BusinessWeek: So far, Apple retail stores fail to produce market share gains for Mac

“By most counts, they’re are a hit. But they were intended to woo new users to the fold, yet Mac market share has only budged — lower,” Alex Salkever writes for BusinessWeek. “When PC maker Gateway announced on Apr. 1 that it planned to shutter its remaining 188 stores, Macheads were quick to gloat that Apple, by contrast, is doing retail right… On the crucial basis of attracting newbies, Apple’s stores have yet to show any notable progress. Despite Jobs & Co.’s claims that 50% of the people buying at its stores are Windows users, Apple’s market share has made no significant advances. So while comparisons to Gateway might seem easy and feel good, they only go so far.”

“Ultimately, Apple stores could successfully become the primary Mac service point and cultural hub for aficionados. Apple already exerts much more control over its marketing message at the grass-roots level,” Salkever writes. “Still, the proof is in the number of new Apple users, and that remains discouraging. In tech tracker International Data Corp.’s latest tally of computer market share, Apple’s piece of the U.S computer pie slid from 3.5% in 2002 to 3.2% in 2003. The decline also speaks volumes about Apple’s campaign to woo switchers — if they were coming over in any significant numbers, then Apple would be growing faster than the broad PC market.”

“Clearly that’s not happening. Sure, IDC numbers are imperfect measures. A huge chunk of PC purchases come from big companies, and Apple doesn’t compete in that market at all. Still, it has to show some improvement in market share to convince Wall Street it has long-term legs,” Salkever writes. “For Apple’s retail experiment to be judged a true success, it would need to see some positive momentum in actual Mac market share from reputable sources, such as IDC. Absent these third-party judgments, Apple’s own claims about switchers lack credibility.”

“Do the retail stores hurt Apple? At this point, probably not. And they’ve certainly helped it to more effectively market its products. The stores have hurt resellers, but these shops presided over declining market share for many years. One can understand Apple’s impatience,” Salkever writes. “All other things being equal, though, until Apple can start posting rising market-share numbers, the final jury on the great retail experiment remains out.”

Full article here.

MacDailyNews Take: Apple shipped 829,000 Macintosh units during the quarter ending December 27, 2003, up 12 percent from the year-ago quarter. Now where did we read the following excerpt? Oh yeah, we remember, it was in BusinessWeek, January 24, 2004. We’ll use it as our rebuttal. Perhaps Alex should read the magazine for which he writes?

“The Mac is currently enjoying a growth spurt. Sales grew 12% during the quarter. 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. [Apple CEO Steve 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,'” Peter Burroughs wrote for BusinessWeek.

59 Comments

  1. makes you wonder whether people are using the term “market share” in the same way.

    Seems to me that most folks think it means percentage of the market that uses the product. Which is not the true definition and isn’t where the 3% stat comes from. That is share of the sales in a given time frame.

    My classic example is 2 people. Together they represent all the computer users. One buys a new mac every 3 years, the other buys a cheapo wintel every year. The percentage of users using mac/pc is 50/50. Yet the mac market share is %. See the diff?

  2. market data seems like it’s always hard to come by, but wouldn’t it be great to know apple’s CONSUMER market share? as in, not corporate machines, not servers, not anything that someone other than a normal person bought. i think in that specific category apple would be doing pretty well actually….

    other than that, i’m looking for their market share to go up slowly as people start to buy their next pc and have used an ipod, are looking for a change, or maybe even used macs in school/work. businesses should also be picking up more macs as apple’s enterprise products get a foothold because of their security and ease of use.

  3. I hate to point out a rather basic grammar error, but the opening line: “By most counts, they’re are a hit” should read: “By most counts, they’re a hit”. A conjagation followed by one of the words conjagated is ridiculous. Obviously this chap didn’t have his work proofed….

  4. Right on BillyBoy.. good example.

    Why do anylists, journalists and the like, spend so much time reporting on the downfall of Apple, when apparently it is an insignificant company, that only has a 3% market share. You would think that Apple is about to take over the PC world.

    Apple sure does actract a lot of attention for a minority company.

  5. And let the next round of “Market Share, Market Share – Who’s got the Market Share?” speculation begin. I don’t think it matters, really…

    If Apple is selling machines and they are making a profit, and, even better, developing ever better machines and all that goes with ’em, I really could care less who is buying anything else and at what rate (however spun large or out of proportion due to whatever “sales figures” and “surveys” and whatever else there may be pumped out by whomever’s marketing department and is picked up by whatever “news” organization)…

    On the other hand, if it really DOES matter, why won’t anyone who’s writing these stories or putting out these figures tell us HOW they’re arriving at these “actual” figures in the first place rather than making their speculation and thin surveys appear as the gospel truth? Is there a specific economic definition of what “Market Share” is supposed to be as opposed to what “market share” is? If there is, I have yet to see it explained in a way that isn’t buried in a bunch of doublespeak. It’s not a “magic formula” is it? It’s not supposed to be a secret, is it?

  6. What percentage of WinPCs aren’t used for office work – where WinOffice is about the only software installed?

    What percentage of WinPCs aren’t used as cash registers, info kiosks, etc.?

    What percentage of WinPCs aren’t used as a $1500-2000 video game machine?

    What do Windows people think can’t be done on a Mac?

    Why do Windows people want the Mac to just go away?

    Will the price of Windows become cheaper for Windows people – if Apple does go out of business?

    Will it become easier for Windows people to ‘choose’ a ‘brand’ of computer, if there’s one less to choose from?

    These are not – empty, rhetorical questions. We’d really like to know.

    Actually, we really need to know.

  7. …and a small market share compared to what? Microsoft? So, apple is being beat in terms of the numbers of customers they have compared to other companies. Who cares? They still have 25 million customers. Most businesses would kill to have a client base of 25 mill.

    At the end of the day, Apple is just as profitable with 3% as they probably would be with 20% marketshare.. Mareketshare does not equal profitability.

  8. what can you say… the fact that macs last around 5 years is gonna kill these stupid marketshare numbers.. it’s basic math.

    end of story.

    apple makes good products..let’s let the software sales tell the marketshare story, shall we? as long as the software’s good..

  9. Apple is doomed by selling more computers. They may never catch up to Microsoft Monopoly and Apple computer also may never gravitate over a desk. Analysts are disappointed with these outcomes.

  10. Salkever’s articles always seem to be written while he’s on the toilet or something. He never really puts much thought into them, and his ideas seem to have been pulled from his own arse.

    I believe that the most important statistic about the Apple Stores are whether they are making a profit. I’m not quite sure how long Apple has had their retail stores in business, but that is another point. Give them time. If they are not losing money, they are at least gaining recognition. In Denver, they are pulling people in from the mall. Maybe they are just curious, but this will eventually help.

    Salkever likes to write just to feel his own hand vibrate.

  11. All these reporters (you notice I didn’t say Journalists) just regurgitate the same old figures. The marketshare they use is generally the whole computer industry. BUT, Apple doesn’t market to a big share of that and doesn’t care to. The don’t sell to the down-n-dirty corporate desktop segment, they don’t sell to the down-n-dirty $400 dollar Walmart segment.
    If you really want market share numbers for Apple, figure it on the segments they do cater and sell to, otherwise the numbers are worthless.

  12. Britons world share is declining and their growth rate is significantly lower than competitors like Pakistanis, Indians and Chineses.

    Surely they are doomed and soon there will be no more Britons on earth. Just face it folks: Britons cannot beat your competitors growth rate on the earth market share. They might make a better living but their fate is sealed.

  13. Seahawk, if you look at Spain in isolation, the market share of Britons is increasing year on year and now stands at around 3%. So the British are becoming what the analysts would call a niche player ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    I think they still see that as doomed to failure though.

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