“In launching its next-generation G5 processor, Apple has made some innovative and market-savvy moves, say industry watchers. The company has formed an alliance with tech powerhouse IBM, it has moved into the new world of 64-bit computing, and it can now claim its computers are as fast as — possibly faster than — the fastest Windows PCs. Yet doubt remains about the company’s prospects for increasing its miniscule market share, which now hovers around 3.5 percent,” reports James Maguire for NewsFactor.com.
MacDailyNews Note: The Apple-IBM-Motorola (AIM) PowerPC alliance was established in 1991.
“‘There is a tendency toward monopoly in the industry, because customers want seamless compatibility,’ IDC analyst Roger Kay told NewsFactor. ‘There’s a tendency among business customers to coalesce around a single standard.’ That single standard ‘could have been Apple, if Apple years ago had lowered its prices and liberalized its licensing policies. But it didn’t do that, and as a result, it got marginalized, and the other platform became mainstream,’ he said. ‘I don’t think anything changes that, so now Apple is down to a few specialty applications that really use the differentiated Apple platform, like superior ease of use and very powerful graphics calculations,’ he said,” reports Maguire.
Maguire reports, “Apple ‘has a solid brand,’ Gartner analyst Martin Reynolds told NewsFactor, ‘They’ve got solid products, they’re good at moving into other areas, and they’ve got attributes that other companies can’t match.’ Successful areas of expansion for Apple include iTunes, which Jobs claimed has sold more than 5 million songs, and the iPod music player, of which Apple has sold more than 1 million. Yet, as Forrester analyst Rob Enderle told NewsFactor, Apple ‘isn’t just a niche player — it’s a small niche player.’ So, for all of the innovation the company is introducing with its next-generation G5 processor, its market battle remains decidedly uphill. The new release ‘will help them maintain market share — I don’t think it will help them gain,’ Kay said.” Full article here.
MacDailyNews Take: Market share, schmarket share. All Apple needs is enough market share to remain profitable, continue its excellent R&D and insure top-flight applications for the Mac platform. Anything else is gravy and an increases the liklyhood of the virus and worm plagues enjoyed by the Windows crowd. These analysts are obsessed with “market share” and cannot see the forest for the trees.
These are the same analysts that jump into their beloved Porche at the end of the day and don’t realize that Porche has a smaller market share in their own industry than Apple does. Why aren’t they comparing their Porche with the Ford Explorer SUV?
They’ll recommend Porsche if they’re making a profit and the yield is good or the share price is rising. If not, they’d be just as critical.
This is NOT about Apple’s products. This is about profitability. Apple have to gain the market share to become more profitable first and currently there’s no evidence that they’re going to do that. Porchse have a yield of nearly 5%. I don’t know what Apple’s is.
Why does Mac Daily news care what the analysts think?
Joe Public does not call his stockbroker when he needs a PC. Analysts are supposed to be experts at picking stocks – they do not need to be versed in how to be a politically correct PC enthusiast.
If you love Apple – but a new Mac, but lots of third party software, and maybe buy some Apple shares. Simple.
The rest of the PC world will look after itself.
Yes…Apple has had to continually battle uphill for the so-called “market share” because of the all M$-Intel-AMD BS being piled up all around them.
Let the anal-ysts preach their market share mumbo-jumbo and just enjoy using a beautiful blend of hardware and software that actually works.
Just my 2 cents worth.
Of course these analysts will be critical – they are probably typing their reports on a Dell box as we speak. To further the analogy, you will never know anything about a Porsche until you own it and drive it. Then you understand.
Profitability is very important in the business world. It is the life’s blood, so to speak. But it isn’t everything. Ask any business consultant. Issues like customer loyalty, mission consistency, and corporate culture are also important factors to success.
Given these factors, we Mac Users have nothing to worry about. There is nowhere to go but up for Apple. If you ask 10 of your Wintel using friends, I think you will find that the first two of my above factors actually score much lower in their world. Many times, their objections are more like �I�ve just used PC for so long�� or �Macs are just so expensive.� These are two objections based on ignorance, and I really think that Apple has done a good job in the last year or two in trying to overcome them with the Switch campaign and various marketing strategies (i.e. �Digital Hub�). However, Apple would be wise to continue targeting these basic objections.
Sure, most Mac users are passionate about their computers, but a lot of PC users couldn�t care less. These are the customers to target. Make them care. Show them that they can care, and not be a nerd. Show them that Macs have lower total cost of ownership and are easier/simpler to master, so it doesn�t matter how long you�ve used a PC.
Honestly, I hear so many people (analysts) saying that Apple should clone their machines and loosen up on their licensing and blah blah blah blah blah. I personally believe that Apple has been doing things right, and need to just be more aggressive about it.
So, this is a long post, but only because I never post to these groups, and when I do, I gush. I must stop�now.
The new G5s are terrific machines for pros and serious home users. They were designed for this market.
For several years pro users have gripped about LACKLUSTER pro towers, Apple has answered in SPADES. Way faster chips with a future roadmap (note all the hints about IBMs commmitment during keynote), better motherboard design with wide ‘pipes’- hypertransport etc.at a competitive PRO price. The Panther software is useful for pros , Expose, Font manager (something most graphics guys would wished to have seen in OS 6 or 7!), file Vault etc. Even the video conferencing stuff would be useful with all the out sourcing and freelance work in the pro industries.
Like I said I think the G5 shown were for pros. Apple has always been very popular with the 2d guys i.e. print publication, but the PC is popular in 3d and some multimedia. Reason why PC is popular in 3d is the power and price advantage of PCs. Some blockbuster movies like Lord of the Rings TT were actually rendered on hundreds of Intel machines. Latests stats show 3d taking about 50% of graphic equipment and software sales and growing. The PC price/power advantage has been seriously eroded by the G5s. The G5’s will undoubtedly help Apple in the 2d arena and the growth areas of multimedia and 3d. Maybe the next Pixar movie will be completely rendered in G5 render farms (maybe that’s why they are so ‘boxy’ so that they can be rack mounted!) — now that would be a publicity weapon — ‘top animated movie made all on Mac!’ (don’t have latest info but last I heard Pixar used Sun workstations and also Intel Xeons in 8 racksaver blade rack ‘supercomputer clusters’) G4 pro tower sales have plummeted in the last couple quarters but G5s will surely push up the numbers.
The G5’s with their 64 bit processor s and large memory capability also seem to be suitable for scientific workstation type apps.
So these particular G5s are for pros and serious users.
What about ‘general market share’?
If Apple and Steve were smart (and with these new releases they have shown they ARE, heck the new machines are BETTER than a lot of the rumour sites dared to predict!) than MAYBE they have a low cost Mac to challenge the $799 Dells in the works. If they can get a good consumer machine (perhaps ‘headless’) at a low comptetitive price then probably the general market share would grow.
In any case Apple is doing Great now.
It seems like everyone is failing to realize one critical point. Profitability is everything. Porche continues to exist, not because they have small market share, but because the cars they produce and sell offset their costs. So much so that they can continue R&D for future models. The instant Porche or any company goes into the RED and cannot recover, its only a matter of time before they fold. MAC has a dedicated user base but this alone was not enough to sustain the company (i.e iPod, iTunes, Steve Jobs). Under sound leadership hopefully they can continue to remain profitable but remember, those with the money have the power, and they determine what exists or does not. Just a thought from someone who enjoys the right mouse button.
The analyists are correct, in what they write as analyists. Remember, analyists do not advise people what computers to purchase–they advise people what stocks to purchase. What they are gauging is the liklihood that an investment’s value will grow. It does not matter to a stock analyist whether Apple makes a respectable profit marketing to a niche. That may make for a healthy company, but it does not make for a wise investment.
Consider investing in a grocery store. If the grocery store makes $100,000 one year, $100,000 the next, $105,000 the next year, $97,000 the next, $100,000 the next, etc., the store is constantly profitable. However, it would not be worth buying a part of the store as an investment–the value of your investment would not grow. What you would pay for the stock would be the present value of that future cashflow–and if you went to sell your investment all you would be able to sell it for is the present value of that future cashflow. Profit, but no increase in value. That sort of business is of value to the person that started the business from zero, but wouldn’t be worth buying stock in.
I believe that the market is moving more and more to open standard, this is ideal for Apple, I think 10% is possible in the not to far distance. Apple has got one priority left; Becoming MS (Office and AD) independent.
Obsessed with market share: I could care less.
Here’s something I wrote earlier this evening that sorta relates:
This may have been covered here but these analysts are not talking about what we talk about. We talk about what a great machine the G5 is… How sweet it will be to own one etc.. They talk of what kind of return, short or long, that they can gain from owning Apple stock. They talk about nothing we care about. We care if Apple will be in business and innovating so we can buy their stuff… Seems like Apple has that base well covered (the future only looks brighter in that respect). So, now, we can all finish our work, smoke a fatty and sync our iPods… no worries.
Personally I think there’s lot’s of money to be made with Apple stock. I don’t mean to insult anyone’s intelligence here but: As with any stock you buy low and sell high. If you are aware of the market and aware of Apple’s product cycle it’s pretty simple stuff. A couple of weeks ago AAPL was trading at around $13.00. At that time I read a lot of financial news that said AAPL was undervalued. I agreed. AAPL now trades at over $19.00. I’m not so good at math but this seems like a reasonable return.
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quote- It seems like everyone is failing to realize one critical point. Profitability is everything. Porche continues to exist, not because they have small market share, but because the cars they produce and sell offset their costs. So much so that they can continue R&D for future models. The instant Porche or any company goes into the RED and cannot recover, its only a matter of time before they fold. MAC has a dedicated user base but this alone was not enough to sustain the company (i.e iPod, iTunes, Steve Jobs). Under sound leadership hopefully they can continue to remain profitable but remember, those with the money have the power, and they determine what exists or does not. Just a thought from someone who enjoys the right mouse button.
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The fact of the matter is, Apple is profitable. Apple has 4 billion dollars in the bank, roughly the same as Dell, which is a lot larger company, and which has remained profitable by laying off over 10,000 employees. Apple in turn has had some layoffs, but continues to innovate and develop new products with new features. As has been stated before in this thread, just because it is not a good investment, doesn’t indicate the company is going out as you seem to suggest, stating that these things are not enough to sustain apple. Apple is facing the same economic difficulties as any company in the current economy, but is continuing to innovate, rather than just copy what somebody else does. Even in the instance that they have copied ideas, they have implemented them in vastly superior manners. Apple will go on.
And that tiny little three percent of us purchased 5 million tracks from the Apple Music Store in almost no time.
We’ll see how much “market share” matters in another year when Apple users rule the world!!
Okay, that was over the top. Point is, market share is just another number used to confuse people who need to follow the masses.