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And then there is the business perspective:

They are really executing exceptionally well in a difficult economic environment,” Ryan Jacob, portfolio manager of Jacob Internet Fund, said in an interview from Los Angeles. Apple is his firm’s largest holding. “Their iPhone sales are tremendous, and there’s every reason to believe these growth numbers will be strong for a long time. There’s no question their business momentum hasn’t subsided at all.”

And 70% of those PC's in use aren't chosen by those who use them.  When you look at the consumer market that almost 4% looks like about 1 in 7.  Not bad at all.

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Five years ago, Apple earned only 20% of what Microsoft did.

Based on Apple's earnings today, it looks like Apple will surpass Microsoft's earnings in the next quarter or two.

I'm not sure how big of a deal it is to grow market share when you're growing so dramatically on all fronts.

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@Avro... oh they're chosen... chosen by IT admins and executives who have decided to be practical, compatible, and functional for what... feels like forever.

Why, exactly, do you suppose Apple has made an effort to allow running Windows virtualized but not the other way around? Because they know they need to in order to be relevant.

4% looks like 1 in 7? I think you'd better recheck your math... 1/7=14% not 4%...

I just love your numbers Paul.

So you have "Mac" which is Apple, vs all other vendors that make "PC's" as in personal computers, Dell, HP, Sony, Acer, Toshiba and many others.

Why do you lump them all in one?  Why not break it out.  In the US the "Mac" would have 9.1% and HP would have?????  Dell would have ????

You lump them because you try to make this a Microsoft vs Apple thing.  Well in that case Microsoft sold 0 PC's, so Apple is ahead of Microsoft by 100%.

Apple had an outstanding quarter.  Which means so much more considering the Microtards always complain about Mac's costing to much, and in this economy the "PC" sales (all other vendors) have not done as well.  However if you break those "PC" sales out into vendors like you do with the "Mac" then you might see that some of them like Acer, did quite well and some others like Dell did not.  Acer should take exception with your logic and demand you break them out.

While we are talking numbers we should talk stock price, market cap, cash in the bank....all of course compared to the other individual PC makers.  It would be really hard to include Microsoft in the conversation since they dont make PC's.

The title of this blog post should be "The Apple Tax Myth" considering how well they are doing.

Of course who cares about that meaningless 3 or 4 % or whatever when 75 % of world doesn't have access to an Apple retailer and more than half these PC sales are driven by big IT purchasers who want cheap gear to do office work !!?!

However you slice it Apple has now one of the most desirable position in the computer and electronics industry.... And it's all that matters to them, not raw meaningless numbers.

From the event today...

"Q: Any thoughts on the economy?"

"A: We focus on Apple, and leave everything else to economists."

Balmer should do the same, instead of blathering on about the "New Normal".

"(This is a figure Leo repeated last week on "Windows Weekly," and I suspect that's because he gets his "news" from Mac sites."

No worse than getting one's "news" from this site. It's a joke to think that.

@GoodThings2Life

The consumer market amounts to 30% of computer sales and 4% amounts to 1 in 7.  The maths are pretty easy.

As for those doing the choosing, conservative types who wouldn't change course unless forced too.  Just look at the economy and you can see their collective wisdom.

Some are 'the glass is half full' people, some are 'half empty'. I enjoy Paul's 'the glass is poisoned and it was probably poisoned by an Apple user' view.

In view of the layoffs and pay cuts at Microsoft I suppose Paul has to put a positive spin on it.

Apple is doing very well.

I can't remember his name... who was that Microsoft exec who was cart-wheeling down the hall after the "success" of their "Laptop Hunters" ads..?

Ugh. Paul's harping on the 3.86 percent figure is nothing but his regular, pathetic attempt at obfuscation. "Nothing to see here, folks -- nothing to see here." And, really, going to all the effort of making a grand distinction that market share is maybe at 9.1% but, good golly, certainly not 10%! Really ... ?  

Let's face it folks, Microsoft is in trouble. The New York Times knows it (read the recent article "Forecast for Microsoft: Partly Cloudy" -- "long and winding course toward irrelevance."), and Daniel Lyons take on that article goes further -- why has Microsoft under Balmer let every significant recently evolved market get away from them: search, social networks, music retailing, mp3 hardware, smartphones/moble, movie rentals. They're struggling to play catch-up, pursuing lost causes and having to defend against markets they already own, Windows and Office.

Look at share price of Microsoft vs. Apple over the last 8 - 9 years. Apple is up 700%, Google is up 400%, while Microsoft is negative.

Apple will release the iTablet next year creating and then dominating yet another market with a device that sports full motion video, color e-ink screen, deals with content providers -- and Microsoft has ... what? Vaporeware? And if Apple TV turns into a gaming console (rumored), with the iTunes Store already in place, there is another threat to Microsoft.

Apple is extremely healthy, even in a bad recession, making profitable products that people willingly pay for (so much for those laptop hunter adds); it sells 90% of computers costing more than $1000 (cha-ching). Microsoft, meanwhile, has not been able to break into any new markets. No matter how good Windows 7 may be, it still has to compete with the large share of the installed base Windows XP computers already out there that for many are good enough -- same with Office 10 versus previous versions of Office. Where will Microsoft's derive its future revenue stream?        

Even if the Mac market share was 70% I still wouldn't  use one, so the current numbers don't concern me.

Apple is #4 in sales of computers (I think?).  I believe HP, Dell and Acer are 1, 2 and 3 in that order (Acer may have passed Dell, but not sure).  I suspect Apple's earnings are far more than any of those three companies.  (I haven't looked it up, so I'm just guessing and am willing to be proved wrong, but I suspect I'm not.)  The top 3 are making cheap computers with very small margins, so they need lots of volume to make a profit.  But, their sales have been declining this year while Apple's has increased.  The only real rise is the netbook market, which is the ultra cheapest you can get with the slimmest margin of all.

So why should Apple do any different than they are?  People are buying their computers in ever increasing numbers.  Apple is making lots of money selling them.  They continue to succeed over and over.  They don't need to be dominant to succeed, either.  However, if MS lost their dominant position, they would very likely be out of business.

Maybe Windows 7 will help the PC market and Microsoft.  I certainly won't complain if it does well.  However, it is clear that it won't hurt Apple either way.

As Leo says, "This  just in from Microsoft apologist Paul Thurrott."

You might check the marketcap on those companies. Apple is 8 times the size of Dell, larger than HP, --40-- times the size of Acer and now 70% the size of Microsoft, and closing.

So, Paul, keep telling yourself that the marketshare number is all that matters. Apple is making a ton of money, and more than half of it from the Mac.

But, this is the man who gloated,

"There's no debate [about Apple's market share] (indeed, Apple executives are still using the bogus 5 percent figure). Apple's market share is 1.88 percent today, and as your own math showed you, it will be 1.7 percent or lower in 2004. Why is this so hard for Mac advocates to understand? The Mac market is ending. Let's hope Apple has broader consumer electronics plans than just the iPod."

Huh. Turns out Apple DID have broader plans. It also turns out that Paul was flat wrong. The Mac market wasn't "ending", in units shipped it has almost tripled since he wrote that. In terms of dollars, every other computer company in the US would kill for Apple's numbers.

But, yah, those no-profit netbooks are the ticket. Apple is surely doomed.

Kinda feels like PT is sour just had to write a negative review

Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share. ITS ALL ABOUT Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share Market Share LOL!!!!

"Microsoft apologist Paul Thurrott"

Truer words have never been spoken.

You would think that, as a self-professed technology enthusiast,  Paul would want to celebrate the success of a company that makes high-end consumer gadgetry, particularly in the face of the worst economy in decades.0

Instead, he puts on his WinJihadist armor and, because they compete with his favorite company (and the one most directly responsible for his income), finds any way he can to be snarky, smarmy, and downright mean. Honestly, Paul, what's your problem? If Apple's market share is so insignificant, why do you even care? You should be grateful that they're out there innovating and helping raise the tide so your precious Microsoft doesn't sink even further into the shallow waters of irrelevancy, staying afloat by sheer inertia.

All I can think of is a quote from Buzz Lightyear: "You are a sad, strange little man. And you have my pity".

Just imagine Paulie saying this:

"These are phenomenal results -- and use that word. You know, it proves that even in a challenging economy people are willing to pay for what they perceive to be high quality product and a good value product.

"It's fantastic earnings for this economy. Actually, it's great number for any economy. It just shows the strength of Apple. It reaffirms that Apple is the leading consumer electronics company.

"The number of Macs sold shows that Windows 7 has not been a threat to the Apple franchise."

-Shannon Cross, Analyst, Cross Research

I sounds like Paul predicted that Apple would sell a broader line of consumer electronics, or Apple listened to his suggestion. Maybe Paul is the reason that for Apple's success. He did write some good reviews about some Apple products. Heck, I would have thought he was an Apple fan boy when I read the Apple TV review. His iPhone review encouraged me to get one [although the wife bought it for me as an anniversary present].

@any windows users

Please quickly post 7,200 comments so Mike doesn't feel the need to complain about all the LOUD MAC USERS on this thread.

@AAPL

Congratulations on an outstanding quarter. You're doing something right.

What I would like to see is Apple's sales figures and market share if Microsoft made it impossible to run Windows on a Mac the way Apple prevents PC users from running their OS. Remove the ability of running Windows and see if Apple's sales and market share don't take a nosedive.

In fact, every Mac user who loads Windows on their system should also have their system counted in the total of Windows systems sold. Everyone I know that has a recent Mac also runs Windows on it. And most of them are too cheap to buy it and generally 'borrow' a copy or outright steal it from the net.

The ability to run Windows on a Mac has probably been the single biggest cause of their increase in sales. Allowing this to happen is one of Microsoft's biggest mistakes.

Of course if they did prevent it, they would probably have all kind of legal problems headed their way.

In other words, Paul hates Apple success but thinks he can be relevant by reporting it.

- Cash and short-term marketable securities total $34 billion

Macrumors' notes on conference call

www.macrumors.com/.../apple-reports-1-67-billion-prof...

Current market cap of Dell, Inc. = $30.04 billion

www.google.com/finance

Apple could buy Dell with the cash it has on hand.  Which numbers are more important???

@techman.merb  I know a lot of people with Macs, most of the NON technical.  None of them have Windows on their Macs.  

My company has about 60 macs, two of them, (IT staff) have Windows in a VM that they test stuff on and then shut off.  The rest are pure OS X users.

I dont think your theory would pan out so well.

"Today's figures are actually dramatic gains."

Once again Paul bashes Apple as he points out their excellent qt.

Funny in the Bay Area where I live it seems like Macs are far more popular than they are anywhere else, in Peet's Coffee next to a Apple Campus in Cupertino 80% of the laptops are PC's and I'm the sort that notices. I also noticed Mac users are far more pretentious than PC users. So the behavior you see on this blog has always proven true in real life pretty much daily.

Considering Paul's a Northeastern liberal and proud of it, that's saying a lot.

This is just my opinion, but I think I know why apple is doing better than PCs are right now. Two words: Windows Vista. Don't get me wrong, I loved vista, but most people didn't, and still don't(like my father who is eagerly waiting for his Windows 7 upgrade). Now that Windows 7 is coming out, people are going to want a new computer with Windows 7 on it. The media mostly gave it good reviews(unlike Vista), and the media is a big influence. I know a lot of hard-core XP users who are going to upgrade to Windows 7. They don't care what version, they just want it. I think that the up coming holidays will bring back the PC marketshare, even if just a little percent. Competition is good. If there were none, we would still be stuck with IE 3 and Windows 95(if that).

"pales in comparison to the 26 percent growth experienced by netbook maker Acer.)"

Wow. 26 percent growth because of sub $400 netbooks compared 17 percent growth by a company who's cheapest computer is a grand.

Yeah. Just PALES in comparison.

You spin me right round baby....right round.

Anything to make Apple look bad...wow.

Who cares about the market share when they are the most profitable computer maker out there.

Go dig deeper into Acer's wonderful 26% increase in sales, and you will find that revenue is down and profits are down due to the razor thin margins on netbooks...

"Acer's net profit fell to T$2.3 billion ($70 million) in April-June versus T$2.9 billion a year ago, partly hit by the harsh economic climate and lower profits associated with low-cost netbooks.

The company was expected to report an average net profit of T$2.34 billion in the second quarter, according to analysts polled by Reuters Estimates.

Revenue also fell, slipping 5 percent to T$119 billion as Acer needs to sell as many as six netbook PCs to make the same amount of money as it would from a single regular notebook PC."

www.reuters.com/.../idUSTP20190820090827

Well, the quarterly reality check is always amusing.

Let's see...

If we're really generous to Linux and pretend they're up to their long-time goal of 1% of the desktop market, then Windows a little over 95% of the worldwide market.

Funny think how just a few days ago we had people on here insisting that Microsoft was doomed since Windows was down in the 80-85% range. Guess we know what orifice^H^H^H^H^H^H^H  oracle they got their "facts" from.

So we're at the same numbers we've roughly been at for the last 15 years...

* Windows ~95%

* Mac OS ~4%

* Linux ~1%

Plus ca change, plus ce le meme chose

Well, actually, not really.

In 1980 Apple had about 26% share.

In 1991 Macintosh was around 20%

But those numbers didn't come from the same source Paul's using so it probably isn't fair to say that "Steve Jobs has brought Mac to almost 1/5th of where it was 18 years ago" and since the US vs Worldwide market was much more US skewed back then perhaps we should really say, "Steve Jobs has brought Mac to almost half of where it was 18 years ago". Hard to say. The answer's somewhere in between those two, though.

A quick fact to put 4% and 1% in perspective:

The percentage of people who think the Apollo moon landings were faked on a sound stage is 6% which is 20% more than the total of Mac and Linux users combined.

We now return you to the LOUD AND REDUNDANT sounds of that that <4% whistling past the graveyard of insignificance.

This post was mentioned on Twitter by EverythingMS: Mac market share is now 3.86 percent http://bit.ly/xhGTd

PC sales will rise soon.  Three reasons.

Normal Holiday sales, the always rise this time of year.

Some economists are saying the recession is turning around and there is pent up consumer demand.  This demand + the holidays should = a rise.

XP hold outs that have needed a new PC for some time now will finally get one after Oct 22, because they HATED Vista.

So all three allow for a good bump.  I bet a lot of Paul/Mike types will point to these factors and just say, windows 7 was the only reason.  However a good comparison would be Fall 2009 vs 2010.  Providing things get better recession wise, the fall of 2010 would lose the pent up demand factor and the need to replace the old XP PC and only leave the normal holiday rise in sales.

THe only think that make Apple profitable is IPhone+IPod sales ... That's it!

So please stop dream apple *fanatics*... Microsoft is not near to death ... since somebody release a new modern operating system...

"We now return you to the LOUD AND REDUNDANT sounds of that that <4% whistling past the graveyard of insignificance."

For something so insignificant, you sure seem to spend a lot of time an energy talking about it.

@EricoF3 so you are saying there is not Apple Tax on a Mac?  You cant have it both ways.  Either Apple makes no money on the Mac, or it makes a ton of money because they are overpriced and use the same PC parts?

Which is it?

I think it is the fact that you are totally clueless or ignorant to the facts.  Some simple number for you.

Q4FY08 2.61 million Macs sold.  Q4FY09 3.05 million Macs sold.  Call me crazy but the second number looks bigger.  If its bigger then does that mean...

"He only think that make Apple profitable is IPhone+IPod sales"

???

yoshi

"For something so insignificant, you sure seem to spend a lot of time an energy talking about it."

Only to keep the LOUD NOISE from the <4% from drowning out actual facts.

Unfortunately, that takes a LOT of typing since we get things like 90% of Office has been the same for 12 years or that Windows is down to 80% or that Office 2010 files can't be read on earlier version.

So, want me to be quiet? Get the LOUD MAC FANS to stop lying.

Mike would you rather have 1000 shares of Apple or 1000 shares of MS?

rr0de

I don't tend to buy products based on how much profit the company makes off me. That just seems like a way to encourge being ripped off. (But, if not, I've got some stuff I can sell you that will make MY profit margins really, really high)

Now as for your confusion with Erico

It is QUITE possible for Apple to have HUGE margins and vastly out of line high prices on Macintosh and still lose money on the line. Remember that it costs the same to develop a computer or an app or a OS that sells 1M units as it does to develop one that sells 20M. The up front costs don't really change when your unit sales and you have to charge much, much more per unit just to break even on the R&D costs (or, in Apple's case since it's a bigger expense - on the Advertising budget)

So more than 3 million chose to purchase a Mac at average price of more than $1200 instead of a much — much — cheaper Windows machine.

Why would they do that?

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Satisfaction is far greater with OS X than Windows: www.appleinsider.com/.../apples_mac_os_x_snow_leopard_sales_double_previous_records.html

All this talk about margins and the like. Look, Windows and PCs are cheap crap. Plain and simple. You get what you pay for when you buy a PC, cheap crap.

@mikegalos: You talk a lot of crap. Really. Quite enormous amounts of it.

@mikegalos: It's amazing you defend a company like Microsoft. Convicted monopolists, liars, thieves and rip-off merchants. I'll give them one thing though, they sure know how to trap dumb people (customers).

Market cap of ...

Apple - $168.5 billion

HP - $115.4

Dell - $29.88

Acer - $3.96 *(As of @ July. Didn't find current market cap for Acer.)

So Apple is worth more than all of those other computer makers mostly responsible for that 95% market share. Well, what do you know. Gee, what sort of topsy-turvy world do we live in?

I bet Dell would love to snatch up Acer. Oh, wait ...

Dell's CFO said of buying Acer, "That doesn't bother me at all. Selling netbooks that have zero margin, I'm not excited about. We'd rather make more money than be the largest unit seller."

Wow, "make more money than be the largest unit seller." Imagine that.

Earnings per share:

Apple - $5.09

HP - $1.63

Acer - $1.66

Dell - $0.86

Oh, and Microsoft (who -ahem- doesn't actually make computers) -  $0.95

Source - WolframAlpha

"It is QUITE possible for Apple to have HUGE margins and vastly out of line high prices on Macintosh and still lose money on the line."

Of course, someone as intelligent as Mike knows that Apple does split out the Macs segment of revenue, profit, margin, etc... in each of its quarterly filings so he KNOWS that Apple IS profitable in its Mac market and has been so since the Internet Bust, but in order to spin some nonsense he will blather on with a few sentences that make no sense hoping you are an idiot that will be confused by his handwaving.

"At most, the Mac now has 9.1 percent market share in the US. This figure is obtained, again, by using IDC and Gartner's numbers. However, because I have to also use their numbers for Mac sales, it's a bit less accurate."

And, of course, Gartner says U.S. Mac market share for this quarter was 8.8 percent, and IDC says it was 9.4 percent, but Paul likes to do this useless handwaving exercise of averaging two estimates based on distinct methodologies of the entire market and then divide by Apple's reported numbers (without ever attempting to do the same with HP's, Dell's, or Acer's numbers) to end up with some meaningless number that has no statistical relationship with Gartner's estimate of 8.8 or IDC's estimate of 9.4, but he knows with certainty that, at best, it can be 9.1 even though 50% of his sources says that it is definitely higher... based on? His own fantasies.

Apple just released the results of another phenomenal financial quarter, earning $1.67 billion on revenue of $9.87 billion. According to the company, "Apple sold 3.05 million Macintosh computers during the quarter, representing a 17 percent unit increase

Excellent math there Paul.. Based on this site, the numbers haven't changed little if at all.

gs.statcounter.com

Worldwide

Windows XP 72.73%

Windows Vista 20.73%

Apple 3.83%

Linux 0.65%

North America

Windows XP 58.45%

Windows Vista 30.32%

Apple 7.99%

Linux 0.59%

Wow. WinJihad in action. Yes, Apple is struggling, no, Vista wasn't one of the most disastrous product launches in history and no, we're not worse than the FUD spreading Mac fanatics.

And yes, it's quite possible for Mike to be right and Paul to be unbiased. I hope to see examples of this in the future.

Love my MacBook Pro that I got this year. no doubt about it. However not exactly bad news for MS, I primarily run Windows on it and I've bought Win 7 Pro to install from tomorrow (UK Postal Workers permitting....).

No way I'd have considered a Macbook without windows. I do use OSX on it too but pretty much for itunes and web browsing. The latter being more on account of Apples sub-optimal Windows drivers giving me less run-time on the move and the former being the POS that is itunes for windows.

And yet there is more banter between both sides.

Can't we all just use what we like without going at each others' throats? Honestly?

Or is fanboyism deluding ALL of you?

This is an honest question. I'm not siding with anyone.

I'm using a Dell Inspiron 1520. I've had no real issues.

My Dad uses a MacBook. He's had no real issues.

Win win situation.

"Of course, someone as intelligent as Mike knows that Apple does split out the Macs segment of revenue, profit, margin, etc... in each of its quarterly filings so he KNOWS that Apple IS profitable in its Mac market and has been so since the Internet Bust, but in order to spin some nonsense he will blather on with a few sentences that make no sense hoping you are an idiot that will be confused by his handwaving."

Of course Mike does.  That is why never answered my question.  He had to throw up this crap and hope it stuck.

@wlow3 best post here.  It greatly magnifies Paul's attempt to use one statistic to paint his agenda.  Why Paul even post about this stuff I dont know.  He comes off like a 5th grader try to tease an adult.

I wish I had a link handy to one of Paul's 2004 columns about how Apple was going under.  Lol!!

Here's my take on this: I don't care about market cap, revenues, EPS or any of that nonsense. Leave that to the economists and CNBC-watching types.

As a consumer, the most important thing to me is marketshare of PCs versus Macs, because such marketshare directly influences how popular each platform is to developers, which in turn influences the range of software and hardware available to each platform.

I own a mid-2008 MacBook. I like my MacBook. But in using it, I can never shake the feeling of being somewhat trapped inside a world created by Steve Jobs. Why can't I have Blu-ray? Why does my $1200 MacBook have a 6-bit color display, with dithering so bad it makes it useless for any graphics work? Why is iTunes my only realistic choice for downloading music? Why in the blue blazes do I only have 1 trackpad button??? Where are all the @#$%! games!?

It boggles my mind how Apple get away with charging premium prices for machines with less capability, but they do, and that's great for them. But having owned a Mac and felt its restrictive shackles, Apple's fantastic quarterly financials aren't going to convince me to buy another one.

I'd say that the Laptop Hunter ads accomplished apple's goal for them, it further cemented the Mac as a premium brand.  People clamor and aspire for luxury items that are stylish and pricy.  Even trendy liberal windbag Paul pops out his macbook pro when he's swilling coffee at starbucks...   probably praying and hoping someone notices he's running windows on it to give him a chance to rant about how much he hates Apple.

"It boggles my mind how Apple get away with charging premium prices for machines with less capability, but they do, and that's great for them."

I would argue that in general, those of us who use OS X, choose to do so, and pay that premium, because what Apple offers, not because we want to "look cool".

I don't really care if I can get a PC with slightly better specs for a few dollars less, because running OS X more than makes up for it.

For example. I play World of Warcraft. Many of the people that I play with online are constantly struggling with their windows based PCs.  They are always having issues with the game running properly. Microphone not working with Vent, some driver issues with the graphics card causing the game to crash, etc.  The people I know who play on a Mac running OS X, for some reason never seem to have these problems.  Yes this is anecdotal evidence, but I see this type of thing everyday. I work at a major university and see Faculty, Staff & Students using every type of computer and OS out there.  The ones who seem to have the most problems are running Windows.  Rare is the OS X problem that is not quickly fixed.

This is why most Mac users pay that premium.  A little more cost up front, a lot less cost in the long run.

Well, here's the real kicker. MSFT seems to think it's 1995 and PCs cost $4000. See, at that price they make a lot of money because they can bury an expensive OS in it. But it's 2009, and PCs cost $599 or less. MSFT cannot make nearly the money on Windows 7 as they could Win95 14 years ago.

My point is that Win7 might be a great seller, but it will absolutely not make a lot of money for MSFT. The cheap PC is a double-edged sword: Windows zealots like to claim it helps them but the reality is MSFT makes less and the manufacturers make way less, while the market seems to be saying (in a recession) that they want quality over plastic, they are tired of fighting viruses and spyware, and they appreciate the high-quality product Apple makes. Don't take my word for it. It's there in B/W. Three million Macs in a recession. It defies logic. The reality is if we weren't in a deep recession Apple probably would have sold 6 million Macs.

You can spin this any way you want. Talk about market share all day long. The fact is it doesn't matter. Doesn't matter to MSFT and doesn't matter to Apple. Shareholders don't care either. What everyone cares about is profits. And Apple is making huge profits (36% margins) while other PC makers are struggling to break even. So go ahead and spin it. Talk all you want about the good old days. They are over. In the end it doesn't matter, but it's the only defense the Windows Jihadists have left.

UnnDunn,

I hear that same comment from quite a few Mac owners.  And that after the "hype", they would not buy another Mac to be hamstrung.

I'm kinda too tired to read and check if anyone commented this, but, with Apple's prices, how come you can compare their market share to "everything else" just based on their revenue?

I mean, average Apple product is at least 2x (if not 3x) of the price of an average PC product. Not to mention a lot of PCs are sold not as white box, but as components (which are than sometimes asembled by the shop in a quick and dirty manner, or by buyers themselves).

Taking those into consideration, I'd say that Mac  numbers (in pieces of units sold) are more like 1% of global market.

Not that it's huge difference, if it's 3%, 4% or 1% :) But still, this is way too far from precise information to actually give percentages with double digit precision (??), isn't it?

Apple Market share eh?

What is the number of PCs that MS makes? Oh that's right 0%.

"Well, here's the real kicker. MSFT seems to think it's 1995 and PCs cost $4000. See, at that price they make a lot of money because they can bury an expensive OS in it. But it's 2009, and PCs cost $599 or less. MSFT cannot make nearly the money on Windows 7 as they could Win95 14 years ago."

I don't think that is correct. I doubt that Microsoft charges less for Windows 7 than it does for Windows XP.

Its purely the PC hardware manufacturers that are working to lower the prices of computers.  So while the average cost of PC has been coming down, I think that the cost of Windows is rising and the overall percentage of what the OS is in relation to the rest of the PC is skyrocketing.  

PCs are half the price of what they cost 10 years ago.  Do you think that the cost of Windows has been cut in half? Microsoft is letting the hardware manufacturers battle each other over razor thin margins, but they reap all the rewards.

@yoshipod

---

"This is why most Mac users pay that premium.  A little more cost up front, a lot less cost in the long run."

---

Except... that isn't true, at least not for a savvy computer enthusiast. In fact, in my experience, the opposite is true, because when you have a problem with your Windows PC, there are tons of resources to help you solve it, whereas when you have a problem with your Mac, you basically have to run to the Genius Bar or Tekserve, both of which will gouge you on out-of-warranty repairs. Heck, in NYC the Genius Bar is typically booked up 2-3 days in advance, and that's despite there being 4 Apple Stores in the five boroughs.

My example is as anecdotal as yours, and just as valid.

@Delmont

---

"I hear that same comment from quite a few Mac owners.  And that after the "hype", they would not buy another Mac to be hamstrung."

---

I'm a computer enthusiast, so I'll probably wind up buying another Mac at some point "just because", but it won't be because of any delusion I may have of the Mac being "superior".

@UnnDunn - "I'm a computer enthusiast, so I'll probably wind up buying another Mac at some point "just because", but it won't be because of any delusion I may have of the Mac being "superior"."

That has been my point for a long time here. You state it perfectly. But, you will now be lumped in as a "Mac Fanatic" by certain people on this site.

--tayme

"Except... that isn't true, at least not for a savvy computer enthusiast."

You are making my point.

Someone who is an enthusiast or that likes to tinker with their machines will no doubt likely choose a Windows based PC.  They can certainly extract more value out of that.

However,  most people are not that interested in tinkering or learning all the ins and outs of computer management.  They just want a machine that works and is easy to troubleshoot. For many people this is why they choose to pay that premium for a Mac.  That is the value OS X holds for 3M people this fiscal quarter.

More people using Windows does not really mean there are more resources to go to when there is a problem, since most of them don't know what to do.  I constantly see students struggling with their Windows laptop and one person after another trying to fix it. Plenty of other users out there to help, but none of them seem to know how to fix the problems.  And trust me, these are some of the smartest people in the world.  Not computer or IT experts, just very smart researchers.

As for the Genius Bar, where does a Windows user go for a free troubleshooting resource? Best Buy? Maybe the new Microsoft Store? We will see how long the wait is there.

UnnDunn

" I don't care about market cap, revenues, EPS or any of that nonsense. Leave that to the economists and CNBC-watching types."

Of course not and that's not what Paul's article is about in any case. The reason it came up here was an attempt by the Mac Faithful to change the subject.

Understandably, they don't like admitting that even with all their ranting about how Mac is now really taking over from Windows the truth is that:

Apple's growth rate continues to be in the same magnitude as a rounding error

Even in the quarter where their bright and shiny new Snow Leopard is out while Windows users are waiting to buy PCs with Windows 7, Windows PCs outsell Macintosh by about 24:1.

It's no wonder they want to change the subject. What IS odd is that they think that a vendor's high profit margins are good for their consumers and aren't a sign that they're paying way too much. It reminds me of people who go into a car dealer and think the person with the "Sales Rep of the Month" plaque got that award from the dealer for getting customers the best deal rather than for doing the best job at wringing out the last dime from the customer's pockets.

That's because chasing market share for the sake of chasing market share is a futile endeavor. Ask Dell.

@yoshipod

"I don't think that is correct. I doubt that Microsoft charges less for Windows 7 than it does for Windows XP."

All I know is Ballmer was specific when he said that he wanted PC prices to rise because he felt they were too low. And from everything I have read Win7 on a Netbook was around the $10-15 range. It would be very hard for Dell to charge $499 for a PC and then shovel $100 to MSFT just for the OS. MSFT can't be making that kind of margin at that price point.

I will say it again: there just isn't much money to be made in the Windows PC market. You can't claim cheap PCs will save the market and then think MSFT is going to be raking in gobs of cash when the manufacturers are killing each other for table scraps. Market share doesn't matter anymore to anyone who has a stake in this. I can't wait to see what MSFT's earnings are this quarter. My guess is it will be another drop in revenue, making it three in a row. MSFT is a slave to this cheap PC model they created.

Live by the cheap PC; die by the cheap PC.

And it was commented (Mike Galos) that Apple doesn't pay any less for PC components than anyone else. That's simply wrong when you have $36B in cash laying around. Apple has corned the market for NAND storage because they pay cash and can buy up the entire market. My guess is they can do the same for any other components when they can pay cash. Can HP or Dell do that? No, because they have too many HDs and other components to buy selling tens of million of PCs. Apple must be doing something behind the scenes to get the cost of their Macs down to the point they can make 36% margins. That $36B in cash basically means they can make the component manufacturers bid against each other when they know they are getting a big fat check NOW as opposed to 30-90 days later. Dell and HP don't have the resources (cash) to pull that off. Hence they are in a losing battle for long-term profits. Apple couldn't be in a better position on all fronts.

Thinking out loud: why didn't Dell develop a Linux OS of their own ten years ago, so they could control every aspect of the PCs they sell? They must have known this day would come.

"You lump them because you try to make this a Microsoft vs Apple thing."

That's exactly what Apple does though.

BladRnr

"And it was commented (Mike Galos) that Apple doesn't pay any less for PC components than anyone else. "

No.

I didn't say that.

If you're going to create a straw man to argue against, at least don't pretend you're quoting me.

I said nothing about component costs. Period.

I  talked about how R&D costs on a product don't change significantly based on the volume sold.

I said was that "it costs the same to develop a computer or an app or a OS that sells 1M units as it does to develop one that sells 20M. The up front costs don't really change when your unit sales [do] and you have to charge much, much more per unit just to break even on the R&D costs (or, in Apple's case since it's a bigger expense - on the Advertising budget)"

In short with smaller sales you have to spread the upfront R&D costs among less products sold so you have to charge back more of that cost per unit.

@Mike Galos

Why do you continue to beat the market share drum? What does it do for MSFT in the long term when their OS rides on a cheap PC that barely makes any money? You seem to have a distain for people buying Macs, like some parent who thinks their kid payed too much, but fail to see the user experience/value Apple puts into their Macs. Rant all you want. The cheap PC market is killing itself. MSFT cannot control the total user experience and neither can the manufacturers because it is all based on cost. MSFT decries cheap, ugly PCs behind the scenes while Dell and HP complain they can't make them more elegant (expensive) because no one will buy them. Isn't that what MSFT claims in their ads? And now it's backfiring on them. People don't want a cheap PC if they can afford a Mac. And the way the iPhone/iPod/Mac experience feeds upon itself, Mac market share will continue to rise and profits will grow even more. It's a huge multiplying domino effect that MSFT and Dell/HP cannot control. Windows 7 will do nothing to stop it because it will be riding on a crappy, plastic-squeaking laptop. Why do you have such a hard time seeing this? The last three Apple quarters prove these points.

Go ahead and keep talking about market share and tell me how that matters financially to MSFT, Dell or HP. The fact is Apple is laughing all the way to the bank.

BladRnr

"Thinking out loud: why didn't Dell develop a Linux OS of their own ten years ago"

Answering out loud: Because they didn't want to own a tiny fraction of a product that 99% of the planet has never wanted even after decades of hype. Or perhaps it's because they realize that even their current 11.4% of 95% is a LOT more than the entire Linux and Mac OS desktop market combined.

Blad

"Why do you continue to beat the market share drum? "

Um, this is an article on market share.

The question is why do YOU insist on trying to change the subject?

A little sensitive that Apple's still under 4% after all those years of Saint Steve being back?

BladRnr-

You hit the nail in the head. Anyone who thinks that the PC manufacturers are going to be content with MS raking in all the profits while they are fighting for meager amounts of "profit" is fooling themselves. For better or worse that is why they hitched their wagon to the Windows in the 90's worked well then, not so much now. I highly doubt HP and Dell will continue to be in bed with MS if the market (especially) home continues to shift to netbooks. Which incidentally, how will that best value/cost benefit the OEMs? It wont.

To all-

Oh yeah Apple is worth more then HP and Dell combined? Continue with the thoughts its just an aberration. Why is this important because only in a black and white world is market share the only thing that matters. By that logic anything that doesn't have the largest market share is a failure. Example Pepsi has been #2 to Coke for decades. Does that mean Pepsi is going out of business anytime soon?

Apple on the other hand is chugging along quite nicely which despite what others might suggest. Despite some saying they don't innovate, blah blah blah, Apple has their hand on the pulse of the consumers while everyone else is out flailing about.

Point being Apple is going from strength to strength. MS? Well there is always the hope their stores will be a hit. And no, I'm not talking about having a computer store. Rather its hardly original to "copy" an Apple store, down to (nearly) everything that an Apple store has. I for one look forward to seeing the results, no not Thursday with the huge "crowds" but weeks/days/months/years down the road. Should be interesting.

@Mike Galos

"it costs the same to develop a computer or an app or a OS that sells 1M units as it does to develop one that sells 20M. The up front costs don't really change when your unit sales [do] and you have to charge much, much more per unit just to break even on the R&D costs (or, in Apple's case since it's a bigger expense - on the Advertising budget)""

It doesn't cost the same. There is no way you can tell me it does. You assume every programmer at MSFT has the same support, management and leadership as they do at Apple. Everyone knows Apple runs extremely lean. MSFT is bloated when it comes to shares/employees. Apple started out with a free OS and tailored it to their needs (in OS X). MSFT has to continue to support vast amounts of legacy code (though it appears to be less and less). So in essence, Apple has way fewer mouths to feed at Apple where MSFT has four times the people (18K vs. 80K, I believe). When considering salaries and benefits that is a huge amount of overhead MSFT bears that Apple generally does not.

Thirty-six percent margins. Yeah, Apple I guess doesn't know how to control costs.

Blad (and by extension Dude)

'The fact is Apple is laughing all the way to the bank."

Absolutely.

And the fact that the people Apple is laughing at are here proudly bragging about overpaying so that Apple's profit per unit sold is exceptionaly high makes the joke even funnier.

@Mike Galos

No, I asked why market share matters. You still haven't answered that question.

My Dell question was that had Dell put together a Linux of their own they could control the user experience from top to bottom, whether it worked or not. They could have made it strictly a consumer OS. Don't you see how that matters to any business, controlling the user experience? It's what makes Apple successful. Now Dell is at the mercy of MSFT. How does that work for them? Not very well.

Question for Mike Galos ?

Im not trying to take a shot at you but what do you do for a living? I see you post a million comments and than get wrap up in these silly arguments..

That goes for a few other cats here but im just asking for some reason you stick out...Do you have a job or wife or something?

Blad

You really can't read, can you. Here. I'll make it simple.

If company X spends $100M to develop product Y and sells 4M units they have to include $25 cost per machine as R&D costs to cover the expense.

If company X spends $100M to develop product Y and sells 100M units they have to include $1 cost per machine as R&D costs to cover the expense.

Whether company X sells 4M units or 100M units they still spent $100M to create product y.

$100M = $100M

4M < 100M

$25 > $1

If that's too hard for you to follow, perhaps you should put down that computer for a while and get a 4 function calculator.

@Mike Galos

Don't you own a Lotus (I thought I remember you saying you did once)? Why didn't you buy a Celica?

I guess it's a crime Lotus sold you a car that was more expensive. I guess Porsche, BMW and Lexus should all be belittled for selling expensive cars. I mean, what value do they add to their cars? Still has four wheels and a motor.

I for one, still hope I would be able to spend a fair amount of money on a computer, as in a way it is NOT a luxury product, it's a necessary tool.

Of course along those lines, you end up buying a Dell, or a HP or whatever floats your boat.

I have to admit, that people that actually buy apple products are probably after that luxerious trendy bit. As what other reason would they have to spend significantly more for comparable hardware ?

It cannot be OSX, altough a nice OS, it is mediocre compared to both Vista and Windows 7.

(but of course many mac users already run windows, since they seem to be unproductive without it..)

@UnnDunn - "I own a mid-2008 MacBook. I like my MacBook. But in using it, I can never shake the feeling of being somewhat trapped inside a world created by Steve Jobs. Why can't I have Blu-ray? Why does my $1200 MacBook have a 6-bit color display, with dithering so bad it makes it useless for any graphics work? Why is iTunes my only realistic choice for downloading music? Why in the blue blazes do I only have 1 trackpad button??? Where are all the @#$%! games!?"

You do realize you are seriously under utilizing your multi-touch trackpad, right? 2 finger tap for right click, tap and a half for click-to-drag, pinch to zoom, 2 finger scroll. This "Why in the blue blazes do I only have 1 trackpad button???" has zero bearing on the debate, because it is patently false. As an "enthusiast" you should better learn to use the technology at hand, these features even work in Windows under Boot Camp.

@ Mike Galos

I simply made the point MSFT and Apple are two different companies. They aren't spending the same amount with the same amount of people. No way. You can't figure out 80K employees is not equal to 18K? Maybe your model works for HP vs. Dell, but not for Apple and MSFT.

How come Dell doesn't have 36% margins? Because they don't want 36% margins? Because they are so kind to their customers they don't want to overcharge them? Right.

Blad

"No, I asked why market share matters. "

Actually, you didn't. But here are a few reasons:

Larger market share decreases expenses per unit sold and thus allow for more profits, more development resource for future versions or add-on products or a combination of both.

Larger market share increases the 3rd party ecosystem that increases the flexibility of the product and thus both increases the usefulness of the product and increases market share even more.

Larger market share improves the liklihood of the product being relevent in future years thus both increasing customer confidence and decreasing development costs of n+1 products since the existing product serves as a jumping off point rather than a false start.

Blad

Here. I'll do it one more time. <sigh>

I did NOT say anything about comparing "company x" vs "company y". I said that increased volume decreases the amount of R&D costs that have to be charged back per unit.

That's true at Apple

That's true at Microsoft

That's true, for that matter, at ANY company that develops and sells products.

Blad

"I guess it's a crime Lotus sold you a car that was more expensive. "

No. I willing paid extra for a niche product. And I have no problem with Mac OS X users paying extra for a niche product.

The difference is that I don't brag about how much extra Lotus charged me compared to a Toyota or pretend they really are the same price or brag about Lotus' unusually high profit margins. (On the other hand, I AM amused that my Lotus costs about 1/2 as much when I bought it as a Porsche with the same performance and worse handling)

Since we are talking about HARDWARE market share how about this one:

Microsoft: 0%

Dude

Actually, we're talking about market share for computers sold with Windows versus computers sold with Mac OS.

That the latter category has been reduced to only one vendor doesn't change. But, hey, maybe Steve Jobs will make the announcment today that he's changed his mind about licenseing and other vendors will be able to bundle Mac OS.

(What do you think, 10,000,000:1 odds against?)

What really surprises me is that with the Apple Store down, the Mac Faithful are here rather than hitting refresh on the Apple fan sites to find out what today's "It's the Tuesday before a new Windows comes out - we have to try to control the news cycle" announcements are all about.

@sjaak

The funny thing is I don't need Windows for any productivity at all.  My main Application for work isn't even available on Windows.

Like many Mac Users I use Windows and Boot Camp for one thing: GAMES

That actually is a case where market share matters.

And don't forget you can have the best market share there is and still go broke....

Avro

"you can have the best market share there is and still go broke...."

Absolutly true.

(But it's a lot easier to go broke with really bad market share)

Lose $10 per unit, but make it up on the volume  ;-)      (Acer?)

Apple doesn't look like they are going broke any time soon!

" But, hey, maybe Steve Jobs will make the announcment today that he's changed his mind about licenseing and other vendors will be able to bundle Mac OS."

Guess not. Just catch-up processor upgrades and a wireless mouse.

" But, hey, maybe Steve Ballmer will make the announcment today that he's changed his mind about copying software from others and monopolizing the market"

Guess not. Just another catch-up operation system, accompanied by tupperware commercials that invite you to host a W7 launch party.

Microsoft will release its copied OS, Apple releases a 27" bigger than HD screen with quad-core processor and exemplary sales numbers.

When will Microsoft release some decent hardware, besides the odd keyboard and mouse? Oh, apart from the infamous and expensive Failure-360 box.

Microsoft is even more hilarious than Richard Pryor was in his best days. And so is this blog.

@MikeGalos

"The difference is that I don't brag about how much extra Lotus charged me compared to a Toyota or pretend they really are the same price or brag about Lotus' unusually high profit margins. (On the other hand, I AM amused that my Lotus costs about 1/2 as much when I bought it as a Porsche with the same performance and worse handling)"

What model do you have? I think you said you had an Exige (?). That's cool by me. A little too small for my girth but I hope you enjoy it. Is it your daily driver?

Don't forget, the Windows PC industry also has pretty decent margins - they're just divided up a little differently.  Microsoft's gross profit margin (based on Q1 09) is just below 80%.  Their hardware partners' gross profit margins are, shall we say, less.  There's money being made on all those inexpensive PCs, but not necessarily by Dell, Acer, et al.

This is why it's ultimately kinda unproductive (IMHO) to compare Apple with the rest of the industry as if they have the same business model.

They don't.

@mikegalos - "The difference is that I don't brag about how much extra Lotus charged me compared to a Toyota or pretend they really are the same price..."

I don't remember anyone here doing that about Apple products, either. But, in your aluminum foil head dress wearing world, you seem to think that anybody that chooses an Apple product is an evil cult member.

--tayme

@BladRnr  -  The spyware and virii that you despise windows for is not on your Mac for one reason: market share.  If you think that trend will continue when Apple marketshare is above 30% you are deluding yourself.  

Someone else was talking about more folks having hardware issues with their PC's than with the Mac.  This would seem obvious as Apple has full control of the hardware for Mac, while MS has to make windows compatible with vastly greater numbers of hardware items.  That doesn't make windows any less worthwhile in my opinion.  Comparing the two isn't comparing apples to oranges (ha!).  You're far more likely to have hardware compatibiliy with a Mac and therefore less issues.  Not sure why that isn't obvious to anyone.  But that also means you are more limited in your options.  That is good for some, not good for others.

Which brings me to this point: why there is so much animosity between the windows and apple folks?  I'm a windows guy because it works for me.  But if the Mac worked for me, or I needed to use it for a job related function I wouldn't hesitate to buy one.  A lot of you seem at each other's throats (well, mostly Mikes).  Just put your facts out, let him put his, and agree to disagree without being hostile.  I think we'd all be happier.

@webguy - "This is why it's ultimately kinda unproductive (IMHO) to compare Apple with the rest of the industry as if they have the same business model."

Ohh, that's what I was saying in a far more winded, spelling challenged way.  :)

@Bladnr

"All I know is Ballmer was specific when he said that he wanted PC prices to rise because he felt they were too low. And from everything I have read Win7 on a Netbook was around the $10-15 range. It would be very hard for Dell to charge $499 for a PC and then shovel $100 to MSFT just for the OS. MSFT can't be making that kind of margin at that price point."

Unfortunately for OEMs that does not appear to be the case

"The current price of Windows XP OEM version is only around US$25-30, but the latest quotes from Microsoft for the netbook version of Windows 7 is around US$45-55 and therefore first-tier vendors are unable to transfer the cost to the netbooks’ sales price due to the fierce competition. The first-tier notebook vendors are still negotiating with Microsoft hoping to bring the price down."

netbookboards.com/.../windows-7-may-cost-45-55

So on a $500 retail Netbook running Windows 7, its quite possible that 10% of the cost of the retail price of the computer is just for the OS. That is up from about 5% for XP.

What happens when the cost of the Netbook goes to $400 or $300?

Its the retailers and hardware manufacturers who are losing out on this, not Microsoft.

@jecouch66

"Someone else was talking about more folks having hardware issues with their PC's than with the Mac.  This would seem obvious as Apple has full control of the hardware for Mac, while MS has to make windows compatible with vastly greater numbers of hardware items.  That doesn't make windows any less worthwhile in my opinion.  Comparing the two isn't comparing apples to oranges (ha!).  You're far more likely to have hardware compatibiliy with a Mac and therefore less issues.  Not sure why that isn't obvious to anyone.  But that also means you are more limited in your options.  That is good for some, not good for others."

You hit the nail right on the head.   This is why Mac owners are happy to pay that premium.  None of the Mac users I know complain about being limited by having fewer options for their computers.  They just want a reliable machine that will work well and allow them to accomplish what they want to do. Everyone wants the fastest machine they can get, but most Mac users don't care if they can get slightly faster PC hardware, since they know their overall experience on the Mac will be faster and more productive.  In the end that is what matters the most.  That is why we pay the premium.  Because we know its really not a premium, but a discount.

Blad

I have an Elise. (Even I'm not quite insane enough for an Exige). I will say that getting in and out has been a good motivator for keeping my girth down!

tayme

You haven't seen people on here saying a Mac costs the same as a PC or people brag about how much more Apple makes on each computer they sell?

Reading comprehension problem or did you just not understand the analogy?

@mikegalos -

"You haven't seen people on here saying a Mac costs the same as a PC"

Nope - I have seen people talking about market share and margins for Microsoft and Apple; but no where on here have I seen anybody say that the per unit cost of a Mac PC is the same as the per unit cost on a Windows PC. In past threads, I have seen people putting up costs of some high end Windows PCs in comparison to Mac PCs, where in fact, they were able to show that some Windows PCs cost the same or more than some Mac PCs.

"people brag about how much more Apple makes on each computer they sell"

Not sure where that came from. I didn't make any reference to that...but yes, in many cases the profit margin on a per unit Mac PC is higher than the profit margin on a Windows PC.

"Reading comprehension problem or did you just not understand the analogy?"

No problem with reading comprehension here...but you seem to have a problem with the truth and bending it to fit your needs. Again, something that seems to be customary to the current batch of liberals in power in the U.S. and the fans that they have following them.

--tayme

--tayme