Apple 'to benefit' from Microsoft's dallying
Published: 24 Mar 2006 09:55 GMT
If there's one company that stands to benefit from the delay of Microsoft's Windows Vista operating system, it's Apple, analysts said.
While Microsoft has been struggling to release its new operating system, Apple has regularly put out updates for its Mac OS. Moreover, Apple is already strong in areas where Microsoft has promised to deliver key improvements with Vista: security; features such as video and photo editing; and search, analysts said.
"Apple is the one clear beneficiary of the flip in Vista," said Gene Munster, an analyst with Piper Jaffray. If shoppers are looking for what Vista has been promising, the decision is easy, he said. Before, "they would have... had to look at a PC against a Mac. Now they only have one choice, at least for this holiday season, and that's the Mac."
Microsoft announced on Tuesday that Vista, the successor to the four-year-old Windows XP, won't be widely available to consumers until January. That has PC makers and retailers missing the important December shopping season to sell computers with the long-anticipated new Windows software.
Microsoft's loss is Apple's gain is the consensus among analysts. "Apple... should enjoy a less competitive market for another holiday season against an aging Windows offering," Richard Farmer, an analyst with Merrill Lynch, wrote in a research note Wednesday.
Apple has an opportunity to further boost sales of Macs, which have already grown significantly in past years, said Shaw Wu, an analyst with American Technology Research in San Francisco. As an additional benefit, Apple now has more time to work on its next operating system release, Mac OS X 10.5 Leopard, he said.
The Vista delay is most likely to be felt by those trying to sell into the consumer market, a space Apple knows very well, Jupiter Research analyst Michael Gartenberg said. "It is a real opportunity for Apple to tout the features of their operating system and, of course, the fact that that operating system is available now." Apple shipped 4.5 million Macs in its 2005 fiscal year, which ended last September. That was up 38 percent from 3.3 million units in the earlier year, according to American Technology Research. For the current year, the research outfit predicts that Apple will ship 4.8 million Macs, a 5 percent year-on-year increase, Wu said.
Microsoft's delay will help generate Mac sales, but it's tough to say how many, the analysts said. "There are two critical PC-buying windows for computers: back-to-school and the holiday season," Piper Jaffray's Munster said. "Microsoft is going to be on the sidelines for both of those this year. That has to benefit Apple."
However, Apple also faces some challenges, particularly with its transition to Intel processors, Wu said. "The Microsoft delay helps, but I think Apple is limited a bit by the fact that it still has not moved its entire product line to Intel," he said.
Microsoft is being hampered by its own success. Apple has been able to churn out operating system update after update, while Microsoft has now taken more than five years to ship a new OS.
"The biggest reason is that Microsoft has a much harder job to do," Munster said. "They need to be compatible with an army of devices and different types of software and different hardware platforms. Apple only has to be true to itself, and because of that the development process is multiple times more efficient for Apple."
Apple has jabbed at Microsoft's slower pace, most notably at its June 2004 developer conference, where it posted huge banners with taunts such as "Redmond, we have a problem" and "This should keep Redmond busy."
The two are likely to draw even more head-to-head comparisons now that both operating systems are running on the same underlying processors and other internal components.
Apple's quicker pace has allowed it to get new features into its operating system faster. For example, both Microsoft and Apple talked about the need for improved desktop search at roughly the same time. Apple shipped the feature as part of a Mac OS X 10.4 update last April, while Microsoft's similar feature won't show up until Vista, though the company has made a downloadable desktop search add-on available amid competition from Google and others.
Many of the new music-handling and photo management tools in Vista are also strikingly similar to features that Apple has either in its OS or in companion products such as iPhoto and iTunes.
Apple had its own quagmire back in the 1990s as it tried to ready its next-generation operating system. In many ways, the original Mac OS X was an operating system that was seven years in the making.
But by moving to a newer and more modern base, Apple has been able to crank out successors in very short order. Apple released the original version of Mac OS X five years ago this Friday, and in September it served up the 10.1 update that fixed some of the bugs and features that were missing from the initial release.
Three more releases, all paid updates, have followed. Mac OS X 10.2 Jaguar was released in August 2002, Mac OS X 10.3 Panther came in October 2003 and Mac OS X 10.4 Tiger went on sale in April 2005.
Apple has since slowed the pace somewhat. Apple's chief software technology officer, Avie Tevanian, said in 2004 that Apple would take a little bit longer with Tiger and its successors than it had with the first few releases of OS X.
Still, the company is slated to release Leopard, the next release of OS X, either late this year or early next year. That means it too could conceivably be on new machines before Vista.
Apple declined to comment for this story.
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