The end is nigh! At least for HP and Dell.

Or is it?

Both Dell and HP love to claim to be the world’s biggest computer vendor. Indeed; Dell used to be and HP is told to be right now. At least when it comes to brute numbers of computer sold.

But when you look at the revenue, the picture is quite a different one. Do you guess who’s profiting most by selling computers? If you picked Apple Inc., you picked the right fruit.

Apple Inc., despite claiming ‘only’ about 5 to 7% of the computer market, generates the same, if not more, revenue as Dell and HP [1].

While those numbers are quite old, they show a clear picture; Apple, even though selling only a fraction of the computers HP or Dell sell, is not only holding their pace, Apple is overtaking them. But it’s getting worse for the two power mongers of years past; Apple’s getting a firm hold in the very profitable notebook market. And it’s getting stronger and stronger [2].

Why is Apple getting so strong? One reason is the high quality of their products. Apple has some of the most solid consumer products you can get. Apple is innovative, Apple stands for quality. Ever looked inside a Mac Pro? Did you miss all those cables, all that wire? Well, I did. And did not.

Apples second strength rises from the incredible high integration with the operating system. While I don’t use OS X regular, I had more than enough opportunity to see it in action. And it is an amazing operating system. It’s keyword is integration, no lose ends. From search to backup to gadgets; everything fits together like a well made puzzle. Except that you don’t see any cuts.

Now while Dell and HP may be able to catch up in hardware quality and innovation, they will have a very hard time to get even on the software layer. Both Dell and HP are stuck with Microsoft Windows. And Windows is in no way able to compete with OS X. Indeed, Windows Vista is a bloody mess. It took Microsoft seven years to develop it, and the amount of innovation is disappointing, to be honest. Not to mention the problems Microsoft has getting the hardware vendors to play along. Do you want Windows Vista drivers for your two years old scanner? Dream along. Instead of programming drivers for old hardware, the hardware business tries to sell new hardware. Of course they are not going to support old hardware! And as long people are not able to use their old hardware on Microsoft Vista, they will be very hesitant to use it. Replace all your computer equipment just to use Microsoft Vista? Thanks, but no thanks.

Funny enough, it’s not even certain that Vista will ever be the dominating operating system in the market. Just as Windows ME, it’s a misbegotten bastard of failed management. ‘Vienna’, Vista’s younger sibling, is planned to arrive 2009. And if Microsoft doesn’t fumble as bad as they did with Vista, Vista’s lifespan looks very short indeed.

To make thing worse, neither HP nor Dell will ever be able to achieve the same level of integration Apple is able to produce. Windows it not their operating system, they are just packing it on their computers, along with some drivers and some tools.

Apple on the other side controls everything. While Microsoft is dedicated to support a legion of age-old technologies, Apple has the freedom to cut backward compatibility to the minimum. It may take Microsoft some long years to support EFI, Intel’s BIOS modular BIOS replacement. Apple is already using it with great success. The result is a seamless user experience, from pushing the power button to entering your password. And even if power user and tinkerers may disagree; it’s what Joe Common wants from his computer.

So HP and Dell are stuck with an operating system they have no control over whatsoever. And while they are still scratching their heads, wondering how to get out of that mess, Apple is getting stronger and stronger. And new reasons to switch over to OS X are popping up like groundhogs; just as the IPod, the IPhone is going to provide a very strong lever for Apple. Though luck.

So how are they going to get out of that mess? Of course they may try to license OS X for their own computers. But Apple is never going to do that. Indeed it’s one of Apple’s biggest concerns; vertical control, from hardware, operating system, applications to gadgets; vertical control allows a tight integration and an extraordinary smooth user experience. They are not going to drop that ball. And don’t forget that Apple burnt it’s fingers with re-licensing it’s operating system before. No, they are definitely not going to make that mistake again.

Another option may be GNU/Linux. While not on the same level as OS X yet, it bears a lot of room for improvement. And while it may have some rough edges, it’s definitely ready for a managed corporate environment [3], the main target for both Dell and HP. Linux is already a testbed for new technologies, indeed it gets used as a platform for reference implementations more and more. IPSec anyone?

So Linux is able to provide fast and solid access to new technologies. Meanwhile the open-source nature of the beast allows both Dell and HP to improve exactly those parts of the operating system they feel lacking – an option they don’t have with Microsoft Windows. Suddenly vertical integration becomes possible, allowing those to brittle giants to compete with Apple again.

I don’t know if HP has seen the tide turn. Dell may have and the Ubuntu-option may be the first sign of that change. But only time will tell if this change happens fast enough to prevent Apple from dominating the computer market a second time.




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