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The value of Apple, versus the cost of Windows

4 May

mac-vs-pcI remember walking in to Seedcamp Week Berlin and shamefully turning on my 4 year old Packard Bell laptop in a sea of Macs. Similarly, if you walk in to Red Rock Cafe in Mountain View, or St Oberholz in Berlin, 90% of the people there are using a Macbook. It seems that Macs rules startups.

Yet a few years ago I remember reading a blogpost where some Venture Capitalist said that if he ever walked in to a startup’s office and all the employees were working on Apple computers, he would walk straight out and never make an investment. The argument being that such a startup clearly did not know how to spend wisely.

At the time I pretty much agreed with him, and always figured if I ever had a startup I would frugally equip the company employees with the very best of Dell.

Over the past six months, I’ve come to realise how wrong both I, and the long-forgotten-to-remain-nameless VC, have been.

Early last year when my trusty, but under-powered Windows 7 Packard Bell laptop died, I dutifully popped along to PC World to buy a new laptop. They barely had any stock, but I had no choice – I needed a computer that day and PC World is usually your only option for a same-day computer purchase. So I walked away with a HP laptop, equipped with Windows 8, and most importantly to me – a promised 5-7 hour battery life.

After only about a week I took the laptop back, because I assumed the battery was defective; it would only ever last about 2.5 hours, meaning after half a morning working somewhere remote I would already be getting battery warnings. Well, it turns the battery is not defective, it is just crap. I don’t know what they have done to Windows 8 to make it such an energy hog, but there is no way that thing would ever get 8 hours battery life unless I used it Jedi-style with the screen switched off and no WiFi.

Every time I moaned about it on Twitter the poor HP social media folk would direct me towards the same “Improving battery performance” page on the HP website, where the guidance to extend battery life is basically to not use the laptop.

The other small issue is Windows 8. I thought it would just take a little getting used to. Nope. Windows 8 sucks. It sucks bad. I can scarcely believe that a company that employs actual professionals to make products to be used by consumers, could make something so fundamentally unintuitive and unusable.

I could have just about lived with these problems if I was ignorant about the grass on the other side of the fence. But nope, with a Apple fanboi co-founder that was never going to be a possibility. I could see him smirking every time I had to reach for the powerpack for my laptop, while he would complain “oh, I’ve been using my Macbook for half the day and it only has 5 hours battery left. What should I do?”

The final straw was when I met some investors the other day and they were genuinely shocked that I didn’t have a Mac. Clearly not the guy I quoted from the blogpost.

So the other day I picked up a 14″ Macbook Air from Gatwick airport. It was about £120 cheaper than buying it elsewhere and knocking off VAT makes it about the same price as my rubbish HP laptop.

Experience since using it? Amazing. Battery life seems to be a genuine 11h. So refreshing not to have to keep one eye on the battery indicator and have the power pack nearby at all times. Size – it’s so light. Everything about it feels better. The touchpad is amazing and the multi-finger swiping feels instinctive almost straightaway. I won’t go on about how good it is, but the most important thing is that I already feel more efficient… and I also don’t get rage at my laptop like I did with the HP.

So, thanks to the combined crapiness of HP laptops and Windows 8 user experience I am now ex-Windows and pro-Mac. Even if they costs a little more, Macs seem to make it up with value.

Now if anyone can tell me why it would ever be worth a business paying £900 for a Mac Thunderbolt display rather than a £150 Dell screen, I’m all ears.

Expensive Apples

26 Oct

Yesterday’s microeconomics class about monopolies was quite fascinating, especially the idea of profit maximisation in a monopoly as at first it is counter-intuitive.

Here’s how I see the profit maximisation theory applying to a well-known company: Apple. Let me know if I’m wildly off the mark and I’ll go back to my text-books.

Apple has a kind of monopoly in the high-end personal computing market. I have read that it has a 90% share of the $1000+ market. Most of the personal computing market has had it’s profits squeezed massively, whereas Apple, I believe, is one of the most profitable companies out there, and is especially profitable compared to other computer manufacturers.

I’ve often read Apple critics say that if Apple were to just lower its prices it would take a bigger share of the personal computing market and would get more revenues as a result. However, I would say that Steve Jobs, as well as being a great product guy and a bit of a psycho, is also a great economist. Perhaps he has got Apple computer sales ticking along at their profit maximisation point and he knows that if they were to sell more Apple computers they would actually reduce their profits.

I asked our Prof about this and he said “I don’t know”, which a bit less than satisfying. I did ask how they can make more profits with a given product line if they’re at the profit maximisation point, and the answer was “they can’t”. So the only way to grow profits is to move in to new product lines.

I was looking forward to this lecture as I’m familiar with another monopoly: the market for MBA loans in the UK (rant warning). There is only NatWest serving the market and one of the things that suffers in a monopoly is customer service. Interestingly, students from Insead have set up their own MBA financing marketplace, Prodigy, where alumni actually invest in new MBA students.

Lastly, I point you in the direction of Mungonomics.

Who gets depressed? The rich. Everyone else is too busy.