Opinion: 'Perfect Storm' of Mac Sales May Be On Horizon

PC users don't really get the Mac, and have never gotten the Mac.

Since most of the world talks Windows, it's no surprise that few in the industry really appreciate the windfall that's in store for Apple Computer (AAPL) over the next 18 months.

The big deal for Mac users will be upgrades, primarily meaning the transition of the installed base of Mac users to the Intel-based (INTC) machines.

The first sign of the pent-up demand for newer, faster Macs can be seen in Apple's latest quarterly results. The sales of some 800,000 notebooks — almost all the high-priced spread — represents a 61 percent increase from the year-ago quarter.

"We know all about that," you say, of course. It was almost a year ago that Apple CEO Steve Jobs walked onstage at the company's WWDC (Worldwide Developers Conference) and announced the switch.

With our internal clocks it feels as if it all must have happened by now. But it's only just beginning. For example, Apple's super-loyal base of professional content creators haven't yet received their Intel machines.

However, this cycle isn't your usual processor upgrade cycle that comes every time Intel or Advanced Micro Devices (AMD) tweaks a process. This is a major shift that affects all parts of the Mac customer-developer-vendor ecology.

Longtime Apple watchers can count two earlier events of similar magnitude.

The first such transition occurred in March 1994 with the arrival of the PowerPC architecture. The Motorola 680x0 architecture that had served the Mac platform for a decade was quickly supplanted by a set of new, more powerful machines.

Along with the CPU came the PCI expansion bus, which replaced a wonderful, but proprietary, bus called NuBus that Apple had used for ages. Customers that had a significant investment in NuBus cards were forced to upgrade their boards to PCI versions.

At the same time, the software that ran on the new machines needed changing as well. At such times customers are open to pitches, and a "sidegrade" war broke out, with software vendors offering all kinds of deals to folks running the competition's titles.

We can expect much of the same this time around.

The second mega-upgrade cycle hit with the PowerPC G3 (the PowerPC 601 through PPC 604 waves were considered the first two generations).

The initial version of the G3 was more than 30 percent faster than the fastest G2 chip and many operations were boosted way beyond that range. Forget that the G3 didn't support multiprocessing — it was a lot faster.

To protect its access to these upgrade customers, Steve Jobs killed its Mac OS licensing program — canceled all agreements and paid off the claims. That shows how big a deal these major platform shifts are to Apple.

This coming Intel transition may prove to be a triple high biorhythm for the Mac.

Along with the new Intel models, the Mac market will be bolstered early in 2007 by the arrival of Mac OS X "Leopard" (version 10.5) and later in the spring with Intel-compatible versions of major Mac software platforms, such as the Adobe (ADBE) Creative Suite 3 products.

The base of professional content creators will likely wait for the software to arrive and then follow with a hardware purchase.

Wild cards in the Intel transition mix are "switchers," the customers persuaded by the demonstrations of content creation in the Apple stores.

Will this trend with Windows users switching to Mac continue after the arrival of Windows Vista and its prettier face? Maybe.

With Vista missing the holiday and back-to-school seasons, many customers are buying Macs.

A family in my neighborhood has been all PC since the PC XT. But the eldest son is going off to college and says he wants a Mac. It's the vanguard of a new generation gap. He's never owned a Mac but he's gotta have one — a good sign for Apple.

In addition, there are the many longtime Mac veterans who often skip the first couple of models in a major hardware transition and let early adopters shake out the hardware bugs or design flaws. It remains to be seen whether these buyers will enter the transition earlier or later.

My estimate is that it will be earlier.

But it's the demand for performance across the segments that creates the most misunderstanding between Mac and PC owners.

All owners of Macs want more performance and need more performance. This is because the content creation and display applications that are core to the Mac experience can take all the bandwidth, processor power, memory and storage that you can throw at them and ask for more.

On the other hand, the PC market is focused on price and commoditization. This holds true for the enterprise and for consumers.

For example, this week's Dell advertisement in the New York Times is all about systems costing around $500. By comparison, all Macs, even the entry-level models, are thicker and more performance-minded machines.

That is because Mac users want more performance and are willing to pay a premium for that performance.

The predilection for thinner clients in the Windows market may be worrying Microsoft a bit, especially when it comes to Windows Vista upgrades. Microsoft wants to figure out how to get the PC market excited about thicker machines running performance-driven applications.

I received a slide from a presentation given by Michael Sievert, the Windows client marketing boss, at the WPC (Worldwide Partner Conference) in Boston earlier in July. It covers this very topic.

The slide describes Windows Vista "scenarios" for consumer, small business and enterprise/midmarket segments. By scenario, he means a value or application that would drive thick Vista sales in that segment.

For the enterprise, Microsoft points to the need to optimize desktop infrastructure; to find, use and share information; to support a mobile work force; and to improve security and compliance.

For small businesses, the slide suggests that the drivers for thicker computing are backup, security, sales and marketing, financial management, collaboration and mobility.

For the consumer segment, Microsoft points to "memories," or content creation and management; viewing TV and movies; gaming; music; "communications," or the connection of messaging content between handhelds and PCs; and productivity.

However, these targets are just that: There's no strategic vision from Microsoft or specific plans built around these bullet points, right now.

On the other hand, Apple over the past five years has executed successfully on a technology and business strategy that puts a thick computing platform in the middle of digital workflows. This plan was articulated before the release of Mac OS X.

The company now offers its users an elegant hardware platform, a robust graphics foundation in its operating system, support for rich content standards, and most importantly, a solid list of solution-based programs for content creation and management from Apple and its software developers.

Guess what? Real customers, not just gamers, want performance, will buy performance and can use it. Apple is counting on it.

David Morgenstern can be reached at david_morgenstern@ziffdavis.com.

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