How Big Should Apple's 'Niche' Be?

A recent story at MacNN quotes anaylst Carmi Levy as saying that Apple will "always be a niche player."

Well, duh.

The move to an Intel-based architecture and the availability of Boot Camp and other solutions for running Windows on new Macs might grow that niche somewhat within corporations, particularly where employees or creative departments who insist on Macs can get a break from IT because the IT folks feel the hardware is more familiar. But Levy feels that the Mac will never eclipse Window's hegemony, which he's right about, except that, in some ways the Mac has a hegemony over Windows PCs that probably won't be supplanted anytime soon, and which Apple can exploit to grow into a "niche" player that also happens to be a household name.

I remember the dark days of the Apple's smallest market shares, circa 1997, when Apple was having trouble getting even CompUSA to sell the machines at retail. At that time, Mac fans would make comparisons to BMW or Porsche, saying that the Mac may not have much market share, but it's a premium brand -- a niche. Looking back, it may not have been a large enough niche to survive without some solid innovation and some marketing magic, so it was fortunate for the company that Steve Jobs and the Next OS came along when they did.

Fast forward to today. In my little piece of the world, Macs are everywhere. I work in newspaper publishing on daily basis and dabble in filmmaking. In the Jackson Free Press offices, the PCs are redheaded stepchildren -- we even do our accounting, invoicing and publication management using a combination of MYOB accounting software and a special (and not inexpensive) FileMaker Pro application written specifically for weekly newspapers. And that's in addition to the obvious InDesign, Photoshop, Illustrator machines that we have for design and production.

Last winter I spent a few months working in the production office on a feature film shoot -- and, again, Macs reigned on the crew...and not 2-to-1 or 3-to-1 -- but 20-to-1. Everyone had a Mac, whether they used it primarily to do their jobs -- many of them working with film industry databases or templates -- or if they used them mostly for hanging out after the shooting day was over, watching DVDs or synching with their iPods.

And I'm not talking about filmmaking and publishing in San Francisco or LA, either. All of this is taking place in Mississippi. I'm surrounding by Macs.

The flip side, though is the notion that if Macs reach, say, 10 percent of the market (at least in the U.S., where Apple's notebook market share is already 12%) then it's a pretty decent niche, right? After all, in the oft overused automotive metaphor, 10 percent is analagous not to BMW or Porsche, but to Honda, which has 10.2 percent of the U.S. market. Macs and PCs, on some levels, are becoming more and more like automobiles -- evolving such that they represent less dramatically different ways of doing the same things. Indeed, with the switch to Intel processors, Apple is competing more directly with the high-end of PC manufacturers, turning in impressive numbers and well-crafted machines using largely the same components.

All the "niche" really needs to do, then, is remain large enough to be profitable for developers and compelling for users. And, for many die-hard Mac users, we wouldn't mind seeing the Mac market stay small enough that the bulk of malware and spyware is written for that other platform. Mac OS X is something to be proud of -- a lot of open source geeky goodness with a strong GUI and plenty of high-dollar apps -- and keeping it thriving and healthy is something that a lot of Mac fans would love to see. We also like the idea of clever freeware apps and Mac-only versions of open source projects (like the Camino and Shiira Web browsers or the OpenOffice/Gimp-class of Unix apps) which requires a certain share of the market to maintain developer interest.

Where I think Apple could see some long-term growth is in small offices...particularly if they could solve a problem that my small office has -- the need for an affordable, robust file server. The Xserve is nice, but it's overkill...leaving me with the option of either buying an Ethernet-based network hard drive (a little pricey for as little as it does) or running a regular Mac with Mac OS X's File Sharing enabled (which is what I do). With an Xserve mini or some similar solution, Apple could open up some small offices to the Mac platform by offering the advantages of less time spent troubleshooting, Windows compatibility via BootCamp or Parallels, user-friendly options for higher-end server functions and integrate some of the stuff that Apple is famous for -- sharing iTunes music, printers and other devices with tech based largely on Apple's ZeroConf implementation, Bonjour.

They could roll that same thinking into a "home server" that would provide a lot of the same benefits to homes that have multiple Macs in them, going so far as to allow for Open Directory access, so that when users logs into any Mac in that home or office, they see their own home folder and personal documents.

But even without a small office/home server solution, as long as Apple can crank out powerful machines with a good overall cost-of-ownership, developers remain interested in the platform, malware authors remain less interested in try to exploit it and a lot of the "cool kids" keep buying Macs, then it probably won't be hard to decide to stick with the Honda of personal computers.