Windows developers’ sub-$1,000 opportunity

Joey deVilla’s suggestion that, for Windows developers, “the fact that Apple pretty much owns the $1000+ computer market is in fact an opportunity” sounds very much like trying to make lemons from lemonade. DeVilla is, of course, referring to news that Apple’s revenue market share for computers costing more than $1,000 — revenue share is the share of total dollars spent, not the share of units — was 91 percent in June.

That is to say, for every $100 spent on a computer that costs more than $1,000, $91 were spent on a Mac. The average selling price for a Windows PC in June was $515; for a Mac, it was $1,400. There are Windows PCs that cost more than $1,000, but people aren’t buying them. Now more than ever, Windows PC buyers are much more price-conscious than Mac buyers: hardly anyone who is willing to lay out real money for a computer spends it on a Windows PC; they’re either getting enough computer for their needs at a lower price point or they’re buying a Mac.

This is a problem for Windows developers — especially those who hope that people will buy their software. Their potential market has shrunk to a much more price-conscious base. If Windows users aren’t going to spend a lot of money on a computer, will they spend money on software?

For years, the conventional wisdom among Mac developers has been that Mac users are far more willing to pay for their software than Windows users are. This was the argument made by John Gruber and Dan Benjamin in response to Joel Spolsky, who wrote that there wasn’t much of a business case for developing Mac software. (Note that this exchange took place in September 2002.) Wil Shipley made similar points in a WWDC presentation in 2005 (slides here, PDF): Windows users don’t want to spend more for higher quality, don’t stay upgraded, and are afraid to install software; moreover, any new product is likely to be crushed by the plethora of lower-cost or free competition (to say nothing of piracy). Now, none of these assertions is backed up by any data other than the fact that a number of Mac developers have managed to do quite well for themselves even before the recent runup in Apple’s market share, but it sounds at the very least plausible.

Still, there is plenty of free competition to paid applications. Take astronomy software: you can spend up to $300 on Starry Night Pro or TheSky, or you can download Stellarium for free. Astrophotographers may swear by MaxIm DL, but you can bet that a lot more astrophotographers use PHD Guiding or RegiStax, which are free and do one thing well, than the MaxIm DL suite, which costs between $199 and $599.

There are people who will lay out the money for better software that costs money, but with Apple owning the premium computer market, how many of these people are still left on the Windows platform? And this problem is compounded if the application requires a powerful machine, if most of your potential market is running low-end, less-powerful hardware. My best guess (not worth very much) is that niche software will do well (because its success is tied to the niche, not the platform), but that any Windows application that attempts to appeal to a broad market and charge money is going to have a problem.

But you know what they say about problems: there are no problems, only opportunities. And it’s safe to say, in that context, that Windows developers have never had so many opportunities as they do now.