Apple has never tried to please all of the people all of the time. But yesterday's launch of new MacBook computers managed to create an impressive chorus of negative sentiment. Among those submitting their disapproval:
- "For crying out loud, Apple, just build a touchscreen Mac already," Matt Rosoff, Business Insider
- "All the disappointments from Apple’s MacBook Pro event," Abhimanyu Ghoshal, TheNextWeb
- "Apple’s New MacBooks Are Beautiful and a Little Disappointing", Will Oremus, Slate
U Can Touch That: The new MacBook Pro does offer a touch "screen" of sorts, in the form of a small... [+]
This is par for the course at Apple, where often the future is arriving (see the launches of iPad and iPhone for much more extreme reactions than those above) and the critics don't yet know it. But this MacBook Pro launch was a bit different. Apple offered nothing radical or revolutionary -- though the new TouchBar has already won some fans . Instead it refined a critical product line in a portion of its business that Apple likely understands is in a permanent decline.
The PC market (Mac vs. Windows), in case you forgot. pic.twitter.com/paYkC1JrBX
— Horace Dediu (@asymco) October 28, 2016
The chart you see above comes from Horace Dediu, the astute analyst from Asymco, which shows two very important things. At the bottom you can see Mac sales, which grew nicely for a while but have mostly flattened out lately. Apple sold about 18.3 million in its most recent fiscal year versus 20.5 million last year and 19 million the one prior. That's not especially exciting until you compare it to the PC industry overall, which has been imploding in the same time frame. As Dediu pointed out on Twitter, "The PC market (excluding Mac) has been in decline for 18 quarters in a row. Vendor consolidation well underway."
And that's true, in the past 5 years the portion of PCs sold by the top 5 vendors -- which does include Apple -- increased from about 60% to 70%. That consolidation is what you'd expect in a declining market: Total PCs sold peaked at 365 million in 2011, falling to 288 million in 2015. There is no turnaround in sight, with 2016 expected to finish the year down another 5% or more.
It's against that backdrop that Apple rolled out the biggest upgrades to the 4-year-old MacBook Pro. Apple, more than many, understands that computing has shifted away from traditional computers to smartphones and tablets. Yet it remains loyal to the Mac, which is now approaching its 33 birthday, as do many of its oldest customers. For those reasons, it will continue to update the Mac but is unlikely to ever emphasize it again.
Consider what CEO Tim Cook said a year ago, soon after the launch of the iPad Pro: "I think if you're looking at a PC, why would you buy a PC anymore? No really, why would you buy one? [T]he iPad Pro is a replacement for a notebook or a desktop for many, many people. They will start using it and conclude they no longer need to use anything else, other than their phones."
Cook is betting that Apple can keep satisfying the generation that grew up on PCs with incremental change to the Macintosh while he keeps Apple pointed at younger generations, for whom PCs are less and less important. In the meantime, Apple is playing nice, talking up the new machines in a beautifully crafted feature at Cnet. Apple vice president Phil Schiller said, "The idea of a laptop … with a surface on the table that you can type on and a vertical screen has made sense for 25 years. As far as our eyes can see, there will still be a place for this basic laptop architecture."
And there's no reason to doubt he means it, even if that "architecture" might eventually run iOS instead of MacOS powered by ARM, not Intel. Apple doesn't like to talk about that, instead it keeps reminding people why the Macintosh is distinct from iPad. The former continues to run a legacy operating system, albeit one that gets upgraded annually, and is manipulated by a traditional keyboard and mouse/trackpad. The latter runs a modern OS and is touch based. Many critics yesterday shared the view of Business Insider's Rosoff and questioned Apple's apparent intransigence to build a Mac touchscreen.
But while the desire for such a feature is understandable, its absence makes sense if you're Apple. The company decided several years ago that touchscreen PCs offer a lousy user experience: Whether on a laptop or desktop, the screen is too far away to be easily pressed most of the time. To fix this, you need to first redesign the OS to support touch and then second redesign the hardware to get closer to the user.
Microsoft has performed a clever version of the latter with the new Surface Studio. But while that machine is gorgeous, at $3000 and up, Microsoft will be lucky to sell 100,000 per quarter. In fact, for all the marketing and hype around Surface, the Pro tablet/PC hybrids sell only about 1 million in a similar time frame. These are products for the pundit class, to be sure, with apparently cutting-edge features and lots of legacy technology built in (USB ports, woot!).
What they aren't are products that will have a meaningful financial impact for either Microsoft or Apple. Today, though, Apple shares something in common with its old rival: The belief that high-end laptops can still command high prices. Apple's new machines are $1500 and up, with the 13-inch Macbook Air now left to hold the "we make a $1000 computer" mantle. If you want to spend less, the iPad Pro -- the machine Cook was arguing is the new personal computer -- starts at $750, keyboard included.
Notably, the iPad Pro keyboard solves that redesign issue mentioned above. By being shallower than a laptop, it brings the screen closer to the user, making touching it dramatically easier. Still, iPad Pro is an odd beast. It's perfectly useful for any number of tasks and can absolutely replace a laptop for the basics of writing, browsing and taking advantage of the countless available iOS apps. But it's absolutely worse at manipulating text -- copy/paste is still unbearable -- or spreadsheets than a traditional laptop.
The weaknesses of iPad Pro notwithstanding, it's the strengths of iOS and Android that are helping to destroy the traditional PC market. Not to mention the technological evolution of the underlying hardware. This is from Ryan Block, co-founder of Begin:
During the same time: CPU advancements in ARM devices of both eras have yielded performance improvements >90%.
— Ryan Block (@ryan) October 28, 2016
Those slow improvements on the Intel side aren't so much a failure on the chipmaker's part but the reality of an architecture that dates back to the 1980s finally running out of steam. The result is a much longer upgrade cycle for PCs, now typically kept 4-6 years, and few compelling reasons to buy a new PC. (It's also worth mentioning that the iMac and Mac Pro didn't see upgraded yesterday, in part due to the lack of availability of newer Intel chips to make those upgrades compelling. Look for new models next year.) In the meantime, the capabilities of mobile devices keep improving, allowing more and more work to happen without using said PCs.
Dediu and I had a brief back and forth on Twitter about where and when the PC decline would end. We both share the belief that (1) we haven't seen the bottom and (2) over time there likely isn't much of one. That doesn't mean PC sales go to zero in two years, as was implied in 2013 by the venture capitalist Keith Rabois. But it does explain Apple's relative disinterest in the sector. Apple already makes about half the PC industry's profits selling <10% of the world's "computers". With the new Macbook Pros it will likely see growth in that segment in 2017 even while the segment itself continues to slowly disappear. That's growth from incrementalism because PC users aren't really looking for radical change, just more power and connectivity. But right now, that's all Apple needs, even if it leaves some wanting more.
