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July 20, 2008
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Crunch Time for Apple Crunch Time for Apple
By James Maguire
December 5, 2002 2:08PM

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How's this for an iPod business strategy? A company launches a snazzy new product in a major growth market, and it's only compatible with 3.5 percent of the buying public.
 
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I love Macintosh computers. I love everything about them: the way they look, the way they operate, even the little sounds they make. When the new Titanium laptop came out, I considered shoplifting for the first time in my life.

But my Mac appreciation makes me an odd duck, considering that Mac users have become such a rare breed. According to research firm IDC, Steve Jobs" company now holds an almost invisible market share, having dwindled to 3.5 percent.

Its market share number isn't the only grim statistic for Apple. The company's usually healthy share of the education market -- its savior in the face of close to zero use at the enterprise level -- has eroded. It slid from 37 percent in the 1999-2000 school year to its current level of 26 percent.

Of course, the current slump in the PC market doesn't help. Apple has seen its PC sales dip like those of other PC makers. The company's third-quarter profit fell a breathtaking 47.5 percent. Whew.

And what about the company's US$50 million ad campaign to lure Windows users to switch? According to one recent report, Apple is converting only 0.9 percent of non-Mac users who visit its Mac stores. (But the commercials were really cool, weren't they? Just like Mac.)

What Apple Needs

Apple's tiny piece of the market pie could expand if it would do three (difficult) things.

First, Apple needs to offer the blazingly fast processor Relevant Products/Services speeds that are available in the PC world. As Intel Relevant Products/Services breaks the 3 GHz barrier, making the highest-end Dells and Toshibas faster than a speeding bullet, Apple must be able to make similar claims.

I don't want to worry that after I plunk down the cash for a Mac (still pricier than its Windows counterpart), I'm going to have to stare longingly at how fast my colleague's Dell Relevant Products/Services is moving.

Make It Work

Second, Apple needs to embrace Windows compatibility. We're living in a Windows world -- that's a harsh truth, but life isn't always pretty -- and if Apple could offer product that admits this, we users could breathe easier.

The company has done this with OS X, but the policy needs to be extended. Take the iPod, for example. Until recently, the iPod could only be used with Macs! How's that for a business strategy? A company launches a snazzy new product in a major growth market, and it's only compatible with 3.5 percent of the buying public. (continued...)

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