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For six years, the Internet Nexus served as my technology blog, but I've since started blogging at the SuperSite Blog instead. If you're looking for the blog, please head there. --Paul

Sunday, September 16, 2007

A Window of Opportunity for Macs, Soon to Close

Randall Stross of The New York Times opines on an issue that was all the rage last year as Apple delayed Leopard again and again, eliminating any possibility that the company could capitalize on Microsoft's own delays:

The Mac's worldwide market share was 3 percent as of June 2007, according to Roger L. Kay, president of Endpoint Technologies Associates, a consulting firm in Wayland, Mass. That forlorn number looks even worse compared with Apple's peak worldwide share of 14 percent in 1984, the year the Macintosh was introduced and sales of Apple II computers were the company's mainstay.

Apple's share was as low as 2 percent as recently as early 2004. The increase to 3 percent may be a result of the 'halo effect' produced by the success of the iPod. It could also just as easily be attributed to Apple's simply offering better products at more competitive prices.

Steven P. Jobs, Apple's co-founder and chief executive, can hardly be satisfied with a 3 percent share after more than 20 years of selling the Mac. Consider whether Mr. Jobs would be able to deem the iPod a success if it had gained only 3 percent of the market for portable players. After all, he gave Microsoft's poor Zune exactly one month to succeed before he mocked the Zune's 2 percent market share at the Macworld conference in January.

The best time for gaining market share is when your main competitor stumbles while introducing an entirely new version of its core product. Thanks to Microsoft's lumbering pace, Mr. Jobs had six years to look forward to the moment when XP would be replaced by Vista.

The official line from Apple is that all has gone swimmingly. The company said it shipped 1.52 million Macs in the first quarter of this year, up 35 percent from the year-ago quarter. In the second quarter through June 30, it shipped 1.76 million Macs, up 32 percent from a year ago, an all-time quarterly record.

Funny thing, though: based on the ratio of Windows and Macs actually in use, no gains can be seen for Apple.

The Mac's share of personal computers has actually edged a bit lower since Vista's release in January, and the various flavors of Windows a bit higher, according to Net Applications.

This guy goes out of his way to explain how poorly Vista is doing from both a sales and compatibility standpoint, which is sort of astonishing given the overwhelming evidence to the contrary. This poor reporting of facts may invalidate the entire article somewhat. (He gets market share data from Endpoint, which presumably measures sales, and then compares it with data from Net Applications, which measures Web usages. These are two completely different things.)


My own analysis of Apple's market share in the PC market shows that the Mac is up, year-over-year, and has been steadily rising for some time. It's hard to grow market share dramatically when you're starting from such a low place, as I've also demonstrated in the past. My conclusion is that the Mac is gaining on Windows at a slow pace, sure, but gaining nonetheless. The reasons are simple: Apple makes good products, people like the iPods are are willing to investigate the Mac, and some Windows customers are tired of the issues that naturally arise in a non-monolithic ecosystem where ever piece of what makes a PC a PC comes from a different company. That Apple bobbled its chance during Vista's innumerable delays in not debatable. But now that Vista is out, there's no change in the big picture, and Apple will simply continue its small market share gains for the foreseeable future. In short, this article is all over the place, and doesn't really hit on the reality of what's happening here at all.

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