Apple Sales and Marketshare Up (IDC)

[Evangelion]

I know you wern't asking me but...
Market share does not matter, in my oppinion, in terms of "if it is a good comapny or not." And so
mething can still be very popular with a low market share (ie: BMW has less
than 2% worldwide).

Your car-analogy fails. Even though BMW has low market-share, you can still use same gasoline as other cars do. and you can use same tires. And if you know how to drive any other car, you know how to drive a BMW. But suppose that BMW's required special BMW-fuel. special BMW-tires and it's controls vere different from other cars. What would happen if the biggest chain of gas-stations decided that they are not going to bother with BMW-fuel anymore and if Goodyear and Michelin decided to drop their support for BMW's? It would make the car that much less appealing, and it could trigger a downward spiral.

Posted from my Nokia 9300 Communicator while sitting in a train

 

[FoxyKaye]

If only Apple Store Employees act less snob and not like from heaven.

I'll say... A close friend of my with severe dyslexia went to the SF Apple store asking about voice recognition programs and systems capable of running them. The employees at the store told her to "look at the Web site and then come back with questions." Jackasses...

The upshot of the story is that Apple lost a customer - she's getting a PC to run Dragon NaturallySpeaking 8.

Though I do wish developers would make the connection between market share and installed base - it would finally eliminate the need for Virtual PC.

 

[kiwi-in-uk]

Your car-analogy fails.

I disagree. Fuel equates to power. Tyres and wheels could equate to standard hardware interfaces. BMW controls are different (in some cases to the degree that buyers need training); yes they have steering wheels, pedals, seats - but that equates to screens, keyboards, mice.

Some of you are missing the point here. BMW stays in business (and accessory makers for BMWs, Mercs, etc stay in business) because it is profitable for them to sell in low volumes. Simple as that. If it is profitable then manufacturers and after market suppliers will develop and sell into that market share.

Equate that to Apple. Apple is very profitable (in margin terms, if not also in absolute terms) at low volumes relative to Dell & HP. If 3rd party hardware and software suppliers also find it profitable to sell at those volumes then they will develop and sell. Evidence? The earlier post about MS Office for Mac. Very profitable for MS, even though the volumes for the product are tiny in comparison with Office for Mac. Why would they stop a profitable product? Only if the reinvestment cost was to make it unprofitable (which must be a concern to Adobe as it contemplates Apple's Mac platform strategy).

 

[wdlove]

Again....block party....my place if it ever gets to 10%

I hope that I live to see that day. Agree with others that slow and steady growth is better.

 

[Lacero]

I hope that I live to see that day. Agree with others that slow and steady growth is better.

It's only been 8 years since Jobs took back the helm of Apple. Who'd guess Apple would be where it is today? I wonder what the next 8 years has in store for us. You'll be, what, 65 by then? Ready for retirement.

 

[Evangelion]

I disagree. Fuel equates to power.

Fuel equates applications. if you have no fuel, your car is useless. If you have no apps, your computer is useless. No matter how good your car is, without fuel it's nothing. No matter how good your computer is, or how great it's OS is, without apps it's nothing.

Some of you are missing the point here. BMW stays in business (and accessory makers for BMWs, Mercs, etc stay in business) because it is profitable for them to sell in low volumes. Simple as that. If it is profitable then manufacturers and after market suppliers will develop and sell into that market share.

You just don't "get it". BMW stays in business because it can use the same infrastructure other cars can use. It can use the same fuel and the same roads. With computers, things are not like that. Mac can't use Windows-apps, and vice versa. And if Mac has a low market-share, then at some point people and companies will start to question the value of writing apps for Macs, when they could be writing them to a much larger audience. And when one company desides to drop their support for Mac, the platform becomes a bit less appealing, which could result in lower market-share. And that in turn could cause even more companies to drop their support, making the platform even less desireable.

Yes, Apple is profitable, and they are increasing their market-share. But listening to your guys, it would be OK if Apple was losing market-share if they were profitable, right? Well, no. Because at some point, the Mac-market would be so small, that everyone would target other platforms instead. And in the timespan of just few years, the business would turn from something profitable, in to a river of red ink.

If Apple wants to thrive, it needs market-share, period. This is not rocket-science people!

 

[WebHead]

The most reliable measure of installed base is web statistics, which show Macs account for between 3% and 4% of computers connected to the Internet. Their share of the home market is probably higher because many Mac users (like me) are forced to use a PC at work.

Safari's market share is nearly 2.5%, which means the remainder are either on OS 9 or using other OS X browsers.

And last time Steve Jobs mentioned the OS X installed base it was about 15 million. It's probably closer to 20 million now. Apple claims a total of 25 million Mac users.

Jobs recently mentioned the Mac's 5% "glass ceiling". I think he finally realizes Apple will be a niche player until it licenses out its OS (which will be easier once the Intel switch is complete).

Because if their market-share is too small, they might become irrelevant. Would Adobe bother releasing Photoshop for Mac if Mac had a 0.4% market-share? Or any other developer for that matter?

This is where different types of market share come in. Apple might only have 3% of total market share but it has well over 50% of graphic arts market share. Thus Mac users account for a quarter to a third of Adobe's business, so I doubt it will be dropping the Mac anytime soon.

(Though with Apple's rumored Photo Pro, who knows ...)

 

[kiwi-in-uk]

Fuel equates applications. ... etc etc etc

I still disagree with you. At the risk of stretching the analogy too far ...
Petrol can equate to electricity at standard voltages; roads can equate to physical desk tops.
BMW manufactures its own engines; writes its own software. BMW and Merc make their own after market accessories. Other manufacturers make accessories for their products. Why would they do that if the market share is small? Because they can design, manufacture and distribute at a price that makes it profitable for them to do so. That requires a critical mass of sales and installed base. But has little to do with market share.

If, however, the absolute size of the market was shrinking then I would agree with you because by implication the number of Mac sales would decrease (although not necessarily, depending on who the buyers were) and then the number of software units sold may shrink, which in turn would make it less profitable for Adobe, Microsoft, etc to reinvest.
Why do small software houses find it profitable to develop rather good apps for OSX (examples on my desktop now - Rapidweaver, Comiclife)? Because OSX makes it easy for them to offer good fit for purpose s/w at a low cost, which means that they can offer to consumers at a low price and still be profitable with relatively low volume sales.

 

[fatfish]

Fuel equates applications. if you have no fuel, your car is useless. If you have no apps, your computer is useless. No matter how good your car is, without fuel it's nothing. No matter how good your computer is, or how great it's OS is, without apps it's nothing.

You seem to be twisting the model to suit your own purposes. Not that the model is particularly useful anyway, but the point that is being made is quite valid, BMW survives (no flourishes) at 2%, if a mac needed a different type of electricity to run on, the fuel thing may be valid.

Many parts for the BMW are specific to the BMW, third party manufacturers often do not bother to produce replacement parts and hence the BMW owner is restricted to genuine BMW parts, but that doesn't seem to affect the BMW share, the owners simply accept they have to pay more for parts if they want a better motor car.

The mac market share is not completely irrelevent, because I suspect nobody would make software for a mac if it only sold 315 units a year, but at 4,000,000 they would have to loose an awful lot of sales before it became relevant.

So to put it in perspective unless unit sales fell dramatically, market share is irrelevant.

 

[seashellz]

wait utill the Mactell machines come out-and then when and IF OS X will run on Intell boxes- jump to 20% marketshare

 

[Evangelion]

You seem to be twisting the model to suit your own purposes.

No, since this is just pure logic. Fuel is what makes cars go. Without fuel, cars are useless, period. Same thing with computers and apps. You do not buy Mac in order to run OS X. You buy Macs to do certain tasks, and you do those tasks with APPLICATIONS. Without applications, your computer would be useless, period.

Not that the model is particularly useful anyway, but the point that is being made is quite valid, BMW survives (no flourishes) at 2%

Would BMW flourish if it required a special BMW-fuel to run? No it would not.

if a mac needed a different type of electricity to run on, the fuel thing may be valid.

Macs require Mac-software. that is a fact. If you have no software, your computer is useless. If you have no market-share, you will have no applications. I'm really surprised that I hav to educate you people about this!

Macs are not BMW's. You can run BMW on normal fuel. But you need Mac-software on your Mac. You can't just walk to a store, buy an app and be certain that it will work on your computer. You CAN do that with a BMW: you can refuel at any gas-station, and you can be sure that the gasoline they sell will work just fine in your car.

Many parts for the BMW are specific to the BMW, third party manufacturers often do not bother to produce replacement parts and hence the BMW owner is restricted to genuine BMW parts, but that doesn't seem to affect the BMW share, the owners simply accept they have to pay more for parts if they want a better motor car.

There are original parts for EVERY car-brand out there

The mac market share is not completely irrelevent, because I suspect nobody would make software for a mac if it only sold 315 units a year, but at 4,000,000 they would have to loose an awful lot of sales before it became relevant.

Where exactly did I claim that Mac is "irrelevant"?

 

[nagromme]

Because if their market-share is too small, they might become irrelevant. Would Adobe bother releasing Photoshop for Mac if Mac had a 0.4% market-share? Or any other developer for that matter?

Absolutely, dev support is why healthy market share matters--or actually, it's why (semi-recent) installed BASE, not market share, matters.

I'd add some things to that:

* A small percentage of a huge number of buyers is STILL a useful market that someone will want to sell to.

* Macs are very popular--even dominant--in certain areas. Adobe, for example, makes a HUGE chunk of its Photoshop sales (around half I seem to recall) to Mac users. So Mac creative software is already a healthy market. Mac business software probably less so... but then, we have Office which seems to be standard So it's the smaller niches that Macs miss out on if there aren't enough Macs out there. And if you're in one of those niches, you'll care! Games are an example too--they cost a lot to make, so having a lot of Mac owners to buy them is a very good thing.

* In the end, the key number here is the Mac's share of software sales. And guess what? Supposedly 18% of all software sales are for Mac:

http://macdailynews.com/index.php/weblog/comments/5933/

 

[fatfish]

wait utill the Mactell machines come out-and then when and IF OS X will run on Intell boxes- jump to 20% marketshare

I wouldn't like to see that. Whilst I am of the opinion that MS does not care about it's customers and does not write the very best software, I have great sympathy with them because their market share is undoubtedly the reason for most of their problems.

I imagine it is close to impossible to make their software run flawlessly on so many manufactures hardware and with so many third party software applications. As it stands Apple has more or less full control over its products, a greater market share would threaten this control.

 

[Evangelion]

Petrol can equate to electricity at standard voltages; roads can equate to physical desk tops.

You are taking the comparison too literally. Let's walk you through it, shall we?

You use cars to go from point A from point B. And in order to do so, you need fuel. And BMW can use normal fuel you can buy from a gas-station.

You use your computer to carry out certain tasks. And you carry out those tasks with APPLICATIONS. But, unlike with cars, you can't use any app you find on a Mac, you need specific Mac-software. yes, you also need Windows-apps on Windows, but there it's not a problem really, since most software out there IS Windows-software. If you get a small game in your cereal-box, it's a Windows-game. If you find some random app on the net, it's propably Windows-app. By default, the apps are Windows-apps.

If, however, the absolute size of the market was shrinking then I would agree with you because by implication the number of Mac sales would decrease (although not necessarily, depending on who the buyers were) and then the number of software units sold may shrink, which in turn would make it less profitable for Adobe, Microsoft, etc to reinvest.

It doesn't quite work that way. Even if sales of Macs were increasing for example 5% every year, while sales of PC's were increasing 50%. By your logic, Mac would be doing just fine, right? Wrong. At some point Adobe and Co. would start to think "you know, we are selling 1 million pieces of software to Mac-users every year. But we are selling 200 million pieces of software to Windows-users every year. Now, which market is more important to us? To which market should we focus our efforts at? Is it really worth it to spend resources on the Mac, since we have A LOT more users and potential users in the Windows-market?"

If Apple was losing market-share (even if their absolute sales did increase), that could and would happen. If you don't accept that fact, you are living in denial.

 

[fatfish]

Would BMW flourish if it required a special BMW-fuel to run? No it would not.

So what you are saying is that no-one will write software for the Japanese earth simulator because the market share is so low, only one I think.

or no one will produce fuel for the space shuttle because there are (were) only 6 of them.


If there's a market someone will provide for it.

 

[grouse]

Suggesting a proposition and then attempting to answer it.

I find it very funny, really.... You people keep on saying "market-share does not matter", and then you proceed to tell that market-share DOES matter. So which way is it?

If you are including me in the 'you people' remark! Presumably you understood the rest of what I wrote.

Maybe I should have said, "Shall we look at why Marketshare matters...?"

I give up!!!

 

[Steamboatwillie]

I have great sympathy with them because their market share is undoubtedly the reason for most of their problems.

I don't feel sympaty at all. Their market share is the multiplier of thier problems not the source. Bad code on one persons computer is a small problem. The same bad code on millions of computers is a largely distributed small problem, aka a big problem. The large market share also gives them large resources (from the money they have made) to deal with the problems. They have failed in doing so.

 

[grouse]

thanks

Absolutely, dev support is why healthy market share matters--or actually, it's why (semi-recent) installed BASE, not market share, matters.


* In the end, the key number here is the Mac's share of software sales. And guess what? Supposedly 18% of all software sales are for Mac:

http://macdailynews.com/index.php/weblog/comments/5933/

Finally someone trying to answer what I was asking. Right, anyone got any more figures on this, percentage of Mac sales for Adobe, ex-Macromedia, MS office, quicken, quark etc....?

 

[kiwi-in-uk]

... actually, it's why (semi-recent) installed BASE, not market share, matters....

Exactly my point.
It is the NUMBER of Mac sales that is important and - as nagromme says - the proportion of those sales that subsequently purchase apps.

A hypothetical for a minute ...
In a fictitious market Apple sells 4,000,000 Macs for a market share of 4%, and 3rd party software producers find that they sell enough copies of their software at a price that makes the market (the Mac installed base) attractive.
For some reason the aggregate market explodes fourfold to a total of 400 million units. Apple still sells 4 million, giving them a market share of 1%.
3rd party software sales, prices and profitability do not change. Why is that situation less attractive for the 3rd party software manufacturers?
Unless - of course - when the total market diminishes the Mac market share does not change (which would mean a lower number of Mac sales).
It is the number of sales - and the consequent number (and unit price) of software sales - that is important.

 

[plinden]

Just a point of interest, some figures I've been looking at for a website I helped create, in Australia:
Windows: 96%
Mac OS: 3%
Linux: 0.5%
Unknown: 0.5%

 

[fatfish]

It doesn't quite work that way. Even if sales of Macs were increasing for example 5% every year, while sales of PC's were increasing 50%. By your logic, Mac would be doing just fine, right? Wrong. At some point Adobe and Co. would start to think "you know, we are selling 1 million pieces of software to Mac-users every year. But we are selling 200 million pieces of software to Windows-users every year. Now, which market is more important to us? To which market should we focus our efforts at? Is it really worth it to spend resources on the Mac, since we have A LOT more users and potential users in the Windows-market?"

Nope! Adobe & Co would not think that, and that is why you are completely wrong.

 

[sai_digitalle]

MacTel shipping dates??

Well considering how much problems apple has had updating their computers what other then a Halo effect can it be. Ones the Intel machines start shipping thing should get alot better.

When are the MacTel systems expected to hit the shelves?

 

[Mr Maui]

To interrupt the disagreement ...

At 3.3-4.3% marketshare Apple has over $6 BILLION in cash available and made $1.33 BILLION dollars in profits last year. I'd hardly say marketshare is RELEVANT here. Apple may want more market share, and they are working towards it as the present IDC numbers show, but they are also doing it with products that make them LOTS OF MONEY. Profit margins for the last quarter jumped to over 28% for Apple last quarter. Do you think ANY PC / Windows-based manufacturer has those kind of margins? HARDLY!!

 

[steve_hill4]

I'd like to see market share rise to about 10-15% maximum. Any more than this and problems will begin to occur. Firstly, trying to manufacture that many identical macs could be difficult, so different hardware configurations would have to be introduced, and if you do that, as someone stated eariler the OS starts to suffer.

What also if a small batch of hardware develops a problem? If it is the hardware apple uses, that could lead to a precautionary recall of thousands/millions of units. Not good PR.

Finally, as more start to use macs, more viruses, adware, spyware etc will creep in with OSX compatibility. That would be the biggest drawback of a bigger market share.

 

[nagromme]

You also have to adjust for the staggering number of copies of Windows which are pirated.

Good point--that increases Windows installed base.

But to tie in the software sales / dev support issue (the reason to care about Mac sales): those pirates are probably not buying a lot of software. As far as developers are concerned, those people aren't a very useful market.


And I agree with the people who don't want Apple to become TOO big one day. (Though if they did, maintaining hardware control would still help them make better products than MS.) Maybe 1/3 market share would be nice. Lots of dev support, but most people still suffering on Windows so Apple can't get complacent (Not that they seem likely to--they have a genuine drive to create great products.)

Or maybe not 1/3 market share, but 1/3 installed base. So, less than 1/3 market share.

Or maybe not even that, if dev support is the issue: maybe just 1/3 of all software sales. VERY doable if we're close to 1/5 already

Anyway, I wouldn't worry yet, we're not even at 5% market share