CNET writer: If Apple Computer is so great, how come it’s so small?

“If Apple Computer is so great, how come it’s so small? With all the hoopla surrounding the company–and you’ll hear a lot this week as Apple turns 30–you’d think it pulled off the first manned spaceflight to Neptune or invented long division. Instead, the company’s recent accomplishments include making it possible to buy Foghat singles on the Web and selling a leather pouch for music players for $99,” Michael Kanellos writes for CNET.

“Apple held 2.3 percent of the world’s computer market at the end of last year… Apple shipped 4.74 million Macs in calendar year 2005. That’s 20 percent lower than the growth in shipments (5.7 million) Dell experienced in the same year,” Kanellos writes. “Size, of course, isn’t everything. Unlike some other PC makers, Apple turns a profit and has successfully branched out into other markets with the iPod. The company has a strong influence on PC designs and home technology, according to, among others, Intel Vice President Deborah Conrad. At scientific conferences, I see a greater percentage of attendees toting Macs than at other events, so clearly the intelligentsia has tuned in. Plus, people love the company and its products… But the company could accomplish all that and still sell a lot more computers. So why doesn’t it?”

“The reason, I think, comes down to the fact that Apple is a company that’s always been more concerned about having good ideas than good friends,” Kanellos writes.

Full article here.

MacDailyNews Take: Things don’t turn around immediately. Apple is clearly on the upswing after paying a huge price for deciding to keep the Mac to itself while Microsoft licensed Windows to anybody with a pulse. But, Mac users received a huge gift from Apple because the Mac remained in Apple’s control which has resulted in the best personal computer platform available. Numbers of units shipped doesn’t equal impact on the market. Apple’s impact is immeasurable; basically everybody uses a “Mac” in some form (the real thing) or another (Windows) today. Apple is growing faster than the PC industry today and clearly they dominate the mind share, if not yet the market share. By other measures, Apple is not “small.” Apple currently has a $53 billion market value and for fiscal 2005, they generated revenue of $13.93 billion and a net profit of $1.335 billion, reflecting annual growth of 68 percent and 384 percent respectively; representing the highest annual revenue and net profit in the Company’s history.. Apple’s on the right track; they need to keep opening retail stores (it’s working), though we do wish they’d advertise the Mac better to the general public.

Paul Thurrott, on Internet-Nexus today, writes a paragraph with which we agree, “I think that what makes Apple special can’t be measured by traditional company metrics. It’s kind of like the basketball player who contributes team-oriented play at the right time but never gets rewarded with decent stats. Apple is special because they do things differently, period. Apple is special because it’s lasted for 30 years despite almost always doing things differently. And it’s special because Apple has stood up to some of the most powerful companies on earth and come away, if not triumphant at all times, at least with its values intact. They’re unique in corporate America, and truly unique in the computer industry.”

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46 Comments

  1. The main reason that Apple is “so small” is due to it’s own marketing mistakes and the illegal business practices of another computer company…

    Both of these problems are in the process of being fixed as we speak…

  2. Could it be the same reason that Bose is so great, but doesn’t dominate the market?

    or that BMW is so great…

    or that…

    There are plenty of examples where market share and product quality are not linear – look at Wal-Mart!!!

    MS dominates the business environment which is slow to change and is still living off of decisions made two decades ago. As IT professionals embrace Linux and xServes, iPods and MacBooks for their kids, the pendulum will swing and over time – just like the mainframes yielding to Windows servers – Windows boxes will yield to web-interface appliances, some of which may carry an Apple logo.

  3. Even if you did (wrongly) say that their only recent accomplishments were; “making it possible to buy Foghat singles on the Web and selling a leather pouch for music players for $99” then you’d still have to compare that to Microsofts what? Er nothing.

    The writer say’s it themselves, size isn’t everything. Apple could potentially grow faster if they marketed more, cut prices etc but at what cost? Dell are huge but where have they got to go? Their only avenues to increase profits significantly are to cut costs on their products which are already at pretty low margins or alternatively to grow with the market itself. Market growth has slowed because everyone who wants a computer based on what they do now has one and the only way you can convince new buyers they want one is to give cool new functionality in an easy package. Unfortunately companies like Dell have to rely on Microsoft and Vista for that. Remind me how that’s going?

    Obviously the situations aren’t exactly the same but what sells more a luxury car like a lexus or some generic family car like a ford? The ford. does that mean ford are better than lexus? Of course not. Is MacDonalds better than a meal at a Michelin starred restaurant? Notice a pattern?

    Apple is doing things their (Steve Jobs’) way, they could grow faster maybe but they’re growing fast enough to be confident they can cope with it and are still making great profits and people like them. Who likes Dell? I’d rather Apple grew slowly and kept whats good than too fast and became shit.

  4. “Microsoft licensed Windows to anybody with a pulse.”

    Now wait a minute. That’s blatant discrimination against the zombie and vampire computer manufacturers. The living dead have rights too you know.

  5. Bill Brown, right on.

    Why is it that no one can seem to speak sense-ably these days.

    “Just look at that baby elephant’s small tail. I guess it will never grow up to be very big. “

    “A ship made out of steel. How stupid, everyone knows that steel does not float!”

    “PCs must be better, just look at how many there are of them.” (ps there are a lot of virsuses (real ones), does not mean I would like one ” width=”19″ height=”19″ alt=”grin” style=”border:0;” /> )

    etc,

    N.

  6. Wake-Up…..

    Microsoft used its application business (word, excell. ppoint, exchange) to create an OS monopoly. (actually each was used to reinforce the other).

    A monopoly forces out others to small minority positions. That’s where we are today.

    I still don’t understand how the US Govt allows MSFT to have both business (applications and OS) under a single company.

    Ahh…Gates and his buddies (Warren Buffet et al)…money talks and this is big money.

  7. Why is it that the ONLY argument people have when trying to criticize the Mac is market share?
    When I’m sitting in front of a Windows computer, I’m not saying to myself,

    “oh boy, I’ve got market share!”

    When I’m sitting in front of a Macintosh I’m not worrying about viruses or crashes that will wipe out my work, I’m actually having fun! (I’m also getting all my work done)

  8. Apple small? ” width=”19″ height=”19″ alt=”LOL” style=”border:0;” />
    What is this guy on drugs or what? The market share maybe small but rising. But the company itself is not small by any means.

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