Market Share

It is entirely possible that hell has frozen over: there are PC industry analysts saying sensible things about Apple’s market share.

In a CNet News.com article about first quarter 2003 PC sales, reporter Ina Fried (and by the way, is “news.com.com” the most senseless domain name ever, or what?) leads with the usual “bad news for Apple” angle:

Apple Computer saw its worldwide market share drop to 2.3 percent, down from 2.7 percent a year ago, although slightly up from the 2 percent Apple had in the first quarter, according to research firm IDC.

But at the end of the article, Fried writes:

As for the PC business, some analysts say it’s time to stop measuring Apple and Gateway by their slice of the overall PC market, anyway. Gateway and Apple, as well as laptop specialist Toshiba, address only part of the market, said NPD Group analyst Stephen Baker.

Gateway, for example, is much less aggressive at selling to large businesses, while Apple has concentrated at the high-end of the consumer market.

“Nobody expects that you can sell Acura TSX sports cars as Taurus wagons,” Baker said.

Mac users have been arguing this point for years, so perhaps it’s finally been pounded through analysts’ thick skulls: Apple is not just like other PC makers.

With very few exceptions, large corporations are either growing or dying. So, yes, Apple needs to grow. They need new customers, not just the same core constituency. But the current market situation is, well, OK — not dire.

But perception matters. A small but vocal class of very-small-weinered self-proclaimed PC experts has been attempting to delegitimize the Mac ever since it came out. Surely you know at least one of these guys (and they are all guys):

  • In the 1980s, they declared that graphical user interfaces were for sissies, dummies, and artists (and frequently insinuated that the three terms were synonymous). The Mac was overpriced and Apple was going out of business.

  • In the early 1990s, they declared that Windows was just as good as a Mac, although experts would never be satisfied with less than a pure command-line interface. Discordantly, they declared the Mac “a toy”, but bemoaned that there weren’t any good games available for it.

  • In the late 1990s, after everyone, including them, had switched to desktop-metaphor GUIs, they conveniently dropped their “real men stick with the command line” mantra, and instead proclaimed that Windows wasn’t merely just as good as the Mac, it was better. Or at least that it had better games. And Apple was going out of business.

In the last few years, they’ve used Apple’s supposed “2 percent and dwindling” market share as the cornerstone of their arguments. As in, Apple doesn’t matter anymore. They used to have like a 10 percent market share, then 5, and now it’s down to 2 — obviously it’s heading toward zero, dude.

It certainly sounds dire when put that way. But it’s a bogus statistic. Overall PC market share covers large market segments where Apple isn’t competing — including markets where Apple doesn’t want to compete. Fifteen or 20 years ago, personal computers were generally only purchased and used by people who were “into” computers. Today, however, many computers are purchased for use as generic business machines, modern-day typewriters and adding machines.

PCs are used everywhere from telemarketing cubicle farms to supermarket checkout registers. The much ballyhooed “network computer” platform never emerged the way companies like Sun and Oracle had hoped (meaning “no Microsoft”), but very cheap PCs are frequently used as little more than network terminals. And Apple simply doesn’t make machines that would be good choices for extremely low-end tasks.

The analyst Baker is on the right track with his “Acura sports cars vs. Taurus station wagons” analogy, but it isn’t quite right. The idea of overall PC market share, as currently conceived by IDC, is not so much like overall automobile market share as it is like overall motor vehicle market share. It’s like counting everything from golf carts to tractor trailers as a single category, thus making the “overall market share” look worse than it is for a company that only makes actual passenger cars.

In the markets where Apple actually wants to compete, the Mac’s market share is certainly higher than 2 percent. While I reiterate that it’s important for Apple to grow, there’s no need for hand-wringing.

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