“Going by the numbers, Apple Computer Inc. (AAPL ) appears headed for trouble again. While CEO Steven P. Jobs engineered a remarkable comeback after retaking the helm in 1997, one-time expenses, such as plant closures, have pushed the company into the red for two quarters running. For the one ended Dec. 28, Apple reported a net loss of $8 million on revenues of $1.47 billion, vs. a profit of $38 million a year ago. Worse, Apple’s share of the U.S. PC market is hovering around 3.5%, according to IDC analyst David Daoud. That’s down from 13.4% a decade ago and 4.2% in the year after Jobs returned.
But fear not, Mac faithful: Apple may never again pose a threat to Microsoft Corp. (MSFT ) and its PC allies, but its niche is safe. In the $160 billion PC market, a 3% market share should be enough to fund Apple’s research-and-development push. So long as Macolytes keep paying Apple’s high prices, its 28% gross margins should far exceed PC rivals–especially if it keeps expanding its portfolio with non-PC products such as the iPod MP3 music player. ‘The battle for market share ended 10 years ago,’ says UBS Securities analyst Don Young. ‘But there’s a place in the PC world for an innovation leader,'” writes Peter Burrows for BusinessWeek. Full article here.