Debunking the 5% Myth

Discussion in 'General Mac Discussion' started by thatwendigo, Apr 2, 2004.

  1. thatwendigo macrumors 6502a

    thatwendigo

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    #1
    I pulled this from the news story at osviews, where a poster was talking about marketshare. Even more interesting to me are the claims made by a commentator, however.

    In it's entirety:

    Here are the numbers: from someones posting 2 years ago - doubt the numbers have changed very much! Read at your convenience:

    -------------------------------------

    Shattering the five percent myth
    17 09 02 | 12:00 AM (@292) | BY JACK CAMPBELL

    Several nights ago I thought I would hit my favorite search engine and
    find out how many personal computers there are in the world. About two
    hours later I had to finally give up the search for the night, and just
    go to bed. It seems that innocent sounding question doesn't have a
    widely published answer.

    I'm now glad that I invested the time to dig up the numbers, because
    the reality they reveal is pretty startling. And, after dozens of
    telephone calls and e-mails, and many more hours spent on the internet,
    all to find this one tiny pool of data, I finally pieced it all
    together.

    Now the question begs, just why was this so important to me? The answer
    is simply that I keep reading manufacturer's numbers about their sales,
    analyst rants about the state of the industry, and media numbers about
    market shares, but without knowing the size of the market, I can't put
    the numbers into any reasonable perspective. If somebody sells 10,000
    widgets this quarter, is that a lot of widgets, or just a few?

    I don't care about widget sales, but sales of computer operating
    systems. Specifically, I am trying to get a handle on the evolving
    relationship between Microsoft's Windows XP and Apple's OS X... without
    any manufacturer's smoke clouding my vision.



    The Tale Of Two Operating Systems

    Everybody today knows that Microsoft Windows is the 600 pound gorilla
    of the personal computer operating system business. And, everybody
    knows that "Windows has 95% of the market.".

    Before I get to some interesting revelations about the true condition
    of the Windows vs. OS X feud, let me just relate a few recent
    statements made in public by both camps.
    Just this past week, Microsoft has said that, "... more than 46 million
    copies of Windows XP have been sold through OEMs and retail outlets
    since the software's release in October 2001."
    Apple shipped the first release of OS X on March 24th, 2001. And, since
    that time, according to Apple's Phil Schiller, it is estimated that
    just over 3.0 million Mac users have adopted OS X as their primary
    operating system.

    Frankly, without any sort of overall market size reference, these are
    both pretty impressive numbers, especially as the general ratio still
    seems to jibe with that ubiquitous 95/5 ratio we all believe exists.

    The Operating System Numbers

    Now, let's take a look at this simple set of numbers that took me
    somewhere around 30 hours of research to develop and to verify.
    Here are the approximate numbers of computers today in the world, by
    operating system and application:
    520,000 AS400's, 210,000 mainframes, 3 million Unix servers, 9 million
    NT servers, 240 million Windows PC's, 32 million Macintosh PC's, and 3
    million Linux PC's.

    Now that we have some real numbers to work from, let's do some playful
    analysis.
    First, let's take a look at the percentage of all personal computers
    running Windows XP. Interestingly, of the 240 million total Windows
    based PC's in the world, only 46 million have been upgraded to XP;
    that's about 19% of the total Windows market running XP. If we include
    Mac and Linux systems in the market total, it brings the XP percentage
    down to only 16.7%. Now, I can see why Microsoft is a little touchy
    about XP sales. XP is an upgrade that is nearly 100% compatible with
    the previous version, so no software and few work habits must be
    abandoned for a user to move up to XP. Even so, adoption is still only
    at under 20%.
    Of the total Mac installed base of about 32 million units, at least 3
    million have installed and are running OS X as their primary operating
    system. That's pushing the 10% penetration level that Phil Schiller
    mentioned at Seybold. Not bad for a new OS that requires that you scrap
    most of your older software and work habits. Even with that barrier to
    adoption, that 10% of Mac users has moved to the new platform. Not bad.

    Despite the statistical novelty of those ideas, the real shocker in
    these numbers is here: Of the 275 million personal computers in the
    world today, 32 million of them run some version of the Mac OS. Folks,
    that's not 5%, like the urban legend has it; that's 11.6% of the
    worldwide personal computer market. And, it's certainly not the 3% or
    so recently published as the Mac's share of new computer sales.

    So what?

    So, more than 1 in 10 people who use personal computers in the world
    are already using a Mac operating system.
    The last time I checked, 5% did not equal 11.6%.

    The Hardware Numbers

    To cap off this interesting study, I'll now share one more group of
    estimates with you: the percentages of installed personal computers
    around the world, by manufacturer. These numbers are drawn a from about
    20 different fragmentary sources, and have been compiled by me, to the
    point that I am confident in their general accuracy. Take a look.

    11.6% Apple
    10.4% Compaq
    9.8% Dell
    9.1% IBM
    7.3% Hewlett-Packard
    5.1% Sony
    3.4% Toshiba
    3.1% NEC
    3.0% Packard-Bell
    2.1% eMachines
    1.7% Microstar
    1.3% Fujitsu
    32.1% Others (each less than 1%)

    Yes, gentle readers, Apple has more installed personal computers in the
    world than any other individual computer brand. To phrase that idea in
    another, totally acceptable and accurate manner:

    Macintosh is the number one computer in the world.

    What does that fact do to the "Five Percent Myth?"
     
  2. KC9AIC macrumors 6502

    KC9AIC

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    #2
    very nice article. I've always noticed a lot more than 5 percent of home computers being Macs. Nice to have reassurance that we're not an insignificant minority.
     
  3. Mav451 macrumors 68000

    Mav451

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    #3
    hmm good stuff. This isn't too surprising when you take a look into computer labs. How many computer labs do you see running XP? None. Even at the workplace, most of it not all are 2000, with a sparse few running 98SE. I think this is probably corporate adoption, and your research reflects that. Aside from home users, most of the US (and US as in corporations, companies, industries) are still running 2k.

    Likewise, I either have seen a G5 or G4 running OSX, but I don't see the OS 8.6 look unless i'm looking at an old school G3 iMac.
     
  4. JamesDPS macrumors regular

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    Location:
    Irvine, CA
    #4
    For most of the people who really cling to the 5% (or less) numbers, unfortunately there's no article or study on Earth that would tell them differently... my roommate constantly says Mac has about 3% market share -- I've given up even bothering to argue with him because he somehow has that stuck in his head and won't let go. With him it all boils down to numbers, mainly cost. So I usually just sit smugly to myself without saying anything except "sure, sure..." but knowing that my computer helps me get a lot more (and better) work done in an aesthetically and architecturally friendlier way with fewer headaches than he would even know unless he bought a Mac. Which he won't, because he really has no good reason to (Excel runs on his machine pretty well, of course...)

    But even given this sad observation, I'm very glad for your analysis! I would love to pore over some of the sources some time.... independent, undeniable proof! Kind of the same way I want Apple to release Power Macs that absolutely undeniably blow away every machine in every test as conducted by every source (cheaply!)... but sadly there's always bias to everything :/ (and it's usually an "Apples to Oranges" comparison, anyway)... still I think the tenet "you get what you pay for" is usually true (9 out of 10 times, at least), so I don't have a problem blowing 3 grand on an übercomputer! :D
     
  5. thatwendigo thread starter macrumors 6502a

    thatwendigo

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    #5
    Whoa there, guys!

    I didn't write anything but the introductory line... As much as I'd love to take credit for the research that went into this, I'm currently trying to track down the poster so that I can get his materials and start a project of my own.

    Thanks for the vote of confidence, though. :cool:
     
  6. sonyrules macrumors regular

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    Ohio
    #6
    That makes sence

    Those numbers sound right, apple said it self there was over 30 million Macs in service, My question is that the PC number seams low. Not that im complaining. Its good to see macs at a higher level, and keep growing
     
  7. kewpid macrumors regular

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    Apr 17, 2003
    #7
    "market share" and "installed base" are different concepts.

    "market share" refers to the percentage share of a particular market over a specified timeframe. Thus, last quarter, Apple had a 1.7% share of the computer market. 1.7% of computers sold in that timeframe were Macs.

    Apple's "installed base" on the other hand refers to all Macs in existence in the world. Assuming that article is accurate, then Apple's installed base comprises 11% of all computers currently used. This figure should not be confused with "market share"
     
  8. ewinemiller macrumors 6502

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    west of Philly
    #8
    You hit the nail on the head. Yes installed base is at a decent level, but market share is small, declining, is a reasonable way to predict future install base, and is what you should worry about. It's okay to be a niche product, but you don't want to be too niche. When it comes to the point that it's not worth it for 3rd party software developers to write applications for your system, Apple won't be able to provide everything. Corel is pulling away, Adobe has started. I write plug-ins for a 3D software package called Carrara. Most of my competitors have gotten to the point where they either don't bother with a Mac port at all or do it when they get to it, usually six months or more after the PC release. Large vendors are realizing it's not worth the cost to them, if you're a small guy it's worse. There just isn't enough money in Mac sales to justify another machine (which should probably be a dual so you can test that way), compiler, and targeting and testing two more platforms (OSX and OS8/9 since that is what Carrara runs on). I can do it because I've got the production pipeline already set up, have lots of products to spread cost over, and have even made it part of my business model to port for other people. However if I was starting from scratch I'm not sure it would be worth it. Declining market share is something to worry about.
     
  9. Rincewind42 macrumors 6502a

    Rincewind42

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    #9
    Actually it is very hard to use market share to predict future install base when your talking about products that are not fully interchangeable. For this reason, market share numbers matter 100% to PC manufacturers, but less to Apple. If you buy a Macintosh, you've committed to buying software and hardware that is compatible with Macintosh computers, and while hardware often is cross compatible software almost never is. Additionally if you look at the usable life span of most computers, you will find the Macintosh often beats them all. Going hand in hand with that, the low-end cost (minimum cost of entry) is higher for Macs than PCs (primarily because you can't get a striped down Mac from Apple like you can from a PC manufacturer or assemble a Mac yourself easily). These factors taken into account generally points to the trend that Mac users tend to buy fewer replacement machines and keep their machines longer. Assuming that most computer users only have one computer, this means that Apple's market share numbers will always look disappointing relative to the rest of the market.
     
  10. CmdrLaForge macrumors 68040

    CmdrLaForge

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    #10
    Numbers are too low

    I absolutly agree with you. And as I understood Apple their goal is to get back to 5%.

    What I find really interesting is the very low number of installed computer base
    They look so low for me. Today we have 4 billon people leaving on earth. 310 million in the US. In Germany today about 80 million people. Everyone I know has a computer. I alone daily use 3 ! Two PCs (notebook and desktop) and one Mac. But I have another 5 un-used just sitting in the garage. I would expect most people using a computer have more than one. At least two. That would mean ~150 million people in the world out of 4 billion are using computers ! Somehow I can't believe this.

    Any thoughts ?
     
  11. ewinemiller macrumors 6502

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    #11
    I find the numbers a little hard to believe too. At home I've got 3 desktops (2 PC, 1 Mac), 2 laptops(1 PC, 1 Mac). At the day job I have another two desktops (PCs).

    Each of my parents have three PCs in their household. One of which is a Pentium 133 laptop, easily 8 or more years old and still in use doing wireless webbrowsing for those that think just Mac folks keep their machines for a long time. All my siblings and the wifes siblings have two or more PCs in their household. Frankly I don't know anyone who doesn't have a computer personally, most have more than one in the household, and most use another one in the day job. These are not IT works or wealthy people either, just folks who do email, documents, web, etc.
     
  12. jxyama macrumors 68040

    jxyama

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    #12
    not to mention longevity... Macs tend to last longer than PCs.
     
  13. stoid macrumors 601

    stoid

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    #13
    While the number to inherently feel to be too low on the numbers of computers, I think that we are not able to make a good estimate based on OUR surroundings. The reason that people are posting on this board is that they are living a technology life in which they are surrounded by computers. I think that a recent survey showed that only 75% of Americans had access to a computer. That's not even HAVING a computer, and so I'd image most of those are people that have to go to local college or public library for access. Then there are the 1 billion or so people in India that are almost completely out of the computer scene, and most of the 1.2 billion people in China that would rather go to a computer cafe that are prevalent there rather than owning their own. I think that we as heavy computer users tend to forget how many people don't have the same access we do.

    Just my 2¢
     
  14. laserbeahm macrumors member

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    Central Valley, CA
    #14
    I wonder if his numbers involve anything pre-Mac. I would image that a lot of Apple IIs were sold. A lot of underfunded schools still have labs full of them. As a matter of fact, you'd be hard pressed to find a school that doesn't have an Apple II somewhere on campus.
     
  15. ingenious macrumors 65832

    ingenious

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    #15
    no no

    here's one: the world has almost 7 billion people on it, not 4 billion! :D "just a thought"
     
  16. wordmunger macrumors 603

    wordmunger

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    #16
    The article is two years old and probably relies on even older data. The most recent data I could find indicated that 5 percent of the world is online. That would be 350 million people out of nearly 7 billion--but that figure was three years old. I suspect it's closer to 10 percent now.

    I suspect that most computer-owning families own just one computer, so the total number of computers may not be too far wrong: If 700 million people are online, they might only account for 300 million or so computers--perhaps more when you consider that there are millions of professionals who own multiple computers, or at least have separate computers for home/work. But don't just ask your computer geek friends how many computers they have, ask your garbage collector, or your hair dresser. Most people in the world are not professionals, they are manual laborers or substistence farmers.
     
  17. stoid macrumors 601

    stoid

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    #17
    I thought that we had just crossed the 6 bil mark a few years ago at most, still though, your point stands. ;)
     
  18. wordmunger macrumors 603

    wordmunger

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    #18
    Well, according to the world population clock (which *sort of* works in Safari), we're at about 6.4 billion now. 7 billion is projected for about 2010.
     
  19. Westside guy macrumors 601

    Westside guy

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    #19
    Sorry, but there's a pretty strong case for playing devil's advocate here

    I was looking at my site's stats just now, and remembered this thread.

    In the last 10 months about 3% of my site's visitors were on Macs (Sawmill says I've had ~35K visitors; and yeah I know the difference between visitors and page views). You can dance around that number all you want, but I don't see the arguments about spoofing your browser and/or OS adding up to any significant cumulative effect.

    Google's most recent Zeitgeist puts it at 4%. I find it kind of funny that the author of the cited article is trying to do all these gyrations and permutations with what he thinks are difficult-to-find numbers so he can run (or is the word "massage" more applicable) his own calculations, when Google already publishes the end data that he supposedly is after.

    I don't buy the "Five percent myth" either - frankly that number's too high. :D I wish the Mac share were a lot higher, but you know what they say about "if wishes were horses, ...".
     
  20. thatwendigo thread starter macrumors 6502a

    thatwendigo

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    #20
    Do the numbers for a given site necessarily tell you anything useful about overall population? The statistician in me says no, because it only tells you about the people who are interested in your site. Google might be a better indicator, but it still only tells you how many visited them in a given time period, not how many actually exist.

    Site statistics measure the platform as it is reported and understood by software at both ends, gathered over a period of time, and not much more in this instance.
     
  21. rdowns Suspended

    rdowns

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    #21
    FWIW, my site (work) gets about 8% Mac visitors a month, abount 165,000 visitors.
     
  22. arsbanned macrumors newbie

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    #22
    I suppose Site visits would be marginally relevant, since a Mac related Site would tend to get more visits by Mac computers. For instance, these forums probably have a high percentage of Macs visiting them. That doesn't lend itself well to an effective statistic. :cool:
    I agree on the argument of installed base vs. Market Share. Most stats indicate around a 3% or less Market Share for the Mac platform. Unfortunate, but unavoidable since it's a wealthy persons platform.
     
  23. Westside guy macrumors 601

    Westside guy

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    #23
    Well, that "statistician in you" should know that when repeated sampling provides pretty much the same number time after time, it's likely a good representation of the dataset as a whole. :) Google's Zeitgeist is published on a regular basis.

    If a site is not at all tangentially related to the subject being measured (for example, mine's a gardening site), it's hard to argue that - assuming you get enough counts to be statistically relevant - the site's visit numbers are somehow being skewed by the topic.

    But hey - you're free to believe that there's a big percentage of Mac computers out there in the world that are not on the Internet, or are at least avoiding sites like Google in droves. ;) I choose to believe that the Mac owners out there use their computers in large part to do the same stuff the Windows users, Linux users, and Solaris users (etc. etc.) use theirs for.
     
  24. Grimace macrumors 68040

    Grimace

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    #24
    Keep in mind that in America, products are cheaper, and the mean income is higher than many other large countries. Take India - lots of people - not lots of computers. You are posting on a Mac message board!! That means that you by definition use computing all the time. The numbers don't seem all that high to me.
     
  25. thatwendigo thread starter macrumors 6502a

    thatwendigo

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    #25
    I'm in my fourth year in a reasearch psychology program, actually, so I do have a working understanding of statistics, thanks all the same. Repeated sampling will show you that the representation stands for the sample group. Generalizability is extremely debatable, and always has been, especially in something as socioeconomically stratified as computer usage.

    Of course, we don't have anything to base this on aside from a very loosely defined naturalistic observation, so it's even harder to apply to a broader group. The confounds that immediately leap to mind are factors like the cost of macs (implying certain economic trends in users), the demographics of computer use in general, the draw of certain sites, and software errors in either browser or site statistic programs.

    What's relevant? Gallup is willing to publish off of 1,000 adults polled through the phone. Even your method of sampling skews your results in some way. There is no such thing as a perfect statistical method.

    I use a proxy that screens me out of Google's information collections system. I can't tell you if it reports me as a mac, Windows, or Linux user, since I don't know what the proxy is running on. That's just one possible explanation for the difference in statistical numbers, and that leaves out things like competing search engines.
     

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