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"Market Share" "Installed Base" and Consumer Electronics 264

Posted by CmdrTaco
from the something-to-think-about dept.
redrum writes "Analysts and reporters like to talk about market share statistics, but the conclusions they draw are often misleading, RDM reports. Market Share Myth 2007: iPod vs Zune and Mac vs PC takes a look at how numbers are used to paint grossly inaccurate portrayals of the market share of the Zune among iPods, and alternatively the Mac among PCs. A follow up article, Market Share vs Installed Base: iPod vs Zune, Mac vs PC demonstrates how the conventional wisdom of market share reporting can be turned upside down by simply comparing what vendors actually sell. An eye opening, in depth look at the real numbers behind PCs, music players, and console games."
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"Market Share" "Installed Base" and Consumer Electronics

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  • by DingerX (847589) on Sunday March 18, 2007 @10:26AM (#18393981) Journal
    No offense guys, but:

    While analysts once liked to say that the Zune would take over the music player world in the same manner that Windows PCs engulfed the Mac, the situation was really not even remotely similar. Analysts had things entirely backwards.

    Sorry guys, the "Pro-Microsoft Press" is as much a straw-man shibboleth as "Main Stream Media's Liberal Bias". Give me a break!

    How many analysts out there saw the Zunes Microsoft unveiled last fall and actually predicted a success? I'm sorry, I call BS, along with the claim that the iPod created the market for HD-based players. HD-players existed long before the iPod, and anyone who remembers the lawsuits involving the Diamond Rio knows that the path to iPod's success was oiled with the blood of its competition.

    I'm not saying the iPod didn't create a huge demand, and grab a large part of the exploding market, but let's not exaggerate things here.

    Put another way, do we really need a pro-mac blog to provide a multi-part essay on why the Zune is not a success? I mean, this thing is as much a dog as the Apple ROKR!
    • by Jeff DeMaagd (2015) on Sunday March 18, 2007 @10:40AM (#18394071) Homepage Journal
      The blog entry didn't say that iPod created the hard drive market, it claimed that iPod expanded the market. The blog entry was pretty clear in stating that there were hard drive players before the iPod.
      • by SnowZero (92219) on Sunday March 18, 2007 @11:49AM (#18394431)
        I'm not sue what article you read. The one I read jumped all over between topics, didn't finish one issue before launching into the next, and included graphs that it didn't even adequately explain. Roughly drafted, indeed.
      • Re: (Score:3, Informative)

        by jrumney (197329)

        The blog entry didn't say that iPod created the hard drive market, it claimed that iPod expanded the market.

        Expanded isn't really the right word. When the first iPod came along, hard-drive players were using 3.5" laptop hard-drives. Apple found a manufacturer that was about to launch 2.5" drives, and bought 6 months of their entire production, blocking competitors from being able to match their smaller players for the first six months of the iPods life.

        • by gozar (39392) on Sunday March 18, 2007 @12:14PM (#18394569) Homepage

          Expanded isn't really the right word. When the first iPod came along, hard-drive players were using 3.5" laptop hard-drives. Apple found a manufacturer that was about to launch 2.5" drives, and bought 6 months of their entire production, blocking competitors from being able to match their smaller players for the first six months of the iPods life.

          It was actually other manufacturers using 2.5" drives when Toshiba introduced the 1.8" drive with which Apple used with the iPods.

          • by jrumney (197329)
            Of course. Desktop drives are 3.5". I was thinking 5.25" for some reason (mixing them up with old floppies - the ones that were really floppy).
        • Close. Existing players used 2.5" laptop drives. Apple bought the new 1.8" drives, allowing their entire unit to be about the same size as the hard drive in their competitors. This didn't matter much, because the first iPod sucked (small capacity, Mac-only, no AAC support, mechanical scroll wheel prone to failure, etc.). The second generation was a huge improvement, but by this time other people were able to buy the 1.8" drives.
          • Re: (Score:3, Informative)

            by Brett Johnson (649584)

            This didn't matter much, because the first iPod sucked (small capacity, Mac-only, no AAC support, mechanical scroll wheel prone to failure, etc.)

            I had a 1st generation iPod and loved it.

            • small capacity - 5GB was a hell of a lot more capacity than the Rio 800 I had beforehand.
            • Mac-only - I have 4 Macs, so that wasn't an issue. Even after Windows support was added later, Firewire-only was the real problem (so few PCs had working Firewire).
            • no AAC - When Apple started shipping AAC, it provided a firmware upgrade to all iPods (including 1st gens) adding AAC support.
            • mechanical scroll wheel - I still prefer the feel of the mechanical scroll
    • Re: (Score:3, Informative)

      by kalidasa (577403)

      Put another way, do we really need a pro-mac blog to provide a multi-part essay on why the Zune is not a success? I mean, this thing is as much a dog as the Apple ROKR!


      Actually, that's the Motorola ROKR; it wasn't an Apple product, but merely licensed Apple software. If you had said "Apple Newton" or "Apple Lisa," you'd have made a better point (but not "Apple Pippin," as the Pippin was also intended to be a licensed technology platform and not an Apple product.

    • How many analysts out there saw the Zunes Microsoft unveiled last fall and actually predicted a success? I'm sorry, I call BS, along with the claim that the iPod created the market for HD-based players. HD-players existed long before the iPod, and anyone who remembers the lawsuits involving the Diamond Rio knows that the path to iPod's success was oiled with the blood of its competition.

      While many critics panned the Zune, there were some that did warn that MS might eventually succeed but not in the first i

    • Ahhh, atribution. (Score:5, Insightful)

      by twitter (104583) on Sunday March 18, 2007 @11:36AM (#18394361) Homepage Journal

      Sorry guys, the "Pro-Microsoft Press" is as much a straw-man shibboleth as "Main Stream Media's Liberal Bias". Give me a break! How many analysts out there saw the Zunes Microsoft unveiled last fall and actually predicted a success?

      Shibboleth [wikipedia.org], I'm not sure what you mean by that.

      Straw man, I understand but did not see one in the article. They were careful to attribute the source of pro-Zune/M$ buzz to several very misleading stories by NPD and Steve Ballmer. They then flay those stories to show how they are misleading.

      do we really need a pro-mac blog to provide a multi-part essay on why the Zune is not a success?

      Sure, Zune tanked but that's in part because of bloggers tweezing reality from BS. Microsoft made a second rate device and tried to push it as "the best ever" and likely to succeed because of M$'s usual market might. When it did not sell because everyone knew it was a turd, they made up numbers to say it was selling. Because of the net, Zune has the reputation and sales it deserves.

    • by Blakey Rat (99501)
      I'm sorry, I call BS, along with the claim that the iPod created the market for HD-based players. HD-players existed long before the iPod, and anyone who remembers the lawsuits involving the Diamond Rio knows that the path to iPod's success was oiled with the blood of its competition.

      Did you even read the article? He acknowledges that the iPod didn't invent the HD-based music player market.

      His point, which you seemed to miss, was that most of Apple's iPod sales since 2002 have been market expansion, that is
      • by Yvan256 (722131)

        That's the entire point of the article. Apple is doing to Microsoft and other HD-based players what Microsoft did to Apple in the mid-90s. Expanding the market to new users.
        It's also what Nintendo are doing to Sony and Microsoft.
    • Sorry guys, the "Pro-Microsoft Press" is as much a straw-man shibboleth as "Main Stream Media's Liberal Bias". Give me a break!

      I used to think that until the early 1990s. Windows was still using cooperative multitasking and Linux wasn't mainstream yet, so the only choice for a "real" OS on the PC was OS/2. I'd been following news reports on OS/2 pretty closely. In one issue of a weekly tech magazine, Information Week I think, they had an article titled something like "New version of OS/2 to be delayed."

      • Re: (Score:3, Interesting)

        Back then, many people still hated IBM, because it was the 'big monopoly' computer company that had reigned in power for decades. Plus, IBM introduced OS/2 along with the PS/2 line and Microchannel in such a way as to recapture the market and kill the cloners. Lots of us were very skeptical of IBM for that reason. Similar to the way that lots of people are skeptical of Microsoft (or Apple, or any other 'big company' pushing their product with hype and marketing fluff.)

        Part of the reason OS/2 floundered w
      • by dryeo (100693)
        I remember a database comparison where the database (can't remember which) was compared running on OS/2 and NT in SMP mode. They couldn't get OS/2 to run in recognize the 2 cpus and had to run OS/2 in single cpu mode for the test.
        OS/2 was still faster on 1 cpu then NT on 2 cpus so the trade rags conclusion, NT was better because it did SMP easier. Should of really been OS/2 on 1 cpu beats NT on 2 cpus.
    • by Sockatume (732728)
      The author does make many interesting and valid points on the way market information is handled, however adding all those trite cartoons, and taking the time to describe our PCs puttering out on a malware-infested "swamp" while the Mac achieves glorious ascention, made me want to punch the guy in the face. Lesson: if you've got an interesting point to make, don't go out of the way to be adversaria. You'll just undermine your credibility.
      • by ZenShadow (101870)
        Lesson: if you don't want to feel like punching someone in the face because of their stance on the PC, then don't read a blog post in a pro-mac rag.

        --S
  • by dpbsmith (263124) on Sunday March 18, 2007 @10:29AM (#18393997) Homepage
    During the 1980s, the computer trade press ran top-forty-like software sales ranking charts. About a year after the release of Lotus 1-2-3, it occupied #1 slot and did so, regularly as clockwork, month after month. It became a unchallenged truism that 1-2-3 was the best-selling software title, perhaps of all time.

    Gradually, it transpired that this simply wasn't true. The best-selling software title was, in fact, AppleWorks, a spreadsheet/word processor/"database" for the Apple II line.

    What had happened was very simple. Apple sold AppleWorks directly. The only place you could buy it off the shelf (which at that time was still an important sales channel) was at an Apple dealer. That AppleWorks outsold 1-2-3 should not have been much of a surprise, because it was much cheaper, and because Apple dealers frequently included in it attractively-priced bundles.

    But of the published figures were based on sales by Corporate Software, Incorporated. Since AppleWorks was never sold by Corporate Software or any other third party, it was literally off the charts.

    • Not real sales (Score:4, Interesting)

      by cperciva (102828) on Sunday March 18, 2007 @10:54AM (#18394133) Homepage
      That AppleWorks outsold 1-2-3 should not have been much of a surprise, because it was much cheaper, and because Apple dealers frequently included in it attractively-priced bundles.

      This qualifies AppleWorks as being one of the most distributed pieces of software, but doesn't really qualify it as being one of the most sold pieces of software. For something to be "sold", it must be "bought"; and for something to be "bought", there must be a deliberate action ("hey, I want that"), not just a grudging acceptance ("in order to get X, which I want, I have to agree to have Y and Z, which are utterly useless garbage").
      • Re:Not real sales (Score:5, Insightful)

        by C0vardeAn0nim0 (232451) on Sunday March 18, 2007 @11:40AM (#18394387) Journal
        so, by your reasoning MS Windows isn't one of the most "sold" pieces of software ever ?

        but it still generates revenue, and for most, this is what counts. specially for shareholders.
      • That's an odd argument, one that's apparently grasping at straws to downplay the statement. A copy sold is a copy sold, it tells nothing of the circumstances of the sale. Who is to say that 1-2-3 wasn't also bundled with computers under the same circumstances?
      • by dryeo (100693)
        Appleworks was very popular and everyone I knew who had it went looking to get it, usually buying it though sometimes looking for a bundle deal.
        Given a choice of paying $150 for plain old Appleworks or $200 for Appleworks bundled with a 1 MB memory card what are you going to buy? Especially since Appleworks really needed the extra memory.
    • Isn't that the fault of Apple or the dealers for not participating and not selling outside it's own narrow distribution channel?
      • by pyite (140350)
        Isn't that the fault of Apple or the dealers for not participating and not selling outside it's own narrow distribution channel?

        For Apple it wasn't a failure, because apparently it was the best selling software. The magazine is at fault for publishing figures without using a statistically significant sample. It's Experimental Science 101.

  • I'd like to see this become required for all those choosing to write in the field of tech journalism, be they pundits, journalists, bloggers, thinktank members or any other name.

    [ The examples were fun, too - Microsoft, Walmart, RIAA and the 70s? I thought "one of these things is not like the others" :-) ]
    • You mean how not to do it? If a reporter came to me and said, "I'd like to write a story shooting down the myth that the sky is purple," I'd have the same reaction as the one I had when reading this piece.

      In other words, show me an analyst that predicted the Zune would be a success, and then we'll talk.

      Dugg down for being lame...oh wait
      • Re: (Score:3, Insightful)

        by hcmtnbiker (925661)
        In other words, show me an analyst that predicted the Zune would be a success, and then we'll talk.

        That is very true. I remeber reading an interview with the team leader of the Zune, he didn't even predict a success. His words where something close to "the phrase 'ipod killer' is a misnomer, i mean the pmp market is huge, we'll be happy with as little as 5-10% of it." Don't go preaching "A Microsoft Failure" when thier attempt wasnt even to kill the ipod, but simply increase thier revenue on a growing
        • Re: (Score:2, Informative)

          by RFaulder (1016762)

          Now I dont know about you, but i've never seen a Mac without Symantec installed on it, and I dont know of a single person who has ever used Geek Squad, IMHO if you need Geek Squad you dont deserve to opperate a computer anyways, and that $1400 you blow on them is your own fault.

          Wow, I didn't even know Symantec even makes anto-spyware or the mac, especially since it doesn't exist (for now). And as for Geek Squad, the Best Buys in my city give you a Geek-Squad install thing when you buy a new computer, so I'd assume that after they set up a box in people's homes they realize that the service was quite nice and get them in more often.

          • Re: (Score:3, Informative)

            by Fred_A (10934)

            Wow, I didn't even know Symantec even makes anto-spyware or the mac, especially since it doesn't exist (for now).

            I wasn't aware of any such product either (but then my iBook is mostly a typewriter to me). So I went to Symantec's site and did indeed find a few MacOS products [symantec.com]. Couldn't quite see the point of them though. Other than making money for Symantec that is. Oh. Right. Sorry. I get it now.

        • Re: (Score:3, Informative)

          Now I dont know about you, but i've never seen a Mac with Symantec installed on it

          there. I fixed it for you.
        • by jp10558 (748604)
          Well, I used to work at the Geek Squad, and let me tell you, there were a lot of people coming and paying $150-$250 every 4 - 12 months for various virus/spyware problems on their machines. The weird part was these were the people who were very "cheap", buying the E-Machines special, and always complaining about the cost, and whether we could do only part of a service for less money. Why they came to Geek Squad with their unabashadly premium (HIGH) prices I'll never know.
  • by Anonymous Coward on Sunday March 18, 2007 @10:35AM (#18394035)
    Myth busting is good. It is even better when it is based on actual documentation, not just some personal pet theories and anecdotes. There are some pretty graphs there, but conclusions based on undocumented assumptions like these can hardly be called "An eye opening, in depth look at the real numbers":

    Assigning Macs a five year useful life span, and PCs a two year life span, the installed base for Macs among PCs on the planet is around 4.5%.
    Well, assigning this author a low credibility, it is clear that this author has a low credibiliy.
    • by crmarvin42 (652893) on Sunday March 18, 2007 @10:51AM (#18394119)
      Instead of skimming the article, try reading all of it. He indicates that they idea of 5 year useful life span for mac's vs. 2 for PC's was based on anectodal evidence, yes, but evidence. He didn't just create those numbers out of thin air.

      In studying the history of PC purchases made by a client with around a hundred employees, I found the company was still using all of their original Macs dating back to 2001, with a few even older Macs still in secondary use. In contrast, there were no PCs more than three years old still in use, and most of the older models were in poor shape. Around 80% of its machines were PCs, and nearly all of those were commercial grade Dell OptiPlex or Latitude models; the other 20% were Macs. About a third of the entire 115 machines were laptops.
      Besides, I've seen several articles over the years indicating that mac's have a longer usful life than PC's. If you need more anecdotal evidence my family has 3 macs that originally shipped pre-Mac OS 10 (2 with OS 9.1 and 1 with the last version of OS 8). they are all currently running OS 10.4 and used every day. I also have one that's sitting in the closet that has 10.3 installed on it and the only reason it's in the closet is because I own more computers than there are people in my house hold.
      • by 0xdeadbeef (28836) on Sunday March 18, 2007 @11:17AM (#18394241) Homepage Journal
        Have you considered the reasons for that lifespan?

        PCs are cheap as dirt, and the components are modular and replaceable. Upgrading is not quite the life decision it is with a Mac.
        There is a lot of PC software. To compete, PC software consumes resources in a never ending arms race to impress users.
        The upgrade cycle is implied. PC software is written with the expectation that most users will have current hardware.

        And BTW, as the Mac cultists were eager to point out in that laptop reliability thread from a few weeks ago, anecdotes are like opinions in that they are like assholes. Everyone thinks their ass is demonstrative of reality, while actually, strippers shave and bleach theirs. Does that clear things up?
      • Re: (Score:3, Informative)

        by smallfries (601545)
        You keep refering to "anecdotal evidence" as evidence. It is only evidence that a) a single office has macs with a lifespan that long and b) your family has macs with a lifespan that long. The whole point with anecdotal evidence is that it is not evidence that the lifespan of macs in the marketplace is normally that long.

        This announcement was brought to you by the board of pendantic criticism.

        PS I've had my PC for about 8 years. It's had a couple of new motherboards, a new case, new harddrives, many process
      • Basing it on one company with a hundred employees is essentially out of thin air, especially because whenever it is convenient to his "argument" he stresses that companies don't count because Apple focuses on consumer computers. His made up figure of an average two year lifespan for consumer PCs is laughable.

        There are tons of consumers (like my dad) who buy a new computer maybe every four or five years. There are very few consumers who buy a new computer every six months or year. There is no way the average
      • Re: (Score:3, Insightful)

        by SnowZero (92219)
        I did read it. Another thing he says is that once a PC has Linux on it, it doesn't count and its beyond its useful life, because it no longer contributes to the software market. So, even though the PC is still around, it doesn't count, while the Mac does, even if it hasn't had a software upgrade in several years. What does the software have to do with the hardware anyway? His assumption also means that all of my computers had a "useful life" of one day, since I installed Linux on them. So, he's fightin
      • by mp3phish (747341) on Sunday March 18, 2007 @06:49PM (#18397007)
        Give me a greak. They bought Optiplex and Latitude systems which "barely" lasted 3 years? PLEASE. They all come with STANDARD 3 yr warranties. They ALWAYS last 3 years +. Meanwhile, the mac's come with 1 year warranties and most IT departments do not purchase the extended plan. (not at the price he is showing as the "average")

        I'm sorry, but this article lost 100% total credibility by stating that dells can barely be supported for 3 years. If his so called "Dedicated IT Department" is having that many problems with the Dells, then they have some major competency problems. We deploy $4 million in dell client systems a year and around 1/2 million in apples in a managed environment. I can tell you for sure that the apples lifespan is around the same as any other brand. If anything, the apples cost the IT department more in labor per machine because their ASP certification process is more expensive and harder to maintain, and parts are not as available in the warranty realm as they are with Dell, which guarantees (and are the only one in the industry who comes through on it) overnighted parts on every optiplex and latitude sold.

        The systems break equally as much at best, and if anything, more when you are dealing with gen1 apple products (gen1 macbook, gen1 macbook pro, gen1 intel iMac, gen1 PPC iMac (after the ilamp). When you are forced to deploy new motherboards to all your newly deployed gen1 macbooks, the labor costs tend to go up. The last time dell systems required major component replacements in a widespread environment was with the GX270 motherboard leaky capacitors (which did not cause substantial problems until most systems were out of the 3 year warranty). This issue is over 4 years old prior to it there were no other major issues. These types of major recalls are a regular occurrence from Apple with every gen1 product they ship. These aren't published recalls, they are ASP recalls. This means that the only people who know about them are the service providers and anyone they tell (like customers). Apple does not admit in the press that they are recalls, and it is against NDA for an ASP to.

        If you have "read plenty of articles" stating that apples last longer then more power to you. But articles don't make facts. Real world events are facts. Articles are just articles. Most articles which state that apples last longer are not based on fact, but are based on the same personal experience of the author, who has had no extensive experience dealing with large scale deployments of PC hardware, or even mac hardware for that matter.
  • by proberts (9821) on Sunday March 18, 2007 @11:05AM (#18394191) Homepage
    The most interesting part of both articles was:

    ====
    In the final quarter of 2007, Apple earned $7.1 billion in revenue, compared to Microsoft's $12.5 billion in total revenue. Yes, that's right, Apple brought in more than half as much money as Microsoft, despite Windows owning 98% of the PC market.

    Even stripping Apple of its iPod revenues, which PC pundits love to do, the company still earned $4.4 billion on its Macintosh business, over a third as much Microsoft brought in from its entire Windows, Office, and server operations combined. Apple's 2% of the PC market doesn't seem so small anymore.

    Of course, Microsoft actually lost a lot of money on all of its consumer electronics products, so looking at profits, Apple earned $1 billion compared to Microsoft's total $3.4 billion in profit.
    ====

    Now, I don't know why he chose only the fourth quarter, but it's going to make me go back and look at the numbers for 2004-2006, because if that's a trend it's a very interesting one.

    Paul
    • by protomala (551662)
      There is a *very* simple error of logic at this comparssion: Microsoft dosen't sell computers, they do sell software!
      Want to compare numbers, it should be with Dell, Acer, HP and all PC manofacturers *together*.
      • Re: (Score:3, Informative)

        by dreamchaser (49529)
        Not to mention that revenue !=profit, and that the margins on hardware (Apple) and Software (MS) are *vastly* different.

        It's not even really apples to oranges...it's apples to rocks.
        • by Echnin (607099) <`moc.liamekaens' `ta' `201f64s3p'> on Sunday March 18, 2007 @11:33AM (#18394351) Homepage
          Did you miss the part about profits?


          Of course, Microsoft actually lost a lot of money on all of its consumer electronics products, so looking at profits, Apple earned $1 billion compared to Microsoft's total $3.4 billion in profit.

          Rouding up, Apple's profits are 30% of Microsoft's.

          • Re: (Score:3, Informative)

            by maxume (22995)
            On 60% of Microsoft's sales. That is not a good thing for Apple. Microsoft can afford to flat out waste billions of dollars and still have higher operating margins than Apple.
            • '' On 60% of Microsoft's sales. That is not a good thing for Apple. Microsoft can afford to flat out waste billions of dollars and still have higher operating margins than Apple. ''

              Maybe. If that's bad for Apple, then it is absolutely shitty for Dell. Apple did actually substantially beat Dell on profits in the last quarter.
        • by proberts (9821)

          It's not even really apples to oranges...it's apples to rocks.


          Nah, it's Apples to Microsofts. ;-)

          Paul
      • by starwed (735423)

        Want to compare numbers, it should be with Dell, Acer, HP and all PC manofacturers *together*.

        I don't want to compare numbers. Few people do, it's trivially easy to tell which of two given numbers is larger, as long as the notation isn't deliberately obscure.

        I might want to compare the profits of only two companies, in which case, the sales figures of other companies irrelevant. Or, I might want to compare the money generated by in a particular OS's ecosystem, in which case, your numbers are more apt.

    • Re: (Score:3, Interesting)

      by RootWind (993172)
      That is exactly why Apple will never license out OSX. Every single percentage that Apple can gain of pure marketshare (hardware & software), is a whole lot more potent than just either or. The only reason Apple would license out OSX or sell Apple hardware with another OS is if they are sinking ship.
    • Now, I don't know why he chose only the fourth quarter, but it's going to make me go back and look at the numbers for 2004-2006, because if that's a trend it's a very interesting one.
      The fourth quarter probably because the first quarter includes the holiday season and may not represent an average quarter. As for 2004-2006, it would be interesting to see
    • Fun with numbers (Score:3, Informative)

      by sweatyboatman (457800)
      It seems obvious that he picked the 4th quarter because Apple had a revenue spike.

      Microsoft's Balance Sheet [google.com] vs. Apple's Balance Sheet [google.com]

      It would appear that over the last five years Microsoft (profit over 5 years: ~$50B) has consistently made quite a bit more money than Apple (~$3.7B) has (and profits at both companies are growing quickly).

      I guess his point is that Apple's making money and selling stuff. Which is nice for them, but that's what companies are supposed to do.
      • Re:Fun with numbers (Score:4, Interesting)

        by bockelboy (824282) on Sunday March 18, 2007 @12:38PM (#18394707)
        Come on, looking at the net income over the last 5 years is about as fair as looking at just the 4th quarter (Holiday season probably accounts for 1/2 of Apple's sales).

        Notice that in 2001, we are talking pre-explosion of the iPod. The net income for Apple was -$37m. Last year's net income for Apple was $1989m. Look at the last couple years of income:

        (FY2006) 1,989.00, 1,328.00, 266.00, 69.00, 65.00, (FY2001) -25.00

        After the explosion of the iPod (FY2003), we have roughly exponential growth

        The net income for Microsoft was $7346m in 2001 and $12599m in 2006. Here's the last couple years of income:

        (FY2006) 12,599.00, 12,254.00, 8,168.00, 7,531.00, 5,355.00, (FY2001) 7,346.00

        Slow, but steady growth.

        If you were an investor, who do you put your money in? The company whose income increased about 20% / yr over the last 5 years, or the company whose income has been more than doubling for the last four years? It's two completely different kinds of investment: stable, mature company or hot, rising star?

        (Yes, I have run roughshed over some of the math, but that's the general idea.)
        • by feepness (543479)
          If you were an investor, who do you put your money in? The company whose income increased about 20% / yr over the last 5 years, or the company whose income has been more than doubling for the last four years? It's two completely different kinds of investment: stable, mature company or hot, rising star?

          Whichever one has a better forward P/E.
    • by kripkenstein (913150) on Sunday March 18, 2007 @11:49AM (#18394429) Homepage

      In the final quarter of 2007, Apple earned $7.1 billion in revenue, compared to Microsoft's $12.5 billion in total revenue. Yes, that's right, Apple brought in more than half as much money as Microsoft, despite Windows owning 98% of the PC market.

      Amusing how RoughlyDrafted sort of misleads with these figures, when he is ranting against other misleading statistics. Based on Wikipedia (disclaimer, but I recall it is basically right from the official reports), Apple had almost half as much revenue as Microsoft in 2006 ($19.3 to $44.2 billion). So yes, as claimed, Apple's revenue is around half that of Microsoft's. But look at net income: $1.73 vs. $12.6 billion - Microsoft makes more than 7 times as much, when measured by net income. So, just as RoughlyDrafted says, partial figures can be misleading.

      In this case, the cause of the discrepancy is quite obvious: Microsoft sells a product with zero marginal value - software. This is basically making money from nothing. Apple, on the other hand, makes actual 'real' products, that cost money to make - Macs, iPods.
      • Re: (Score:2, Informative)

        by maxume (22995)
        Software has zero marginal cost. The marginal value is whatever someone is willing to pay you for it.
      • The marginal cost bit is a bit of a strained mantra around some parts of the Internet. The term is a real econ term, but the arguments on the Internet are generally constructed in such a way to ignore the original development cost. "Making money from nothing" is a misnomer because they had to make the original investment of developing the software. Marginal cost doesn't cover that expense.

        The bits do mean something, if the initial investment truly didn't matter, then I might as well start selling CDs wit
        • Re: (Score:3, Insightful)

          by alexhmit01 (104757)
          Why marginal costs matter. Apple develops OS X and Microsoft develops Windows REGARDLESS of costs. When Apple sells and iPod for $300, they generally spent $200 on parts and sales costs. So while their top line (revenue) goes up by $300, their gross income (revenue - COGS) only goes up $100. While revenue is interesting, a company has to pay all it's expenses out of gross profits. When Microsoft sells a Copy of Vista for $150, the marginal costs (COGS) is pretty close to $0, but for retail is probably
    • This is the most interesting part to me:

      Apple extends support for older machines far longer with its operating system software.
      Older Macs are faster running a newer version of Mac OS X; older PCs can't even run the latest Windows.
      It is easier to support and maintain older Macs; older PCs rapidly become more expensive to maintain.
      Older Macs retain a high resale value, older PCs actually have a negative value after the recycling fees.
    • Apple sells hardware and software. MS sells mostly software. Comparing their income is a bit skewed, but still quite revealing especially when you consider that Apple turned around some years ago with a low of 2 billion in yearly revenue.
  • Usually, I read /. for the comments. But in that case (ok, I'm an Apple satisfied customer), reading the whole entries is really worthed. FTA: "Clearly, market share is meaningless taken out of context, and anyone insisting that market share "speaks for itself" probably has good reason to avoid explaining things." In our fast pace life, to understand the big picture, we must take time to learn about the context of events...
  • roughly drafted (Score:5, Insightful)

    by zyzko (6739) <kari.asikainen@g[ ]l.com ['mai' in gap]> on Sunday March 18, 2007 @11:37AM (#18394367)
    Can we please have an own category for roughly drafted stories?

    They are sometimes interesting but for the most part I would like to ignore them for being outright false and so strongly biased that they smell like rotten apple for miles.
  • by hullabalucination (886901) on Sunday March 18, 2007 @11:39AM (#18394379) Journal

    Old article on Slashdot:

    http://apple.slashdot.org/apple/05/06/05/0548225.s html?tid=3 [slashdot.org]

    Summary: Software Publisher's Association and other groups estimated in 2005 that 16% of all computer users were on Macs.

    * * * *

    All my life, I always wanted to be somebody. Now I see that I should have been more specific.
    --Jane Wagner

  • hmm (Score:3, Interesting)

    by nomadic (141991) * <[nomadicworld] [at] [gmail.com]> on Sunday March 18, 2007 @11:42AM (#18394395) Homepage
    This seems a little weird:

    Charting Gartner's sales numbers for PCs since 1991--including its estimated sales through 2010--provides Apple with an embarrassingly tiny bit of blue next to the towering yellow bar representing the entire worldwide PC market, even when the chart is expanded vertically to flatter Apple.

    However, in the same January 2007 press release, a Gartner analyst also stated that "the PC industry battled for wallet share against other consumer electronics products, such as games consoles and flat panel TVs." In other words, the vast PC market is but part of a larger market: consumer electronics.

    That "however" doesn't just make any sense. In terms of marketshare of computers, Apple is tiny. How does saying that the PC market is a subset of a larger market have any impact on the truthfullness of the previous paragraph? All that means is that the Mac's tiny slice of the market looks even smaller when you incorporate consumer electronics into your definition of the market.
    • > That "however" doesn't just make any sense.

      The specious "however" is a standard journalistic technique for creating a false sense of contradiction. Read the news carefully and you will see this and similar techniques used to cast doubt on the statements of those the reporter dislikes without actually producing a contradicting statement or fact.
  • Microsoft doesn't just want "market share," it wants to make money. Apple wants the same thing, it is just achieving that more successfully.

    What is this guy thinking? Based on the quarterly reports for the last decade or more MS has been wildly more successful at achieving the goal of making money.
    • by DaveCBio (659840)
      It's called the "Reality Distortion Field" and Mac users are well aquainted with it. They cherry pick stats to make Apple look great, but it's okay when they do it. However, let a Windows user do the same thing and "blood will rain from the sky". It's the usual MS hate that is acceptable here on Slashdot. It's humorous because they think that if Apple was the dominant force in the PC market that they'd be some benevolent corporation that only thinks of the children. The way I see it, if Mac had the same pos
    • I think what he's trying to say is that the actions MS are taking right now to increase their revenue are not as effective as the ones Apple are taking.

      MS are, and have been for a decade or so (as you point out), vastly more profitable than Apple. That's not in dispute. A large part of that profitability comes from their own inertia, however. The fact that they *are* the massively-dominant market leader itself propogates that position, meaning they get "money for nothing" as people migrate to the market lea
  • The article is intresting enough although you really get the feeling this guy is a major mac fan and a zune hater, but that is alright, doesn't mean he doesn't have a point.

    He however then goes on to claim that installed base is everything and that Apple's installed base for computer market is 8%

    While a 2% share of the entire worlds PCs wouldnt suggest much of a reason to target Macs for software development, having 8% of the active US installed base certainly does.

    He then goes on with this:

    Since more

    • by Blakey Rat (99501)
      I agree that the article is kind of misleading, but you'll never find Apple by looking at corporations. Apple hardly even bothers with that market.
  • by MaWeiTao (908546) on Sunday March 18, 2007 @12:35PM (#18394675)
    This is an interesting article and I generally agree with what has been written. However, they make a few statements I'm very skeptical about. I get the impression these guys are biased towards Apple.

    Maintaining a PC costs professional users around five times as much as a Mac.

    It's possible a PC may cost more than a Mac to maintain, but 5 times more? I work in design, so I've been around both Macs and PCs in a professional environment for quite a few years now. In that period of time our Macs have been replaced far more often than PCs. In the 8 years I worked with this one company Macs were replaced 5 times. They started with old Power PCs, moved on to first generation iMacs, hoping to save some money. Those were replaced in about a year by G3s, then came 2 generations of G4s and most recently Intel-based Macs.

    In that same period of time the PCs have been replaced 2 to 3 times. The first upgrade in the same period of time was for IBM machines. Maybe 3 or 4 years later they were replaced by Dells and some of those were replaced by more recent Dell machines. Interestingly there are still a handful of those old Machines around the office being used, not on a regular basis, but they're around. The old Macs are all long gone.

    I suppose on a per machine basis a Mac is cheaper. Macs aren't held onto as long and they aren't really upgraded. Many of the PCs in the office saw at least one OS upgrade, at first from Windows NT to 2000, and then to XP.

    1. Apple extends support for older machines far longer with its operating system software.
    2. Older Macs are faster running a newer version of Mac OS X; older PCs can't even run the latest Windows.
    3. It is easier to support and maintain older Macs; older PCs rapidly become more expensive to maintain.
    4. Older Macs retain a high resale value, older PCs actually have a negative value after the recycling fees.

    In the design industry, which is one of the biggest users of Macs, this is quite common. Design companies replace their machines quite often. They often have no choice, and for exactly the problems that article claims afflict PCs.

    Apple doesn't extent any support for old systems. It doesn't offer any support for any old products. Once an Apple product has been replaced by a new model you're out of luck. Of course, there's a good support community out there for older Apple devices, but Apple can't take credit for that. Anyone running OSX 10.3 or older wont be getting any updates any time soon.

    Older Macs don't run more recent versions of Mac OSX very well. I've experienced this first hand. Even a 3 year old Mac can have difficulty running OSX 10.4 consistently well. A 3 or 4 year old PC can handle XP with no problems at all. Vista is the exception. But then Macs had similar problems when OSX was released.

    And then there are the countless times I've been unable to run applications because they were coded for a more recent version of OSX than I was running. And I don't get backwards compatibility people claim Windows lacks and Macs support.

    Even with the OS9 environment in OSX old applications don't necessarily run, and that's assuming that environment is even installed. In Windows I can even run many DOS-era applications.

    Old Macs are difficult to maintain without the afore mentioned Apple community. Old PCs are exceedingly easy to maintain and similar support communities exist. And why is resale important? I can't think of anyone who's ever sold an old computer. I've seen a lot more interest in old PCs than old Macs which nobody wants if they're 4 or 5 years old. I believe, however, that PCs have a low resale value. PCs are much cheaper than Macs, why spend the money on an old PC when for not too much money a person can buy a new one.

    The article also puts forward a few assumptions they can't really prove. One more absurd one being that most PC users will go out and buy a new PC instead of having the current one services. I'

    • What instead is the case is this, a quality machine will last longer then a crap one. Shocker no?

      But that is what the article is claiming, that a 2000 dollar Mac will outlast a 500 dollar Dell. Well, that is a suprise?

      If you compare expensive Mac's with expensive PC's you might see a difference but basically all this says is that quality pays for itself. Well, I be damned.

      To be honest he talks about technical lifespan NOT usefullness lifespan, be honest, did your designers REALLY need to upgrade their Ma

  • While he states that Apple's computer sales were taken out of context when compared to the entire market, he makes no effort to put them in context compared to other companies/products. He only later compares them against themselves showing that they stayed the same for a few years then increased a bit. If you're going to tell me that the way everyone compare's Apple's computer sales to the market or other companies is wrong, you should also tell me the right way to compare them.
  • Random kid with fanatical Mac blog posts diatribe on how Apple's perceived market share makes them appear smaller than they really are, dresses it up with pretty pie charts, uses a few sound-bites, and ends up on the front page? Seriously, why do people care that a company isn't perceived as well as they think it should be? This whole debate is a playground pissing contest perpetuated by immature people who can't tolerate any sort of alternatives to their own narrow views.
  • "In the final quarter of 2007, Apple earned $7.1 billion in revenue, compared to Microsoft's $12.5 billion in total revenue."
    Someone discovered the secret of time travel.
  • If you're getting into the retail computer business, then you want to know market share.

    If you're getting into the software development business, then you want to know installed base.

    If you're getting into marketing or blogging, then you want o know both so you can pick the one that supports your argument. :)
  • Roughly Drafted has had a madman's war with the Zune since its announcement. Look through the archives of this blog, it's like an anti-Microsoft/pro-Apple Mein Kampf. Why do we keep treating this as fact? The Zune is just a (actually fairly-decent) MP3 player... why has it generated such a massive battery of fanatical FUD? The fact that the Zune had so much rambling consumer backlash from Apple-fans will actually help sell them to anti-scenesters.

    Here's a viral/word-of-mouth marketing standpoint-

    There's bee
  • "All your installed base are belong to us."

Computers will not be perfected until they can compute how much more than the estimate the job will cost.

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