Apple Macintosh owns 45% of PC market profits

“The Windows PC market is contracting. The market data has been showing unit shipment declining for some time with the latest quarter having perhaps the steepest decline for two decades,” Horace Dediu reports for Asymco.

“What remains undocumented however is how the market looks when considering economic value. A more complete picture would be to show revenues, average selling price (or revenue/unit), operating margins/unit and percent of profit capture,” Dediu reports. “The only inference I made was with respect to Apple’s margins for the Mac. These are based on deriving a gross margin of 26% and adding an estimate of the SG&A and R&D “overhead” of 7.1% of sales, a figure which applies to the entire company. This yield an operating margin of 18.9%.”

Dediu reports, “If this estimate is considered then the operating profits from PC operations imply that Apple generates more profit than all the top 5 PC vendors combined. Assuming further that “other” vendors have the same profitability ratio as the top 5 combined yields a figure of 45% ‘profit capture of PC market’ for Apple. This is not as good as its performance in the phone market, where Apple has about 72%, but it’s not bad.”

Read more in the full article here.

MacDailyNews Take: So, who won the “war,” again?

As we have always said, even as many short-sightedly waved (and continue to wave) the white flag, the war is not over. And, yes, we shall prevail… No company is invincible. Not even Microsoft.MacDailyNews Take, January 10, 2005

Related articles:
Apple Macintosh on the rise as Windows PC market plummets – April 11, 2013
Gartner: PC Market posts 11.2 percent decline in Q113; Apple Mac sales up 7.4 percent in U.S. – April 10, 2013
IDC: PC shipments post the steepest decline ever in a single quarter, down 13.9% in Q113 – April 10, 2013


  1. Poor Apple, they keep struggling to get market share and the only thing they got is PROFITS, almost all of them, but who cares about profits? Self respected companies look for popularity and market share, right? How is that thermonuclear war going apple?
    Good Job Larry on android, even if you don’t make a dime your OS is very popular, even your competitors love it 😉

  2. Okay, so why doesn’t Apple concentrate on producing a major line up of top of the line Mac Pros? I know a new version is finally imminent but is the marketing strategy designed to maximize the potential of the pro markets – to say noting of corporate America and, of course, the biggest buyer of them all – the governments of the free world? Might just get AAPL out of the doldrums and help the company gain some respect among investors.

  3. At most MacPros would garner 200K more units per quarter. That is paltry compared to the MacBook market. Assuming an ASP of $2500, that would produce $0.5B in revenue and probably about $0.2B in profit.
    I truly understand that Pros need a better MacPro and hope Apple release one soon. But on a financial standpoint I can understand why Apple are focusing on the portable market.

    1. here you go touting volume sales when MDN’s article is clearly supposed to make you believe that high margins are all that matter. How dare you think independently! 😉

      Personally, i think that any company that supposedly puts customer experience first — and which is sitting on a pile of cash so big that the fat cats on wall street have publicly plotted to raid it — should be releasing a wider range of products to serve a bigger portion of the overall PC market.

      When you’re operating an App store, it doesn’t matter that each hardware product hit mainstream unit volume targets, nor that each hardware product always hold industry-high profit margins. In the long term, what really matters is that the % of returning customers stays near 100% and switchover count stays high. Only when Mac market share is near 50% should Apple let up on aggressive expansion of the Mac platform. The world is not all going to be operating iOS devices — in fact, iOS is losing market share slowly but surely to Android in the same way that slow, profit-margin-obsessed management gave away the desktop to Windows 30 years ago.

      … but who are we kidding? Cook, the most overpaid CEO ever to win the lottery, lost the incentive to compete. His golden retirement already taken care of, he’s in full coast mode. With how little he shows his face to the world, it makes one wonder if he’s spending all his time attempting to use Maps to find private islands to buy.

      1. Apple tried that and failed miserably. Can you (without looking it up) tell us the differences between the Performa 6400 and the Performa 6410? Or the differences (other than SCSI versus ATA) of the Macintosh 6400 versus the Performa 6400? Once upon a time (the beginning of the Dark Days, thus the “Once upon a time” phrase) Apple had so many variations of Macs that even the Mac Fanatics could not list the differences between models or the benefits of one model over another without looking things up.

        Apple does NOT need 1001 models. Apple needs just what it has, a limited number of products that can be configured as build-to-order. All it truly needs to add is a truly relevant, up-to-date Pro model. If in the next year Apple added a high dynamic range 4096×2560 monitor that would be good too. But that’s it.

        Apple does need to keep improving the Mac line, from the Mac mini through the iMac to the Mac Pro. But that set of Macs is all that is needed for the desktop.

        For the portable Macs: The MacBook Airs and MacBook Pros (and retina models) are easily enough diversity. Many might say too much diversity. (Why a MacBook Pro and a Retina MacBook Pro?)

        Apple really does not need more diversity in its Mac lines.

        1. There is a big difference between the dozen major product lines Apple currently makes and the 1001 you claim they don’t need.

          Do you honestly believe that one of the world’s richest companies can’t profitably offer a few more major product lines?

    1. Wouldn’t it be nice to model the ratio between profits and excellence since we know the profits (give or take) we could then calculate excellence and do similar modeling for the Dells of the world 🙂

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.