A new software program from
will now allow Macintosh users to run
Windows as easily as Apple's own operating system.
But will anyone really want to do that?
Many on Wall Street seem to think so. In a research note following Apple's announcement on Wednesday, American Technology Research analyst Shaw Wu said the program was potentially a "significant game-changer" in terms of helping Apple lure new users to the Macintosh platform and boost its market share.
"We believe a key reason why AAPL has not gotten more 'switchers' is lack of strong Windows compatibility. But now ... AAPL is able to offer full compatibility with Windows XP on a Mac," said Wu, whose firm does not do investment banking.
The market seemed to concur with Wu's bullish assessment. In recent trading, Apple's stock was up $5, or 8.2%, to $66.17, helping to power the
toward another five-year high.
But industry analysts weren't as wowed. Sure, the ability to run Windows on a Mac may appeal to some computer users, but the limitations of the program -- and the premium Apple charges for its Macintosh computers -- are likely to restrict its appeal, they say.
"Wall Street's reaction has been pretty dramatic here," says Roger Kay, a longtime technology analyst who heads up Endpoint Technologies, an industry consulting firm. "I'm scratching my head
and saying it doesn't seem like that big a deal to me."
Apple's newly unveiled Boot Camp software allows Macintosh users, when they start up their computers, to choose between running Apple's Mac operating system or Windows.
Users will be able to designate a certain amount of the hard disk to be used by Windows. And Apple is providing all of the drivers that will allow Windows to take advantage of the Macintosh hardware.
Boot Camp will only run on Apple's latest Macintoshes, and takes advantage of the fact that those machines run on industry-standard
processors. After years of relying on PowerPC processors from
, Apple is in the process of moving its entire Macintosh line over to Intel chips.
For now, Apple is offering the program, which is still in beta testing, as a free download from its Web site. But the company plans to build the program into the next version of its operating system.
Apple has carved out a niche for itself in the PC industry by offering a product distinct from the Windows standard. And the company has no plans to offer technical support to users who install Windows on their Macs. Indeed, users will have to buy Windows separately.
But the company said it was offering Boot Camp in response to user demand.
"Many customers have expressed their interest to run Windows on Apple's superior hardware now that we use Intel processors. We think Boot Camp makes the Mac even more appealing to Windows users considering making the switch," said Philip Schiller, senior vice president of worldwide product marketing at Apple.
The difference in reaction between financial and industry analysts could simply be a case of the two groups talking past one another. Both sides agree that there is some demand for the feature.
Boot Camp may not boost Apple's market share all that much, as the industry analysts believe. But for Apple, any market share gains could have a significant impact on the company's financial results.
In its last fiscal year, which ended in September, Apple posted $6.28 billion worth of computer sales, which represented about 45% of its overall revenue for the year. For that period, Apple had a little more than 2% of the worldwide PC market. Should the company boost its market share by just 1 percentage point, it could conceivably add another $3 billion to its total revenue. That's a big number for Apple, considering Wall Street expects the company to post just $20.4 billion in overall sales this fiscal year.
"Apple will gain share in the PC market in
2006 and Boot Camp may serve to accelerate these market share gains," said Gene Munster, an analyst with Piper Jaffray, in a research note on Wednesday. "Small market share gains would be material to our AAPL estimates," added Munster, whose firm has not done recent investment banking business for Apple.
But some industry analysts were questioning whether the program can significantly budge Apple's market share. Compatibility with the Windows platform has been a problem for Apple in trying to lure corporate customers. But an even bigger problem is cost. Macintosh computers are simply more expensive than PCs from
, and having to buy an extra copy of Windows for a Macintosh would make it that much more expensive, they note.
"I don't see
Boot Camp as a huge pop to
Apple's market share," says Crawford Del Prete, an analyst with industry research firm IDC. "For a lot of corporate environments
the cost difference is hard to justify, if hasn't been justified already."
Gartner analyst Van Baker puts it more succinctly: "This is not Apple's assault on Microsoft in the Fortune 500."
But if Boot Camp won't make Macs that much more appealing for corporate users, who will it appeal to? Baker and other analysts believe it may draw interest from some individual and small-business users who were interested in buying a Mac but need to be able to run one or two Windows applications.
Gamers, for instance, might be a natural target audience, suggests Tim Deal, an analyst with Technology Business Research. The number of games available for the Mac is much smaller than those for Windows PCs and the games that come out for the Mac often come out months or years after their Windows counterparts.
But users needing to run multiple applications within Windows -- or who would like to switch back and forth between the two operating systems -- likely won't find Boot Camp all that appealing, analysts say. That's because in order to run Windows, users will have to reboot their computers, often a time-consuming process. And in order to get back to the Mac OS, they'll have to do the same thing.
"There aren't a lot of people that are going to be switching back and forth between environments," says Kay. "Think about your day: You're not going to be wanting to reboot your computer at all."