Is the battle for the PC one that Apple Computer can still win? Or has the company become like a Civil War nostalgist, re-enacting skirmishes long since decided?
That question takes center stage at the Macworld San Francisco conference this week.
The show is the tone setter for Apple’s year. Apple Chief Executive Steve Jobs’ flashy keynote address can sometimes send ripples through the tech industry. Last year, Apple showed off the first flat-panel iMacs.
Apple still captures the attention of technology lovers with its bold design. Despite the fact that its annual sales have shrunk from nearly $8 billion to $5.7 billion since 2000, the company still shows attitude–most recently in its campaign to get users of Microsoft Windows to switch to the Mac.
Apple has long struggled with the fact that its products cost more than many competitors’. While Gateway, eMachines and other manufacturers have PCs with 1.7-gigahertz Celeron processors for $400, Apple’s most affordable computer costs $800.
About 90 percent of the world’s personal computers run some version of Microsoft’s Windows operating system, the software that runs a computer. Research firm IDC estimates that Apple’s market share dropped from nearly 5 percent in 1999 to nearly 3 percent in 2001. Apple has said it believes its market share is higher.
Consumers do not change operating systems lightly. Even Microsoft has had trouble convincing customers to switch to the latest versions of Windows.
“There’s still a lot of old stuff out there. It takes a long time to get all that stuff replaced,” said IDC analyst Al Gillen. “Apple has been losing market share consistently year after year. They’ve got the nicest product lineup that they’ve probably ever had. The quality of their software is not the impediment holding them back at this point. It’s the fact that they’ve ceded so much market share, they’re in such a minority position, it’s difficult to recover.”
Industry watchers will be looking to see if Apple has a plan to boost its sagging market share.
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“Apple is selling its products based on features,” said Brooks Gray, director of research at Technology Business Research. “The price-performance comparison for Apple is not up to par with Windows boxes. In order for Apple to reach the mainstream market and switch them over to the Mac, they need to address the price-performance ratio.”