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Let me get this straight.  Apple over the last 2 years has nearly doubled its world wide market share and increased its market share in the US by over 50% and is still somewhat "irrelevant?"

Clearly Apple now has 10% of the consumer market in the US and is anything but irrelevant.

Regards

Joe Dokes

Here we go again ! Sucks to be Apple... 3% Market share ! laughable !

Now who's better of, Apple shareholders or Dell shareholders ???

^ What I want to point out is that you have to compare what's comparable.

Apple's strategy and core identity has never been to be a commodity PC manufacturer and they will never be. It is what constitute their image and their strength. And thanks to that they make more money than PC makers who are in the commodity PC business which brings no money at all.

Why would they spend time and money entering a cutthroat market just to gain a few % market share and lose money ?? Makes no sense to me.

Shareholders are more than happy with Apple's strategy and want to keep it that way. Thus Paul, Apple will never be in the double digit market share and everybody's happy about it (including their users like me).

It's like comparing BMW to GM.

daveinla: That's a different discussion, and I'd imagine Apple shareholders are better off. But I'm not examining stock prices here, I'm examining actual hardware sales.

joe-dokes: When your market share is tiny, it's easy to make big gains. I've pointed out that Apple is performing very well. But worldwide, they're still not registering as a force in the PC market as they do in the US.

I'm not sure what Apple's share of the "US consumer market" is but I bet it's bigger than 10 percent. I think you're mixing up my comments about worldwide and US. Apple is a major force in the PC market, but only in first-tier computer buying countries, especially the US.

daveinla... The Mac market share stuff dates back years and to my previous blog. I started doing this because there's a lot of baloney thrown around in the Mac community about market share and how Apple will suddenly dominate because of strong YOY sales, which frankly they've been doing for a while now. The reality is that it's hard to make big market share gains because the rest of the market is growing.

Here's an example. Looking just at the US--Apple's best market by far, and why I call it out here--you can see that Apple grew an astonishing 29 percent (averaged).Neat. But the top PC maker, Dell, grew almost 16 percent. And it was already outselling Apple 4 to 1 or 5 to 1. So the actual real world gains aren't huge. They're gains. But it takes a long time to grow compared to the overall market because no one else is standing still either.

daveinla: I'd also point out, btw, that I'm not making fun of Apple or suggesting anything negative. I am in fact documenting their growth. They're doing quite well, especially if you believe (as I do, btw) that they occupy a BMW-like niche of the market. Apple is surely doing a better job than BMW in their relative markets, I'd say.

Totally agree Paul. The business in which they are is huge and any increase in their sales in % whether be it 20 or 50% will always translate to modest worldwide % increase as the market is so huge, all categories of PC and brand mixed-up.

You did a good job of journalistic reporting, besides the irrelevant moniker that you could have spared. The relevancy of a brand is not judged by its % but by it impact on its ecosystem.

daveinla ... absolutely. And that's exactly why I cover Apple at all. Their impact is enormous.

Can anyone tell me what percent of sells are 10.5 compare to vista? joe-dokes not making fun just asking

I'd argue that the 3.26% number is irrelevant, simply because Apple has a bigger impact on the market than anyone else above them...those who simply pushes boxes.

Their shareholders are happier too.  Win Win...and with only 3.26%

All are 10.5

Joe

Ok one more time in all pc sells not just mac sells (forget the computer sells). How many copies has apple sold as upgrades/retail or on new computers. Compare to vista sells as upgrades/retail or on new computers. I think this should give as a better idea on the actual market. Because when you upgrade your computer they don't count that.

Sure Apple is doing well,especially in U.S.A and sure it is making high quality product.

However we(me and most people i know) will consider them as a valuable alternative for Non Mac PC once Mac OS X will run on other PC than Mac and when Mac PC will be sold without Mac OS X bundled.

Until them no Mac for us.

PC running both Windows(even this O.S need serious paradigm shift) and Linux are giving with me plain satisfaction.

Btw, i am an outside U.S IT engineer and worldwide market does matter for me.

So looking as annual sales vs market share.  Apple had 24billion last year with a 6% market share?  Microsoft had 55billion and 92+%?

So if Apple increases their share to 12% will they just buy Microsoft and then have 100%:)

Stock price matters to investors more than market share.  Apple has 17billion in sales at the mid year point.  If the Exchange/3G iPhone comes true in June, will they reach 30...32..35 billion for this year?

"So looking as annual sales vs market share.  Apple had 24billion last year with a 6% market share?  Microsoft had 55billion and 92+%?

So if Apple increases their share to 12% will they just buy Microsoft and then have 100%:)

Stock price matters to investors more than market share.  Apple has 17billion in sales at the mid year point.  If the Exchange/3G iPhone comes true in June, will they reach 30...32..35 billion for this year?"

I don't know where you got these numbers but lets say they are true. 24b x 12% = 2.88b So how would they get the rest? And this is just one year sells not the value of the company.

So what conclusions can be drawn from these good numbers ?

a) People are tired of Windows and want to experiment with OSX.

b) People find Apple machines sleek and not so expensive. Plus they can run Windows on it, so why not try one of these machines ?

I would guess it's a combination of the 2, but I lean more on the b) thesis.

in my company, we are slowly replacing bulky, noisy non-energy efficient PC boxes with Macmini on which we install XP SP2...

I think many people buy Macs and run Win on them. (and probably try out OSX at the same time too as you can dual-boot)

Paul,

You post and your comments here are all pretty fair.  I think it's reasonable to say that Apple is pretty irrelevant in many international markets.  I don't think the chinese or indians are using many macs.  I think it's very fair for Paul to acknowledge that Apple's consumer share (which should matter most to consumer buyers since it's a sign of the platform's viability and support for them) is probably well about 10% in the US.

DarkSages,

You missunderstand the math Lindy is talking about.  If Apple has 6% markshare and earns 24Billion, than 12% marketshare would be double.  Given that the market is growing, and that share is a percentage of the market, not of your past sales, that means that Apple could substantially more than double their revenue by doubling their marketshare... except that about half of their revenue comes from the iphone and ipod.  But with the iPhone set to truly explode, I think it's reasonable to expect apple to get up to 40 to 50 billion in annual revenue.

That means, that Apple could very reasonably be making as much or possibly more money than Microsoft with a relatively small portion of the market and a much smaller portfolio of products.

That is pretty amazing considering how targeted Apple's products are and how many markets they ignore all together.  Clearly, they're focusing on the profitable markets and leaving the commodity garbage markets alone, for now, that seems to mean avoiding the low-cost machines that developing countries buy.

Hard not to think back to Michael Dell saying Jobs should just shut the company down and give their cash to the shareholders in 1997.  Look at Dell's finances now.  Ah, Schadenfreude is a beautiful thing sometimes.

I think some of you have it backwards. It's not Apple who is irrelevant in the world wide market, it's the world wide market that's irrelevant to Apple.

If the company's cash cow was selling to enterprises and international corporations, they'd no doubt put the same effort into that market which they do into consumer electronics and entertainment. In which, I have no doubt Apple's present would be more prominant world wide if that were the case. That's not the case though, is it? Apple's market is in the US. They sell to a totally different kind of consumer, and target a different kind of "office." One that's in your living room.

But enough hyperbole :P good figures. I've sat back as many of you have over the better part of this decade and watched Apple go from nearly bankrupt to in the spotlight (no pun intended). As for Microsoft, they're not in this article because they don't sell PC's. In turn, do not compete with Macs either. So they're not much of an issue here. Macs are as important to Apple as hardware sales are to HP and Dell. In such a market, Microsoft is a ghost competitor to Apple at best.

"in my company, we are slowly replacing bulky, noisy non-energy efficient PC boxes with Macmini on which we install XP SP2.."

Dave, you probably just solved a problem at home for me.

Thanks,

Doc

Pingback from  Iphone » re: Mac Q1 2008 market share: 3.26 percent worldwide, 6.26 percent

"bulky, noisy non-energy efficient PC boxes with Macmini on which we install XP SP2"

I guess your company never heard of the Lenovo ThinkCentre A61e Ultrasmall Form Factor PC?  Especially since this is EPEAT Gold certified, which the Mac Mini is not.  Toolless design also means that it is easy to work on.  Adding in the cost of the XP License that you will need to purchase (right?), your companies cost per unit will certainly be more, and won't save as much electricity as they hoped.

www.epeat.net/SearchResults.aspx

All of these gains are excellent, but I think the Mac-eroti tend to get a little bit ahead of themselves.  As Paul mentioned, while the percentage growth of Dell was half (and yes, I'm speaking of units here, what this article was about) of Apple, the actual unit growth of Apple was 325,000 units (taking the more favorable to Apple Gartner numbers), but actual unit growth at Dell was 753,600.  So while Apple IS making huge headway, the leader of the market is also moving, with growth in units equal to 75% of Apple's total sales.

I think that chole got it right.  Apple simply is not interested in the world wide market.  I'm sure that if they did put more effort into this area they would see thier sells go up, somewhat.

The truth is, as Paul points out, is that Apple is a "high-end" computer and for many people world wide that is not the type of machine they are looking for.  However, in the US, where consumers will spend the extra cash, Apple's numbers are quite good.

Because of these reasons I think it is fair to say that Apple's world wide numbers are irrelevant.  They are, and this is shown by the fact that Apple doesn't even target that area.

The bottom line is that in the US Apple is growing and is a major contender.  Buying an Apple computer is now a real option to a lot of people, which really wasn't the case in the not so distant past.  However, I don't think that we will ever see them surpass Dell or HP as Windows without a doubt controls the market.  It will be hard for Apple to topple a company that is outselling them 4/5 to 1, let alone two of them.

daringfireball.net/.../april

>>    Motorola’s quarterly results: 27.4 million phones sold and $7.45 billion in revenue. But the bottom line? A $194 million loss.

   What matters is profit; market share and revenue only matter insofar as they lead to making money. Motorola sold 16 times more phones than Apple for at least 8 times more revenue — but is there a person on the planet who would trade Apple’s phone business for Motorola’s?

<<

Dipsh:

Actually no we had never heard of the Lenovo A61. And the thing is even if you had even heard of it, it's impossible to find it (almost) on Lenovo's website as it is so badly build and organized. Actually, I think the M67 compares better with the Macmini, but it's more expensive/uggly/bulky. Of course in terms of expandability design they seem like great machine, but we never had to expand our machines in my company. As long as they come preinstalled with 1GB of memory at least and have a decent processor, it's all we ask for.

Also I doubt that the A61 with its X64 processor is as silent as the Macmini, but I have to agree it's a great economical and environment friendly machine for that price.

I have been waiting with eager anticipation for your spin on these quarterly market share results. You started the ball rolling with Leo on the most recent TWIT podcast. Leo mentions that Dell and Apple were the big winners in the US. "What were they(Apple) up worldwide?" asks Paul. Gave me a little giggle. Apple hadn't released their own figures and (even if you really hadn't seen IDC and Gartners figures) you would know that Apple wouldn't register in the top five worldwide share. Cute Paul.

So to the real meat  of your in depth examination.

"Apple is growing faster in the US than all other PC makers"

You forgot to mention that Apple is doing the same thing in the rest of the world (mergers and acquisitions apart). Actually their worldwide share rose at a faster rate than their US share.

"Dell shipped five times as many PCs in the quarter as did Apple"

Good for Dell! Remember one of your posts from a couple of years ago? The one highlighting that Dell shipped TEN times as many PCs as Apple.

"Worldwide, of course, Apple continues to be somewhat irrelevant"

Yep. Spot on! ;)

"though I'd guess that at least some of the growth in the "other" segment can be attributed to the Mac maker"

If by "some of the growth"  you actually mean 'most of the growth' (0.772 million out of 1.081million... 71%) then you are correct again.

"When your market share is tiny, it's easy to make big gains"

Er.... why?

Which do you think is easier Paul?

Selling 30 million widgets one year and then selling an additional 3 million widgets.

Or selling just 3 million a year and then doubling your sales to six million.

?

"I started doing this because there's a lot of baloney thrown around"

Sure is!

Good post Mary,

"When your market share is tiny, it's easy to make big gains."

Actually no it isn't Paul, you were the one that pointed out that Apple was chasing a growing market.  Thus, in 2000 when Apple's market share hit an all time low of about 2.4% in the US and 1.8 Worldwide you basically argued that Apple would NEVER be able to grow its market share.

Over the past seven years Apple has manage to grow significantly faster than the overall market.  Considering the overall maturity of the market in the US this is simply amazing.  

In the first quarter of 08 Apple's sales were up 50%, year over year.  More amazingly Apple sales in the first quarter were even BETTER than in the fourth quarter of 08.  Apple sold more computers during the slow part of the year than they did during the Christmas Rush.

Not too bad for a company that should have closed its doors and returned its money to its share holders.

Apple, Proudly going out of business for two decades.

Regards

Joe Dokes

I think one thing that Paul and Leo have to admit is that their knowledge of sales outside the US is pretty vague.  The Western European (and Canadian) market for Macs is strong and getting stronger.

The BBC has acknowledged that 10% of the UK consumer market are Mac Users and a quick sniff around the mature student submissions at our University in the UK comes up with at least this figure (the software leaves a footprint so we know who uses a Mac).  In much of Western Europe the situation is the same.  Don't forget our market is about the same size as the US market.  We have 3 monthly Mac Magazines in the UK: MacWorld, iCreate, MacFormat and a fourth one publishes every 2 weeks MacUser.  So the Mac market is pretty big in Western Europe and more and more Apple Stores are opening here.

Where the Mac is not strong (yet :-) )is in Eastern Europe, Africa and much of Asia.

I did some research last summer and the major country where the Apple was strongest was Canada.  Not much higher market penetration than the US, but a couple of percentage points more.

So please stop saying that the Mac does not have much of an international presence outside of the US.  It does and it is getting bigger by the day.

In computing, I'd say that it's easier to grow from a large base than a small base, and I think that's pretty much common sense.  Computing has "network effects" related to the size of the installed base.  Large base = more software devs.  More software devs = more people have the software they need.  More people use the platform with the software they need = they network with other users in their markets and spread the word as well as the blanket of compatibility.

There's also the word-of-mouth and mental momentum effects.  People like to go with the winner.  If they perceive a platform as irrelevant, they're less likely to spend money on it.  This was Apple's #1 problem in the mid 90's.  IBM-compatible was the buzzword everywhere.

Now that much of the world has tasted what Windows has to offer  and experienced it's problems with stability, durability and ease of use, they're open to the Mac and the combination of great word-of-mouth, the apple stores, and iPods in most of their hands... the network effects are starting to reverse.

But the point here is simple.  Paul, you need to PROVE that it's harder to grow from a larger base.  The simple fact that Dell grew faster than everyone but Apple seems to in itself contradict that thesis. The problem with Paul's "analysis" is that he often makes these kinds of declarations as if they're established fact when that couldn't be further from the truth.

Let me say this so there's no confusion. A huge Texas sized congrats to Apple for their excellent quarter. 11 years after Apple's darkest hours, they have made a huge come back and shown they've got something to say. Apple did not go quickly into that good night, they stood their ground and fought back from the abyss. I have to admire the tenacity and creative talents of those guys. Great job guys, you've even peeked the curiousity of this die-hard Windows user.

BUT..... As great as they have done, like the Pennsylvania outcome, it did little to change the game. MS is reporting around 140 Million licences of Vista sold since launch. I will give Apple further credit, they're forcing Microsoft to step their game up. Windows Seven will have to deliver big time where Vista has not. (Although a lot of it I believe was hyperbolie press, a lot of the criticism is justified and well deserved.) If Windows Seven anything less than stellar, Microsoft wil have handed the keys to Apple or Linux based OSes to start gaining tremendous ground. I really do think the Intel switch was a great tactic which has fostered this explosive resurgence of Apple.

However, I do honestly feel if Apple needs to come up with a lower end, high quality Mac for the lower income spectrum and soon. Our economic woes here in America will start impacting Apple's bottom line.  What I mean is a good quality desktop and notebook line that cost between $399-$499 price range. And not just the box like the Mac mini, I mean the whole package of box, monitor, keyboard and mouse. As consumers tighten their wallets and bare down for $4.00 a gallon gas in the U.S., a thousand dollar Mac will not sell as well here. Rising food cost, tightening credit, foreclosures, and other factors will lead to a decline of Mac sales. American's will go into cheap mode and get the best bargan for their wallets. This has happened before as it did in the early 1990s.

"it's impossible to find it (almost) on Lenovo's website as it is so badly build and organized."

Really?  4 clicks and you are there.  While I'm not going to go out on a limb and say that Lenovo has some great website, which they don't, but I hardly think that 4 clicks is excessive.

"Also I doubt that the A61 with its X64 processor is as silent as the Macmini"

Do you know, or are you guessing?  Ever use an A61?

"but it's more expensive/ugly/bulky."

In a business, who really cares what it looks like?  And in terms of the expense, are you including purchasing an XP license in your Mac mini figures?  Not a fair comparison.  Also consider that the A61 comes with a 3 year warranty.  All of these must be considered when examining the TCO of a solution.

"but we never had to expand our machines in my company"

I don't do much of that either, but the idea behind a toolless design is the ability to fix or replace parts.  As far as a business is concerned, these are important considerations.

"you need to PROVE that it's harder to grow from a larger base."

He has in the past.  But, what he is really getting to is that if you already have a large market share, making additional gains becomes tricky in mature markets.  Take the iPod.  Sales have leveled off, showing that growth is more difficult to grow when you already are bigger.  So, doubling market share when you have say 3% is much easier, because the unit growth is manageable.  If you already have say 90%, it is nearly physically impossible to double.  Or, if you have even 20% of a market, doubling to 40% is not an easy task, because that unit growth is simply not manageable.

Best comparison I can think of is speed.  Let's assume that your cars top speed is 100 MPH and typical speed is around 60 MPH.  Now, traveling at 5 MPH, doubling to 10 is quite easy and effortless.  10 to 20, still quite easy.  20 to 40 is getting a little harder.  40 to 80 is much harder, and any growth above that becomes that much more difficult.  Of course this assumes that this is something like a Smart Car, and not something like a speed limited Nissan GT-R.

@Joe-dokes

"Over the past seven years Apple has manage to grow significantly faster than the overall market"

" More amazingly Apple sales in the first quarter were even BETTER than in the fourth quarter of 08."

Joe, if some of us are trying to keep Paul honest then we really need to present accurate facts.

Apple's recent strong growth started around the last quarter (calendar)  of 2004. So that's about 3.5 years. Not 7

Q1 08 figures are a few thousand lower than Q4 07.

Dipsh t Admin

Good points I agree with all

@ subzerohitman721

Exactly why should Apple aim for the bottom end of the market where margins are wafer thin when they are doing very well at the middle and top end?  

(BTW if you think that petrol at $4 a gallon is bad you should try paying $8! (and that is for the small Am gallon :-( )  

It would be like BMW trying to produce a Chevette.  Why?  The economy may be going to pot, but the people most affected will be the ones at the bottom of the market and they most likely will just put off a purchase until things get better.  Apple would be wise to avoid this area of the market.  As the Ferenghi say 'There's no profit in it'.

@Avro

You are right that Apple does and excelent job of producing computers for the middle to high end consumer and them producing a low end computer would be wierd to say the least.

However, a low priced Apple may not be such a bad idea as it would allow some of those sitting on the fense to see if the grass really is greener on the other side.  The Mac Mini is close to this, but I think that they can do even better.

I could see from your point of view it could be a good thing, but once they go into the pit with wafer thin margins - quality would drop, user satisfaction would drop, service would drop and profits would drop.

Macs are good, just save up a little more for one.  :-)

Avro,

The reason why I strongly suggest a low end Mac are quite numerous. Traffic patterns across the U.S. are already down to what we consider high gas prices. (I truely sympathise with your $8, its not right no matter how high.) Consumers are already spending less on groceries, media, clothes, and other retail sales figures. Almost every U.S. PC manufactuer is predicting lower sales across the board. Even with all the medium to high sales, with all the new interest in Macs, when recession is in the minds of Americans even the most lavish of spenders cut back.

I would consider this a major creative challenge for the boys of Culpertino. Create a lower end, complete package, yet within the realm of quality Mac that plays to the lower end. Perhaps Apple could tap the creative talents of AMD and start coding for AMD processors. Or even tap Intel to make something happen. If it fails, Apple pulls out. If it succeeds, they get a chance to truely challeng one of the two core constituencies of the Microsoft dominance. If Steve's a gambling man, Apple will find a way. Without sacrifising any quality, Apple should be able to pull it off.

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