“Only a few years ago, Apple Computer’s high-end computer fare seemed stuck in a dusty corner of the market reserved for cult favorites. But with the breakaway success of its iPod music player, the company run by design snobs is veering surprisingly closer to the mass market,” K.C. Swanson reports for TheStreet.com. “But while iPods have put Apple back on the consumer map, there hasn’t been a related surge of interest in the company’s flagship computers, which accounted for 52% of sales in the most recent quarter. Apple accounted for a surprisingly small 3.7% of PC shipments in the U.S. during the second quarter, according to IDC. That’s actually down slightly from its PC share of 3.8% a year ago.”
Swanson reports, “Though many analysts think Apple will soon begin to expand that share, it would be a long, slow climb back to its peak in 1993. Back then, the company ranked No. 1 in the U.S. PC market, claiming over 13% of market share, just ahead of IBM… Regaining some of that lost share is key to ensuring Apple’s revenue growth. Merrill Lynch analyst Steve Milunovich estimates that each half-point of share that Apple can add is equivalent to about $1 billion in revenue. Apple executives have been quite upfront about the fact that PC share gains aren’t a primary company goal — a sentiment verging on heresy in the share-obsessed computer industry.”
“Instead, Apple is focused on broadly boosting growth in the top and bottom lines. As CFO Peter Oppenheimer explained on a conference call Wednesday, ‘We’re not focused on market share because we’re really not participating in the low end of desktops at $800 and below. We don’t think we can make a lot of money there,'” Swanson reports. “In other words, for all the democratic appeal of the iPod, Apple still sees its computers as premium products. It would rather reach its revenue targets by selling fewer, more-expensive computers than by hawking lots of cheap boxes… consumer lust for iPods shows no sign of flagging, and keeps Apple top of mind for PC buyers. And counting Wednesday’s [earnings] report, the company has now surpassed analyst expectations for seven quarters in a row. That doesn’t sound like a company to bet against.”
Full article here.
MacDailyNews Take: It is too early to measure whether the iPod “Halo Effect” will substantially increase Apple’s market share. But, as long as the ranks of Apple Mac users continue to swell, does it really matter? 25 million Mac users and growing is a fact that any software developer interested in making a profit should not reasonably ignore.