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Mac at the Crossroads

Will Apple seize the opportunity to grow its market share?

Regular readers know I’ve always been a Mac fan. But we now cover Mac-related topics a lot less than we did before we got the results back from our recent readership study. The survey indicates that only about 5 percent of our readers are interested in Mac-related topics, which is about the Mac’s market share. I had hoped that OS X would elevate that number, but it hasn’t happened yet. When and if it does, I will gladly increase our Mac content. Until then, our coverage of MacWorld will just have to do.

Speaking of MacWorld, Steve Job’s keynote indicates that Apple is content to chip away at the Windows hegemony with programs that you can’t find in Microsoft’s environment– iTunes, iPhoto, iMovie, iDVD, etc. The latest are iCal and iSync, which synchronizes all calendar and address-book listings for individuals or companies across multiple devices–PDAs, mobile phones, laptops, PCs, servers, etc. The program solves a problem for Mac users I talked about in my April Insights column. I thought the problem wouldn’t be solved until more exotic technologies like transferable core PCs matured. It’s here now for Mac users, and Windows users will just have to switch if they want to solve this problem. (Or just wait longer, as they have for the iPod. Apple announced at the show that it has uncharacteristically made an iPod for Windows which will use MusicMatch not iTunes.)

Unlike the other “iApps,” iSync seems targeted at businesses rather than consumers. Apple has never made a dent in the enterprise, where Microsoft’s 95 percent overall market share approaches 99 percent. A lot has been made recently about whether the Mac will start to make inroads into this market, with Apple and Microsoft trading jabs about whether Apple has done a good job marketing to business users. Obviously it hasn’t. If it had done a decent job, it would have better numbers by now, especially since OS X is a superior operating system for businesses.

Perhaps iSync is the beginning of a trend towards better business marketing. If not, the future looks grim for Apple. Why? Several reasons. Over the last few years, Apple has consistently lost market share in its bread-and-butter market–education. This is mostly due to cost issues but it also relates to one reason the Mac has had such a poor showing in enterprises; schools need solid networking and Apple is way behind in this key area. Without solid school presence, demand for Macs by recent graduates will not be there. More importantly, without better enterprise penetration, home users will see little reason to buy Macs. In my case, I had to order a PC for my home because there is no solid VPN software for my Mac, though this will be addressed in the September release of OS X 10.2 “Jaguar”, which includes a VPN client capable of connecting to Microsoft VPN servers. Similar issues related to business software compatibility (outside of Office) hinder Apple’s business penetration and affect home sales as well.

Jobs is finding out what the rest of the market has known for a long time. You can’t just focus on a couple of niche markets and hope to hold your own. The industry is holistic: education feeds both the home and the business markets, which feed each other. And Apple can no longer rely on the graphics market because Quark is single-handedly killing its efforts to get OS X upgraded in the high-end graphics houses. Quark just released its latest version of XPress for OS 9, forcing graphics houses that want the improved networking, stability, and speed of OS X to switch to Adobe InDesign. Most will just wait for a year or so for Quark to get its act together.

In the meantime, the enterprise is growing in importance for Apple. OS X needs a boost, and Microsoft is providing an opportunity with the growing frustrations from enterprise veterans in security and reliability, not to mention all the licensing headaches. Windows XP Service Pack 1 is exhibit A why a solid and secure operating system that runs most business applications should garner its share of converts. If Apple can manage to get a large enough contingent of converts, the competition can spur the industry to ramp up innovation again. Let’s hope it does.

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