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Story: Gartner: Apple should quit hardware business

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Posted by: Anonymous (Thursday 19 October 2006, 3:14 AM)

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Sigh. This again?

Okay, let's do some seat-of-the-pants math based upon Apple's just announced numbers.

Apple shipped 529,000 desktops and made $705 million doing so. So Apple made, on average, $1332.70 per desktop sale. Apple shipped 798,000 portables and made $1.161 billion. That means Apple made $1454.89 on each portable sale. In total, Apple made $1.866 Billion selling Macintoshes. With me so far?

In the second quarter of 2006--which is the best I can find for Dell--Dell shipped 9.73 million PCs. HP shipped 8.107 million PCs. Lenovo shipped 3.994 PCs. Acer shipped 2.836 million PCs and Toshiba shipped 1.906 PCs. So, in all, the Top 5 PC manufacturers shipped 26.573 million PCs (out of 54 million total PCs shipped--a little less than half). Still with me?

Okay. So, Apple made 1.866 Billion selling Macintoshes. Let's say Apple gets out of the hardware business and licenses Mac OS X to Dell for $100 per PC, just to make the math easy. To have a quarter like we just had, Dell would have to sell 18,660,000 PCs with Mac OS X. Considering that, last quarter, it sold 9,730,000, it would have to sell twice as many PCs as it usually does--with Mac OS X!

Let's say that Apple teams up with the top 5 PC makers. 70% of their sales would have to be Mac OS X for Apple to make the same amount of money they made this quarter. We're not talking more money! We're talking the same amount! If they sold it through all PC makers, they'd still have to get almost 34% of the market to make the same amount of money!

So, in other words, Gartner's theory that Apple would end up with about 20% of the market would mean that Apple would make less money than they made this quarter!

And this assumes that Apple would be able to get $100 for Mac OS X. If Apple did this, Microsoft would drop it's price for Windows (which, as I remember from the trial, is around $100). It'd be a race to the bottom and Apple would lose that race--Microsoft has four times the money of Apple in the bank. They could give away Windows and outlast Apple.

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Full Talkback thread

Story: Gartner: Apple should quit hardware business

  1. I have bought and used Macs since the IIe, put Del... Stuart Bailey
  2. I have bought and used Macs since the IIe, pu... Trust me i can help
  3. Apple's core strength is that it is vertically int... Bozoa the Great
  4. It really is amazing how consistent analysts... Erik
  5. I agree. And if Mac OS X gets 20% market share, th... ZDeX
  6. OK, so in a recent audit on reliability Apple scor... ROFL
  7. Gartner has obviously never dealt with Dell custom... Anonymous
  8. Apple is a master not of hardware or software... Anonymous
  9. I agree that Gartner obviously has not looked... Alex Forbes
  10. This analysis demonstrates what can happen when yo... B. Jefferson Le Blanc
  11. Personally I think Gartner is a bit out to lu... Ken
  12. I must say, I'm losing all faith in Gartner.... James
  13. Dell bought Alienware and is no longer exclusively... Anonymous
  14. The Mac Pro costs less than a Dell Server, and wor... Anonymous
  15. I can't believe that someone actually pays that gu... Anonymous
  16. Let's see if I have this right. Apple - which curr... Raymond Meyers
  17. Sigh. This again? Okay, let's do some seat-of-the-... Anonymous
  18. Same old song by a person who has no clue what mak... Alice Verboten
  19. Thats a Joke. Apples Hardware is much more attrac... Jim Reid
  20. My regards for Gartner just went down somewhat aft... Bart Hanson
  21. Has Andrew seen the latest figures? Apple is a sol... Anonymous
  22. The time machine at Gartner must be on the fr... macFanDave
  23. This article makes no sense if you look at what's... Anonymous
  24. Why would anyone listen to Gartner? This one story... JB Smith
  25. This guy gives analysts a bad rep. It's clear that... Anonymous
  26. This preposterous claim is nothing but an attempt... a. lorenzo
  27. Apple should open their hardware. They claim to b... jay
  28. An indispensable part of the thrill of using my iM... Anonymous
  29. Apple continues to make money and PC/Windows lumin... B. Scott Andersen
  30. mmm... In my life I bought many Apple computers an... Federico Chieli
  31. Poster Federico may have put the finger on it: Del... John Sawyer
  32. I hate it when "analysts" make predictions like th... Anonymous
  33. Should Apple get in bed with Dell it might help De... Robert Morgan
  34. You have to be crazy! One of apples best attribute... Anonymous
  35. Michael Dell's elusive pipe dream continues. He k... Likeitis
  36. Some people just can't grasp the whole concept. I... Andres Zapata
  37. Thanks Gartner! You have convinced us to avoid co... Anonymous
  38. You guys are all Mac users, aren't you? I'm here t... Ethana2
  39. It is rather amazing how misguided and ill-informe... Anonymous
  40. Hey isn't Dell now using AMD's proccesors now? Timothy Rivera
  41. This posts a day after the announcement that Apple... Michael
  42. Quality still matters. Apple has it, most don't. A... Anonymous
  43. Isn’t it wonderful when the trolls write the artic... Jeff Drake
  44. Gartner has demonstrated a thorough lack of unders... Michael Fortson
  45. As if the author knows better. Its so obvious that... jeric
  46. Dell service SUCKS. Apple service is GREAT. I've... Joe Lapp
  47. Yeah, sure and Porsche should license the 911 to G... Anonymous
  48. Hello, this guy is full of drugs,or something. Wh... Anonymous
  49. What an absolute idiotic notion. Apple IS a HARDWA... Cheddarhead
  50. Will this talk never end? Apple's hardware design... Anonymous
  51. Gartner: always good for a laugh They've been wron... Michael Edwards
  52. This is why people don't really pay attention to G... Scott Kallen
  53. Gartner is either an 'embedded' analyst for micrso... Larry Laurenzi
  54. I should know better. It almost the reason I read... Anonymous
  55. HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA thanks for the fu... Anonymous
  56. Has Andrew Donoghue being paying *any* attention t... Tim Mansour
  57. Easily the funniest thread ever! Dell to make... Lafcadio Dithers
  58. Who the hell would want an incompatible... Myles
  59. Apple are a hardware manufacturer?... SeanTheMac
  60. You know, I think some of this is very funny. Appl... Mike Bryant
  61. Thanks for all your Talkback - this is clearly an... Andrew Donoghue
  62. Gartner should quit analyst business. Herb Shipp
  63. I would think that Acer would be a better fit. Th... Anonymous
  64. And Rolls Royce should stop building cars. After t... Anonymous
  65. Gartner should look at Apple's Stock growth over t... Paul Randall
  66. Idiots MagicRat

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