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  • Is Apple Becoming Number One in PC Sales?

    November 23rd, 2011

    An interesting phenomenon is playing out in the PC industry. To see where it's going, let's take a look at the past, particularly in the 1990s, when Apple as a company was regarded as lost. Before Steve Jobs returned, plenty of red ink was being shed, and some suggested Apple would be gone in a few months.

    Consider a certain Macworld Expo keynote in 1997, where Steve Jobs, having recently regained control of Apple as iCEO, introduced Microsoft's Bill Gates on a large screen via a satellite feed. You could feel and hear the boos in the audience. But the event was designed to announce that Microsoft had invested $150 million in Apple, and had agreed to a five-year deal to continue to produce Office for the Mac. Talk about confidence. And, of course, the Mac version of Office is still being produced.

    But the most significant remark came from Jobs, who said that the PC wars were over, that Microsoft had won. Maybe he was right in a matter of speaking, but that victory may be a hollow one as time goes on.

    In recent years, sales of Macs have increased by larger percentages than those of most PC makers. Nowadays, PC sales remain relatively flat, as even the largest companies are struggling to move product. Where Mac sales were once in the hundreds of thousands each quarter, now they are roughly five million for the same period. Apple is entering the top four and top five positions among PC makers around the world. This is a pretty amazing achievement for a so-called "niche" product, or, as Microsoft Steve Ballmer once suggested, a rounding error.

    But when you analyze PC sales, it is becoming more and more obvious that you cannot limit market share figures to traditional desktop and notebook computers. The picture has become a whole lot more complicated, and it all began with a monster that may have been created by Microsoft.

    For a number of years, Microsoft touted tablet computers as the next great thing, perhaps believing that if they said it long enough, it might just happen. But their vision of a tablet, essentially a tricked out notebook with a rotating display sensitive to a stylus, was too expensive and never caught on with consumers. Sure, some businesses embraced them, but not in large quantities.

    So when the iPad arrived, the skeptics howled that it was nothing more than a glorified and swollen iPad touch. That is until customers embraced them in huge numbers, and higher and higher percentages of big corporations either tested or deployed them. Suddenly the industry took notice, but, unlike those other tablets, they weren't initially classified as personal computers.

    Of course, that takes us back to what a PC is supposed to be, and whether the iPad or any similar mobile device can fulfill all or most of the same functions. It's not necessarily whether it uses a physical keyboard or not, which is probably the biggest area where the iPad differs from traditional desktops and notebooks. And even then, if you must, you can connect a keyboard to it, so that argument goes out the window.

    The other issue is screen size, but don't forget that, for a number of years, those original Apple PowerBooks had displays that were smaller than the iPad, and even where the sizes more or less aligned, the iPad had more pixels.

    Now it is reported that some of the companies that survey PC sales are including tablets too. Certainly, traditional PC makers who have had no luck competing with the iPad are going to freak. But when you combine Apple's Mac and iPad sales into a single category, which in theory is where they ought to be, something magical happens.

    Indeed, projections indicate that, assuming a huge uptake of the expected iPad 3 in 2012, Apple is poised to become the number one PC maker on the planet ahead of HP. The fact that Microsoft is going to deploy Windows 8 on traditional PCs and tablets indicates that, to them at least, they exist in the same category. Microsoft did present tablets as just another type of PC that, to them, was meant to run Microsoft Windows. That Apple chooses to use different operating systems on Macs and iPads shouldn't change things.

    So, yes, if you consider a PC as defined by the standards of the 1990s, I suppose Microsoft's dominance is not expected to end anytime soon. But as soon as that huge fly in the ointment, in the form of the iPad, comes into play, the situation changes. Apple is a major player, and it doesn't seem likely that Microsoft's will alter their vision of what a tablet should be.

    But there are numbers and there are numbers, and not all market research firms are quite ready to embrace this new reality. But that situation is destined to change.



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    6 Responses to “Is Apple Becoming Number One in PC Sales?”

    1. Duncan says:

      Did Jobs say that "PC wars were over"? He did say...

      "If we want Microsoft Office on the Mac, we better treat the company that puts it out with a little bit of gratitude; we like their software. So, the era of setting this up as a competition between Apple and Microsoft is over as far as I'm concerned. This is about getting Apple healthy, this is about Apple being able to make incredibly great contributions to the industry and to get healthy and prosper again."

      There seems to be a growing myth that Microsoft "invested $150 million in Apple" in an act of largesse. This "investment" was part of a negotiated settlement of the long running legal disputes between the companies whereby Apple was seeking damages for Microsoft ripping off the look and feel of the Mac OS, to a greater extent than had been agreed by their initial licensing deal with Apple, and the stealing of QuickTime code which they had incorporated into the media player. The investment involved the purchase of non-voting stocks which were soon sold at a profit.

      "if you consider a PC as defined by the standards of the 1990s, I suppose Microsoft's dominance is not expected to end anytime soon."

      Microsoft does not make PCs. Apple Makes PCs. Microsoft makes the Windows operating system. I run Windows 8 on my Mac. One day, not too far away, I will be running the Mac iOS on both my Mac and iPad.

      Gene Steinberg Reply:

      @Duncan, There's no disagreement with many of you basic points. I didn't cover the whys and wherefores of the Microsoft investment, since that's a matter of history. I didn't need to revisit old myths.

      Microsoft depends on the success of PC sales to move Windows licenses. Fewer PC sales, fewer Windows licenses. It's not that they can expect people to just run Windows on their Macs, except for limited purposes.

      Peace,
      Gene

    2. SteveP says:

      Some people drive trucks that don't really need a truck.
      Some people haul stuff in an SUV.
      That doesn't make an SUV a truck.

      A really old riddle addresses this:

      Q. How many legs does a sheep have if you call the tail a leg?

      A. 4! Calling a tail a leg doesn't make it one.

      A lot of people do just fine with an iPad as you suggest. However, that doesn't make it a PC.

      Gene Steinberg Reply:

      @SteveP, Where's the line of demarcation? A physical keyboard? Most of the things many people do on a PC can be done on an iPad. I wouldn't write my columns on one, though I'm writing this response on an iPhone.

      Peace,
      Gene

    3. Drew Costen says:

      I think the iPad is more of a PC than any Windows computer. PC means "Personal Computer," and you don't get a computer more personal than the iPad (yes, it is a computer by any definition of computers that I'm aware of). It doesn't even allow multiple logins, and every app on it is geared towards one user, unlike the programs on my Mac and on any Windows PC, so it's certainly personal.

      And if we're talking specs, my first generation iPad is thousands of times more powerful than my first PC, an 8086 laptop running MS-DOS 3.2 with no hard drive (it did have two low-density 3.5" floppy drives though), less than 1 MB of RAM, and a monochrome screen. My iPad is far more powerful and capable than it ever was so I don't see how it isn't a PC.

      By the way, not only have I written plenty of blog posts on my iPad, I've written plenty on my iPhone as well thanks to the WordPress app.

    4. Shameer M. says:

      @Drew Costen,

      I agree completely. Apple is racing fast towards a future where the vast majority of individuals won't need anything more than an iPad (other other "large" tablet) for their computing needs. The PC is the new "workstation" for those who need to do more heavier lifting for their computing needs.

      Steve Jobs' example of PC's being like trucks and tablets such as iPads being more like cars is making more sense everyday. As for the Kindle Fire, think of that more like a motorcycle.

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