Windows, not Walls

"Obama will pick Kansas Governor Kathleen Sebelius" Let me state right now that I called this one wrong and am absolutely delighted to be wrong. Senator Biden is the choice I'd hoped and this is a fantastic surprise. (See, I admit when I'm wrong)

Avro, as I already said, I expect the percentage gain for Poland in iPhone sales will be huge. (When you don't sell any, anything is a huge percentage growth) Seriously, where are you dreaming up these figures (seeing that Apple doesn't release regional sales breakdowns)

@Mike, I can empathize with your Microsoft cheerleading. You clearly have worked at the company and must know a ton of great people in the organization. When you personally know people, it's much harder to stomach attacks against the organization you believe in. I get that. It's a very human response. Clearly too smart to be so absolutist. And yet your views are often so one-sided and strident (and thus easily invalidated by the smallest contradiction) that they just play like partisan cheerleader. Then again, our universities are packed with brilliant professors who peddle their personal politics to students as absolute truth. They are also just trying to "educate" as you put it. Of course, most of these professors outside of the economics department are demonstrably wrong in their opinions on economics... but that never stops someone with the arrogance to assume they are smarter than everyone else. Of course, the best educators understand that reaching your student/audience is usually best achieved by seeking a common ground of understanding. But between your ongoing "Nobody innovates but Microsoft" mantra and your paul-like obsession with meaningless worldwide market-share demonstrate that you're not interested in a discussion built on any common ground. Microsoft isn't "the only one innovating" in anything. Neither is Apple or anyone else. That's bad language that speaks to bias. They may be the "main innovator". It's a shame, really, because your clearly have a lot of knowledge and probably have many incites into Microsoft at the ground level. But your tactics make it hard for anyone not already a Microsoft cheerleader to listen. This reminds me a book I'm reading right now. The Black Swan by Nassim Taleb. For a long time everyone thought that all swans were white... All evidence suggested that was the case. The history of known human experience all supported that. And then someone discovered a single Black Swan. And that single animal instantly erased all human knowledge and certitude about swans. Having absolute certitude is a sure fire way to be surprised by a black swan. We are at our best when we always come from a place of humility for what we do NOT know. Not arrogance for what we do know. The smartest among us should know this, and yet their smart tend to reinforce the opposite behavior. Socrates had to deal with these people all the time.

"Let me state right now that I called this one wrong and am absolutely delighted to be wrong. Senator Biden is the choice I'd hoped and this is a fantastic surprise. (See, I admit when I'm wrong)" LOL...Mike, even when you're wrong, you're wrong. It's Biden.

24!!!! HE CANT BE STOPPED! Oh and I love the faint to the right into the politics. Not sure how what is has to do with a company that peeked 10 years ago using a comedian that peeked 10 years ago for its new advertising campaign????

"@johnpapola I can empathize with your Microsoft cheerleading...." Ok here's a serious question. Some people here seem to believe that Mike's positive opinions, and others, of Microsoft can just be chalked up to "cheerleading" It is pretty arrogant, which in my opinion is typical behavior of Apple fanatics, to on one hand call people on defending Microsoft and speaking positively of them just mindless cheerleaders, while saying nothing to those who do the same for Apple. I want to know John's opinion of people here that talk positively of Apple. The ones that are so identified with that company that they just buy stuff from, that their avatars are variations of the Apple logo? I want to know are you consistent. Have you've ever posted a comment like you did to Mike to those people?

It'll be funny seeing Bill Gates in a brown suit and Jerry trying to look cool. :-) I doubt they'll do that.

Good post, john!

John You missed the point again. I don't care what Apple's profit margins are. What I do find bizarre is that Apple fans are proud of how high Apple's profit margins are. Who else but an Apple fan would actually effectively say, "One of the reasons I like Apple is they make so much more money off of me than their competitors would"?

Avro Saying "Apple spent x on R&D last year" would be a perfectly rational thing to brag or complain about (depending on how big or small x is) Saying "Apple's profit margin was higher than any of their competitors' last year" is the equivalent of bragging about how proud you are of ExxonMobil when you pay $100 to fill your car at their gas station.

cesjr brought up product reviews earlier. Most reviewers focus on both the negatives and the positives of a product. It's the amount the choose to focus on the positives or the negatives that indicates their bias. I can write pages and pages about everything I dislike about the iPhone and end the review with one paragraph about all the things I like about it. Someone who hates the iPhone will claim I'm unbiased because I did mentioned the positives. Someone who likes it will hate my review. When Pogue, Mossberg, and others review Windows, they start off by assuming that you're either already a Mac user or you're an idiot not to want to switch and go from there. Paul, on the other hand, looks at it from a Windows XP user's perspective. On the other hand, Paul's Mac reviews are not meant for Mac users, but for Windows users. I think it's a shame that when over 90% of the world uses Windows, most reviews in mainstream newspapers are written for an OS X user.

shark VERY OT: "Blame Exxon for the high price of oil (which they technically do not set) " Even ignoring the complexities of the geopolitical influences that ExxonMobil may have, if they only passed on increased costs beyond their control you'd be right about them not setting the price. If that were true, their sales and costs would have gone up but profits would have been flat. But they didn't just pass along cost increases, hence the increase in profits. And that was in their control.

"Just remember that if we were to extract "windfall profits" taxes, Microsoft should come before the Big Oil based on any rational discussion of such a tax punishment given their margins and absolute profits." Unless you're an employee or a shareholder, I don't see why one should be proud of MS's revenues.

WAY WAY OT (but certainly more interesting): Any discussion of oil prices that doesn't take into account the value of the dollar is not a complete discussion (I'm being kind here). Never mind that the prices have been falling drastically the past month. It seems likely that this has been a commodities bubble driven by the flight from financials and housing and reinforced by the weak dollar and the the group-think hype about Chinese and India demand. I'm gonna just guess that energy demand from China and India hasn't dropped off by 20% this month. Just a guess. How else could we explain this drop during a conflict along a major oil pipeline in Georgia when previous issues with far less important pipelines have cause large spikes in the price? Given that markets build their current price based on expectations for the future, it's possible that the price declines are related in part to what seems like an inevitable move to open off-shore drilling. It certainly correlates to that, as well as the obvious dollar strengthening, which seems related to the slowdown in the Eurozone economy. ...but what the hell do I know?

@johnpapola and anyone who made it trhough his false "straw man" post... Here's one example from this thread that you could have found by actually reading the thread. And you'll note that I was NOT the one that brought up Apple profitability as a bragging point and thus changed the topic. Now, care to retract the condescending "straw man" diatribe? ----------------- lotsamystuff said: "Apple does really, really badly everywhere except the US" Define "badly". The last I looked, Apple was insanely profitable. After all, they're in business to make money, not satisfy the WinJihadists of the world. The former is something they do very well, the latter is impossible unless you have the Microsoft Windows Logo tattooed on your backside. Perhaps Waethorn can tell us if "mikegalos" does.

Mike: You said Apple did "badly" everywhere except the U.S. I'm simply asking for clarification of what you mean by "badly". In no way did I mean to misrepresent your opinion. There's no straw man here. I don't think any reasonable person can look at the performance of Apple as a company and conclude they're doing "badly", but perhaps we disagree. Or perhaps you're just unreasonable. I can live with either outcome.

"Senator Biden is the choice I'd hoped and this is a fantastic surprise." On that we can absolutely agree. Now if they'd just flip the ticket at the convention, all would be right with the world.

Lotsa What I mean by doing badly is almost summed up by the concept of gravitas. A little background. Any market typically has three key players. First is the market leader who has the role of creating stability in the market and providing a "safe" choice. This company typically won't be the most technogically advanced, they won't be pushing things forward, their big advantage is that they are a known commodity and there is no risk with choosing them. Their goal is to maintain their position as the top seller. A second player has role of being the force that keeps the top player from stagnating. They are still mainstream but, being #2, they "try harder". They will be the force that drives the product niche forward slowly and keeps the market leader on their toes. They won't do wild risks because they want to keep a reputation as the alternate choice. Their goal is to become the logical new top player if the leader falters. The third player is typically significantly smaller than the other two and this role isn't as stable. Many companies may alternate being the company in this role. This player is the one taking the bold risks. Their goal is to push the envelope and hope that one of the bold risks will shift the landscape enough for them to move to the top in a new world. Now, on to answering the question. In order to be in either of the top two roles, you need enough share, enough sales and enough mindshare to be able to influence the direction of the existing market. In the US, Apple barely has sufficient sales to have some influence in the personal computer market. Not enough to do the second role through actual innovation but with the advertising and fan driven mindshare, enough to do some of that role. A key part of the resentment against Apple is that they do not innovate to drive the market and instead focus on intangibles that do nothing to improve the product ecosystem. Outside the US, however, neither sales nor innovation nor mindshare has been sufficient for Apple to be taken seriously as a #2 alternative. The real problem is that Apple has stopped bothering to make Macintosh a #2 in the personal computer market. What they've done instead is to redefine the world into a market for personal computers (where they don't really compete) and a market for Macintosh (where they have a 100% monopoly). In this way, rather than be #2 in a huge pond, they've decided it's easier to be #1 in their own pond and thus they've become their own stagnant monopoly. This leaves the industry with nobody pushing Microsoft to improve or innovate and the fact that they do actually violates what you'd expect from a market leader role who typically only does what's needed to keep #2 from pushing them out of the top position.

Actually Apple sells more than half its Macs outside of North and South America - let alone just the US. It's simply a fact. As I mentioned before in new sales it is dominating the education market in Western Europe, Australia and New Zealand. Mac market share is even higher in Canada than the US. So its time to cut the BS about Apple doing poorly outside the US. Every time I see someone post that you know they haven't foggiest notion of what is going on. Be interesting to find out what is causing their reality distortion. I think some of them could not even find Europe (maybe Canada too) on a map.

@Mike, With all due respect, your effort to "educate" us on the workings of "any market" is problematic on many many front. And it's very arrogant. You don't even qualify this "lesson" with something like "I have a theory..." or "I believe". Nope. Just stated as fact. Mike's math. Mike's principles of markets. And, of course, you use absolute terms. The reality is that market dynamics vary so wildly that any rule of thumb, such as the one you are proposing here, is at best an approximation from what has already been observed (and thus subject to demolition by a change that could happen any day) and at worst a wild guess. Neither is predictive of the future in one market, nor applicable to all markets. But again, your rhetorical hubris seems to prevent you from admitting how much you don't know. Honestly, this theory of yours is so full of holes and bad analysis I don't know where to start. Seriously, this post is a travesty of anecdote presented as logic and fact. First, I'm going to assume that this whole "theory" was intended to conclude by saying "so really, really badly means you are in group #3 and not even trying". Wasn't that the point? You made this over-the-top statement about Apple doing really, really badly everywhere but the US and now you are trying to justify that with a re-imagining of market dynamics. Face it. Your "really, really bad" statement was just an opinionated slam at apple with no real foundation in markets or anything else. And it had nothing to do with Apple not pushing the envelope outside the US. It had to do with Apple having lower market share outside the US. Now... as far as these three players you've constructed... and their application to "any market". That's bunk. Commodity markets tend to have many players all competing on little other than price. Think oil, food, and... well PCs! Your construct ignores that... and yet... it is the model for the PC market. Weird right? Yep. Dell, HP, Acer, Lenovo, Toshiba, Sony and, yes, Apple all compete in a market that is largely a commodity. Among the Windows PC vendors, it's truly commodity dynamics. This is why a firm like Dell whose only innovation of direct sales and superior supply chain efficiency could rise to the top. So, that destroys the application of your 3-player construct to the PC market. Now, the computer OS market is essentially a monopoly... and one with deeply recursive network effects thanks to the high barrier to entry that learning new software development tools creates. Digging into why Microsoft has no major competition requires far too much re-litigating of the US vs. Microsoft and I'm neither prepared nor interested in that. "The real problem is that Apple has stopped bothering to make Macintosh a #2 in the personal computer market." What are you talking about, mike? They are actually the #3 computer maker in the US right now. They're lower worldwide, but I'd hardly say that constitutes not competing hard. What they've done instead is to redefine the world into a market for personal computers (where they don't really compete) and a market for Macintosh (where they have a 100% monopoly). In this way, rather than be #2 in a huge pond, they've decided it's easier to be #1 in their own pond and thus they've become their own stagnant monopoly." This is a completely arbitrary and bizarre line of thought. The mac market is not a separate computer market. The same people that buy Macs could just as easily choose Windows PCs. They compete in the same market. Period. So what we have here is a tendency to compare Apple to other PC makers when it suits your argument on price and to compare them to Microsoft when it suits your argument about relevance, influence and sustainability. You complain about Apple's high profits compared to the Dell's of the world, even though Microsoft's margins are double Apple's, yet compare their market share not to Dell but to Microsoft. These kind of convenient mode switches are indicative of an argument driven by ideology instead of the honest pursuit of the truth. Your mind is made up and you don't appear to mind a little intellectual dishonesty if it helps you "win" the debate. Sure, there is, in fact, a distinctly separate Mac software market... as there is for Linux, Unix, the iPhone, Symbian, Blackberry and every other distinct operating system... but there's only one PC market... or wait.. no there isn't. There's many many PC markets. There's the consumer market. There's the info worker enterprise market. There's the content creation market. There's the vertical markets like manufacturing and medicine. In some Apple comes up big with double digit share. In others, they are nonexistent. What you are doing is assuming that the only way to really "compete" with Microsoft is to license your OS. That's a big assumption and one that's ideological rather than practical. Linux has made less progress against Windows than the Mac OSX is desktops despite being a blatant rip-off of Windows, being broadly licensed and being FREE. You clearly reject the value proposition (and core philosophy) of Apple which is the tight integration of hardware and software that comes from one company making the whole widget. You seem to think there is no place for that approach. And yet, it is an approach that has proven very sustainable for Apple and allowed them to survive and thrive where every other operating system that isn't windows has failed (even and especially desktop linux). Hell, Apple has outlived IBM's PC division. I do have a point that can be short. Mike, you mistake your own opinions as fact and state them as such. This is not a pleasant quality of your discourse. Not every statement needs qualifications and equivocations, but certainly some of yours require them.

Gorath, did you spell that wrong?

Christ on a casserole!! I cant believe this is still going on???? I could not agree more with gorath. Mike you got stamina brother, crazy blog posting stamina. You are like the "King Leonidas" of the winsupersite, being attacked from all sides in the desperate attempt to hold of the iCabal or whatever you call it......SPARTANS!!!!!! Just throw some grecian formula in that beard and you will be a shoe in for lead role in 300 - II "The fall of Microsoft":)

Guys, Feck comes from the Father Ted TV series. It is the way the Irish pronunciation of a certain word is heard by English ears, so Gorath who lives on the same side of the pond as I do is correct in writing it this way. It is considered to be on a more polite level than the way we pronounce it in English. Sort of the difference between darn and dam*.

Lindy, LIAR! 'FRAK' started at Farscape first, NOT BSG. WRONG!!!! :)

Avro, that article contradicts itself. "Apple is also the leading PC manufacturer in the UK - eclipsing Dell - for laptops and now also desktops" then later.. "Apple is now the fifth biggest PC maker in the UK. " I still maintain that I've yet to see this trend of Apples taking over in schools. and yes, feck is from Father Ted.