“Steve Jobs says analysts should stop worrying about market share and focus on profits… Apple’s Macintosh computers have long been considered more elegant, easy-to-use, and innovative than their Microsoft Windows and Intel rivals. Yet Apple’s market share has slipped inexorably. It dropped from 9.4% in 1993 to just 3% in 1997, the year Jobs was rehired to run the company, according to Gartner Inc. By then, most companies and consumers had already made the jump to Wintel, due to cheaper prices and a wider selection of software titles,” Peter Burroughs writes for BusinessWeek.
“[In 1997,] Jobs embarked on a plan to win back a point of market share each year. That would have been more than enough to deliver brisk revenue growth. But despite a series of impressive machines such as the iMac and the 17-inch PowerBook G4 laptop, and a pricey ‘Switcher’ TV ad campaign to win converts, Jobs has been unable to stop the bleeding,” Burroughs writes. “According to Gartner’s preliminary market-share data, Apple held just 1.8% of the worldwide PC market in the fourth quarter of 2003. And some think Apple’s share will fall further, if it can’t keep pace with surging overall PC demand. Salomon Smith Barney analyst Rich Gardner expects Apple to post PC unit growth of 6% in 2004 this year, vs. 11% for the entire PC industry. One reason is price. Gardner says the average price of a Mac is $900, although half of PC buyers now spend less than $600.”
“That sounds awful, but it might not be so bad — if Apple can maintain its success with the iPod, and follow up with other non-Mac products (the iPod works with the Mac as well as with Wintel PCs),” Burroughs writes. “…the Mac is currently enjoying a growth spurt. Sales grew 12% during the quarter (iPod sales grew 238%, by comparison, but off a smaller base). The sleek PowerBook laptops remain hot items. Sales of higher-end PowerMacs — used by publishers, ad agencies, and the like — are getting a lift from the economic rebound. Some evidence even points to Apple turning around its long decline in the education market. In a survey of school districts, market researcher Quality Education Data found that 30% plan to buy Macs this year, up from 21% in 2003. And brisk sales of the latest upgrade of Mac OS X, called Panther, suggest that many Mac customers are planning on sticking around.”
“[Jobs] wouldn’t mind if those analysts would start measuring the Mac by the profits it produces, rather than by its market share. ‘We’ve got 25 million customers that want the best computers in the world. If our market share grows, we’re thrilled. But we’ve held our own, while our rivals were losing hundreds of millions of dollars a year,’ he says. ‘We’re in pretty good shape,'” Burroughs writes.
Full article here.