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Mac Marketshare Growth in High End Retail Market
- Thread starter IJ Reilly
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Is that the premium segment of the retail market? Not a lot of B&M sell computers over $1000.
I like this quote:
I like this quote:
That's pretty impressive...but the majority of the market (consumers) want a computer under $1k.
Ok, I sound like I speak for everyone, but in all honesty, if the Mini was a little more competitive and they had more to offer in the sub-$1k area, Apple would be doing even better.
I know that Dell and most of the others tend to take big hits when they sell computers at such low prices, but Apple can just put less pricy/advanced hardware inside and turn a profit. Put in an efficient single/dual core processor, and get it out there for a cheaper price.
Ok, I sound like I speak for everyone, but in all honesty, if the Mini was a little more competitive and they had more to offer in the sub-$1k area, Apple would be doing even better.
I know that Dell and most of the others tend to take big hits when they sell computers at such low prices, but Apple can just put less pricy/advanced hardware inside and turn a profit. Put in an efficient single/dual core processor, and get it out there for a cheaper price.
True, although both Dell and Compaq have/had been talking a lot of stuff about wanting to be in this market. The XPS line was supposed to be Dell's huge entré into this market. And if this includes business notebook computers, do remember that most of them are >$1000 still. Lenovo might sell lots of computers to consumers for $600, but I don't think the average Thinkpad price is <$1000, is it?
erm, isn't that what they're doing with the mini already?
its nice to see apple grow like this, and quite impressive.
I thought B&M stood for builders and manufacturers. Actually now that I think of it more, I've never heard that term. Sorry. What is B&M?
(Oh, and sorry, I didn't realize the 66% was only of retail premium computers)
Honestly, I thought that remark was fairly clueless. First, Apple does offer a choice under $1,000. Second, everyone has another choice -- they don't have to buy a Mac. Third, if making money in the PC market was as easy as "don't give people a choice," then everybody would be doing it. Obviously, Apple has figured out how to sell computers into the $1,000+ market in a way the rest of the industry has not, and it wasn't about not giving them a choice. It was about giving them a choice they wanted to make.
Apple should update the Mac mini so they can capture the sub-$1,000 market. 
Quad cores roll for $600 or less nowadays.
Quad cores roll for $600 or less nowadays.
I don't think Apple wants to capture the sub-$1,000 market. There is very little money to be made in that market. The margins are very poor.
Using laptop processors and 2.5" hard drives isn't helping their margins.
There's still money to be made on a $600 computer. Keep in mind I could build a tolerable midrange quad core for $400 on a good day. I just helped a friend do so. It was an Intel Core 2 Quad as well.
Some money, but not healthy margins. Apple's margins are the envy of the industry because they are not trying to sell in the parts of the market where the margins are poor, which is the bottom end. The margins in the Windows PC business stink, and they pretty much alway have. What we are seeing now is a manifestation of a characteristic which has always separated Apple's business from the Windows OEMs. The PC makers are selling a virtual commodity product. They all function the way Microsoft dictates, which forces the OEMs to distinguish their products mainly on price, resulting in a race to the bottom. They have few opportunities for creating a value-added product, which is what Apple does so well.
Apple has demonstrated time and again that they are not interested in a market of 6% profit margins. Nothing below 28% makes Apple Happy. It is rather obvious that there is a market for a well designed system that just works and works for years.
Way to go Apple.
Way to go Apple.
The Mini is so badly supported and lacks up-to-date hardware..
What's worse, it's a BYOKDM system, unless you want to pay another $600 (price of the system!) for a 20 inch LCD from Apple along with $50-100 for a keyboard/mouse...mine as well get the iMac.
What strikes me most interesting about this data is that the number of PC's on the market at a retail price point of + 1000 has diminished.
While there may be various reasons for this I can't help but draw my own conclusion that HP, Dell etc can't justify the cost of a + 1000 PC in quantity to the consumer (specialty consumers and hard core gamers aside ).
Because no matter how hard they try they have very little to offer / differentiate at those price points. Where as Apple has been able to do just that and keep that market segment.
The world has finally realized that there is little substance behind the short lived trendy marketed scheme of advertising a PC company with Cow patches and a "im getting a dell" kid. Underneath all the hoopla it's just a PC.
Naturally this is something most mac users have known for quite some time but it's nice to see it translate into actual market share as a result finally.
people are willing to pay premium if the product is right. Apple has demonstrated this fact.
While there may be various reasons for this I can't help but draw my own conclusion that HP, Dell etc can't justify the cost of a + 1000 PC in quantity to the consumer (specialty consumers and hard core gamers aside ).
Because no matter how hard they try they have very little to offer / differentiate at those price points. Where as Apple has been able to do just that and keep that market segment.
The world has finally realized that there is little substance behind the short lived trendy marketed scheme of advertising a PC company with Cow patches and a "im getting a dell" kid. Underneath all the hoopla it's just a PC.
Naturally this is something most mac users have known for quite some time but it's nice to see it translate into actual market share as a result finally.
people are willing to pay premium if the product is right. Apple has demonstrated this fact.
I think this is about right. While the rest of the industry was needling Apple that they didn't have an entry in the "high growth" area of the market, Apple let their competitors fight it out in the high growth space and then came in behind them to take over the high margin space.
Now HP and Dell get all the whiny, "I paid $400 for this machine and demand $500 in customer support", customers and Apple gets the "I'll take one of those and all the accessories, please" customers.
I'm not sure I agree entirely. Apple's marketing, plus run-away iPod sales, the iPhone, and all the BUZZ, is definitely attracting customers in a big way. But look at where one finds an Apple Store. They're not at the corner strip mall. They're always in some upscale mall or area of town where more affluent people shop. These people are getting Apple's message loud and clear - and they are responding.
I think Apple has figured out the way to (finally!!!) sell computers, period. The trouble is, they only care about the more affluent shopper. They're not interested in targeting the sub-$1000 market. The Mini is a joke. I love mine. It's a great home server. But it's not that much machine for $599, especially when you still have to buy your monitor, mouse and keyboard. At $399, not a bad package. At $599? Not so much.
Getting into places like Best Buy is the most crucial step to reaching the rest of the market. There are plenty of places that Apple will never deem worthy of an Apple Store, but those people still want to buy computers. And they want to touch them, try them out, talk about them, be sold on why they should take the plunge, etc. Apple needs to bolster their presence in these stores. I think Apple should staff B&Ms more than 50 miles from an Apple Store with Apple employees, not rely upon the store employees to sell the product.
Of course, a $399 as-is Mini or $599 TRICKED OUT Mini would go a long way towards expanding their share of the sub-$1000 market. But first the products need to be in reach. Get them into Circuit City, Best Buy, and all those places, and staff the stores. That'll make more people, especially those out of reach of an Apple store, buy.
You make it sound like sub-$1,00 computers are a bad thing.
Keep in mind my workstation is still my quad core desktop. I wish it ran OS X but the price was right. It still hasn't broken $1,000 with all the small upgrades it has gotten since November.
are we implying that data this isn't fair because not a lot of B&M's sell PC's priced over 1000?
Well that's true in the same way that not a lot of B&M car dealers sell cars priced over 75K however the point eluding is the fact that very recently many B&M's did in fact sell and compete at +1k per PC. And that Apple has managed to continue to offer value to this day in that market even after the competition imploded to nearly the generic value of salt. Hell even salt has managed to distinguish itself if you want to pay premium for the currently trendy Ungrinded Sea Salt.
The PC market is reaching the brink of becoming a plain utility (marginalized segments aside pls)
Well that's true in the same way that not a lot of B&M car dealers sell cars priced over 75K however the point eluding is the fact that very recently many B&M's did in fact sell and compete at +1k per PC. And that Apple has managed to continue to offer value to this day in that market even after the competition imploded to nearly the generic value of salt. Hell even salt has managed to distinguish itself if you want to pay premium for the currently trendy Ungrinded Sea Salt.
The PC market is reaching the brink of becoming a plain utility (marginalized segments aside pls)
You make it sound like sub-$1,00 computers are a bad thing.
Not "bad" as such, but not very profitable either. Apple's "open secret" is that they aren't very interested in the lower-cost market. For all the complaints about the mini's middling specs, I believe it an overlooked fact of life that Apple is never going to try to match the generic PC makers on a pure bang-for-buck basis. The mini is addressed at the sub-$1,000 market in a completely different way. The freedom to address a market in the way which preserves their margins is one that is unique to Apple. They are not going to trade away this advantage just because some people would like them to sell budget boxes that complete with the likes of HP and Dell.
Mac Marketshare Growth in High End Retail Market
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eWeek first reported on an interesting breakdown of Apple's retail marketshare. According to numbers from the NPD Group, Apple's Q1 2008 retail (brick and mortar) reached 14%. Note that by limiting it to retail, they've excluded online sales and institutional/enterprise sales.
Chart from eWeek
More surprising, however, is if you limit the data to computers priced above $1,000, Apple represents 66% of all retail computer sales.
One long term question becomes whether or not the saturation of their target market ($1,000+ computers) will limit Apple's future growth. If more customers aren't attracted to this high-end market over time, Apple's Mac sales growth will necessarily stall. Meanwhile, up until now, Apple has been resistant to compete in the low margin market. Apple's only sub-$1,000 offering, the Mac mini, has been rumored to be just hanging on to life.
This phenomenon could explain Apple's willingness to experiment in seemingly niche markets that were not previously satisfied by Apple's offerings. A product like the MacBook Air might be able to further expand their already-large marketshare amongst customers in the $1,000+ market. If Apple's success continues, however, there will be no where else to look but to the sub $1000 market for additional customers.
Article Link
eWeek first reported on an interesting breakdown of Apple's retail marketshare. According to numbers from the NPD Group, Apple's Q1 2008 retail (brick and mortar) reached 14%. Note that by limiting it to retail, they've excluded online sales and institutional/enterprise sales.
Chart from eWeek
More surprising, however, is if you limit the data to computers priced above $1,000, Apple represents 66% of all retail computer sales.
As with all statistics, it's difficult to take these raw numbers at face value. Instead, the most revealing finding is how quickly this market share has been increasing. Fortune reports that Apple's $1,000+ January 2006 marketshare was only 18%. Their share grew to 57% by September 2007 and finally to 66% in the 1st quarter of this year. These numbers confirm Apple's reporting of large year-over-year growth of Mac sales during their financial results.
One long term question becomes whether or not the saturation of their target market ($1,000+ computers) will limit Apple's future growth. If more customers aren't attracted to this high-end market over time, Apple's Mac sales growth will necessarily stall. Meanwhile, up until now, Apple has been resistant to compete in the low margin market. Apple's only sub-$1,000 offering, the Mac mini, has been rumored to be just hanging on to life.
This phenomenon could explain Apple's willingness to experiment in seemingly niche markets that were not previously satisfied by Apple's offerings. A product like the MacBook Air might be able to further expand their already-large marketshare amongst customers in the $1,000+ market. If Apple's success continues, however, there will be no where else to look but to the sub $1000 market for additional customers.
Article Link
I don't think Apple wants the $500-$750 market anyway. Apple wants to make $$$ and the profit margins in that range are miniscule. Higher-end products usually command higher profit margins. iTunes breaks even so that we will buy expensive iPods!
Look what happened to the companies that offered bargain-basement computers: Gateway, eMachines, Dell -- yikes, not profitable...selling eleventy-threeve-zillion computers at $299 won't help if your margins and R&D costs limit profit to 5%.
Look what happened to the companies that offered bargain-basement computers: Gateway, eMachines, Dell -- yikes, not profitable...selling eleventy-threeve-zillion computers at $299 won't help if your margins and R&D costs limit profit to 5%.