Apple’s Competitive Advantage

I sit on a lot of PC company advisory boards, and, while this may surprise you, I actually point out Apple’s competitive advantages on a regular basis. The problem for me is Apple’s market share, which is at a tiny and stable 2.6 percent of the PC marketplace.

Don’t get me wrong, Dell is where Apple once was at the top of the PC stack. But Dell got there by specializing in cost control, controlling the customer experience and being the first to do direct-PC purchasing right. Both companies are profitable. And while some people do, in fact, lust after Dell PCs, generally Dell boxes are utilitarian. Dell has learned one thing that Apple hasn’t, and that is to choose powerful partners to leverage. No other company leverages Microsoft and Intel as well as Dell does.

Motorola, BSD and IBM are no match for Intel and Microsoft. If it weren’t for the powerful advantages Apple brings to the table, the company would be gone by now. Let’s revisit some of those advantages.

Apple Hardware Design

Apple’s designs are, well, elegant. There is no better word for it. Sony and Toshiba can come close at times, but, on average, Apple has the best-designed hardware from an aesthetics point of view of any vendor. It is amazing that, after several years, no one has been able to design a better hard-drive-based MP3 player than Apple did with the iPod. Even Toshiba’s design, which used many of the same components, sucked.

Have you noticed that Apple doesn’t live by the version-three rule? In the PC industry, there is this rule that some of the branded vendors take three tries to get something right. Apple often gets it in one try. The first iteration might not be perfect, but it is often so close to the ideal that the difference is insignificant. I’m clearly one of those folks who wish this rule didn’t apply so well to companies other than Apple.

Sometimes it’s the little things. For instance, if you look at the laptop hinges on the new PowerBooks and iBooks, you’ll see the way screens should be attached to laptops. The screen opens out and down, minimizing the height of the open laptop and making it much more practical for airplane use. The hinge itself is not only robust, but also protected, so it would be difficult to break. The end result is like a Porsche design in a good year: clean, understated and elegant.

On the desktop side, Apple has done little things like the placement of the power button on the iMac into the screen, where it is both easy to access and provides an experience not unlike that with the start button on a Honda S2000. Apple also has turned desktop keyboards into hubs for easier cable management, although I still think the iMac should have a wireless keyboard and mouse.

Even though it is several years old, and I’d still prefer black or gray over white, the design of the iMac looks more advanced than any of the other all-in-one products out there, including the Sony W600 and Intel-codesigned Gateway 610 Media Center.

Even the company’s tower computer, the G5, takes what has become an increasingly boring form factor and makes it look trendy. It looks exclusive, which — given its cost — it is. But it is a stunning design. On the PC side, you typically have to go to Voodoo or Alienware for anything that even comes close to an Apple design, although you have to admit Sony’s RS products are rather close.

Apple Marketing

Where Apple really stands out is in marketing. The company simply seems to understand what will get people excited about its products, and then it executes on that vision. You don’t see the company mainly talking about features or technology, but about how the computer will make your life better. The iPod ads actually won an award from AdWeek and, if it hadn’t been for an even more stunning campaign from Citibank, they might have won best ad overall for 2003 as opposed to just being in the top 10.

Apple also has not been afraid of in-your-face campaigns. The company has run campaigns that have shown Intel-based laptops catching fire and getting flattened by steamrollers. Contrast this with IBM, which has backed away from connecting Dell’s “Dude” to the dropped laptop in its new campaign for fear of upsetting Dell, even though Dell abandoned “the Dude” some time ago.

Simply look at where Apple puts its logo on its products. On the laptops, the logo is right side up when the screen is open. Many vendors don’t understand the power of walking into an office and seeing a large number of logos advertising their products to everyone in the office and everyone else who comes into it. The logo even lights up on most Apple laptops. Apple understood that the logo is not for the person who bought the computer but for the person who is in the market for one. It is good advertising placement — not a throw-away design element.

Of the PC companies, Apple definitely does best placement in TV shows — which really showcases that logo. If you didn’t know better and expected TV shows to represent real life, you would assume that few people use Windows machines and that almost everyone has an Apple notebook or iMac. Dell has started to show up as well in TV shows, but Apple is king when it comes to placement in the PC space. Even when the other vendors get a spot, their logos are so hard to see, I’ll bet they are generally missed.

Apple’s Steve Jobs

The guy just flat-out gets marketing. He can show up on stage at a Macworld event, give his talk, and it can be days before anyone realizes he had nothing new to sell. With Jobs’ backing, Apple outspends almost every other hardware vendor in the space on marketing personal technology. It seems to be more focused as well.

This natural competency goes a long way toward overcoming the serious disadvantage of being the existing minority player when a new minority player, Linux, seems to have an even broader — and more rapidly growing — following. Clearly, and I doubt many would disagree, if it weren’t for Steve Jobs, Apple would have vanished several years ago.

An Apple ‘What If’

I still think, given the massive success of the iPod, that Apple could have done wonderful things by using its UI and hardware design skills on a Wintel platform product. What if Apple, in conjunction with HP, had built an iTunes PC to go with the HP-branded iPod?

What if this PC had an Apple hardware design and used a skin to give Windows XP an Apple-like user interface, and if the application load were similar to what you would get with an Apple?

And what if, like the Ferrari laptop from Acer, Apple played a visible role in insuring the user experience? Consumer Reports consistently rates Apple at the top in terms of customer satisfaction.

I wonder how well the product would sell. It would be an interesting test, regardless, and one we’ll likely never see. But who knows? Both Apple and HP have a history of surprising us, and we can only wonder what their next surprise will be. Maybe the HP iPod will, in fact, be the beginning of a beautiful friendship.

Rob Enderle, a TechNewsWorld columnist, is the Principal Analyst for the Enderle Group, a company founded on the concept of providing a unique perspective on personal technology products and trends.


  • Apple truely did lose out to microsoft by not fully comprehending the demand for dirt cheap software, microsoft created market share by selling technical products to non technical people. While apple did lose horrendeous market share it refrained from sinking to microsofts level and pushing out inferior products through those unfortunate years of management driven deployment.
    To many people Apple proved its worth in that respect and that reputation will be extremely difficult to tarnish in the next wave of adoption, whatever that wave will be.
    It may not ride the booms and busts like microsoft has, its more of a turtle in that respsect. Rather then focus on what will make you buy a computer after 3 years it’s concerned about what will make you buy Apple’s over the extent of your lifetime.
    As for an Aqua skin for xp, I’de rather Microsoft bring Bob back, that would also be very "interesting", certianly dumb, borderline retarded but still interesting.
    Note to TechNewsWorld: Stop publishing this crap.

    • Like I said, Rob, I have mixed feelings about your piece. I also put a question mark after my subject line ("damning with faint praise?")
      I just don’t think marketing is Apple’s core competitive advantage. It’s the quality of the product, a quality that is the result of their approach (integrated hardware and software). Sure, that approach has not been as commercially successful (to date). But in my view it produces a better product (for some purposes).
      Also, I never said the mac is better at everything. I said some core things. It’s not a better general purpose business machine, for example. Or gaming machine. Or CAD machine (due to lack of software).
      It’s also not about "praise." It’s about the truth. There’s nothing magical or perfect about Apple. I think what we’ve seen is a company under good leadership (Jobs), that has to innovate to stay alive. If Apple ever gets fat and really profitable again (and loses Jobs), yes, I would not be surprised if they stopped innovating.

      • So Jim where were you when they were looking for someone who switched from Apple to Windows?
        So when did you move to Windows XP? It is not clear you ever owned an Apple computer. What Mac OS did you stop at and what machine?

        • Jim, I have to ask…and you make money doing what on 3 XP machines?
          Did you get them off the back of a truck? You couldn’t have bought a nickels worth of software out of your savings other wise. It’s highly unlikely you’ve ever worked on a Mac long enough to appreciate it’s features, much less switched. Jerry

  • I don’t understand the praises for Apple’s marketing. Certainly there are times Apple did not get it right the first time, such as Newton.
    I get the praises for iPod either. If it takes a company like Apple to develop iPod, that is pathetic; iPod should be develop with just a handful of engineers.
    Finally, why is Apple not pushing G5 into the engineering and scientific community? these communities is willing to pay for more processing power that Sun is unable to deliver. Apple needs to work with killer engineering and scientific software vendors, such as Cadence and Synposis to name a couple, and grab and secure a large niche market before 64-bit PCs does. Seems to me Apple doesn’t understand its product. iPod isn’t going to get it anywhere.

  • "What if this PC had an Apple hardware design and used a skin to give Windows XP an Apple-like user interface, and if the application load were similar to what you would get with an Apple?"
    Because that wouldn’t be an Apple. Skinning XP to look like Mac OS X could make people blame the bugginess and general bad UI design of Microsoft’s Windows XP on Apple because of the skinning. It would be a horrible compromise. Quite frankly it’ll be a cold day in Hell before this happens.
    Also, you note that IBM is a second-rate partner to Intel in system design. I presume this is why Microsoft have dumped Intel and gone for 3 multi-core PowerPC CPUs (offshoots from G5s) for the forthcoming XBox2 and why they are shipping Apple Dual G5s as development kits? (confirmed by a mate of mine who is developing for XBox2)
    Still, what more can be said about an article that started off good, balanced and well-written and then suggests Apple copy the Acer Ferrari laptop? Rob, do you even comprehend how much people are laughing at you when you take pride in that thing? It’s a shame, it was a good article until the last paragraph or two.

  • As a Mac user (well PC/Windows and Linux too) and someone who generally disagrees with Mr Enderle’s articles, I have to praise this article for being reasonable and well-written. Unfortunately there are some Mac users who are unable to exercise their imaginations and consider his final point — but hey, can’t win them all.
    Of course, I AM also writing to counter Mr Enderle’s "nothing if not predictable" remark — I’d hope there are other reasonable folks out there besides myself.

  • Thank you for this Apple article. I gave up the Apple several years ago and move to Windows XP. You’ve confirmed for me the value of that move. If the only thing Apple has going for it is a good logo, a start switch and marketing strategy and thank God I left Apple behind.
    Instead of one Apple, I now own three XP e-machines. Not only that the money I have saved has purchased a lot of software!
    Jim — Michigan

  • I have mixed feelings about this article. It does give Apple some credit where credit is due. On the other hand, focusing on Apple’s "marketing" and "design" i.e. looks, well this is often just a way (for Rob and other PC advocates) to discount or denigrate the importance of the basic functional quality of Apple’s products (ease of use, reliability, etc).
    It’s a sneaky way of saying, it’s not the product or the way it works that is better – Apple just "markets better" or their products are just "pretty looking". This line of argument has surface plausibility because, of course, Apple products are good-looking and well-marketed (in many ways).
    The defect in this line of argument is that no AM ount of marketing or good looks will sell a poor product. And in this case, even making a "good" product is not enough. Apple simply would not have survived the Wintel freight train but for making a BETTER FUNCTIONING PRODUCT (better in some key ways, at least).
    But Enderle et al have a hard time conceding the mac DOES anything better. So they go on and on about "marketing" and "aesthetics" – things that (implicitly) don’t or shouldn’t matter as much as function (the computer is just a tool in the end).

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