POST OF THE DAY
Apple
Why Apple Kicks Microsoft

Related Links
Discussion Boards

By SaintCroix
November 14, 2007

Posts selected for this feature rarely stand alone. They are usually a part of an ongoing thread, and are out of context when presented here. The material should be read in that light. How are these posts selected? Click here to find out and nominate a post yourself!

I'm going to talk about long-term technology trends, which kind of sucks for me, as it will show just how old I am. Anyway, I'll be referring to products and services that don't exist any more. So bear with me youngsters. It's All True.

In 1986, I told my dad he should buy some Microsoft stock. "Hey Dad," I said. "You should buy some Microsoft." He didn't buy any, probably because I was more or less clueless about why he should buy Microsoft. "Because they make the software that runs computers." I was kinda like that guy in The Graduate who told Dustin Hoffman, "Plastics." That was me, the one word guy. And I was right! That's the crazy thing.

Flash forward nine years. It's 1995, I'm in law school, working on my personal computer. No, ha ha, just kidding. I was still using a typewriter in 1995. I know, I know.

Anyway, 1995, I had no computer. And I was watching the playoffs on TV and this little promo appears about how I could get more information on the world wide web. The information superhighway.

I had no idea what they were talking about. And I had this intuition that I was missing out on something. Plus, it was getting harder and harder to buy ink cartridges for my typewriter. So anyway, kicking and screaming and without any Microsoft stock to my daddy's name, I was dragged into the internet age. Or information age, whatever.

So I had a decision to make. PC, or Apple? This actually was a very easy decision to make. Why it was an easy decision, I'll need to disrupt the space-time continuum again and rewind to 1982. Or maybe it was 1983, it's kinda foggy. Anyway, I had a VHS, and a buddy of mine had a Betamax. And he was going on and on and on about the technology, about how cool their resolution was, and blah blah blah. He was kinda like an Apple guy. In fact, come to think of it, I think he was an Apple guy.

Me, I'm a movie buff. So what I noticed was there was a lot more movies available in the VHS format than in Beta. Now my friend won the Morehead at Carolina, so he's not a total doofus. And I had to go to my safety school. So today he's making more money. But let me tell you, it was kind of funny when we went to that video store in 1982 (or 1983), and I had the whole store in which I could look for movies, and he had that one pathetic, sad-ass shelf.

So, we're back in 1995 now, and I'm in a computer store, trying to decide what to buy, PC or Apple. And I see there is all sorts of software for the PC. Lots and lots of games for the PC. And not so much for the Apple. It was like that sad, pathetic Betamax shelf of yesteryear. Bingo. Like most people in the universe, I became a PC guy.

Now we flash forward to 2007. I have quit the practice of law, and I'm in film school, trying to finish my first feature film. I'm on my fourth, maybe fifth PC. They don't last very long, the ol' PC. Those eMachines, that was a cruel outfit. So, anyway, like every other student in the world, I use Macs at school and I'm used to the Mac. And like every other Dell owner, I've about had it with your stupid ass, allegedly free printer, with my inability to buy ink cartridges for the damn thing in a store. Again with the ink cartridges!

But here's the thing. And you're like, get to the point, old guy. I'm here! I'm at the point. And my point is...I don't buy software for my computer. I don't buy games to play on my computer. It's all internet. All that stuff is on the internet. So my "must buy PC because of all the software applications that will only work on the PC" rule is no longer valid. It's just not the case anymore. So, ipso facto, Microsoft's value proposition has shifted, in a very bad way for them.

And the reason I am posting all this, is because I do not believe most people realize this. Most Apple shareholders, they were excited about the iPod, and now they're excited about the iPhone. Okay, it's exciting. And you know what? That excitement has already been priced into the stock. Arguably, anyway. What hasn't been priced in, is that Microsoft's market share dominance is toast. It's toast in laptops already, we own, what, a sixth of the laptop market? And we're increasing our share in desktops every quarter, on the way to Double Digit land.

What will Apple's market cap look like when a third of computers bought are Macs? Dude, I don't even want to do the math, it will just excite you. You people are frothy already, I don't want to be responsible for heart attacks. For every one percent gain, our market cap goes up...I don't even want to say. We got so much room to grow internationally...I don't even want to point that out.

What I do want to stress here is that software compatibility issues--which is the whole basis for Microsoft's value proposition--don't really exist anymore. I already use Word on the Mac, for example. As for smaller software companies who don't write software for Apple, so what? Who buys software anymore? Dude, games are on the internet. Everything is on the internet. Microsoft is so frickin worried about Google, it's not even funny. They want to be Google. Why? Because their historical value proposition is gone. It doesn't exist anymore. Microsoft is gonna end up an internet company who has to convince people to use their software. Good luck with that.

Apple smacks Microsoft around every day on television. What do they say in response? Nothing! What can they say? Hell, they're not even worried about us. They don't even view us as a competitor. We're just some little $150 billion dollar company with a tiny slice of the home market. And we make nice-nice noises about how we don't want the corporate market. We're not looking for share or anything. We just want the kids. We're playful. We're Apple.

Uh-huh. We're the dagger in your heart, baby. Listen, historically, corporate buyers had a choice. You could be special (Mac), or you could be just like everybody else (PC). And the smart thing, compatibility wise (and stock wise), was to be just like everybody else. Well, maybe not smart, but certainly safe. That's why Microsoft's stock was so insanely good for so many years, and we were stuck with all the special kids down at $5 billion, or wherever the hell we were.

Now, going forward, you buy a Mac, you have two operating systems. You can be special (O/S X), or you could be just like everybody else (Windows). So what are the compatibility issues? You tell me, I don't see any.

So now, for the next upgrade cycle--and the PC dies every frickin 3 years, believe me--it's just a question of which computer is better, and a better value for the money. Okay, let's all say it together. Macs are better computers. They're less buggy and they last longer. Corporate I.T. people know this; they've had twenty years to figure it out.

My ass we don't want the corporate market. We want it, and we'll get it. A chunk of it, anyway. Why wouldn't we? You can now buy a Mac with two different operating systems, Windows for the people who need it, O/S X for the people who love it. And in five years corporations will probably be downloading all their software off the internet anyway, just like the rest of us. Not to bubble over with enthusiasm or anything, but the Vista disaster, coupled with the Windows option on the new Macs, is a huge market opportunity for us. Dude, we're a $150 billion company and we're tiny! It kills me.

Now, I'm not saying your iPhone excitement is wrong. Froth away. I'm just pointing out we got some extra excitement on top of that, that nobody's excited about yet. We got future Mac excitement that's gonna shock some people. That's my two cents, anyway.



Taylor