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Mac Boot Camp: Catching a Falling Knife

Strategically, is this a good move or a bad move for Apple?  I’ve been wondering that for the last couple of days.   Historically, there have been examples of Dual OS systems that have fared very badly, such as OS/2.  Will Apple do better?

The driver in the OS business is developers.  If you have lots of developers, and by extension lots of applications, supporting your API, then you will have success.  Trying to create cross over systems which also support the competitors API and applications in the hopes of luring their developers is a bit like trying to catch a falling knife; a neat trick if you can pull it off with high potential for personal injury if you make a mistake.

The situation is different for Apple than it was for IBM with OS/2, however. IBM’s message was that OS/2 was a "better Windows than Windows", because it could run Windows sessions as well as OS/2 applications in separate virtual machines on the desktop.  In OS/2’s case, there were relatively few native applications available, and plenty of pretty good Windows applications. The result was few developers wrote native OS/2 applications. Most customers just bought a Windows app, and ran it on OS/2.  All Microsoft had to do was catch up to OS/2’s capabilities, and then there was no reason to buy OS/2 anymore.  Unlike OS/2, Apple already has a large and loyal following of developers.  What Apple has to do is hang onto those developers.

There are those in the Apple Community debating this question right now.  Hadley Stern’s No Windows Boot Pledge is a good sample of the dialog.  He writes:

Sure, I can hear already all the good responses. Like there is the real estate program I want to be able to run that is Windows only, or, look at all the cool games on Windows. But these arguments will lead to a further undermining of the Mac platform. Developers will just think, hey, if a Mac person wants it they can just dual-boot so screw the Mac platform. Not good.

Here’s an interesting thought experiment. What if Apple sees this as a no-lose gambit? Here are two possible outcomes:

  1. Apple successfully hangs onto their large and thriving OS X developer community.  They enlarge their business by bringing more Windows folks into the Apple fold, providing a safety net for users to cross over.  Microsoft and Apple both win in the short term. PC manufacturers (Dell, etc) are the losers. Longer term, if this strategy is succesful, Microsoft is also impacted, as developers move away from Windows.
  2. Apple’s OS X developer community shrinks. Developers reason that they can build one version of the software, and run it on Macs on Windows or OS X so why bother building two? As the number of developers building apps shrinks, Apple’s focus shifts to their excellent hardware, and they become a highly differentiated PC manufacturer.  Microsoft wins the OS battle, but now Dell et al are stuck competing against Apple’s superior hardware, and Apple has gained a strong position in corporate America.

Personally, I find Apple’s move compelling.  It might just get me to go buy a Mac after all these years.  Who knows which OS I’ll run on it, though…

{ 4 comments… add one }

  • MatthewS April 9, 2006, 10:26 am

    I think that there was an element of being forced into a corner. We now know that Apple planned on releasing this functionality with OS X.5–Leopard but with the xp on mac contest being successful found that they needed to step up release (even as a beta) more quickly. Apple isn't really targeting its existing base of users with bootcamp, at least not in the long term. They are seeking ways of expanding market share. The only way that they can be successful in expanding the market will be through eating into HP and Dell's market.

    I look at the "No Boot in Windows Pledge" as being the most zealous of the Mac user segment. Fine, don't boot into Windows ever. Personally, once I have purchased a copy of XP I will be putting it on my MacBook Pro. In most cases I would far rather be in the OS X environment, but occasionally I find myself really wishing that I was carrying another laptop with Windows on it.

  • Frank Miller April 9, 2006, 1:08 pm

    There are two other questions that need to be asked. First, how much money does Apple make on its software business? They have a certain cost associated with developing OSX and all the apps they do and nurturing the developers. When you offset this against the actual revenue they make on this software, how much profit do they retain? I have not looked at any of their annual reports lately but my suspicion is that its not much. This leads to question two.

    Apple also has one really really good Windows app, iTunes. I say really really good because its probably the best piece of Windows software I run (which I know is arguable, but thats not my point). How much money do they make off of it? Well none, they give it away. However, its a huge enabler for their service which make tons of money.

    So hows this for fun. Lets suppose that Apple really doesnt like OSX that much because they really arent making any money with it. They make money on their hardware and thats good. And they make money on iTunes (and lets assume the can monetize other apps similarly). Maybe they're just cutting their losses? Maybe they really want to run Windows on their Macs and own the hardware and the apps businesses?

  • Alec April 9, 2006, 1:23 pm

    I think that's part of the equation Frank. Apple has no way to monetize the OS right now save selling upgrades to the existing user base. I am sure that's a good business, but it's not a large business. The billions Microsoft makes from Windows are predominantly OEM sales, not retail. A really outstanding year selling upgrades is 5 to 7 million units. That's nothing to sniff at, of course, but Apple currently represents less than 10% of the install base. Assuming 500K units sold at $100 per, that's just $50 million in sales over an upgrade cycle.

    But as I pointed out, Apple can win if the OS business thrives, or it dies.

  • Charles Jolley April 10, 2006, 3:37 am

    Hi Alec:

    I think the value of Mac OS X is in the value it adds to their hardware. The only reason Apple hardware is not a commodity compared to other PC vendors is because its the only way you can get access to Mac OS X. If Apple gave up OS X or released it for other PC vendors, they would destroy their entire business model. (Not to mention abandoning the distribution channels they've built up.)

    Here are four more reasons why I don't think Apple is going to drop Mac OS X or offer it for sales on other machines:

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