Apple market share myths deconstructed

“In The Apple Market Share Myth, I demonstrated how overall market share numbers can be used to suggest ideas that have no basis in reality. Here, I’ll look at the slippery aspect of numbers, prove that a quality share of the market can be better than a larger market share, and then compare how the definition of a market is critically important in determining how useful market share numbers are. In particular, I’ll look at the iPod’s market share,” Daniel Eran writes for RoughlyDrafted.

The very interesting full article contains a number of points about Mac and iPod market share myths and realities here.

[Thanks to MacDailyNews Reader “James” and “LinuxGuy” for the heads up.]

Related article:
16-percent of computer users are unaffected by viruses, malware because they use Apple Macs – June 15, 2005

47 Comments

  1. The AMA (American Marketing Association) defines market share as:

    – 1. (geography definition) A proportion of total sales in a market obtained by a given facility or chain. 2. (strategic marketing definition) The proportion of the total quantity or dollar sales in a market that is held by each of the competitors. The market can be defined as broadly as the industry, or all substitutes, or as narrowly as a specific market segment. The choice of market depends on which level gives the best insight into competitive position.

    Please note: “The proportion of the total quantity…in a market that is held by each of the competitors.”

    The point is: What is the share of Macs in operation? I’m willing to bet that Macs actual share is much larger than Share of Sales.

  2. The definition of market share depends on the definition of market.

    You have a k to 12 education market.

    You have a cash register market.

    You have a consumer or home market.

    You have a scientific market.

    You have a creative market.

    The list goes on and on.

    What is the market? Once you know that then you can set about finding Apple’s or Dell’s or even Microsoft’s share of that market. Apple does dominate some markets.

  3. Lies, damned lies, and statistics. That article made me nauseous. Seriously. What a mess.

    There’s probably a dozen definitions for “market share” but let’s keep it simple. WikiPedia’s–

    http://en.wikipedia.org/wiki/Marketshare

    “Market share, in strategic management and marketing, is the percentage or proportion of the total available market or market segment that is being serviced by a company.”

    “It can be expressed as a company’s sales revenue (from that market) divided by the total sales revenue available in that market. It can also be expressed as a company’s unit sales volume (in a market) divided by the total volume of units sold in that market.”

    So, “market share” can be total sales or total units sold in a given market or segment. That’s how business views it.

    All the rest of that mixing and matching is just plain silly.

    For example, I read an article yesterday that says the iPod’s share of the MP3 player market really is about 11-percent, not the 75-percent claimed by Apple and others. Why so low?

    Because the writer broadened the “market” to include cell phones which play music (MP3 or whatever). Well, guess what? That’s silly. Why? Because the writer failed to include the 500-million PCs that are capable of playing music (they’re MP3 players, right?), so the iPod’s “market share” in that market is less than 1-percent. See? That’s silly.

    Worse, what’s with all this mixing and matching of markets– hardware and software. At least compare Apples to apples. Microsoft doesn’t sell PC hardware (yet) but still shows up with about 90-percent operating system “market share” in the known PC world. Yes, Apple’s Mac OS X is increasing, so is Linux, and there are others. But Microsoft owns that space– PC operating systems.

    In hardware, it’s a different story. Apple’s “market share” in PC hardware sales dwarfs that of Microsoft. See? Again, it’s a silly argument.

    Apple’s US units sold give it about a 4-percent to 5-percent “market share” when counting boxes. Forget the “shipped vs sold” argument. Boxes don’t get sent back to the factory once they’re ‘shipped.’ Apple’s “unit” market share on a world wide basis is lower, most estimates have it at less than 3-percent.

    The “market share” for sales is probably different than for units sold as Apple’s prices on per unit basis are probably higher. So what? So is Apple’s gross margins. They’re highly profitable as a PC box producer than most others–per unit sold.

    The “installed base” market share is merely a different number and a different view. Apple’s is probably higher than the sales or unit number because Mac users and schools tend to keep their Macs longer than PC users. See? That’s not hard. I’ve also read that Mac users, on average per machine sold, buy more software than PC users. I do. Most Mac users I know do the same. But PC users buy more anti-virus and anti-spyware software than Mac users.

    Keep the premise simple, with well defined terms, and understanding the numbers will be much easier.

    Tera Patricks
    Tera Talks

  4. Daniel Eran, who wrote this article, is a total idiot. The guy is confused beyond confused at what market share is, what markets are, what sales of MP3 players are – he has written pure garbage.

    He´s got a chart showing Microsoft competing with Dell, HP, Apple and others for computer market share.

    It is so confused and stupid that it made perfect logic to MDN – they obviously just read the headline of the article.

    The authors total creditials:
    “I write about technology, Apple, motorcycles and the place I call home: San Francisco.”
    The only place he has been published is on his own blog.

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