The everyday ramblings of an everyday geek.

Monday, June 13, 2005

Pirates ahoy

As I've been trying (and probably failing) to express in my other blog, copyright is in a weird place at the moment and Apples move to Intel only seems to emphasise that further. Leaks of Tiger on x86 have shown that it will run on non-Apple hardware, and its hard to believe that this is a mistake. There was nothing stopping Apple from requiring a certain graphics chip, or checking the serial number on the processor, or deliberately leaving a dead block in main memory... you name it, they could to it, and yet they haven't. Perhaps this isn't surprising.
Apple has been suffering when it comes to getting people to 'switch' to the Mac platform. As a switcher myself I can understand the reasons. There is no try before you buy with Macs. Sure you can walk in to an Apple store and play with a G5 for 5 minutes, but it probably won't have the apps you want, and you'll be playing with it, not using it in anger. Taking a 5 minute play and translating that in to £700 investment is a big leap of faith. So for Apple's three main switching markets (made up entirely by myself) it might be worth exploring why piracy may be the best marketing strategy.
Casual Switchers (mini, ibook, iMac)
In my own experience, this has been the group of computer users who are the easiest to switch. They don't use a computer very often, and use it mainly for surfing the web, email, the odd family news letter, or Church fayre flyer. Macs offer them some huge advantages:
  • No Spyware
  • No Viruses
  • Ease of use
but as they often don't see the value of these advantages until after the purchase has been made all they can see are:
  • More expensive
  • Doesn't play games very well
  • Can't 'borrow' my mates copy of Office or use old software
and that is enough to put them off as it takes them well and truly out of their comfort zone. Moving to x86 could make this switch a lot easier for this market. If they can 'borrow' a copy of OS X before they buy, and still 'dual boot' into Windows they can experience first hand the true advantages. So how do Apple make a sale? That's easy, product design. Provided Apple can continue to make their products the most attractive computers on the market and put them in the affordable luxury market they've created with the iPod Apple could really start to see a massive improvement in they're market share. Will they make a killing? Nope. This market simply doesn't have the disposable income to spend on computers. Its not that they don't have the cash, its just that they don't want to spend it on computers. If Apple can get 1% of the 'borrowers' to buy Apple hardware, and the iWork suite they'll still make a killing, and Apple will start to look like a real contender to software developers.
Small Business Switchers (iBook, iMac, PowerBook)
This is the core market that Apple has got to convince to buy Macs. For one reason or another, these are people that use computers to make money, but have no interest in computers except as a tool to generate money. The main difference between this demographic and the casual switchers is that they have the funds to buy what Apple really wants to sell - software (read high profit). The advantages Macs offer are:
  • Greater productivity
  • Lower TCO
Why aren't these people switching? Cost. Although they have money to spend on computers, the cost of switching to Apple represents a significantly larger sum of money when it comes to buying a new computer. It's not that this market doesn't upgrade Office/Photoshop every 18 months, its just that they don't do it in the same month they buy the hardware. Piracy opens up the doors for at least of a few of these users to try without any risk and at a much lower initial cost of ownership. And the fact is that it doesn't matter how many people tell you its cheaper to run Macs in terms of total cost of ownership until you can see you start to fill in your tax return and see that your hardware / electricity / maintenance bills are lower that you start to believe them.
So how does Apple make any money? Honesty. If they have a product that is as superior as I believe, then people will have to buy. Anyone that chooses to run their business on 100% pirated software is going to run into problems at some point in the future. It simply isn't worth the risk of getting caught - and that means buying Mac hardware.
Power Switchers (PowerBook, PowerMac)
If these guys were going to switch, they would have done it all ready - or would they. The problems that affect casual users and small businesses simply aren't a problem for power users. Spyware, malware and TCO aren't an issue if you know what your doing on Windows. I work in an office of over 300 power users, so far I've only met 2 other Mac users, the rest didn't even know they were a viable option. Linux on the other hand they are all over - they don't like it much, but they know what it is, and quite a few have it installed on a dusty partition for bragging rights.
This is not surprising as Macs are so inaccessible and inflexible from an outside view. Until now, you had to buy the 'expensive' hardware before you could try the OS out. Now, this is a market that builds its own computers, or at least knows its way around the inside of cheap Dell enough to know how to replace the processor, RAM and video card without breaking a sweat - so yes the hardware is expensive. They also aren't worried about aesthetics - and if they are they whip out the dremmel and whack a few LEDs in to the case. In short this market is unlikely to ever buy Apple hardware, apart from the laptops - and then only for extended battery life and instant sleep.
The weird thing is that it will be these guys that make the biggest difference as they are the group the other demographics listen too (and get their pirated software from). Hopefully, they will dust off an old Linux partition and try out Mac OS X. Even if they can't see an advantage for themselves (unlikely) they will undoubtedly see the advantage for the other groups and disseminate the information - viral marketing. The other thing that could happen is that they will start to play with XCode - I believe core data alone could be enough to re-ignite the passion of the casual coder and as a result see the Mac platform get a surge of new software. There is of course the hope that they will fall in love with the platform and simply buy whatever Apple throws at them.
I think the benefits of piracy for Apple are clear - and a major reason for the switch to Intel (as crazy as it may seem). The fact is, what really matters is market share, pirated or not, and Apple could do with at least 30% - if only to make the big corporations give them a second look when they roll in with the highest bid and but the only legal way of getting the OS its workers desire. I predict that by the time Longhorn is released the official market share of Apple will have risen maybe 1% at best, but 50% of the power users I work with will have tried it, 30% will like it and continue to use it, and 5% will have bought a Mac - that would have never happened on PPC, and I wonder weather it will be enough to make the release after Leopard, the biggest release in Apples history.


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