[OT] - As Apple Gains PC Market Share, Jobs Talks of a Decade ofUpgrades

I had no idea Apple was up to #3 in the PC market.

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October 22, 2007
As Apple Gains PC Market Share, Jobs Talks of a Decade of Upgrades
By JOHN MARKOFF

SAN FRANCISCO, Oct. 21 — It may have dropped the word “computer” from
its name, but Apple is certainly selling plenty of Macs.

Driven in part by what analysts call a halo effect from the iPod and the
iPhone, the market share of the company’s personal computers is surging.

Two research firms that track the computer market said last week that
Apple would move into third place in the United States behind
Hewlett-Packard and Dell on Monday, when it reports product shipments in
the fiscal fourth quarter as part of its earnings announcement.

“The Macintosh has a lot of momentum now,” said Steven P. Jobs, Apple’s
chief executive, in a telephone interview last week. “It is outpacing
the industry.”

On Friday, Apple will start selling the new Leopard version of its OS X
operating system, which has a range of features that in some cases match
those in Windows Vista and in others surpass them.

Mr. Jobs said that Leopard would anchor a schedule of product upgrades
that could continue for as long as a decade.

“I’m quite pleased with the pace of new operating systems every 12 to 18
months for the foreseeable future,” he said. “We’ve put out major
releases on the average of one a year, and it’s given us the ability to
polish and polish and improve and improve.”

That pace suggests that Apple will continue to move more quickly than
Microsoft, which took almost seven years between the release of its
Windows XP and Windows Vista operating systems.

Vista has had mixed reviews, and corporate sales have been slow so far.
Mr. Jobs declined to comment on Microsoft’s troubles with Vista, beyond
noting that he thought Leopard was a better value. While there are
multiple editions of Vista with different features at different prices,
the top being the Ultimate edition, Apple has set a single price of $129
for Leopard.

With Leopard, Mr. Jobs joked, “everybody gets the Ultimate edition and
it sells for 129 bucks, and if you go on Amazon and look at the Ultimate
edition of Vista, it sells for 250 bucks.”

Microsoft has said that it will release an update, or service pack, for
Vista in the first quarter of 2008. But it has also said that it intends
to offer a service pack for Windows XP in the first half of the year.
That, analysts said, could further delay adoption of Vista as computer
users wait to see how XP will be improved.

Microsoft has also hinted that its next operating system, code-named
Windows 7, would not arrive until 2010. At Apple’s current pace, it will
have introduced two new versions of its operating system by then.

Apple has not been flawless in its execution. Early this year, it
delayed the introduction of Leopard for four months. Mr. Jobs attributed
this at the time to the company’s need to move programming development
resources to an iPhone version of the OS X operating system.

Several analysts said they thought that Leopard would have only an
indirect effect on Macintosh sales.

As for Vista, it has clearly not pushed up demand for new PCs as much as
computer makers hoped. Last week, the research firm Gartner said PC
shipments in the United States grew only 4.7 percent in the third
quarter, below its projection of 6.7 percent.

That contrasted sharply with Apple’s projected results for the quarter.
Gartner forecast that Apple would grow more than 37 percent based on
expected shipments of 1.3 million computers, for an 8.1 percent share of
the domestic market.

Apple has outpaced its rivals in the United States, particularly in the
shift to portable computers. While this is the first year that laptops
have made up more than 50 percent of computer sales in this country, Mr.
Jobs said that two-thirds of Apple machines sold in the United States
are now laptops.

Apple has also outperformed rivals in terms of market share by revenue,
because its machines are generally more expensive.

According to Charles Wolf, who tracks the personal computer market in
his industry newsletter Wolf Bytes, Apple’s share of home PC revenue in
the United States has jumped in the last four quarters. In the second
quarter, for example, the Macintosh captured a 15.8 percent share,
almost double its share of the number of units sold.

He added that Apple had a significant opportunity now in terms of
visitors to its stores. Apple is now reporting 100 million annual
visitors, and Mr. Wolf estimated that 60 million to 70 million of them
were Windows users drawn by the iPod or the iPhone, who could
potentially shift to Macs.

Although Apple may be able to grow briskly by taking Windows customers
from Microsoft, the two companies face a similar problem: the industry
is maturing and there have been no obvious radical innovations to
jump-start growth.

Indeed, many of the new features in the Leopard operating system version
are incremental improvements. But Mr. Jobs said he was struck by the
success of the multitouch interface that is at the heart of the iPhone
version of the OS X. This allows a user to touch the screen at more than
one point to zoom in on a portion of a photo, for example.

“People don’t understand that we’ve invented a new class of interface,”
he said.

He contrasted it with stylus interfaces, like the approach Microsoft
took with its tablet computer. That interface is not so different from
what most computers have been using since the mid-1980s.

In contrast, Mr. Jobs said that multitouch drastically simplified the
process of controlling a computer.

There are no “verbs” in the iPhone interface, he said, alluding to the
way a standard mouse or stylus system works. In those systems, users
select an object, like a photo, and then separately select an action, or
“verb,” to do something to it.

The Apple development team worried constantly that the approach might
fail during the years they were creating the iPhone, he said.

“We all had that Garry Trudeau cartoon that poked fun at the Newton in
the back of our minds,” he said, citing Doonesbury comic strips that
mocked an Apple handwriting-recognition system in 1993. “This thing had
to work.”

Copyright 2007 The New York Times Company