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January 23, 2007

Apple’s Golden Opportunity

Update: A podcast of an interview Phil Leigh did with me on this subject is available at http://www.insidedigitalmedia.com/downloads/apple_vs_vista.mp3.

The release of Vista and a new Office suite create a huge opportunity for Apple to wrest significant market share from Microsoft.  Chances are, however, that Apple will pass up the opportunity.

In a Fortune article titled Windows on the Mac changes everything, David Kirkpatrick writes:

“The lines between the Mac OS and Windows are starting to blur. And that portends major changes going forward in the world of PCs. At MacWorld, a little company called Parallels won awards for the latest version of its hit product, which enables you to run both operating systems at the same time on a Macintosh. It's a major breakthrough.”

Although it is really cool that you can toggle back and forth between Windows and Mac applications on a Mac and that capability probably will get Apple some additional sales, turns out that there is a more significant capability to the product from Parallels:  an upcoming version will make it possible to run Mac OS and Mac applications on commodity PCs!  That’s a big deal and a big opportunity for Apple.

PC users are being forced into a software upgrade cycle if they want to stay current.  As always, corporations and individuals say that they won’t be hurried into moving to Vista but, in the not very distant future, there’ll be new products and new versions of old products that make upgrading compelling.  New hardware will also come with Vista installed; old hardware’ll be upgraded to the new software to keep company-wide compatibility and simplify training and administration.

But what if Apple were to make a compelling offer to PC manufacturers to distribute Mac OS on PCs? 

In the past, since Apple software ran on Motorola chips and commodity PCs used Intel-style chips, this couldn’t have happened. But it sure can now.  Moreover, as the product from Parallels demonstrates, old Windows applications could be kept running on the same machine for a lengthy transition period.

Kirkpatrick quotes an email from Michael Dell: “We would offer MacOS, if customers wanted it and Apple would license it on reasonable terms...It's Apple's decision.”

What decision will Apple make?

Early indications are that Apple will choose to pass on this opportunity in favor of keeping its OS locked to its own hardware (or trying to keep its OS locked to its own hardware).  VMware has a product similar to that from Parallels which its customers are already using – without official sanction – to run Mac OS on nonApple machines.  Kirkpatrick quotes VMware CEO Diane Greene on the difficulty of getting Apple cooperation for their product even when it was not positioned as anything but a way to run Windows applications on a Mac:

“We were trying to do it the way they wanted to, but in hindsight we should have just gone ahead.  I wonder what Steve Jobs is going to do, because there is so much pressure to run Mac OS on non-Macs. There's no technical reason not to do it. He's so proprietary about everything, yet it could be a very strategic move for him to make.”

My guess is that Steve Jobs will decide not to seize this strategic opportunity; he won’t want to cede that much control over the hardware component of the user experience.  And Mac OS will remain an elegant operating system with a limited (although large and oh so sophisticated) marketplace.  This’ll please many Mac zealots enormously (see the comments on a related article at engadget); but isn’t ultimately good for either Apple shareholders or PC users.

Followup discussion:

Apple’s Golden Opportunity – Readers Respond

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