Apple's US Market Share Slips in 1Q 2009

[dejo]

They fell in two consecutive quarters. It appears that the drop is beginning to "level off," but it's still a loss nonetheless. The typical cycle has them dropping only one quarter each year, and the other three quarters they make gains.

Ah, that's true. Still, this is just a preliminary report and I won't be too concerned as long as Apple's quarterly reports are positive, such as last quarter when they reported record revenue and record net quarterly profit and nine percent unit growth over the year-ago quarter in the Mac department, the same quarter in which Gartner said they lost market share.

 

[Saladinos]

Apple is looking at Acer and wondering how they can get some growth.... TABLET.

Nope. Acer is positioning themselves as a budget brand. They make small, cheap computers. That's why they've got 49% growth.

Apple have enough cash reserves to experiment with a low cost model. It's simply a question of whether they want to.

 

[AlphaBob]

I
BTW, I wrote my original post on my brand new, 0.6K (0.594K at MacMall) Mac mini, so your 1.5K figure is another misleading hyperbole.

This isn't a very good argument or example. Your MacMini is sans keyboard, mouse and display. Add costs those in an it is more like a $850 computer. Performance wise, you are now into the class of machine that is sold by WalMart with keyboard, display, and mouse for $399.

For the record, I own and love my MacMini, but it isn't "cheap" for what it does, but it is reasonably priced for what I get out of it. And I love my MacBook too. But it stays at home while I take a Asus Eee PC around with me on trips. The Air is just too expensive for my mobile computing requirements -- especially in light of all the "Cloud Computing" applications that exist today.

 

[gnasher729]

If all Apple cared about was market share, they would have operated quite differently over the last 10 years than they have, probably putting out netbooks, Mac mini towers, etc. Lots of knee-jerk products. But they haven't. I think that says a lot about what they think of market share. I.E. not operating in a way that sacrifices their other goals.

Remember that these numbers are "units sold". One octo core Mac Pro with everything you could dream off = 1 sale. One Netbook with a tiny screen for $299 = 1 sale. These numbers are of no real interest to the companies. It would be much more interesting to compare revenue. According to some recent studies conducted and heavily advertised by Microsoft, Apple actually makes much more revenue per unit sold than everyone else. So if we had a chart showing "million dollars" instead of "thousand units", Apple would look a lot better. But what a company really looks for is profit. You might find Apple to be number one.

Many years ago, there were the "Cola wars". Coca Cola and Pepsi Cola fighting it out. At some point the Pepsi guys figured out that Coca Cola marketing was counting "bottles sold", whereas Pepsi was counting "ounces sold". So they shifted their strategy to increase sales of larger bottles. The advantage: Coca Cola _believed_ they were in the lead and increasing their lead, when actually the opposite was true. Pepsi sold fewer bottles, but they had more revenue. Coca Cola worked very hard to improve their numbers, but they worked hard to improve the wrong numbers.

 

[Macaday]

I have to admit I'm guilty as charged on this one.

However, Apple's focus didn't change, just during the boom times they also were grabbing market share. But it is HOW they were gaining market share. They didn't gain by going to lower margin/high volume computers. They were gaining share with HIGH margin computers. Now they are losing share, but keeping high margin computers.

The industry focus changed but Apple has stayed on target.

You're dead right, Apple have said time and time again that they place themselves at the higher end of the market because the core of the business is quality and reliability. If market share was such a high priority they would have many more lower end devices to compete with the likes of HP. All in all, I really don't see how Apple could bring out a netbook at a competitive price point and stick to their core business without massive subsides from network carriers for mobile broadband.

It could go one of 2 ways if they bring one out. It will be priced too high to fit in the 'PC' netbook market and people will complain, or it will be tied to a mobile network and... people will complain!

 

[gnasher729]

In theory there is a curve. At one end you sell product at your cost. You sell a lot of product but don't make any money. At the other end you price it very high but no one buys. At some point on the curve profit is maximized and it should be clear that profit is not maximum when you are selling the greatest number of units.

Actually, you increase your total profit by finding ways to sell the same product at different prices. Instead of selling at price X, you make it easy to buy at price X + delta, so you get more money from those who would have been willing to pay more, and make it a bit harder to buy at X - delta, so you get additional customers.

 

[gcmexico]

i dont think apple cares about market shares, they worry more about making great products.

*
I agree...I can't understand this netbook crave...you're buying a cheaper product, with cheaper specs, that can only surfer the net and maybe word processing, on a 10inch (or smaller) screen...I saw one of them at the mall recently, I just don't get it, everything looks so tiny...might as well use your cell iphone and save 399

 

[applecultvictim]

the other a glossy MacBook Deluxe for customers who are more like the couple in the "Two @ssholes" skits on Saturday Night Live.

HAHAHAHA...exactly!!!!

Hey why was this post deleted a while back, sure it's not the most constructive post, but neither are 95% of the posts, and I have every right to express how I liked another users comment. Hey mods why don't you go for a walk and loosen up, no use venting out by deleting people's posts......it's really annoying, delete your own posts and let others be the judge of merit if a post is not offensive in any way...moderating here has always been challenged and it's getting worse. And start showin some respect too for people who are here 24/7 and keep your site afloat by clicking on the ads.

 

[freebooter]

Apple has a hard time competing on price.

Maybe it's those high profit margins. Look at the latest iPod Shuffle.

A sub-500 netbook from Apple would be snapped up like the latest celebrity skank video...

A day may come when the hype runs out and the reality of value sets in. Windows 7 may usher in that day.

This from a purely Mac user.

ps: glossy sucks! (big time)

 

[oldwatery]

Well if they got back to making great innovative computers again this would not happen.
Sorry, but the iPhone was the last nail in the Apple Computer coffin.
RIP.

 

[dejo]

Hey why was this post deleted a while back, sure it's not the most constructive post, but neither are 95% of the posts, and I have every right to express how I liked another users comment. Hey mods why don't you go for a walk and loosen up, no use venting out by deleting people's posts......it's really annoying, delete your own posts and let others be the judge of merit if a post is not offensive in any way...moderating here has always been challenged and it's getting worse. And start showin some respect too for people who are here 24/7 and keep your site afloat by clicking on the ads.

Please consult the Forum Rules concerning Useless Posts.

 

[FoxyKaye]

That graph looks eerily consistent to me. Maybe the 2009 figures are dipping lower because of netbooks, maybe it's because of the recession. I wonder what it will look like in early 2010? It seems to me that the real test of Apple will be whether or not it can recapture lost ground in the fall and holidays.

 

[Edwin the Elder]

You're dead right, Apple have said time and time again that they place themselves at the higher end of the market because the core of the business is quality and reliability. If market share was such a high priority they would have many more lower end devices to compete with the likes of HP. All in all, I really don't see how Apple could bring out a netbook at a competitive price point and stick to their core business without massive subsides from network carriers for mobile broadband.:

I agree. Apple's business model is to differentiate its products and sell them at high margins to discriminating and affluent consumers (think of the high end of the demand curve). It needs those margins for development costs that other PC makers don't incur. It will not sacrifice margin for market share. It will not introduce "me-too" products.

So I would conclude 4 things:

1. If Apple offers a "netbook" it won't look like the current offerings. It will be different; it will be innovative; it will offer something more.
2. It won't be priced anything like the current offerings - it'll be higher priced, much higher.
3. If it thinks it can't be successful with that type of product, it won't introduce it. They will maintain they have that market covered with the iPhone, the iTouch and the Macbook Air.
4. For those of you hoping Apple will cut its prices on its current models, don't hold your breath. If the price is out of your budget, buy something else. You're not Apple's target market.

 

[Anuba]

Uh, Mel...does that mean that since no one company gathers all the money in the world that all companies are losing money? This is NOT something anyone in economics knows. If you actually owned a company, you would know it's profitability that counts. That's it. Period. Sell one unit or one billion units, doesn't matter. Market share is irrelevant

Perhaps, but in this case the market share dictates the size of the OS X install base, which in turn dictates a lot of factors that directly or indirectly make up the sum total of the Mac experience. With a small market share for OS X, the network effect benefits will remain limited:

"In economics and business, a network effect (also called network externality) is the effect that one user of a good or service has on the value of that product to other people.

The classic example is the telephone. The more people own telephones, the more valuable the telephone is to each owner. This creates a positive externality because a user may purchase their phone without intending to create value for other users, but does so in any case."

iChat may be great, but 99% of your friends are still on Windows Messenger. More OS X users means more software, more games, more peripherals and other third-party gadgets. The more people have Macs, the more value each individual gets out of his or her Mac. The only thing Mac users get out of the market share remaining small is an illusion of exclusivity, plus less exposure to malware. All other effects are negative.

 

[farmboy]

This Just In: Whole Topic Wrong

This just in:

IDC says Apple GAINED MARKET SHARE through the March Quarter, even though sales were offyear-to-year. The market as a whole declined far more than Apple's share, representing a MARKET SHARE GAIN for the company, up from 7.4% to 7.6%.

And by the way, folks, anybody (analysts) claiming to know sales figures to the tenth of a percent based on guesses, because not one of the companies actually submitted certified figures to these bozos, is not worth debating. All the end of the world folks here just are too gullible and don't really understand business.

 

[ecoons]

Discounting netbook sales is like saying, "well, I would like to see Toyota's car sale numbers without their Prius sales."

Not entirely, because you have to look at the "purpose" of a graph that displays market share, what if it included the iPod Touch as a "computer?" This market share is defined in terms of number of units, and yes, although Apple would love to sell more units, it isn't important (except mearly for the basis of being higher on this graph) to sell more units COMPARED to some other computer company. What is important is how much money they are making.

For instance, say you sell 10 million computers a year, but are barely making any money off them (i.e. netbooks). How do you increases you profits for the next year? Sell more units? or increase the price (as a new model)? If you sell more units, you are diluting the market, and the more units you sell, people will eventually realize they don't need 3 netbooks, and just stop buying them. And they can't increase the price TOO much because the competitors would just undercut them.

However, lets say you sell 2 million computers a year, but make just as much money as the company selling 10 million computers. Now this company has much more POTENTIAL in the market, which is hugely important.

Not true. Apple cares about making money through the selling of good products.

If they lose market share, than others are doing something better than Apple. And hence, Apple is losing money compared to the ones that are gaining market share. In this case the others are making netbooks and selling lots of them.

Just because they are losing market share (units) does not mean they are losing market share ($$).

With all that being said, Apple is still definitely going to enter into the "netbook" market, but as always will have high margins.

 

[zabbadoo]

Looks like those HP ads by Microsoft are already working. But Apple cares more about iPods and iPhones which is why fewer people are buying their computers.

 

[applecultvictim]

Please consult the Forum Rules concerning Useless Posts.

I read everything to a t. and I am not in breach of any rule. You guys should really get out more, it's a community here, if it's considered a useless post to reply to someone with a hey I liked your comment and I found it funny we might as well get the bots to reply instead of us people. I just agreed with someone on another thread and had this deleted too as useless... it's very enervating to find your posts just vanish into thin air...so just take her easy...

 

[Anuba]

Looks like those HP ads by Microsoft are already working. But Apple cares more about iPods and iPhones which is why fewer people are buying their computers.

Those ads have only been out for 3½ weeks -- these numbers cover the entire first quarter of 2009. Besides, the economic downturn has had a million times more impact than any ad campaigns could ever hope to achieve.

 

[dejo]

Looks like those HP ads by Microsoft are already working.

Amazing how they were able to affect the sales from the previous quarter! Talk about your time-space continuum distortion!

 

[dejo]

I read everything to a t....

Even the part about "Posts saying "I agree", "+1", "me too", or the equivalent are also routinely removed"?

 

[milo]

you're buying a cheaper product, with cheaper specs, that can only surfer the net and maybe word processing, on a 10inch (or smaller) screen

It's pretty simple actually.

Some people just want to surf the net and do word processing.

 

[ULFoaf]

Share is all relative - Netbooks really are the cause IMHO.

How many Dell Mini's and HP Mini's flew off the shelf to increase market share.

Apple REALLY needs to get on the ball with a $399 Netbook.

They would FLY off the shelves. I would buy two immediately.

HHM

I don't see a $399 one, but we might see an $800 10" this summer, hopefully. This hope is keeping me from buying a Dell Mini 9 with Linux. Meanwhile, I use my iPhone like a netbook at home on the couch...while my wife has the Macbook. :>} If they are losing market share, I think we will see something. Like eveyone else, I think it is the netbooks that are taking it.

 

[zabbadoo]

Remember that these numbers are "units sold". One octo core Mac Pro with everything you could dream off = 1 sale. One Netbook with a tiny screen for $299 = 1 sale. These numbers are of no real interest to the companies. It would be much more interesting to compare revenue. According to some recent studies conducted and heavily advertised by Microsoft, Apple actually makes much more revenue per unit sold than everyone else. So if we had a chart showing "million dollars" instead of "thousand units", Apple would look a lot better. But what a company really looks for is profit. You might find Apple to be number one.

Many years ago, there were the "Cola wars". Coca Cola and Pepsi Cola fighting it out. At some point the Pepsi guys figured out that Coca Cola marketing was counting "bottles sold", whereas Pepsi was counting "ounces sold". So they shifted their strategy to increase sales of larger bottles. The advantage: Coca Cola _believed_ they were in the lead and increasing their lead, when actually the opposite was true. Pepsi sold fewer bottles, but they had more revenue. Coca Cola worked very hard to improve their numbers, but they worked hard to improve the wrong numbers.

So are Macs Coke or Pepsi?

 

[mustang_dvs]

Full of Win will look up and shout,

HEADLESS MAC​

And I'll look down, and whisper, "What do you think a Mac Mini is!?"