Apple, Market Share, and Who Cares?

by Chuck Toporek




There was an interesting roundtable discussion last week on SiliconValley.com, which posed the question: Does Apple Matter?. Sure, Apple might only have a small fraction of the operating systems' market, but on a grander scale, the concensus seemed to be "Yes, Apple does matter."




Apple has continued to take jabs on the chin, in the side, and the occasional rabbit punch to the back of the head. Granted, sometimes its deserved, but not all the time. A recent discussion on SiliconValley.com posed the question to a group of industry pundits and some Apple luminaries, including Gil Amelio, Jeff Raskin, and Jean-Louis Gassée.





For more news on Macintosh, visit
O'Reilly Network's Mac Dev Center,
or see the list of all of
O'Reilly's Macintosh books.





What I did read mostly made me believe that people are looking at Apple as the "innovator" in the hardware industry. For example, they're the ones who pushed USB and FireWire, they're responsible for dropping floppy drives from boxes, they're creating software that the average Joe can use to edit and create digital movies, edit sound/audio, etc.




There was also a great discussion on market share and whether it really
matters how much of a share of the market Apple holds. John Welch of
MacTech had
this comparison that I thought was beautiful:





"This only applies to one industry, the computer business, and
it is an artificially-created rule. Mercedes has been making
cars for over a hundred years; when have they ever had the
leading market share? Porsche is the same way. Even Honda. Still,
when you think of outstanding automotive engineering, those are
the companies that first come to mind. So when are they due to
go out of business? Mercedes -- not anything soon I think, they
just bought Chrysler.



"Also, comparing Microsoft's R&D to Apple's is just silly.
Microsoft is first and foremost a software company. Yes, the
X-Box is hardware, but face it, it's a PC in a cool box running
custom w/Windows for games. This is R&D? Keyboards, mice? All
good products, but 99% of their R&D is software, which is
inherently high margin, (I've heard reliable estimates that MS
gets 80% margins on each copy of Windows.) So now who's charging
the premium?



"So you are comparing a Systems and Applications software
company to one of the five companies doing real computer R&D
(Apple, IBM, Compaq, HP and Sun. Compaq looks like it's going
to turn into Dell or Gateway soon, and drop this list to 4.).
And Sun is an excellent example. They don't have a majority
market share, yet they certainly matter, and they will continue
to matter for a long time to come.



"Any company that creates, and markets their creations and
services to its customer base well, regardless of industry,
pundits, and stock analysts will succeed, thrive, and matter.
BMW, Carver Audio, all of the premium, "niche" companies know
this.



"Again, I ask, except for computers, what major purchase do
you make solely based on market share?"





I was surprised to see the following (snippet) from Gil Amelio's (only) response about whether Apple mattered and about its market share:





"Just as Steve Jobs went to Xerox to discover the GUI, I went to NeXT to find
the new territory on which to build our castle. This meant buying NeXT and
bringing Steve Jobs back to Apple...generally over the objections of my
staff. I had no illusions...I knew it was a bold and dangerous move...and I
was right. I may have lost my job for all the wrong reasons but I believe
those decions were correct and enabled us to have a forum on Apple this
week!



"A final comment on market share...market share is important but it is also
important how you define the market you are measuring your company or
product against. Mercedes is only a small part of the auto industry but it is a
giant in the luxury automobile market. The trick is defining your space
correctly."





The discussion goes on, but the general feeling that I got from the discussion was that yes, Apple does matter, regardless of its market share. As a Mac fan, I've always thought of Apple as the Mercedes of the personal computing market, so to me, their market share is less of a concern. With personal computers, you get what you pay for.




Chuck



7 Comments

timoreilly
2001-08-22 07:32:41
Sales of Cocoa and Carbon books
Another point I'd make about the importance of the Mac: sales of our recently released Mac development books, Learning Cocoa and Learning Carbon, have been terrific. They've been among our strongest new releases this year, indicating that there's still a vibrant Mac developer community out there.


rennard
2001-08-29 04:30:23
Apple is exciting
Apple always manage to excite - whether it's their hardware, their new OS, their pro and consumer software, or the rollercoaster share price, being an Apple fan is never dull !


I like the comparison with Sun - this is exactly how I feel. Apple really do innovate in a way that Dell or Gateway cannot. Interesting that Apple, like Sun, now ships a Unix based OS.


Sometimes it saddens me that 99% of my IT collegues have probably never even *seen* a Mac.

toru1
2001-09-02 18:25:03
I don't care.
But, I really wants to a new powermac.
invalidname
2001-09-03 13:02:59
Re: Sales of Cocoa and Carbon books
I hope the next O'Reilly Mac books have more meat to them -- we need something more like the Java "Nutshell" editions, covering as much of the Carbon and Cocoa API's as possible. Instead, the "Learning" books spent too much of their time reprinting developer docs thar are included with OSX's dev tools, and pushing the Project Builder IDE (to the complete exclusion of market-leader CodeWarrior).


I usually buy the O'Reilly book on a topic sight-unseen, and the Carbon book was a massive disappointment.


Some of my linux-oriented developer friends are really taking to Mac OS X and want to port stuff and develop new Mac apps. But we need more substantive developer info than what we've currently got...

derrick
2001-09-03 23:32:45
Re: Sales of Cocoa and Carbon books
Your point about having better Mac OS X-related developer books is a good one, and it is being taken seriously at O'Reilly. Chuck Toporek is the most appropriate person to comment on the status of future Apple developer books, but I can tell you that he is working hard now on a few very solid Mac book projects.
plaw
2001-09-04 19:54:53
Xerox: the True Innovator
Xerox was the True Innovator. Xerox Palo Alto Research Center (Xerox PARC) was responsible for the GUI, mice, Ethernet, and a whole lot more.


And where did it get them?


Microsoft is hardly an innovative company. Their software defines the "Microsoft curve." Any software which falls below the "Microsoft curve", in terms of its mix of Price, Performance and Features, will be driven out of the market.


What does this mean? Microsoft software is the bottom of the line.


The true innovative force in today's software market is Open Source.

anonymous2
2003-04-29 12:41:07
Apple and Xerox. The True Innovators.
Xerox invented the GUI. But it was Apple who set the standard of what GUI-interface was. Apple polished and made is useable, while the Xerox GUI was a proof-of-concept. Where Xerox exectives saw little in store for the project, Apple and Steve Jobs had the vision to see it revolutionizing computers.


Both are innovators, both had the vision, and both created.


The world isn't so black and white. Xerox didn't invent the GUI, just like Apple didn't. It was a collaboration. Without the original idea created at Xerox and without Apple own contributions and theory of User-Interface the modern day GUI was born.


Here is a good website that is far more even-handed in it's history than a lot of sites out there: http://www.mackido.com/Interface/ui_history.html