Why Apple Wins? (Part 2)

8/17/2012 11:29:31 AM

WINDOWS 7, the current version of Microsoft’s desktop operating system, comes included with every current PC at no visible cost to the user. Those wanting to upgrade to it on an existing machine or add it to a Mac, face an all too visible cost. The OS comes in numerous versions, of which the cheapest, Home Premium, sells for around $176 from dealers, or $136 to users with an eligible previous version to upgrade from though upgrade paths are limited to equivalent versions. Windows 7 Ultimate, which is identical to Windows 7 Enterprise, costs over $240, while Windows 7 Professional, which is different, sells for much the same price.

Description: Mac OS X Lion

Mac OS X Lion

OS X Lion, the current version of the Mac operating system, sells for $33.584. Users who need Server features can add them for $55.98. Mountain Lion, due out later this month, will cost just $22.38. Because it makes its money from hardware, Apple doesn’t have to gouge users on software. Just the reverse: it has every reason to make its OS better, to attract new hardware sales, and cheaper, to incentivise existing users to upgrade. And, thanks to the App Store, almost every penny it does get from OS X sales goes straight into its own coffers, not to distributors or retailers.

Little wonder that Windows users are slower to adopt new versions. Apple has tripled the Mac’s installed base in the past five years, according to figures given by senior vice-president Craig Federighi during last month’s WWDC keynote. And of the 66 million current Mac users, 40% are running OS X Lion, which took just nine months to reach that level. Federighi compared that with Windows 7, which took 27 months to reach the same penetration. Of course, given Windows’ installed base of a billion users the numbers involved dwarf Apple’s, but the strategic point remains significant - as does the fact that the Mac’s fastest growth is in the present, while the PC’s is in the past.

IT’S ALSO INSTRUCTIVE to compare the mobile market, where Microsoft hopes to make a serious impact next year - at last - with Windows RT and Windows Phone 8. At the moment, the dominant players in smartphones and tablets are Apple, with the closed ecosystem of iOS running on its own hardware, and Google, which supplies its Android OS to hardware makers, much as Microsoft supplies Windows for PCs (although free of charge, since Android is nominally open source).

As we’ve previously reported, Apple’s Scott Forstall showed a pie chart at WWDC of the versions of iOS and Android currently installed on users’ devices. More than 80% of iOS customers are running iOS 5, the latest version. The equivalent figure for the latest version of Android? 7%.

There’s no benefit to Google or its hardware partners in this number being so low. They simply don’t have the kind of control Apple does over compatibility and availability. Meanwhile, the proliferation of Android devices of all shapes and sizes makes the platform a daunting prospect for third-party developers, who have to figure out ways to allow for all possible screen dimensions, as well as multiple hardware configurations, in their apps. While hardware makers can experiment all they like, software makers are left struggling to keep everything working. Remind you of anything?

I like big buttons Zune’s style didn’t catch on

The off-putting fragmentation of Windows is a symptom of producing an operating system that has to address many different market sectors - sectors in which all kinds of companies across an industry that Microsoft doesn’t control have a vested interest in keeping distinct. While most users crave simplicity, Microsoft doesn’t have the will to deliver it.

The problem extends into the software customers are faced with when booting up a new machine. Apple has developed a set of approachable, attractive apps for everyday tasks that comes with every Mac and has the same look and feel as the OS itself. They won’t get business users very far, but business users will have their own preferred or obligatory third-party apps anyway; much more enticing to the average person setting up a new computer is the ability to import and manage their photos, tidy up a quick video or play around with some sounds.

MICROSOFT ISN’T BLIND to these benefits, but it’s always been hopeless at making accessible, creative consumer software, and with PC makers free to tart about with their systems independently, the gap has been filled by acres of cut-down, jazzed-up, ill-matched third-party nonsense, added either to support a few more tick boxes on the spec sheet or to attract fees from software makers keen to get their nag screens in front of hapless customers.

So bad is the problem of unwanted software infesting new Windows PCs that Microsoft now offers a service in the US that it calls Signature. This rids your new machine of all the rubbish that came preinstalled on top of the operating system. It costs $99. Watch the pitch at and keep reminding yourself it’s not a spoof.

By contrast, Apple exercises complete and meticulous control over every pixel of every app that arrives on a new Mac. And when users want to go further, it can afford to sell them its Pro apps for much less than the competition - because the only way to run them is if you buy a Mac.

The best part of this model is that the more successful Apple is as a hardware maker, the more it can subsidize the development of its software, which it can market to a bigger user base at a lower price, and use to attract more customers to buy more Macs. It just keeps snowballing. When Final Cut Pro was introduced in 1999, it brought the cost of a full-blown non-linear editing package below $1600; the current (and much more powerful) version, Final Cut Pro X, is under $320. Aperture launched at $558.4 in 2005; today, you can buy it for $87.98. Logic Pro, at $223.98, has got so cheap that its low-end version, Logic Express, has been discontinued.

Not only does Apple win, everybody wins.

Description: I’m back lOS sales have catapulted Apple into the mass market

I’m back lOS sales have catapulted Apple into the mass market

IN THE FIRST quarter of 2000, Apple sold 1,377,000 Macs. Twelve years later, in the same quarter it reported sales of 4,134,000 Macs, 7,331,000 iPads, 16,234,000 iPhones and 19,446,000 iPods. It’s tempting to see the Mac as being overshadowed by its younger mobile siblings, but as Tim Cook loves to point out at every opportunity, looking only at the Mac, Apple has outgrown the rest of the PC industry for six years.

How is one company shifting quite so much kit? Forging and maintaining a reputation for high-quality products that appeal to cool people certainly helps. To paraphrase Steve Jobs, Apple’s strength lies not only in what it does but what it doesn’t do. At apple, com, it’ll take you several clicks to find the technical specifications of any given product, and even then the details will be sketchy compared with the spec sheets of many competing products. Selling on tick boxes just isn’t the way Apple does it.

What it sells is well-rounded, sensibly designed products that feel right in themselves. Yes, they often incorporate cutting-edge technologies and components specially designed from scratch, and when pressed - or when addressing a technically savvy audience, for example at WWDC - Apple isn’t afraid to show off its technical prowess. But it doesn’t expect customers to care. Its TV adverts don’t list features and numbers. They depict what products help users to do.

Description: Retina Mac-Book Pro

Retina Mac-Book Pro

Simplicity is a value that’s been pretty constant through Apple’s history, taking precedence over factors that others might consider more important. Recently, the iPhone, the iPad and now the Retina Mac-Book Pro have been severely criticised by some pundits and tech experts for their sealed cases, lack of user-serviceable parts and poor expansibility and repairability. But when Apple launched the original Mac in 1984, the range comprised one model, sold as a sealed unit with few upgrades available.

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