“In 2005, Apple moved to Intel to gain equality. In 2020, it’s moved away from Intel to gain superiority.” — Veteran advertising executive Ken Segall
From “Apple’s monolithic moment” posted Monday on Truth, Justice and Simplicity:
No question, Apple Silicon is a very big deal. But—it’s an even bigger deal in the context of Apple history. Monolithic even…
Just minutes after Steve stepped off the stage at the Intel announcement event, I jokingly said to him, “Please tell me you’re not putting an Intel Inside sticker on the Mac.” With a big grin, he replied, “No way—I made sure that was in the contract!”
As important as Intel processors were to Steve’s strategy, Intel could not overshadow the Apple brand.
Behind the scenes, this commandment played out in the box design for the first Intel-powered iMacs…
The team presented several box designs to Steve. On one, this Intel chip image appeared on the front, right alongside the large iMac image. Steve killed it in a nanosecond.
He chose the design that relegated the Intel chip to “feature” status on the side of the box, amongst the list of iMac’s other selling points. Intel was just one ingredient in the mix.
Something else Steve refused: Intel’s money.
Every year, Intel contributes obscene amounts of marketing dollars to PC makers around the world. But it comes with a catch—all ads must display an Intel Inside logo at a specific size, with a specified amount of white space surrounding it. TV commercials must feature the logo for a specified length of time along with the annoying Intel “bong” at ad’s end.
Steve never gave a thought to joining that mob. Apple would forever be the hero of the new partnership, not Intel.
My take: I like Segall’s work, but I’m sparing you his 2001: A Space Odyssey references.
I know Apple thinks far out into the future, but is that a 15 year road map I see?
But when I read something like this:
https://www.patentlyapple.com/patently-apple/2021/01/idc-report-states-that-pc-sales-were-on-fire-in-q4-2020-with-apple-showing-the-highest-growth-in-the-industry.html
I feel compelled to extrapolate it forward. For the purposes of comparing Apple and Dell’s growth I used the average growth rate of the top 3 vendors (#1 HP, #2 Lenovo and #3 Dell) to forecast Dell’s future growth rate. Dell’s actual growth rate (according to IDC) was 8.1%.
Again, according to IDC, Apple grew computers at a 29.1% rate during C2020. Much of that growth was attributable to the COVID pandemic and the shift to work at home and home learning. I used a reduced growth rate of 20% going forward to project Mac units sold.
In that hypothetical model Apple surpasses #3 Dell in computer units sold in 2029. I believe the Mx family of processors can sustain a Mac 20% growth rate and could cause Mac units to surpass Dell’s unit share before 2029. And then there is Mac’s much higher ASP to contend with. Revenue and net income will shine.
It should be noted that in this exercise I increased Dell’s 2020 unit growth rate 13.5% above IDC’s estimated results, and reduced Apple’s 2020 growth rate by 31.3%.
So what percentage of Wintel computers sells for >$900 (close enough to a Mac to tempt a Wintel user to switch)?
20% of 210,000,000 (HP, Lenovo, Dell, Acer total shipments) = 42,000,000.
15% of 210,000,000 (HP, Lenovo, Dell, Acer total shipments) = 31,500,000.
10% of 210,000,000 (HP, Lenovo, Dell, Acer total shipments) = 21,000,000.
5% of 210,000,000 (HP, Lenovo, Dell, Acer total shipments) = 10,500,000.
Pick one then tell me what percentage of WINTEL’s high end market do you think may switch to Mac.