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  • Another Look at Apple’s Quiet Success

    January 13th, 2012

    The conventional wisdom has it that PC sales flagged over the past quarter, with more and more customers looking at sexier gadgets, or just buying smartphones and tablets. HP suffered more than most, with a case of corporate musical chairs and the lack of a sensible strategy about their PC division. According to a Gartner survey of preliminary PC sales for the fourth quarter, HP's U.S. sales were down a whopping 26.1%.

    For a while, in fact, it wasn't at all certain whether HP would spin off PCs or sell off that division, simply because it wasn't very profitable. That cloud over the business may have convinced lots of potential customers to look elsewhere. Besides, it's not as if HP's computers are really all that different from a Dell or other generic PC boxes. At least the newly-minted CEO, Meg Whitman, finally announced that PCs would remain in HP's future, but that announcement may have come too late to restore confidence.

    But as I said, what distinguishes the HP PC from competitors anyway? Because it's HP?

    In the meantime, all signs from industry analysts seem to indicate that Apple's Mac division continued to score higher and higher sales. Apple has moved into the number three spot in the U.S., ahead of Toshiba, with a sales boost of some 20.7%. Understand that this happened without a major advertising campaign, at the same time that Microsoft has been spending lots of cash running utterly pathetic ads for Windows 7.

    Now remember that Apple no longer uses those Mac versus PC ads, or much of anything else to promote Macs on radio and TV. Most of Apple's advertising is focused on the iPhone or the iPad. You hardly know there is such a thing as a Mac nowadays, at least if you considered the number of ads you hear or see about them. It almost seems as if they sell themselves.

    Indeed Apple is doing amazingly well with Mac sales. The iMac, for example, has about a third of the all-in-one desktop PC market. This is one of Apple's huge strengths, since the very first Mac, in 1984, was an all-in-model. But nearly three quarters of the Macs sold these days are notebooks, and the MacBook Air also remains a great success story.

    Certainly, the PC world is noticing. They continue to introduce all-in-one models, and Intel's ultrabook program will allow them to build ultra thin notebooks designed to compete with the Air. So far, however, the PC makers haven't found a way to beat Apple on price with their thin and light portables, except by cutting back on features or using cheaper parts.

    But Microsoft's biggest dilemma in helping fuel sales of PCs is that they really have nothing new to offer. Sure, Windows 7 is better than Windows Vista, but largely in areas that aren't necessarily visible to the end user. It's still just Windows for better or worse.

    Later this year, Windows 8 will arrive, with a Metro graphic layer consisting of tiles rather than icons, but it didn't do so well on the Zune or Windows Phone smartphones. When you set Metro aside, it's still just Windows, at least on the developer beta I tried some months back. That there will be a Windows 8 running on tablets using ARM processors, but that doesn't necessarily allow for application sharing between the two platforms.

    While Microsoft is flailing, Apple is soaring into the stratosphere on all fronts; well, perhaps not the iPod, where people who want music players will use the iPhone or iPad instead. But the prestige of Apple's gear across the board no doubt contributes significantly to the continued success of the Mac.

    Despite reports that sales of tech gear simply failed to take off over the holiday season, every indication has it that Apple did great business, particularly with the iPhone 4s, which still remains somewhat backordered. Clearly customers are willing to buy if they perceive the product has value, and maybe they have begun to decide in far larger numbers that the perceived value of a PC is not terribly great. Maybe they have decided to just keep the old PC until it breaks, or consider other options, such as Macs.

    This doesn't mean that the PC business is finished, only that the current structure may be in need of life support. You can expect the various manufacturers to be hoping and dreaming that Windows 8 will somehow turn things around, or that their various and sundry attempts -- so far unsuccessful -- to make it in the tablet space will come to fruition.

    As the economy improves, of course, lots of companies may be ready to upgrade their old PCs, though you wonder if Windows 7 will take over XP as the default OS of choice, even after Windows 8 arrives. While Microsoft's pathetic attempts at visual eye candy might count for something in the consumer market, it's not at all certain that this sort of window dressing will mean much in the corporate world. Beneath Metro, it's still Windows 7 with a few refinements. How's that going to change the game?

    Meantime it appears Apple is in no rush to overhaul the industry any more than they already have with the MacBook Air and the iMac.



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