Apple Has Squandered the Gift That Was Vista

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While it’s true that Apple has significantly grown its share of the desktop operating system market since the release of Windows Vista in November of 2006, the company's market share remains below 10 percent, and it actually dropped in Q1 2009, according to Gartner’s Worldwide PC Shipment report.

To most observers, it’s fairly clear that Vista’s failings gave people a reason to take a fresh look at the Mac. And in its own right, OS X has become a robust, reliable, and feature-rich OS. It appeals both to the techie who is attracted to its UNIX underpinnings and the neophyte who wants a computer that just works. Additionally, Apple has always appealed to professionals in audio, video, graphic arts, and publishing. Basically, the Mac appeals to people who are willing to pay for something that is a cut above.

Steve Jobs and company have been too stingy with their bottom lines. While it’s hard to criticize a company who does a good job catering to the top 10 percent of the consumer market, resulting in unusually robust profit margins, I would like to have seen Apple extend an open hand to extend their reach into the top 25-30% of computer consumers. It'll need to go after these customers as the economy whittles away the number of high-end buyers at the Apple Store.

To do this, the company will need a few more products.

1. A netbook: Steve Jobs says Apple doesn’t know how to make a sub-$500 computer that isn’t garbage. I call BS. If Acer and Asus can make a pretty nifty package for under $300, Apple certainly could have sold one for $500 and still maintained a healthy profit margin. They could have added a touchscreen that supported gestures and multi-touch on top of a full-featured OS like OS X. Customers--particularly the Mac faithful--would have eaten them up at $600-$700 a pop. People are hungry for a product like this, so much so that there are a number of Web sites that will give you step-by-step instructions for converting the most popular netbooks into “Hackintoshes.”

Instead we have only rumors of an oversized and overpriced iPod touch. Who cares about a product like that? We’re only willing to put up with the keyboard-less iPhone because it’s a reasonable compromise for a device that supposed to fit in your pocket. For something with a 8.9-inch to 10.2-inch screen, I want a keyboard and a full desktop OS (one that, you know, actually works with Flash). The soul-less product the rumor mill is buzzing about would be as successful as the Apple Newton or the Sony Magic Link. (“Magic what?” Exactly.)

2. A mid-range desktop: For desktop users, our current choices are the underpowered, yet still overpriced Mac Mini, the limited expandability of the iMac line, and the powerful but appropriately pricey Mac Pro. There are tons of people who want a mid-priced mini-tower that'll let them use whatever monitor they want, swap the video card, add additional drives, etc. Apple could sell the base model for $1200, and plenty would pay.

3. A business laptop: Apple could have really gotten a jump on desktop operating system market share, but instead chose to play it close to the chest. The company stuck with its bread-and-butter profit strategy. This may have been the best thing for profitability in the short-term, but had Apple been willing to cannibalize some of its existing product sales and been more aggressive in pricing, they could have taken a bigger chunk of the market. They could have had more leverage for even bigger profits in the years to come.

Now, it may be too late. I’m not saying that Apple won’t continue to be successful and profitable, only that a window of opportunity is closing.

Windows 7 is on the horizon. Preliminary responses show that people are excited about it. It addresses many of the complaints people had about Vista and provides a number of usability and performance enhancements. It probably won’t be the whipping boy for Apple that Vista has been.

In the end, Win 7 may not really be better than OS X, but it doesn’t have to be. It just has to be pretty good. The Mac’s nearly three-year window of opportunity to take the desktop market is just about to close. Apple could have done better.

Michael Scalisi is an IT manager based in Alameda, California.

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