Vista and Mac OS X: Will Apple’s Sales Dip?
February 14th, 2007I have to tell you that maybe I shouldn’t be so down on tech pundits and analysts when they make their proclamations about one thing or another. Sometimes they’re even right, and I’m sure that their jobs are incredibly difficult. After all, they have to predict the future and not embarrass themselves.
So let’s take a set of facts and see where they take us. First off, according to a published report quoting analyst Gene Munster, of Piper Jaffray, sales of Vista upgrades haven’t done quite as well as expected. No surprise here, because it was already widely reported that people weren’t exactly lining up to purchase their upgrades on the evening of Vista’s release.
According to Piper Jaffray’s survey of 50 Best Buy ele ctronics stores, it appears that buyers would rather buy a new PC that’s already preloaded with Vista. Considering the upgrade hassles that have traditionally accompanied a Windows upgrade process, this makes a lot of sense. Besides, the new PC will at least be certified for Vista, which you can’t say about millions upon millions of recent PCs that their owners are still paying for.
At the same time, Munster is quoted as speculating that the pent-up demand for a Vista PC will have a slightly negative impact on Mac sales, reducing worldwide share from 2.5 percent to 2.3 percent somewhere in the second quarter of the year.
According to Munster’s analysis: “Due to pent-up demand for PCs with Vista preinstalled, we anticipate a spike in PC sales during the Mar-07 quarter, which could put downward pressure on Mac market share.”
What he’s suggesting is that folks who may have otherwise gone to the Mac will stop in their tracks and settle on Microsoft’s operating system instead. That statement can have few other meanings that I can see. The impact is supposed to be slight, although, with such a low market share to begin with, even a couple of tenths of a percent are quite significant.
The key here, of course, is buyer attitudes and plans. In addition, how many sales of a PC is a loss for Apple — or does it even make a difference? Yes, Vista will reach the consumer and content creation market, just as Apple does. At the same time, are Vista’s features, particularly the ones that mimic Mac OS X, such as the enhanced desktop eye-candy and search schemes, sufficient to curtail some switchers from jumping to a new platform?
That’s a really good question. and, as usual with an industry analyst, Munster tries to hedge his bets, stating, “We also believe that widespread computer upgrades could lead consumers to evaluate their options, which may allow Apple to sway buyers toward the Mac platform.”
So is it one or the other, or a combination of both, with Windows gaining just a bit on Apple because so many people have been aching for Vista for all these years and are sufficiently content with the PC to stay with the platform?
The problem with all these analyses is that they have few facts to go on. They take what surveys they can and hope they can project them to the population as a whole. The problem here is that is a lot of information they just cannot get. Nobody at an Apple Store will dare tell them a thing, lest they face the immediate loss of their jobs if Apple finds out. And, beyond the small amount of data from a quarterly report and analyst meeting, it’s extremely difficult to put together a meaningful set of trends.
And that’s where these predictions are bound to fail. Without that key chunk of data from Apple and its own retail outlets, where 50% of the purchases of new Macs go to people who are new to the platform, the surveys from Piper Jaffrey and other companies are deficient. No, make that almost meaningless.
Now it may well be true that Vista will help Microsoft hold onto some market share it would have otherwise lost. Or maybe, if tepid sales of upgrade kits is any indication, people really don’t care all that much about Vista. They’ll buy a PC with Vista if one was already in their sights, but how many will decide they must have Vista and make a purchase that would not otherwise have been made — or gone to the Mac?
Of course, none of this should dissuade Apple from bombarding the public with those sly Mac Versus PC commercials, which put an honest perspective on what Vista might inflict upon the end user. They definitely cannot let down their guard now, no matter how it all plays out.
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Isn’t this the same thinkng that says many people will slow their buying decisiona nd wait for a new Mac with 10.5 pre-loaded?
Please note that he isn’t actually saying that Mac sales will decrease. What he is saying is that as a percentage of total systems sold, Apple’s market share will go down. This is due mostly to buyers who have been putting off a new Windows system purchase until Vista and Vista-ready systems were available. If there is more of an increase in Windows system sales than in Mac sales, that would show up as a market-share decrease, at least in the short term.
Or — you can prove anything with numbers 🙂
Peace,
Gene
The concept is the same for Windows users, but it has more traction, simply because upgrade issues are far more onerous there.
Peace,
Gene
It would appear that the real increase in Vista sales is coming from Mac users that have Mactel boxen! They do not seem to be suffering as much from the install, as is occurring on non-Mac systems.
The “dip in sales” for Mac systems is apparently based on the “wiat-until-Leopard-comes-out mentality”, also espoused by Apple Sales personnel who unabashedly tell customers “wait” because there apparently is no “coupon” for the up-and-coming Leopard when you buy a new box from Apple.
We sell Macs and Apple PR has not been forthcoming with an answer on this issue.
Or it could be that most people when faced the need for a new computer stay with what they have because of other, non-OS issues.
Switching to a Mac does not just involve buying a new computer, but also REbuying all of the applications that you use. That is why more people don’t switch.
Some publishers will let you sidegrade to a different platform for the standard upgrade fee, which helps. But if you face the prospect of buying new Vista-savvy applications, whatever those might be, this would equalize the cost of the platform switch, at least somewhat.
Peace,
Gene
Gene,
Let me start out by saying that I love your site and visit it daily. Thank you for your enlightened commentary.
However, I’m going to have to disagree with your interpretation of Gene Munster’s note. He never once says that there will be a decline in Mac unit sales. Let’s say Mac market share is 5%. To oversimplify, let’s just say that in one period, only 100 computers are sold. Five of those, then, would be Macs, and the other 95 are Windows machines. In another period, if there is a surge in Windows units sold as Gene M says, 120 units might be moved (again, all hypothetical). Let’s also assume that during that same period, Mac sales continue to rise and they sell 6. Apple moved more units than before, but their market share is less than 5% for that period. Once things return to normal in a later period of time, Windows machines may go back to only moving 95 computers, and Apple’s market share numbers will rebound.
This is the short-term loss in market share that the other Gene is referring to. I’m sorry, but I don’t see any reason to interpret Gene M’s comments as saying that there are any number of people at all who were once considering moving to Mac, but will now change their minds and go with Vista.
That’s my take.
Thanks, Gene!
Thats one of the things Microsoft has done that compromises Windows, they tend to maintain compatibility with older applications. I LOVE the old Age of Empires game from 1997, and guess what, it works just fine in Vista. Maintaining such backward compatibility is partially why malware is so easy on Windows and why the OS is so bloated, but they do this for a reason, so that older, highly specialized and expensive enterprise applications continue to run on the new system.
There is very little need to buy Vista-Savvy applications as Vista will run most older applications just fine. Yes, there are exceptions. iTunes crashes when I try to watch TV episodes on Vista, but music and my iPod work fine. More important is that actual productivity applications keep working. I still have a 1998 copy of Word Perfect for Windows that I need for criminal matters in Federal court, and it runs like a champ on Vista.
Apple is actually far worse in this regard. Classic applications only run in emulation on OS X, and not at all on Intel machines. Those old Windows 16 and Windows 32 applications were written for a system as different from Vista as Classic Mac OS is from OS X, namely DOS in the old days and NT on modern versions. OS X doesn’t RUN classic Mac OS apps, it runs an emulated classic Mac OS. Windows NT actually runs those older DOS applications natively.
I think Piper Jaffrey is correct to be not too terribly concerned; they have a MUCH better track record than average among tech analysts.
I think it MSFT’s decision to re-issue of XP with prettier eye-candy (Vista) will sway some people, but Apple will be continuing THEIR advertising assault and new product development this quarter, too.
Munster is correct.
And, personally, the glib “you can prove anything with numbers” is one of my “hot buttons” (or warm one, anyway 🙂 )
You can’t “prove anything with numbers”!
You can just make statements that are based on ignorance of what the numbers really say (politicians!) or you can SAY that numbers mean something that they don’t and hope for the ignorance of your audience.
Otherwise, numbers just describe and quantify and allow knowledgable people to analyze data using mathematical processes.
The dishonesty is in the intent or ignorance of the people. You have to think about what the “numbers” are really saying. Just like you have to think about what politicians – or “analysts” or anyone else is really saying.
I think Brad’s right and it has nothing to do with manipulating numbers. So I’ll put it on a more personal level that might be more understandable.
You want to get your kid a computer for Christmas. You want it to have the latest and greatest or you know he’ll howl. So you think about it and realize that when Vista comes you’ll have a tough upgrade process. So you buy him a bike instead and get him a computer when Vista comes out, i.e. now.
So Microsoft lost a sale two months ago and gained one today. This has nothing to do with the Mac because you were not seriously considering a Mac, but if there are a flood of people similar to this “you”, the Mac market share will appear to decline for a brief period.
Studies of market share are indeed skewed by the Apple retail stores. Obviously there will never be a Zune in the Apple Store’s top 10, and that makes it more likely that the Zune will reach Wal*Mart or Amazon’s top 10. (The fact that it did for only a very brief moment indicates what a weak product the Zune was).
D
What this means is far more than what you imply. A survey, for example, rises or falls by its methodology, and its interpretation can be colored by emphasizing certain results and deemphasizing others. Indeed, there may be dishonestly here, or just human error. But I’d be real careful about writing too much into statistics until all the facts about it are known.
Peace,
Gene
You’re correct. There is more to it. Perhaps I was a little “glib” myself. :)?
Your last line is a more succinct way to say what I wanted. Don’t read too much into statistics until you know the facts about them.
I didn’t intend to sound quite so harsh about your original statement.