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Apple built its PC business on the backs of creative professionals because they were among the few groups who thought Macs were worth more than $0.00, thanks to

by jmeller 10y ago

Apple built its PC business on the backs of creative professionals because they were among the few groups who thought Macs were worth more than $0.00, thanks to its superior experience with Adobe's creative suite when compared to Windows. Apple now has a dominant position in the PC market, not because they catered to creative professionals, but because they listened to their initial creative audience and focused on making their computers better. Apple doesn't focus on the Mac Pro because they want to abandon creatives, it is simply because the Mac Pro doesn't enable any meaningful use-cases not served by the 5k iMac or its notebook line. Form-factor, screen quality, battery life, weight, speed of I/O, and all the other design goals the author dismisses, are perhaps the most important metrics meaningful for the current generation of laptop buyers, including professionals.

grzm 10y ago
"Apple doesn't focus on the Mac Pro because they want to abandon creatives, it is simply because the Mac Pro doesn't enable any meaningful use-cases not served by the 5k iMac or its notebook line." Well said. This thought has been banging around in my head half-formed for the past couple of days. Thanks for expressing it so succinctly. I think this also answers why Apple has made the decision to limit/remove expansion and upgrade options in their hardware. "Apple built its PC business on the backs of creative professionals because they were among the few groups who thought Macs were worth more than $0.00, thanks to its superior experience with Adobe's creative suite when compared to Windows." This idea of creatives being the core market for Apple during its early years is often floated. I'm not questioning its veracity, though I'm curious if anyone knows of references that backs this up with numbers or research? Education was a pretty big market early on as well. How do they compare?
- jmeller 10y ago
  > This idea of creatives being the core market for Apple during its early years is often floated. I'm not questioning its veracity, though I'm curious if anyone knows of references that backs this up with numbers or research? Check out Steve Job's first keynote after returning to Apple in 1997 starting at 18:35. He enumerates the assets the company still has at its disposable to claw its way out of almost imminent bankruptcy. He specifically mentiones creative proffesionals and educators and backs them up with some interesting stats. https://youtu.be/IOs6hnTI4lw?t=18m35s https://youtu.be/IOs6hnTI4lw?t=18m35s
  - grzm 10y ago
    Thanks! I pulled out some of the stats: From 1997 Macworld Expo - Apple marketshare: 7% - 80% of all computers used in advertising, graphic design, prepress, printing - 64% of Internet websites created on Macintosh - ~ 10-15% Mac sales traced back to people using Adobe Photoshop - Apple single largest education company in the world - 60% of all computers in education were Apple - 64% of computers teachers use were Apple - Over $2 billion business in education Also of note: Steve was not wearing a black turtleneck. So it's pretty clear what segments of the market Apple was dominant in. The question in my mind is related, but slightly different: what percentage of Apples revenues and profits came from these segments? Were there other markets out there that perhaps Apple wasn't dominant in but still contributed significantly to Apple's overall revenues? That said, I wouldn't be surprised if these two segments were the majority.
    - jmeller 10y ago
      > The question in my mind is related, but slightly different: what percentage of Apples revenues and profits came from these segments? Were there other markets out there that perhaps Apple wasn't dominant in but still contributed significantly to Apple's overall revenues? That said, I wouldn't be surprised if these two segments were the majority. Unfortunately Apple's financial reports don't break things down in detail necessary to answer your question, but because of the power hindsight, we know that Steve gave this keynote when Apple was months away from folding (http://www.macrumors.com/2011/09/19/steve-jobs-apple-almost-went-bankrupt-because-it-failed-to-innovate/ http://www.macrumors.com/2011/09/19/steve-jobs-apple-almost-...). If Apple had other significant sources of revenue, he likely would have touted them as prominently as he did educators and creative professionals. Since he didn't, we can conclude with some level confidence that these were the only sources of ongoing significant revenue.
flukus 10y ago
> Apple now has a dominant position in the PC market, not because they catered to creative professionals, but because they listened to their initial creative audience and focused on making their computers better. How are they at all dominant in the PC market?
- jmeller 10y ago
  PC meaning Personal Computer market, not the Windows/IBM PC.
  - flukus 10y ago
    And how are the dominant in that? They've got about 5% of the market share.
    - jmeller 10y ago
      Great and valid point. My counter to that is that despite having only 5% of the market share they take home 45% of the profit. [1] They also continue to erode the marketshare of the current leaders even as the overall PC market shrinks. [2] [1] http://fortune.com/2013/04/16/pie-chart-of-the-day-apples-oversize-share-of-pc-profits/ http://fortune.com/2013/04/16/pie-chart-of-the-day-apples-ov... [2] http://www.siliconbeat.com/2015/10/09/report-apple-widens-share-of-pc-market-despite-slowing-mac-sales/ http://www.siliconbeat.com/2015/10/09/report-apple-widens-sh...
      - flukus 10y ago
        That doesn't make them dominant in any way. That's only a good thing for apple shareholders and bad for their customers.
        jmeller 10y ago
        > That doesn't make them dominant in any way. That's only a good thing for apple shareholders and bad for their customers. Yes it does. They are the envy of every other device manufacturer, and not just because they make the most money. The reason why Apple gets more profit than its competitors despite lower market share is because customers are willing to pay high prices for a better computer. How do we know this? When surveyed, users have consistently give Apple top marks in customer satisfaction. They've done it 13 years in a row. http://www.macrumors.com/2016/09/27/apple-tops-pc-customer-sat-13th-year/ http://www.macrumors.com/2016/09/27/apple-tops-pc-customer-s...
agumonkey 10y ago
A lot of video shops also used Mac extensively for decades. It seems it wasn't only good marketing, they were alright for this profession. Saying this lightly, I was a kid in the 90s, but I do remember a lot of ads for large Mac stacks (towers, disks, video cards, etc). Tiny SGIs in a way.
- flukus 10y ago
  > video shops Presumably you mean video editing shops and not blockbusters? Our video shops were green screen terminals on DOS until... well until they ceased existence.
  - agumonkey 10y ago
    I couldn't say which precisely, maybe only part of the market, maybe some part of the post production pipeline. Surely lots were done on Flame like systems, which AFAIK weren't Mac based.
- mch82 10y ago
  49% in 2007 is a figure cited in the Final Cut Pro Wikipedia article. https://en.m.wikipedia.org/wiki/Final_Cut_Pro https://en.m.wikipedia.org/wiki/Final_Cut_Pro Notable films include Benjamin Button and one of the X-Men: Wolverine films.
hota_mazi 10y ago
> Apple now has a dominant position in the PC market Mmmh... how so? Internationally, Apple has less than 5% market share compared to Windows PC. And that number appears to be destined to drop if the reactions to the new generation are any indication.
- jmeller 10y ago
  From that 5% market share they capture approximately 45% of the profits. https://www.google.com/amp/s/www.engadget.com/amp/2013/04/17/apple-sells-5-of-pcs-world-wide-makes-45-of-the-profit/?client=safari https://www.google.com/amp/s/www.engadget.com/amp/2013/04/17...
  - hota_mazi 10y ago
    That number is nonsense. If you follow the source, it comes from Dediu, who's a well known Apple apologist, and if you read his own article, there's no substance to it. I'd love it if we could find actual, objective numbers.
    - jmeller 10y ago
      To be honest I don't really know much about Dediu but I did read his article and I didn't get the impression that it lacked substance. What is wrong with his methodology or assumptions that invalidate the 45% number? I am honestly curious because I don't want to continue to cite a bad source.
basch 10y ago
>Apple now has a dominant position in the PC market ?? Lenovo, Dell, HP, ASUS = 64% marketshare. Apple=7%. http://www.businessinsider.com/apple-macbooks-pc-market-share-2016-10 http://www.businessinsider.com/apple-macbooks-pc-market-shar... Apple laptops are not dominant, they are a large niche. Microsoft dominates the PC market.

by jmeller 10y ago

grzm 10y ago

"Apple doesn't focus on the Mac Pro because they want to abandon creatives, it is simply because the Mac Pro doesn't enable any meaningful use-cases not served by the 5k iMac or its notebook line." Well said. This thought has been banging around in my head half-formed for the past couple of days. Thanks for expressing it so succinctly. I think this also answers why Apple has made the decision to limit/remove expansion and upgrade options in their hardware. "Apple built its PC business on the backs of creative professionals because they were among the few groups who thought Macs were worth more than $0.00, thanks to its superior experience with Adobe's creative suite when compared to Windows." This idea of creatives being the core market for Apple during its early years is often floated. I'm not questioning its veracity, though I'm curious if anyone knows of references that backs this up with numbers or research? Education was a pretty big market early on as well. How do they compare?

jmeller 10y ago
> This idea of creatives being the core market for Apple during its early years is often floated. I'm not questioning its veracity, though I'm curious if anyone knows of references that backs this up with numbers or research? Check out Steve Job's first keynote after returning to Apple in 1997 starting at 18:35. He enumerates the assets the company still has at its disposable to claw its way out of almost imminent bankruptcy. He specifically mentiones creative proffesionals and educators and backs them up with some interesting stats. https://youtu.be/IOs6hnTI4lw?t=18m35s https://youtu.be/IOs6hnTI4lw?t=18m35s
- grzm 10y ago
  Thanks! I pulled out some of the stats: From 1997 Macworld Expo - Apple marketshare: 7% - 80% of all computers used in advertising, graphic design, prepress, printing - 64% of Internet websites created on Macintosh - ~ 10-15% Mac sales traced back to people using Adobe Photoshop - Apple single largest education company in the world - 60% of all computers in education were Apple - 64% of computers teachers use were Apple - Over $2 billion business in education Also of note: Steve was not wearing a black turtleneck. So it's pretty clear what segments of the market Apple was dominant in. The question in my mind is related, but slightly different: what percentage of Apples revenues and profits came from these segments? Were there other markets out there that perhaps Apple wasn't dominant in but still contributed significantly to Apple's overall revenues? That said, I wouldn't be surprised if these two segments were the majority.
  - jmeller 10y ago
    > The question in my mind is related, but slightly different: what percentage of Apples revenues and profits came from these segments? Were there other markets out there that perhaps Apple wasn't dominant in but still contributed significantly to Apple's overall revenues? That said, I wouldn't be surprised if these two segments were the majority. Unfortunately Apple's financial reports don't break things down in detail necessary to answer your question, but because of the power hindsight, we know that Steve gave this keynote when Apple was months away from folding (http://www.macrumors.com/2011/09/19/steve-jobs-apple-almost-went-bankrupt-because-it-failed-to-innovate/ http://www.macrumors.com/2011/09/19/steve-jobs-apple-almost-...). If Apple had other significant sources of revenue, he likely would have touted them as prominently as he did educators and creative professionals. Since he didn't, we can conclude with some level confidence that these were the only sources of ongoing significant revenue.

flukus 10y ago

> Apple now has a dominant position in the PC market, not because they catered to creative professionals, but because they listened to their initial creative audience and focused on making their computers better. How are they at all dominant in the PC market?

jmeller 10y ago
PC meaning Personal Computer market, not the Windows/IBM PC.
- flukus 10y ago
  And how are the dominant in that? They've got about 5% of the market share.
  - jmeller 10y ago
    Great and valid point. My counter to that is that despite having only 5% of the market share they take home 45% of the profit. [1] They also continue to erode the marketshare of the current leaders even as the overall PC market shrinks. [2] [1] http://fortune.com/2013/04/16/pie-chart-of-the-day-apples-oversize-share-of-pc-profits/ http://fortune.com/2013/04/16/pie-chart-of-the-day-apples-ov... [2] http://www.siliconbeat.com/2015/10/09/report-apple-widens-share-of-pc-market-despite-slowing-mac-sales/ http://www.siliconbeat.com/2015/10/09/report-apple-widens-sh...
    - flukus 10y ago
      That doesn't make them dominant in any way. That's only a good thing for apple shareholders and bad for their customers.
      - jmeller 10y ago
        > That doesn't make them dominant in any way. That's only a good thing for apple shareholders and bad for their customers. Yes it does. They are the envy of every other device manufacturer, and not just because they make the most money. The reason why Apple gets more profit than its competitors despite lower market share is because customers are willing to pay high prices for a better computer. How do we know this? When surveyed, users have consistently give Apple top marks in customer satisfaction. They've done it 13 years in a row. http://www.macrumors.com/2016/09/27/apple-tops-pc-customer-sat-13th-year/ http://www.macrumors.com/2016/09/27/apple-tops-pc-customer-s...

agumonkey 10y ago

A lot of video shops also used Mac extensively for decades. It seems it wasn't only good marketing, they were alright for this profession. Saying this lightly, I was a kid in the 90s, but I do remember a lot of ads for large Mac stacks (towers, disks, video cards, etc). Tiny SGIs in a way.

flukus 10y ago
> video shops Presumably you mean video editing shops and not blockbusters? Our video shops were green screen terminals on DOS until... well until they ceased existence.
- agumonkey 10y ago
  I couldn't say which precisely, maybe only part of the market, maybe some part of the post production pipeline. Surely lots were done on Flame like systems, which AFAIK weren't Mac based.
mch82 10y ago
49% in 2007 is a figure cited in the Final Cut Pro Wikipedia article. https://en.m.wikipedia.org/wiki/Final_Cut_Pro https://en.m.wikipedia.org/wiki/Final_Cut_Pro Notable films include Benjamin Button and one of the X-Men: Wolverine films.

hota_mazi 10y ago

> Apple now has a dominant position in the PC market Mmmh... how so? Internationally, Apple has less than 5% market share compared to Windows PC. And that number appears to be destined to drop if the reactions to the new generation are any indication.

jmeller 10y ago
From that 5% market share they capture approximately 45% of the profits. https://www.google.com/amp/s/www.engadget.com/amp/2013/04/17/apple-sells-5-of-pcs-world-wide-makes-45-of-the-profit/?client=safari https://www.google.com/amp/s/www.engadget.com/amp/2013/04/17...
- hota_mazi 10y ago
  That number is nonsense. If you follow the source, it comes from Dediu, who's a well known Apple apologist, and if you read his own article, there's no substance to it. I'd love it if we could find actual, objective numbers.
  - jmeller 10y ago
    To be honest I don't really know much about Dediu but I did read his article and I didn't get the impression that it lacked substance. What is wrong with his methodology or assumptions that invalidate the 45% number? I am honestly curious because I don't want to continue to cite a bad source.

basch 10y ago

>Apple now has a dominant position in the PC market ?? Lenovo, Dell, HP, ASUS = 64% marketshare. Apple=7%. http://www.businessinsider.com/apple-macbooks-pc-market-share-2016-10 http://www.businessinsider.com/apple-macbooks-pc-market-shar... Apple laptops are not dominant, they are a large niche. Microsoft dominates the PC market.