Apple & Mac growth, market share

[Jeff Wexler]

We have seen in Apple, Inc. indisputable and dramatic growth over the last several months and much of the main stream business and technology journalists still cling the whole notion of the "halo effect" of the iPod and iPhone. I believe that there is a halo effect but it is only one factor. At the core of Apple's success is still undeniably the Mac and it continues to gain on "the other computer" every day. Here is an excerpt from one of the more thoughtful analysts:

"C|Net: More to Mac Sales Than Halo

by John Martellaro, 4:10 PM EDT, October 23rd, 2007

Looking at the Apple sales numbers in detail, it remains impossible to attribute Apple's sales growth to the iPod halo effect alone. There are other effects, according to C|Net on Monday.

The halo effect results when iPod customers go into an Apple store, have enjoyed their iPod experience, and see the Mac in possibly a new way. Apple has sold 120 million iPods, and many of the visitors to Apple's retail stores become new Mac owners.

"... despite the recent results, it's just not that simple," Tom Krazit wrote. " Apple sold 473,000 Macs at its retail stores. That means we're talking about something like 200,000 people last quarter who were new to the Mac."

That's not enough to account for all of Apple's sales growth.

"Maybe Mac shipments are growing because people have had two or three Windows PCs in their lifetime, and are looking for something different," Mr. Krazit observed. "Maybe Mac shipments are growing because people are upgrading older PowerPC-based systems to Intel-based systems. Maybe younger buyers, a larger segment of the population than us Gen Xers, prefer the Mac over the PC. And, yes, maybe Mac shipments are growing because of the amazing swirl around Apple in 2007 spearheaded by the iPhone."

More questions were posed by the C|Net author. "Are you more likely to buy an HP PC because you own (and like) your HP printer? Are you more likely to buy a Sony television because you've spent thousands of quality hours with your PlayStation 2? Maybe, maybe not."

Apple's growth, then, could be a combination of many factors. There's no penalty in switching to a Mac now. Windows can run nicely on them. Apple has world-class marketing and design. In short, all the factors that Apple has been emphasizing lately could account for their success rather than a mere iPod halo effect alone."

Regards,  Jeff Wexler

[Marc Wielage]

Some market reports that came out this week indicate that Apple's market share is now as high as 8% (depending on how you measure it), and their profits are somewhere north of $900 million. The company's market cap is at $160 Billion (!), which has prompted some Wall Street-types conjecturing that Apple might be in the market to buy a movie studio, TV network, record label, or all three.

More significantly, Apple's market share of high-end laptops is enormous -- said to be as much as 25%, which is huge.

The Wall Street Journal and a few others gave stellar reviews to OSX Leopard this week. I'm keeping my fingers crossed to prepare for the onslaught this coming Friday night, as we rip up my home system and upgrade five different Macs...

The Powerbook I use for Metacorder will stay as-is, though. After I finsh with a project in a week or two, I might experiment with an upgrade and see if everything's still bullet-proof.

--Marc W.