The End User End Run
Perhaps knowing that it has burned bridges with IT, Apple is putting more effort into marketing to business users.The results of our survey, which also included 243 end users, suggest that Macs and iDevices are making their way into the enterprise because users -- not IT managers -- like them. Nearly half of the IT organization respondents think Apple products are too expensive for the value they provide. They rated the cost of Apple gear midway between "poor" and "fair," and their value as only "fair."
End users rated Apple products between "good" and "excellent" on design, ease of use, reliability and innovation. When asked what's driving support for Apple products in their companies, respondents' top answer was "end user demand"; IT decision-makers gave that answer more than twice as frequently (65%) as the next most common answer, "ease of use" (32%).
It's no coincidence that Apple's interest in data center hardware waned just as the iPhone began to surpass the Mac in both unit sales and revenue. Apple's profit margins on its desktops and laptops are the envy of the industry, but sales and profits of its consumer-focused iOS devices now dwarf those of its desktops and laptops. Macintosh sales as a percentage of total revenue have fallen below 20%, and it's quite likely that figure will dip below 15% by the fourth quarter. Nevertheless, Mac sales continue to be solid, with Apple seeing a surprising number of record-setting quarters as competitors struggle with stagnant sales. Fourth-quarter U.S. unit sales of Apple desktops and laptops grew 5.4% last year compared with 4Q 2011, according to Gartner's preliminary estimate. Total U.S. PC sales fell 2.1% in that same quarter compared with the year-ago quarter, with some competitors seeing major declines. Dell's unit sales were down 16.5% for that quarter, and Acer's were down 21.6%.
Apple may not be a presence in the server room, but it's surging on the enterprise client side. Forrester predicts that Apple will sell $7 billion of Macs and $11 billion of iPads to companies this year and $8 billion and $13 billion, respectively, in 2014.
Apple's financial health is unparalleled, with profits rising year after year in magnitude, margin and often as a proportion of the markets where it competes. Apple's $41.9 billion profit over the last four quarters is more than twice the total of the combined profits of Acer, Asus, Dell, Hewlett-Packard, IBM, Intel and Lenovo.
Apple has used part of its huge cash stockpile to build a well-oiled machine to deliver top-quality products to consumers -- your executives and other end users -- and then support those products with an attention to detail and execution that's second to none. It's no wonder that users' perception of corporate IT teams, stretched thin and tasked with everything from provisioning to patching, may suffer in comparison to stopping in at Apple's Genius Bar.
Apple has made mistakes along the way, like its substandard iPhone Maps app and missteps that have led to complaints about some iPhone app developers improperly collecting users' Address Book information. But most of the data points to an extremely well-run operation.
So your fleet of iDevices is unlikely to lose vendor support. That's the good news. The bad news is that Apple has little financial incentive to meet enterprise needs, where costs and complexity tend to be higher and profits lower than in the premium consumer market it dominates.
Is iGear Worth The Cost?
Macs running OS X tend to be more stable than their PC counterparts, with fewer critical failures, OS corruptions and kernel panics (the Mac equivalent of the dreaded Windows BSOD). Some of this stability has to do with the unique advantage Apple has in delivering both the hardware and operating system for its products, which makes for a less chaotic environment in terms of components, drivers and compatibility. The number of variables is simply much smaller, as are the variations in quality and design typically found in the Windows PC world.
On the software side, Apple's Boot Camp multiboot utility and virtualization applications such as Parallels and VMware's Fusion let you run Windows on Macs, often at full speed and with excellent compatibility. Linux can similarly be run on the Mac. We've seen Apple hardware run Windows faster than some dedicated Windows machines.
In addition, Macs are still less likely to be infected with malware or to need the kind of time-consuming repair or OS reinstallations that Windows devices can require. It's arguable how much of this security is due to architectural and implementation decisions versus the Mac market share being a smaller target, and there has been more Mac-directed malware in recent years. But Macs are still, proportionally, much less likely to be infected with malware than Windows-based devices.
Nevertheless, Apple gear is expensive, and the company has refused to undercut its margins, maintaining that its products are worth the premium. The evidence bears out this perception: Apple's products score near the top of most reliability and customer satisfaction surveys.
Of course, when the business is paying, the calculation changes. Just 11% of IT decision-makers and end users in our survey rate the value of Apple products as excellent, and where we asked them to rate Apple tablets and smartphones across 12 criteria, they said they're least impressed with product cost and upgradability.