Oops. Not even a year later and you’re wrong about AutoCAD.

It costs about $15 to make the A4. Apple could give it away and make its money on the e-media that it delivers as i-media. While at the same time controlling the user experience…

“Remember Apple is taking 30% off the top every purchase.”

Take a little time finding out what the dev split is on other platforms.

Hint: 70%, 3B downloads, and a lot of freedom (compared to most other platforms) is, by far, the best deal in town.

Also you seem to imply that Apple has the smartphone market to lose. Nokia and RIM are by significant margins the market leaders. It is their market to “lose.”

Apple is as Apple has always done. Marketing a design aesthetic to the uninformed who confuse style with quality and are willing to pay a price premium for usability. What has shocked me personally is how much ISV have willingly agreed to become subcontractors for Apple donating such a huge portion of their revenue to Apple via the AppStore.

Apple is in effect forcing ISVs into a revenue sharing license of the iphone platform. Remember Apple is taking 30% off the top every purchase. And that in my opinion will be where Android and RIM will undermine the mindshare of Apple devotees. It seems like a no brainer to me at least to develop for RIM and Android (and Nokia outside of the US) first and IPhone last.

I had hoped for a $300 Mini/$500-$600 laptop during the days of XP/Vista, when there were some very compelling reasons to switch. Alas, with Windows 7, most of those reasons are gone. I think Apple missed a real window there for gaining not only “units sold” market share, but application software market share as well. BTW, this is coming from an OS “agnostic” who uses both Macs and PCs (hell, I started using OSX back when it was called “NeXTstep”)

Why the quotes on ‘loses’? The only reason I can think of is that Apple never had the PC market to lose. Yes Apple makes more money than Dell and HP, but it doesn’t make this on PCs – although I don’t have the figures I suspect that Apple’s PC business makes less than both Dell and HP (certainly not more than them combined). Apple made more money than Dell and HP but this was on PCs, media players, phones and app. store.

If your figures are to be believed, Apple’s current cash cow is the iPhone and iPod. If Apple “loses” the smartphone market to Android it could be be catastrophic for them – if they don’t manage to diversify again in time.

BTW, I would have been happy to accept this as an honest mistake if the author had compared HP and Dell’s total profit with Apple’s total profit – however the figure for HP is only for HP Personal System Group, not the whole of HP. The author obviously knew what he was doing.

on the mac… what can i say… i was a hardcore mac developer from 1987-1995, at which point i switched to windows 95 and Java development. the biggest failure imho was that the mac os completely stagnated after system 7 in 1991. so for example in the 1990s there was no 3D look and feel in the mac os, and every app developer invented their own 3D look and feel, resulting in an environment where on a Mac every app looked different, and on Windows 95, they all looked consistent!

peter

As a previous commenter illustrated,us lay Apple fans have a different set of stories of why the Apple failed, Writers like John Gruber have proposed theories that sound very plausible, and yet none of these sound like Mace’s three lessons.

It would be great to know what you think of the following two factors:

1. The Parlay: Apple did not effectively leverage the Apple II, or other strengths, when launching the Mac, or other businesses (see Newton). MS wasaterful in their parlaying one strength to expand into new businesses. This one is from John Gruber.

2. The Price Umbrella: Apple has used this term recently. The isn’t just about market share vs margins, but also maintaining total control of the value equation and competing. The implication being that the Mac rested on it’s 7 year GUI headstart.

Folklore.org, which is where I first learned about the roles both of you played (speaking of online reputation!), also has more stories about what I would call logistics mistakes around the launch of the original mac.

Anyway, let us know if you do have that lessons learned talk!

I agree with your comments, and want to build on them a bit. I think Steve learned three key lessons from the Mac-Windows experience, and he has corrected them with the iPhone. Those lessons have nothing to do with licensing…

1. Stake out a claim in a new market. DOS PCs were already the standard before Mac came out,and most users were incredibly resistant to switching. As soon as Microsoft had even a half-usable Windows environment (Windows 3.0), Mac share gains slowed dramatically. In contrast, there is no huge incumbent in smartphones. Apple is the one establishing the installed base, and they will be very hard to displace because…

2. Keep the developers barefoot and pregnant. Apple (including you and me personally) spent a ton of money and time promoting third party Mac software that was then ported to Windows. We didn’t realize it at the time, but we let other companies control our differentiation. In contrast, the iPhone app base depends on quantity, not individual apps. Apple’s ads are all about dozens of different apps, and they don’t let any of them grow to “killer app” status. In fact, the economics of the App Store prevent app companies from getting big. I can’t believe that is a complete accident.

3. Pick a battleground that favors you. Mobile devices are incredibly personal, so people respond to small increments in usability and hardware-software integration — the sort of design Apple excels at, and is very good at marketing. There’s still a huge amount of innovating to be done in smartphones, meaning that Apple has many years of running room to keep upping the stakes for its competitors, before the market commoditizes. Many of them (especially Google and Nokia) have fallen into the trap of trying to beat Apple at its own game, rather than trying to use their strengths to change the market in ways that will give them an advantage. Good luck with that.

‘You compare Apple with it’s 10% to Dell and HP with their combined 33% and note that Apple makes more money than the two of them combined. While that’s an accurate statement, it’s debatable whether it’s important.’
WTF How is making a profit in business debatable? or not important?
How else do you expand the company, fund R&D and marketing, compensate hard working staff, pay for healthcare, develop new products, fight-off takeovers or buy-up competitors, etc etc. without making profits? You can’t even borrow money to fund all these things unless you make profits.
A company that does not make healthy profits is just treading water without a lifejacket.

‘Microsoft’s revenue for the quarter ending September 1st, 2009, was $12.9 billion and it’s net income was $3.3 billion. Apple’s revenue was $9.9 billion but it’s net income was $1.67 billion–half of Microsoft’s.’
So?
This is just meaningless and simplistic juvenile twaddle without an ounce of comprehension.
Clue…. it’s what you do with your profits that matters. You could have, for instance, invested in other companys, funded more development, taken on more staff or a myriad of other ‘investments’ which look to the future, all within the last 12 months, which are directly reflected in the bottom line. In fact, making profits and doing nothing(except an abortive Yahoo take over), is doing nothing to ensure MS’s future.

Indeed, that is a myth.

As paper publishing is replaced by paperless publishing, the issue is not whether the operating system is licenced, but, as Jonathan Seybold pointed out in 1984 and again in 1992, whether the graphics primitives and graphics commands for the system software integrate with the graphics primitives and graphics commands for the fixed page format document description model.

The problem as between Apple and Microsoft today is that Distiller is a PostScript interpreter, and a PostScript interpreter ignores the tagged file format of ColorSync and the ICC Specification, and the tagged file format of TrueType and OpenType. Microsoft has had success because it has used the FSTYPE selector in the OS/2 table of the TrueType Specification to embed the intact intelligent font file and the intact source character string. Contrast the repurposeability/searchability that is possible through PostScript and PDF where the Type 42 Specification strips away the tables that specify the semantics (CMAP and MORX for Apple, CMAP and GSUB for Microsoft), leaving only the font program with the scalable spline shapes chopped into arrays of 256 shapes.

Best wishes,
Henrik Holmegaard

You compare Apple with it’s 10% to Dell and HP with their combined 33% and note that Apple makes more money than the two of them combined. While that’s an accurate statement, it’s debatable whether it’s important.

Because Apple “makes the whole widget” and Dell and HP do not, Apple would obviously make more money.

Microsoft’s revenue for the quarter ending September 1st, 2009, was $12.9 billion and it’s net income was $3.3 billion. Apple’s revenue was $9.9 billion but it’s net income was $1.67 billion–half of Microsoft’s.

1. Apple is remaining price competitive with their products while reaping huge profits. ($600 per iPhone!)
2. Apple has already fostered a huge developer community with a best of class mobile SDK and a complete development, delivery, upgrade and billing system that is successful beyond anyone’s wildest fantasies.
3. Apple has become almost completely independent of the dopey middlemen like Sears, CompUSA, Circuit City, etc. who totally botched selling and marketing Mac hardware and software to the consumer.
4. Apple has some of the tightest logistics and supply chains of anyone in the industry whereas in the 80s and 90 they were legendarily bad in those areas.
5. Apple has an industrial class, UNIX -based, completely modern OS which scales across their entire product line-up, as opposed to Apple II OS vs. Mac OS vs. Newton OS vs. Pippin OS which were all incompatible.
6. Apple has a hugely profitable, strategically placed and growing network of retail stores where their products can shown be off in the best light to masses of well-heeled people who would otherwise never see Apple products.
7. Apple is completely independent of third party software in the mobile space like Office or Photoshop or even Flash, thank God! If one developer drops his app, a hundred more will take his place.
8. They make money off of every aspect of the iPhone, not just the hardware, including software, peripherals, music, movies, and TV shows. (Legend has it that MS made more off the Mac at one point than Apple by selling most of the critical software.)
9. The mobile space depends on selling to Joe & Jane average consumer and not IT departments who are convinced that IBM/Microsoft is their only salvation.
10. While Microsoft openly licensed the OS, it kept ironclad control over the OS and pushed the OS forwards in a unified manner. Google is already allowing the the OS to become fragmented. Huge difference. Nexus has Android 2.1 while Sony’s new flagship Xperia 10, not out yet, has Android 1.6.
11. Finally, Apple has an entire leadership team that actually has a clue, which was never really the case while Jobs was absent after 1984.