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Why Apple 'computers' outselling Microsoft may not be fair, but is incredibly important

Earlier this week analyst Benedict Evans published a chart showing how “computers” running Apple software are starting to sell at greater volume than "computers" running Microsoft software. Of course he’s counting all Macs and iOS devices as computers, just as he’s counting all Microsoft Windows PCs and Windows Mobile phones as computers. But the numbers don’t lie. In the last quarter Apple's traditional + mobile business is responsible for shipping just as many units as Microsoft. And obviously Apple is growing much faster. The blog post accompanying the chart was a mere 3 sentences. The most important sentence was:

This is a pretty good illustration of the scale of mobile: Apple limits itself only to the high end of the mobile market but still sells more units than the whole PC industry.

The comments on Evans’ blog post do a great job of illustrating how poorly people can often understand very simple points. The argument that erupted is all about whether or not Evans’ comparison of Apple vs. Microsoft is fair. In reality this has nothing to do with fair. This has everything to do with showing just how bloody BIG the mobile space has become. Apple plays only at the high end of the market and they, alone, ship more devices than Microsoft powers PCs.

As an investor I take a very long term perspective on stocks, and I love seeing this kind of analysis. Remember the launch of the iPhone seven years ago? It had crap email. You couldn’t copy and paste. There were zero third party apps. It ran on a frikkin’ EDGE network, so without Wi-Fi the awesome browser was practically useless. In a short seven years the entire computing industry has been revolutionized, and I don’t think it’s stopping anytime soon.

The question is not “is the comparison fair?” It’s what happens in the next seven years?

Former sell side analyst, out-of-box thinker, consultant, entrepreneur. Interests: Wife & kids, tech, NLP, fitness, travel, investing, 4HWW.

  • You're confusing two totally different things:
    1) Sales of new devices;
    2) SOs that are powering current devices; There are hundreds of millions of windows machines all over the globe which were not sold this year, so there are NOT more iOS+OSX than Windows machines, and there won't be for the foreseable future. Right now, if you add everything Apple sells, its approaching PC sales (some of which, by the way, run Linux too), but Apple OSs do not power more devices than Microsofts OSs, they may be selling a lot right now - but in the process are also selling less than Android devices by a growing margin, so the whole comparison is silly and quite unimportant.
  • It sems like the Apple blogosphere will never let go of the pointless Apple/Microsoft dichotomy, as if Microsoft had caused any harm to Apple and not extended its hand when Apple nedded it most. If we're talking about the future and mobile devices, the real player to compare is Android, and not Microsoft/Linux. Its comparing oranges to bananas, desktops to cell phones.
  • And as long as we're counting *everything* from Apple, why Evans did not count *everything* from Microsoft and included XBoxes? Why just PCs? Simple, because his math would not work then, although XBoxes are Microsoft devices and access its services and stores just like regular PCs. The original article was designed as a "in you face!" piece, because it cherrypicked numbers from Apple and Microsoft and ignored major players. The analysis on the shift to mobile is completely pertinent, albeit a little obvious and overdone by now, but sadly that was not the emphasis, not here nor on the original article.
  • The day an Xbox can replace my computer, much the same mobile phones and tablets have, the day those numbers will be acceptable to count.
  • Smartphones have in no way or shape replaced my computer, so we, as most people, have different needs and views on the subject. XBoxes can be used in many functions previously reserved to PCs, like gaming, internet browsing and media consumption, so ignoring XBoxes is unfair.
  • So you don't email, text, web surf, listen to music, watch videos, play games or use any other apps for work or entertainment on your smartphone? What exactly do you have a smartphone for?
  • Taking calls, shocking eh? And while I eventually do some of those things on my phone, it is still a million times better to do them from the comfort of my PC. Skyrim just doesn't look the same on a 4" screen.
  • So why have a smartphone? I still know plenty of folks who haven't made the switch and really have no need to. Kill a fly with a flyswatter, not a shotgun. Each platform has it's place. I'm a gamer and can't imagine playing high-end games on a screen under 24" and it would almost be a crime at under 15" with the graphics available on a PC and some high-end laptops.
  • I use my smartphone to do things I never did on my PC, such as keeping appointments and contacts, which I did by hand before. Besides, its a very handy camera, but the pictures still need to go into the PC for backup, printing, display. So there is hardly any overlap between PC and smartphone, they complement each other.
  • Definitely agree on how they complement, but smartphones and tablets can also do a fine replacement job if you give them a chance. To each his own.
  • My wife hardly uses a "regular" computer anymore. Neither do the kids. They use a phone (Note 3 for my wife and Galaxy phones and tablets for the kids) for most of their stuff. My daughter who prefers iOS devices uses her iPod Touch (and sometimes my iPad) primarily. I would say that 95% of their "computing" is done on "mobile" devices. (Though none of their systems have cellular data, so that term is a bit of a misnomer.) That said, none of them use the Xbox or PS for anything other than games. Honestly we hardly use the Windows PCs for anything other than gaming either.
  • We use our mobile devices too, but the kid prefers the PC for youtube and the wife prefers the PC for shopping. Anyway, the keyword here was "replace", and I don't think mobile devices have replaced the PC, just complemented it. It is also obvious that for each household you will have an average of four mobile devices for each desktop/laptop, and currently a good desktop may last five to six years. If you replace your mobiles every two years and your desktop every five, mobiles will obviously sell more. All this contributes to this "post-pc" nonsense.
  • I agree that the key word is "replace". It's not my place to tell you how to use technology in your life, but we have a sample size of two families and a 50/50 split. I currently need some form of computer that can help me efficiently perform my daily tasks. I am a professional web developer. This currently means I need some sort of computer that can handle that. Common "mobile" devices are usable for certain parts of that, but they just aren't efficient. I'm the only person in the household that really needs that. The only other "edge" case if you will is that the wife and I (and some of the kids) enjoy gaming. And the games we enjoy together are traditionally desktop games (mostly of the Blizzard Entertainment variety). In order for my wife and I to raid together (yes we are "those" people) we both currently need a "traditional" PC. (Incidentally I use a MacBook Air 13" for this and she uses a windows desktop although we will most likely be upgrading her to a Windows ultrabook soon.) But how long are we going to be willing to shell out $800-1000 on about a three year rotating basis (plus the cost of the game) just to play a few games and write a couple of spreadsheets? When does the cost to discomfort ratio shift? When does Blizzard see declining PC sales cutting into its business and branching out to non-traditional gaming platforms (hint: Hearthstone will be on tablets "soon"). You may not be able to currently say "wide scale replacement" but I'm certainly sure you can say "trending toward wide scale replacement". I don't plan on replacing the desktop PCs, the kids are going to have to find a different way to play the games they want or pay for those devices themselves (I'm guessing you can probably figure out which option they will be choosing).
  • The data does not bear out your argument. Who browses the web on an Xbox? That statistic is so low it is not even included browser usage across the internet. Who browses on their iPhone? That number is huge and continues to overshadow PC stats. So while technically any device, game system, smart TV, etc. can replace your computer, only mobile devices have done so successfully.
  • The text could have been clearer (edited to make it so), but you'd have to work pretty hard to misunderstand it, but the point Ben and Chris were both making is how mobile has changed everything.
  • Was that really the point? Why not mention Android then, or Linux, or consoles?
  • Because he didn't need to. All it took were Apple's combined sales alone to top or tie Windows. Throwing in the others would have simply been piling on. While the graph displayed Microsoft and Apple, the important information was the number of total units sold. The traditional PC form factor (desktop and laptop) for computers is trending towards becoming a niche product. That's the point of the article.
  • Why add Macs to the mix then? That added desktops and laptops to Apple's side as well. If that's the point of the article, and the author did not feel he should mention the Android platform, which collectivelly outsells Apple, then its a very poorly written article.
  • I think the point was that while OSX has a very small piece of the PC OS pie, the huge volume of Apple mobile devices sold brings the combined Apple sales to even with Microsoft's combined PC OS and mobile device sales. Android OS is huge in mobile, and wasn't needed to show how easily parity was able to be achieved. All it took was Apple. The granddaddy platform for computers, desktop/laptop, is lapped by a high-end only player in mobile computing. For future sales, installed base means nothing. Talk to thin client manufacturers who led the market before PCs. Their dominance on computing bit the dust a long time ago. Much the same will happen to the PC/laptop platform. Gaming consoles, NAS, media servers and mobile are where we are headed and that's where the smart money will go. Like thin clients, PCs will always have a place, but no longer a prominent one.
  • Because Android was never part of the pre-PC world?
  • Evans' text was clear - Chris' text, not so much. Carioca's point was that PCs have a *far* bigger segment of older devices still in use, as well as millions of non-windows devices. The comparison as written on imore still points to devices Apple ships vs devices Microsoft powers, which, deliberately or not, misrepresents Evans' numbers pretty badly. The actual comparison is "Apple currently ships more devices running IOS or OSX than Microsoft currently ships running all variants of Windows." That may not sound as grand as the article text, but it is more correct, and big enough news for the future all on its own. Sent from the iMore App
  • Where does the text give you that impression?
  • "Apple plays only at the high end of the market and they, alone, ship more devices than Microsoft powers PCs." It's not an impression -- it is directly stated that way.
  • @carioca32
    After re-reading the original Ben Evans post and Chris's clarification of it, I do not see a single instance of either claiming that Apple's installed base for OS X & iOS exceeds that of Windows. The comparison is important to illustrate the relative sizes of the mobile vs desktop computing markets. In our world, where many can afford a smart-phone, a tablet and a desktop/laptop computer, it can be difficult to appreciate how a powerful single portable computing device can be so valuable in an emerging economy as to replace all the others.
  • Rene did some editing, but kept some of it at "Apple plays only at the high end of the market and they, alone, ship more devices than Microsoft powers PCs".
  • Sorry, you are correct. That statement did misquote Ben's post and muddied the waters. The original comparison was of quarterly sales levels between Apple products and those of all OEMs running Windows as quoted in the article here.
  • The article isn't about "how bloody BIG" the mobile market is. It's about sales of "computers" I think you missed the point of the article and put your own spin on it. The people commenting on it are correct in bashing it.
  • How so?
  • Feel good journalism is okay to a point. Apple deserves every accolade it can get but this sounds like manipulation to counter the trolling that infests every Mac centric website. And the trolls have an answer for every positive metric Apple dominates. You can’t defeat them and you can’t convert them. They exist to counter and spin stuff like this. Just look at the “Microsoft saved Apple” comment above. If we say we don’t care about market share then why come up with this sort of numbers game? I think it plays to our insecurity about the past troubles and the fear that history may repeat itself, like the trolls keep insisting will happen.
  • Re-read the most important sentence Chris quoted from Ben above. That's the one everyone keeps missing. And missing. And missing...
  • Thanks, I appreciate your comments on the anti-Apple trolls. Since making the switch from the HP/Palm mobile devices and Microsoft/Windows desktops 2 years ago, going all-in with Apple, and coming to this web site, I've been amazed at all the trolls. I just can't wrap my head around why they spend their time on Apple-centric sites in order to be so negative and often obnoxious.
  • I think his article has some good points. It's only feel good for Apple.. and even Google.. For Microsoft, it's scary. So much so to the point they have had to replace their CEO and pull Bill Gates out of the closet to get their game face on... Mobile Platform is a true and real threat to Windows PC's.. It becomes even more scary for Microsoft once you include Google and realized they have even more all across the low-high range.. Just look at products like the Asus Transformer.. It easily replaces many of the laptop functions you'd get with Windows.. You only need to make sure you have the right Apps to do your job.. Games/Productivity.. you name it.. At this point, if you don't count mobile, your have to be in serious denial .. Especially now that Apple is making major headway into the Enterprise.. One place Microsoft has been secure in until just recently. Look at what Ubuntu is doing, creating a hybrid PC/Phone.. Yea, they didn't make their Indigo Funds to make the super high-end phone.. but they are pushing forward with partners.. If Microsoft isn't careful, they will be considered legacy software in the next 7 years. The landscape is changing, fast..
  • Typical Anti-MS spin on a pulled-out-of-ass statistic that Apple's OS has overtaken Windows. Dream on Umi, dream on.
  • You know what's interesting? The average price of an iphone or ipad (no macs involved here) is actually higher than the actual price of a PC. This article isn't about Apple. Heck, you could count up all of the android devices and crown your winner right there. It's about mobile. And mostly MS's inability to be a serious player in mobile. Once again, try to understand that Apple's market is high end only. And they're outselling windows PC's and mobile put together. What do you do if your MS? Those PC sales aren't coming back as they'll continue to drop (but it doesn't mean they should neglect windows and they really need to focus on desktop users to mitigate this and learn to market). Rene has mentioned it. So have others. Where in the world is Microsoft's xphone? The xbox is MS's biggest brand that promotes any kind of coolness or excitement among the mainstream. That they can't see this is just bizarre. Heck, I doubt if most know you can hook up an xbox controller to a PC and play some pretty cool games. But yet the windows brand means boring, dull, work, viruses, etc to the mainstream. That's their biggest failure.
  • My point is, and I think someone mentioned on a previous comment too: if you count EVERY pc running Windows, even if it is an old and rickety Pentium 4 on a 14-inch CRT monitor as I saw one recently, no OS around, nor mobile nor desktop, can even touch Windows. Of course if you only count sales on the last 3 years or so, and unfairly bundle iOS with Mac OS X, then yes, Apple has reduced the gap somewhat compared to MS dominance in Operating Systems.
  • Installed base didn't help out horse-drawn carriage manufacturers too much during the first half of the last century...
  • Windows ain't no horse, that "Post-PC" Steve Jobs baloney died with him. The personal computer is the money-maker, the iPad is a toy, an incredibly well-made, world-changing, masterpiece of a toy, but a toy nevertheless.
  • What money is left in PC? I don't want to dismiss your comments as trolling, because you sound passionate, but how can you frame the changes in the market as anything other than mobile changing everything?
  • I actually meant that people make money and earn their living WITH personal computers, not that the PC business is thriving, because in all honesty is not. The idea of my comment is that regular folks are content with Windows 7 and below, and have dismissed Windows 8, OS X and any Linux variant as their daily driver for working, and that same group of people have adopted for, let's say "fun and games" the iPad, iPhone, and/or any of the hundred of Android devices around. Of course Microsoft, and specifically Steve Ballmer is 100% at fault for not having made the moves to win that leisure market, which, as Apple proves every quarter, is insanely profitable.
  • Windows isn't a horse. It's a tire in that comparison. The PC is no longer a money maker. People buy multiple mobile devices for every PC they buy. Many of those mobile devices have an equal or greater amount of profit than the PCs being sold. The PC is becoming the horse-drawn buggy of the computer world just like the thin client that it replaced.
  • Anyone who counts an iPod as a computer is officially an idiot. Seriously. By the same logic Toyota sells quite a few computers as well to consumers and is hence even quite a major player in the marketplace. And these are very mobile computers. Mobile indeed. Or wait... Anyhow. What we can tell from these stats though is that Google is the new Microsoft and Android the new Windows. Obviously.
  • My twelve year old daughter uses her iPod touch as her primary computing device. Every once in a while she will get on the Windows desktop to play desktop games (mostly Sims), but that's only occasionally. 99% of the time she is on the iPod listening to music, reading, and even working on school papers in iCloud. Ask her and she will say it is her primary computer until she can get an iPhone (or I relent and give her more access to my iPad). So I guess my daughter is an idiot...officially. Am I right? Remember, in ten years these people will be shaping the technology industry. I think you could argue that they already are.
  • I wonder if people actually read the posts, or do they just read the title and come up with some ignorant comment based on that. To make the clear even clearer: we are talking about mobile here. More specifically, Apple mobile. So to compare it to Android would be irrelevant to their point. You're focused on something completely different. The "most important line" clearly directs your attention away from that.
  • Of course competition is important because it drives innovation keeping everybody on the edge. the only problem I have with it is all that time and money I've spent making that ecosystem work for me, and then having to change if somebody else takes the lead and the costs of staying the old ecosystem outweigh the benefits of changing, and then you have to go through the whole expensive cycle again. And that's why I never try to tie myself down to much to one ecosystem.
  • I wonder what the numbers for all Android and Chrome OS products there are? Posted via the Android iMore App!
  • I would actually like to know these numbers as well. I'd also like to know what the revenue stream comparison is like since many of the low-end devices are actually sold at a loss in an attempt to recuperate that loss in software and services sales (Microsoft has operated this way in the past with the console market).
  • Very good point. This article makes this comparison fair game by allowing the diverse vendors of Windows devices compared to the one-vendor-iOS devices. Android is the big elephant in the room that the author conveniently forgets about.
  • Sure, but Android wasn't around during the "PC-wars", so there's no inflection point to be measured. This is a very specific, very historic, very profit centric point.
  • Exactly my pont, its not a "mobile market" article, its a "in your face, revenge is mine" article.
  • I think the point they're trying to get across is simply the size and growth rate of the mobile market. It could have been more accurately done without the brand comparisons, but a device category comparison, but that wouldn't be sensationalist. This doesn't necessarily correlate to desktops going anywhere though. People update their mobile equipment much more frequently than their desktops. I know people that have bought every iPhone generation and multiple iPads, but only buy a new PC every 8-10 years. Their desktop isn't going anywhere and they'll buy a new one eventually, they just buy less of them.
  • +1
  • I think he was trying to ground this in a framework that we have seen for years (PC vs. Mac) and expand upon it to show how the relevance has diminished in importance compared to the platform shift from PC dominance to mobile dominance. I personally change out my laptops every two years. I change mobile devices about every 18 months (sometimes yearly, sometimes every other year). I have both a smartphone and a tablet. My wife and 3 kids are on the same schedule I am. Makes for a lot more mobile purchases than PCs.
  • Sadly that — the update cycles of PCs — isn't working in Microsoft's favor here either.
  • Yes, and sincerely I hope PC makers don't go the Apple way and start on the 2-year planned obsolescence path.
  • 2-year planned obsolescence? What sucre or stats do you have to back that up?
  • I think Apples strict division between iOS and MacOS is a mistake. I am a heavy iOS user, but I'm not a fan of Macs, never have been, never will.
    But if Apple could sneak in more and more "laptop-style" capabilities into their line of iOS products, like file system, decent printing, and interaction with desktop-size displays and entry devices, I might give up having a separate computer altogether.
    At that point the iOS share of Apple "computers" will dwarf both the Mac and Windows numbers.
  • IMO the whole OS statistic game has been skewed long before iOS devices came on the scene. Mainly because Microsoft Windows is used as a one-trick pony, especially in the enterprise. OSX and now iOS devices were always more capable than simple business machines installed enmass at corporations. Actually, it made sense and had a rather easy to calculate ROI in a typical business setting. I would like to see a statistical analysis that only takes North American households into account. Not because I'm American (actually in Europe), but because it's the only market that both Apple and Microsoft compete at their very best. Even in western Europe, Apple still hasn't gained the traction they have in America, if not only for the availability of 100's of Apple Stores across the country, and having full access to everything the iTunes and App Stores have to offer. BTW: I'm all for throwing Android devices and other operating systems into that chart as well. NOTE: here's an interesting chart that breaks down by country and continent
  • Simply no point in combining mobile phones with PCs. I use them for largely different things. I'm not encoding video, or editing video, or audio on my phone. I'm not writing 80 page documents on my phone, then editing them, and proofreading them. When i'm podcasting i'm not walking around with my pc in my pocket cause it won't fit. No that's my phone. When i see a pretty image i don't whip out my pc to take picture. if the entire point is to say mobile is big well i say "duh." Everyone has known that for 6 years now. it's not new or perceptive. I just find this, slightly misleading because it infers one form factor is replacing another which is surely not always the case. There is clearly overlap. But not for everyone. And i'm someone whos next computer will be a mac.
  • Isn't he also mixing data sources? Some from Big G, some from Apple and some from the firm he works for? I certainly don't know which research note he is getting the Gartner data from but he probably won't have had access to the source data that was used to write it.
  • Ben doesn't work for an analyst firm, he's just been hired by a VC firm.
  • What happens in the next seven years? It will be an iPhone + Android world with their cousins in wearables thrown in.