Mac welcomes Intel...what is the big deal?

[Brian Alves]

Ok, its official. Mac is switching over to Intel.

What does this mean for a creative professional. Don't understand the big deal.

Fill me in.

[Jeff Sayre]

Brian:

Have you read this thread? It may answer your question.

http://www.dvinfo.net/conf/showthread.php?t=45738

[George Ellis]

You have it right. Mac fanatics have always branded the wrong "enemies" to why Macs are not the market dominator. Intel and Microsoft are the latest targets.

[Jeff Sayre]

To the creative professional already using Apple systems, the switch to Intel will assure longer product-line viability--and possibly better performance. In other words, it's a good thing!

What's the big deal? I'm not too sure either because I believe it is simply a sound business decision. Apple nut or not, this move will bring more flexible-choices to creative professionals everywhere.

[Richard Lubash]

Other than the mystique (which is something that can be dealt with in therapy) the only concern should be:

Will Pro Ap’s like Final Cut be able to advance significantly in the next 24 months.

With the X86 Pro boxes coming out last in 2007, programs like FCP which depend on Altivec which wouldn’t port to X86 (please correct me if I’m wrong) run into a development catch 22. FCP is seeing significant respect in the industry but to keep that trend ongoing evolution is necessary. Dumping resources into development of aspects of software that wouldn’t effectively port to the new processor is a dead end. This creates a challenge for Apple and how they handle it will have an effect on Mac Pro Ap users over the next few years.

Richard
2K-Plus
Atlanta

[Richard Alvarez]

The big deal is that Apple lost half it's markedt share when they changed processors last time. Went from 10% to the current 5%. So people are worried.

[Jeff Sayre]

Richard:

Are you referring to when Apple shifted from the Motorola 68000 to the PowerPC processors ten years ago? There were many countervailing factors that resulted in Apple's market share dropping from 10% or so down to 5%.

First, Apple was not in the best shape in the early 90's. It's leadership had lost sight of the vision that made Apple so unique. Second, Microsoft's Windows operating system releases dominated the market while Apple kept releasing OS's that had big problems. Third, the inflation of the Internet bubble fueled Microsoft and non-Mac PC manufacturer's market share.

I don't think it was the switch to the PowerPC that caused Apple's market share to erode so precipitously. It was poor leadership, a lack of a focused vision, and the timing of the Internet craze.

Of course, Apple's recent announcement has caused institutional investors to dump their Apple stock (or should I say, take their big profits before the small investors go running). But Wall Street is always scared of change. Share price and market share often are unrelated concerning news like this. In fact, the initial shock may be over for the time being as it seems that Apple's share price has finished taken it's beating.

Obviously it is too early to tell what will happen to Apple's current less than 5% market share (some say it's close to 3%). But companies that have a clear vision and stay on focus can do amazing things over a 10-year period. Look where Apple is now compared to ten years ago. The percent market share has not changed, but Apple's reputation and foundation have been shored up. If Jobs and company carefully execute their strategy, it will be interesting to revisit this question in 2015.

[Richard Alvarez]

Jeff

Everything you posted is true. Including the fact that their market share dropped at that point.

Other factors involved? Sure. Always is. But people look back at that and see the drop, and it's a big deal. Will it happen again? Doubt it. But the numbers are there, which causes 'discussion'. And 'discussion' is often referred to as a 'big deal'.

Which is why I answered the question.

[Jeff Sayre]

Your absolutely right, Richard! That is also why I answered the post--the buzz on the street is a big deal.

I guess what I'm saying, and it sounds like you're there also, is let's not make a big deal out of this issue prematurely. Time will tell whether or not the decision was the right one. We on the outside can only speculate and gossip about it. The market will make up its mind based on the quality of the product.

[Duane Smith]

Originally Posted by Richard Alvarez

The big deal is that Apple lost half it's markedt share when they changed processors last time. Went from 10% to the current 5%. So people are worried.

There is little correlation between that switch (68K to PPC) and Apple's market share loss; in fact, the switchover was practically problem-free and happened very quickly (FAT binaries made it very easy for consumers to handle the changeover).

You seem to have forgotten that when Apple had 10% market share, it was competing against a primarily a DOS-based PC world. Microsoft Windows 3.1--the first viable and commercially successful version of Windows--is what caused the massive loss of marketshare; for the first time, people could buy a sub-$2000 PC and get a relativley easy-to-use GUI instead of buying a $5000 Mac. And with the release of Windown 95--which was even MORE Mac-like than Win3.1--many casual buyers decided there was no compelling reason to buy a more-expensive Mac, especially considering that Apple seemed to have no clue what to do with it's own long-in-the-tooth OS....

Early 1990s: Apple has 10% marketshare in the DOS-based PC era
May 1991: Apple introduces System 7 (new tech, but similar GUI to Sys 6)
March 1992: Microsoft introduces Windows 3.1
June 1993: Michael Spindler replaces John Sculley as CEO of Apple
Feb 1994: Apple announces "Copland" OS Project (Mac OS 8)
March 1994: Apple releases first PPC-based Macs (switch from 68K to PPC)
June 1994: Apple releases System 7.5 (shockingly minor upgrade)
Sept 1994: Apple liscenses Mac "Clones"
May 1995: PowerComputing releases first clones (destroying Apple sales)
Aug 1995: Microsoft introduces Windows 95
Feb 1996: Michael Spindler canned; Gil Amelio becomes new CEO
Aug 1996: Apple kills "Copland" project.
late 1996: Amelio trys to buy BeOS for future OS replacement
Dec 1996: Apple buys NeXT for future OS; Steve Jobs returns as "advisor".
Late 1990s: Apple has 5% marketshare in the Windows-based PC era

I just don't see how you could think the 68K-to-PPC switch was the reason for the market share losses. The "other factors" were much more significant than you seem to be giving them credit for. The switch was nothing more than a tiny blip on the radar screen in comparison to all the other turmoil, strife, and competition that Apple was facing at the time.

[Richard Alvarez]

See,

You replied to my post. My comment was enough to get you to respond with facts and figures.

You missed my point. It doesn't MATTER if there is a hard cause and effect. It's the perception that there MIGHT be, however tenuous. That's the sort of stuff that causes market fluctuation. I didn't say it would. I didn't say it should. But I've seen enough speculation and arguing and pointed long posts full of compare and contrasting numbers...

That it's a big deal.

And every post that responds to this, that makes this thread longer... makes it a bigger deal.... and proves my point.

[Duane Smith]

You make an excellent point. Richard...one that I had not considered. It also happens to sound quite similar to the kind of "sensationalism" techniques so often employed by news media outlets. LOL!

I guess I just expect people to make a reasonable--but not necessarily exhaustive--effort to seek the truth, rather than twist tiny bits of the truth into irresponsibly false misrepresentations of reality.

Well, here's to another post that further proves your point. ;-)

[Greg Boston]

Originally Posted by Jeff Sayre

Of course, Apple's recent announcement has caused institutional investors to dump their Apple stock (or should I say, take their big profits before the small investors go running). But Wall Street is always scared of change. Share price and market share often are unrelated concerning news like this. In fact, the initial shock may be over for the time being as it seems that Apple's share price has finished taken it's beating.
.

I've been watching AAPL closely since I bought it a few months back. They had a 2 for 1 split on 3/1/05 and went from post split mid $40's to mid $30's and they have recently started going up again just since the Intel announcement. Most investors and analysts believe Apple can't follow up with another killer product like the iPod which drove their stock way up over the last year. That's been the reason for the beating as of late. Perhaps the promise of forthcoming Intel based systems will alleviate that concern. Also, strong iPod sales have created what is called the 'halo effect' where iPod owners find out that they would now like to own a Mac and have done just that. The Mac mini is filling the bill for those folks. Estimates now show that Mac based systems are gaining market share, perhaps up to 15% by year end.

But as always, crystal balls are known to have lots of cracks so we will have to see what happens.

-gb-

[Boyd Ostroff]

Yes, AAPL is down to the point that my gain is only 190% :-) Today it closed at $37.65, up 2% on the day. It's a volatile stock and there isn't always an obvious reason for the fluctuations. A month ago (May 9) it closed at $36.97. I wouldn't read a lot into these day to day mood swings. On Tuesday Piper Jaffray maintained its outperform rating and $52 target, saying the positive aspects of the Intel switch will outweigh any negatives. They also called the iPod Apple's "foundation of growth."

I haven't seen a market share number as high as 15% anywhere; do you have a link?

[Patrick King]

Boyd,

I think this move may even depress the stock price some until it becomes common knowledge that Gates offered to buy Job's shares (controlling interest) at a premium if Steve would position Apple to become part of the Windows family.

Microsoft Macintosh. Nice ring to it.