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03 Dec 2005
Apple Computer has quietly voiced its concerns about the growing threat it faces from Linux in the desktop market. The Californian manufacturer’s concerns emerged in its Form 10-K filing with the US Securities and Exchange Commission late this week. The 10-K is an annual report on the company’s business, and an effective disclaimer on factors that may affect the company’s future performance.
In this case, Apple concedes that the personal computer industry is highly competitive and is characterized by aggressive pricing practices and downward pressure on gross margins, amongst other elements.
“Over the past several years, price competition in the market for personal computers and related peripherals has been particularly intense as competitors who sell Windows and Linux based personal computers have aggressively cut prices and lowered their product margins for personal computing products,” the company said.
Apple concedes that its financial condition has been adversely affected by these pricing pressures, but goes on to continue that “Mac OS has a minority market share in the personal computer market, which is dominated by makers of computers utilizing other competing operating systems, including Windows and Linux.”
Moreover, the company expressed concern that to the extent its minority market share has caused software developers to question Apple’s prospects in the PC space, developers could be less inclined to develop software for Apple products, and instead feel more inclined to devote their resources to developing software for the larger Windows market or growing Linux market.
“There can be no assurance software developers will continue to develop software for Mac OS X, the Company’s operating system, on a timely basis or at all,” the firm said.
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Do you agree?
A non story and a non starter
What i see on this forum time after time is that everything except linux is bad, is faltering or is just a lump of harware.. I do not get it. Mac is outperforming the market. Profit margins are very acceptable. I should starting to worry a bit more about the inability of linux to break through. A miracle child who reaches the age of 50 is no longer a miracle. No apple user will ever change to linux, because it looks terrible, it feels terribe, and it does not perform at all in the desktop market.
Posted by: jai 12 Jan 2006
James, what have you got against Apple??
As others have said - this is a non-story. The SEC filing is framed by lawyers and accountants. Ask yourself, honestly, "what is the chance of an Apple user switching to Linux?" Why are you guys so anti-Apple? I have a lot of MS software running on my G5 - I don't feel the need to slag off MS . Are you jealous that we get to use really cool computers and you have to use cheap, crappy ones?? Go on - say something nice about Apple before the year's out!
Posted by: Peter Dunkley 05 Dec 2005
What squeeze?
This article presents a sensationalist title that is not supported by the content.
Posted by: Michael 04 Dec 2005
"Vertical integration" concept at odds with independent developers
"There can be no assurance software developers will continue to develop software for Mac OS X..." Adobe loved developing Premiere for Mac until Apple bought proto Final Cut, enhanced it, and of course promoted the Final Cut solution over all other video pp systems. How about Emagic? Bought by Apple and now competing directly against any sound editing/creation product. How long with MOTU last? How many Cubase/Nuendo users leaving for pc world? Umm, Aperature? Disk Warrior? Watson? Go on a date with Apple and you'll likely get stuck with a sermon and a bill.
Posted by: blair 04 Dec 2005
One shouldn't read too much...
... into 10K disclaimers. Just standard operating procedure to list every potential risk under the sun.
Posted by: KenC 04 Dec 2005
Nice but...
This doesn't take into account the rapidly growing Apple userbase. It is currently growing at a faster rate than LINUX. Using the same argument, one can extrapolate that developers will be following Apple system moreso over the LINUX one. All of the latest data shows this trend.
Posted by: Technophile 04 Dec 2005
silly.
there is no Linux squeeze.
Posted by: John Affer 03 Dec 2005
Always conservative
Perhaps you haven't considered (or were not aware) that Apple is ALWAYS conservative and ALWAYS voices concerns about competition and market pressures. Market successes are usually downplayed in these filings to the point of being overly dramatic. In this way, if and when there are record earnings or major market victories, it will seem as they didn't expect such overwhelmingly good news. I would imagine that they hope financial markets are pleasantly surprised, too, and consumers will take even more notice of Apple. Linux is no more or less the threat than it has been in the past.
Posted by: Rich 03 Dec 2005
SEC Risk Statements
You have to be very careful trying to derive news from SEC filing Risk Statements. They are written by the lawyers as a counterpoint to any perceived positive aspects of a filing. So they are inserted to minimize Apple's liabilities to shareholders in case there is a negative turn of events. You'll find similar type risk statements in all public companies SEC filings. It really is not newsworthy...
Posted by: Stingerman 03 Dec 2005
Loyal Customers Losing Faith
Unfortunately the 'Apple Faithful' are losing faith due to the poor support for older hardware and previous versions of OS X. Many loyal customers are seriously considering trying out Linux due to the poor support offered by Apple these days. These are customers that have been buying Apple computers for many years but are seriously considering what to buy next. There is also a growing belief that the new Hardware is of a poorer quality. A few examples: 1) Users of G4 MDD PowerMacs which were sold new as recently as March 2004 have been putting up with Sound problems since 10.3.5. Apple has yet to fix the problem of distorted sound and an incredibly loud volume level that occurs for most users when they restart the MDD PowerMac. 2) Apple still has not upgraded to Open GL version 2 which was released in September 2004. Open AL has not been upgraded and is causing problems for many developers. 3) No security or sofware updates are offered for versions of OS X prior to 10.3.9. For Example - many Jaguar (10.2.x) users have been asking for Safari updates for a long time. 4) Hardware that was sold with top of the line machines as recently as 2004 is no longer supported. For example - the SCSI cards that were sold by Apple as a Built To Order option for PowerMac towers are not supported at all in Tiger (OS X 10.4.x) Unfortunately, Apple has had to move too many of its Software Engineers/Developers to the Intel Project to make sure that it is released on time. With insufficient staff left to support Tiger mant problems are not being fixed in a timely fashion and many updates are being released which do not resolve existing problems or introduce more problems or bugs. I should state that I am a loyal Mac User who owns 15 Apple computers for my business and that I've been a Mac user since 1993.
Posted by: Disappointed Mac Addict 03 Dec 2005
Linux threat doubtful
I doubt that Apple was directly referring to Linux and more towards competitors who have cut their prices and margins aka Dell. Linux doesn't seem to be a direct threat to Apple as it is to Windows. I think Apple was referring to Dell's method of slashing hardware prices to the bone and we see now that Dell is in trouble because the consumer is still expecting price cuts when there isn't enough margin to make more cuts.
Posted by: Ben 03 Dec 2005
What year would Apple NOT have said this?
Seriously now, since the advent of OS X as a shipping operating system in 2001, these same threats have been in play. Indeed, those precise sentences could have been used in any SEC filing since then. The headline is misleading at best. It's hardly news, and no sane person looking into the future from a Mac perspective could fail to mention Windows and Linux. Also, where's the mention of another obvious threat: XBox-like devices that live in living rooms attached to TVs and acting as thin clients to web-enabled software? My opinion is that such devices are far more of a threat in the Western world than Linux. The real threat of Linux is in China, not the West.
Posted by: Jim 03 Dec 2005
Apple is *DOOMED*
Apple Computer, Inc., proudly going out of business for almost thirty years now.
Posted by: Lawrence 03 Dec 2005
You don't read many 10-k's do you
This is nothing special. Apple is required by law to note possible future issues in it's 10-k filing. Anything can be taken out of context, you just twist it to make it seem like Linux is the new dominant OS.
Posted by: David 03 Dec 2005
This is non-story!
These concerns have been mentioned in every SEC filing Apple has made for the last 15 years. In addition, you will find the same concerns in the filings for all of the competitors (everyone in the industry is facing pricing pressures, Red Hat cannot guarantee that developers will develop, etc)
Posted by: anon 03 Dec 2005
Don't think so
what an over active imagination. Linux is great if your a geek, not very useful for the average user. Apple has a very large number of developers and getting more every day, clean your crystal ball you have a distorted picture.
Posted by: thomcarl 03 Dec 2005
a subtle softening-up ?
readying people for a generic x86 osX release??
Posted by: bob hoskins 03 Dec 2005
no big deal
It would be naive to make too much of this, given Apple's growth and recent market success in Macs as well as iPods. It is just the standard kind of butt-covering language companies use in SEC filings to avoid liability if market conditions change.
Posted by: cferry 03 Dec 2005
watch the stampede?
It is interesting that Apple should express these sentiments. However, every year for the past six or seven was supposed to be the time for linux on the desktop. It is on the desktop, and it works. Why have not the masses flocked to it? Why has Adobe not gone with linux? They have not even kept up with FrameMaker for solaris. What will be required is for one or more large computer makers to just put linux on desktop computers. You can get computers with linux on them now, towers, and laptops. But it will take a marketing campaign, and a machine with an interface that is friendly to the user to achieve something. That sounds like a Macintosh. If the software makers are not willing to make for Apple, how will they be willing to make for linux, when there is less of a base for linux on the desktop(not talking about servers, or hundreds of CDs floating around. It just seems like neither IBM, nor Sun, nor even HP are willing to make the big move to challenge ms. I rather hope that some day Apple makes its OS available for other hardware, you know, buy the license. Various linux geeks have called upon Apple to do this, even if Apple does not entirely go open source.
Posted by: Leonardo 03 Dec 2005