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Mac Software Takes New Direction

There has been a recent shift in consumer and business response to the Macintosh platform. The old thinking, largely fostered by the PC industry, was that although Apple's (Nasdaq: AAPL) platform might be better for some tasks, Mac users were constrained by a limited choice of software.

That view seems to be fading away, though. "The common perception of Mac software has changed in the last few years," said Ryan Kish, vice president of marketing at AEC Software, which offers project management technology. "We are seeing more interest in Mac software for use in small-to-medium businesses, as well as the larger enterprises."

A driving force for this uptick in Mac software sales, he suggested, has been a growing response to Apple's new marketing methods.

One noticeable change: It is now quite common to see major software players develop applications for both platforms, he noted.

"Just look at what Microsoft (Nasdaq: MSFT) alone is doing," said Bill Keech, vice president of sales and business development at AEC. "[It] is playing to consumers and businesses in both architectures, and there are numerous other big players, as well. Consider Photoshop, Dreamweaver, and lots more that run on both platforms."

Apple is seeing great marketing results, adds Mark Jen, product line manager for Plaxo, which just released a Mac-based version of its Windows smart address book.

In addition, "Apple is capitalizing on the consumer interest in music- and photo-sharing products," he said. "The average consumer uses a computer for specific tasks. They don't want to be bothered with all the extraneous issues that Windows users face."

Education the Key

Apple was once a heavy hitter in schools; the venerable Mac II was a classroom staple for decades. Windows-based computers have eaten away a solid chunk of that user base, but lately there have been indications of an Apple resurgence with the current crop of Mac-based desktop and laptop computers making small, but impressive, gains.

"We are seeing a fair number of educational customers using Mac," said John Livingston, CEO of Absolute Software, which recently shipped a Mac-based version of its computer recovery software, LoJack for Laptops.

Macs "are easier to use than Windows-based machines and display graphics well," he claimed, adding that it makes sense for Apple to dominate the education and home entertainment markets. "Apple really cultivated the education market with a high support mechanism," he added.

The recent popularity of Apple's iPod and iTunes combo is a strong consumer influence. iTunes technology appeals to students but can also deliver other educational wares, according to Livingston. For example, Apple is now looking at educational video deployment through its iTunes platform.

Business Market Challenge

Apple will not lose market share in product areas that have a strong consumer following, predicted Livingston. The trick is to become more prominent in the business workplace -- although he suggested that Apple's strong relationship with Mac software vendors is a way to crack other new markets, such as government agencies.

"The business market has always been a challenge for Apple. The Mac machines really need a new killer business application to attract new business customers," added Livingston -- something analogous to the way the iPod appeals to consumers.

A turning point for Mac-based software could be found in more recent developments, such as populating Macs with Intel (Nasdaq: INTC) chips that can run Windows XP in a separate partition. The accompanying marketing strategy will work, he believes, if Apple's upcoming Leopard operating system can reliably handle Windows-based software along with new Mac titles.

"This will be a tough road for Apple to travel," he warned.

Migration Path

The Mac is making a modest comeback in the enterprise, according to a recent Yankee Group analysis, thanks in part to the upgraded graphics capabilities and the Spotlight search engine included in its OS X 10.4 Tiger release.

Mac-based software remains very viable for small business and enterprise users, noted Laura DiDio, an analyst at Yankee Group, particularly in specialized applications such as graphics, marketing and advertising. Key to getting more exposure for Mac-based software is the ability of software writers to encourage business users of Windows software to migrate to the Mac.

Mac-based software can gain in popularity among potential Windows-platform converts, according to the Yankee Group, and it can also be positioned as a strong alternative to the Linux platform.

That said, the Mac and the OS X operating system command a slight 4 percent of overall OS market share, based on the Yankee Group's 2005 Linux Windows TCO Comparison Report.