Apple: To Be Dragged Kicking and Screaming?

Last week Business Week published an article on Apple’s potential in the business market - making the point that business staff are frequently requesting Macs rather than PCs. This has moved beyond the marketing departments and graphical design shops, where Macs were always part of the scenery. Business workers are particularly covetous of Mac laptops, because they are both a computing device and a status symbol - especially the new razor thin Mac Book Airs.

Playing Hard to Get

In theory, Apple has no interest at all in business computing. Steve Jobs definitively announced as much to Apple staff a few years ago, when he emphasized that “Apple is a consumer electronics company.” He reinforced this message in March of this year saying:

“Our DNA is as a consumer company - for that individual customer who’s voting thumbs up or thumbs down. That’s who we think about. And we think that our job is to take responsibility for the complete user experience. And if it’s not up to par, it’s our fault, plain and simply.”

It doesn’t matter much though, even if Apple isn’t so hot to trot, it is going to be dragged, kicking and screaming if necessary, into the business computing market. ChangeWave, a research company that regularly surveys both the consumer and business market published some thought-provoking research at the beginning of April. It included the figures shown in the table below, relating to corporate users‘ satisfaction of with different OSes.

It’s difficult to read these figures without concluding that Apple will have a role to play in the corporation - not particularly because OS X is so good, but because Vista has failed so badly. And note that pretty soon, the Windows XP option will disappear from this table. If you want further statistical confirmation, in the same survey Changewave found that corporate buying intentions for the Mac are currently at 7% of companies (for laptops) and 6% (for desktops). These figures are 3 times higher than they were a year ago.

There’s no mystery to why this is happening. Enthusiasm for the Mac is clearly skyrocketing in consumerland (click here and here if you want more details) so it’s clear where the pressure is coming from. The corporate resistance to the Mac began to dissolve when it became possible to run both Windows (XP) and OS X on a Mac, using VMware or Parallels. The “compatibility objection” was put to bed. So now the door is open for Apple in many organizations.

The First Wink

Taking a broad perspective, perhaps the most important current focus for Apple is to gain firmer control of the home entertainment market. Apple may have stolen the music market with the iPod, but the video market is going to be a much rougher competition. And in harmony with that, Apple is also stalking the telco world, stitching new iPhone deals with wireless carriers. Indeed, according to reports, Apple has tripled the market for the iPhone with the recent deals it has made - making the world’s best known phone available to a subscriber base of over 450 million people. Apple doesn’t need to be distracted.

It sounds very sober, doesn’t it? But actually it’s not a very sober way to look at things.

At the weekend I went into an Apple Store to buy a cable and came out with both a cable and an Apple Time Capsule in my hands. My fault entirely, I guess. However I was waylaid by one of Apple’s shop assistants (or as Apple calls them, Personal Shopping Specialists), whose name was Anna. In casual conversation I discovered that she had been a coder (in C and C++) - and yet she hadn’t graduated yet to the Apple Genius Bar. She confessed to being a geek.

When she noticed I was looking at a 500 GB Time Capsule, she asked me if I was part of a small business. When I said I was, she let me know that I could get a 5% discount on that specific item. So I signed up as a small business, spent $300 and walked out with a Time Capsule in my hands. When I got home, an email was waiting for me from one of Apple’s (new) Business Consultants offering to help me in my computer purchases.

So what’s Apple doing?

I deduce from my trip to the Apple Store, that Apple is making a play for the SMB market - and being intelligent in how it does it. It’s simply extending the reach of its stores to include actively catering for the small businesses. One of Apple’s differentiators for the Mac business is effective support, much of which it provides directly to customers through its stores. (To my surprise, it turns out to be economic thing to do - mostly, I guess, because of product quality.)

To extend such support to businesses is unlikely to involve extra expense, and may even be more economical, because small businesses will buy Macs by the dozen. If large organizations chose to line up for big numbers of Macs then Apple is likely to be unfazed, because large organizations support themselves anyway. All Apple needs is a discount structure for large numbers.

As regards any special requirements, for given vertical markets, say, apple can ignore them, because if it continues to grow at the current rate, a commercial ecosystem will naturally develop around it, anyway. The point is that Apple can stroll into the business market without little need to change its focus. For better or worse, Apple is slowly getting drawn into business computing.

It has nothing to fear but rising revenues.