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Summary:

ChannelWeb’s Steven Burke says that in the manifold comparisons of Windows 7 with Snow Leopard burning up the Web, what all the reviewers and pundits seem to be forgetting is that it’s not about the operating system, which he maintains is simply the engine that runs […]

ChannelWeb’s Steven Burke says that in the manifold comparisons of Windows 7 with Snow Leopard burning up the Web, what all the reviewers and pundits seem to be forgetting is that it’s not about the operating system, which he maintains is simply the engine that runs the PC. As Burke puts it, you don’t go into a car dealership and buy an engine. You buy a car, and in his opinion, starting October 22, there will be no better ride available for the money than Windows 7.

Burke leans heavily on the initial purchase price angle, noting that an Apple Mac Pro desktop he cites as an example is nearly four times the price of an HP Pavilion, asking rhetorically whether anyone really believes the Mac is four times better than the HP Pavilion? I think some of us would argue that the value is there under the right circumstances, but it would’ve been more relevant to compare a mainstream Mac model such as the iMac or MacBook to their still admittedly cheaper, but not so dramatically so, Windows competition.

Apple Ignoring “Economic Reality?”

Burke accuses Apple and company CEO Steve Jobs of not considering “economic reality,” and having no interest in producing mass-market PCs, which is fair comment I suppose. However I’m constrained to observe that as Forbes’ Brian Caulfield pointed out last weekend, over the past year, banks have collapsed, PC sales have plummeted, unemployment has soared, and Steve Jobs went on mysterious medical leave for a liver transplant, but meanwhile Apple has thrived through all this with sales and earnings down less than everyone else in the industry and actually up year-over-year — on Monday reporting the company’s best quarter ever and a net quarterly profit of $1.67 billion on revenues of $9.87 billion. Consequently the question is begged as to who is and is not considering economic reality.

Netbook Sales Soar But Profitability Fizzles

NPD Group’s DisplaySearch Q2 ’09 PC shipment data released last week estimated that netbook sales soared a whopping 264 percent year-over-year in the quarter, accounting for 22.2 percent of overall PC sales, but woefully for PC manufacturers and for Microsoft — only 11.7 percent of revenues. Overall PC laptop sales (excluding netbooks) declined 14 percent and PC laptop average selling prices dropped to $688 in Q2 2009 from $704 in Q1 2009 and from $849 in Q2 2008.

Apple, on the other hand, eased prices somewhat on entry level MacBook Pro models in all three sizes while holding the $999 price point for its price leader white MacBook, and is still enjoying healthy sales and profits on its laptops. Even the most substantial MacBook Pro price cut — $400 on the base 15″ model — was partly compensated by substituting an SD Card slot for the preceding model’s ExpressCard slot, and leaving out the discrete NVIDIA GeForce 9600M GT graphics processor unit with its 256MB of dedicated VRAM in the new price-leader model, so I doubt that Apple has taken a major profitability hit. It’s more about marketing refocus.

Burke says Jobs wants to build “Rolls Royces,” not “Fords” and for him it was never about putting a PC on every desktop, while Microsoft has always had more of a Henry Ford style mass production bent. Again, partially true I suppose, although it doesn’t hold up particularly well in the iPod and iPhone context, and I don’t think Mr. Jobs has anything against growing market share provided he can do it without compromising quality standards or profitability, as his “there are some markets Apple doesn’t choose to serve” comment a year ago attests.

Simplistic Fixation On Initial Purchase Cost

I don’t gainsay that Windows Vista was a gift to Apple that just kept on giving, or that Windows 7 will prove much stiffer competition for OS X, but I think Burke is overstating his case in contending that Apple’s market share gains over the past several years are now destined to evaporate. To borrow his own analogy, it’s the whole car, not just the engine, and many of us perceive the Mac as being not only a smoother, better-handling ride, but also a better value in a whole raft of contexts that transcend simplistic fixation on initial purchase cost. CNET’s Dong Ngo reports that Snow Leopard consistently beats Windows 7 in many general performance areas including boot up time and battery charge life in laptops, for example.

Burke says PCs running Windows 7 are for “the masses” while Macs running OS X are for “the rich.” I’m not rich by the wildest stretch and neither are most of the other Mac-users I know. I do like to think that I appreciate value, a superior user experience, lower total cost of ownership, and elegance of form and execution, and that while Windows 7 will narrow the gap somewhat, it will fall well short of closing it.

  1. Some nice points in the article.

    One of the things I don’t think Mr Burke is considering in his analogy is that some people do like buying premium brand cars, just as some people appreciate a premium brand computer such as an Apple computer.

    Yes a Ford does the same job as say an Audi or a Volvo, but you ask those who choose to pay more if they’d rather have the lesser brand vehicle.

    1. I consider Macs to Windows not Rolls Royce to Ford but a Honda Fit to a Chevy Aveo. Sure they are similar sized economy cars with similar fuel economy and similar horsepower but even though the Fit is about three thousand dollars more than the Aveo the Fit is worth the difference. The Fit has more storage, a more reliable engine, a more reliable transmission, a more comfortable ride, better handling, better looks, better interior, safer, faster, easier to repair, easier to load, has a better stereo and has a higher resale value when you are ready to upgrade. So if you are going to be living with a car for a few years wouldn’t you rather pay the extra 3,000 up front for a better experience and sell it for above Blue Book value or pay 6,000 later when you have had enough of the transmission whining for no reason, taking a minute to reach 65 mph and desperate to get rid of it so you sell it for much less than the depreciation should have let it sell for. The same is true when you buy a Windows computer because while it maybe cheaper than a Mac up front, $300 at times, it is just going to cost you more over the life of the machine and when you are about to upgrade to a new PC you have to settle for a couple of bucks and a Bananarama tape losing a good $600. I could buy a new MacBook with my MacBook Pro’s resale value and my roommate recently gave away a similar vintage PC for $200 that cost nearly $800 new.

    2. Meant to say MacBook Pro for the Price of my MacBook Pro. It was a high end Pro new that now is worth the price of the mid range Pro.

  2. Apple is certainly here to stay. Burke’s issue really seems to be with the profit margin of Apple. They do sell the same hardware at a much higher price, but PC venders also do it, just look at Sony. His frustration is shared by many, the fact that individuals are willing to pay considerably more for something marginally better. Granted its all in the eyes of the beholder, but this is not just a computer issue. Luxury cars v. standard cars, private college v. public college. His issues seem to be more with society as a whole than Apple v. Microsoft.

  3. I actually really love Apple’s hardware but I gotta say that I prefer to use it with Windows. Wish they would spend more time on the bootcamp drivers and marketing it as a pc and they would probably sell a lot more computers.

    1. I like the comparison of Rolls Royce and Ford haha..

      I know a lot more about computers than I do about cars in terms of internals and parts-makers since I build my own, and I can never justify spending the amount of money required to get a Mac Pro or Macbook Pro of equivalent performance/strength as a PC desktop / laptop.

      I customized a Mac Pro on Apple’s site last year, for example, just to see what it came out to. What cost me $900 to build by buying PC parts throughout the web spec’d out somewhere around $2,800 on Apple’s site. No exaggeration, and nearly identical internals. No way is a case worth an extra $1,900. To put it in perspective, that’s over 2X what it cost me for my case AND all the parts actually *doing* things internally!

      I do think the Macbook Pros look pretty sleek, and the Mac Pro itself looks alright, but you’ll never catch me shelling out that much dough for a computer when I can get a machine of identical performance for 1/3 the price *and* without sacrificing part quality.

    2. @Kyle

      All that may be true, and I am sure it is. Don’t forget, though, that most of the market doesn’t want to build their own computer any more than building their own car. A case in point is Dell’s Adamo laptop computer. Clearly from the marketing of this machine it is Dell’s head to head competitor with the Macbook Air. Spec these out on the respective builder’s websites and then look at how close the price comes. The fact is that when compared to PCs built for the same intended market/function Apple often comes out pretty darn close to the competition.

      Yes, you can save a ton by building your own, but I can also cut the cost of a new sunroom on my house by paying my buddies in beer rather than paying a contractor to build it for me.

    3. @Kyle

      I don’t doubt the hardware cost difference. But I’m curious if you priced out EXACTLY the same parts. Was it the same RAM brand, power supply brand and model, HD make and model, same media drive model, etc.?

      And when you get past the part where they were NOT the same (because we all know they weren’t), you still have to get past the point that a build-it-yourself PC doesn’t include Mac OS X, iPhoto, iMovie, iDVD, GarageBand, TimeMachine, driverless printer, camera and scanner support, and all the other apps and utilities that come pre-installed on every Mac.

      I think that, as Charles points out in the article, most Mac users could care less about the internals of the hardware. They’re paying for the full experience.

  4. Right off the bat, his car analogy is off. He claims that the OS is just the “engine that runs the PC.” Well, then… in this analogy, the “car” is the actual computer? So he’s saying that people first decide on a piece of computer hardware (the car), and it doesn’t matter what OS it runs (who built the engine)? Or, is the “car” the applications run on the PC or something?

    Anyway, it’s clear that his analogy is exactly backwards. The “engine” of a PC is the hardware – it’s the motherboard, CPU, RAM, etc. This is the stuff that most people don’t care about, as long as it works and it’s fast and stable enough.

    But the “car” itself, or at least what most consumers care about, is the OS. Just like the interior of a car, the OS is what consumers interact with and look at all the time – it’s what the “sit in” all day, push buttons in, feel comfortable with, etc. Most people decide on what kind of car (OS) they want first – how it looks, feels, and it’s functionality – then can make relatively minor decisions later about big or fast the engine is (hardware).

  5. You don’t go into a car dealership and buy an engine. You buy a car.

    Which is why cars only come with one engine right? What’s that? Many cars actually are available with a choice of engine? Why that would be kind of like PROCESSORS in computers wouldn’t it?

    I’m not sure I’ve ever seen the car/OS metaphor abused as badly as this. Mr. Burke’s poor knowledge of computing seems only outstripped by his less than stellar automotive acumen.

    Windows 7 is leaner, faster and back to basics… like a heavy, slow and devilishly complicated Prius!? Oh, and who the hell buys a Prius for ANY reason except the ENGINE!?

    So Vista is an SUV and 7 is a hybrid while OS X is a Rolls freakin’ Royce? (a car which, btw, costs about TEN times what a Prius does) Great argument there. For OS X.

    Personally I think of my Mac Pro as more of a BMW or Benz to Windows’ Ford or Chevy (yes, a ZR1 Corvette and an SL 65 AMG have similar performance… now go drive both and tell me which one you’d rather drive in all the time).

  6. You don’t go into a car dealership and buy an engine. You buy a car.

    Which is why cars only come with one engine right? What’s that? Many cars actually are available with a choice of engine? Why that would be kind of like PROCESSORS in computers wouldn’t it?

    I’m not sure I’ve ever seen the car/OS metaphor abused as badly as this. Mr. Burke’s poor knowledge of computing seems only outstripped by his less than stellar automotive acumen.

    Windows 7 is leaner, faster and back to basics… like a heavy, slow and devilishly complicated Prius!? Oh, and who the hell buys a Prius for ANY reason except the ENGINE!?

    So Vista is an SUV and 7 is a hybrid while OS X is a Rolls freakin’ Royce? (a car which, btw, costs about TEN times what a Prius does) Great argument there. For OS X.

    Personally I think of my Mac Pro as more of a BMW or Benz to Windows’ Ford or Chevy (yes, a ZR1 Corvette and an SL 65 AMG have similar performance… now go drive both and tell me which one you’d rather drive in all the time).
    Forgot to say great post. Can’t wait to reading your next post!

  7. Macs are for people who’s time is worth something.

    1. only true if you don’t know anything about computers lol. i have a mac at work and a PC at home, and objectively speaking, i run into more trouble with Mac operating system issues than with PCs. Ironically, many of the things that people complain about on Windows are things they’ve caused and they just don’t realize it. I give Windows haters a free pass *just* when it comes to Vista haha.

      Mac simply prevents some of those errors seen in PCs by tying the user’s hands behind their back in terms of full customization. If you understand computers, it’s never a problem. Even if you don’t, Windows has become a lot more intuitive than it used to be even for the novice users.

    2. @Kyle

      I have been using and supporting Macs since 1984. I spent over 2 years as a Mac Genius in the Apple Store. Let me tell you, providing free tech support for everyone from the 4th grader who constantly spills soda on his iBook to the State Senator with data issues including doctors, lawyers, veterinarians, private investigators, photographers, professional sailors, musicians, retirees, and a magician who has performed for British Royalty teaches you one thing very clearly. Regardless of the platform most computer users’ complaints and problems are caused by the user themselves. This is just as true for Macs as it is for Windows PCs.
      If you understand computers, it’s never a problem. Guess what? Most computer users are looking for an appliance to do a job. they don’t want to have to “understand computers”.

      I agree with most everything you have had to say to this point. You and I are technically proficient people. Most computer users are not. The added value of the Mac (or any intuitive GUI for that matter) is that you should not have to be technically proficient to use it. I can make a Mac sit up and beg. I can customize it until the cows come home (yes, you can do that on a Mac) I just choose to spend my time using the system rather than tweaking it.

      Written on an aluminum unibody Macbook running OS X 10.6.1 and XP SP3.

    3. @Kyle

      You know, i like to think of the mac style of not letting you completely changing it as a fence on the edge of a cliff. unless you know rock climbing, you do not really want to fall down and end up breaking your computer. you are just one of those rock climbers that enjoy making the cliff side look like their face, while mac people are fine with a garden looking like their face on the clifftop. i’m not saying that you wont do that, but that people often dont need a permanent cliff carving

  8. One thing is for sure, Macs are expensive. Whether a Mac is a good investment for you, it depends on many things and also on your personal preferences. Macs have excellent hardware and if you pick a top-of-the line Dell or Lenovo you also pay dearly. But, a lot of people don’t want to pay that much (even though they could afford it, it’s not like buying a house) — not everyone is a computer connoisseor. A cheap PC with Windows 7 makes a great computer too. Also, I’m not sure if the Apple’s profits are because of Mac or iPhone sales…

  9. Wow, he compares a $3200 Mac Pro to an $899 HP system just because the Mac Pro came up first when searching for “Apple” at Best Buy. And then uses that as the basis for his price comparison? Anything he said after that lost any credibility.

  10. You’d think the “pro” moniker would have given something away…

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