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Why Apple and Sun Can't Sell Computers

Joel Writes:

"of course Apple and Sun can sell computers, but not to the two most lucrative markets for computers, namely, the corporate desktop and the home computer."

and

"Why? Because Apple and Sun computers don't run Windows programs, or, if they do, it's in some kind of expensive emulation mode that doesn't work so great."

While this is not completely wrong, it does feel a bit like a revisionist theory, or at least putting the horse behind the cart.
I'd say the main reason by far Apple and Sun can't sell computers for the corporate desktop and the home computer is because THEY NEVER INTENDED TOO. Let's take Sun first, as that is the most clear cut case: Sun  started out in the academic workstation space. They where a direct competition to Lisp Machines and Big Iron. They offered a quick and dirty platform, but delivered it at a much lower cost than the competition. So far so good.
Now instead of agressively going down that same route that brought them success, they decided to go up the mountain towards themselves becoming the big iron in the middle. In the Sun world model, you don't have a corporate desktop computer; you have an empty box consisting of a screen, a keyboard, a mouse and an Ethernet card. All "computing" happens on the big Sun Fire E99M, a 65535 processor behemoth sitting in the corporate datacenter. The margins on these babies are far more lucrative then those on the commodity Corporate Desktop PC boxes.
Why did they need the big margins? Couldn’t they make it up in volume instead? No. While the original Sun’s might have been >relatively< low cost, we are still talking about close to 5 digit tickets. At these prices you need a nice, personalized sales force knocking on doors and rolling out the red carpet treatment on customer premises. Compare that to Dell: did you have a Dell rep picking you up and buying you lunch the last time you replaced a few OptiPlexes? Sun couldn’t reinvent itself and was granted a stay of execution by the irrational exuberance of the .com boom. Corporate desktops were never an option, and the home market wasn’t even on the radar.

On to Apple. The sad thing with Apple is that they could have owned the home space. They had a usable product with the right features, but they missed on one crucial point: pricing. The Macintosh was priced well outside the range of the normal family, and remained the exclusive domain of the liberal baby boomer’s fancy toy. Apple never could bring itself to go for “a computer on every desk and in every home”. They were simply not prepared to make the necessary compromises. What didn’t help was that for Apple the corporate desktop was simply not on. They never went for that market. They never offered the management and operation facilities needed beyond what was needed for a tiny workgroup to share a printer. Besides, the corporations didn’t want to pay for the fancy extras and Apple didn’t allow competition on the platform so no one else emerged to offer a toned down no frills MacOS machine. There was no equivalent of Compaq in the Apple universe. Mac’s where saved from extinction by the LaserWriter. This created the DTP market, and carved out a viable niche during the decade they stumbled time after time in OS land. So it always was rich kids and graphics professionals, not corporate desktops and home computers for Apple.

Meanwhile Compaq broke open the PC, and Redmond was prepared to trade margins for mass. Corporate Desktops and Home computers were exactly their market, and they kept going at it where other just looked down there noses on the compromises made. Where it all lead to we can see all around us. If Apple and Sun can’t sell computers, it’s because they never chose to, not because they didn’t run Windows. They never settled on the land, but just past it on the right on towards a sunnier valley. When their lush valleys started to run dry, they found the land they had thumped their noses at was in fact quite fertile, but now no longer open and unclaimed but built out and in full production.

But what about now? Is Microsoft doing a Sun, or is this a completely different scenario? This post is long enough as it is, so I’ll save it for another time.

Just me (Sir to you)
Thursday, June 17, 2004

Good post.

Mr Jack
Thursday, June 17, 2004

I don't think Joel was trying to rewrite history; he's telling it like it is now.

In the here and now, where MS has over 90% of systems, if you want to break into the home/corporate desktop markets, you've either got to have inexpensive clone products of what people use most, or you've got to run those products themselves.  And you must do it flawlessly, so that Joe Nobody can keep doing his work without a hiccup.

He's pointing out that they can't do it yet, and therefore can't jump tracks from the dried up ones mentioned in the original post.

Conspiracy Anti-Theorist
Thursday, June 17, 2004

Apple has continued to very successfully be unable to sell computers for almost 30 years, just as Ducati continues to be unable to sell motorcycles (a 4% US share) since 1946.  It's such a silly thing to even talk about, as if market share is relevant to survival.  My local pasta shop has only had about a 0.0000017826% share of global pasta sales for 35 years.  Are they going to disappear soon?  The Mac thrives as a platform, regardless of what anybody else is using.

As a vendor, I'd be perfectly happy to sell to a market of 20M customers, 3M of whom were thrilled to buy brand-stinkin-new $2500 computers this year.  If I sell to just a couple percent of just that 3M, I could do well and have damn fun doing it.

In 1973 the bad Sweet hit #18 on the Billboard US "Hot 100" chart with "Little Willy".  Tom Waits' debut came that year too, and to my recollection has never charted.  He's still making great records, Sweet disbanded more than twenty years ago. Who will still recording in 30 years, Britney Spears or Hilary Hahn?

Sun, on the other hand has been bleeding money for, I think, 13 quarters, and unless they staunch the flow, they'll go the way of DEC.  Their dwindling market share is not the problem, but rather their ratio of revenue to costs, and their lack of compelling advantage over commodity Linux boxes for most of the **kinds of things their core market wants**.  (Note well that last phrase.)  But having essentially jettisoned the useless McNealy, they still have a chance to turn things around if they discover a lucrative niche they're positioned to keep, and if they don't lose engineering talent.  (That last one is a big if.  They don't have a spotless history of keeping the cleverest ones happy.)

Cabby
Thursday, June 17, 2004

Simply said:

Apple now has a unique position to do what it has to do:
Stop designing motherboards and cooling systems,
satisfy its hardware fantasies with iPods and just move
to Intel. It's (again) now or never!

VPC
Thursday, June 17, 2004

Absolutely. If Iwant to drive down the autobahn at 200mph I'm going to use a low market share Porsche. If I want to dawdle along the high street at 30mph I can do that as well, just like all the other Camry's.

Interaction Architect
Thursday, June 17, 2004

Cabby:

It is true that is possible to make money selling Mac software today. But there is usually a lot more money to be made writing for Windows.  An ISV starting a new project today would look at the numbers and find very little reason to write for Macintosh. Yes, Apple users are more likely to dispense a larger amount for a program, and yes, on niche markets (DTP, Video) Apple is a big player.

If Apple continues to cater to the specialty markets it already has, it won't die. But with Adobe and other vendors focusing more and more on Windows development, things look grim in Cupertino.

The network effect on plattaforms (here your analogies might break) cannot be underestimated.

R
Thursday, June 17, 2004

Cabby, you are perfectly right. I erred by not limiting the "valley ran dry" endnote to Sun. Apple's valley bares plenty of fruit, and now provides a nice solid home base from which to expand.
I also need to stress what I have said a number of times before. Both in the corporate space and the home environment the battle is far from over. Personal computers are just one way to answer certain needs. PDA's, Phones, game consoles, settop boxes, PVR's and masses of "dedicated" embedded or standalone devices all continually grab pieces of the traditional PC territory. Those who don't keep moving, will soon find themselves sitting on an ever shrinking empire.

Just me (Sir to you)
Thursday, June 17, 2004

Cabby should get a 10 point bonus for making a computer analogy out of Tom Waits.  Classic. 

christopher baus (www.baus.net)
Thursday, June 17, 2004

Sexual prostitution promises far more money and more medium-term job security than marble sculpture.  So what?  Should sculptors move on to the more lucrative market, or do something more pleasant?  How much money do you need?

Adobe is an important vendor, but they're not leaving the platform in any segment they were strong in. If they do, the development tools are nice enough that lots of little vendors could quickly fill the void.  (My own programmer heart lives partly in a few of their markets, and might relish the opening.)  Remember, most of Adobe's products and programming talent were acquired from tiny vendors.  And look at how fickle some of their markets can be... for layout, everybody moved to Quark, now many are moving to InDesign as Quark languished.  That game goes to whoever is best at the moment (and yet always stayed on the Mac.)

I might even go so far as to say that people who care about things like design want beautiful design to permeate their lives, and aren't likely to buy a Dell if they can find any way to avoid it.  The only Microsoft on the Mac platform is Microsoft, and they're not really even a Microsoft over there, if you get my meaning.  Plus, the Mac is now Unix and so runs more software than Windows, albeit lots of that ancient command-line crap.  It's really a very exciting place to be building software right now, and rife with modest opportunity.

I see it as an untarnished developing country versus crumbling empire.  If anything, Joel's latest piece casts strong light on that view for me.  Regardless of how wrong I might be, it will be fun to see it all play out.  May we live in interesting times, I say, no matter how bad.

Cabby
Thursday, June 17, 2004

Q: What is Apple's mission statement?
A: Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.

Interaction Architect
Thursday, June 17, 2004

Apple => Tom Waits
Apple Platform => developing nation
Microsoft => crumbling empire
Developer => prostitute

This guy cracks me up.  Keep 'em coming.

christopher baus (www.baus.net)
Thursday, June 17, 2004

"Developer => prostitute"

Is that why I always feel like I'm getting screwed?

...
Thursday, June 17, 2004

The premise for my argument is not that money is the only motivator; it's that developing a successful product is the main motivator. A developer has an idea for a new software and will choose a plataform to build upon. In most cases developing for Windows will result in a much greater chance of success. And for a small ISV failure isn't equal to less money - it's equal to bankrupcy.

Apple and Microsoft opened doors at about the same time (late 70's I think). Apple was bigger than Microsoft on the early years - people didn't even think that pure software was a market of interest. Jobs' company has been declining in market share ever since. So I don't understand how Apple is aking to a developing country. And Microsoft is so huge right now that it can afford to make several mistakes before becoming a "crumbling empire".

PS: Nice metaphores by the way...

R
Thursday, June 17, 2004


> "Developer => prostitute"
>
> Is that why I always feel like I'm getting screwed?

Yes, most likely. You've seen this I assume?

http://www.manbottle.com/humor/Are_you_a_prostitute_or_a_software_consultant....htm

European
Friday, June 18, 2004

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