How will Apple react to Vista?

TG Daily ^ | February 2, 2007 | Rob Enderle

[ShorelineMike]

A big week for Microsoft is winding down - the company's first new operating system in five years has made its debut without major hiccups. It was a launch as typical as it can get for Microsoft and very different than one of those Apple product announcements. Get the background launch story and how Apple's Vista reaction could look like.

You have to admit the PC guy probably does more positive for Microsoft's image than anything Microsoft has done for the PC in a long time. But Microsoft has brought out Vista, the first really new operating system since Apple launched OS X and that means things should get rather heated going forward.

As promised we'll take a look at the Vista launch and compare it to an Apple event and then we'll chat about the rumored response Apple is supposedly cooking up to spoil Microsoft's party. Oh, and yes, we'll chat a bit about Vista someplace in the middle.

Vista launch: It sure wasn't an Apple event

I was talking to another analyst about this and he probably said it correctly. When Apple does a launch event Steve Jobs takes special interest and personally has a great deal to do with the staging, something he is incredibly good at. For Microsoft, they contract it out and you often wonder if the folks that designed the event either understood or cared about what it was they were launching. Microsoft's events tend to be parties bracketed by stunts designed to make people remember the name so surveys testing name recognition show improvement.

Apple, on the other hand, does events designed to sell products and the most recent example was their launch of the iPhone which virtually overwhelmed everything at CES and caused Apple's stock price to spike. This is a good example of doing an event that has a clear purpose and goal to sell product vs. doing one where the goal is visibility.

Now it may actually be kind of smart to do this with a Microsoft OS launch. The biggest problems with upgrades and migrations to a new OS occur in the first three months and things get vastly better after that as fixes are created for OS and application migration issues and more and more people are embraced by these fixes. If you realize that something like a billion PCs run some version of Windows, then, say even a 10% initial migration would be 100 million folks or 2.5 times Apple's estimated entire installed base of Macs. If only 1% of those folks had problems, and typically it will be much more than this, you would have 1 million people in dire need of help and there is no support organization or combination on the planet that could handle that kind of load over a short period of time.

This initial sales spike for Windows 95 nearly shut down Microsoft support and partially resulted in sales that were estimated to be only 50% of potential over the first year. This would suggest a softer launch would be better for a stronger first year sales ramp.

If Vista eases into the market, then the techies get it first and they, by nature, become part of the virtual support organization that updates to both Vista and the applications that run on it. In effect, the percentage of problems drops and the support capability of the market improves resulting in a sharp decrease of really upset people who can't get this product to work.

This could, and to be honest should, result in a more linear ramp for the product and a better overall experience for everyone involved. We'll try to revisit this at year end and discuss how it went.

Vista: When do you move?

Typically there are a couple of rules to moving to a new major OS release. The first is the migration gets much better, as I've noted, after the first three months because more of the third party applications have both migrated and been patched and because the drivers are more mature (both more reliable and better tuned).

The best experience will always be on new hardware and, if you bought a new PC last quarter, you probably already paid for a copy of Vista. This copy should come from the OEM designed specifically for the machine you purchased. Some will have them right away while others may take a few weeks to get it right. Trust me when I say it is better you get this right than get it early.

When you migrate, try the built-in Vista migration tool coupled with a migration cable. The Belkin Data Migration Cable for Windows Vista which costs under $50 seems to work fastest but you can also do the migration over your home network.

If you want to see just how much can be done automatically, the PCMover Application from Laplink actually moves many of the applications, you can get the download version for $50 and it should save you a lot of time. You will probably still need to upgrade these applications to their newest versions but this is arguably the simplest way to move to a new PC running Vista.

Is it worth it? That depends on you, I do identify with the PC guy in Apple's ads and it sure was worth it for me. But there is no need to rush, it isn't going anyplace. Some of us just like to get places first.

Apple's rumored response

With every major upgrade, there is a significant opportunity for a competitor to come in and steal market share and this one is no exception. At the Vista launch, there were folks chatting about Apple's supposed planned response to Vista and it could actually work.

If what they said is to be believed, Apple will come out in force when the most breakage is likely to occur and will roll against Vista with a campaign that targets this breakage and promises to give more benefit than Vista does without all of the pain.

Based on some informal sampling, if Apple was able to execute on such a campaign it could increase their market share by two points this year taking them to 6% of the market or nearly half again what they currently have.

Now because this is the slowest time of year for PC purchases in general that 2% may be conservative but the overall numbers sold won't be as impressive because they will be a fraction of what could have been sold had this occurred in the fourth quarter. Still, you play the cards you are dealt.

While I was thinking that the Super Bowl ad Apple is funding might kick this off, other industry observers who are likely better connected to Apple indicate that this will be a launch of the iPod based on the iPhone design instead. While I don't like the iPhone for a lot of reasons, an iPod based on that design could, if done correctly, get even me into the store wanting one. This is because most of the things that make the iPhone a bad phone simply don't apply to a device that doesn't need to be a phone in the first place.

Of course, if Apple does this after saying nothing about PCs during Steve's MacWorld address its going to cause folks to once again wonder if Apple is exiting the PC business. The other rumor was that Apple was going to license out their OS, that's been around for awhile and I still doubt that Steve would do that, but given the iPhone is actually a kind of a newer version of the Newton and we know Steve would never do that, maybe someone has upgraded his brain while he wasn't watching.

We'll see, regardless it may make the Super Bowl required watching for those of us that are more into tech than sports. I'm guessing even the PC guy from Apple's ads will be watching this game for that very reason.

[Swordmaker]

"It's simply not true, and you make yourself a bigger fool every time you spout off about it."

Okay, now I understand the phrase "spout off" because I have seen you in action.

Uh, guys? I think that ByDesign has mis-addressed his overall comment... I think he was reading KellyAdmirer's comments and mis-connected them to Petronski...

[Petronski]

I hope so.


In either event, that post DOES constitute "spouting off."

[Petronski]

Of course, I fell asleep half an hour ago. ;o)



Be well, SM.

[avenir]

In context, I was responding to the thoughts of Apple gaining marketshare vis a vis Microsoft. I don't have a problem with Apple as it is, which is very successful.

Several on these threads insist Apple is gaining ground on Microsoft, so at least some Mac users want the market share to expand. You don't, fine.

[avenir]

"Notice the captions. Got a clue now? They're personifications of the computers... not users."

I wasn't questioning the intent, but the recieved perception. Apple isn't all that smart in their advertising, or many, many more people would have responded affirmatively to the ads.

I think they're painfully stupid. On the other hand, the Mad TV sketch was disturbingly funny and did more for the mythos of Jobs, the iWitch.

[conservatism_IS_compassion]

There wasn't anything original about what Jobs did...

Research the price of the machine at XeroxPARC vs. the first Mac. As I recall (I invite correction) $80,000 vs. $2,495.

Price is driven down the supply curve by production quantity. That is, the innovation in question is simply figuring out how to make a lot of Macs economically enough to be able to make a profit in the market.

As the Russians put it (tho probably in Russian rather than English), "Quantity is a quality all its own."

[cavador]

Here's a question I'd like to ask :
If Apple compters ported their O.S. to run on an intel machine,Would you buy it? or would you buy Vista?
No I don't want anyone to say they would stick with Win XP.
(It's a hypothetical question if you HAD to upgrade.)

[television is just wrong]

I agree, Microsoft is not to be pitied, they have their dedicated customers. Apple is another option. I'm on a Linux machine home built myself.

[MaxMax]

Hmm.

[jalisco555]

When this Dell dies, I'm going Mac. Son has one and I picked up on it in an afternoon.

Been there, done that, never looked back. You will never regret that decision.

[Lurker]

The first is the migration gets much better, as I've noted, after the first three months because more of the third party applications have both migrated and been patched and because the drivers are more mature (both more reliable and better tuned).

Only Microsoft can get away with selling a product which they admit won't work with other products for a month or two.

I can't imagine what the reaction would be if the manufacturers of washing machines told their customers something like:

"Not to worry. The detergent manufacturers will have compatable products in a couple of months."

"Do be careful in the meantime because some detergents may cause your machine to become inoperable, destroy all your clothing, or have some other negative consequence which we can't even begin to warn you about. Best of luck and thanks for buying a Maytag!"

L

[jalisco555]

He suggested they talk to Gary Kildall about acquiring CP/M (Control Program for Microcomputers). They did try but Kildall was apparently not available (out flying his plane, it's said) and his wife and lawyer refused to sign a non-disclosure agreement.

IIRC, Kildall died a while back under rather mysterious circumstances. Rumors at the time were that he killed himself due to his never getting over the missed opportunity to get in on the IBM PC gravy train. He was major player in the early days of personal computing and watching Gates whiz by him was unbearable, so I've heard.

[savedbygrace]

Leopard isn't likely to be released before the NAB in April. That would be pretty late to qualify as a reaction to Vista.

[Swordmaker]

IIRC, Kildall died a while back under rather mysterious circumstances. Rumors at the time were that he killed himself due to his never getting over the missed opportunity to get in on the IBM PC gravy train.

I don't think suicide came into it... unless you count SBBBB... Suicide By Biker Bar Brawl. He was killed in a bar fight, July 6, 1994.

[jalisco555]

Thanks for the clarification. What a way to go for someone who was once riding so high.

[Terpfen]

Leopard will inevitably be compared to Vista, however.

[RightFighter]

The operating system that is going unnoticed is Vista. Microsoft did not have huge lines of people clamoring for their new OS

Not what I've seen at all here in Daytona Beach. I was in three different Office Depot stores on launch day, and there were lines of people waiting for the computer specialist to show them the features of the new Vista laptops. Best Buy sold out of Vista Ultimate (full and upgrade) in a couple of days.

It really is a great new operating system. I've been using the final version since November and I love it.

[Vaduz]

Microsoft=CRASH system is failsafe failsafe failsafe...

[6SJ7]

Whoa! Sounds like Balmer has a few unresolved issues.

[RightFighter]

If I recall correctly, all of the PC clone manufacturers except for HP reported a decline in their Q3-to-Q4 shipments. Apple did well by maintaining their quarter-to-quarter level compared to Dell, Lenovo, Acer, etc.

I would suggest that a large part of any decline in the late stages of 2006 on the part of PC manufacturers might have something to do with consumers and businesses holding off their purchases to wait a couple of months for Vista. I know many people who did this, and I recommended it to customers who were about to purchase new hardware.