What is Apple's current share of the computer market? Most people
will probably quote you an answer somewhere around the 5% mark.
And the iPod? That's got about 70% market share, right?
Well, no. Actually both of these figures are overestimates.
That's right - during the last quarter, Apple's most successful
quarter in its entire history, Mac market share was around 2.4%, and
iPod market share was a mere 14% (see
Demise of a Darling: iPod Market Share Crashes to 14% Amid Management
Denials).
Yes, you read that correctly - iPod market share was at 14%.
The iPod Figures
Of course, I've fiddled the iPod figures somewhat. It depends on
what we are included in the iPod market.
If we stick with hard drive music players, then Apple has a
phenomenal market share. If we talk about flash-based music players
(such as the nano and shuffle), again we see Apple as the dominant
brand.
But if we include mobile phones with the ability to play music, then
Apple's market share plunges dramatically.
The Mac Figures
With such great year-on-year growth, how can the Mac still have such
a small market share?
Well, one factor which must be remembered is that during the
slowdown which followed 9/11, computer sales fell dramatically for
pretty much everyone.
In the quarter to July 2006, Apple shipped 1.33 million computers,
up from 1.11 million in the previous quarter. But by Apple's very own
figures, this is still less than the number of computers they shipped
in the quarter to January 2000 (1.38 million). Mac sales have been
growing in recent years, but they're still playing catch-up with the
company's past.
Paul Thurrott is a keen watcher of Mac market share (see
Apple Announces Quarterly Results), and I've
quoted him in a previous column giving a figure for Mac market
share of 2.25%. He's
also quoted a figure of 2.0% for 2004, and 1.9% for 2003.
His figures show that Mac market share is growing, but not at the
phenomenal rate that the growth in Mac sales would have some
believe.
Growth in Context
The issue is the context in which Mac growth is viewed. Yes, Mac
sales are growing - but so are PC sales.
If the PC market grows faster than the Mac market, then although
there may be a growing number of Mac users, the overall market share
wanes. At present, it appears that Mac sales are growing faster than
the PC market, but the difference isn't enough to produce a sudden
surge in market share.
It's the same issue with the iPod - sales of the infamous music
player have been phenomenal, but it remains a small player next to the
immensity of the mobile phone market. Many see iPods as luxury items,
whereas the mobile phone has become a necessity.
Active Users
But how important is market share? Does it tell us anything
useful?
It gives us a measure of how a company like Apple is competing
against its peers, but how useful is that information?
Much as I (and many others) loathe the analogy, in the car world the
BMW or Mercedes or Porsche market share figures don't really mean much.
So what if they sell a small number of vehicles compared to the rest of
the industry? The companies are profitable and will therefore
survive.
Likewise with the Mac; we see that the market share figure is small,
but overall the company is raking the money in right now and is
therefore in rude health.
But there's one more issue with market share doesn't address, and
that's the number of active users.
Let's say Company A and Company B are selling computers, and each
has a market share each of 50%. But if all of Company A's sales are
upgrades for existing customers, they aren't growing their base of
active users. If Company B is selling the same number of computers but
to brand new customers, then they are seeing 100% growth.
50% market share means very different things to each company.
The problem is, there's no easy way to find the number of active
users out there.
Passing It On
I recently upgraded from an iBook G4 to a Power Mac G5. This made me a
new computer purchaser and a contributor to those Mac market share
figures. But I didn't represent new growth - I wasn't a new customer,
since I was just upgrading.
However, I did then pass my old iBook on, and thereby created a new
Mac user.
Rumours, Rumours, Rumours
We all know the anecdotes: Mac users keep their machines for longer.
Mac users are more likely to pass old machines onto other users to
"convert" them.
But how can any of this ever be quantified? My own website has a
tracker
that tells me the operating system of visitors to my site. At present,
it reports that 17% of my visitors use a Mac. [Editor's note: At Low
End Mac, 44% of visitors use Macs.]
But do I really believe this to be the global Mac share? No!
Yet this is the kind of data that is used by major companies to
estimate installed user base. Browser toolbars can report back on the
OS of the browser that they are running in (for example, Alexa's
toolbar sends back data that is used to
rank popularity of websites).
But when such a toolbar only works with Internet Explorer and has no
support for Safari users (let alone Firefox), how can we expect Mac
users to be properly represented? And how would one ensure that the
toolbar is installed in a suitable cross section of browsers?
Ignore the Hype
We'll never stop people talking about market share. And we'll never
get a definitive number of Mac users. Even if we could identify the OS
on every computer connected to the Net, where would that leave all the
low-end machines that aren't on the Net but are fulfilling someone's
requirements somewhere?
Market share can be misleading when thought of in terms of active
users or compared to Period X in history.
What is clear is that Apple is making money. And for as long as it
continues to do so, they'll continue churning out Macs.
