Building and dismantling the Windows advantage

When the Macintosh was launched in 1984, computers running the MS-DOS operating system were nearing a dominant position in the market. Having launched in 1981 as the IBM PC, they were quickly cloned and four years later “PCs” were selling at the rate of 2 million/yr.  The Mac only managed 372k units in its first year.

In other words, PC was outselling the Mac by a factor of nearly 6. It turned out to be a high point. The ratio by which the PC outsold the Mac only increased from there.

When Windows 95 launched in 1995 it negated most of the advantages of the ease of use of the Macintosh and the PC market took off. The ratio reached 56 in 2004 when 182.5 million PCs were sold vs. 3.25 million Macs.

During the second half of the 90s it was already clear that Windows won the PC platform war. Windows had an  advantage that seemed unsurmountable.

I should point out that this ratio between platforms is not just an exercise in arithmetic. It’s a measure of leverage. The advantage of dominance is realized in an ecosystem which creates lock-in and additional economies in marketing. Ecosystems become self-perpetuating and there is a tendency toward monopoly. The stronger you are, the stronger you get.

 Then, in 2004, something happened.

Although PC volumes continued to grow, they did so more slowly and the Mac grew faster. What coincided with this was the emergence of portable computing. The MacBook became easily differentiable as a “better” laptop. It was not faster, did not have more storage or any key metrics being used to sell PCs. It was just better as an integrated product. The integration manifested itself through a sense of quality and robustness as well as intangibles like aesthetics and “feel”. I wrote about this a few years ago.

As a result the Mac began to whittle down the advantage Windows had. The ratio  of Windows to Mac units shipped fell to below 20, a level that was last reached before Windows 95 launched. It’s as if the Mac reversed the Windows advantage. This was an amazing turnaround for the Mac.
But the story does not end there.

If we consider all the devices Apple sells, the whittling becomes even more significant and the multiple drops to below 2. Seen this way, Post-PC devices wiped out of leverage faster than it was originally built. They not only reversed the advantage but cancelled it altogether.

Considering the near future, it’s safe to expect a “parity” of iOS+OS X vs. Windows within one or two years. The install base may remain larger for some time longer but the sales rate of alternatives will swamp it in due course.

The consequences are dire for Microsoft. The wiping out of any platform advantage around Windows will render it vulnerable to direct competition. This is not something it had to worry about before. Windows will have to compete not only for users, but for developer talent, investment by enterprises and the implicit goodwill it has had for more than a decade.

It will, most importantly, have a psychological effect. Realizing that Windows is not a hegemony will unleash market forces that nobody can predict.

  • KirkBurgess

    I think 2 more things happened in the early 2000s which also improved the Mac/PC ratio:

    1) the iPod reasserted the apple brand to a desirable level with mainstream consumers

    2.) The Internet with high broadband penetration lessened the role of platform specific software, and most of what the average user used their computer for was able to be done on the Mac just as well (if not better).

    The 2nd reason above (platform agnostic uses) enables many platforms to emerge, assuming users will still rely on the Web for the bulk of their use. Apps may be a sticking point here however, swinging the pendulum of stickiness back to platforms with a large app library & dev community, of which the two fastest growing are iOS & Android. This would actually leave Microsoft in the opposite position it was in pre-internet.

    • JohnDoey

      I disagree. People always bought Macs for the apps, same as they bought iPhones for the apps and iPods for iTunes (the apps.) Consumers do not generally know what the Web is except they know it is free and they just expect it on all PC’s. It doesn’t influence which PC they buy.

      Mac OS X also happened at the same time as iPod, and so did PowerBook G4 Titanium, which was the first 21st century notebook (1 inch thick, metal body, Wi-Fi, high-speed serial, 5 hour battery, enough power to edit pro video. Mac OS X caused all the Web developers to switch to Mac. PowerBook G4 got all the audio video people who had strayed to Windows. The Mac proved it was back with Mac OS X on PowerBook G4 — easily 2x–10x better than any rival system.

      Also iLife sold a ton of Macs from 1999 forward. iMac sold a ton of systems from 1998 forward.

      And iPod was Mac-only for the first 2 years. It was made successful on the Mac, not the other way around.

      • I bought a TiBook… Top machine! Eventually gave it to my son-in-law when I bought a 17″ AluBook. I have that in my bedroom, along with a 17″ Intel iMac…

        Both sit unused, while I use my iPad.

      • David Illig

        Glad that works for you. I haven’t found a way to run Adobe Creative Suite, Aperture, Final Cut Pro, or pro audio applications on my iPad. So the iThingies and my Macs remain analogous to my stovetop and my microwave oven. I pick the one I need for the job at hand.

      • I have a 27″ loaded iMac with two Promise Pegasus RAIDS that I use for those applications. That is in my den/office.

        I was referring to use in my bedroom or on the couch front of the tube — where I surf the web, watch videos, check investments, play games etc.

        Like you, I pick the right tool for the job at hand.

        — Dictated on my iPad.

      • Space Gorilla

        It is simply a matter of time before the iPad is powerful enough to do all these things you speak of. And in some cases a touch interface will be superior.

      • freediverx

        Not to mention that any extensive writing is a horrible experience on an iPad, given the lack of cursor keys, tab, and multi-key operations to streamline editing.

        Love my iPad, but it’s nowhere near replacing my Macbook Pro or my iMac.

      • “Consumers do not generally know what the Web is except they know it is free and they just expect it on all PC’s. It doesn’t influence which PC they buy.”

        You misunderstand Kirk’s point. The internet wasn’t a differentiator for the Mac, it was an equalizer. It allowed you to do the same stuff on a Mac that you could do on a PC.

      • famousringo

        Exactly. The web didn’t promote the Mac, it undermined the hegemony of Windows. That didn’t just help Mac sales, it made the iPhone’s first year of success possible.

      • orthorim

        The internet was an equalizer, clearly. But now Apple is starting to replace the internet with native apps, in the next step of the platform game. It’s hard to predict what the outcome of this will be.

        The fact is Apple built a better platform (than either PC or Mac), and native apps are setting expectations for usability that the web or cross platform frameworks cannot fulfill. People do not care about “open” – they care about the user experience. Apps are on their way of replacing the web thanks to a much superior experience, and they’re completely proprietary.

        Footnote: I think we need to keep in mind that both Apple and Microsoft are experts on how to play the platform game – they know more about it than we do.

      • I disagree that Apple is replacing the Internet with apps. What they are doing is using the Internet backbone to allow apps to have access to cloud services and to keep apps synced across different devices.

        What native apps are replacing is the web browser.

      • orthorim

        Point taken, de-facto most iPhone apps have a server component, and yeah a lot of iPhone apps just provide a better UI for a web based service.

        Not all though. Games are huge for example.

      • Tdizzle

        OP didn’t say apps were replacing the Internet, they said apps were replacing the web. Your point actually reinforced that.

      • Here’s the direct quote from OP’s post;

        “But now Apple is starting to replace the internet with native apps, in the next step of the platform game.”

      • APai

        this is where android steps in. if there was only apple & microsoft for the phones – it would have been curtains for open standards, open platform or for innovation, the two would be content sharing the riches amongst themselves and shutting everyone out. this is very clear already – both microsoft are playing the “ban the device game” or “ban the platform” game with android. microsoft is doing it covertly, and apple is doing it overtly. i hope of them get their share of karma pretty soon!

      • orthorim

        Android being open is merely a possibility, not a reality. Google controls Android, and Google isn’t doing it out of the goodness of their hearts but to further their business interests. As long as this is the case Android is not open.

        Another funny thing has happened with the open-ness of Android, too – Amazon and now Samsung have started to use that in order to create more closed ecosystems. They’re replacing the closed Google ecosystem with their own Amazon / Samsung ecosystems. Meanwhile, carriers are loading Android phones with corporate crapware.

        You get an open Android device if you root it and install your own software. Manufacturers often lock this down, and also you could argue that you can do the same thing with the non-open iOS.

        Steve Jobs might have sounded like the world’s most cynical person when he said iOS is freedom from carrier crapware and malware, but he did have a point. A power vacuum tends to get filled.

      • APai

        of course google is doing out of their business interest, they are not there for charity. and google has done well to tackle the issues of crapware and others like samsung and amazon twisting and modifying android too much by laying down some set of rules. while apple chooses to lockdown everything watertight.

        but you miss the central point of freedom of choice.

        you still can jailbreak it without having to resort to being a contortionist like with apple – and apple can close it randomly with an update. there are more developers who are dedicated in bringing out interesting hacks & mods for android, and which can be easily installed, unlike a very popular ios.

        you have nexus which is plain vanilla android.

        anyone can still take android and make phones out of it – so price points for developing nations plunge (they get what they pay for) unlike apple phone which limits their hallowed phone to the elite.

        crapware is a corollary to android – some guys will do it no matter what because the source is open, but the most important thing is that there’s a ton of variety in hardware, than a single phone that everyone has to stick to. so what good is a freedom that asks you to stick to umpteen random rules that suits the business plans of one company ?

      • freediverx

        “of course google is doing out of their business interest, they are not there for charity. ”

        A key distinction between these companies is that Apple’s business interests are generally aligned with the needs and wants of their consumers. Apple increases their sales and profits by delivering products and services that are irresistible to users.

        However virtually every other company in this space – Google, Microsoft, Samsung, etc – have business strategies that primarily serve other interests (advertisers, enterprise buyers, mobile carriers, retailers). And mobile carriers, devoid of any vision or talent, seem to have nothing to contribute beyond figuring out ways to charge their customers more for less, when in reality their rightful place is as dumb pipe providers.

      • APai

        “generally aligned with the needs and wants of their consumers”
        that’s rich, as if apple doesn’t have their own advertising platform.and google also strives to improve the user experience. they’ve been doing that right from the beginning with an uncluttered spartan search if you remember.

        if apple was so concerned about users, they would give it to any and every carrier, not restrict it to a single carrier or two. they are profiting by giving it to a couple of carriers only. they are making users come to horrible monopolistic carriers. so much for caring about users!

        they shaft their retailers by not allowing fair competition. the price of the iphone is fixed – it does not drop as demand increases. they keep the production under tabs to keep the price stable too. it’s all about maximizing their profits one way or the other.

        apple does it all for revenues, as does google. their revenue models differ. apple does not have any altruistic intention to help the users.

        apple keeps control over their platform at the cost of convenience to users. google gives that freedom to the developers and users. so who thinks in favor of users ?

      • Apple obtains value from selling to users and Google obtains value from selling users’ patterns of behavior. How companies structure their technology architecture follows.

      • Jerry

        “the price of the iphone is fixed – it does not drop as demand increases.” Adam Smith is turning over in his grave.

        — Jerry 🙂

      • APai


        as the demand increases for a particular product – particularly in large volumes, they can produce the product at cheaper price and there fore pass on the benefits to the customer as the time goes by – that’s how it works isn’t it ? the launch price of every product from graphics cards to phones is pretty high, but the prices drop as soon as it hits the main street. however the products keep selling much more than the first month in the coming year or so until the product is out of demand.

        it’s only when there’s scarcity of any particular product that the prices rise along with demand, and prices crash when there’s no demand

      • ex2bot

        Apple doesn’t update the devices without the owner’s consent. So you get to a version you like and jailbreak it. It will only be a matter of time before an exploit is found for the next time. Must say, though, I don’t agree with their control-freakage concerning jailbreaking.

        And I don’t think Google is the morally superior to Apple. They’ve made some interesting decisions. They saw what Apple did and thought, “Well, yes, we have a friendly relationship with Apple. Let’s rip off their basic design. They’ll roll over like they rolled over for Microsoft. Then multiple-vendor, single-operating system devices will dominate.” This was their thinking. *

        * I know this is a bit inflammatory, so let me say that I don’t believe Android is a cheap rip-off of iOS. Google added innovations even early on, and now Android has its own substantial strengths and philosophies.

        (I don’t know that I would have done what they did. Maybe the appropriate way to handle it would have been not to get so collegial with Apple in the first place. Microsoft managed to develop an innovative touch operating system that in significant ways operates very differently from its competition.)

      • APai

        largely agree with you except for this part “Let’s rip off their basic design” c’mon now, apple has ripped off from anywhere and everywhere. they do it left right and center, and yet they try to latch on to the “we innovate other copy” part. they act as if they invented the phone in its entirety! they say “this changes everything” and the media buys all of it.

      • @orthorim
        You don’t even know what Android is and how it works.
        Android has nothing to do with Google services, it is carriers and manufacturers who with own will pre-install them to Android phones because 1. People expect that they get Google kind services 2. They get royalties from searches what users do from Google Search bar.
        Android is 100% open source, it just isn’t open developed and it isn’t against open source.Google isn’t the one what develops Android but Open Handset Alliance is (OHA) and Google is the presenter and leading part of nearly hundred companies.
        Android does not have closed services and API’s what can not be extended (some stupid people call it as “ecosystem”) by third parties.
        Freedom means that everyone has freedom and no one can deny it. Google or Android isn’t the bad ones here, some carriers (actually basically USA carriers only) and manufacturers are. Most phones in USA are locked to carrier or boot, but in EU, phones are open all ways. You can even install custom ROM without losing warranty for Hardware (=the phone itself). Problem is mostly only in USA corrupted business model, not in Android.
        And thats why OHA added a feature to Android what allows pre-installed applications to be disabled. Thats why users can install default Android launcher and install any service what they want if they don’t like Google, Microsoft, Amazon etc services.
        It is customers stupidity (or possibility limitations) if they go and buy a device what is from worst carrier or manufacturer instead spending little more time and effort to get the better one what suits to their needs and philosophies. Monopolies are tough thing in USA where you are so bad tied to carrier network, while in EU countries you don’t even need to care about who carrier you have because you always have best network and services and government is actually protecting customers rights, instead corporations rights to rip customers.
        You don’t need to root your Android phone, normal user does not actually gain anything from it. They don’t need latest Android version at all because backward compatibility. It is the wannabes and nerds who always want the latest and greatest because they have small ego.

        Android does not have anything to do with Google.
        GMail, Picasa, Google Search, Google+, Chrome, Currents, Google Maps etc etc *are not part of Android*. The real Android is without any Google services and apps. You need to blame your carrier (who forces/pays manufacturer to pre-install applications for their customers). You need to blame your carrier not willing to update your Android if needed (manufacturers demand payment per handset of Android feature updates and carriers are no willing to pay because they want to sell new phone to their customers instead).

        The openness is that you can *have a change* to do what you want, not that it should be so easy with just one finger touch. But even some people have enough wisdom to understand that they can not demand latest hardware after they bought the device, but they don’t understand that same rule is in software system as well.

      • Ian Ollmann

        I may be biased, but I think it is pretty revisionistic to say that Android is the main force behind innovation on mobile platforms.

      • ex2bot

        Nothing wrong with people who favor open-source software. But I do have a problem with people who choose to use Windows and then complain that Apple is so closed and they prefer open. I think Microsoft has done more harm to open-source *by far* than Apple (who are far from perfect, of course).

        For example, J++, FrontPage, IE ActiveX, patent power. I’m sure others can add to it. Remember the time before Firefox emerged when it was looking like the ***whole web*** would only work for IE and ActiveX. And only on Windows, because ActiveX was Windows only. I love Firefox and haven’t switched in part because of their accomplishments.

        I personally believe that using completely 100% open-source software is far from ideal for my needs. The UI’s often are poor and coverage (types of software), while improved tremendously over the years, is still somewhat lacking (I’m thinking non-mobile). I have used OpenOffice, GIMP, Blender, Firefox and others that I have been impressed with.

      • ex2bot

        I should have written: “Nothing wrong with the opinion of people who favor . . .”

      • anon

        I believe you’re wrong. I will devote my life on it if need be. Anything less is just too depressing. Apps? Just a fad. Most of the functionality and presentation is technically just http, html and xml, open standards, anyways.

        WWW has always been “proprietary”. What is important is open APIs, and increase in those are now becoming an exponential curve. Now THAT will be interesting, and valuable.

      • ex2bot

        Wait a second, here. Don’t you use “apps” (applications or programs) on your computer? I wouldn’t call them a fad. Many of the programs running on iOS (for example) are as complex as what your used to using on your computer.

        Now, if you’re saying you don’t want client apps on mobile devices to replace generic browser access to websites, then I agree too.

    • Addicted4444

      I agree with your points. I think there is another less significant, yet crucial factor. Moore’s Law meant that your stock computer was now powerful enough to do what the vast majority of consumers would ever want to do. What most people want to do is surf the net, communicate with friends, family and colleagues, and run some basic applications like word processors. In the 90s, if you bought a computer a year later, it would do all these things faster and better. In the mid 2000s this wasn’t true anymore. A 2005 computer runs Word about as fast as a 2012 one does. This meant that differentiating factors shifted from raw processor power to softer things, like design, integration of hardware and software, ease of use, screen quality etc. there was also a corresponding shift from desktops to laptops. In other words, assembled devices’ advantage (upgradability) was becoming less important, and integrated devices, like laptops, we’re becoming more popular. This gave an edge to a company like Apple which created both the software and hardware. Apple products always lagged power wise towards the end of their life cycle, but this was not relevant anymore. What was more relevant was that when I closed my laptop’s lid, the computer automatically went to sleep.

      • Gordon Shephard

        ” A 2005 computer runs Word about as fast as a 2012 one does. ” – for the consumer. It’s always important to recognize the difference between casual and business computing. In business computing, Microsoft Word, Power Point, Visio are still lacking resources for larger documents, but, thankfully, small-mid sized documents have basically reached “Performance Ceilings” in which increasing CPU power is no longer required. So – when doing your assessment of where “raw processor power has shifted” – we need to analyze which markets are no longer sensitive to that power. But, (as in my example about small documents having reached a performance envelope in the business space, and likewise for casual web browsers and email reading executives) – those markets are to start increasing – soon, the question of “Do I have enough power” will be “Do I like the Laptop/Tablet’s Design/Weight/Battery Life/Interface” – particularly if the application ecosystem comes along with it.

      • Jerome

        For business as well. On the one hand, there is nothing special about the business use – all those meeting notes, slides, spreadsheets are no more complex than today’s family calendars, media management or whatnot people do at home with their computers.

        The key difference is: the business user patiently puts up with everything the IT department throws at him, he has no choice. The consumer has a choice and votes with his wallet.

      • IndigoHomme

        Excellent point.

      • ex2bot

        I disagree to some extent. Microsoft still has the edge with Word, Excel Outlook and Active Directory. I can’t think of any other products that can stand up as well as these in their respective categories in business use. Business use can be very different than home use. Think of 200-500-1000 employee businesses, for ex.

        I know Apple has competing products and I have used them, but I don’t think they’re adequate for more than home/student use. I’ve heard and read plenty of horror stories from people trying to use non MS software for the above. (Yes, we’ve also heard plenty of MS horror stories but still.)

        I have also used some of the iPad word processors and let me tell you that they’re not really there yet. Having said all that, I’m a big Apple fan. I wouldn’t willingly buy any other hardware, and I’m thrilled that Apple is so successful now..

      • I would agree with Word and Excel. Outlook/Exchange are the worst enterprise mail clients I have ever used. They are simply horrid and feel like a poorly up scaled home email system. AD is OK but nothing special from a technical standpoint.

      • try opening two files with the same name and in a different directory using excel. (tested in office 2007)

        okay thanks bye

        for the uninitiated, excel will say something along the lines of “ERROR ! – there is another file with the same name open”

    • Typo333

      The iPod back in the “early 2000s” was not a “mainstream consumer” product. It was a $400 MP3 player that worked only with Macs, and even there only with a brand-new piece of software that nobody used yet. It was a good product, and a solid start, but it wasn’t mainstream by any stretch.

      It took a few years and a few product generations until the iPod was mainstream. They planted the seed in the early 2000s, but you don’t get fruit (so to speak) from a seed right away.

      • KirkBurgess

        I should have specified “first half of the decade” when I said early 2000s. The iPod exploded sales wise in the late 2004 (thanks to the ipod mini) – from that point on it far outsold the amount of Macs being sold (20 million ipods in 2005, 40 million ipods in 2006, etc). 2004 is also the peak of the windows/mac ratio on Horaces chart.

      • xynta_man

        > only with a brand-new piece of software that nobody used yet

        You are mistaken. iTunes was released prior to the iPod and was a huge hit for Mac OS users. Remember the whole “Rip. Mix. Burn” campaign.

    • dpgj

      I agree with the two points but the analysis is still intact. However for the OSX+iOS analogy there is a catch that at present people buying iOS devcie is not for PC replacement. So the whole picture is not as gloomy as it sounded.

      • Kizedek

        I don’t know, it still seems pretty gloomy for MS.

        1) Apple is making good money on iOS devices. Apple acknowledged defeat in desktop PC wars and moved on to the next big thing. It put a computer in everyone’s pocket. These are other legs of the “stool”. So, it is fair comparison to the share that Window’s PCs have historically garnered. So far, mobile and entertainment areas that MS has gotten into are “me too” areas and have yet to make real money or impact (if they aren’t losing money).

        2) There is the so-called “halo effect”. Every sale of an iOS device
        increases the chance that the customer’s next purchase will in fact be a
        Mac over a PC. Apple is selling far more Macs than ever, and half of
        them are to those who never bought one before.

        The thing is, an iPad or iPhone that sells for 400 – 800 dollars and makes a good margin is just as good or better than a PC sale for any other computer maker. There is the introduction to Apple software, quality and service; there is the ecosystem, etc. The margins aren’t as good for Apple as on a PowerBook, but they are far better than HP or Dell get on a full PC. So, hey, it’s a computer sale, OK? The sale of a Nokia phone with Windows Phone 7 on it just isn’t the same to MS as the sale of an iPhone or iPad is to Apple; it doesn’t help MS make 150 dollars and upwards per device to replace their historic and core businesses; and it is not selling in any numbers to make a difference to the decline in PC sales. Hey, the iOS devices are stealth products, they land behind enemy lines.

        It’s pretty much a semantic debate about what is a PC or what is a PostPC mobile device. MS wants to cast it one way: pretend that iOS devices are “media tablets” with a limited repertoire of very few jobs that they can do (ignoring all the new jobs and innovations and expansions into new industries); while MS is going to save the future of computing by giving everyone what they always really wanted — Windows on every device (promised for years).

        But Apple doesn’t really care, it just wants to produce and sell great products. You like your iPhone or iPad? Maybe you get an iMac next time around. If not, fine, maybe you get an iPad for each child instead. Then maybe the old PC just sits in the corner like a toaster where it belongs and gathers dust. Hey ho.

    • Boltar

      The Internet wasn’t so much an agnostic use as a standardized document format that allowed any compliant application running on any platform to compete on equal terms (which contributed to the renewed competitiveness of the Mac as you suggest). If the Federal government had created open standards for document formats and required Federal acquisitions of hardware and software be compatible with those open formats Apple would have been a far more effective competitor, the door would have been open for additional platforms, and Microsoft might nev have attained monopolistic market share.

      • McMac Pentaxian

        You make a good point. I was an Apple IIe user when the PC came out. Before the Mac was even on anyone’s radar. I worked in a government facility, where getting permission to buy an Apple II+ to replace our TI desktop calculator with it’s 2″ paper strip printer took many months.

        Four months after the IBM PC hit the stores for the first time, trucks pulled up to the loading dock. In one day, everyone’s Wang terminal was replaced with one of those PC units, a five foot bookshelf, shelves filled with maroon hardboard slipcases containing every thing Microsoft had written (mostly CP/M ports), plus one copy of Lotus 123. As I understood it, the same thing was happening all over Washington D.C. as well as government facilities across the country. The price? Practically free.

        That is how you establish a base for new products. That is what Apple had to overcome in a few years when they introduced the Macintosh. It is also the reason Apple subsidized most of the K-12 school systems by installing Apple IIs and IIgs computers. In 1984, our higher halls of education sold, in some cases requiring, Macs. I believe it took MS and the (PC) boxes that ran their software a decade to crack into that market.

        I am not an expert on the history of the PC and Apple. But I got in on the ground floor, worked for the government from 76-88, worked in computer sales part time in the DC area, started an Apple club in 1977, graduated from Applefests to MacWorlds, sat on the board of directors of the second largest Macintosh Users Group until 1995.

        I now run Parallels on my iMac and MacBook for the rare occasion Windows was required, like loading local channel freqs into my aged portable scanner. Recently used my iPad 2 almost exclusively on a two month trip throughout the western USA.

        I’m a retired photographer, loading everything I shot on that trip onto a USB drive attached to the iPad so I would have 3 copies, SD card, HD, and iPad. Couldn’t ask for a more integrated solution. My camera system is Pentax. Has been since 1965. Every lens I bought for that Spotmatic remains useable on my K-5. I guess you can say I’m a proponent of the underdog but elegant solution. Still prefer Beta over VHS, VW over Lexus. Have (had) red hair. You catch my drift? 🙂

    • AndyW

      I agree with these two, but I have two more that happened in the same timeframe.

      1) Non-nerds joined the computing world and now far surpass the old customers. Back in the late 90’s I was perplexed why anyone would want one of the blueberry iMacs. In part it was because people wanted a pretty computer to put in their kitchen. The internet gave a lot of these people a draw into the computing world. Beige boxes and arcane operating systems were not going to cut it with this crowd. These people are not going to wipe their drives to reinstall an OS, and are baffled by viruses. Though the vast majority in the early 2000’s were buying pc’s to do this, those machines drove them crazy. Over the decade Macs appeared as a more acceptable alternative and the gateway drug effect of iPods came into full effect. The internet and Microsoft’s own efforts to simplify starting with Windows 95 drew a lot more of these people to the market, and Apple was well positioned to take them away.

      2) The management of both companies had a complete reversal. When Steve returned in 96 the pc war was already settled. Apple was horribly mismanaged with lousy, bloated product lines, and no buzz. Since then Apple had very few flops. That’s not through luck or genius designers (though of course they had both.) They stuck to their very simple concept of well designed, easy to use products from top to bottom in that company. Everything they do follows that simple pattern.

      Meanwhile, Microsoft is just dominating. They roll through their monopoly lawsuit mostly unscathed. They have all of the attention to the point of it being a little bit ridiculous to consider a Mac or Linux. Then Bill Gates left in 2000. Their flagship product didn’t get updated for 5 years and Vista was very poorly received. They flat ignored their dominant browser until Firefox gave them a kick in the backside in 2004. The Office suite has received mostly cosmetic updates and bloat. And they went into every market they could think of in a halfhearted way. Some may say that they borrowed most of their good ideas, but this was a company that was built on engineering dominance. But they let a money guy run the company and they lost their direction.

      • No. Microsoft was never built on “engineering dominance”, and when you say that it certainly make me question if you are indeed an “old timer”.

        MS was built on a key move to produce a DOS (which itself was a copy of another), that allowed them to become dominant. Since that time, their has been no meaningful innovation or superior products. Only 2nd rate knock-offs (which, over say 5-10 years do eventually get polished).

        MS missed the boat on GUI’s, the internet, browsers, office applications, search engines….it’s actually astonishing how they’ve missed almost every key area….doesn’t matter if it was OS2 warp, or Netscape, MS needed to buy/leverage (often illegally) to get back in the game. Had they not been the 800lb gorilla, they’d have died long, long ago.

        It’s easy to legally or illegally bully your way back to dominance, WHEN it’s in an industry you effectively control, it’s when MS ventures into any other area that their 2nd rate products don’t cut it. eg. phones…use our OS or else! Or else what?

        In terms of engineering, MS has been an example of a black hole into which fine minds are hired….and nothing comes out. Impressive tech demos occasionally….all of which fail to reach market….the products that do come out are…..poor. There is no other word for it. Whether it’s a clunky Zune, an overheating xbox, a bloated Vista, a MS Bob….they are just poor….the only well received items are iterations of products tweaked for decades eg. office….even then, “improvement” is questionable.

        It doesn’t matter if it’s Gates or Ballmer, neither has shown any insight…in fact both have shown remarkably block-headed failures to stay on top of the industry.

        This is the problem for MS as the importance of the desktop, and thus Windows, slowly ebbs away. It is remarkable, that in all this time, with all their power and money, and engineering talent, they have failed to become significant in the emerging platforms.

      • I disagree with your opinions on all the products that you claim were poor. The Zune HD was superior to the Apple offerings in every possible way– but nobody cared. The “overheating xbox” was a wild success that many people love, overheating or not. Windows Phone is hardly second rate, especially given it tries to be something other than an iphone clone, but again– few people are aware it even exists.

        Micosoft’s biggest problem is the perception issue that everything they make is poor, when really the people saying this haven’t even used the products.

      • How was he Zune HD better than the iPod Touch in every possible way? The problem with the Zune line was it always targeted 1.5 year old Apple product lines.

      • Zephyr

        I used Windows 98, 2000 and XP and those 3 OS worked poorly. In contrast I’ve never had those problems with Mac OS X.

      • symbolset

        I really, really don’t like Microsoft. My disgust for how F*d up this company is is legendary. But to try to pretend that Apple had some credible solution this whole time? No. Not just no, but please hand over your geek card.

      • zeb

        I used Classic Mac OS 1,3,5 and 9 (introduced in 1999) and those worked poorly. In contrast I’ve never had those problems with Windows 7. 😉

        Can it be because I compare a 5 to 10 year older system with a new one?

        All Japanese cars are lousy because they were of very poor quality in the 1970’ies!?

      • Consumer_NeXT

        I agree: Microsoft has a perception issue. However “… when really the people saying this haven’t even used the products” may be true on the moon’s dark side but where I live everyone uses MS products. Big, fat, bloated, complex Microsoft products that require administrators or Geek Squad intervention regularly. Today MS is finally coming to the table with a competitive phone but the competition is on their 4th or 5th major revision: prior MS phones WERE second rate. The xbox is popular, in part, because MS can afford to steal the oxygen from competitors by dumping their “hot” product into the marketplace and not worry about recouping R&D and manufacturing costs.

        I, for one, use MS products and am tired of being surprised at 4 a.m. when MS treats me like a criminal because I added RAM or a hard drive to my system. (Authenticate your copy of Windows) I do not enjoy reinstalling my OS regularly. I dread background processes software engineers could not anticipate or that may steal my data. Finally, I am tired of paying >$300 for an office suite that is profitable at $100.

        I have choices now that I really didn’t have before so I’m looking elsewhere but I agree Microsoft has a perception issue; however, it isn’t the fault of others.

      • Bob

        I also disagree with your comment about xbox. Yes, the early ones had some issues, but the Xbox 360 is the dominant console right now and for the foreseeable future. I won’t be surprised if Sony and Nintendo drop out of the console business completely.

      • symbolset

        XBox is still seeking its first profit dollar. If it has some benefit to Microsoft, it isn’t money.

      • Koen

        You know, if you replace ‘Microsoft’ in your lunatic ramblings with ‘Apple’, it’s still, hm, how can I put this gently, crazy nonsense.

        I think it was Steve Jobs who said, ‘one can never be late in a market. Just make sure you can offer a higher value’. That was what MS did when they made the famous deal with IBM. That was what Apple did when they launched the IPod, iPhone and iPad.

        Calling Gates a failure is just as stupid as calling Jobs a god.

        Every major company, tech or otherwise nicks ideas from wherever they find them. Yes, even Apple. In fact, most major (tech-) companies have a healthy mix of in-house making stuff and out-house buying stuff. It is a normal business practice. The things you blame MS for, is Apple also doing.

        As for the bullying : pot meets kettle. Apple is suing just about everyone based on the must ridiculous patent-claims. Way to go, Apple. Really nice.

        In terms of engineering: Again shall we draft a list of true engineering accomplishments of both Apple and Microsoft? I think you might be in for a surprise. Microsoft engineering features are mostly software accomplishments and large hidden deep under the hood. you know, software is more then just an UI.
        speaking of UI accomplishments: the Metro-UI is one of the most innovative UI refinements I’ve seen in a very long time. It is radical and beautiful and a remarkable piece of engineering.

        Here’s another little list to think about: Pippin, Newton, eWorld, MacintoshTV, Quicktake 100, MobileMe. you see, dismissing *any* company based on some failed attempts is easy. And therefore completely useless.

        And about the desktop: Apple is a home consumer company. Microsoft users are both home and enterprise customers. Huge difference. As long as I don’t have a tablet or smartphone as my ‘primary’ workhorse, there is no ‘post-pc’ era for me.

        Smartphone and Tablets are about content consumption devices, desktop-computers are about content-creation, again a huge difference. I develop on a full scale desktop PC, not on a smartphone. Everyone (not only the devs ore other techies) in our company has at least two large screens. There’s a real use-case for that. Neither smartphone nor tablet can match this, unless they can project their display output on large(r) screens. It’s not about portability, it is about comfort.

        One last thing: Apple is an home consumer company making, in essence only two product-lines; IOS-based devices and OsX-based devices. If, as you predict, we’re all living in a post-pc era, shouldn’t Apple be ending the OsX based devices? Do you think that will happen? And if they do this, what will happen then? If they don’t, why not?

      • Peter Resele

        I don’t agree with several points of Koen. While Apple did not originally invent many of those things (microcomputer, mouse, Window-based GUIs, even multi-touch), they adopted them a full generation *earlier* than Microsoft – and were the first to build successful products around them, in contrast to research prototypes. This is a huge difference, as not only Steve pointed out many times. Building these products requires a lot of hard work and innovation – and this is where all patents come from, that Apple is now rightly (in my opinion) defending.
        Only when Microsoft realized – and sometimes they consciously waited – that those things could be made to work, and could be successful – they copied it. Years later! It is not the same to copy from Apple (when things are already developed to a stage that is consumer-ready) as it is to copy, say, from Xerox (ask people who knew the Alto).
        This time, Microsoft probably came to late. Because finally, short before his death, Steve and Apple succeeded in not only in making these products first, but also in making them a true, big success in the market.
        Bill Gates once said himself that Microsoft’s strength is not in inventing things but in making them really big. Finally, Apple has learned it, and now it is too late for MS.

      • I agree yiu should be able to defend legit patents which I’m sure Aple has but most I’ve seen in the news are pretty ridiculous

      • Peter Resele

        well, agreed in part… there were no doubt serious innovations (and certainly patents) around the first iPhone. I mean, serious things that Android blatantly copied. But it might be the case that those are not easy to defend in the courts, or it would take a lot more time… I am no expert. So that might be a reason to fall back on things like “design patents”.

      • symbolset

        Did you know that the bottle of tequila has a top. And you can screw it on and go to sleep?

    • Cordell

      Microsoft, under anti-trust investigation in the late 1990s, helped to destroy its own monopoly by investing $150 million in Apple to forestall its potential bankruptcy and by agreeing to support Microsoft Office on the Mac well into the future. With the launch of Mac Office 2004, which also included Microsoft’s Internet Explorer, PC users once essentially locked into the Wintel standard suddenly had a viable alternative that provided sufficient compatibility with existing standards in terms of user application interfaces and file formats. Switching to the Mac became a relatively painless experience, particularly when Apple adopted the Intel PC platform in 2006; peripheral manufacturers could port their PC device drivers to the Mac without much additional effort, giving Mac users access to the Windows hardware ecosystem. Combined with the widespread popularity of Apple’s iPod and the advent of iTunes for Windows in 2003, Apple’s brand gained increasing recognition worldwide.

      • Your lead in thought process is an Internet myth whose time to die can not come soon enough.

    • symbolset

      Somebody else probably covered this, but they gave one Mac to every school in the US at that time.

    • One thing the author misses is how MS used its dominance to unfairly create a monopoly. MS was brutal with any competition and squashed them using its monopoly for leverage.

      One of the big arguments against Macs in the 90s was the mantra of “incompatibility.” Apple was able to work in the ability to read/write files on PC servers, but MS worked against them at every step.

      In particular, they took what was to be standard language across all browsers,
      Javascript, and created their own version of it – an incompatible version – and
      through frequent updates had the whole web programming community eating out of their hands. Additionally, all other browsers were incompatible do to this conscious manipulation. In fact, even IE on the Mac was incompatible.

      They did the same thing with Office. MSFT made Office on the PC. MSFT made Office on the Mac. If the two products had incompatible files – who was responsible? Again, this was a conscious effort by MS to monopolize the industry.

      • neutrino23

        This is one of the important things about Microsoft. It’s unofficial mission statement was about survival, not so much about delivering a product. I recall Balmer in an interview talking about the early days when they won the contract to supply an OS to IBM. He described it as riding the tiger. They had won the lottery by getting this contract and now they had to feed product to it. Later, when they disengaged from IBM they still had the notion of keeping power. I believe this is why they failed to make really excellent products. It was always a mystery to me why with thousands of really smart engineers they couldn’t make really great products. The reason was the mission statement. They had all sorts of committees to manage their power in the market and keep it so it was really hard for a great idea to make it to the market unscathed. And it was really hard for them to recognize a good idea for MS rather than simply a good idea. And they knew this. Look up the self parody video they made about how MS would design the box for the iPod. Instead of the clean design Apple made it was all cluttered with corporate stuff you couldn’t see the product. This is why Vista got away from them. There were stories around back then that code was just proliferating almost to the point that it wouldn’t run. There was no control. If you needed a system call of some sort it was easier to just write it than to find the existing call someone else had written. To get Vista out the door they had to throw away millions if not tens of millions of lines of code. I think of MS as a heart that is fibrillating. All the heart muscles are firing but because they don’t fire in sync no blood gets pumped.

        One of Steve’s great achievements was to instill Apple with clear internal values so that they could all work toward common goals. Now that they are huge and are being pulled at by the huge market they serve we’ll see how well they can keep those values.

  • Joel Topf

    Should the y-axis start at 1 not 0? Numbers below one would indicate more Apple OS devices and really stretch out beyond a single unit. No?

    • Steve Weller

      The best representation would be a logarithmic y axis. Then the zero point would correspond to 1 and the future Apple dominance can be easily graphed.

  • obarthelemy

    I’m not sure Entreprise and Consumer are as interdependent as they were when only geeks used IT on both sides of that fence.
    I think we’re mainly witnessing the explosion of consumer IT, I don’t think changes in pro IT are that dramatic at all.
    MS hasn’t failed (their sales are still as stong as always) as missed a tremendous growth opportunity. They’re quite good at catching up from a late start though. Has the fat lady sung yet ?

    • JohnDoey

      No, that is wrong. There has been no growth in Windows for a few years, and it used to grow. Also, Windows Mobile has reduced in size dramatically even as ARM systems overtook Intel. The fat lady has sung at Microsoft. They are on the same plan as Apple was in 1986–1996, for the same reasons.

      iPad is the biggest story in both consumer and enterprise computing. Users who refused Windows 7 upgrades for their XP systems then brought in their own iPads and use them 80% or more of the time. It is very common. The iPads have a fraction of TCO of a Windows system. The user goes to a mobile PC with 10 hour battery for much less than their 3 hour HP notebook used to cost in TCO.

    • The fat lady has been sighted in the wings, and those who fell asleep during the other part of the program are starting to wake up and notice what’s going on. 🙂

      It wasn’t too tough to copy Mosaic; it’s tougher to copy iPhone + iPad + iOS + OSX + iTunes + iCloud + App Ecosystem + more. If MS had made an earlier start, they would have a much better chance.

  • The Intel transition in 2006 eliminated the last excuse not to buy a Mac for those with enterprise software written in Windows.

    • Tom

      And several more reasons:
      – Panther was the first Mac OS to be better than Windows in several years
      – the iPod introduced new customers to Apple
      – overall, the company was able to shake off that “loser” stigma. Buying a Mac was not a risk anymore

      • ex2bot

        Yeah, Panther brought sighs of relief. Jaguar did a lot to improve (and reduce the beachball), but Panther brought the speed and polish.

  • Frank van Leeuwen

    Horace, wouldn’t the vertical axis be more informative when displayed in a logarithmic scale?

    • jawbroken

      Why? In what way would it be more informative, easier to read or more clearly demonstrate the point being made by the article?

      • Frank van Leeuwen

        Because the graph shows factors. The difference between 2x and 3x is much bigger than the difference between 48x and 52x, but the current graph suggests otherwise.

      • jawbroken

        Not really a clear explanation, at least to me, because you haven’t defined what you mean by the “difference”. Certainly not true for normalised yearly unit sales, for example.

    • For those of us used to thinking in a log scale it makes sense, but until the ratio gets below one, a linear graph is simpler. See Steve Weller’s post below.

    • Alfiejr

      no it wouldn’t. logarithmic scales distort simple data like this. they are needed only when dealing with exponential factors – orders of magnitude, not mere multiples.

    • Walt French

      Your suggestion will be increasingly appropriate as the two companies’ user counts approach parity. Right now, the rather unimportant distinction between say, 25X and 35X takes up a large part of the vertical space, while 2:1 versus 1:2 or even 1:5, an enormous transition (when/if!), would look insignificant.

      Horace, it doesn’t tell today’s story quite so well, but I’m sure it will be increasingly helpful.

  • jawbroken

    There are four endpoints on the right hand side of the chart but only three are labelled. What does the darker green in between the lighter greens show?

    • jawbroken

      iPod Touch, perhaps.

    • IR

      Good question. Something launching simultaneously with the iPhone? And it looks like the iPad sales are being counted from around 2009, too, don’t you think?

      • The starting point around 2009 is an artifact of using area charts.

      • vastaman

        It’s also easy to mistaken area for size of contribution. iPad’s contribution seems to be 3X iPhone’s. An artifact of the nature of the chart and the stacking order.

    • That’s the contribution of the iPod touch.

  • I get why you count iPads, indeed they substitute PCs. I don’t see that happening with phones nearly as much. It’s interesting to see, though.

    One factor that can’t be properly measured is piracy in Windows. I don’t have the data to back it up, but It seems obvious that the multiplier reached much higher values.

    • Noah Berlove

      There is always a gap between Windows sales reported by Microsoft and
      the Windows percentage of PC sales reported by the research houses
      (there are many reasons for the difference, piracy probably being a
      major one). I believe Horace uses the latter numbers, so, if anything,
      he errs on the side of overstating, not understating Windows size.

      • I used Gartner’s PC shipments (adjusted for Macs) as a proxy for Windows.

    • mjtomlin

      Because we’re talking about platforms here, not device types. Windows, Mac OS X and iOS are all platforms. The iPhone (along with the iPod touch) is a device which runs iOS and therefor should be considered because it adds to the overall platform share.

  • poke

    Excellent article. Your analysis looks right. If you look at Apple around 2004, it’s before the Intel transition (which I might have suspected would be important), but a few years after Apple moved to its modern laptop design with the Titanium PowerBook (2000) and the non-clam-shell iBooks (2001). They’ve used very similar designs for their entry level and pro range ever since. As others have noted there were other important factors – OS X was reaching maturity, the iPod had rehabilitated Apple’s brand and the web made it easier to adopt alternative platforms – but the hardware was likely the most important.

    I think the analysis also neatly explains why Apple has stepped up innovation around OS X and the Mac range, rather than simply concentrate its efforts on iOS. The Macbook Air line and the mobility-oriented OS X updates will continue to put pressure on Windows and “dismantle” its advantage. With Lion Apple redesigned the OS around its multitouch trackpads and with Mountain Lion it’s redesigning it around iCloud. The level of integration is unprecedented. The list of features Apple has that the PC manufactures and Microsoft have no been able to match is growing with every new product cycle.

    • Gavin Hay

      I would disagree with your discounting the web as an important factor. When I chose to go with a MacBook for my new job, knowing that almost everyone lived in the cloud was a very serious consideration.

      It really freed me to make the best desktop environment decision for development without having to worry about ensuring that I was file format compatible. With Google docs, LucidChart, Collabnet, etc, my dependance on Windows is gone.

    • normm

      If Mac sales are currently 5% of Windows PC sales and iOS+Mac sales are 50%, the volume story is 90% iOS. Apple does make a lot of the profit in the PC industry, though. But the dominance story is about post-PC devices: Android is already passing Windows PC rate of sales, and iOS will soon.

    • Jonshf

      I agree with these factors. The question going forward is about Apple keeping a differentiating advantage. I think the move to retina displays throughout their product lines will play a big role.

  • KitFR

    The PC advantages were: Intel, cheap standards-based hardware, Office and Explorer. Apple’s move to Intel was huge, especially as it took the risk out of buying into the platform as now people could boot directly into Windows or run it in parallel. Of course to do that meant junking proprietary interfaces for those of USB and Bluetooth, which opened up the platform to lots more hardware and generally lowered costs.

    Getting Microsoft to commit to keeping Office on the Mac was another key move, and Apple followed through with its iWork suite in order to minimize its dependence. And let’s not forget Safari which helped nudge the web back to its standards-based promise and away from sites catering explicitly to Microsoft.

    In these ways Apple whittled away Microsoft’s advantages. OSX, MacBooks and iMacs with their high design and ease of use, cloud services–these were examples of Apple extending its traditional advantages.

    • Good analysis. Another related factor that is sort of a “dirty little secret” about Mac growth was that, with Intel, came good PC virtualization, and that made Mac OS X a much MUCH more viable choice, easing the transition from Windows. Parallels and VMware are directly a big part of the Mac growth spike of 2006-2010.

    • Which proprietary interfaces are you referring to?
      PowerPC Mac’s had USB since the iMac in 1998. Bluetooth was on Mac’s at the same time as it was on PC’s (ish, i don’t have dates to hand).
      The last Powerbook (PowerPC) had more or less identical ports and wireless interfaces to the first MacBookPro (Intel).
      I think your whole point here ‘opened up the platform to lots more hardware and generally lowered costs’ is unfounded. Sorry.

      • KitFR

        ADB, SCSI (PCs used IDE) and Firewire (never popular on PCs). While the latter two were not strictly proprietary, the end result was the same–higher prices and less choice compared to what the PC crowd enjoyed. Jobs returned in 1996 and I do not think it a coinsidence that with his return the mac started shedding the various counter productive ways in which it differed from the PC and instead started concentrating on putting real distance in the areas where it added real value.

      • Ted_T

        ADB and SCSI were gone long before Intel — they went away at the end of the 1990s. There is no connection between the shift to Intel and I/O port changes.

      • Jason

        ADB was discontinued in 1998. SCSI was very dominant on PC until SATA came out. Firewire aka IEEE1394 was and still is very prominent on sony computers and most popular camcorders, and is a standard in the recording industry for digital thru-put on mixing consoles. Firewire is a very good port and I don’t think it will be going away for at least 5 more years. The Powerbook TI was the first mobile computer with a DVI port. Apple was the first company to incorporate the ALS and backlit keyboard into portables. Apple’s G5 was one of the first machines to incorporate Gigabit Ethernet. Apple is one of the only companies that offers light-pipe/optical audio built into all of their systems. iMac G5 was the first computer to build in a webcam.

        the list of apple’s innovations is endless….

        While PC manufacturers competed on making computers cheaper and “faster”, Apple was innovating and improving their computers.

        look at the “chick let” keyboard design that apple started. now EVERY laptop uses this style keyboard…

      • Divebus

        My 450MHz Blue & White G4 tower had Gigabit Ethernet in 2000. Everything else is right on. PCs were (and still are) very slow to get with any new technologies. You can start thinking about those stupid 25 pin ports that keep showing up on PCs as proprietary these days.

      • Point is, you could add stuff (cards, etc.) rather easily. You won’t believe how much trouble I went through finding and then installing a Wifi card on my G4 tower back in the day. That was mainly a driver issue, but indirectly a consequence of a different attitude towards hardware on the part of Mac users. Most of them simply didn’t tinker with their hardware much.

        I don’t think there are many PCs still being sold with a parallel printer port, and to my knowledge (see Jason’s comment) SCSI was never very big on PCs; HD interfaces were almost always (P)ATA.

      • xynta_man

        > SCSI was never very big on PCs; HD interfaces were almost always PATA

        That depends on the segment. Cheap PCs used PATA, SCSI was used when a PC required performance, e.g. workstations, servers, etc. It’s just as time passed PATA cleared the gap, marginalizing SCSI.

      • ex2bot

        SCSI was used when performance mattered, esp. on servers. Only fairly recently did PATA and esp SATA put a serious squeeze on SCSI in applications where performance really mattered.

        Parallel ports haven’t been gone for long on Windows machines. Maybe 5 or 6 years.

      • ex2bot

        I believe Apple was also first with built-in DVD burners IIRC.

      • The_Z_UK

        Umm, I’ll have to correct you a little there, Apple wasn’t the first to manufacture a device with a chicklet keyboard. It first appeared on laptops with the Sony Vaio X505. It had appeared on desktop keyboards years before, like on the ZX Spectrum, but I’m too young to remember that.

    • I agree that the move to Intel is what unleashed a lot of pent up demand. Prior to that as Mac OS X matured into a complete modern OS, I heard a lot of people, (ordinary everyday, if tech savvy, people) express admiration for Macs, but at the same time saying they could not bring themselves to buy one because of the enormous amount of money, time and expertise they had invested in their existing Windows software. When they could at last run that stuff on a Mac with little or no speed penalty, then a transition to the new platform became possible

    • ex2bot

      Wha? Apple had USB before anyone else. The iMac was first.

  • Don

    My understanding, as a former mainframe programmer in the 80s, is that Windows is held back by supporting many legacy programs and hardware configurations and OS X is not. My suspicion is that the windows code base is much larger than the OS X code base and complexity grows exponentially with size. This is why Apple can make frequent and timely updates to OS X and Microsoft has infrequent updates to windows that are always years late. Time is not a friend to keeping all that old baggage working.

    • I think there’s also a difference in corporate philosophy. Microsoft wants to have every feature every customer wants in their check-off list; backward compatibility is one of the bigger ones there, since change is cost in corporate IT. (Though this principle doesn’t see to extend to their UI designs, which change constantly. Possibly because their corporate IT customers aren’t the ones to feel that pain.)

      Apple is willing to lose sales by dropping features, compatibility, etc., if it streamlines the design and experience for the majority of customers. I’m not entirely happy about this myself — I was just forced to lose a bunch of old PowerPC apps due to the iCloud transition. But overall, they’re probably right… sometimes you have to clean house.

      • Walt French

        Microsoft’s announcements of the past 30 days show that legacy support and full check-off lists have dropped dramatically in priority. I’d say those were talking points, rather than actual corporate philosophy.

        Their real mission, which continues mostly unchallenged, is to be the unquestioned leader on the corporate desktop (which they are) and the go-to OS for servers for corporates (a bit less so). Apple, for instance, quietly abandoned the server market a few months back, focussing on the mobile business lines, which are growing by leaps and bounds.

        The balance of power and budgets have now shifted enough that Microsoft recognizes the threat to the desktop if all the new user paradigms are developed for iOS and OSX; if that keeps up, Windows will be relegated to green-screen monitor tasks of the 2010’s. Yet again, the disruption theory prediction is validated: that the incumbent waits until its core function is threatened, and that by then, it has to compete on the disruptor’s terms.

      • adrianoconnor

        Not strictly true — pretty much the entire point of the Intel-based Surface is backward compatibility…

      • Walt French

        Surface is a break with past practices and legacy support in MANY ways. If MS mostly wanted more legacy support, they had no reason to do Surface. I have not yet seen any Windows 8 feature aimed at sustaining Microsoft’s desktop functionality. It’s instead all about mobile—form factors, UI, battery life…

      • This is true. But don’t underestimate the value of backwards compatibility for businesses and enterprise. It’s huge. This is where I think Surface will gain the biggest traction since this is MS’ domain. They know enterprise like Apple knows consumers. I generally don’t care for MS’ products but Surface looks very nice. Kudos to MS.

        Where backwards compatibility hasn’t proven to be a big deal is with consumers. The iPad has proven this to be so.

    • If you could summarize Apple’s success in both hardware and software in four words, I believe they would be “Jettison whatever you can”.

    • Walt French

      Don, I think this was a significant issue a decade ago, but time has passed it by.

      MS is less and less committed to legacy support. And that’s the reason why many major firms (e.g., the bank I formerly worked for) stay with XP, having skipped the newer releases that no longer support some key legacy systems (including, ironically, security tools). Users who want extensive legacy support are NOT customers for new machines and new OS releases.
      Meanwhile, as they weed out the worst of the cruft, the not-dead-yet stuff becomes less expensive to support. Does it take an extra hundred megabytes of each user’s virtual memory space? … an extra GB on disk? Even multiplied by millions of machines, it’s a relatively small cost.
      So I think this is a relatively minor part of the economics these days. Much more important is that Microsoft has fixed itself to a relatively slow-growing user segment, failing to catch the two waves of mobile that Apple has identified, and tailored is systems for.

    • Typo333

      “OS X” is not, but that’s because they made the decision to. There’s nothing inherent about “Mac OS” or “Windows” that makes this necessarily so. In the OS 8/9 world, there was definitely an expectation of Mac OS compatibility. Apple decided it was worth it to cut the cord, by offering temporary backwards compatibility (Rosetta), and get a new OS.

      This is probably a contributing factor to Microsoft’s infrequent updates, but it’s certainly not the only cause. Windows 7 includes “XP Mode”, an actual Windows XP virtual machine, for running older code. Sadly, however, despite having this perfect-compatibilty system for older apps, they don’t seem to have made any great push to simplify the current APIs. The reasons are mostly social and cultural, not technical.

      • Ian Ollmann

        Carbon/Classic was for OS9 apps to run on OS X. Rosetta was to enable PowerPC code to run on Intel.

    • symbolset

      Web apps eliminate the control ownership of the client OS gives to be deliberately incompatible with competing apps. It rocks.

    • Space Gorilla

      “My suspicion is that the windows code base is much larger than the OS X code base”. You think? 🙂

  • JohnDoey

    “Why is [Steve Jobs] doing [the Apple comeback]? He must know he can’t win.” — Bill Gates, 1999.

    • But Steve didn’t do “an Apple comeback” vs. MSFT — they had already won. It was acknowledged, and that was that. What Gates failed to realize is that continued success was not assured — in other words, he didn’t heed Solon’s warning.

    • IIRC, just prior to selling NEXT to Apple, Jobs said the desktop wars were over, Apple had lost, and if he ran Apple he’d milk the base and get going on the next big thing.

      • Walt French

        There’s a great. Ideo of him saying about the same thing right after he. Ecame the Chief Executive Consultant. (Sorry no link.) Said “no” to many pet projects, including Newton. Then foreshadowed most of what he did since. Kinda amazing, well worth the time for students of him.

        But I don’t recall “milk the base” in it. Maybe in other words.

      • huxley

        Jobs did say it, but not “just prior”, it was 10 months earlier and well-before any negotiations even started.
        “If I were running Apple, I would milk the Macintosh for all it’s worth — and get busy on the next great thing. The PC wars are over. Done. Microsoft won a long time ago.”

        Steve JobsFortune (19 February 1996)

  • “Microsoft’s moat is imminently draining” is one hell of an investable thesis.

    • Ian Ollmann

      What’s more, where MS goes, Intel may follow. Both are driving huge ships that take half a decade or more to change course. Both parties’ margins are ultimately paying for the small device transition.

  • You could take it one step further and include XBox. So, all-in ecosystem vs. ecosystem

    I find the PC vs. Mac the most interesting. Even with all the success the last few years, the Mac is still well well behind. I wonder looking 3-5 years out if the Mac can achieve a 15% to 20% share of the market. The trend line appears to indicate that “Yes” there a chance. Apple would need to ship 10-15 million units a quarter

    I would expect significant upgrades to Windows 8 over the next year (aka new PC purchases) and the curve to flatten out (at least for the short term)

    • mjtomlin

      Well then he would also have to consider the iPod touch and the AppleTV, which are also a part of the iOS ecosystem.

      I don’t think Windows 8 is going to help. It may initially retard the trend as all new product releases do, but in the end, people aren’t buying Macs because of their opinion of Windows, they’re buying Macs because of their opinion of Apple. iPods and iPhones (and iPads) are driving Mac sales growth.

      • Yes, that is what I was getting at – all in. Ecosystem vs. Ecosystem. Horace’s charts above already include iPod Touch by the way

        I personally was driven to Apple because of my very bad experience with Windows over the last three+ years

        Personally, I think Apple does have a chance to get to 15%+ share of PC market

    • Walt French

      Different charts for different purposes. But while it’s true that an OSX app doesn’t inherently mean more power for iOS users, Apple *IS* solidifying its aggregate power thru iCloud sync.

      An anecdote: my wife forwarded a dinner invite from her cousin; I clicked on the time in the email and it created a calendar event that included the address. After OK’ing the details, iCloud populated the event onto my phone. When the 30 minute alert went off, I clicked on the address and we had driving instructions ready to go. This is the sort of user-appreciated integration that makes it appropriate to compare company-wide user bases instead of just like platforms.

      Google is obviously integrating its web- and Android-based versions. Inasmuch as EVERYBODY uses Google (in the US, anyway), maybe just Android is a good measure of the extent. I’d like to see the three-way chart, too.

    • Huxley

      Microsoft sold about 67 million Xbox 360s since its release 6.5 years ago, whereas Apple has sold that many in 2 years. Since we are unlikely to see a successor to the Xbox before 2015, the iPad will probably sell double the number of Xboxes by next April.

      • XBox will have a successor before 2015. Possibly late 2013 but more than likely mid 2014. I’m thinking it will be announced next year.

      • unhinged

        What about the Kinect system? What impact will that have going forward, and can we infer any causation from the previous 12 months’ figures?

    • unhinged

      Can you explain _why_ you expect “significant upgrades” and why that would equal new PC purchases?

      I myself expect flat to negative sales growth for desktop PCs and flat to minimal growth for laptops, based on current observable trends. Tablets and phones are where it’s at. 🙂

      _If_ Windows 8 results in significant new purchase numbers (and based on the reviews I have read, that seems unlikely), then it will be for “post-PC” devices.

      Apple is likely to continue its trend of growing sales in every device category, given the market appeal that has so far drawn users from other computer manufacturers.

      • My point is that Windows still has ~ 90% share of new purchases. And, a lot of Windows customers still run on Windows XP (having skipped Vista, Windows 7). So, for these customers, there is pent-up demand… Putting aside the overall shift to Post-PC products

    • ex2bot

      I don’t think so. XBox is very specialized. Games and media, right? It’s not a general purpose computer, not by any stretch. Maybe if MS would let people put Linux on it (I’m sure you can somehow).

  • NeilM

    Let’s not forget the other metric: profitability. Whatever the volume multiple or its trend, PC makers are also barely making a margin, while Apple has neatly skimmed off most of the profitable part of the computer market.

    • I agree. It would be really interesting to see the same graph with prifitability instead of number of units.
      Kind of like how Apple have x% smartphone market share, y% smartphone revenue share and z% smartphone profit share.

      I would guess that x < y < z is true for both platforms.

    • orthorim

      Tim Cook. That’s how Apple turned from a maker of fantastic hardware and software into a margins monster that nobody can match. That’s why he was appointed CEO – it’s all fun and play but at the end of the day it matters how much money you make.

      Supply chain excellence allows Apple to dominate the tablet market on price, just like they did with the iPod. With the iPhone it’s more of a classic Apple product which is so good it sells itself so Apple is riding it for huge, unheard–of profits instead.

      Thanks to the supply chain magic of Tim Cook, Apple always has a choice with new products: Price it so nobody can produce a similar product at lower cost. Or milk it for margins unheard-of in the hardware business. It’s a good choice to have and it’s what makes Apple king of the world right now.

      • David

        Supply-chain excellence. O, the irony! Remember when Apple didn’t know supply chain from key chain? A product was announced and generated lots of excitement in the Mac community, but it would be obsolete before they met demand.

  • Alfiejr

    this post’s point is right-on. BUT, it leaves out all the other new Windows/MS computing competitors, Android mostly! so what happens to MS’ dominance, to the multiple, if you add in all the Android smartphones being sold? doesn’t it totally collapse to less than 1:1?

    that is the real news. it is the end of an era for MS, and the Fat Lady is in fact screaming.

    • mjtomlin

      Problem with considering Android here is that it has not proven to be much of a platform. It has only found success as a phone OS, pretty much as Symbian did in its heyday. A majority of users aren’t using Android the same way they use iOS, which shows in real world usage statistics and the fact that actual tablet sales are dismal.

      • Alfiejr

        True, many Android phones are not used to their potential as mini-computers (also true of some fraction of iPhones too). some millions of Android tablets have been sold tho.

        but they still should be counted for the purpose of this chart and the dramatic shift the post-PC era represents for MS.

      • symbolset

        Android tablet sales in the Christmas quarter were about 28 percent. I wish I could fail that badly.

      • mjtomlin

        That was mainly due to the Kindle Fire. And what happened after the “gifting” season? Those sales dropped off a cliff. Again if we look at real world usage statistics, which demonstrate what devices are actually being used in the wild, the iPad usually sits above 90%. I’m guessing people who bought the Kindle Fire aren’t straying outside of Amazon’s content or they just aren’t being used (or were returned).

    • Android will be at parity with Windows this year.

      • techSage

        Facial tissues will probably be at parity with Windows this year, too.

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  • JZ

    It’d be interesting to see the same chart but with ios vs android

    • The resolution of the chart is one year. iOS would have 5 data points and Android only 3. There would be a ratio to calculate for only three years: 2009, 2010 and 2011. Not much of a story to tell about the building of any advantage.

  • oilburner

    As much as PC users bash the Apple ecosystem for being just that, I think there is a point where MSFT went too far the other way. By nearly completely democratizing their OS save for price (worst possible variable) they didn’t enable (or more accurately mandate) their OEMs to push technical boundaries.

    Rather than permitting Dell/HP to junk up Windows with all those add-ins (which only made Windows look bad, somewhat undeservedly), had they opted for Dell/HP to push speed/efficiency boundaries (make a jewel-like “ultimate laptop”) they could have had price competitors on one end of the spectrum and technological competitors on the other end. Think Toyota pursuing both quality, growth and technology all simultaneously (Lexus, Toyota VVVT, F1 Racing, Trucks, Scion, Corollas, Prius Hybrid), all pretty well (give or take a few years in the mid 2000’s). Instead it was all price leverage on moving units.

    It lasted long enough to turn a brand into more/less a commodity, and next turned all the manufacturer brands into more/less commodities. Then AAPL comes along, switches its hardware TO their design and says, “hey, I’m different!” and people (right or wrong, I’m talking brand perception here) buy in.

    I’m a Mac user but am _not_making a fanboy argument. I have had some great PC’s but it was always despite a philosophy that put users second to volume pricing and bundling deals.

    • The comparison to Toyota doesn’t make sense. They control specification, supply chain and manufacturing. They just don’t control sales. They are more like Apple than they are Microsoft.

      Do you really think Microsoft didn’t want OEMs to make the “ultimate laptop”? What reason would they have for not pushing the OEMs to do this? It’s in their best interest.

      If Microsoft prevent OEMs from customizing the PCs however they wanted, everyone would be crying bloody murder. Instead, the OEMs are the ones that chose to put crapware on the PCs to improve their margins instead of innovating in supply chain, manufacturing or designs to increase their margin (by saving money or charging more for superior products). For the past 15 years, PC OEMs have been fighting amongst themselves with no real competion. Then along comes Apple which changed the game completely for them.

      I think OEMs are finally seeing the light based on this competition for platform switchers (and the fact Apple’s hardware kicks butt). We’ll continue to see vastly superior products come from them much like we’ve been seeing great PCs come from Samsung the past year or so.

      My only wish is that PC makers get the memo that their keyboard and touchpad need to be top notch. It seems like every PC review you read is “This laptop is great except the touchpad/keyboard suck”.

  • warcaster

    Hasn’t Android already reached parity with Windows? Does Microsoft sell more than 365 million Windows licenses per year? I think they only sold 400 million Windows 7 licenses totally so far, in 3 years. In 2 years Android should reach parity in terms of user base, too – 1.5 billion units or so.

    • Nope. Microsoft has sold 600 million licenses of Windows 7:

      • techSage

        Good to see that there are some people here that actually know some facts.

    • The difference being that selling Windows is highly profitable for Microsoft. You can’t say the same for Google and Android.

      • Windows began with Version 1.0 in November 1985. It was not a highly profitable business until Windows 95, 10 years later. Google’s Android is three years old and profitable. Can you be sure that it won’t ever be highly profitable?

      • xynta_man

        Horace, is it really profitable? If so, how much? They have tremendous costs of developing it, hosing the Play Store, etc. They’ve even purchased Motorola for 12.5 billion dollars to protect their Android business.

      • I’m going by the statement from Andy Rubin. I also did my own calculations and profitability is indeed plausible, though it’s contribution is still small to Google.

      • xynta_man

        Well, sorry to doubt you, by I wouldn’t really take Andy Rubin’s word. Such high executives don’t usually tell the truth. Those people also have a PR duty to the company. Just like Google’s Vic Gundotra some time ago said that Google decided to make Android to battle the monopoly of Apple, which is total BS, as we all know.

        I mean, if Android is profitable, then why doesn’t Google show it in theirs earning reports? Sure, it’s possible to achieve some operational profitability, but what about all those sunken costs, like 12.5 billion for Motorola?

        P.S: I (and presumably many other of your readers) would love to get a post with detailed estimation of Android’s profitability, though I understand that it’s difficult to estimate Google’s expenses on Android.

      • The making materially inaccurate public statements by company officers is punishable by the law and can also be ruinous to the executive as they become targets of shareholder lawsuits.
        Discussion of profitability is material information.

        You can read my analysis of Android’s income statement here:
        See also posts linked from that post.

      • Harvard Irving

        Companies and their executives break the law all the time. The law isn’t much of a barrier to them.

      • xynta_man

        Well, of course they wouldn’t outright lie in public, I mean more like bending the truth – I believe it’s quite common among executives.

        In the end of the day profitability of something can vastly depend of how it is calculated. Let’s say Android makes about 500 million dollars a year for Google (just for example). Sound good? But is it good, when you take in account the 12.5 billion dollar hole, that the purchase of Motorola made in Google’s pockets?

        The main issue I have with such estimates (while you did indeed make a great post) is the in-direct nature of “Android’s revenue”. Android has direct revenue in form of AdMob (since it’s part of the application ecosystem), Play Store purchases (likewise), etc, which I find more than appropriate to include in the calculation of profitability. But they are very small. The main source of income form Android is “search”, which isn’t really “money from Android” – it’s the “money from the search engine”, since it’s made the same way as the search engine makes money from Windows users, Mac users, even Linux users.

        Should Google consider that they are profiting from Windows? Not really, they are profiting from their users, whose platform of choice doesn’t matter. If tomorrow Android loses marketshare to the platforms of competitors (e.g. Samsung forks Android Amazon-style), nothing will change in the revenue, that is generated by Google’s search engine. There’s no direct relation of that search revenue with Android, hence why I don’t consider it part of Android revenue. The same thing can be said about the “AdSense source”.

  • Now this is a useful perspective. This is a war of ecosystems, mobile and desktop combined.

    No wonder Microsoft is slashing prices for upgrades to Windows 8. They must get all their users to one integrated ecosystem. They have realized that Windows OS is a mere component of an ecosystem, rather than a money-maker in itself. To enable a serious app commerce ecosystem, the most current OS must be installed on all its users devices. Damn the torpedoes, damn the OS profits.

    • Jeff Ratcliff

      There’s a recurring desire on the part of technologists to combine everything in a “one-size-fits-all” fashion. Historically, it’s never worked.

    • Kizedek

      You are right that the whole app economy has hit them asymmetrically and they must react to that. But, I wouldn’t call OS X / Mac App Store, and iOS / iTunes Store integrated as such (with each other that is). So, I don’t think that is necessarily the lesson MS are learning… or, rather, it’s not what they should be learning.

      One wake up call they are facing is just as Horace has noted: that MS realize they are not going to continue getting the traditional margins on OS they have enjoyed in the past, while Apple is getting larger margins (percentage and actual value) from each device (because of the attraction of the whole ecosystem and the actual jobs to be done).

      Articles are saying MS needs to do it themselves because they can’t rely on hardware partners to compete well with Apple in terms of the product itself (true); but there’s more to it than that: Horace has said that MS is doing it because they see they are in a dead end business, having damned themselves and and their partners to ever decreasing margins.

      Building the whole widget as part of an integrated approach is suddenly seen as the only way to go, after all — both for quality and for survival. Wow… what a seachange.

      They are slashing prices because they realize that their traditional high margins doomed their OEMs to making cheap products that no-one wanted, and that they must slash them in order to sell any more Windows. But, to keep making the margins they are used to and need to make, they must now make the whole widget to make up for it (at once alienating those partners). Do they have the expertise? Doubtful.

      If they are working on unnecessary and misguided integration in the meantime (ie, a tablet/pc just to get “Windows” everywhere), then I think they are missing the most important lessons about integration.

      • unhinged

        I disagree that the OEMs were doomed to making cheap products – they chose to compete solely by lowering prices rather than isolating another factor for comparison. They would not have been able to use OS as a differentiator, sure, but look at Alienware – not cheap, focussed on a niche market (PC gaming) and clearly distinguishable from machines made by other manufacturers. HP could have focussed on tighter integration with its research equipment, for example.

        I prefer to think that MS is changing because its own profits are now under threat. Previously, they licensed Windows to OEMs at an equitable value based on volume (and various other requirements, such as “thou shalt not make Linux the default OS on your machines”) and the OEMs treated this as a fixed cost of their manufacturing. The OEMs then competed in a price war when selling their goods and absorbed the hit to their profitability – then didn’t know how to escape the race to the bottom.
        Eventually, profits dipped so low that the previously sacred cows had to be slaughtered – such as the idea that Windows was a fixed cost component. After that, the idea that Windows was a necessary component was challenged as well.
        So, Microsoft used the OEMs as shields against the drawbacks of lowering end sale prices while benefitting from the advantages of higher volume. Now the shields have been worn so thin they no longer offer protection, MS is having to react to the actions of competitors in the market – and it is not currently structured in a form to achieve that. I think there will be continued experimentation to find the best configuration for the business, and that MS is in the rather rare position of still having the resources to fund its reinvention (compare to Apple in 1996/97).
        Whether or not it has the will to make the required changes remains to be seen.

      • orthorim

        Well what choice do the OEMs have? None. Whatever they do, they are stuck with the crappy Windows user experience. It’s nothing to write home about.

        The thing that matters the most about a computer, in day to day use, is the software, and the hardware makers really can’t differentiate. Windows also dictates that they must use Intel so they don’t have much wiggle room on hardware either. They can put a different color on the outside. And compete on price. What else can they do?

      • Jerome

        Exactly. The Software is the decisive component. OEMs are doomed to compete on price. PC are a commodity, and Windows makes them all equal. Except for some niches like gaming or rugged devices, the race to the bottom is the OEMs only option.

      • KarlWa

        The most important resource that Apple had for its reinvention was a good, focused strategy that was unique to how they saw the industry and how it fit their talents (and how they could improve their talents and products progressively and even define how the industry moved forward).

        Cash isn’t such a vital resource for established companies needing a turnaround (look at Nokia and RIM, they still survive today). A good, unique strategy and a willingness to fight against inertia are.

        Microsofts surface tablets (not to mention everything in Windows 8 from the APIs to the pricing to the UI) that there’s a willingness to make big changes to how they’ve done business before. The changes are long overdue, though, and I’m still not seeing a clear leadership from Microsoft about what they think this industry should look like.

        Microsoft need to show that they won’t just make futuristic videos, but that they’ll put those things on the market today (or at least realistically iterate towards them), and put that vision on the market,

      • xynta_man

        >I disagree that the OEMs were doomed to making cheap products – they chose to compete solely by lowering prices rather than isolating another factor for comparison

        I disagree, them game was rigged from the start to OEMs eventually drive themselves into the ground. Remember when PC companies at least tried to make something semi-good? Like IBM ThinkPads. They weren’t cheap, but nor was they crappy. It was because the market wasn’t saturated enough and you compete on non-price features.

        You see, geeks like to complain about the situation in the PC market, saying thing like they would buy more expensive, but more good products, but they are out of touch with reality.

        What can a PC company do to break away from cheap products? Increase quality? Nobody (in the grand scheme of things) is willing to pay for it, with the super-low average selling price of a PCs being a clear indicator of that. The majority of demand for PCs is driven buy spec-sheet and feature comparisons.

        You essentially can’t put quality into a spec-sheet. Even Apple finds it somewhat hard to make people acknowledge the quality of their products, if they don’t already know about it from their previous experience or someone else, hence the Apple Store tactic with aligning the display of MacBooks at a particular angle, to force people to touch the laptop.

        To brake away from the cheap OEM hell you need to differentiate your products enough from them, which is mostly unreal for regular PC companies. What can they do? Put a custom theme on Windows? Almost any hardware can be bought from multiple sources, so they won’t have any exclusive hardware features.

        Trying to push the hardware to the limits will result in limits that Windows imposes on you, e.g. Sony was pushing high-resolution displays in their small laptops for years, but wasn’t successful since a high resolution just made everything look unusably-small on the screen and scaling the Windows UI botched the layouts of most applications one way or another. They couldn’t make a “Retina Display” move, since they didn’t control the OS.

        Any real hardware differentiation you try to make needs to be backed by software, the software that these OEM don’t control.

        Companies like Alienware, VoodooPC and other were essentially ultra-niche boutiques, competing for hardcore PC gamers that didn’t want to build their own PC (many of them still do it, since it’s a better value proposition), trying to get attention with some custom or semi-custom parts like watercooling, etc. They weren’t really popular or successful, and when they were bought by regular PC companies they essentially killed them, with Alienware now being a sad little parody of what they were.

        Differentiating on software is also mostly out of the question for these OEMs, since they can’t make their own version of Windows. If Windows has problems with drivers, they can’t fix it. If Windows has security problems, they can’t fix it. They can’t really add any new significant features. Plus, any software development is expensive as hell.

        It still boggles my mind how HP blew it with webOS and essentially killed it. They had their own OS! Sure, it had problems, but HP could’ve fix them, since they controlled it. They could use it for smartphones, tablets and eventually even small PCs (they could even make them ARM based), since internally webOS supported mouses and keyboards. They had a ticket to independence at least in some areas, but they totally botched it.

        The reason Apple is able to differentiate is, among many other things, their control of both the hardware and the software.

    • Markus

      I agree.And additionally they give each Windows RT device a full copy of Microsoft Office 15 (Windows RT version)!!!

      • And this is a smart move by MS as pretty much everyone uses Office and it will be a competitive selling point of Surface tablets.

      • Thompson

        The usability of MS Office applications has deteriorated for years in terms of nonintuitive placement of features in inscrutable menu structures, etc, making you search around madly looking for whatever it is you need at the moment. Even on a big monitor, it is extremely frustrating. Imagine doing all of this on a ten inch screen!

        Tablets force one to really simplify and streamline their interfaces. And this has never been Microsoft’s strong suit. Therefore, my crystal ball shows a train wreck in a tunnel if Microsoft really tries to shoehorn any of their flagship software products into a ten inch frame.


  • Comparing iPad and iPhone sales to desktop PCs is misleading. Windows 7 is the fastest selling of any Microsoft OS. This article seems little more than hit bait to be honest. Call me when people in large corporations start using their iPhone to work on massive spreadsheets.

    • i maybe ill informed, but i understand a significant proportion of large corporations are using their iPhones to work.
      perhaps not editing massive spreadsheets, but how many people actually do that?

      • Jeff Ratcliff

        I think a lot of the corporate use of iPhones and iPads are by top execs who want to play with the latest and greatest toys. It’s a great match for them since many don’t really produce tangible work.

      • Huxley

        There are far too many iPads and iPhones in use in corporations to reduce it to toys for bosses. Unless the bosses are using them as disposable since-use computers, but then a 5 iPad a day habit could get expensive.

      • symbolset

        iPads make great Citrix client devices.

      • nojo

        Nielsen (TV ratings) is switching all their field reps from Crackberries to iPhones. Corporate use goes a bit beyond massive spreadsheets.

      • FalKirk

        “I think a lot of the corporate use of iPhones and iPads are by top execs who want to play with the latest and greatest toys. It’s a great match for them since many don’t really produce tangible work.”-Jeff Ratcliff

        “Better to remain silent and be thought a fool than to speak out and remove all doubt.”-Abraham Lincoln

      • Steve Setzer

        Every textbook sales rep at Pearson, America’s biggest textbook company, uses an iPad.

    • Jeff Ratcliff

      I agree. The proper comparison is OS X and Windows. I don’t recall anyone counting the Pocket PC or the early Windows phones as part of the Windows installed base.

      In addition, one factor that has contributed to the improved market share of OS X are desktop virtualization products like VMware Fusion that allow Windows applications to run on the Mac.

      • Huxley

        You could include all Pocket PC and Windows mobile and Windows Phone sales without changing the graph by more than a pixel or two. The complaint about the lack of Xboxes would be more telling, but the iPad is on track to beat all Xbox sales ever in a bit over 2 years on the market.

        The point you and David are missing is that both smartphones and tablets are being used for the tasks most people use computers for.

        Email, web surfing, games, etc make up most of the tasks of a modern computer usage. Giant spreadsheets may need a full computer as will CAD, professional video editing, etc. but millions won’t ever do those things.

      • Jeff Ratcliff

        In a business environment there’s no need for games and those workers who surf the web for legitimate business purposes are very likely to be running desktop applications as well. The size of the spreadsheet or the amount of data in a database isn’t important – it’s the fact that touch devices are inherently inefficient for data entry.

      • unhinged

        I agree. Yet there is a growing trend in UX development to reduce the amount of time (and number of steps) required to input and absorb information. As time passes, the effect of this trend will be to reduce the impact of such inefficiency.

        Also, automation of business processes continues apace. Need to process hand-written forms? Scan them, apply OCR and touch up the result. Need to analyse the sales data for the past six months by territory? Press a button and have the data imported from the database, processed to identify and highlight key data points, and presented in one or more visual arrangements that explain the important information for the decision-makers. Need to write an email? Have voice control take care of that for you.

        Obviously, you’ll never reach a situation where every possible activity has been automated – but data entry for a lot of tasks is being reduced to the point where the inefficiency of a touch-based system becomes a lot less relevant. We might even end up in a situation where you have to book time at a communal workstation, as with the mainframe-driven days of the 60s and 70s! (although this is unlikely, given how easy it is to pair a Bluetooth keyboard with a tablet)

      • FalKirk

        “…touch devices are inherently inefficient for data entry.”-Jeff Ratcliff

        It depends upon the type of data being entered. Lowes purchased 42,000 iPhones to be used by employees on store floors. Alaska Airlines is giving iPads to all 11,000 of their pilots. Siemens is outfitting 350 wind service technicians with iPads, with plans to eventually issue 5,000 more.

        Don’t judge tools by narrow needs. A lot of real work is done while standing or moving and tablets and phones are ideally suited for those types of tasks.

      • normm

        I think you’re missing the revolution in business use of computers. Doctors aren’t using PC’s, they’re using iPads. Small businesses use smartphones and iPads for point of sale. Sales guys use iPads for presentations. Real estate agents use iPads for showing homes. Pilots use iPads instead of a suitcase full of maps. Restaurants use iPads as menus. Photographers and artists use iPads to show off their portfolios. Most business use of PC’s is no longer spreadsheets!

    • What’s your phone number?

      • KGB


    • Alfiejr

      it’s all a question of what story you want to tell.

      “computing” started out first for science and business only. the PC revolution brought it into the consumer realm. now the consumer realm is shifting very quickly to mobile computers as much as possible, and the new “post PC” devices – iOS and Android now (plus MS’ hoped for RT Surface/Windows Phone) are clearly going to dominate there in sheer numbers. (add the XBox if you want, but then add the PS3 too at least. even then the total sales of game consoles lately is relatively modest – declining due to inroads by iOS/Android gaming.)(and how do you want to handle the growing wave of “smart” TV’s and smart set top boxes? if they count, it is more erosion of MS’ multiple.)

      presumably the enterprise market is going to stay with the prior desktop OS’ devices, even if mobile laptops (incl. MS’ hoped for Intel Surface), but also add significant numbers of post-PC devices for everyone that is not tied to a desk 40 hrs a week, and especially where they offer unique work advantages.

      i am one of many who see MS inevitably retrenching into an enterprise-only IBM business model. which isn’t bad, just not the late-1990’s “Windows Everywhere” fantasy it still clings to.

      if the three charts were each split in two, one for enterprise sales and one for consumer sales, these two related but different stories would pop out clearly. MS would be getting wiped out now in consumer sales, but still dominate enterprise sales, altho the post-PC devices would be making real inroads there now too.

    • Noah Berlove

      Call me when you start lugging your PC around everywhere to manager your email, review documents or collect data. Believing that working on spreadsheets is the only and best reason to own a computing device is a very, very limited view.

  • Matthew

    What’s the chart look like if windows phone is included as well? Seems only fair once you add iOS devices in. I doubt it makes a large difference, but the curiosity has got me.

    • The chart ends at the end of 2011. The total units shipped in 2011 for Windows Phone is not known but it could be estimated to maybe 5 to 8 million, about a 2% boost to the Windows base.

  • nuttmedia

    Brings to mind a most prescient essay, written by Paul Graham back in 2005:

    Indeed, the waters are beginning to recede on the beaches of Microsoft. A harbinger of much more difficult days to come…

  • Insightful commentary, but this needs to be reassessed 1 year from now to see what the impact of Windows RT devices have.

    • It will be. However I am not optimistic about RT unless there is widespread OEM adoption and so far that looks difficult.

      • Ian Ollmann

        If you are an OEM, are you going to install RT or Jelly Bean?
        Where’s the money on this one Horace?

      • Well, it’s hard to know because OEMs try many things. I just read that Samsung will launch an RT unit this fall, but Samsung tries every platform. The economics are probably much better for Android on a device-level (cost and revenue sharing). But Microsoft might offer more unique positioning.

  • Windows also has no developer ecosystem to speak of. Even fans of the MSFT stack develop *web* apps instead of making native Windows software. That MSFT encourages devs to make Metro apps out JavaScript and HTML is telling.

    Marco Arment elaborates here:

    • techSage

      This is because you know all of them, right? You have no idea what you’re talking about.

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  • Gordon Shephard

    The graph is striking, but, to be consistent, we need to add the Windows Phone, Windows Mobile, Windows CE, and Windows Kiosks that also make up a very significant part of the Windows Developer Ecosystems, particularly for OEMs who don’t deliver on the Laptop and Desktop platforms.

    • Daniel1900

      Wouldn’t this just make it worse for Microsoft since the heyday for Windows mobile has also passed?

    • huxley

      In my experience, Windows Kiosk usually gets included as part of desktop sales.

    • symbolset

      And Android too. Let’s not fail to notice the elephant in the room.

      • Gordon Shephard

        It is indeed the elephant in the room – and I came back to make that comment (but did a search for “Android” and saw that you already had. Now – some of those IOS (and, if we can believe market surveys about Web Usage and application purchasing, probably more of the Android) users are simply using their devices as “phones” – and we therefore their computing use may not be disrupted by their smart phone. But, if you add the huge volume of Android Phones (and, with the Nexus 7 and whatever the next amazon iteration will be) – to the graph – Wow – I think we can finally understand why Microsoft is pricing Windows 8 upgrades @$39, as compared to the Windows 7 Upgrade @$199. Their ASP is going to take a _huge_ hit, as they fight with everything they have to retain their consumer users.

      • symbolset

        Android and iOs are sticky as well. When you buy an app for your phone, you get it for your future tablet too. Compared to the software rebuying and reinstalling experience you get when buying a new pc, it’s night and day.

      • symbolset

        Agreed. And “Pro version for all” helps fight fragmentation. “Upgrade from XP or even free preview version” brings along the laggards and some pirates too. But will it be enough? Time will tell.

      • This is not a comparison of the volumes of various platforms (that has been done on this site many other ways). This is a question of whether Windows still enjoys an advantage by sheer weight of numbers relative to it’s historic adversary.

      • symbolset

        I did not mean to be critical of this piece sir. I find it interesting and insightful work. Like any such analysis would, it inspires more questions, and I was just musing about other analysis I would also like to see.

        As you note elsewhere in these comments though, the brief span of this data doesn’t allow for its meaningful inclusion here. Thank you for the article. I look forward to reading more of your work in the future.

  • Daniel1900

    I haven’t seen it mentioned here but 2003/2004 was also when the successor for XP should have arrived. Vista was a couple of years late and was terrible when it did arrive. This was a huge mistep from Microsoft just at the right time for Apple.

    • twilightmoon

      If I’m not mistaken, Vista arrived close to the same time that Macs switched over to Intel architecture which was a huge driver of sales for the next few years, and perhaps meaningful even to this day.

  • J

    Horace, what about the impact of microsofts failure to get their customers to continue upgrading (hardware and os and office). When they launched vista, many decided to wait out the upgrades. If a pc is only used for office there is not much incentive to upgrade. The drop after 2006 is brutal

    • Ian Ollmann

      The continued longevity of XP to some degree suggests that Windows was “good enough” in 2001, and continued improvements didn’t service a true market need. Windows may have been ripe for disruption at that point, but I guess you need to wait for the next product to come out to see it.

      Intel had similar problems when they hit a thermal wall at P4 timeframe and haven’t been able to do much clock frequency improvement since then, though there have been IPC improvements and of course more cores. I find this case interesting, because the processor (IMO) still isn’t good enough, but the fact that it can’t improve easily in areas where customers really want it to improve,* means that it acts like a mature product. It is being disrupted by the low-power ARM designs that run far cooler and with ever increasing performance.

      *Here i’d argue that what customers “really want” (without knowing it) is faster clock speed. This allows programmers to get away with writing really simple code and have it still perform comparatively well on nearly all code. These days, to get full performance out of a CPU, you have to vectorize, multithread and do quite a bit of other fussing over code. Not many developers are willing or able to do all of that, and not all code can be even accelerated in that way. The value proposition of the new machine is much reduced. Some are willing to put up with reduced performance to get a more portable product.

  • Jeff

    Actually, what happened when this ratio went down was that Vista was introduced. This dog of a product made people start to look over there at the Mac book. I know I did – I bought an Acer with Vista and said “why on earth am I dealing with this aggravation?” And I went out and bought a Mac for the first time. As others have pointed out, the introduction of the ipod showed the world how good Apple was so with the combination of Vista it was a natural act to look over at that Macbook when deciding on a new computer….

    • Didn’t Microsoft also introduce some kind of new upgrade pricing policy at the corporate IT level around the time of the fall-off? I vaguely remember stories about IT people looking for alternatives because MS was going to force them to buy every upgrade incrementally, rather than upgrades skipping over intermediate versions. (I.e. MS wanted a reliable revenue stream from upgrades, rather than just new machine sales.)

  • huxley

    “Andy Lees, SVP of Microsoft’s Mobile Communications Business, said the company has sold more than 50 million Windows Mobile devices over its lifetime.”

    Andy Lees said that in 2009, so, it’s roughly 50 million devices spread out from the intro of Windows CE in 1996 to January 2009. Add on whatever Windows Mobile and Windows Phone 7 has sold since then and you might get a bit under iPhone sales over the last 3 quarters or the number of iPads sold since its introduction in April 2010.

    It seems to me that adding things like Windows Mobile and the XBox only accentuate the overall trend, they don’t change the direction.

    • symbolset

      Wow. That’s not even two months worth of Android phone activations.

  • JulesLt

    I bought my first Mac in 2005 – and what attracted me at the time was the clearly better nature of software like OmniGraffle and TextMate – in retrospect it was the point when OS X came good – and was clearly far ahead of Windows – ie when Apple ceased to be alternative and started being competitive again.

    One thing I would add is that even now most Windows software targets XP – locking in dated applications. Only games developers target ‘modern’ PCs.

  • Thanks for such an interesting analysis, Horace, as usual.

    On a closer look, however, I can’t quite figure out the last graph, the x-axis labels in particular. The iPhone was introduced in June 2007 and the iPad in April 2010 but that doesn’t quite seem to match the x-axis. It’s not easy to place things in time accurately because the year labels are so wide and ambiguous. Does the graph end in 2010 (of course not, because the iPad would barely be covered)? Is the beginning/middle/end of the numeral the point in time corresponding to the beginning/middle/end of the year?

    I also can’t understand why there are 4 kinds of greens at the end of the graph if you’re only labeling 3 of them (Mac, Mac+iPad, Mac+iPad+iPhone). What does the other unlabeled green stand for?

    Sorry if I’m the only one so stumbled. Any clarifications would be much appresh.

    • The unlabeled area is the contribution of the iPod touch. The areas show a shift due to the way area charts work. I tried a stacked bar chart but, though more precise, it was not as easy to understand

  • Presumably one trend that is relevant is how long in the tooth Windows XP got, which allowed Apple back in (a new OS always used to be a good reason to buy a new machine), 2004 is about the time leading edge buyers would have been wanting to replace the machines they bought to take advantage of XP. As you point out this co-incides with Apple “getting it right” in the laptop space.

    To be fair to MSFT, especially while we are thinking about platforms, it would maybe make sense to point out that in this later period they sold 80M xboxes, which replace one of the classic roles of the home PC- that of a gaming machine.

    ps- Can you clarify what you mean by “Windows PC sold?” I assume you don’t mean MSFT claimed license numbers, but your 2004 number for sales of machines is not what Gartner’s numbers were that year (trying not to be picky, but that was the only year I could see a data point for…). fwiw the Gartner number would make the ratio even larger.

    • The topic is the advantage Windows gained and whether it still exists. Microsoft’s performance overall is only loosely correlated.

    • Walt French

      I’ll leave it to others to fully assess the importance, but XP was turning into the worst-ever vector for malware during this critical juncture. Even a small fraction of buyers who were fed up enough to say, “OK, I’m a Mac, too” would carve that56X multiple rapidly.

  • Sam

    All that happened is more clueless cocks bought computers without knowing what the hell they were buying.

    • FalKirk

      It saddens me that you wasted both your time and ours on such tripe.

    • gwan starr

      crude, but I kind of agree with the sentiment.

      • Indeed many more people bought computers once Windows 95 launched but I don’t think they were particularly more arrogant than average. In fact, given the size of population involved, statistically they are normally distributed in their personalities.

  • JohnDoey

    As a 20 year Mac user, 11 year OS X and iPod user, 5 year iPhone user, and 2 year iPad user, I am not surprised by this at all. When you ship literally 10x better systems than your competition, the market comes around to you eventually, no matter what dirty tricks are tried.

    • gwan starr

      Haha! 10x better. Hahaha! Such a delusional statement. I would say marginally better at some things but at 3x the cost… Certainally not 3x the value. Whatever floats your boat, but for the cost of one Mac I can buy a comparable Windows machine, a new Android or Blackberry phone and an Android tablet with money to spare.

      A good comparison for me when sizing up the value of a Mac laptop is with cars. Is a Toyota Corolla better than say a Hyundai Accent? Most as I, would I automatically say yes, but I guarantee you that you wouldn’t pay $60,000 for a Corolla versus $20,000 for the Accent. I’m sure that some would argue, that a Mac is more like a Porsche and is worth paying 3x more. A Porsche however is crafted in Germany and has 3x the horsepower whereas a Mac is assembled in China and has many of the the same internal components as the PC.

      Again, whatever floats your boat, but not much value for me with Apple products and I don’t feel any technology deficiency with the Lenovo Core i5 Laptop that I recently bought (which cost me $399) or with any of my other non- Apple products. I do however enjoy the extra savings.

      • FalKirk

        “The cynic knows the price of everything and the value of nothing.”-Oscar Wilde

      • Noah Berlove

        I think it is more relevant to say the comparable Mac is $800 more than your Lenovo rather than focusing on it being 3x the price. Its not like you are choosing between 1 Mac and 3 Lenovos, just as few buyers chose between 3 Accents and one Lexus.

        If the Lenovo meets your needs, great. However, there are obviously a lot of people who get enough additional value for that $800 (lighter, better battery, better build quality, faster hard drive, more useful software, etc).

      • gwan starr

        My point is that a compatible mac computer costs 3x as much as my lenovo – and the other thing is there is no $800 mac – the cheapest is $1200+ and up.
        CORE i5 2.5GHz vs CORE i5 2.5Ghzand everything else is compatible as well – front side bus speed, hard drive size and rpm, battery life etc, etc… I just can’t see the value in spending 3x the price.

  • D.C. al Fine

    The trend seems right. But the article would be more credible if the source of the data were more transparent.

  • JV

    Which perhaps answers why Microsoft is planning on selling Win 8 upgrades at $40 – to cling onto the installed base while hoping to invigorate PC sales. Desperation setting in.

  • RF

    I know many people who transitioned to the Mac from early 2006 onward because of the switch to Intel CPUs. You could run pretty much any operating system on a single machine. That certainly eased the decision to go with Macs and fed into Apple’s impressive resurgence.

    But that last chart makes no sense to me. Why should anyone care about the aggregated MacOS + iOS tally? Why not compare it against Windows + XBox + Windows Mobile? The first two charts make sense but that third one is just padding.

    • normm

      In the post-PC world, iPad/iPhone are the new PC’s. They are the future of computing (along with other smartphones and tablets). People use these instead of PC’s, and so they should be counted as PC’s. XBox doesn’t replace a PC for very many users, and Windows Mobile has negligible market share now.

    • ex2bot

      I wouldn’t include the iPhone or iPod.

  • Microsoft only plan to get into direct production of a tablet because they know manufacturing OEMs and home users will not pay for a traditionally expensive Windows License.

  • /dev/null

    Are you including windows phones in your last chart?

    • No, but I don’t think I should unless Windows Phone confers specific market advantage to Windows.

  • John

    What about iPod touch?

  • orthorim

    Totally agree with the consequences – if Microsoft suddenly has to compete on _merit_ they are in deep trouble. In part because they have not done this for a very long time, and in part because Microsoft I don’t think realizes how bad their products really are.

    Microsoft knows it too – it will be a whole new world when Microsoft has to compete with iOS and Android with Windows Phone and their Surface tablets. Chances are in such a scenario Microsoft will be relegated to being a bit player, to a 5% market share company, if that.

    The glacier of PC based sales is not going to disappear overnight, it’s going to melt slowly. But the writing is on the wall.

    Given that Microsoft knows better than most what’s in store here for them, and that they have $Bns of disposable income every year, I imagine they will find a way to survive in the same way IBM has survived. What that way is nobody knows right now.

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  • ya it really is but apple also seems to be stupid by not concerning the ‘Not Rich’ buyers

  • Joe05

    wow! you’re twisted, you wrote this whole piece for what? I love my 2010 MBP but the future is the cloud and once again Apple is not going to be a major player here.

    The future is Microsoft’s in Windows Azure and Amazon and maybe Google, Windows advatage in business has as much to do with adaptability and extensibility and choice. and there’s a Microsoft software solution business wise for almost any situation.

    Windows 7 has crossed the six hundred million mark in just three short years.

    I think Apple makes some fine products, but it’s just not realistic to think most businesses would turn to Apple for their computing needs, pretty and expensive hardware that offers no real advantage with an OS who’s security wouldn’t meet
    the needs of a large fortune 500 company has next to no chance of making headway.

    The Macs future is assured, 20 to 25 million sold annually means we’ll have a Macintosh of one form or another for years to come.


    • FalKirk

      “It’s just not realistic to think most businesses would turn to Apple for their computing needs…”-Joe05

      You really need to learn more about iPad sales to the Enterprise. They’re much larger and broader based than you know.

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  • The transition point is heavily correlated with Mac’s move to Intel
    Basically for the first time Mac were able to run Windows and that changed the game in terms of landscape. Pre 2005 it was.a war of ecosystem and Mac was loosing but post 2005 it was a hardware game and Mac won on its superior manufacturing capabilities.

  • Tom

    ‘..Windows units sold as a multiple of Apple devices…’ You need a much, much, much better EXPLANATION as to what one has to do with the other You should just say MS vs Apple sales. Or Windows vs OSX sales. Comparing copies of Windows sold to iPods and the like is ridiculous.
    Get real – stop the nosense. iPods/Pads/toilet brushes are NOT a vald comparison to the PC (understand- Personal COMPUTER) market.

    • Kizedek

      MS itself has already provided “the explanation as to what one has to do with the other”. They are busy trying to cram Windows onto ARM because they see where this is going, even if you don’t.

      The unsurprising thing is that MS insist (as usual) to call it “Windows” of one flavor or another. So, there’s your justification. The fact is, iOS bears much more relation to OS X than Metro does to Windows. What many would like an explanation of is why MS is tarring Metro with that brush and causing a lot of confusion in the process. The next 9 months are going to be interesting (since they sat back and waited until they were 5 years late to the party, again)

      iOS may represent a new, “non-traditional” “postPC” platform that makes you uncomfortable and cry “foul”, but it is nevertheless representative of modern personal computing. Notice how it has overshadowed and left netbooks behind (where did THEY go?). And you will notice that Horace drew the line at iPods and did not include those; iPods have been selling like gangbusters for years and years and eclipse XBoxes, Windows Phones, etc. If these other platforms of MS were to be included, then iPods would more than cancel them out.

  • wgd82

    Then MS screwed up Windows Phone 7 user by denying the Windows Phone 8 upgrade… way to go MS… Soon they will become like IBM…

  • This article is a reprint of another article…so who wrote it? Same graphs, same verbiage.

    • actualbanker

      Asymco’s material appears all over.

    • I wrote this. What reprint are you referring to?

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  • romainl

    I don’t know how this would change anything, but what kind of devices do you count as “Windows units” on the Microsoft side? What about Tablets ? Windows phones ?

    • The value for Windows was derived as the total PCs shipped according to Gartner minus the number of Macs shipped according to Apple.

  • Paulo Silva

    Another signal of Windows advantage dismantling is that this past june Objective-C overtook C++ in popularity, as measured by the Tiobe Index (
    C++ is used to write native Windows applications while Objective-C is used to write Mac and iOS native apps. Thus the Windows plataform is also loosing traction among developers.

    • Though to be perfectly fair, C++ has also been losing some of its historical users to C#. I know a fair number of guys who write software for Windows for their living. None of them use C++; they’re all taking advantage of C# and WPF (as well they should). Since the API is perfectly accessible from C# and you no longer have overhead of memory management, it’s just sensible. So the comparison isn’t really quite right. Still, the growth in Objective C is impressive. (I’d venture that almost all of that gain is the shift to iOS rather than to OS X, though.)

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  • Philip Widing

    The most important distinction between Microsoft and Apple is that Apple is focused on platform-agnostic operating systems. The transition from PowerPC to Intel was almost unbelievable in smoothness: very few bumps. And iOS is just OSX tailored to run on less powerful, and less power consuming, ARM processors. But Microsoft is producing only a crippled ARM version, Windows-RT, that is restricted from running regular Windows apps. Can it even be included as Windows platforms if it has a distinctly un-Windows platform ?

    Microsoft seems focused on checking off boxes. Intel? Check. ARM? Check. Phone? Check. Tablet? Check. Apple seems focused on giving the device user the best experience, on each device type. And delivering months to years ahead of Microsoft.

    • It’s a little unfair to say that iOS is “tailored” while WinRT is “crippled”; neither mobile platform can (or should) run desktop apps. WinRT just looks like it can, because they included a desktop mode.

      You are right about focus, however. Microsoft has been riding a wave, and they are only recently coming to grips with the fact that you need to keep paddling if you want to ride the next one.

      • Space Gorilla

        Depends what you call ‘desktop apps’. The iPad can run some pretty powerful apps, and that capability will only increase. If we’re defining ‘desktop apps’ as those apps which require a mouse and keyboard, I think that’s an outdated definition.

      • I was using “desktop apps” to refer to apps designed for desktop operating systems, specifically Mac OS X and Windows 7. But you are correct, if we define “desktop apps” to mean something completely arbitrary, such as “a type of poisonous snake” then it’s easy to say we should or shouldn’t expose our iPads (or children) to “desktop apps”.

    • anon

      The first Macbook Pros including mine were basically melting and had too many issues. Fixing OS X with Bootcamp didn’t yield such greater experience than PC with Winows as fanboys claimed, as Bootcamp never left beta.

      After iPhone and iPod with similar abysmal experiences I’ll have to say: Never Apple again.

      • ex2bot

        I had one of those early MacBook Pro’s with no issues. I have also had two unibody MBP’s with no issues. The surveys indicate that Apple’s laptops are about as reliable as everyone else’s. And most Apple owners love their hardware, more so than HP/Dell/etc. owners. So if you’re trying to paint a picture of horrible hardware melting down on suckered Apple owners, it’s inaccurate.

    • ex2bot

      Apple wouldn’t have done the transition between PowerPC and Intel unless it absolutely had to. And it did. The PowerPC’s were too hot for laptops (G5) and not being improved quickly enough (G4 and G5). That said, the transition was the one of the most amazing feats in computing I’ve ever seen. Platform emulation software doesn’t work well. Until Rosetta / Transitive.

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  • PF

    Its pretty clear at this point that everyone else has woken up to the fact that Apple has eaten their lunch. Hardware is just hardware and if Microsoft and Google bring their A-game to the hardware, there will be alternatives. The actual hardware is pretty competitive already, but its for geeks putting their own flavor of Android onto them. To compete with ‘dumb’ users, the software needs to work right out of the box.
    Wait a while, that big target on Apple’s chest will get tested.
    The consumer market is all about mobile devices, its marketing hype that the package deal that get things sold.

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  • If you are a Microsoft competitor and you feel the bleeding, you could attack.
    Google Nexus 7 seems more a defensive move against amazon’s fork, but still could be a pain for Microsoft.
    And an iPad 7″ at 200$? And a Mac Mini at 400$?
    What about Android notebooks?
    Business market will be with windows for a while (but likely 7 not 8), but consumer’s market is in great danger for Microsoft and we will see the outcome in a year or so.
    Ballmer will be a genius or gone by the end of next year?
    Meanwhile HP announced they will make w8 tablets only for business, leaving consumer’s market. Uhm I wonder why?

  • Jaded Consumer

    Does the “Windows Units Sold” graph reflect all versions of “Windows” (e.g., Windows Phone and other WinCE-derivations) or just the versions that would run on a “PC” (notebook/desktop)?
    Thanks for the charts!

    • No. The question I’m trying to answer is: “What is the inherent advantage that Windows enjoys because of its dominant position?” I’m unsure of the benefit that Windows CE had to the Windows hegemony. Neither the code, nor the applications nor the way it was used made Windows better or more powerful, though I admit that’s a judgement call.

  • Suddy

    Hi Horace, Could you please share your thoughts on the new iPad mini? not on the rumor, but on the strategic +/- ive’s and what its impact will be to iPad (current form factor) and Apple post Steve Jobs.

    I personally think this is a bad idea to launch a small iPad just to compete with AMZN and MSFT/ GOOG, and thereby lose the higher margins that the current form factor iPad provides to AAPL.

    Would love to hear your analysis on this in a post sometime.

    • I don’t usually comment on speculation. I did tweet however that I hoped such a device would fall under the iPod brand because it might be more appropriately positioned as a media consumption device.

      • Suddy

        Wow! that is a brilliant insight. Makes perfect sense as an iPod w/ media consumption.

  • As someone who bought a Mac 128K in 1984 and has used them ever since, this is so utterly gratifying to see. It’s also a very interesting study in the progress of technology for computing. Mainframes were supplanted by mini-computers (DEC), then minis were supplanted by desktops, (Compaq bought DEC, an unthinkable proposition a few years earlier.), desktops are now undercut by tablets and phones and the whole system is now being abstracted away into the cloud.

    Apple has succeeded, but we also must note that Microsoft has failed, and failed starkly. Their CEO is, as SJ noted, “the sales guy” and his mission in life is to protect the two cash cows: Windows and Offices. This is not a viable strategy in the face of disruptive changes. Ballmer recently stated, “We are in the Windows era. We were, we are now and we always will be.” Fine, you can ride that one right into the ground.

    With the dismal failure of Windows phone, Microsoft remains tied to the legacy desktop box and back office servers in the enterprise. They’re not going away, and they remain immensely profitable, but they’re now the Walmart of computing. The recent decision to sell Windows 8 upgrades for $40 is an admission of how much trouble they’re in.

  • Matthew Ward

    In on of the comments David Illig says “So the iThingies and my Macs remain analogous to my stovetop and my microwave oven. I pick the one I need for the job at hand.” This brought to mind a structural engineering illustration of the angle of repose. Once you incorporate the iOS devices into the chart you start to see the unstable (read “available”) segment of the market shifting to the new platform. It is good enough for a lot of tasks. Most tasks that most people do on an average day. Even the MS Surface appears to acknowledge some of these assumptions (good luck running Solidworks on the Surface). Some people still need a tower. Some people still need a large internal RAID. But that market is heading towards its angle of repose. The mainframes are there, waiting …

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  • kaelef

    I agree with most of the comments here. Just another thought to add to the pile: The Internet was not built on Windows. Both Windows and Mac OS arrived as newcomers and client devices, which, I think, served as another equalizer where Microsoft had become complacent in owning the playing field.

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  • Every windows computer I owned was total crap. They all failed and were a miserable experience.. I bad mouth Microsoft/dell whenever possible.

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  • Hi, I’m on Ubuntu! Even when I buy Mac(iMac or Macbook Pro) – I’m replacing Mac OS with Ubuntu.

  • Joeguide

    Our company which is has been a Windows only just bought over 500 iPads, and will probably buy several fold more. With Citrix, it’s is seamless. Will still need Windows, but not so much. This is not the future, this is the present. Change is coming very quick. Blink and it is too late. Ask RIM and Nokia.

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  • El Tritoma

    how do you get to 0x on the y-axis???

  • Watcher

    So, if I read the last paragraph right, you are saying 2015 is the year of Linux?

  • Bill Coleman

    I’m missing something here. How can the MacBook engineer a comeback in 2004, when it wasn’t introduced until mid-2006?

    The switch to Intel processors definitely accelerated the acceptance of Macs after 2006, but clearly something else was at work. Very likely the iPod halo effect, as well as the excellent engineering and design.

  • Bill Coleman

    I’d wager these graphs look even bleaker if we consider only US, instead of world-wide shipments.

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  • gpurcell

    Small changes off of a small base can lead to superficially large percentile changes. This is a deeply misleading graphic.

    • There are no percentiles or growth data in the graphic.

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  • I plotted the same market share the normal way, and the point you’re attempting to make doesn’t look so strong:

    • unhinged

      So what you’re saying is that “the normal way” doesn’t show anything interesting happening.

      Your graph shows that Windows has roughly the same market share it always has (declining slightly) and that Apple has improved slightly. Horace’s graph is different because it reflects the growth in size of the overall market – which according to other reports is tapering off.

      Two ways of looking at the same situation, and arguments (sorry, “meaningful discussion”) can be made upon viewing both analyses. But Horace’s, being “not normal”, provides extra information that could be useful.

      I wonder what other forms of analysis could be performed to increase our understanding of the situation?

    • My point is about market leverage which is a multiplicative force of numbers. If seen only as market share, signals of waning market dominance will be easy to miss.

    • OpenMinde

      You look at what you have right now (market share). Horace looks at what changes (sold per Q). Yours is static view frozen in time, Horace’s is dynamic view. I guess NOK and RIM were using static view back 3-5 years ago. Good luck to you and your business if you manage one.

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  • DNA

    1. One, and maybe the most important reason why PC manufacturers are continuing to sell less hardware in comparison to their previous years is not direct competition from Apple, but hardware itself. Apple market share in terms of desktops is the same or maybe slightly bigger than it was 10 years ago. However, majority of Apple computers you see are fairly new. With PCs, once Intel offered Xeon processors and Microsoft came out with Windows XP there was no reason to buy new computers. Industry stats are showing that XP is still the dominant OS and most of it is running on computers built almost 10 years ago

    As a result slower sales of the PCs allow people to claim that any platform is outselling Windows. It does, even coffee grinders right now outsell PCs with Windows 7, because more people drink coffee today than 10 years ago. However, it is completely unrelated to how many Windows computers are out there in use.

    2. Comparing mobile devices with desktop OS is to expose lack of any understanding of how the business world works. There are no offices where one would come in and turn on 20 iPads or 50 Galaxy Tabs to do the work. Mobile devices are designed for consumer market, so far. Give iPad to an engineer to complete his work and within minutes you will see a calculator app running on it, while more complex applications will sit on their 30″ screen helping them to complete the work. In fact, the title for the article should read “Apple is building and dismantling its desktop OS advantage by selling more iPads and iPhones.”

    3. Apple attempts to capture the business world did not bring any results for a very long time. Their withdrawal from manufacturing the backend OS and hardware left many hard core Apple customers up in the air. Not a single IT manager will consider Apple as a backbone of their IT system. Many people would love to see Macs in their offices, if they would be able to run the applications from PC world, however it may only take place if Mac will crawl out of 15% of the market share. Current numbers suggest 5% – 6%.

    While the author produced some interesting facts, piling them all up in a single article shows how far away he/she is from the real world. iPad, iPhone and desktop Macs are competing with each other. People at home who used to have desktop now settle for a slate in their hands. On top of that majority of the applications are entertainment apps. Netflix, games and Facebook are consumer apps. Don’t get me wrong, there are serious businesses behind each app. Guess what do they use to produce them?

    Apple got a head start with better hardware and exceptional marketing for their iPhone. They also told people that it is OK to get a slate to e-mail, read some books and watch some movies. Innovation is what drives the IT industry. With Jobs ideas of closed ecosystem and nuclear war over their devices and inventions will help their competitors to bypass Apple in a very short time. Microsoft 8 solutions look very promising. You don’t have to like them, just try Windows Phone 7 and get yourself a preview of Windows 8. It’s good, it may even give you the same sense as the first time when you got your iPhone. It feels right at home. Things do work now better, much better even in the corporate (Microsoft) world.

    If you think I like Microsoft, no I don’t. Close to 80% of our hardware runs Linux of some flavor, but that is a different story. However, in the last 15 years it never crossed our mind to write an app for Apple. 5% market share? If our costumers (they are all businesses) want to use our solutions they must have Windows on their side.

    • What I find intresting is how out of touch you seem to be with what is happening in the real world. My guess is your business, if it fails to adapt, will be not so healthy in the coming years. As an engineer, I am using iPads more and more for presentations and on The fly content creation during meetings. My smartphone has a better on the go interface for exchange than outlook and gets used more than my desktop for that purpose. The company I work for (20,000+ employees) is shifting internal tools development fron .NET/desktop to mobile with an emphasis on iOS.

      I am betting Horace is seeing the real world much better than you. Just a guess.

      • dna

        I think we are on a different sides of IT. Products of our company do not require “emphasis on iOS” they work on any platform using browser, so I think we are just fine in terms of being in touch. No apps, no installation, and our customers don’t have to choose between desktop vs mobile. There are features that will run only on desktops and that’s where Apple units are out of question.

        Professional engineer is using iPad for presentation. That’s the idea Apple introduced to the market. Very, very successful idea (for Apple).

        .NET is development platform. If software engineers and programmers know how to use it the final product will work on all devices. What you are witnessing in your company is migration to the cloud.

      • Nope. .NET does not run on all platforms and is very easy to target only to Windows (and generally does as you admit yourself in having Windows only web clients). There is a strong migration to custom apps installed through the enterprise that provide a much nicer/faster/productive interface than most craptastic interfaces that are web based (have you used the new DOORS interface?). In this case, there is a stronger emphasis on supporting iOS than Android. WP7 is not even considered. So yes, there is a shift in trends that will leave your company behind.

        The term Cloud is so overused as to have lost its meaning.

    • Noah Berlove

      This is not a binary market. It is not desktop OR smartphone and it’s not desktop OR tablet. Companies are using all 3 in various combinations. It should not take that much imagination to see how having access to different computing devices can increase productivity. Similarly, its not a single choice between Apple and Windows. Companies can and do use both.

  • Awesome! Now we all just use both…

  • keke

    Macbook is too expensive in Europe. Apple must reduce the price of maschine….

    • xynta_man

      It’s the european taxes, stupid.

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  • Rutherware

    I wonder what the ratio is when you add the iPod Touch?

  • gpurcell

    Disqus is being odd, so I can’t respond directly. There most certainly are percentiles in this data–the ratio is an inverted percentile, one that, in this case, deeply obscures what is going on in this market. 54:1 would be roughly equivalent to 2 percent of computer sales being Apple. 18:1 is roughly equivalent to 5 percent of computer sales being Apple. If you used a proper measurement scale the very marginal change in Apple’s fortunes would be immediately apparent.

    • 2% to 5% isn’t marginal, though. That’s pushing to edge into the top 5 of all personal computer manufacturers, period, if not actually there. Wikipedia has total PC sales in 2010 at 351M, in 2004 at 189M. Those numbers mean Apple went from selling ~3.78M computers/year in 2004 to ~17.55M computers/year in 2010. That’s in the GLOBAL market. Almost 5x as many units sold, when the market itself didn’t even double. And their profitability on those units is much higher than any of their competitors. Not marginal at all, especially if the trend continues – which I suspect it will.

      The numbers in America are, I would guess, much stronger for Apple. On college campuses, the proportions are just unbelievable: Apple may have close to 50%, at least on the basis of what I saw in the classroom a few years ago.

  • BigShotRob

    ummmmmm since Macs have gone to Intel chips several years ago, the Macs are now really “PCs”

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  • Andrew Sheppard


    Thanks for an excellent article, and for putting numbers and charts to a phenomenon that we have all been aware of but could not explain.

    Clearly, Apple’s hardware was improving and its OSX was making considerable software improvements since the turn of the century, while Microsoft wasn’t able to provide much innovation after Windows XP.

    But if you look at the timeline, I think you will see that the introduction in 2003 of Unibody Aluminium MacBooks was the turning point. By that time, most tech savvy people knew that a Mac could do most of what a Windows PC could do, maybe more maybe less, but they had no reason to change if they were comfortable with a Windows laptop. The peak of your graph is in 2004, but the chamfer starts in 2003 when the Unibody MacBook was released.

    The Titanium G4 was an excellent laptop, but did not seem affordable enough. The hardware excellence of the Unibody Aluminium MacBooks was, I believe, enough reason to switch, for journalists at first but eventually for everybody. The Unibody MacBook, I believe, turned the corner for Apple.

  • Joe_HTH

    This is an idiotic article. Since when are the iPhone and iPad even remotely comparable to the full blown OS market. Windows is as dominant as ever, holding 90+ percent of the market. OS X still hovers around 6% market share, give or take a percent in either direction.

    What the iPhone, iPod, or the iPad does is completely irrelevant, as they are different markets entirely. If you’re comparing Windows versus Macs, Apple has gained nothing.

    If you want to talk about the mobile market, get back to me in a couple of years after Windows 8 tablets and Windows Phone 8 has been on the market a year or two.

    Just another insipid article from a clueless idiot. There’s an old saying. There are lies, damn lies, and statistics. Statistics are the worst. You can make statistics say anything you want to.

    • Kizedek

      @Joe_HTH, Adas Weber, Damon Sanchez:
      Do you honestly think the point of the “exercise” is for Apple fans to pat themselves on the back that Apple isn’t a failure after all these years after all, because, look guys, Apple has 15% share not 6% if Horace is allowed to count it a certain way!

      Who cares? This is not a retrospect conducted to console ourselves that Apple was only a “bit of a failure” vs a “complete and abject failure”. We know Apple’s doing fine — it’s the most valuable company on the planet, and the iPhone business is worth more than the whole of Microsoft.

      No, this article is another look by Horace into understanding the nature of technology industries and how they get disrupted over time; how adept businesses are at disrupting themselves before someone else does it; how agile they are at spotting opportunities and creating new business opportunities.

      LOL? laugh it up: Ballmer’s done a fair bit of that himself; and the CEO’s of RIMM; and Michael Dell; and…perhaps most of your heroes. Everything DOES look fine for MS, and Windows will be dominant as ever (for all the right reasons, I’m sure) …until it falls off a cliff. This is fascinating stuff, if not a bit tragic like watching a trainwreck in slow motion. This stuff hasn’t been tracked like this before, and many many people here appreciate Horace’s insights (However, it’s probably the ones that don’t appreciate them that could really benefit from them).

      But I do think someone at MS must be taking note of the postPC computing trends, even if you’re not, because here we are anticipating the launch of Windows on ARM (arguably 5 years late). It is precisely the different approaches to what you protest are wildly different markets that is of interest here: identifying areas for disruption and finding the underlying jobs to be done. The skill is in recognizing it when everyone else is complacent and incredulous. A year or two? come back in a few months as this stuff is unfolding now. Grab some popcorn as we learn how well MS makes use of any “windows” of opportunity remaining to them.

    • symbolset

      The answers to your questions will be explained later son. These are grown-up matters. In time you will understand why.

    • I am noting that you are expecting the eighth major version of mobile Windows to be a winner.

  • Android has overtaken Windows daily sales since last year.

  • LOL yeah….all these numbers show is the current “WORLD ECONOMIC CRISIS”…nothing more…nothing less…

    to postulate the decline of PCs into these numbers I think is a bit far fetched.

    you could wrap any industry into the “WORLD ECONOMIC CRISIS” and it would look the same.

    “NEWS FLASH….. brand – x ….is on a slow decline!!!”

    I give you that within this world crisis Apple is selling more mobile devices, but this isn’t a PC replacement.


  • I think that if you’re going to make a true comparison, you really need to include XBox, Windows Mobile,
    Windows Phone 7, other embedded Windows CE devices, Windows Servers, Windows
    tablets, and also include Macs running Windows as Windows PCs. Otherwise the comparison is kind of pointless!

    • The comparison is a review of the leverage Windows has over its nearest competitor. It’s not clear to me that Xbox offers a greater advantage to Windows itself. Windows Mobile has not had an appreciable impact on Windows itself and its volumes have not been significant on a yearly basis. Windows tablets and servers are included in the data. But including all you ask for would not change the primary argument: the Windows hegemony and hence market and ecosystem leverage it could obtain due to ubiquity is eroding rapidly. What we lack is a metric of exactly how to measure this erosion. This is my proposal.

  • capablanca

    Horace, I find myself wondering whether this chart would be even more meaningful on a log scale. Did you look at it that way, before deciding to present it as linear?

    • I did look at it many ways. For the way I wanted to narrate it, I chose the stack area as the key construct. But that means I cannot use log scale.

  • upwut

    You can’t compare Windows Unites (read PCs) to iOS. Saying that it’s dire is ridiculous. If you include the ratio including iOS then one should include Android operating systems as well. It’s comparing apples to oranges, then all of a sudden you throw a banana into the mix.

    • I am measuring the leverage that Windows has in terms of ubiquity relative to its nearest competitor historically. As Android has emerged only recently the graph would include only three data points for it.

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  • Mario Kadastik

    I find the graph with Mac + iPad and Mac + iPad + iPhone a bit weird. The iPhone was introduced in 2007 and iPad in 2010 yet the sharp dropoff in the graph seems to indicate iPhone eating into Win based sales starting from around 2005 and iPad since 2009. If the graph is to be shifted 2 years, then things make a bit more sense, but the exponential growth of iPhone and iPad shouldn’t be so sharp initially and leveling off as it is. I think there’s some small issue there with the numbers (and I do understand it’s a ratio so also PC sales would impact this).

    • FalKirk

      Mario, Windows on the desktop continues to dominate OS X. But in 2006, 95% of all Personal Computers ran Windows. Today, Android has already surpassed Windows and iOS is well on it’s way. What’s even more startling is that desktop and notebook sales are flat or diminishing while phone and tablet sales are enjoying meteoric growth.

      Window’s is becoming a minority player. And unless they’re able to transfer to tablets (and phones) their OS share will fall dramatically in the next few years.

      It’s a sea change that few saw coming and that most don’t see even now as it’s happening before our very eyes.

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  • tjamesjones

    good old apple v microsoft comment war. this one’s pro-microsoft, so you can start marking me down now, don’t waste any time thinking! I got on the mac bandwagon via an iphone & then macbook etc. But I’ve gone back to using my old PC desktop and I think in a simple head to head, Windows is a better system for creating documents on. It may or may not be a hegemony, but after spending time with both, I think it’s the best system for working on.

  • Launching the iPad, Steve Jobs killed the PC, because we do not need a computer with a “local” computing power and local heavy disk capacity.
    Computing power and storage capability are now in the cloud.
    What we need now is a mobile thin client: a tablet or a smartphone.
    So either the PC or the MAC are almost dead.

    MAC survives because it is a luxury product: well designed and very expensive, like an Armani dress or a Chanel bag, targeted to the people that works in communications, media, design, advertising.
    But, in the end, the concept of a personal computer will vanish and IBM take it all.

    • For the general user, perhaps. They’re not going anywhere, though, because someone still has to write the software that lets us have this conversation… and you’re just not going to do that on an iPad. Now, the guy who is just consuming content, or even creating at a more basic level? Sure. The iPad and its competitors will fill that niche just fine. But you’re not going to see serious software developers, designers, writers, etc. doing major work on the iPad anytime soon, or probably ever. The laptop isn’t perfect for everything, but it’s pretty darn close for some of those tasks.

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  • Fred

    That chart is a t-shirt I’d like to have. I owned a NeXT Cube. In the bubble, Microsoft paid us well to develop for I.E. but we suffered NT server/db update hell. In 2001 I moved a whole company to OS-X 10.1 and watched each and every successor OS-X generation run perfectly and *faster* on the oldest hardware. It has been a long, long, long time. Nothing like an overnight turnaround. Our business culture mostly treats Apple as the freak outlier, the one bright kid in class ruining the curve for everyone else. Let Apple be a model of perseverance and integrity. Not enough people believe this “new,” apparently golden in every sense rule, applies to them: build a product as you would have it for yourself.

  • $igma902

    I think chart 3 needs to be the next t-shirt (á la “It’s not rocket science”).

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  • Maurya

    Mind you, Microsoft is now addressing this very issue – Windows 8 is meant to give all the advantages of what Apple products offer while maintaining the dominance in the enterprise market. What has pushed Apple up is the consumer market in which Microsoft products never had any appeal. Apple might not be able to dent Microsoft’s deep foundations in the enterprise sector. It has almost become like the English Units being too expensive to convert to in the US while other countries have switched over to the Metric system. It would be prohibitively expensive for enterprise market to move away from the Windows platform. They do not care much for looks or finish. They want their investment to be minimal and have a tested and tried platform that they can use. Consumer market is more volatile compared to the enterprise sector. Apple might find its sales fluctuate based on how economy goes. Enterprise purchases are part of an investment to improve productivity. Microsoft might gain some ground here with its new Metro based phone, tablet, laptop and desktop integration. Within five years, Microsoft will be in a much stronger position than it is in now. Unless Google and Apple come up with something radical that the Enterprise sector can adopt quickly, Microsoft cannot be shaken off its foundation. That is the biggest market there is. And Microsoft is not going to sit quiet in the meantime. It is company well known as the survivor against odds and the most underestimated one. The future will have Apple, Google and Microsoft on equal terms. Amazon is the fourth one in the race. I don’t think one company will get to dominate everything like it did before. Apple’s dominance is due to its introduction of radically different products. But others have almost caught up with it. Now they will need to do something new to stay ahead. I do not see anything in the horizon. For sometime, each company will focus on cutting as much inroads into other others’ territory. The next two years will see Microsoft gaining some ground and Apple flattening out a little.

    • Torstein Opperud

      “Is meant to” … well, its not really working all that well this far…

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