "hybrid kernel", and it definitely has viruses.
But, if OS X doesn't have a microkernel, it brings us back to the original poster's question: why do Macs not have viruses. My theory is that there is no homogeneous community for a virus to incubate in. Macs, are, as a rule, integrated with other systems (Windows and GNU/Linux) which would act as a buffer. Since a virus written for one operating system can't infect a different operating system, it is much safer running a heterogeneous workplace. (Due to CNNMoney's inability to post images in comments, you will have imagine here Macs, Windows, and GNU/Linux happily living together, sharing data freely without prophylactics. The sun shines. Rabbits are playing and birds singing.)
Ah, right on cue. Told you I could smell it. I say "buy the best you can afford", PC or Mac. Run Windows or OS X. Platform agnosticism. And this starts a tirade against designers.
As someone who ran a software dev & design agency specializing in enterprise software for biotech and pharma, I can tell you that Macs excel in any Enterprise that is *NIX savvy. All of our geeks (enterprise coders, webdevs, etc) switched to OS X and none of them want to go back. No iPhone app writing. Just web-based business software. And huge enterprises like Genentech do just fine running all on Macs. That said, all of it can be done on Windows too. It's just personal preference for hardware and dev environment. The company makes really good money so we always bought the best stuff we could – Apple workstations and Apple, Sun and Dell servers, running whatever OS we needed at the time.
As for the old argument that no one writes viruses/worms/malware for Macs because – "why bother?" Seriously, how ignorant. That barely held water 12 years ago. It's just plain stupid now. Are you seriously going to tell me that there is not at least one angry little bastard out there who would want to target all the iPods/iPhones and millions of "stupid mac users" out there? Not even one?? I mean how best to get attention? Write yet another Windows threat that people treat like common pests now? Or write the first widespread, effective OS X exploit that garners headlines in IT and popular media? But people still pretend that no one who writes malware even knows what a Mac is. They've never heard of the iPod or that pesky phone either. They must not watch to markets either. So they haven't noticed the market cap of the media darling. Why write malware to attack one of the largest brands in the world? No one will notice that.
Let's retire that old fallacy and move on.
To G in San Diego This might help you why mac's don't get Viruses
While the target "audience" is smaller for Apple than Windows, it is growing every year. Don't worry about that increasing the risk of viruses on Apples, though.
Consider the arichtecture of the Apple OS, or more specifically, Darwin. But first, look at Windows (and Linux as well), which are a monolithic-based operating system. Monolithic refers to the kernel implementation, and basically means that the system if very layered.
Linux is a more secure implementation then Windows, simplifying system calls are at the top of the key differences (i.e. Linux is a UNIX OS, Windows is not). Windows, however, runs a lot more right inside the kernel. While this may increase speed in some aspects, it puts the system at a high risk: DLLs (e.g. used for device drivers) are installed into the kernel; the Windows registry can easily be modified, which is also inside the kernel. You can see how this is a security issue!
Now Darwin, which is also based of UNIX (i.e. FreeBSD) does not run on a monolithic kernel. It actually uses a microkernel (based on the Mach3 microkernel).
A microkernel is minimal in layers, and you can't just go and and start running code in the kernel; only low-level objects are allowed here (virtual memory, process scheduling…). While these may reduce speed, it greatly increases stability and security.
Microkernel systems are often used in military systems.
Simply put, it is easy to crash Windows (despite their high efforts on increased Security) compared to crashing a Mac.
I use both PC and mac. Surfing the net I prefer mac because of all the crap out there. Ive own a imac for three years and not one time have I had a problem with viruses or anything like that. I use my PC for my business like payroll and billing. I think Apple makes a good product.
There are a lot of stupid people leaving comments here who think their smart anyone who thinks that a pc is as good as a mac simply doesn't have a clue i have both a hp laptop and a macbook pro the macbook is better at everything and for those who said that macs r 4 people who don't know how to use their computer are morons ms is plagued with all kind of defects my mac has never crashed my pc does so on a reg basis as for those who think there is more software for pc r right that b/c mac come with almost all the software u will ever need built in pc have nothing that can size up with ilife and no 3rd party software is developed to compete with it b/c the apple software is great unlike the disaster that r windows programs like photo gallery iphoto blows it away in ever way and iworks is a very good office suite that in the future will compete with office and has already surpassed it in terms of ease of use and presentation windows movie maker and dvd maker r also deeply flawed and has a lot of failed burns which has cost me a ton of discs the macbook is a complete product windows is not if u want a program like ical u have to buy outlook 10 which is poorly reviewed so when it comes to price don't forget to add all the 3rd party software u have to buy for windows to have all of the features that come standard on a mac
@G from San Diego
more like 90% according to the graph up there.
Oh and let me clear something up… "Photoshop" could be most design app that's out there (including audio apps)… developers aren't naive…they're developing for 90% market share.
Apple targets less tech savy people.
Their commercial is also misleading about their virus free computers.
The only reason why there is more news about viruses on Microsoft computers is because there is over %80 who use them. Why would someone create malware for the few?
"Fear of aging IT guys…"
Right…
fearing that one day I'll walk into the data center of a major corporation (or any hospital in the country) only to hear the sweet buzzing coming from white servers and mainframes with glowing single bitten apples…or every vendor will suddenly port their software for use on OSX or OSXI? That's not the smell of fear…it's the smell of my lunch.
Graphic artists… take a look around you, there are some major design houses out there that only have Macs for the "just in case someone needs one" scenario. Unless apple buys Adobe, there will always be plenty of software for Windows. (remember what they did to Logic Audio for Windows users?..heck I probably would've done the same thing if I were top brass)
The "I'm a designer so I need a Mac" thing is nothing more than a myth…especially if you work alone. This statement wants you to believe that Photoshop for Windows is completely useless compared to its Apple counterpart.
I do like that Apple doesn't have to resort to filling their factory builds with tonnes of trial software the way Dell and HP do, but a fresh build on any PC makes it every bit as reliable as you would need it to be. ** Note to Dell and others ** stop adding so much bloatware trial apps to your oem installs of windows!
Gain some market share and tell me if the script kiddies don't start attacking Macs. If you were gearing up for a bot net DOS attack…would you really do it using such a small chunk of the computers out there? NO! you want Windows machines since there's millions and millions of them out there.
Is anyone tired of this yet?
We get it… software built for specific hardware is stable. I'm also guessing Apple doesn't have a tech support line, repair depots, or help functions in their software. Probably no warranties either since no one would ever need it.
Be careful what you wish for (recruiting windows users to see the light) We've all seen the guy at the grocery store take that one apple from the pile and they call come falling down.
@ George Trout
" If Mac is so good, why won't it's great and cheap OS run on a PC–both use Intel chips? Windows has be to able to run on every type of PC, no matter who the manufacturer is or if you build a custom system yourself. If you have half a brain, you can select the video card, hard drives, etc. yourself."
Well being a stupid Mac user I can't possibly have grasped what has been going on in the Hackintosh community. The Mac OS can run on any pc and many people have made it so.
As an Apple shareholder I would prefer if people actually bought and paid for the hardware as well. But you are talking from a very blinkered point of view if you think it can't be done.
I find it funny that people like you are probably arguing here that the Mac has no software and therefore can't possibly match up to your PC and yet you probably are going to other sites to say that the 85,000 apps on the iPhone are not important.
For your information my Mac runs all the apps for the Macintosh and all the software written for the PC – I don't see how that is a "limitation".
@ George
"The article should also have mentioned Linux, which has progressed to the point that ordinary users can use it easily for ordinary tasks. In the battle between Microsoft and Apple, Linux wins."
You like many others here seem to think that this is a fortune blog, indeed it is but one which is specifically about Macs. PED writes a daily column about Macs. If Linux were important then Fortune would have a Linux 2.0 column.
It seems a bit simple to state that Apple's cash stockpile is more the Microsoft.
Not sure that really tells me anything about how the company is returning value back to the shareholders…
The sheer amount of idiocy and misinformation in these comments makes me want to take a hiatus from the web.
You can practically smell the fear of aging IT guys as their job security is eroded by the rise of better operating systems. Win7 promises (we'll see) to be what Vista should have been. And OS X just keeps getting more refined, from a great starting point.
The days of building your own crappy box full of jumpers just to save a couple bucks are in the rearview mirror. Computers are no longer a novelty. People just want stuff that works. More and more people are platform agnostic, due largely to the fact that most people spend most of their time in a web browser – and Microsoft has given up on trying to make their own version of the internet. They threw in the towel after Gates had to rewrite his book to remove his earlier dismissal of the internet. I still have the First Edition. It is LOL.
So… just buy the best machine you can afford. You can get a cheap decent PC that will last a couple years for a few hundred bucks. Repeat. Or you can try the Mac experience, and still run Windows natively as needed, for less than $600. Just use your existing monitor, keyboard, mouse and other peripherals.
Mac vs PC won't even be a conversation 5 years from now. No one will care.
I am a long-time Windows only user and until more recently a Mac opponent. My wife is a graphic designer and has been pushing to get a Mac laptop for some time now in order to work from home. Long story short I finally gave in and bought a 17" Macbook Pro (from Gainsaiver.com lightly used…and perfect). After only 2 weeks of ownership I can proudly say "I'm a Mac" now. Rather than wondering whether it will boot up, load programs properly, etc. as I did (and still do with my year old PC desktop) it just works.
That's the difference between a Mac and a PC: instead of spending time making it work, a Mac just works. And I'm not an idiot who doesn't know how to use a PC. I'm just a person who got sick of buying PC's to have them stop working properly 3 months later.
And to the comment about PC's being so much cheaper via Dell & NewEgg.com: there's a reason they are cheaper…it's because they are inferior. You get what you pay for.
You foolish, foolish people. Microsoft wins when Apple sells computers. Who has the number one selling productivity software for the Apple? It's microsoft office, hands down. has less competition with those using Apple computers than they have with those running Microsoft's operating system.
I been a big fan of Windows since 3.11 and I can tell everyone out there that you can start to enjoy life a little more when you switch to Mac.
Try do a disk cleanup on Windows XP and Vista by clearing those old roll-back images on your drive. You be surprise how much disk space is washed. It you don't do it, your hard drive will soon run out of virtual memory to function properly. If you are still figuring out what was that I'm writing, then it is time to switch to Mac and enjoy life a little more.
I am a software developer and part time student, as well as a lifelong gamer. I have owned over 10 PCs (including laptops) all running windows of some generation and 2 Macs. In 20+ years of using computers I have only found one single thing that a Mac does better: develop iPhone apps. Why? Because Apple won't allow app development on a windows machine.
As it has been said, Macs are great for the 'out of the box' user who just wants to use Microsoft Office (ironic that these are the same people bashing Microsoft), browse the web, check email, or chat on some kind of IM. Windows allows flexibility, and freedom to choose your own hardware.
If I'm on a limited budget say 1,000 dollars, and I need a new computer. I don't have a whole lot of options for a Mac, and once I purchase my Mac for under 1,000 dollars it becomes a huge pain to upgrade any part of it. Now walk over to Dell.com or NewEgg.com (to build your own) and you have millions of combinations of PCs you can build. If I'm on a limited budget I can play the triage game and decide what I need now, and what I can upgrade later. If I choose to limit myself to 2 gigs of RAM up front upgrading RAM later is as easy as a) unplug computer b) take RAM out of box c) open computer d) plug RAM in e) turn on computer.
This is one small part of the picture, but the main gist of what I'm saying is that part of being successful in todays world is offering choice. Apple doesn't offer a whole lot of choice. Apple will capture the market share of people who are happy to sit on the same computer with the same hardware, same configuration, same look and feel, same crappy everything that comes with a Mac for years at a time and then upgrade to something very similar with modern day hardware. Windows will always have a majority of the market share because a majority of the market share likes choice.
Linux is the only thing that could one day actually compete with Apple. In my opinion OSX and Windows 7 shouldn't really be placed in the same category as they don't target the same group of people (many will disagree here). What's happening right now is simply a shift of people who belong with Mac, and a shift of people who belong with Windows.
From my chair, Mac is for people that are not smart enough to use a PC. Of course Mac computers work very well. One can't buy parts to fix a Mac as everything is controlled by Mac. If Mac is so good, why won't it's great and cheap OS run on a PC–both use Intel chips? Windows has be to able to run on every type of PC, no matter who the manufacturer is or if you build a custom system yourself. If you have half a brain, you can select the video card, hard drives, etc. yourself. Not so for the Mac. If I had the funds, I would probably buy a Pro Mac myself just for digital photography–almost. So many programs only run on Windows. And what does the argument accomplish anyway? Most people buy home computers that are the same as the one's they use at work. I've heard this arguments over and over and over. Mac owners think anyone who does not have a Mac is a fool. PC owners could care less and think only a fool would continue this never-ending "my dad can beat up your dad" crap that should have ended in elementary school. I could care less what computer you own. I like my custom-built PC and it does everything I want it to do. It has never crashed, and all my programs work perfectly. Get a life and stop holding your breath and stamping your little feet because everyone doesn't use what you have.
I am using my cousins MACBOOK every now and then and believe me its a pain to use a MAC when you are a constant PC user.
Maybe MAC users wont get back to PC because of just one reason:
"They paid the high price to use a MAC and they dont want to be a fool among everyone by ditching the mac so they stick to a MAC and pretend to be cool."
With VISTA they thought it was a right decision. But MS is not dumb either. I guess WIN 7 will get the consumer confidence back. But stll MAC users will be big time PRETENDERS all the time.
What a sell out, clearly are you are looking at is the financial side of things and know nothing about the business of computers or anything close to it. In fact, I'm sure that you are writing this on a Windows Machine and see that Apple is gaining market share so you want to say that they are the next coming of the greatest thing since slice bread.
What you don't understand is that (which is quite a bit) as Apple gains marketshare it is going to have the same problem that Windows had, virus, Trojans and attacks on its service, thus they are going to have to run an Anti-Virus firewall etc. that Windows have been running for years. How else do you think that Safari 3 roll-out on Windows became a disaster because it had 100 security holes as soon as it first came out. Since it was on a Mac, no one cared, and now it's going to be on 90% of the machine, it's going to be attacks and scrutinize like every other windows software.
When Apple gets to a big enough marketshare, which it never wants to do because it will change the way they have to protect their computer from attacks, is going to be similar to Microsoft. After all, it's pretty much a PC you are buying but with Mac OS X on it instead of Windows.
Wow, those stats from last year and current.. what a big difference! As a new Mac user this year, I believe I've made the right choice mvoing to Windows. Well, I still have a PC at home just in case but rarely switch it on. I won a copy of Windows 7 and so I might install it on the PC. Overall, as Michael stated, It really works like a dream out of the box. That was exactly my experience with the Macs. Looking good there. google sniper
I have worked on Apple machines since the Apple Lisa – I have never owned a Windows machine. Over the past 20 years I have never had a virus on my Mac. I just bought the new Apple desktop and it is a beauty.
Windows machines are unstable, costly to maintain, and not intuitive. Mac, on the other hand, may be more costly on the front-end but I have never had to spend additional monies for fixes, etc. The cost of ownership is something to consider – and I believe Apple is much lower than a Windows counterpart
The success of Apple can be attributed to 3 things…
1. Build your own hardware
2. Write an OS ONLY for that hardware
3. Invent the iPod
If OSX had to run on as many different hardware configurations as Windows, (read, Dell, HP, Acer, etc…) I would be interested to see if it still "works like a dream"
I find that avid PC users tend to tinker more with their computers; modifying, replacing, etc… while mac users tend to be more into just "using" their computer…different strokes for different folks I guess.
Not hating on either user, but some people just want to use a computer, they don't want to know how much RAM is installed, nor do they care about the administrator ID, or when to right click instead of left click.
Ask a hardcore gamer which computer he/she has… most likely they don't eat fruit (apple)
Apple produces a hand full of models all with the most expensive components. While it is true a Windows PC with the same components costs about the same, not everyone needs the most expensive components. If theft, loss, or destruction is an issue, do not buy an Apple anything.
It is also clear that windows machines address many niche needs which Apple simply does not. Net Books and Panasonic Toughbook are examples of windows machines that Apple cannot replace. The lack of an Apple net book is a bad sign as it as it implies Mac OS on a net book cannot be profitable.
The article should also have mentioned Linux, which has progressed to the point that ordinary users can use it easily for ordinary tasks. In the battle between Microsoft and Apple, Linux wins.
Finally there is still alot of oddball software out there that only works on Windows.
As to Win 7, it does run a bit better than Vista on my computer, in particular it updates drivers much better than earlier windows versions.
@JamesC,
As a long-time user of both OSs, I only buy Macs for my home. While there are publications devoted to Apple products, they only contain tiny slivers of troubleshooting information. The reason for this is a Mac works like a dream from the moment you take it out of the box. Really, it does.
Just open the insides up between a Mac and a PC. The system is much better design. A whole lot less jumper wires and it is very clean, unlike your typical PC. Better design means less problems.
Win7 is a much improved OS over its predecessors, however it still has the following issues (not in OS X or Linux):
1) Registry – 8 bit technology (used mainly to address slow drive access in those days) that should have been eliminated over 15 years ago.
2) Embedded DRM within the OS itself. At least on a Mac the DRM is only at the application level and not built into the OS itself. Linux has none so they the best here.
3) Software dongle – Only MS still requires software activation and is restricted to hardware it is activated on unless you go though a process to re-activate it for new hardware. This is unforgivable and should not be part of the OS.
4) Limits – Win7 has a 792 GB ram limit. Neither OS X or Linux has this limit.
5) FileSystem – both Win7 and the Mac I think need improvements here. Linux provides more alternatives.
Good for Win7:
1) Win7 kernal is more secure than OS X or Linux in its construction and random segmented modularization. UAC is improved but users need to learn to live with it to fully exploit its benefits. I still think MS needs to work on this a bit though on the user side. But for security Win7 is the best at the moment.
2) Market share – Win7 will keep MS in the lead I have no doubt of that.
I have owned about 15 different PC's and laptops over the years. None of them ever did all that was promised, most did far less.
I recently bought a MacBook Pro and wonder why I waited so long to switch!
I truly beleive if every PC owner could live with a Mac for even a week. They would never look back.
I actually spent my time reading some of your comments.
I thought I was bad living and dying with the success or failure of the New England Patriots.
But hearing the debate about windows 7 versus the Mac and why one company is better than the other, or why one product does this versus that.
It makes me laugh. There are a lot of lame people out there. And by the looks of it the "Lameness" is growning.
Think about what the majority of people use the computer for:
Check e-mail
Up Load / watch "you tube"
Check Face Book / My Space
Read the news / Sports Scores
Watch Movies or TV
Blog / Rant
Watching Adult only material
I do not see too many people playing the Mathew Brodrick role in "War Games" and sending NORAD into a hissy fit.
So why would the America public not want something which can do all that for the cheapest price.
I bought my e-machine refurbished computer from Comp USA for $225. They asked of I wanted to by and extended warrenty, I said no, if it breaks I will throw it away and buy another one.
I run Windows OS and know only a small bit about Apple OS, but I do find it strange that there are many publications focused on Windows and all the ways to fix it, etc.
It makes a strange economic argument for people to purchase a product and then pay more money to learn how to keep fixing it.
It has much in common with the idea of purchasing a dishwasher and then learning how to get it to keep running.
Are there publications that survive primarily by showing users how to fix Apple software?
As a designer I use a MAC mainly because it is more intuitive to use. I have a six year old machine that is still running very well.
The brilliance of the MAC over the last few years is how they have gone after the younger generation. As long as they continue to do good business their market share will grow. I believe we will see a shift in MAC vs PC for the business world as more of these young people get into the workplace and start demanding the computer they are more familiar and comfortable with.
With its higher margins, Apple may only have 9-10% market share but it probably has a 30% share of the gross margin earned in the PC business.
I had a window xp for many years, however I switched over to a Mac system. I really enjoy the software stuff that comes with the Mac, which you have to spend $$$ to get for a window system. Also, I just upgrade my Leopard OS system to Snow Leopard and it was just $25.00 for their software!
There has been a vry strangely high amount of pro-Apple and anti-Microsoft articles on this site in the past week or so. Are CNN and Fortune in Apple's pocket? What happened to being fair and objective? Enough of these Mac fanboy rants, how about some real news?
To Midwest News Guy: It doesn't matter where it's made, apart of the US economy not benefiting from it. Even in China the quality depend on the factory and Apple clearly has one of the best. Apple charges a premium as there's no better alternatives to their innovative products. Even long awaited Win7 hardly looks any different from Vista:(
As for big TVs, Samsung LEDs are the best at this time on the Market – hands down, so there's no need to pay premiums for anything else.
To the guy who said:
"The comments on this thread are no different from the IBM vs. Apple postings on bulletin boards more than 25 years ago."
All I have to say is that IBM has exited the PC market and Apple is still around. Who knows where Microsoft will be in 25 years….
It seems that everyone compares Apple's revenues to Microsoft's. Apple get revenue from the the OS and hardware but MS gets it from the hardware only. Is this a valid comparison? Otherwise it appears that the assertion that Apple is overtaking MS based on revenues is a disingenuous argument.
Brad Smith writes: "Cant understand why and how we are going back to closed products controlled by one company and how it can be good for consumers in the long run."
What openness in Windows are you suggesting? You can change the hardware but the operating system remains the same. Hardware companies and corporations are stuck with Windows, so you shouldn't raise any specters.
People choose to use Macs, and some corporations do too. If and when they come to you asking which you prefer, go ahead and choose Windows.
How liberating it will be, to actually have a choice in operating system for a change.
Release of Windows 7 is exactly what Apple needed. In fact, the folks at Infinite Loop were undoubtedly hoping for an early release. The reason is the plugged/unplug metaphor: some technology expenditures were frozen in place pending release of W7. Those lobbying for a shift to a Mac OS were held at bay by those wanting to give W7 a fair hearing.
Now that's over, the cat is out of the bag, and there is no excuse. Folks see W7 for what it is and isn't, and the drift to Mac OS is free to gather momentum.
This is gonna be fun to watch.
http://wereport.com
I think Apple has good products ipod/iphone. But in PC market its still has a long way to go to catch up. Apple still has market share less than 10%. No big corporation will buy Macs for their business period.
Apple products are made in USA blah blah blah. Please almost every product we use is made in china.
Regarding Microsoft Observer's post, luxury can mean anything depending upon a person's view. I was thinking more on the lines of a Bentley than a BMW – now that's luxury. Also, Microsoft should not be represented as a Honda, but a GM car.
But really, it's not about pricing although it can affect a person's decision. In general, you get what you pay for. If you want superior products, then you pay for them; if you want inferior products, then you pay for them too. If Apple's prices were lowered to competitive levels, would you actually buy an Apple computer? In my guesstimation, you would not, for reasons only you know, so pricing is really not the issue. Just because PC prices are dropping, (because PC companies are desperately competing with each other to stay afloat), that doesn't make Apple a luxury company.
Regarding Brad Smith's post, there's nothing wrong with doing well for a company. Remember Microsoft is not in business to "lift up other businesses." That is just a by-product. Microsoft is in business for themselves, just like most companies are.
Let me ask you this question, why isn't Microsoft "lifting up Apple" by conceding more market share to Apple?" Because, simply put, they are competitors.
Apple is doing something right and people are changing ship. Peace out!
You just have to do the math – most of MS sales of WIN7 will be OEM versions for $20-$30 so each $1,500 sale of every Mac is X-hundreds of sales of one WIN7. The bigger issue is that MS is NOT a consumer company but thinks it is – in the last 10 years, MS shareholders have allowed MS to spend $30 BILLION more than the consumer division takes in … MS can't even money on the internet (internet division lost $700 million). Ms should stick to the enterprise market where it knows what it is doing. WIN7 will be MASSIVE retail failure – why pay $299 for a $399 PC that comes with it "free?" MS shareholders are certainly cavalier with their money & return.
At the rate MS is going, it will soon be the RCA or Xerox of companies – making more money licensing out their name for electric toothbrushes than any actual products.
The comments on this thread are no different from the IBM vs. Apple postings on bulletin boards more than 25 years ago. Both companies sell great products, and the extra competition makes it better for all of us. Personally, I'm a PC/Windows guy who loves his iPhone.
I think Windows is wonderful. I encourage all my competitors to use it. Then I beat the noodles out of them in speed to market, and the beauty, sophistication and excellence of my products.
And more important, I beat them to death on price by doing it faster and cheaper.
I love Windows. Thank you, Jesus!
Apple had about 3% of the American market when they changed to Intel, since then an average 50% of new buyers have been MS PC users (according to the quarterly financial reports of the Apple stores sales) to reach about 9-10% of the market now, the 3rd of 4th PC vendor in the US.
Following this trend, they are DOUBLING their share every year in the US, 10 to 20% in 2010, 20 to 40% in 2011, and so on. Internationally they are opening new stores in many countries and expanding into new ones slowly but surely. Their international market share is now only 3% on PCs but they are buying iPhones like crazy and once you bite an apple…
No way they are getting into the cheap stuff, netbooks, etc., they'll keep doing what they do, offer quality/value. All the MS followers scream: they are overprice, too expensive, can't run programs, and so on. The button line is that they offer what the customer needs and no matter what the critics say it has been the best run company since Steve's return in the world. Ballmer is no-match and Gates got out right on time.
Anyone find it interesting that Fortune is posting a ton of articles bashing MS the same week Win7 is released???? Makes you wonder who is paying whom for advertising. I don't mind Ads, but please don't disguise them as news.
Midwest Guy
I just had a iMac 20" delivered to my house on Sept 4, it was labeled "Assembled in USA", in fact most all of Apple's desktop line is assembled in California, most the rest China.
And some folks think a Ford or Chevy is the cats meow. To each their own. I prefer quality. I prefer simplicity. I prefer things that just work.
@a-dawg
"Currently there is a HUGE difference in cost between equally spec'ed macbooks and dell notebooks. When you get into iMac's vs. Self built desktops the difference becomes just ridiculous. Macs are just for people that edit videos seriously and people that really have no clue how to properly use a computer.
That's total BS. While Apple isn't very competitive at the low end, their products are not far out of line on the high end.
For example, tell me how much it will cost you for a 27" iMac equivalent from Dell or HP? Oops- can't get one.
Ok, let's try an easier one. How about a dual-quad core system comparable to the Mac Pro? Last time I checked, it was a lot more than Apple's price.
The comparison I'd like to see is Apple's revenues and profits compared to the revenues and profits for all other PC manufacturers combined. I'm pretty certain Apple makes more profit on its 4-5% worldwide market share than the rest of the industry put together.
I was at Oracle OpenWorld two weeks ago — hardly a bastion of appledom. I saw iPhones, iPods, and Macs (especially Macbook Pros) everywhere. They dominated the show. In my booth (one of the largest booths at the show) there was a ratio of three Macs to one PC laptop, and virtually all PC laptops were hidden while virtually all Macbook Pros were on display.
I use both macs and pcs in my company, which is one of the largest hardware computer companies around — I'd say that usage is probably 60/40 in favor of PCs right now, with mac usage growing.
As far as cost differences are concerned, if you compare apples to apples (pardon the pun) between a Dell and a Mac, they're about the same price. Macs might be $100 more, but that's about it. This is for high-end laptops with accelerated graphics and high def displays. We've standardized on Toshibas — while they are about $300 cheaper, they simply don't have anything that compares from a performance standpoint, which is my justifying buying 4 Macbook Pros for my department, much to the delight of my constituents, all of them unix guys, by the way.
A quick check of the past four years shows that Apple will surpass Microsoft in revenue during the next half-year, and will likely surpass it in market cap during the next year.
As the gaps grow over the next four years, it will be interesting to view articles like this with Microsoft being a financial underdog.
D-man:
That Chinese mercury comes back to you all right, in the shrimp and talapia we import from them. No environmental controls, cheap labor, that's why we make all our stuff there. It can't go on for ever. Get your head out of the sand, man. As you say, grow up.
I read an interesting article a while back that by *not* having a large presence in the corporate world, Apple is more free to innovate. They have a very loyal following that will put up with problems–at least short term. Think of the mobileme migration, which really was a disaster.
Then there is the underdog factor. People often root for David versus Goliath. Especially when Goliath is an unsympathetic, arrogant bully.
Apple has vision, has class, has wonderful hardware, and OS. Apple does a great job at customer support. It runs circles around their competition in Consumer Report surveys. Deservedly so.
I own both an iMac and a high-end Dell XPS system. I'll take the iMac and OS X, warts-and-all, over the Win-Dell combo. Apple deserves the extra money they charge for their equipment because their customers get a superior experience–in most cases.
As for laptops, my understanding is that they do well against Windows laptops and are gaining market share.
When MS does well it lifts a lot of other companies like HP, Dell, partners, consultants etc. When Apple does well .. well Apple does well. Cant understand why and how we are going back to closed products controlled by one company and how it can be good for consumers in the long run.
@Chris — An iPhone and/or iPod a *MUST* have for any computer user?
Puhleeze. Myself and many others have lived without either one, and we certainly can continue to do so. They are only must haves in the minds of the sheeple who can't think on their own.
We also agree that this data is somewhat skewed. While non computer growth is a really big area that Apple can exploit both in the US and world-wide, in PCs its like comparing Honda vs. BMW. Sure, there's a little cross over in customer segments, but on the whole, Apple provides a luxury product experience (product, OS and customer support) that its customers are willing to pay a premium for. Until Apple changes its pricing strategy and moves into mainstream price bands, comparing Apple and MSFT in the PC space is a waste of time.
http://www.microsoftobserver.com
I owned a Dell for years (company policy) and broke from the mainstream and bought a Macbook Pro last year. The only reason I can is that VmWare makes running the Windows-only apps now possible. The experience running windows on a mac (especially together with MacOS X) is still way inferior to having a Dell – but it will only get better. With the new Macbooks being sturdier and starting at $1100, the Macbook is coming to a business cube next to you very soon. All you have to do is own a Macbook for six months after running Windows for years. There is no comparison. The stuff just works. There are still applications that are Windows based that work horrible on the Mac (i.e. Lotus Notes, or Excel with Macros) but these roadblocks are slowly disappearing.
I hope Apple continues to gain market share because Apple provides consumers with the best quality products than Microsoft, bar none.
I believe America and even other countries would be further ahead (in their cultures) at this point in time had they used Apple computers and products from the get-go back in the mid-80s.
People are finding out that Apple with its hardware and software is superior to Microsoft's Windows OS and whatever else they have. I don't even use IE anymore. I use Mozilla's Firefox or Apple's Safari web browsers.
I think the majority of people who use Microsoft's OS in any PC don't even have a clue that Apple's products can effectively improve their lives. They simply have not experienced the Apple experience and therefore are in the dark. If you were battling sickness and the prescription or OTC medication has not been effective, wouldn't you take something that does the job? Why settle for Microsoft when you can have an Apple? An Apple a day keeps the doctor way.
Think inside the fruit!
@ Apple is not overpriced. If you spec out a Dell laptop with equal features you will find that both machines will come within 100 dollars of each other. The big difference is the Dell will be all plastic and end up breaking before the aluminum Macbook will.
Are you serious? Macbooks are a far inferior product compared to a well built dell notebook, and price wise they don't even compare. Currently there is a HUGE difference in cost between equally spec'ed macbooks and dell notebooks. When you get into iMac's vs. Self built desktops the difference becomes just ridiculous. Macs are just for people that edit videos seriously and people that really have no clue how to properly use a computer.
@ Tom: when are you greens going to grow up? How's about we manufacture mercury for your green CFL bulbs in Santa Fe, just to keep it local? Or lead recycling plants? I'd love to see thousands of 200 foot tall windmills turning in your backyard, right next to the miles wide solar panel array, too.
The greens continually whine about stuff like this, then turn around and lobby that it can't be placed in their backyards, thus pushing it offshore. Sitting here in California, I would LOVE to see Santa Fe, New Mexico be the center of mercury manufacturing in the USA as well as supply all of my state's electrical needs. I suspect that Tom would not be as enthusiastic about it as I am.
@Marc andersen
I've used a Mac at work for every company I've worked for. Should that skew my perception also? Look outside your cube, floor, or company to get a better sample of what is being used.
You iPhone comment is unintelligible. The money is rolling in from iPhone sales and iPhone apps. The iPhone like the iPod is the common must have for ANY computer user, Mac or Windows PC.
A very distorted view. For example their cash piles … Apple does horde cash while Microsoft paid out in dividends about as much profit as Apple had. That is about $1.1B a quarter. Then there is companies that have been bought and share buy-backs, which were lower this last year for Microsoft but still far beyond what Apple does. Why doesn't the author compare Free Cash Flows? Maybe because it shows Apple in a different light.
I don't mind the comparisons, but I don't like basic facts being left out when the auther is clearly trying to paint a distorted picture.
It is riduculous to think that Apple will ever take over Microsoft. I like many others used an Apple in the late 80s and early 90s but have been using a PC since then.
How many of you actually use an Apple computer at work? There is your answer. My guess is that percent is VERY low.
Sure everyone may eventually own an I-phone but that is not where the bucks are. The bucks are in the computer you buy and software you but and use with it.
Marc andersen
Midwest News Guy:
You make a great point. The "greenest" thing Apple could do would be to make their stuff in the USA like they did before the Tim Cook era. An article in Tree Hugger talks about this: http://www.treehugger.com/files/2009/10/cut-global-stuff-miles-buy-durable-goods-made-your-country.php
Apple is not overpriced. If you spec out a Dell laptop with equal features you will find that both machines will come within 100 dollars of each other. The big difference is the Dell will be all plastic and end up breaking before the aluminum Macbook will.
An Apple computer made in the USA? Instead of $1900 wouldn't we be talking three grand? And how many of those do you think they'd sell? That said, I don't know what the labor content is to build a Mac. But one things for sure, it would be more expensive built here than say China. Also, we're talking assembly not full manufacture, since most components are made off-shore too. Get with it, that's the way of the world. Next, we'll be buying stuff made in timbukto.
@Mike Blacksburg:
While you could still consider Apple to be a niche PC maker, they are hardly a niche player in the smartphone market, and they are the dominant player in the MP3 player market.
Your analysis of the sources of Apple's growth is far too casual. If you dig deeper, you'll find that their main source of competitive advantage is the interplay between hardware and software (as Mark mentioned below) – and it spans all 3 of their markets (Mac, iPhone, iPod). Note that the same base software platform (OS X) spans all 3 devices now, with iPod touch and IPhone using a slight variation, but still essentially the same core, which Steve Jobs brought with him from NeXT in 1997.
This idea of vertical integration bombed in 1985 (and nearly killed Apple – without Steve Jobs – in 1995) but it started to become noticeably better received in 2005, and may just be the better solution as we head towards 2015.
Apple does not make cheap computers, they're generally price competitive with similar PC hardware. There is some single-vendor lock-in pain, such as overpriced (with fewer options) peripherals, but that is balanced by the fact that their software and hardware are single vendor, so none of the blame passing that you run into with PC's when something breaks.
If you were to look at the numbers where Apple actually competes, the high end, they own a higher percentage of the market, as their record profits show. The low end has much smaller margins and that's the reason Apple has higher profits; in fact Dell computers equivalent to Apple's offerings often cost more.
It's really easy have huge growth when you are a niche player.
Apple's market share will hit a ceiling at some point (maybe around 15%) due to their prices.
Well, what about this year's non-GAAP revenue and income numbers?
You know, since the non-GAAP will quick becoming the GAAP next year.
Here's an original thought I've not seen published anywhere:
As a way of full disclosure I own and Apple and a PC. One thing that bothers me greatly about Apple is that while they tout their environmentally friendly computers in a bid to be such a green company, for the average American worker they are no better than any other large company.
We pay a good premium to buy an Apple computer. That is the reason why they are sitting on a huge pile of cash. In many cases when consumers are paying such a premium it is because you are getting American quality. I love cycling. When I buy the best Trek bike, it is very expensive. Partly because it is still built right here in the Midwest. If I bought the best plasma TV on the market, the Pioneer Kuro, I pay a huge premium. Partly because it is assembled right here in the US. Apple? The huge premium gets me a product assembled in China. Should I care? I do if for no other reason that this product carries a huge premium to it.
Apple is smart for sure. But they would be even smarter if they could show that America can be more than a center of design and engineering and can still make the best products in the world. Especially at the prices they charge.
"I do more than just web browsing and checking email.
I enjoy gaming, and I enjoy photo editing and graphic arts in general.
Sure I can pay $3000 or more for a current Mac Pro, but for the same performance I could probably build or even purchase a cheaper computer." – Chris
@Chris-
You have a point on gaming. I won't lie I put Windows Vista on my MacBook Pro to play games. However, when it comes to photo editing and graphic arts, there is aboslutely no way I would use Windows, on any machine, ever. When working on photo editing and graphic arts projects my productivity on Mac OS X is at least 10 to 15 times faster, and greater, than on any Windows platform.