Mac users: new Macs

[aeberbach]

The third party tests need to by somebody who isn't paid to do them, especially not by Apple!

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Regarding the first item, clearly, Apple Inc. is in financial trouble

BoyElroy this is wrong. You have presented no evidence or sources for this. Why can't you understand that market share does not matter as long as the business you do brings in more money than it costs you to do it?

Nobody here is claiming that Apple's benchmarks are reliable. As I suggested (and MacDEF agreed) there will be no reliable indication of G5 performance until a non-partisan 3rd party like Arstechnica does some real testing and compares it directly in real-world applications.

Joswiak's comments are the kind of rubbish you would expect from a VP of Marketing. Either he knows as much about what he sells as Best Buy staff of he's just a liar.

"gcc has been available on the Intel platform for a lot longer and is more optimized for Intel than for PowerPC"

No. Microsoft and Intel compilers outperform gcc in almost any test. GCC is acknowledged as about the worst compiler available.

"Apple numbers could be higher with a different compiler too"

But they just couldn't be bothered doing that before the launch of this flagship new line of machines - wouldn't want to look TOO good.

Ed Stroligo's article is mostly reasonable but he misses a really interesting test that could have been performed - x86 Darwin on dual 3.06 Xeons. I say mostly reasonable because he misses a few more things too. I expect that would make a G5 look pretty weak. But it's not just about benchmarks. If I knew the G5 would be as snappy as Windows XP on a P4, and had an anti-aliasing technology as good as Cleartype I would probably buy one.

 

[BoyElroy]

Greetings Aeberbach--

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BoyElroy this is wrong. You have presented no evidence or sources for this. Why can't you understand that market share does not matter as long as the business you do brings in more money than it costs you to do it?--Aeberbach

I believe that I've put up a couple of articles on this topic earlier in the thread.

Your view of the market oversimplifies the nature of competition and business cycles. Market share is extremely important if it is your core business. For some reason, some people seem to have trouble realizing that Apple's market share in its core competency, personal computers, has been steadily declining for a more than a decade. At this point, its market share of home computers is around 3% and falling. If your main money maker is steadily losing market share, at some point, you're going to be out of business.

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Why can't you understand that market share does not matter as long as the business you do brings in more money than it costs you to do it?

If we take your simple cost/revenue ratio argument to its logical end, we would have to say that as long as Apple has one user willing to pay $2 billion for a single Mac, and Apple's operating costs are $1.999 billion, then there's nothing to worry about. This is clearly not true. The computer market is incredibly complex, with dynamic links between suppliers, investors, consumers, distributors and manufacturers. At some point, if the market decides that Apple has no significant future in the computer hardware business, share prices will fall, software developers will stop supporting Apple, consumers will buy in even fewer numbers than now, etc.

To its credit, Apple seems to have recognized this some time ago and has attempted to widen its revenue stream (i.e. mp3 players, iTunes, etc.) but the fact remains that market share is very important when 1) it is your main product and 2) it is steadily losing ground to competitors. At what point do you raise the white flag? When Apples market share is .002%? You can bet that long before that point, distributors will stop carrying Apple products en masse and Apple will enter a non-virtuous circle of increasing costs and diminishing revenue base. The market is not static and indeed, in this case presents a slippery slope for Apple. It may soon reach the proverbial "tipping point" beyond which it will not be able to finance and produce cutting edge computer hardware technology.

Here is an instructive excerpt from a Cox Wire report on Apple (5/24/03)

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Sales decline for iMacs While overall computer sales grew slightly in the first quarter --- industry leader Dell Computer Corp. saw a nearly 25 percent spike in business --- sales of Apple's consumer-oriented iMac computer were down more than 30 percent from a year ago. Sales of its business computer, the PowerMac G4, were off more than 25 percent, though portable PowerBook sales were up sharply. Moreover, Apple's minuscule share of the overall PC market --- by some estimates, a mere 3 percent or so of a business dominated by Microsoft Corp.'s Windows software --- is shrinking, not growing. "Apple is clearly a competitor, but it's not nearly our biggest competitor by any stretch of the imagination," said Jim McDonnell, an executive vice president in charge of Hewlett-Packard Co.'s PC business. Industry leader Michael Dell has been even harsher. Six years ago, he brazenly suggested that Jobs should shut down Apple and give its proceeds back to shareholders.

Indeed, Apple's share value as of May was unchanged from 15 years ago.

Again, the wild card here is whether or not Apple will be able to transform its core competency from computer hardware manufacturer to an entertainment products company, much like Sony. There's a very good possibility this may happen, but that would in no way halt the continuing decline in the Mac user base.

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CBS Marketwatch--"I think Apple's yesterday's news," said Bruce Lupatkin, general partner with North Bay Technology Partners in San Francisco. "They have great products, but they've been struggling for a long time." And those are analysts who are relatively upbeat on the company. Other analysts are not even in the same ballpark. Merrill Lynch analyst Michael Hillmeyer reinitiated coverage of Apple with a "sell" rating on its stock, saying the company is continuing to fight an uphill battle in a market where standardized technologies from the likes of Dell can erase the appeal of Apple's products.

Finally, regarding the testing issue, you wrote--

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As I suggested (and MacDEF agreed) there will be no reliable indication of G5 performance until a non-partisan 3rd party like Arstechnica does some real testing and compares it directly in real-world applications.

While I agree with you on this point, the facts as they stand re: Apple's massive ad campaign boasting of a sizable lead over Wintel machines sets a new standard in marketing chutzpah.

Apple should be held to account by consumers for any deliberate misuse of data, if indeed, any such deception did take place.

 

[Russ Arcuri]

BoyElroy, for every article you can post quoting some doomsayer about Apple's future, I can post a similar article from a third party (i.e., not an Apple press release) that says Apple's future is bright (okay, maybe not 1 for 1 -- the doomsayers have been legion for the past 15 years. Just because there's more of them doesn't mean they were ever right.) As I mentioned previously -- but you chose to ignore -- several investment houses have upped Apple's stock rating to "buy" and "strong buy" recently.

After 15 years, you'd think it might occur to you that maybe Apple's not on the brink of destruction? Your ridiculous example of them selling 1 computer for 2 billion dollars is just that - ridiculous. Let's look at some actual numbers, okay?

Apple sold 150,000 Airport Extreme products last quarter. Apple has had over 5 million songs downloaded from the iTunes music store since it opened. Apple shipped 711,000 Macs during the first quarter, 40 percent of which (285,000) were notebooks. They sold 78,000 iPods during the same period, about half of which were to Windows users.

I don't know about you, but I think selling nearly three quarters of a million computers plus lots of accessories in three months is pretty good, especially when their flagship line (the G4 tower) was selling so poorly. Know why the G4s were selling poorly? Because the G5 rumors were so well-known and persistent. Who's going to spend $1500 - $3000 on a G4 if the G5 is right around the corner?

The G5 is going to sell like hotcakes. Is it going to suddenly give Apple 10% of the market? No way. Does that matter? Not a bit.

I have explained repeatedly why market share means nothing. (Okay, I admit it -- at the ridiculous extremes you're quoting, market share matters. But we haven't come anywhere close to that point. You seem to have a problem with single-digit numbers, thinking intuitively that they're "small." They're not, in this case.)

You've ignored every example -- Worldcom and Enron (both in dire straits despite huge market shares) and BMW (financially stable and strong with less than 3% of the market.)

If you're so confident that Apple's on the ropes, go ahead and give us a date that they'll be gone by. Come on, Kreskin... we're waiting.

 

[Russ Arcuri]

I thought it might be fun to post some actual discussions about Apple from public fora like this one from 1993. Of course the web didn't exist in '93, so I had to go to usenet. But there was plenty there. Here's the lead post from a thread titled "Apple IS dying!" from June 26, 1993 -- exactly 10 years ago today. (Condensed quite a bit to save space): Quote:

Early June, Apple was forced to admit that the profit for 1993 probably wont be more than $470M, a drop of 11% compared to 1992. Analysts warn that the drop might well be more along the lines of 20%. <Apples> sales of personal computers during the first quarter rose by 13% ... But what good is that when the worst competitors has taken even bigger shares of the market? Analysts think that the drop <of profits> is will continue during 1994... I must say it's nice to see that the world has finally started to see what inferior machines Macs are... No real OS, poor hardware and LOTS of hype. People are starting to learn enough about computers not to want to run restrictive OS'es, and are turning away from fool-proof computers that only fools would buy.

Hmmm... sounds familiar. I wonder if that guy expected Apple's "death" to take so long. Let's look at another one, from 1994, with the title, "Apple's amazing 10% market share": Quote:

Apple's problem is that they are view as a niche computer company that controls the hardware and software. Since Apple's profit margins are razor thin right now, if they don't increase marketshare they're doomed.

One has to wonder... was that guy's idea of "doomed" that it would take at least 10 more years for the company to breathe its last?

There are lots more examples, and they all sound like BoyElroy. I wonder... if Apple does die for some reason in (oh, let's pick a date out of the sky) 2010, will BoyElroy feel vindicated? Will the two guys I quoted above?

 

[BoyElroy]

Russ Arcuri--

I don't think there's anything to argue about here. Apple is in a long term decline and there's nothing that's going to halt its continuing market share loss in the computer hardware business. Make a chart and plot market share over time. I think that even you will see a pattern.

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After 15 years, you'd think it might occur to you that maybe Apple's not on the brink of destruction?--Russ Arcuri

Did I ever say, "brink of destruction"? Please, don't pull a MacDEF on me and go psycho with the printed text you see before you.

As I have documented above, Apple is in decline in the personal computer business and whether it happens tomorrow or next year or the next couple of years, Apple is doomed to irrelevance in its current core business.

And, like I said above, there's a very good chance that Apple may continue as a corporate entity by transforming itself into an entertainment products company. As for the computer hardware business, seeing 7% fall to 5% fall to 3% is a pretty telling sign. Deny it if you will, but once Apple's market share falls below 2%, I think Steve Jobs will be making a thinly disguised move into entertainment content management. Think a combination of Pixar and Universal music.

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Okay, I admit it -- at the ridiculous extremes you're quoting, market share matters. But we haven't come anywhere close to that point

I would say 2% of the market is verging on ridiculous and Apple currently stands at 3%.

At which point will developers abandon the Mac platform? 1%? 2%?

In any case, I think you have blinded yourself to the situation. Apple is already readying itself to move its core competency away from the Mac platform into media and entertainment. Think Vivendi, iTunes and Universal.

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You've ignored every example -- Worldcom and Enron (both in dire straits despite huge market shares) and BMW (financially stable and strong with less than 3% of the market.)

Russ, I don't know what sort of economics background you have, but trying to compare businesses across several industries, one of which is in the midst of massive de-regulation, is a doomed effort. Worldcom and Enron represent a fairly unique juxtaposition of fatal management and oversight failures that really don't have much to do with direct competition. I could go on at great length about the Enron case if you'd like, but suffice to say that it has little bearing on the question at hand.

BMW, OTOH, is a good case in point. BMW serves a market niche that has only a handful of direct competitors. If you look at BMW's rivals such as Mercedes, Lexus, Jaguar, etc., you'll notice that they have relatively equal market share (at least compared to the personal computer business). The resources available to Mercedes, Lexus, BMW, etc., are roughly similar and they serve an exclusive clientele.No single luxury car maker dominates its market the way Microsoft/Intel dominates the home computer market.

In this sense, then, it would be specious and misleading to compare BMW to Apple since they operate in very different market environments. BMW competes exclusively with other specialty niche luxury carmakers. It does not compete directly with Toyota or GM. Apple, however, does compete directly with Wintel companies. In this regard,then, the BMW comparison simply doesn't apply.

Yes, BMW has 6% or whatever of the overall car market but it has at least 25% of the luxury car market it serves. Such a market segment does not exist in the home computer business. Perhaps a more apt analogy would be to hypothesize what would occur if BMW had to compete for the same consumers as GM with little or no technological or quality advantage.

 

[BoyElroy]

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Hmmm... sounds familiar. I wonder if that guy expected Apple's "death" to take so long. Let's look at another one, from 1994, with the title, "Apple's amazing 10% market share" --Russ Arcuri

Russ, I'm actually kind of flabbergasted. Doesn't it worry you that Apple has gone from 10% market share ten years ago to 3% now? We're talking a consistent and steady loss of market share that borders on extremely worrying to say the least.

At the rate of the above decline, where will Apple be in 5 years? You seem to feel that market share is somehow irrelevant but losing 70% of your market share in a decade is NOT an encouraging sign and certainly nothing to boast about.

In any case, I do think that Apple will survive, only not as a prime manufacturer of personal computers. It just doesn't make sense for Apple to stick to this relatively low margin business when it could conceivably make so much more by becoming an entertainment company and cooperating with the Wintel companies as a content provider.

Or, another option would be for Apple to license out production again to 3rd party manufacturers and simply support the OS/software base with its primary business in entertainment. This may actually make the most sense.

 

[stuartr]

ok, forgive me if I skipped the last 14 pages of flaming and debating. This was a thread for mac users. This is like when people who like grado are trolled. ANYWAY, I am drooling at the thought of the new G5's. I do not care how fast it is relative to a PC, I currently have a dell laptop that has performed fairly well for about two years. That said, I appreciate WHAT I PERCEIVE as a superior design, ergonomics and cleanliness of the operating system. I love the idea of a new, quiet cooling fan system, and I love the 20 inch flat panel (this is noticibly brighter than the 23 inch). I mostly use my computer for email, internet and scanning in my slides into digital images and altering them in photoshop. For me a G5 would be perfect, and it would not look like a sack of **** cramping my desk in my office rattling around making a ton of noise. If an intel can do more jizzy-flops per nincompoop, I really don't give a ****. That said, I think that once objective analysis comes out on it, the G5 will likely hold its own or beat comparable wintel machines...if you add in aesthetics and overall "pleasure of use" I don't think there is a contest. But, that is just me. I think MacDEF made a very salient point when he said that Apple was not making pc's for the DIY contingent -- it is like comparing a leica with a Canon D1s...the D1s is a hunking bad ass digital camera that can do almost anything, and the leica is a fully manual rangefinder with impeccable design and build quality. Which is better? God only knows, but I would prefer the leica.

 

[Dweebgal]

yess.... but macs are pretty looking

 

[stuartr]

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Originally posted by BoyElroy Yes, BMW has 6% or whatever of the overall car market but it has at least 25% of the luxury car market it serves. Such a market segment does not exist in the home computer business. Perhaps a more apt analogy would be to hypothesize what would occur if BMW had to compete for the same consumers as GM with little or no technological or quality advantage. [/B]

I don't really want to enter this argument, but you are assuming that wintel and apple are competing for the same market niche. I don't think this is necessarily so. It's market share may be decreasing, but it does not take a genius to figure out that this is relative to the worldwide growth of computing --- the new business is primarily in Asia, South America and Eastern Europe -- places where macs are not readily available or available only at a premium. I would be willing to guess that macs market share has been much more stable when compared to the overall US market. If it has fallen, it is likely more in desktops...I would not be surprised if their laptop market share had increased, but then again, I know nothing of this, and care very little. I don't really think mac is in trouble, as their will always be people who prefer a product where design has been made a priority -- the only other manufacturer of computers in the U.S. that I think this can apply to is Sony. Apple has successfully marketed itself as the computer of the urban intellectual and artist -- though these are not giant markets, they are certainly stable ones. Well, I am off to bed, fight amongst yourselves on the scraps of my argument.

 

[scrypt]

What annoys me about the various insipid digressions on this thread are the constant intimations that MacDef "sounds" upset or defensive. He doesn't sound that way at all -- he's simply being persistent. The people who sound defensive are the ones who repeat their accusations about nebulous emotional states like a horde of indefatigably self-conscious echolaliacs.

This is exactly the sort of propaganda-fest that decides political outcomes arbitrarily: Cynthia McKinney gets voted out of Congress because a decillion reporters write that she's suggested 9/11 was Bush's doing, when she'd never said anything of the sort. People decide on the outcome they want and then manufacture reasons for the artificially inevitable.

It's not a matter of which platform you prefer. It's a matter of dropping the smear campaign mentality and discussing these matters technically and factually, without resorting to your-nose-is-crimson-therefore-I-can't-take-your-response-seriously and other vicissitudes of reflexive ad hominem barking.

 

[cyberhazard]

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Originally posted by scrypt What annoys me about the various insipid digressions on this thread are the constant intimations that MacDef "sounds" upset or defensive. He doesn't sound that way at all -- he's simply being persistent. The people who sound defensive are the ones who repeat their accusations about nebulous emotional states like a horde of indefatigably self-conscious echolaliacs. This is exactly the sort of propaganda-fest that decides political outcomes arbitrarily: Cynthia McKinney gets voted out of Congress because a decillion reporters write that she's suggested 9/11 was Bush's doing, when she'd never said anything of the sort. People decide on the outcome they want and then manufacture reasons for the artificially inevitable. It's not a matter of which platform you prefer. It's a matter of dropping the smear campaign mentality and discussing these matters technically and factually, without resorting to your-nose-is-crimson-therefore-I-can't-take-your-response-seriously and other vicissitudes of reflexive ad hominem barking.

I quickly grab a dictionary to look up some new words....

Yea, what he said!

 

[fiddler]

Well said as usual, scrypt!

 

[plainsong]

Scrypt is my hero.