The Company That Does Everything Wrong

To me, that is Apple. An amazing number of new ideas and new technologies have come from Apple, but bad business decisions, poor marketing, and the inability to expand beyond a niche have kept them from becoming the great company they have the potential to be. Now that IE for Macs is no longer supported, there is worry that MS Office is next, and that could really hurt Apple. Execs claim the relationship is fine:

Microsoft Word, Entourage, Excel, and PowerPoint are key bridges between the two worlds. Remove them, and buying a Mac suddenly looks a lot scarier. Microsoft swears six ways to Sunday that it's going full-speed ahead in developing the next version of Office for Mac. And the Redmond team says it'll ship software this summer that will allow Apples running Microsoft's Entourage e-mail client to hook into the dominant corporate e-mail and scheduling program, Microsoft Exchange. "The relationship is as strong as ever," says Jessica Sommer, product manager at Microsoft's Macintosh Business Unit (Mac BU).

But common business sense says that Microsoft may not want a part of this for much longer:

I'm having trouble seeing why Microsoft would continue throwing a significant amount of resources — the Mac BU has 150 coders — at a computing platform with a market share of only 5% of the installed PC base, according to Apple itself. Software works as a business when it scales to larger numbers of buyers. That's because once a program is developed, the cost of selling an extra unit is virtually nil.

So selling to smaller markets means, necessarily, smaller profits. As Microsoft seeks to squeeze out more income with Linux slowly eating at the edges of the desktop market and overall tech sales stagnant, support for Apple will look less like a viable business and more like foolish charity. As Linux matches Apple's market share and looks increasingly like a real competitor, any antitrust benefit to Microsoft for keeping Apple around has all but disappeared.

As Linux gains popularity for desktop use, I think it will spell even more trouble for Apple. They have some great products, but they need to find a way to use marketing to overcome consumer anxieties about purchasing a Mac. I think the problem is stagnant market share. Call me crazy, but if I was Steve Jobs I would say screw the earnings for a year or two, and focus on gaining market share by practically giving away Macs, or giving away any software you could ever want for your Mac if you purchase one. Once more people started using them, they may stick with it for their next computer purchase.

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