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10/22/2014
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Apple's Mac Surge: 4 Observations

Apple's record-breaking Mac sales last quarter were a surprise -- but 2015 could be even bigger.

Apple iPad Air 2: Visual Tour
Apple iPad Air 2: Visual Tour
(Click image for larger view and slideshow.)

"I usually go through a few updates," Apple CEO Tim Cook said a few minutes into last month's iPhone event. "But we have so much to cover today, I'm dispensing with those, other than to tell you, everything's great."

No kidding. The massive iPhone sales that Apple announced this week as part of its quarterly earnings are impressive but not shocking. But best-ever Mac sales? In a quarter in which the PC market shrank overall? That was a surprise.

Macs supplanted iPads to move up to number two, behind iPhones, in Apple's revenue chain. Granted, iPad sales slid 12.5% relative to last year -- but Apple still sold 12.32 million tablets during the quarter, a sum that exceeds the quarterly PC sales of all but the top two vendors, Lenovo and HP. Even with iPad revenue down, it's no small feat for Macs to have pulled ahead.

Moreover, Apple achieved its record Mac sales despite playing an outsider's role in the Windows XP upgrade frenzy that benefited many Windows OEMs. Viewed from any angle, it was indeed a "great" quarter for Macs.

[Tablet shopping? See iPad Air 2 Vs. Surface Pro 3: No Comparison.]

But what caused this uptick, and is it more than a short-term swing? What does this OS X momentum mean for Windows PCs and their perennial 90%-plus market share? Are rising Mac sales related to sliding iPad sales? Here are four observations about Apple's record-setting Mac sales.

1. Apple outclassed the rest of the PC industry.
According to research firm IDC, the overall PC industry shrank slightly in the most recent quarter -- which makes Apple's big 21% jump in units sold all the more impressive.

Smaller PC makers were responsible for most of the industry's quarterly losses, with the top five PC vendors all increasing shipments compared to the year-ago period. But Apple's 21% increase was almost twice that of any competitor.

What's more, top Windows PCs vendors improved only compared to last year's disastrous sales benchmarks -- not exactly a high bar. Apple, in contrast, earned its best Mac numbers against any historical comparison.

Businesses propelled much of the PC growth during the quarter, with Windows XP's end-of-life deadline driving an obvious uptick in demand for Windows 7 PCs. But Windows 8 and 8.1 PCs continue to post uninspiring sales. In an effort to stimulate consumer interest, Microsoft and its partners have started pushing ultra-cheap devices.

Apple's computers, on the other hand, still cost more than $1,200 on average. Macs have traditionally been more profitable than PCs on a per-unit basis, and if Mac sales volume continues to climb in 2015, Apple will lead the PC industry in profit by a truly epic margin.

Overall, Apple sold 5.52 million Macs, generating more than $6.6 billion in revenue. CFO Luca Maestri attributed the record-setting performance to strong back-to-school sales, particularly for Macbooks. Mac sales also enjoyed double-digit growth across most markets. Sales in emerging markets, where Apple has traditionally been a smaller player, were up 46%.

Apple claims its PC market share is higher than it's been since 1995, though it did not claim to possess a particular share of the market. According to IDC estimates released earlier this month, Apple was the fifth-largest PC vendor during the quarter, with a bit more than 6% market share. IDC underestimated Mac sales by several hundred thousand units,

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Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 ... View Full Bio

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stevew928
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stevew928,
User Rank: Ninja
10/25/2014 | 2:36:01 PM
Re: Apple's Mac Surge
I think I understand where you're coming from. If you just work in one or two specialized apps all day, the OS and UI (aside from how they contribute to the said apps) is rather irrelevant. I used to do a lot of support and consulting to architectural and engineering firms, so I get person who sits in AutoCAD all day. :) And no, you don't want to use an emulator for that kind of stuff. Just recognize how small that market is in the grand-scheme.

re: "cutsy hand holding graphics as in Apple's OS-X" - do you mean a graphical UI at all? Otherwise, I see little in terms of cutsy about most of OSX. Microsofts infamous paper clip... now that's cutsy (and mostly useless).

And, just remember, there is a massive difference between that $1200 Mac and a $400 PC. (You're pushing at the extremes there!) I'm typing this on an under $1000 MacBook Air that is not only one of the best computers I've ever owned, it's completely capable of just about anything you'd want to throw at it besides the most GPU/CPU intensive stuff (and it even does OK at that... for example I play Minecraft on it frequently). And, while I haven't had the need yet, I'll probably install my CAD software on it, and expect it will work reasonably well.

That $400 PC isn't even in the same league. And, as you noted, it certainly isn't of similar quality. My in-laws never listen to me about my Mac recommendations, so they are constantly needing help with those cheap PCs, both in terms of technical help that I can address, and going to the store to get stuff fixed, or buying yet another 'deal' to replace the previous 'deal.' And, I'm pretty sure they spent more than $400 on all of the 4 or 5 'deals' they've had over the last 6 or 7 years. My parents are still on the same iMac they bought in 2008 (so similar age) and we're only considering replacing it because a lightening strike took out the ethernet port... so while it's still fine on WiFi, is it worth upgrading or replacing at this point? I think they did pay around $1500, but that included a printer and some software like VMWare and a few other things. I'm sure my in-laws have spent well over $2000, maybe even $3000 by now.
moarsauce123
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moarsauce123,
User Rank: Ninja
10/25/2014 | 8:20:56 AM
Still negligible overall
21% more of 100 is really not that much, means it all depends on the base number. While it is nice for Apple, overall Macs remain a negligible niche prodcut that is hampered by not being compatible with anything non-Apple.
moonwatcher
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moonwatcher,
User Rank: Ninja
10/24/2014 | 4:49:27 PM
Re: Apple's Mac Surge
TerryB, that was my sentiment as well, since our business requires running engineering software such as Solidworks (and their mechanical, aerodynamic, and thermodynamic simulation software), Draftsight, an electrical RF engineering simulation software called HFS, and a few others. I'm pretty sure that none of them will run natively on a Mac. Sure, in theory you could run them using an emulator, but why risk it and add an extra layer of complexity just to use a Mac?

For us, the operating system just needs to work and get out of the way, hence my comment about wishing we could run all our software on a flavor of Linux like Ubuntu.  We don't need cutsy hand holding graphics as in Apple's OS-X, and we sure as heck don't need or want Microsoft's "tile world" inane interface.

I'm glad Apple is doing well as that will hopefully make Microsoft more focused on consumer and business needs and wants, instead of trying to force people to get familar with their phone and tablet O/S.

There is plenty of room in the world for all operating systems, each in their own niche markets. I guess it makes perfect sense for those with deeper pockets to buy a $1200 and up Mac for doing their web browsing, online shopping, Excel spreadsheets, Word documents, and email. But for many folks, they can do the same tasks just as well on a $400 PC, but they may have to learn a few things along the way, or have a relative or friend who is knowledgeable handle their inevitable tech problems with malware or cheap hardware that is not reliable or long-lived.

One thing you do have to give Apple (Steve Jobs) credit for is bringing esthetic design to a market that was dominiated by ugly loud black boxes.
stevew928
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stevew928,
User Rank: Ninja
10/24/2014 | 4:10:51 PM
Re: Apple's Mac Surge
@ Alison -

I think that did have some effect. I'm not sure how long ago that was, but often these Mac enthusists were just forced into the Windows paradigm once they there hired by various companies. Microsoft's lock was too strong and it was just too difficult to swim against the current. So, the effect was muted.

I think things are a lot different today. The barriers aren't as high and most companies have to deal with iOS devices at least, and probably some Macs as well (and a lot more Macs externally). Once you can't stay 100% Microsoft, the benefits start to disappear and it becomes more obvsious which platform and software is most productive for given tasks, or even to the point of supporting user preference.

For example, how long ago was it that you'd go to a website to use tool xyz, where it only worked with Windows? Do you see that much anymore?

So, I'm guessing that the current and next wave of, in many cases, majority Mac users start entering the business world, it will have more impact.

And... (this is the big thing), if there truly is a productivity/implementation advantage for the Mac (which I believe there is), large companes aren't going to be able to withstand competition from small to mid-sized companies without innovating as well. A lot of these graduates are going to start their own businesses or go to work for non-enterprise level companies, and they will use Macs. That's going to put pressure for the enterprise level companies to take a closer look.
stevew928
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stevew928,
User Rank: Ninja
10/24/2014 | 3:54:27 PM
Re: Apple's Mac Surge
@ TerryB -

Fair point about Active Directory, but that (in concept) isn't specific to Microsoft, but is certainly a reason for IT to stick with one system over another. While Macs and Unix boxes can be added (in limited ways), it's an IT friendly thing for sure. Novell had their version before Windows was even around. Apple probably had theirs before Windows as well. You're probably right to some extent about other various solutions you mention, depending on the size of the enterprise, needs, existing systems, etc.

A lot of that stuff probably does run in a browser now, though due to Microsoft's lock-in strategies, some runs on older IE and excludes other platforms. (Kind of running contrary to the whole point of web-based... but unfortunately a lot of IT folks didn't get that, or didn't care, back when these things started.) I'll admit I'm not up on some of the big enterprise solutions, besides Lotus Notes. But, unless you're the biggest of companies (and even then), I'm not sure I'd say those are generally that great of solutions anyway. They are great for IT, not for the user... and in the long run, focus on IT rather than the user is a productivity mistake.

re: AutoCAD and SolidWorks - AutoCAD is, once again, available on the Mac (it was back in the late-80 and early 90s and then went away until a few years ago). I don't think SolidWorks is. But, again, I'd probably argue that aside from exchange of files or certain custom extentions, these aren't always the best packages for the job. I spent a few years at an industrial design firm and got quite familar with their CAD and 3D rendering apps. We ran circles around the AutoCAD folks who we shared office space with.

But, yea, I'm guessing for *most* office jobs, stuff like e-mail and Office makes up the core. There might be speciality software involved in some jobs, and then a lot of database driven stuff that should be platform agnostic. One nice thing about the Mac, is that using something like Parallels or VMWare it's incredibly easy to run a Windows app or two right alongside your Mac apps if you need to. Of course that isn't the imaged-out generic Windows boxen a lot of enterprise users get... but again, that's an IT-centric solution which isn't optimal for the end-user at all.
Alison_Diana
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Alison_Diana,
User Rank: Author
10/24/2014 | 2:30:26 PM
Re: Apple's Mac Surge
Many years ago I worked at a publication called Macintosh News and started a project with the University of Miami, where we were tracking students to see whether they went on to use Macs in the office after being exposed to them at school. Sadly, the publication folded and the project ended but it's interesting to see somewhat anecdotal suggestions that my theory (and Apple's theory) was right.
TerryB
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TerryB,
User Rank: Ninja
10/24/2014 | 1:40:23 PM
Re: Apple's Mac Surge
@Steve, I read this entire chain from you and others. While there are some excellent points, not one person mentioned Active Directory, which is really the driving reason enterprises stay with Win PCs. You may or may not have a point that business software runs on both Win and Macs. Not having any Mac experience in any business I've been in since 1985 keeps me from objecting. But I'm highly suspicious. How many ERP systems which don't run in browser can run on Mac?  SAP? Oracle? Infor's suite of stuff? Dynamics AX?

Does even stuff like Autodesk CAD software or SolidWorks even run on Macs? So many people equate "business software" to Excel these days, makes me wonder what their business does? Do that many jobs now just require use of Office, email and browsers?

 
moonwatcher
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moonwatcher,
User Rank: Ninja
10/24/2014 | 8:50:11 AM
Re: A couple of points
Yeah. the slow down in the sales of iPADs was a no-brainer. After the initial uptake, most of the people who were comfortable spending $500 and up on a tablet had already done so. Others were happy with the Android powered $200 to $300 tablets, while perhaps secretly wishing they could justify an iPAD. Then most people have learned that to get the best bang for your buck that you skip generations, hence people who already have iPADs are in no rush to replace them (except for the techie early adopters who always want the latest greatest). iPADs and tablets are here to stay - at least until the "next thing" comes along. People will buy them, and that initial frenzy was amazing (quicker than the adoption of VCRs), but not sustainable.
moonwatcher
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moonwatcher,
User Rank: Ninja
10/24/2014 | 8:29:41 AM
Re: Smart tactic
Yeah, I didn't mean to start an infantile "Apple vs. PCs" chain....Each has advantages that people (and businesses) need to weigh when making purchasing decisions. As for me, I am estatic that 3 of my neighbors and one of my nieces bought Macs.  It means I am no longer their "go to" tech support person, wasting countless hours fighting endless viruses and malware or user errors (or God forbid, having to train them on how to use Windows 8). I'm finding it hard enough to transition my sister to the online version of MS Office...After the distaste for Windows 8 and the bad rep it got, I would not be surprised to find Apple having 10% market share now, especially with many school districts deciding that the harder to screw up Apple laptops make a better fit for use by kids than Windows based machines. In the end it is all about vision, and it seems that since Windows XP, Microsoft has lost that vision for what an operating system should be.
stevew928
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50%
stevew928,
User Rank: Ninja
10/23/2014 | 8:15:54 PM
Re: Apple's Mac Surge
@ Lorna -

For sure, you're quicker at something you know than something new... almost always. Once you know the short-cuts and your way around, it's more efficient than fumbling. However, that's not an apples to apples (pardon the pun) comparison!

The point about efficency would be: what's the learning curve to get the efficiency? and, once a user has obtained some level of efficency, on which are they more productive?

Back in the day, Gartner used to do some pretty huge studies with thousands of users on efficiency. Apple always came out on top. This had little to do with hardware quality or tech support. It was a simple matter of UI design difference between the OSs, typical UI differences between apps running on the OSs, and ease of interaction with peripherials and other users.

Today, I'd say some of this has eroded. Windows has improved some and Apple doesn't have the tight control on UI that it once did, especially for 3rd party software. (For example, Apple key-something almost always did the same or a similar thing across software years ago... not so much the case anymore.)

But, based on my years of consulting experience, I've seen users on just about every platform, including those who switched platforms. Typically, the Mac users have not only been more efficient, they have done more tasks with their systems. And organizations that have been primarily Mac simply blow away what organizations using Windows have done. Heck, I was working with a decent sized law firm in early to mid 90s that was networked, using e-mail, networked time-tracking and billing, etc. Many of my PC clients weren't doing that kind of thing until years later.

re: connecting to a remote network - I guess I'd have to know what you're trying to do, but I'm not sure why that would inherently be easier on Windows. I suppose if the network is running Windows-centric setup, then it's going to be more straight forward on Windows (if you're talking becoming a network peer). If you're talking things like SSH, FTP, Citrix, screen-sharing, etc. I'd probably beg to differ.

re: fonts in Chrome - Interesting you mention that, because Chrome just (a month or so ago) started properly supporting Google Web Fonts! They have looked great on Macs for years. In fact, I was trying to talk a client into switching their website to some more Windows friendly fonts because their site (and, actually a lot of sites) look horrible on Windows in the most used browsers. No contest here, the Web looks MUCH, MUCH better on a Mac. Only recently has Windows started to render websites reasonably.

re: ctrl/alt/delete - try command-option-esc
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