Who You Callin’ ‘Super-Small-Market Share Guy,’ Bill?
by John Paczkowski
Posted on October 11, 2007 at 12:19 PM PT
Because they’re the super-small-market share guy, they get all these statements about them.”
Much has been said of the iPod’s “halo effect”–the notion that the device has so enhanced perceptions of the Apple brand that consumers are migrating over to its Macintosh platform. And analysts routinely cite it as a reason for bolstering their outlook for the company, despite its relatively paltry share of the global computer market. And for good reason.
The iPod “halo effect” is indeed having a hell of an effect on Apple’s global market share. According to Bernstein Research analyst Toni Sacconaghi Jr., Apple’s global PC market share has risen in 10 of the last 11 quarters. What’s more, the company has managed to claim a remarkable 29% share of the U.S. laptop market top fifth, or quintile, of the U.S. laptop market.
An impressive achievement. But one not without its downside. Apple, as it so often does, is playing in the high-end market here, one without much room for growth. “Accordingly,” says Sacconaghi, “we believe Apple faces a trade-off in its Mac business over the next two to three years: either lower price (and margin percentage) to sustain share gains, or retain its current price premiums and face slowing unit growth.”
Comments
No question that Apple’s notebook market share is rising, but it’s not 29% of the U.S. laptop market. It’s 29% of the highest priced quintile of laptops. Makes sense the two base prices of Apple’s notebooks average around $1200 and $2200 respectively. Plenty of folks are buying sub-$1000 notebooks where Apple doesn’t even have a product. Explains why the correct U.S. notebook share for Apple is around 8%.
Posted by Kevin Tofel at October 11th, 2007 at 1:14 pmThanks for the catch, Kevin. I’ve updated the item.
Posted by John Paczkowski at October 11th, 2007 at 1:52 pm“Apple, as it so often does, is playing in the high-end market here, one without much room for growth.”
1. So, Apple can increase market share by the simple act of lowering some prices whilst DELL. et. al, will have spend big bucks on design and advertising.
2. The average REAL income in the USA has doubled in the last 50 years. So, who captures that growth in income? Wal-Mart with “Always the Low Price. Always” or Target with Michael Graves designs? Lenovo or Apple? We report and you decide.
Posted by Dave Barnes at October 11th, 2007 at 7:07 pmSacconaghi’s sentiments that Apple will remain “stuck” because it’s hitting only the high-end market is the same nonsense I’ve heard since Jobs’ return in 1997–Apple can only grow so much because its products are priced too high. Bull!
Apple’s success speaks for itself. For those who have, and continue to predict, Apple’s “struggle” to continue to gain market share, they should reflect that, for the last 10 years, Steve Jobs has been right and they have been wrong…consistently.
Posted by Jim Hillhouse at October 12th, 2007 at 1:15 am