Apple News & Analysis : Three Guys And A Podcast

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During the June 2014 quarter Apple, Inc. sold 4.4 million Macs. The sales figure was surprising in that during the year ago quarter Apple only sold 3.75 million Macs, representing a year-over-year sales increase of 15%. Based on IDC’s worldwide estimates for the June quarter, coupled with Apple’s actual Mac shipments, Apple likely achieved 5.9% global PC share.

What may be the most noteworthy comparison to Apple’s Mac market share is that Microsoft Windows Phone holds only 2% share worldwide. Microsoft's 2% Windows Phone share is well below the market share levels Apple had back in the day with Mac sales when Apple was on the brink of bankruptcy.

In 1997 Apple’s Mac sales had slipped to holding only 3.3% worldwide market share, with then CEO Steve Jobs later claiming the company was 90 days away from going bankrupt. 

Microsoft’s current CEO, Satya Nadella, is slashing 18,000 jobs, leaving employees and investors shell shocked. No layoff under Steve Ballmer had ever been this drastic, but Nadella appears to have some connection to reality — understanding that all is not well within Redmond’s fortress. Of the 18,000 pink slips, 12,500 are coming from within the Nokia division, a clear sign that Nadella is ending Ballmer's long suffering endeavor to achieve some form of relevance within the smartphone industry.

Apple was a one-trick pony in the 90’s, with only Mac sales to keep the company running, while Microsoft has many software and hardware markets to keep itself afloat. But should the drain of failed divisions continue, Microsoft may be quickly heading towards repeating Apple’s state in 1997. 

Will Microsoft’s failed XBox division be the next to go? If Nadella is the anti-Ballmer, then yes, XBox will be the next division on Microsoft’s chopping block. The latest Xbox One is an utter failure, selling at half the rate of Sony’s PS4. XBox loses roughly $2 billion a year for Microsoft, and Skype, purchased for $8 billion, loses roughly $500 million a year for the tech giant.

One thing seems abundantly clear, Ballmer’s dream of taking on — and taking out — Apple’s iPhone and Android clones is over. Windows Phone has been losing ground in the US, China, UK and Germany. Windows Phone has seen sequential quarterly market share declines in key territories and shows no signs of bottoming out.

Microsoft may not see bankruptcy any time soon, but Windows Phone surely will be a footnote in tech history, while other divisions like xBOX and Skype — should Nadella be taking Microsoft’s problems seriously — are likely the next to go.

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3 Comments

  1. RNKLN ~ July 24, 2014 11:22

    Steve Ballmer: "but when you get right down to it, it's a rounding error" #
  2. A Proud Former Mac-only Dealer ~ July 24, 2014 13:25

    "… CEO Steve Jobs later claiming the company was 90 days away from going bankrupt." Interesting, though incorrect meme begun by Jobs. When I started my Mac-only dealership in 1996, everyone thought I was crazy because Apple was losing money quarter after quarter after quarter. That being said, if they continued to lose money at the same rate as their worst quarterly loss ever, it would have taken 7 YEARS for Apple to run out of cash and liquid assets, even in the mid to late 90s. That's precisely why I was confident that a Mac-only business was violable back then and, for 15 years, I was proven correct. What killed us is that dealers like us were the collateral damage of the war between Apple and the big box stores … that and the fact that Apple ceased to care about the dealer channel from about 2005 onwards. #
  3. Neil Anderson ~ July 27, 2014 10:03

    Maybe Apple will have to invest $150 million to keep Microsoft afloat. #

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