I wanted to wait for a bit before writing about this, to avoid writing something silly while getting caught up in the hysteria. Also, I had decided a while back that this wasn’t going to be a geek blog, but, geek that I am, it’s time to break the rules.

This is a week that shook up the computer industry, because, after Apple’s move to Intel chips earlier this year, this week they officially endorsed the running of Windows on their hardware with the release of Boot Camp. This is certainly a Big Deal™, for more reasons than one, and I’ll toss my opinions into the fray, having been a Mac user for 13 years now.

Apple v. Microsoft

In a nutshell: not yet. Many in the media are casting this development as proof that Apple is ready to take on Microsoft. I even said this myself, to a few friends, after the original announcement, though I now think this is not what it is about. I do believe this is Apple with a newfound swagger, a real “what the fuck are you looking at?” kind of attitude, and I have to say I like it. The Boot Camp page itself takes not one, but two big swipes at Windows in the PR copy, positioning Windows as both “stuck in the 1980s” and “plagued” by security attacks.

Further, the very design of the application is, as many have pointed out, a not-so-subtle lesson in the subtext that can be embedded in graphic design. Apple cunningly remade the Windows logo. It’s rather amusing, on many fronts…the Apple-made Windows logo is a black diamond, which is a euphemism for coal. Further, the four squares draw a big ‘X’, as if to say “don’t use this”. Finally, the stark logo is all greyscale, and sitting next to the full color happy smiling Mac face. (And then, in one final bit of intentional irony, the fake Windows logo they created looks better than the real Windows logo.)

The whole subtext here is: Windows is old, unfriendly and dangerous, and OS X is modern and friendly.

Despite the insults, Apple’s message here to Microsoft is “the game has changed”, but they are not yet saying “we’re gunning for you”. In point of fact, this is not a bad development for Microsoft, because if some users buy Macs and run Windows on them, it means some more sales of Windows (and higher margin non-OEM Windows), which means a little extra money their way. This also frees Microsoft from the time-consuming work of reengineering Virtual PC, which is a program that many Mac users have come to depend on. With Boot Camp (and Parallels Workstation for OS X), Virtual PC is now obsolete, and so Microsoft can just sell Mac users $200 full Windows licenses, which cost Microsoft exactly $0 to develop.

No, I’ll tell you when we will know Apple is going after Microsoft’s market: it’ll be when they release OS X as a shrinkwrapped product to run on other PCs. For now, there’s little chance of that, but it will happen, probably within 2-3 years.

So Apple v. who?

So who stands to lose from this development? Well, Apple is still primarily a hardware company, and they want to sell Macs. So who is Apple going after here? Obviously, they are going after Dell, Alienware, HP, Gateway, and so on. Is Apple a threat to these companies? Yes, to some degree, and I’ll explain why.

First, I was going to write this long piece explaining Apple’s place in the hardware industry, but Daring Fireball already wrote it. For one, he wrote about how this positions the Windows experience on these new Macs. Windows becomes the second citizen (in his words: “the new Classic”). This is an astute observation.

But another astute observation, which perhaps didn’t make for such a clever title to his article, is that Apple’s position in the PC hardware market has now reversed. Before, Macs were “different”. Now, they are “special”. The reason? Apple’s machines are now just PCs. But they are the only PCs capable of running OS X (legally and easily). This positions them as having something extra, rather than being something strange, different and handicapped.

So back to my point. This is bad for the PC box makers because Apple concentrates on one very specific piece of the hardware market: the high margin market. And this is really the heart of what Apple is trying to do here. They are declaring war on high-margin PC makers. This means Sony, Alienware, et al., companies who, in the Windows realm, have specialized in providing elegant solutions (or, at least, the most elegant solution you can provide when your OS is the decidedly inelegant Windows). But no one can provide a more elegant solution than Apple. Their machines even feel better…they choose materials that are soft to the touch…so Apple is trying to capture the percentage of the Windows market that is equivalent to their own market (i.e., upscale customers). Note, for example, that Apple’s stores are located in upscale shopping centers and neighborhoods. Apple is not going after Joe Sixpack; they are going after the people who sign Joe Sixpack’s paychecks.

And for the first time, they have what they need (Windows compatibility) to capture a much larger percentage of that market.

Risk management

So is this move without risk for Apple? Hell no. This is where it becomes a gamble that possibly could benefit Microsoft. At the moment, Apple has provided a beta dual-boot solution. This has major geek-quotient credibility, but really, it’s of limited use. If you do what they want - which is use OS X for your daily needs, and then run Windows when you have to use WindowsOnlyThing ProGold - dual booting, after the novelty wears off, will just become a big fat pain in the ass.

No, the real holy grail here is something like Parallels Workstation, and this is a solution that I’m now reasonably certain Apple will bundle into Leopard (10.5): namely, the ability to just run a Windows app alongside your primary OS X environment at native or near-native speed. For users, this sounds great, but it could have negative effects for Apple.

The possible negatives have been discussed everywhere, but in a nutshell: many developers are on the fence about making their products compatible with OS X, because it represents extra development effort. With integrated virtualization of the OS, there would be less incentive for these developers, because they could tell Mac users “run it under Windows”. I do think we will see some of this during the next few years; particularly in the area of AAA games, and in some specialized software (QuickBooks comes to mind). Of course, Apple has other possible weapons in their arsenal, which I may discuss at a later date, but I think they will keep their cards in their hand until they have to play them.

Bigger family

The first thing that could mitigate against this dilemma would be an increase in market share. Is it possible? I say yes; this clearly removes a limitation for many Windows users who are curious about the Mac, but could not stomach the commitment necessary to move to the new system. Now, Windows users can have no fear about buying a Mac. Even if they find that they hate OS X, they can just erase it and have a perfectly nice PC until they decide to upgrade again later.

I believe Apple’s internal target is 10% marketshare. I believe this because their strategy is to compete with Alienware, and Sony’s VAIO, and so on and so forth. If they can steal a percentage of that that high-end prosumer Windows market, they will go a long way toward increasing their marketshare. Further, Apple can now make a serious pitch to some businesses about multiuse PCs.

Assume Apple’s marketshare is…say…3%. In this recent Appleinsider article, Rich Farmer of Merrill Lynch was quoted via a research note to clients that each percentage point of marketshare for Apple represents, in Merill Lynch’s estimate, about $2 billion in revenue. So, if they get to 5%, or 7%, or whatever, you can see this being a very big deal for them, very quickly. In short, Apple doesn’t have to gain much from Windows compatibility for it all to have been worthwhile.

I think this is the real goal of Boot Camp (and later, virtualization in Leopard). For the first time, Apple can have a real “switcher” campaign, except that new users need not completely ’switch’ in order for it to help Apple.

To be sure, these are exciting times to be a geek, and exciting times to be a Mac user. And the Mac user in me is amused by the new in-your-face Apple, who’s not afraid to say “Windows sucks. We think when you use Windows and OS X side-by-side, you will choose us.”

I have to think they are right, because…well…Windows does indeed suck.

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This entry was posted on Saturday, April 8th, 2006 at 10:31 and is filed under Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.