A while ago I posted my thoughts about the new Mac running ontop of intel cpu’s
Introducing the new Mactel
Since then there have been hacked ports of Microsoft Windows running on the new ‘mactel’ machines.
In my previous post I speculated that OS X was going to directly compete with Windows. However, the other day I was doing an analysis for my strategic management class on a case study of Apple. The case study itself was 2-3 years old and printed in my text book so It didn’t take into account the latest changes at Apple.
Basically the case study explains that apple has come back from the dead since it was able to rehire Steve Jobs, however Apple only has about 4% of the PC marketshare. Also, the PC market, while it is a mature market, is also a market in which a company cannot stand still in. So, Apple has to do something to gain more market share.
So I had to think about what Apple will have to do to grab more market share.
First, what makes someone pick Apple over any other PC? I came up with the following 2 main points:
- Ease of use
The main purpose of Apple has always been to bring technology to the ‘everyday’ user. Apple has been known as geniuses when it comes to the user experience. This is why they don’t allow other companies to develop Mac’s; Apple wants to control exactly what hardware is used so it can completely control the user experience. Unfortunately for Apple, this also makes their hardware much more expensive compared to the generic PC’s since they don’t have the same economies of scale that all other PC vendors enjoy. This is also why Apple developes their own operating system (aka OS). It wants to control the whole experience, the hardware and the software. Unfortunately Apple is not the greatest OS developer there is, this is why the switched to a UNIX based OS when creating OS X. What they did was take an existing OS that is able to run on their hardware (UNIX has been developed to run on practically any hardware configuration) and then develop their own interface. So what they did was alieviate themselves from developing the actual OS and focus all their efforsts in developing the Graphical User Interface (aka GUI.) In controlling these to major aspects of PC development Apple is able to control their user experience, which is their main competitive advantage.
Their second competitive advantage is the image they project, its sexy to be a mac user. Apple has spent tons of money and time in grooming their customers to believe that using a Mac elevates the user to a spiritual level of bliss, everything else is plain, borring and dirty compared to the Mac. However, only the most die-hard people are willing to forego compatibility with the rest of the world in order to atain this spiritual bliss.
Then I thought, what is preventing people from switching to using the Mac?
The main reasons is compatibility with Windows which is the ubiquitous standard.
In the case study it stated that if Apple were to capture just 1% of market share from Microsoft’s Windows it would mean a 20%-35% increase in market share for Apple. The PC market is mature and at the point of saturation. Apple isn’t going to grab more market share from people who don’t have computers, it has to grab market share from Microsoft. In order to do that Apple needs to be compatible with Windows. Here is what I put as my Key Issue for Apple:
Apple’s Key Issue is that it is difficult to convert customers from Microsoft Windows to Mac OS due to incompatibilities between the two operating systems. If Apple can facilitate a one step conversion from Microsoft Windows to Mac OS it can capture market share from Microsoft.
Here is my proposed action:
Apple needs to invest in creating technology that will enable Mac OS X to run any Microsoft Windows software. This will then give Apple users the ability to be ‘Microsoft compliant’ while still able to be defined as a Mac user. As noted in the Apple case study, if Apple is able to take away just 1% of Windows users Apple will increase their market share by 20% to 35% (Keith pg c17), this increase in market share will more than make up for any extreme costs used to implement running windows applications on Mac’s.
So why am I posting this today?
Well, I have stumbled upon an Apple rumour that suposedly explains why Microsoft will be delaying windows untill Janurary 2007, to help facillitate Apple creating a GUI on top of Windows.
This could have been the main reasons Apple switched to Intel for its CPU, to prepare their hardware to run Windows.
There have now been reports that people can get Windows to run ontop of the new Apple hardware, all Apple has to do is implement their GUI ontop of the Windows OS. Once this is done Apple users can run 100% of all windows applications, and through emulation, most of the old Apple software.
But now that I’m writing this I realize that it is also doing something else, something potentially HUGE for Microsoft. It is turning Windows into a commodity. By that I mean that Windows isn’t a product in and of itself, it will become a product within a product, like lumber, steel, or oil. This could be the first step in removing Windows from the market place. Microsoft would love it if you couldn’t by windows directly, windows would just be a licensed product for Apple, or any other company that wanted to ‘create’ an opreating system with a ‘Windows core.’ This will also help deflect a lot of the monopolistic acqusations flung at Microsoft.
This could potentially give Apple ton’s more market share since the major barrier to entry for customers will have been destroyed. Then we will have Apple vs Microsoft as the two main competitors and the public at large will largely be blind to the fact that it will actually be Microsoft vs Microsoft. This is a win-win for both apple and microsoft.
This could change the whole market of PC’s very quickly.
It will definately be interesting to see if this rumor is true. Actually, with the potential benefits for both companies, I find it would be hard to believe this rumor is false!