“The iPod isn’t just bringing digital music to the masses. It’s bringing Macs to the market,” Fahmida Y. Rashid reports for Forbes. “A comprehensive consumer survey by S.G. Cowen & Co. in June lays out a convincing case for a ‘halo’ effect for Apple Computer’s Macintosh computers.”
Rashid reports, “Of the 1,443 households surveyed, 3% owned only Macintosh computers, while 7% had both Windows PCs and Macs. But of the 36% of responders who owned digital audio players, more than half owned iPods, which runs on both Mac and Windows computers. Of the responders who said they had decided to buy a computer in the next 18 months, 7.5% said they were planning on buying a Mac. That doesn’t sound like much until you consider that Apple only has 3.3% market share in the U.S. today. If all of the buying intentions pan out, and the survey is representative of general PC buyers, Apple could conceivably double its market share in the not too distant future.”
“For some, the iPod has been their only exposure to Apple products. It appears that exposure is raising interest in other Apple gear. The survey found that overall, only 3% of people primarily using Windows definitively planned on Mac purchases. However, iPod owners with Windows computers were more than three times as likely to buy a Mac… S.G. Cowen expects Apple to snag 3.7% of the U.S. PC market by year’s end, up from about 3.3% currently. It expects its share to grow to 4.2% next year, and it believes that 6% is achievable by 2008. By then, analysts envision Mac revenue topping $11 billion and worldwide market share nearly doubling to 4%,” Rashid reports.
Full article here.
MacDailyNews Take: S.G. Cowen’s Mac market share expectations are on the conservative side in our view, but their survey backs up what Apple management and analysts have been saying for some time: the “iPod Halo Effect” is real and people are buying more Macs.
Related MacDailyNews articles:
Smartmoney.com article sounds stupid about Apple’s ‘iPod Halo Effect’ – July 12, 2005
SG Cowen survey shows evidence of a significant iPod halo effect boosting Apple Mac sales – July 12, 2005
Analysts expect Apple to post $3.33 billion in revenue for Q3-2005 on July 13 – July 07, 2005
Merrill Lynch: Mac sales ‘appear robust,’ expects futher evidence of ‘iPod Halo Effect’ – July 07, 2005
BofA raises Apple earnings estimates, forecasts 5.4 million iPods, 28-percent Mac growth for quarter – July 07, 2005
TheStreet.com dubiously concludes that iPod demand has slowed, could impact Apple earnings – July 06, 2005
J.P. Morgan raises Apple estimates based on ‘more optimistic’ Mac shipments – July 05, 2005
First Albany raises Apple earnings, sales, iPod forecasts, cuts Mac mini forecast – July 05, 2005
Apple to webcast third quarter 2005 financial results conference call on July 13 – July 05, 2005
RealMoney: Apple’s iPod Halo Effect ‘quite profound,’ Macs taking good market share from Wintel – June 27, 2005
Morgan Stanley: Apple’s ‘iPod Halo Effect’ is ‘roughly double what the market expects’ – March 18, 2005
I hope we won’t have to wait too long to see some ads from Apple playing up the halo effect (or at least something that shows consumers the real-life benefits of using a Mac)
Still a “Nope”.
No real iPod effect is visible in these statistics.
-Did these Windows/iPod owners visit an Apple store?
-Are they having security woes that the other Windows users are not having (because they are on the internet more, buying music, for example?)
You get the idea. There are lots of things causing people to buy Macs.
Sorry for repeat post, but is essentially the same story:
The fact remains that in marketing you must create awareness as well as a call to action (i.e. purchase).
The iPod has certainly increased awareness of Apple, and I believe increased Apple sales to people that previously would not have considered Apple products.
Including myself, I know 6 people that have purchased (or will be soon purchasing) an Apple OS X laptop and/or desktop product AFTER purchasing the iPod as their first Apple product (EVER)!
I know for sure that four of us NEVER even considered Apple as a Personal Computing choice prior to our experience with iPod (i.e. we now discuss how we have “seen the light” as a result of “discovering” Apple)
After getting our iPods we started looking into Apple related websites (as well Apple’s own) for info about our iPods, and of course discovered all the information about OS X, and the Apple Mac hardware.
Yes viruses and malware etc were factors in our decisions to purchase Apple, but without the iPod, we would have just been coughing up for another 1 year subscription to our Firewall, Adware and Virus protection software, totally unaware of the existance of a real, and even better option.
I am not going to suggest that our experience is typical of ALL iPod owners, however I also think that statements such as “I know ‘x’ number of iPod owners that aren’t going to buy a Mac” are flawed in conclduing that the iPod halo effect does not exist.
The fact remains, the iPod halo effect is only described as the INTRODUCTION of Apple and it’s hardware/software to people previously unaware of it, through their experience with the iPod. The premise being that SOME of these people, now that they are aware of Apple, will consider, and better still even purchase Apple products.
For at least 4 people I know, and I’d be willing to bet the other 2 people can be counted in as well, our “Apple hardware purchases are the result of our experiences with the iPod” – I believe that the “shorthand” for that is the “iPod halo effect”?
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I offer this as SOME evidence that as a result of a connection with an iPod, there was a connection made to Apple, and then onto their hardware/software.
And in this case, one, ten or even 1000 negatives do NOT disprove the existence of the iPod halo effect, however only a few positives DO prove that it DOES exist, as it shows that as a result of the iPod, SOME consumers have been exposed to and then chosen to purchase Apple products when they previously wouldn’t have, which is the ENTIRE concept behind the iPod halo effect.
my 2 cents
Luke
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To Mr MacPhee, I offer the following as evidence:
1) Yes we did go into stores (as well as online) and purchase Apple Macs.
2) Yes viruses etc were factors, but the iPod made us aware of another choice.
You seem to think that because you know/knew all about Apple and the Mac, that everyone else does. In my experience, the iPod HAS introduced people to Apple and the Mac, AND this HAS resulted in sales.
Also to your point that:
“No real iPod effect is visible in these statistics.”
You said in a previous a post that “Personally, I would need to see some pretty compelling evidence that the mind of “Joe Sixpack” connects iPod>Apple>Apple Computer>Macintosh.”
ahhh, HELLO, this survey has got evidence of the thoughts of people that own an iPod and what they will do.
It states:
“The survey found that overall, only 3% of people primarily using Windows definitively planned on Mac purchases. However, iPod owners with Windows computers were more than three times as likely to buy a Mac.”
This is the “mind” of consumers (sorry I don’t understand this American obsession with refering to them as being “Joe Sixpack”). The ones WITHOUT an iPod have indicated a certain likelyhood to purchase a Mac (and they are experiencing viruses etc like ALL windows users). The consumers WITH an iPod have indicated they are THREE times more likley to purchase a Mac (and YES viruses may be involved in that decision, but SO is owning an iPod – obviously). Sure not all will go into a store, but not ALL of that 3% will either. I do know that some will, as I and my friends, are examples of people that have.
You are right, there ARE MANY factors contributing to Apple Mac hardware sales increases, however ONE of those factors IS the ipod halo effect.
You seem to be “throwing out the baby with the bath water” as they say.
Just because viruses and other factors are contributing to Mac hardware sales growth doe NOT mean that the iPod halo effect DOES NOT exist!
The amazing thing in markets (as you yourself have repeatedly pointed out) is that MANY things can all act TOGETHER to contribute to something.
You are deetermined to dismiss the iPod halo effect as a possible market force, and yet your arguement is based on the fact that there are a number of possible market forces!?!?
Is there a chance that the people that have ACTUALLY surveyed “Joe Sixpacks”, and analysed their responses, may have a better idea of what is happening?
How about my own experience (as well as my friends) as “Joe Sixpacks”, are we I allowed to have it, or is your feeling more valid?
My 2 cents
Luke
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A basic principle of advertising is that increased exposure and mind share usually equates to increased sales. Add to that the fact that most people love their iPods and have had really great experiences with them and a lot of them end up going into Apple Stores crammed with other cool Apple products to buy their iPods and accessories and there really is no debate. Of course the halo effect is real. The only question that remains is one of degree.
And yes, the iPod experience may be only one of the motivating factors to buy a Mac. But if it contributes to the motivation at all then it classifies as a “halo effect” – especially if it was the prime mover factor in getting consumers to consider Apple at all.
I believe M. T. MacPhee, in error feels the Halo effect is the guarantee of a purchase of a Mac because of an iPod.
A halo effect is where awareness, positive impressions leads to future purchase.
Luke is right, unfortunately a majority of the masses is not aware that living with viruses/spyware/etc is not a fact of life to being online.
The illusion out there is that MS is the only option and all experiences are the same regardless of operating system. The iPod halo effect is bringing awareness of the options beside MS for personal and business computing. With Tiger out there Apple is in a great position to capitalize on the curiosity out there.
I know since I just brought an iBook and a Power Mac in the last 4 months after being a PC person only for the past 18 years.
If there’s no halo, then that means:
Everybody who poo-pooed Macs has also poo-pooed iPods.
Or if they did try an iPod, none of them were impressed enough by the quality to consider a Mac.
Of COURSE there’s a halo effect. How large won’t be known for years, if it ever really gets measured at all. But measured or not, it’s real.
While we’ll never have certainty, this survey provides more than enough evidence of the halo effect, at least for those open-minded enough to be convinced.
‘Nuff said.
I influenced a guy that I work with to purchase an iPod about a year ago.
Just last week that same guy purchased his first computer ever–an iBook.
The fact that his PC-using brother has a new virus on his system every time he turns around was certainly a factor, but so was his experience with his iPod.
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Luke, good commentary. You’ve convinced me the halo effect is real. The only question which remains is: How big is it? It’s a question which may never be answered completely, because there are so many other independent variables which simply can’t be controlled.