Microsoft’s Mac upside

Posted on May 6, 2005 by Ian Betteridge

Link: seattlepi.com Microsoft Blog: Microsoft’s Mac upside.

The recent increase in Macintosh shipments has focused attention on the newfound potential for Apple to chip away at the dominant position of Windows-based PCs. But buried in Microsoft’s most recent quarterly report is a reminder that the Redmond company also benefits from increased Mac sales, albeit in a very small way, relatively speaking. The quarter to which this sentence refers is roughly the same period in which Apple reported a 43 percent increase in Mac shipments:

This is something I’ve actually long wondered about: Would Microsoft actually end up making more money if Mac sales increased? The average OEM pays $70 for Windows on a new PC. The cost of Office is minimal – in bulk, you’re probably talking $100 or less. Even the cheapo student/teacher edition of Office for Mac costs $139, and the development costs on it are considerably less than on Office for Windows. Of course, Microsoft makes a lot of money from selling software that depends on Windows being the dominant platform, but I’d bet that if Apple doubled it’s market share MS would still end up making more money as a result.

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  • http://chrisphin.mindsay.com Christopher Phin

    That’s a really interesting angle, and one which hadn’t before occurred to me. My only reservation is with the assumption with the notion that development costs would be lower for the Mac; how would you back that up?

  • http://technovia.typepad.com Ian Betteridge

    Because they don’t have to develop both an OS and an Office suite :)

  • John

    But when someone buys a Windows PC (instead of a Mac), there is a high likelihood they will also get a copy of Office for PC, and other MS products like SMB stuff, and use MSN (at least as a startpage) and Windows Media Player (and WMA-based/Janus players). And so on because you become locked-in to many MS protocols.

    A business buying Macs may lead to buying Mac OS-based servers instead of Windows Server-based servers and software like SharePoint, etc.

    With Linux growing on the desktop as the monopoly-busting alternative, there is really very little use for MS to have Apple around.

  • jbelkin

    MS & Bill Gates has said more than once that the Mac division is a money maker. It is advantageous in many ways besides it being a money maker. They have enough monopoly/legal problems – thi is one less accusation of holding back another OS. They get an early peek at what Apple’s OS is doing next and they can save a lot of manpower not having to answer ‘why did you stop making a mac version,’ or ‘when are you going to a mac version.’

    And the work is pretty done. The difference between Office 98 and Office X is very minimal other than the look & feel of the app looks nicer and there are Mac like drop shadows – everything else that’s changed or added is really just sprinkles.