Why Not Count Apple Twice?
There’s an argument that you should count Apple twice when you are counting units. If you say, for example, that HP has a 20% market share, you are really saying that HP and Microsoft together constitute a 20% share. The 20% is counted both for Microsoft and for HP. If you say Apple has 8% you are really saying that Apple Mac and Apple OS X together have 8%. So maybe we should count the 8% twice, because the HP/Microsoft 20% gets counted twice.
If you’d like to apply this logic then it would be legitimate to apply it to market share figures I, II and III above, giving you: 6.4%, 8% and 14.8% market share respectively. If you accept this idea then it suggests that Apple’s market share by unit and by revenue are roughly the same.
Projections
In December 2002, IDC analyst Dan Kusnetzky was quoted as saying; “Certainly by…2005, possibly by the end of 2003, Linux will pass Mac OS as the No. 2 operating environment [in the PC Market]“. That projection now looks ridiculous. In fact, Linux now languishes in the basement with Net Applications giving it only .67% market share by usage. However, I can imagine that extrapolations of OS market share figures from 2002 and before suggest the trend that Dan Kusnetsky put his name to. Extrapolations suffer from that problem.
If Apple’s Mac business continues to grow at the rate it has been growing, then Apple will double its market share in about three years. That’s a simple mathematical extrapolation involving no analysis. But as soon as you analyze the situation you find factors that could affect the market. For example:
- Apple does much better among the teens and student population. They are trend setters, so this indicates continuing strength maybe even accelerating growth.
- There is a trend in the business market to thin clients, which will reduce PC populations in businesses – a negative trend for Microsoft.
- The PC market is growing fast in China, India and other places. This is negative for Apple market share and may be negative for Microsoft, if it means a healthy Linux PC market, but it may be positive.
- Perhaps we’re heading into a recession, which will diminish all the growth percentages and perhaps even reverse them. Apple’s premium pricing may have a negative impact in a recession.
I don’t know whether Apple’s momentum will continue, but even if it does, the whole market is fragmenting. No-one ever counted the TiVo as a PC, but it is one if you accept a broad definition. I suspect no-one counts the Apple TV as a PC. It’s possible that televisions will have PCs embedded in them soon – and so will other other devices. The basic components of the PC are getting cheap enough for that and Linux is free. So, when do these devices count as PCs and when not?
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Very interesting take on this. I have wondered as well about regional USA market shares such as the New England and Los Angelos areas where film and graphic design may be more prevalent as well as high end colleges teaching these subjects?
“Right now it’s obvious that Apple is trampling all over Microsoft and it’s the PC manufacturers that are taking the hit.”
I like it! Tramp on Apple!!!
I have no solid data on regional figures, but its clear that Apple puts many of its stores in University towns and it has always taken care to serve the film industry just so that Apples keep appearing in movies.
Thanks for the feedback.
Robin
Excellent analysis. I think you’re correct that Apple’s market share will accelerate. People are just beginning to grok Mac.
“Apple actually has a 100% market share (of the Mac market) and the Home Mac market is outgrowing the Home Windows PC market by a factor of about 3 or so, indicating that consumers have concluded that it is a far superior product. ”
I just wanted to address this point. Is it really a fair comparison to try and compare a market in a growth stage with a market that’s in a mature stage?
To say consumers have deemed the mac to be the “far superior product” based on the growth rate is sensationalism at its finest.
Those PC users who do not switch because they believe the PC to provide superior utility do not affect the growth rate because they are already included in that market share. You can’t deny the growth, but you can’t claim the Mac “far superior” based on that and actually believe that is what consumers believe. Some yes, a majority, not a chance.
Other factors not considered is the growing number of PC users who do not purchase a PC from a store and build their own machines. I will likely never buy another “brand name” PC again, the last time i did was in 2002.
Later figures suggest that Mac market is outgrowing the PC market by a much higher factor (10 to 15). More than 50 percent of Mac buyers are switching away from the PC – even though the Mac is more expensive (except at the top end of the range.)
So the disparity is growing and you seem to think that these consumers don’t believe that the Mac is a far superior product. What is your alternative theory?
a) They think the Mac’s inferior but they’re happy to pay more and buy it anyway.
b) They think it’s fairly equal, but they’re happy to pay more and buy Macs anyway.
c) They feel sorry for Steve Jobs and are behaving charitably.
d) All these buyers are mentally incompetent and need help.
“Mac users replace their computers a lot less frequently (i.e. greater obsolescence in Windows PCs leads to more PC sales)”
Alternatively, PCs are cheaper so people are more willing to discard old ones. If Macs cost more, naturally people will replace them less often.
Perhaps the truth lies somewhere in between.
A further factor is the virus problem. PC performance degrades over time but does so quite quickly if virus infected. Owners that don’t understand the problem often simply buy a new PC.
“Owners that don’t understand the [virus] problem often simply buy a new PC.”
If they take their PC to a shop to have it virus cleaned, the cost of labour soon makes a new PC appealing.