Re: How Netbooks Impact Microsoft and Apple
- From: Thundercleets <thundercleets@xxxxxxxxx>
- Date: Fri, 9 Jan 2009 12:26:58 -0800 (PST)
On Jan 8, 3:54 pm, Tommy Troll <tom_e...@xxxxxxxxxxxxx> wrote:
On Jan 8, 2:51 pm, Chance Furlong <T-B...@xxxxxxxxxxxxxxx> wrote:
From Low End Mac:
http://www.lowendmac.com/nash/09tn/netbook-impact.html
Cuss and discuss.
How Netbooks Impact Microsoft and Apple
Tim Nash 2009.01.07
If cheap and "kind of works most of the time" were the only criteria for
buying a computer, Apple wouldn't exist. And if netbooks were the only
answer, why did Apple laptop sales grow 50% faster in November than
Windows, according to NPD's US retail figures?
Moving Boxes
Windows PCs are a commodity business. The drive is always to the lowest
price point, because that's where the volume is. For many users, there
is little difference between PCs apart from price. Brand name quality
means little.
The problem with a commodity market is that it gives PC makers
razor-thin margins, so miscalculations quickly lead to losses. In a down
market, there is much less room for recovery. Look for more and more PC
makers to go out of business.
Most of the recent growth in Windows laptops was in the so-called
netbook market, low-cost laptops like those sold by Acer, Asus, and
others at less than US$500. Apart from being low cost - with specs to
match - netbooks are more portable than standard laptops, providing you
don't mind working with a smaller screen.
They all use the low-cost Atom processor, which Intel currently
restricts to laptops with screens less than 10.2." According to
DigiTimes, "Hewlett-Packard (HP) is in negotiations with Intel seeking a
slackening of its current restrictions as HP hopes to use Atom in new
mini-note PC models with larger screen sizes." So screen size may not be
a restriction for much longer.
Intel supplies all the processors to this market and will want to keep
this monopoly going for as long as possible, but agreeing to Atom's use
with larger screens will cut into sales of more expensive Intel CPUs. It
will also accelerate the move away from desktops, as the laptop premium
gets less and less. In any case, AMD, the longtime #2 in the x86
processor market, will find it difficult to regain market share and
profitability.
Windows XP Lives
The "netbook market" has another advantage over standard Windows
laptops. Windows XP, not Vista, is loaded as standard. Many Windows
users are more familiar with XP from work, where it is still the
standard in most departments. Some prefer and/or need XP compatibility
for ease of use and so they can use exactly the same versions of
software at home and work. So buying a cheap laptop - good enough to
keep them going until they see what happens with Windows 7, makes a lot
of sense. Also, the $150 that Dell charges for shipping XP on a more
powerful laptop goes quite a way towards paying for a netbook.
Users have been conditioned to buy a new computer when they want to
upgrade to a new Windows release. While Vista can run reasonably on the
minimum specified hardware, you do need to remove all the crapware.
Rather than do this, most seem to prefer buying that new, more powerful
computer.
The Windows 7 Future
This gives Microsoft a big problem with Windows 7. Only those who need
to or see a compelling advantage from Windows 7 will buy a new computer
in a down economy. According to a ZDNet article, Windows 7 Beta 1
Performance
How Does the OS Compare to Vista and XP?, performance of the current
beta, tested on two desktops, is better than Vista and XP.
However, until Microsoft can show good Windows 7 performance on
netbooks, XP will remain the standard there. This means less revenue for
Microsoft as netbooks gain market share from other Windows laptops
because of the lower fees for XP.
The widespread use of XP in netbooks and business will slow down the
adoption of Windows 7. Until the economy recovers, businesses will try
to concentrate IT spending on maintaining current systems and software
which gives them a competitive advantage. The cost of migrating current
systems to Windows 7 will stop them. This means that Microsoft will
probably have to support XP longer than it wants to, and while XP use is
widespread (currently used by three times as many users as Vista), it
will remain the main target for malware.
Even when Microsoft has Windows 7 running on netbooks, it will have
difficulty not supporting XP there or risk a further expensive
investigation into it's business practices. Since netbooks are a low
cost market, Microsoft may have to sell Windows 7 at costs similar to XP
to persuade manufacturers to adopt it.
The other risk is further fragmentation of the Windows market. Microsoft
still has to support Windows NT because of how many systems in finance
run it. With the amount of red ink around Wall Street, migrating away
from NT is not a high priority.
Parallel Markets
Apple suffers from the same "new computer" problem as Microsoft. Unless
users feel the need to move on and are willing to look at a new computer
and OS, few will look at the advantages of OS X. Although Apple has a
base of enthusiastic Mac users, they too will have less money to spend
until the economy recovers, and the size of the base means that Apple
needs a constant stream of converts if Mac sales are to stay at the same
level.
In this sense, Windows and OS X are two parallel markets. Once you have
decided to use OS X, there are few who are prepared to seriously
consider moving back to Windows, but even now few Windows users are
willing to spend the time to move to Macs unless they see immediate
advantages. Most of the potential buyers of an Apple netbook would
otherwise buy a MacBook.
Perceived Value
Provided Apple can keep the perceived value of MacBooks high enough, it
will continue to grow market share.
While some suggest that Apple should sell a netbook because "we live in
a Wal-Mart kind of world", just because Walmart is adding sales volume
doesn't mean that everyone shops there, or even wants to shop there.
Provided Apple can keep the perceived value of MacBooks high enough, it
will continue to grow market share. The recently released Unibody
MacBooks essentially delivered MacBook Pros at a much cheaper price, if
you can live with a 13" screen.
According to an NPD study of US retail, Apple had 66% market share for
the above $1,000 price category - and 14% overall. In an August 2008 NPD
study, Apple's market share for the previous 12 months in the above
$1,500 price segment was 69%, up from 41% in the August 2007 survey. In
other words, although HP etc. offer similarly specked laptops at a
similar price, Windows systems aren't worth as much for most retail
customers.
In November, US retail market share was slightly lower because Apple
sold 38% fewer desktops. Since many are looking for a refresh of the
iMacs in the January-March quarter, a drop there shouldn't be too
surprising.
The Education Market
However, the education market is at risk, particularly the school
market, where Apple is the largest supplier. With US governors busy
cutting every budget they can, there will be few, if any, large computer
contracts available until the economy recovers. Indeed, many schools
will find it difficult to replace the computers they have, so the longer
useful life of Macs may put Apple in a strong position when the recovery
comes.
For Apple, an alternative approach to the netbook is to build around the
iPod touch and iPhone. Make a good, lightweight USB keyboard with a
stand for holding the iPod touch at a good viewing angle. This makes it
easy to type notes in classes, write long emails etc. It is also much
easier to use than the usual laptop on planes when you travel in coach.
The advantage of this approach is that it adds to the value of the
iPhone OS platform and moves it even further towards becoming the
handheld computing platform of choice.
What could also work well for Apple is a MacBook Air with a smaller
screen as an ultimate portable. Many owners have a strong attachment to
their 12" G4 PowerBooks. With a 10.2" organic LED (OLED) screen, a
smaller battery could be used to reduce the weight yet still offer the
same life.
Samsung is the #1 OLED manufacturer, so it should be interested in
working with Apple and giving a substantial discount to build the
market. However OLEDs are expensive at present, so the "ultimate
portable" certainly won't be priced at $500.
Making Megakat City safer one troll at a time.
W7 is being scaled to run on a netbook.
The article kind skimmed over the Celeron and Via C7's in Asus and HP
netbooks but so what.
The problem with netbooks is that like most things x86 they are
mutating way beyond what they were meant to be. Like the way Windows
mutated from being a home os for the kids, the original netbook
concent was small, good battery, usable for typing, mainly for
interacting quickly with the Internet and running Linux.
In the US the "netbook" now is a Windows sub-compact computer, battery
life an performance have gone out the door in favor of pleasing M$.
The problem is the M$ does not offer any kind of streamlined product
between fat Vista and brain dead Mobile. XP would be kind of like
that were it not on it's fifth stay of execution with M$ jumping up
and down on its neck to try to get it to go away.
That leaves Linux. Apple could get into the act because they can
scale back OSX if they wanted to go low market. M$ really should
shell Windows over *NIX or a BSD and do both themselves and the World
a favor.
The make pretend it's not DOS really! is getting kind of tired.
"Bill Gates is a monocle and a Persian cat away from being the villain
in a James Bond movie"
-- Dennis Miller
.
- References:
- How Netbooks Impact Microsoft and Apple
- From: Chance Furlong
- Re: How Netbooks Impact Microsoft and Apple
- From: Tommy Troll
- How Netbooks Impact Microsoft and Apple
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