Gartner: Apple should license the Mac to Dell

— 12:37 PM on October 20, 2006

Apple should ditch the hardware business and license its operating system to Dell, according to a report by analyst firm Gartner. The firm believes Apple will not be able to continue growing the Mac's market share because of increasing pressure to cut its prices, and that the cost of components will also increase for the company, forcing it to reduce its margins. Apple is currently able to enjoy 40% margins on its Mac business largely thanks to discounts from Intel and other component makers. However, the report says, "As a result of permanently changed market conditions, Intel has been forced to restructure and, in our opinion, cannot go on supporting Apple (or any other customer) indefinitely."

Were Apple to ditch the hardware business and license MacOS X to Dell, Gartner believes the operating system could eventually grab 20% of the market—substantially higher than the Mac's current market share, which stood at 4.6% in July. Becoming a software company might make sense if Apple wishes to take Microsoft head-on and grab a significant slice of the operating system market. However, Apple has essentially been a niche hardware company with high margins for years, and it has shown little willingness to change. During an Apple shareholder meeting earlier this year, Steve Jobs stated, "One of the nice things about having four or five percent market share is you don't really care if [the PC] market is down." Thanks to TR reader DrDillyBar for the tip.

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