Microsoft stagnation will lead consumers to Apple or Walmart?

A couple of MIT undergrads were over here at the house yesterday.  These technology connoisseurs said that the stagnation of features available in Windows will drive consumers to buying Macintosh computers, especially laptops.  Apple is apparently on a roll with new OS features including a disconnected and resync-able file system scheduled to ship in 2005 (didn’t Carnegie Mellon do this with Andrew File System many years ago?).  I compared their prediction to the high-end audio nerd’s belief that CDs would be supplanted by a digital format with superior sound quality.

In the audio market the connoisseurs were mostly wrong.  There are two competing high quality digital music formats, SACD and DVD-A.  Together there are fewer than 1000 titles available in these formats, more than two years after their release, and you can’t find these in most record stores.  By contrast the mass market has embraced digital music formats that are lower quality than CD:  MP3, XM Radio, Sirius Radio (the satellite radios put out about 64 Kbits/channel and are noticeably inferior to a regular FM station, even on a fairly cheap set of speakers).

Suppose that Microsoft never adds another feature to Windows?  Not even my personal pet desire, the ability to display and lightly manipulate camera raw format images that come from high quality digital cameras.  Would that drive consumers to buy Macintosh?  Not if the computer market turns out to be like the audio market where people said “CD quality is more than good enough; I just want music that is more convenient and/or cheaper”.  People would say “Windows XP Home is good enough but let’s get it for as little as possible”.  The result will be a $350 laptop at Walmart.  I met a senior Dell engineer recently and he told me that Dell was already producing a laptop on which they could cut the price to $500, without downgrading any components, and still make a profit.  The cheapest Macintosh laptop, by contrast, is $1100.

People who stopped buying CDs now spend their home entertainment budget on fancy digital cable.  If Microsoft’s feature stagnation leads to a big drop in the average price of a purchased PC who will pick up the dollars not spent?  My prediction is mobile phone makers and carriers.  I saw a billboard yesterday for a Nextel phone with built-in GPS and voice-prompt navigation.  That seems more useful to most people than whatever OS tweaks Apple and Microsoft might offer to their 1970s-style mouse-windows-keyword systems.

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