“Apple has gotten many such bear arguments lately – with the sole focus on market share of some total product industry categorized by some third party or analyst, leading to the assumption that Apple is in a desperate state quickly losing market share of some rapidly growing industry. In actuality, most of such market share arguments are entirely flawed,” NYC Trader writes for Seeking Alpha.
“Let’s take IDC’s market category of the tablets for example,” NYC Trader writes. “A simplistic assumption is made by IDC that all tablets should be placed in the same one category – tablets – and with the iPad’s premium pricing, this general assumption inevitably places the iPad at a market share disadvantage to peers – because Apple’s tablets only appeal to individuals whose affordability levels allow them to purchase premium products.”
“Apple still has an enormous unfulfilled smartphone market opportunity in China (when, for example, additional China networks become compatible with Apple’s 3G/4G capability),” NYC Trader writes. “China currently has a population of 1.35 billion. In 2005, 32% of China’s income share was held by 5% of China’s population and 48% was held by the highest 20% of the population. This suggests that the majority of China’s population will not be buying Apple’s premium products and would prefer to buy cheap knock-offs or heavily discounted, lower margin, bottom-tier products. Apple can live with that. Let me rephrase that. Apple prefers to live with that. Apple’s focus is not on the 80% who can’t afford premium products. With their #1 global brand, Apple does not need to heavily discount its products to appeal to the masses. Instead, Apple would prefer to appeal to that 20% of China, or people looking to buy premium products.”
Read more in the full article here.
MacDailyNews Take: “Apple’s focus is not on the 80% who can’t afford premium products. With their #1 global brand, Apple does not need to heavily discount its products to appeal to the masses. Instead, Apple would prefer to appeal to… people looking to buy premium products.”
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Newsflash: Apple sells premium products at premium prices to premium customers – October 23, 2012