Maybe Leopard was closer than you think

by Oliver Breidenbach

After a long day at Macworld and unwinding at dinner, I've come to the conclusion that we might have seen more of Mac OS X Leopard today than we realise.

I think we caught a glimpse of what Leopard is really going to be like with the new iPhone UI. It surely was a showcase for Core Animation and screen resolution independence if I ever saw one. Was it also a showcase for Mac OS X's new look?

Oh, and one more thing: Wanna bet that when PC returns from his "major surgery", he'll be running Mac OS X instead of Vista?

14 Comments

pauldwaite
2007-01-10 01:10:18
> "Wanna bet that when PC returns from his "major surgery", he'll be running Mac OS X instead of Vista?"


Nah, I'll leave that one.

M. David Peterson
2007-01-10 02:07:59
>> Oh, and one more thing: Wanna bet that when PC returns from his "major surgery", he'll be running Mac OS X instead of Vista? <<


What better way to compete against the release of Vista, than to provide the ability to upgrade WindowsXP to OSX? Profit in the hardware business (at least in comparison to the software business) is small enough as it is, and with the ever plunging prices of commodity-grade hardware, the higher-end hardware has to follow to stay even remotely competitive. In other words, Vista's $200-$400 price-tag represents a whole heckuva lot more potential for profit than does an iPod of the same price range. So why not provide OSX-Leopard at a competitive price point (few would argue that they could easily come in at $100USD over Vista, and still remain an attractive option) using "PC's" return from surgery to goose the press round about the same time Vista hits the shelves?


May not happen, but beyond pride, what exactly would Apple lose by such a move? Control of their own hardware is attractive when the average price for an off-the-shelf system is 2k. At $500USD, and dropping fast, the lure of regaining some of that lost percentage-based-revenue by licensing Leopard for use on non-Mac hardware seems like exactly the kind of move Apple should make.


Guess we'll see... :)

Michael Heinz
2007-01-10 06:32:54
Wow - that's... I didn't think of that. I was thinking it was a reference to Vista coming out.
Oliver Breidenbach
2007-01-10 07:23:49
So why not provide OSX-Leopard at a competitive price point (few would argue that they could easily come in at $100USD over Vista, and still remain an attractive option) using "PC's" return from surgery to goose the press round about the same time Vista hits the shelves?


I am thinking that this opportunity to take Vista heads on is just too sweet to pass up. So, how about Apple shipping Leopard and iLife in one box priced around $149 for a "competitive upgrade"? Could be a huge hit, I think.


And you are right. Potential profits probably excede what they could make with hardware.

William
2007-01-10 08:09:39
Honestly I would prefer if OS X remained at it's current $129 single and $199 5-pack pricing. It's how I'm budgeting for leopard. Anyways, I think this is interesting conjecture. But I doubt Apple will be releasing OS X for non-apple computers. (I'm more of a cynic these days because I've wished for this before and been disappointed)


- Cheers

Jonathan
2007-01-10 08:48:34
A Mac OS for "high end" PCs has been on my radar ever since the intel switch started. Make it simple. If your PC is "good enough" then the installation continues. If your PC doesn't make the grade maybe come back to the user w/ a "Sorry but ... " message along w/ a list of what it would take to make the PC Mac capable!
Werner Nieke
2007-01-11 06:13:44
About the PC returning from major surgery: I was exactly waiting for s.th. on the scale of that (e.g. Apple licensing their OS X to Microsoft) instead of that lame-ass Newton revival... "We've reinvented the Smartphone?" C'mon, Steve, the vapors from your turtlenecks seem to start having unfortunate effects on your mental health.. (Wait? He never WAS mentally healthy, you say? *lol*).


Other than that, I agree. Probably a masked "Leopard in action" demo, actually.

M. David Peterson
2007-01-12 04:33:48
@Oliver,


>> I am thinking that this opportunity to take Vista heads on is just too sweet to pass up. So, how about Apple shipping Leopard and iLife in one box priced around $149 for a "competitive upgrade"? Could be a huge hit, I think. <<


That would ROCK!!! Add Parallels to the mix, and my guess is that you would see exactly what both Microsoft and Apple would want to see (as well, of course, as the high-end hardware manufacturers) -- a surge in high-end hardware sales spurred by the new found desire to have the best of both worlds running side-by-side, with the freedom to choose whatever hardware you might want to juice up your system to the max.


It seems to me that if there is one thing that is lacking in the current state of both the hardware and software industry is a truly compelling reason to purchase and/or upgrade to a new system. Our current hardware is "fast enough", our current software "gets the job done" and while there is some really cool and exciting hardware and software out there, a software-only release of OSX-Leopard would be one hell of a way to kick start the momentum into providing recent and incentive to upgrade.


Again... Guess we'll see :)

M. David Peterson
2007-01-12 04:46:35
s/recent/reason
Travis Butler
2007-01-24 17:07:17
...


... --- ...


[Gets out Large Clue Sledgehammer] I'd really hoped I could stop using this, but I guess not.


Apple makes the vast majority of its profit on hardware, and (this section modified, I admit) a large chunk of that on computer hardware. Until Apple can do without the revenue from its computer hardware, Apple will not release a version of OS X that runs on generic PC hardware.


Did it get through this time?


Claiming 'They'll make it up on software sales' is at best unrealistic. Even if the margins are higher on software, the price they're figured on is much smaller. To toss off some mostly guesstimated numbers, 30% on a $1000 MacBook is $300, 50% on $130 for OS X is $65. You'd need almost 5x sales on a software-only OS X release to break even - and that's without taking into account OS X R&D costs, which IIRC are subsidized by hardware sales (and presumably would need to be boosted substantially to cover compatibility and support for the huge variety of commodity hardware out there).


Sure, it's possible that Apple would see 5x sales of a commodity OS X release. But that's one hell of a gamble to bet your company on, which is why I don't expect to see Apple doing it. If they ever get to the point where they can get by without their computer hardware revenue, maybe then - but sure as hell not now.

Oliver Breidenbach
2007-01-25 01:25:08
Travis,


how about if market research told them that they could sell 10x more Mac OS X boxes? And get to keep the hardware business as the current Mac fans would largely continue to buy Mac hardware plus new customers running Windows on the only good looking PCs out there?


Sure it is a gamble, but even with current growth rates, 10% - 15% market share in the PC market is out of reach, they would have to at least quadruple current Mac sales. With a Mac OS X which includes iLife on sale to every PC customer would get 20% into reach. Which is roughly 10x more than now. Steve Jobs is not one for 3% market share, or even 5%. If he can, he goes for 20%.


Also you might have noticed that Mac and iPod are now each about half of the company's business. The iPhone, if they meet their goal of 10 Mio iPhones in 2008 will approx. double the company's size once more, so that Mac then only comprises about a quarter of the company, thus reducing the gamble somewhat.

Travis Butler
2007-01-25 23:50:09
Oliver,


First, I want to apologize for my initial tone; I have seen this topic brought up so many times, and seen it refuted to my satisfaction at least that many times, that I am heartily sick of the idea and get very frustrated to see it brought up Yet Again - especially when it's not backed up by anything more concrete than "I wanna!" (Sort of like tech support combat fatigue.)


That said...


> how about if market research told them that they could sell 10x more Mac OS X boxes?


Can you point me to any kind of numbers whatsoever to support this? I admit guesstimating my margin numbers, but I've seen profit margins tossed around enough in financial result reports that I feel confident that I'm at least in the ballpark. I have yet to see any kind of 'market research' figures on what kind of sales Apple might expect from a software release of OS X, or indeed any kind of authoritative information beyond anecdotal assertions that "I'm sure people are going to buy lots!"


>And get to keep the hardware business as the current Mac fans would largely continue to buy Mac hardware plus new customers running Windows on the only good looking PCs out there?


Did you follow Apple through the clone era? I was there, and as far as I'm concerned, that proved that enough people will buy 'cheap' over 'quality' (did you ever have to try working inside a Motorola Starmax? What a mess.) to put a major crimp in Apple's sales; back then, it was enough to send Apple into the red.


> Sure it is a gamble, but even with current growth rates, 10% - 15% market share in the PC market is out of reach, they would have to at least quadruple current Mac sales. With a Mac OS X which includes iLife on sale to every PC customer would get 20% into reach.


Again - sources?


I'll also assert, from anecdotal evidence of my years in tech support :), that this kind of 'growth' from generic PC installations - especially having to support a near-infinite variety of hardware combinations, as opposed to their controlled reference designs - would cause a rise in development and especially support costs far out of proportion to the increase in market share, to the point where I suspect that they would lose more than they gained by doing so. (I used to work at APS. Remember them? Part of the reason they folded and had to sell out to LaCie was covering the warranty costs from the Micropolis bankruptcy. The other major killer was the costs of their abortive expansion into the Mac clone market.) Apple's current market share growth is slower, but it's also consistently profitable and above all, manageable. (Another APS war story: I remember when our growth started shooting through the roof after getting some awards from MacUser, but we couldn't increase the support department fast enough to compensate. There followed weeks of hell trying different ways to handle call queues of 100+ people on hold at any given moment... with five people in the department.)


> Also you might have noticed that Mac and iPod are now each about half of the company's business. The iPhone, if they meet their goal of 10 Mio iPhones in 2008 will approx. double the company's size once more, so that Mac then only comprises about a quarter of the company, thus reducing the gamble somewhat.


This is the one factor that has changed significantly in the years since this meme started popping up - which is why I amended the standard response. However, even half the company's revenue is still a chunk big enough to kill them if they lost it. And while a massive success with the iPhone would change the equation still further, doing a release now predicated on a success that may not happen - and whose scale is unknowable until and unless it does happen - is sheer idiocy.

Oliver Breidenbach
2007-01-26 04:44:08
Travis,


I was playing out a "what if" scenario. My desk is not in Steve's office (nor anywhere near Apple) so I am not familiar with any market research Apple might or might not have. All of my (and your) arguments are based on certain assumptions. Yours are assumptions that float around the web for a number of years now and may or may not be valid today. I was making new assumptions that could lead to different conclusions. The market is always on the move, so what was true ten or more years ago (regarding clones) must not be true today. For example, the problem with the clones was that it was all small companies without their own customers. In Germany, the largest Apple retail chain even startet their own brand. It is different now. Apple has their own retail channel that they control and Dell would be a tremendous partner bringing millions of customers to the table.


2007-02-03 13:38:49
No PC will come back with a brand new suit indicating you need to buy a new PC to run Vista