I was so thrilled when I heard that Snow Leopard (AKA Mac OS X 10.6) would support direct integration with Microsoft Exchange! I even went so far as to force our company (and all seven email users) to suffer a migration from MS Exchange 2003 (which doesn’t work with Snow Leopard) to MS Exchange 2007 (I won’t comment about how thrilled I am to upgrade to software that’s already more than two years old). I am the email administrator and am the decider in these matters!

But now my new setup has been working for about a month and reality is setting in. And that reality is that Apple’s Macintosh equivalents of MS Entourage on the Macintosh and MS Outlook on Windows has its own symptoms of old age and bad design! Now the email rage that was focused on Microsoft is pointed right at Apple!

For instance, you can cannot paste into the location field of an appointment iCal on the Macintosh. That’s right: No cut and paste in that particular field! So if you set up a new appointment and you want to have the location handy on your Blackberry or iPhone, you have to type it in separately, which means you have to remember it or write it down on a piece of paper if you don’t have a screen big enough to see both windows at once.

For instance, Macintosh allows you to add an email address as a new record in Address Book, but you can’t specify which “group” that record will be added to (which controls how the record will be synchronized to other databases). So to make sure that the record is synched to Blackberry, Plaxo, LinkedIn, and other databases. you have to remember to go to Address Book and copy the record into the right group!

I can keep for instancing, but the point is that the level of dysfunction with the Apple software promises to meet and potentially exceed the dysfunction of the Microsoft software! And we’re talking about Apple, the company that can do no wrong…

Recently, I have two experiences that have damaged my ability to do business. The first time, Apple Mail failed to send a file with two attachments that totaled about 18MB. With the help of our email hosting service, Intermedia, we tracked it to a known and discussed issue with Apple Mail’s inability to reliably and quickly deliver emails with attachments larger than about 4MB. That instance might have cost us a relationship with a new investor, because it appeared to them that we couldn’t respond in a timely manner. The second time, Apple Mail sent an email that was truncated because the attachments were placed inline in the text of the message rather than appended at the end of the text. That truncated email got sent to our limited partners and caused tremendous confusion about what we were communicating; made us look foolish with our investors.

I am completely committed to Apple’s platforms since I switched to Macintosh (in 2006) and adopted iPhone in addition to Blackberry (2008). I’m even more committed now that I bought the Snow Leopard story about Exchange integration. But I’m wondering whether Apple really does know software as well as it knows hardware and whether it can fix the issues in its software faster than Microsoft.

I flew on Virgin America recently and noted that, including myself, five of the six people in my row opened Macintosh computers after the flight took off. That got me to thinking about what the real market share of the Macintosh computer is.

Most analysts cite that Apple, as a company, sells a few percent of the personal computers sold in the world each year. Apple is selling Macintoshes at a rate of about 10M per year; PC sales worldwide were around 270M in 2008. That would make Apple’s market share around 4%. So this is the truth. But is it truth that actually matters to anyone?

The reason to care about Apple’s market share is to get a clear idea of what impact Apple has in the computer industry. The market share of computers used by people in row 12 of that Virgin American flight was 83%. Big difference between 4% and 83%. Except that neither number tells you anything about what really matters, which is: How many software developers are making Macintosh programs for sale (relative to Windows) and how many web developers believe that they need to support the Macintosh with plug-ins, testing, and design awareness?

I don’t think there is a single factory (probably including the ones that Apple pays to build Macintoshes) that buys Macintosh computers to control the manufacturing process. If that was considered a market, Apple would have 0% market share. I certainly haven’t seen any bank tellers, airline clerks, hotel clerks, or other service people using Macintosh computers. I’m almost certain that the tens of thousands of customer service people we talk to on 800 calls don’t use Macintosh computers, although I’ve never visited one of those call centers.

In other words, I don’t think it is useful to total up every personal computer sold worldwide and call that a “market”, since it is composed of multiple markets, each of which has different dynamics. The market that interests me is that one composed of people who choose, buy and install software on their own computer and of people who use their computer to engage in commercially interesting activities (like buying stuff or searching for stuff).

i’m inclined to believe (but can’t back up with statistics; any researches offering help on this are welcome!) that at least half the computer sold to run Windows in the world are not really “personal” computers. That would mean that Apple’s share of the real market is closer to 10% than 4% (since every Macintosh is bought by a human being).

And, if you imagine that Apple’s sale of Macintosh computer outside the US isn’t quite as broad as it here, you might think that Apple’s share of “the market for computer bought by human beings in the US” is even higher, closer to 15-20%. That makes Apple’s design decisions much more relevant to the current market than it would otherwise appear.

Earlier this week, Smith & Tinker took the wraps off its first product, the Nanovor game and its associated Nanoscope portable player. Smith & Tinker is one of our most interesting and aggressive portfolio companies, because it is trying to establish a new approach to building digital toys, one that fully embraces the idea that the current generation of kids want toys that are digital, interactive and internet enabled and are impatient with the half-steps that have been taken so far along that road.

This is a company that was originally hatched in the experience of The Geek, Gilman Louie. Ever since he sold his company, Spectrum Holobyte, to Hasbro, it’s been bugging him that toys didn’t use digital technology more aggressively. When we formed our partnership in 2006, he started playing around with the idea of a company that would do just that. We worked with our first EIR, Lenny Raymond, to outline the business plan for the company. Eventually, we asked one of the team that Lenny put together to become the founder, Jordan Weisman, and he recruited Joe Lawandus to become his co-founder. Jordan is an experience entrepreneur and creative genius. Joe is an experienced general manager and toy executive with experience at Disney Toys and Cranium Toys.

We worked with Jordan and Joe to recruit executives, directors and investors and have ended up with a remarkable team: Steve Arnold, founding president of LucasArts (the game division of LucasFilms); Jim Whims, former market executive for Sony Playstation and Worlds of Wonder; Ryan McIntyre, co-founder of Excite and investor in Guitar Hero; Randy Rissman, founder of Tiger Electronics (creator of Furby); not to mention Gilman himself.

Smith & Tinker raised a significant new financing that includes DCM (Doll Capital Management) and Procter & Gamble as new investors. And now the company is ready to go to market, having introduced the online component of Nanovor and scheduled distribution of the handheld Nanoscope this fall, before the Christmas season.