Could Apple's Mac Finally Win the War with Microsoft’s Windows?

Apple could use its mobile advantage to take market share away from Microsoft's Windows.

Jun 9, 2014 at 1:30PM

In terms of market share, Apple's (NASDAQ:AAPL) Mac appears to have lost the war with Microsoft's (NASDAQ:MSFT) Windows long ago. Today, Windows powers more than 90% of the world's PCs -- Macs account for less than one in ten.

With the PC market in outright decline, however, the "Mac vs Windows" debate that dominated the tech landscape nearly a decade ago seems to have fallen by the wayside -- the arrival of tablets and smartphones has made the traditional PC uninteresting.

But Apple clearly isn't giving up on the PC market, and with a variety of new initiatives, could see its Mac market share grow dramatically in the coming quarters, further eroding the market for Microsoft's Windows.

Apple plays to its strength
Apple is primarily, and overwhelmingly, a mobile company. Last quarter, Apple's mobile devices -- the iPhone and iPad -- collectively accounted for more than 70% of Apple's revenue (if you include iTunes, it jumps to more than 80%), and last year Apple sold more than 150 million iPhones.

There are a lot of consumers who own Apple's mobile devices, and they're generally extremely loyal. That mobile dominance is Apple's biggest advantage.

People who own iPhones and iPads tend to own more Macs than the general public, but they are still in the minority. According to a recent survey from Consumer Intelligence Research Partners, just one-quarter of people who recently purchased an iPad also own a Mac, and only 28% of iPhone buyers have one of Apple's PCs. While a few may be running Linux, or simply not have PCs altogether, most of them likely own computers running Microsoft's Windows.

Binding OS X and iOS
Could they be converted into Mac buyers? That appears to be the angle Apple is taking. Most of its Worldwide Developer Conference (WWDC) keynote was spent demonstrating features of its new Mac operating system, many of which serve to tie the Mac to Apple's mobile devices.

With OS X 10.10, iPhone users are able to place and receive phone calls with their nearby Macs, as well as send text messages. A feature known as Handoff allows iPad and iPhone owners to work in an app on one device, and then easily switch to another -- for example, an email draft started on an iPad can be seamlessly picked up and finished on a Mac. Instant Hotspot allows a Macbook to more easily utilize the mobile Internet connection of an iPhone.

iTunes and iCloud have bound Macs and iOS devices together for some time -- but these new features enhance the relationship between the devices to a level never before seen.

One major hurdle
To take advantage of these features, owners of Apple's devices may be tempted to get a Mac when it comes time to buy a new computer. Unfortunately, there's still one major hurdle standing in the way: price.

Apple's cheapest Mac, the Mac Mini, retails for $599 and doesn't include a monitor. Apple's cheapest laptop, the Macbook Air, starts at $899. Historically, the average PC running Microsoft's Windows has sold at around $500-700, and Microsoft has been working to aggressively reduce the price of Windows-powered devices, cutting the Windows license fee entirely on PCs with screens 8-inches or less.

But Apple has been steadily lowering the price of its Macs as well. Apple's Macbook Air used to start at $999, but Apple cut the price by $100 in April. It has also reduced Macbook prices in other ways, making OS X upgrades free last October, and giving away its iWork software suite.

An unlikely growth market
As Apple slowly reduces the costs associated with Mac ownership, and builds in features attractive to Apple mobile device owners, the Mac could emerge as an interesting growth market for the company, even as the larger market continues to contract.

It's Microsoft's market to lose. Although the company has a iron grip on the corporate market, consumers in developed economies, happy with their Apple-made mobile devices, could be lured to a Mac.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

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Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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