Why X86?

The biggest reason why Apple moving to Intel is a good move for Apple hasn’t even been mentioned by Apple yet.

It can be illustrated by two conversations, one Before Intel, one After Intel:

Before Intel

MacLover: You’re getting a new computer? You really ought to get a Mac! They’re wonderful!

MacCurious: OK, how much does one cost?
MacLover: You can get an iMac G5 for just $1,500!
MacCurious: (Disappointed) But I can buy a pretty fancy Dell for just $1,100. How is the Mac better?
MacLover: {Goes into flower child as channeled by Steven Jobs spiel}
MacCurious: {Half-convinced, half-not} I don’t know. I’ve spent a lot of money on Windows software. Can I take my software and run it on the Mac?
MacLover: Why would you want to?
MacCurious Because I paid a lot of money for them.
MacLover: Well, if you insist, you can pay $110 for Virtual PC, and it will run most Windows programs OK.

MacCurious: Just most? Just OK?

MacLover: You see, it lets the Mac emulate a PC by setting up a virtual computer by. . . .
MacCurious: (Eyes glaze over) Will all this let my programs run as fast as they do on a PC?
MacLover: Well, no. But once you try MacOS, you’re not going to want to run those Windows programs, anyway. You’re going to want to buy Mac versions of all those programs.
MacCurious: Really?

(MacCurious goes home and grudgingly orders Dell.)

After Intel

MacLover: You’re getting a new computer? You really ought to get a Mac! They’re wonderful!

MacCurious: OK, how much does one cost?
MacLover: You can get an iMac G5 for just $1,400!
MacCurious: (Disappointed) But I can buy a pretty fancy Dell for just $1,100. How is the Mac better?
MacLover: {Goes into flower child as channeled by Steven Jobs spiel}
MacCurious: {Half-convinced, half-not} I don’t know. I’ve spent a lot of money on Windows software. Can I take my software and run it on the Mac?
MacLover: Yes, just like you can on a PC. It’s like having two machines in one!

Do you think the odds on MacCurious ordering a Mac will go up?

What going to Intel does is cut the cost of trying out the Mac from $1,000-2,000 to just a few hundred dollars. It provides a safety net for hesitant switchers.

Yes, for most, those “few hundred dollars” will still be too much, but using pretty much standard Intel CPUs and Intel-based mobos offers at least the opportunity to make those “few” hundred as few as possible.

Purists may be grossly offended, but if MacOS X is that good, it ought to sell itself, and where does it stand a better chance to do that? In the person’s house available 24/7, or in some computer store for fifteen minutes?

There are other groups that come into play with an Intel Mac, too, generally ex-Mac users who switched because they had to. The office worker in a Windows office who needs to work at home. The ex-Mac gamer who wants top gaming performance. The people who can’t or don’t want to have two machines to handle two different computing tasks. Now they don’t.

Does this mean Apple will take over the world? No, of course not. However, it’s not unrealistic to hope for Apple’s marketshare to go from 2% to 5-10%, maybe more if the price premium can be minimized.

Let’s take the middle of that range: say 8%. That would be four times the number of machines Apple sells today. That would swamp the current loyal Macster community, and would certainly make up long-term for any short-term drops in Mac sales the next year or so.

I’m not saying that’s the reason why Jobs switched, but it’s an awfully good reason to back up the decision.

They Have To Do Something

There’s a huge problem with the Mac community, one that eventually will turn terminal: There’s not enough of them.

This is all you need to know to see how badly the Mac has done in recent history.

Graphed:

(Sources: Low-end Mac, Apple SEC 10-K filings, Gartner)

So while overall PC sales went up 278% between 1995-2004, Mac sales went down 22%. This made Mac market share drop almost 80%.

Hardly a success story, is it?

Some no doubt will accuse me of cherry-picking statistics. Well, the real collapse in Macdom occurred between 1995-1998. Sales dropped 40% between 1995 and 1998, from 4.5 to 2.7 million, while the PC market kept growing. Apple market share dropped 70% during this time, from 9% to 2.7%.

Since then, sales have bounced up and down erratically. The best Apple has done since then is 4.5 million Macs sold in 2000, or 3.3% market share. Since then, they’ve dropped to a range 3-3.5 million Macs sold yearly, or about 2% marketshare.

For Apple to just get back to 1995 levels (which is only about half of what AMD is doing right now), they’d have increase Mac sales 400%.

It’s not that Apple hasn’t tried to make its product more appealing since Jobs came back in 1997. They’ve introduced new models, they’ve cut costs (more on that below) so they could lower prices and come up with cheaper models. Nothing has had any lasting results on sales. The overall net result of all these efforts has been to let Mac owners move down the food chain and buy the cheaper stuff.

It is clear to all but the deeply deluded that the vast majority of computer buyers will not buy Macs in their current form, and they never will.

Enter the (i)Pod People

There’s always been a sizable MacCurious group. In the last year or so, that group has been bolstered by the iPod people.

Last quarter, Apple sold almost 4.6 million iPods. That’s about four-and-a-half times the number of Macs sold. If most iPod buyers also bought Macs, Apple would be well on its way to getting back to 9%.

But, for the most part, they aren’t. Even if you assume that the entire increase in Mac sales the last couple quarters are iPod people (which is pretty dubious), only about 5% of them are buying Macs. The Mac Mini was designed to cash in on Pod people, but for all the hoopla, sold only 67,000 units last quarter (in contrast, when the iMac first came out, it sold 278,000 units in a couple months).

It’s clear that most iPod people are Windows people. It’s also just as clear that very few of them are going to jump off the Windows ship and onto the Apple raft without extra help.

Mr. Jobs clearly wants to be a power in the digital media world. He can’t do it being the head of a niche computer market that can’t speak the mainstream language. It’s like trying to be an American rock-and-roll star singing only Lithuanian. Not going to happen until you go bi. Then maybe you can teach your audience a few Lithuanian words.

What more can Apple do to entice such people to shift? Why, why not build a machine that lets people have it all, one that lets them explore Mac OS X without giving up their Windows security blanket? Build a competitive bilingual machine that a Windows user might actually find OK to use for Windows, with OS X as the cherry on top?

That means x86.

iPod people help make the x86 switch possible in two ways. First, they’re a big pool of potential Mac buyers. Second, even if they’re not interested in Macs, buying iPods will keep Apple afloat during the transition.

Inviting The Bis

Let’s put this in an edgy way. If you find it too edgy, substitute a term like “strawberry ice cream lover.”

In many ways, being a Mac owner is like being gay. You’re a small minority in a population that handles matters quite differently than you. Like many other groups with a dubious relationship with the mainstream world, you tend to cluster in fairly insular groups and form a subculture accepting of the lifestyle.

The mainstream has differing views of you. Some are overtly hostile to your beliefs. More are tolerant/apathetic, but just don’t get it. Others are potential recruits, but can’t bring themselves to come out of the closet.

What an Intel Mac does is the technical equivalent of introducing discrete bisexuality into the picture. You don’t have to choose between one or the other, you can try going both ways without being instantly outed. If you prefer the new way over the old way, fine. If you decide that’s not for you, no big deal. If going one way is best in one situation, and the other way is better in another, you’re free to do that.

The only people who might heartily object to this are the purists at both extremes who insist you go one way or the other, all the way. But then, extremists everywhere tend to think like that, don’t they?

Why Isn’t Apple Talking Bi?

Yes, it’s true that Apple isn’t talking up this possibility.

Then again, consider the circumstances. This announcement was made at a conference for Mac programmers. These are the people who have to do a whole lot of extra work to make this switch work. Do you really want to tell such a group how wonderful it will be to be able to run the hated competition’s software on their box? It’s not like they couldn’t figure that out, but why shove their faces in it at that point?

There will be plenty of time for the Apple marketers to come up with “Switch On Steroid” campaigns, preferably after the programmers have done their work.

The same pretty much applies to the users, too. While very many are happy about the bi-idea, either for themselves, or for the future prospects of the company, many are quite unhappy about it, if only because they expect the switch to obsolete/devalue the Macs they’ve bought the last few years. They’re the other group paying a big price for Apple’s future well-being.

Again, they’re stunned and angry enough, it is not the time to explicitly pour gasoline on the fire.

There is a time and place for everything.

The real hard nut to crack are the hardcorers, the ones who say things like, “This makes us into another Alienware.”

We’ll talk about them in the next article.

Ed