The recession has Mac pundits frantically calculating the impact of a down economy on Apple's sales. Many project static or declining Mac sales, with cheap netbooks gaining market share quickly. Surely Apple's Waterloo has arrived? Hardly.
The technology industry is almost entirely divided into two types of company, those that make standards, and those that have to follow them. Typically, leaders risk only market share with poor implementation, while followers face an existential threat if they fail to conform.
The pre-"Jobs 2" Apple was the rarest breed, a company that knew it was too small to dictate terms to the industry, but was determined not to try to adhere to the acknowledged industry standard. To survive at all it was thought the Mac had to hold on to standard-bearer status, or relevance, in niches (graphics, publishing, education) and build consumer and corporate market share from a beachhead.
The strategy was impossible to execute. Apple had uniquely expensive R&D overhead (OS, hardware, Claris), and, with less sales volume, could not get equal component pricing. The Mac had a flawed cost structure that no technical edge could overcome. Every quarter of decline represented a trend towards Wintel standardization, and every lost sale pushed the Mac farther from price parity. A recession in this scenario would indeed be dangerous, speeding up market share losses as buyers focused on cost, making the Mac even pricier, and eventually killing it and Apple. (Cool looking Windows PCs coming from Cupertino with Apple badges may have persisted. Yuck.)
The Apple of today faces a far different market. Partial standardization (on Intel) has allowed Apple to direct still-costly R&D towards moving the user-facing platform forward, driving improvements in OS X. That is far different from the old mandate that Apple spend richly to match the competition, or else face a cataclysmic shortfall. The risk that a single misstep in hardware would lower sales and threaten the relevance of the platform has also been lifted. Software availability is no longer completely contingent on rising Mac market share.
So, while sales of "luxury" items may decline, and Mac sales numbers might even fall year-over-year, the consequences are no longer existentially dire should that occur. It is the idea that a Mac works a certain way, not structural costs, keeping Apple out of the netbook market.
1 comment:
I agree. You make some valid points and I personally think that if it was true that Apple was in trouble, then what about every other computer maker? Apple has more money in the bank, more innovation and marketing varooom than any other company out there. It's probably the most successful company in it's field and if they can't make it in this recession, then no one else can either!
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