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Taking Back the Market

OS X: How Fast the Future?

Tim Nash - 2002.01.25

Apple is looking for adoption of OS X to drive Mac sales. Recent figures show that over 1 million shrink wrapped copies (including betas) have been sold and over 1 million machines have shipped with OS X. As the Mac user base is 25 million, OS X is used by at most 10% and is still in the early adopter phase.

So how realistic are Apple's hopes for OS X, and what will this mean for shareholders?

Anecdotal evidence from MacFixit and MWSF shows that OS X has attracted a growing band of enthusiastic users. Recent columns from Henry Norr and Andrew Orlowski detail the frustrations they found in using OS X, which is still a work in progress.

There are 2,500 applications available for OS X now, but 15,000 on the classic Mac OS. Apple needs to keep the momentum up to make sure that new applications keep arriving for OS X. If sales of newly ported software don't continue to grow, then ports of major programs will be at risk. Providing Apple sells 3.5 million (or more) Macs this year, the potential market for OS X sales will increase by over 150%, which should be enough to keep the software companies happy for a while.

Photoshop and Quark are expected in the Spring. When these arrive, graphics professionals will have available native versions of all the major programs. They will then move on a new Mac, if the stability advantage of OS X outweighs the disadvantage of learning the new UI and the cost of upgrading to new versions of essential software.

Professionals are naturally cautious. They want a decent return on their computer investment. Missing a deadline is expensive. They will therefore continue to work with what they know until it is clear there is a more productive way. When they are convinced, they will move as quickly as budgets allow. Until then they are likely to continue with their normal Mac upgrade cycle.

In education, orders are being deferred. (See last week's article.) Budgets will tighten until the recession is over. There will be little money for widespread training and deployment costs, let alone upgrade costs outside of the usual replacement cycle.

How Apple can speed the take up:

Tempt the consumer market. iPhoto, written in Cocoa, is only available on OS X. If all future releases of iTunes, iMovie, iDVD, and AppleWorks are only for OS X, many will want to move. As this is free, bundled software, the downside is largely limited to those education users who would need to upgrade in a time of tight budgets.
Ensure that all Macs ship with enough memory. The lower models ship with 128 MB, while most users feel 256 MB is the minimum useful amount under OS X.
Make sure that the regular releases of OS X continue to improve in speed and usability. People will keep using software that they feel is getting better.

There will still be hiccups on the way to widespread adoption - my first serious trial of OS X was setting up my mother's new iBook over the Christmas holidays in England. I found the lack of speed in Aqua annoying, yet the idea was compelling. My mother, a neophyte computer user of 82, can use a modern, highly stable OS. Her sight is no longer good, and those large scalable icons would be easy for her to understand. I would be doing the troubleshooting over the phone from France and could learn more about OS X at the same time. Unfortunately, none of the three ISPs I had chosen in the UK (including AOL) supports OS X. End of idea, and she has learned the use of cmd-ctrl-pwr.

Not many ISPs would have moved to support OS X while the market was 10% of 3% (Apple's current market share in Europe). Now that OS X is the default, this sort of basic infrastructure problem should start to disappear, but support will be limited until businesses feel they are missing out on a profitable market.

From the point of view of Mac sales, providing we keep upgrading our machines at the usual rate, it doesn't matter how long most users stick with 9. Sure, Apple has to continue to support it with bug fixes and porting it to new hardware, but most of this work is necessary for Classic, which will be with us to support useful old applications for the foreseeable future.

Many will try OS X on their new systems Now that most Macs ship with G4s and adequate memory, more will enjoy the experience. For those that don't, making 9 the default is straightforward. Sooner or later some new software - like iPhoto or a needed upgrade of some key software -- will only be available on OS X. Then and only then will the rest be tempted into or forced to make the move.

We can expect adoption by the Mac user base in waves as Apple releases compelling new applications and the OS X experience gets better and better. These, combined with ever more powerful hardware tailored to OS X, will make users want to move.

However, in my opinion, Apple will have done well if in three years over 60% of current users are using OS X. Remember, this will be 15 million users and will require sales of at least 4 million Macs every year.

As it will take time to be totally tempting, I expect OS X to really start driving sales next year.

In next week's article, I will discuss areas where OS X can make a difference to Apple's market in the short term.

Tim Nash lives with his wife, her website on the area ariege.com, two daughters, a cat, and a dog in the French Pyrenees. He has worked for computer companies for more years than he cares to remember, lapsed for a while after the Apple II, but became a Mac fan when his wife introduced him to the IIsi. If you find his articles helpful, please consider making a donation to his tip jar.

Recent Taking Back the Market columns

No Verizon iPhone Any Time Soon, but Verizon May Have Another Apple Opportunity, 10.23. Put simply, the iPhone is a GSM device that Apple would have to re-engineer for Verizon's CDMA network. But Apple's tablet could benefit from Verizon's 3G network.
How Apple Will Beat Sony and Nintendo in Handheld Gaming, 10.16. The iPhone platform has more users than Sony's PSP, and it will pass Nintendo's DS platform within two years.
Palm Pre: Cutting Off Business Customers, 10.05. Palm contines to shoot itself in the foot by making the Pre increasingly unattractive to business users.
Competing Visions: Apple, AT&T, Google, the FCC, and Google Voice, 09.03. Apple wants to sell hardware, Google wants to sell advertising, and AT&T wants to sell you minutes. Some conflict is inevitable.
More in the Taking Back the Market index.

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