The truth about Apple's market share [was: What is Usability...]

19 Nov 2004 - 6:18pm
10 years ago
3 replies
1078 reads
Manu Sharma
2003

Prady:
> > On the other hand, look what Apple decided -- to maintain close
grip
> > on their proprietary. They have their box and they have their OS.
At
> > what cost? Look at their market share.

Chris Ryan:
> I think this is an incorrect bit of conventional wisdom, and I
haven't
> seen a better analysis of it than John Gruber's recent piece:
>
> http://daringfireball.net/2004/08/parlay

Prady again:
> In my opinion, author is just trying to justify Apple's lack of
> business acumen, and the lost opportunity

Gruber's article does a good job of dissecting Apple's fateful
decision... but it remains arguable. Steve Jobs wasn't at the helm when
the decision was taken [infact all of Apple's period of inactivity was
when Steve wasn't there]. Besides, Apple's former evangelist Guy
Kawasaki has admitted that it was a mistake [1].

But when it comes to Apple's market share, you have to understand the
market they compete in. Apple has never tried to sell their Macs to
corporates, which makes for the bulk of PC sales worldwide. They are
leaders in Education with over 80% market share. They have over 50% of
what they call the "creative-professional" market. And their consumer
market share nearly doubled in the past few years. [2]

Apple and Dell are the only two companies which are making money in the
PC business. HP/Compaq, Gateway, Sony, IBM, Toshiba are all LOSING
money in the PC business. [3]

With all this and over $21 billion in market cap, rejecting Apple for
their "lack of business acumen" does sound a little exaggerated.

Ziya:
>What exactly is market share? In most markets Apple competes in, they
have
>double-digit market share, in many core markets they simply dominate.

Exactly!

Manu.
http://orangehues.com/blog/

[1] "Mea culpa, we were arrogant and French (that is, led by Jean-Louis
Gassee)."
Guy Kawasaki http://www.fastcompany.com/magazine/22/bookreport.html

[2] & [3] http://www.rollingstone.com/news/story/_/id/5939600

Comments

21 Nov 2004 - 11:27am
Chick Foxgrover
2003

I don't think this was always true. When I went to work at citibank in
1989 the retail (branches etc) side of the company was all Macintosh.
Macweek in those days would publish a Macintosh 100 (was it 200 one
year?) list of the numbers of Macs in major instittutions and there
were many corporations back then. Ashton Tate brought out dBaseMac and
Word and Excel were Mac-only for some time. The folks who invented
Powerpoint thought there would be corporate macs. I think THEY thought
Apple had a good chance of keeping a strong presence if never
dominance in business. I remember an Apple ad of two executives
looking over a beautiful report, asking how the team managed it, while
watching a guy pull a Mac out of his trunk to bring into the office.
At some point they fell back on to the creative and education market
but I think out of necessity.

That is ancient history though and has little to do with the licensing
decision. What I remember being most dramatic was the introduction of
the PowerMac and Word6. An absolute dog that made it almost impossible
to justify keeping a Mac in the corporation. Citibank had signed a
major contract with Gateway for computers that all came with
MicrosoftOffice preinstalled. The REALLY incredible result was
watching WordPerfect and Lotus 1,2,3 die practically overnight. I
think Microsoft used Office as a weapon of mass destruction in those
days. Cripple the Mac version and destroy the competition on the PC.
The Mac had a loyal community to fall back on but the corporate story
was over.

BUT, that Apple has been brilliantly managed as a business since Jobs
came back is clear. Can you believe that Apple is at $55/share!

> But when it comes to Apple's market share, you have to understand the
> market they compete in. Apple has never tried to sell their Macs to
> corporates, which makes for the bulk of PC sales worldwide. They are
> leaders in Education with over 80% market share. They have over 50% of
> what they call the "creative-professional" market. And their consumer
> market share nearly doubled in the past few years. [2]
>
> Apple and Dell are the only two companies which are making money in the
> PC business. HP/Compaq, Gateway, Sony, IBM, Toshiba are all LOSING
> money in the PC business. [3]
>
> With all this and over $21 billion in market cap, rejecting Apple for
> their "lack of business acumen" does sound a little exaggerated.

-----------------------------------------------------
Chick Foxgrover

21 Nov 2004 - 4:27pm
Pradyot Rai
2004

Chick Foxgrover <chick.foxgrover at gmail.com> wrote:
> BUT, that Apple has been brilliantly managed as a business since Jobs
> came back is clear. Can you believe that Apple is at $55/share!

Here's some data that I pulled from Yahoo!Finance. Snapshots of where
they closed in last 5 years --

Date Adj. Close*
----------------------------------
19-Nov-04 55.17
21-Nov-03 20.28
21-Nov-02 16.35 <-- this is (approx.) the same point where they
were in 1996 too
21-Nov-01 19.68
21-Nov-00 18.81
19-Nov-99 46.22
* Close price adjusted for dividends and splits.

It tells me that something dramatically changed in last 52 weeks.
Doesn't give me any information about Jobs charisma. But it does point
out that Apple gained it's ground back again by diversifying into
other areas. The losses they incurred from getting reduced in market
share from computer industry, was spread by making profits from other
businesses.

Probably the gains in last year was due to iPod's enormous success.
This surely goes to Jobs innovative approach to deliever. John Schully
might have not thought about it at all.

Prady

22 Nov 2004 - 9:22am
Alain D. M. G. ...
2003

--- Larry Tesler <tesler at pobox.com> a écrit :

> But the Newton put the ARM microprocessor on the map. ARM stock
> generated $700+ million for Apple. That cash helped Jobs buy time to
> implement his turnaround. And the high-performance, long-battery-life
>
> market that ARM pioneered made iPod possible.
>
> So, in a roundabout way, Sculley's Newton helped to enable Jobs'
> iPod.
>
> Larry Tesler

Is this comparable to the cash that kept coming in from the Apple II
(despite repeated attemps by Apple management to kill the Apple II)and
made it possible to slowly develop the really useful
hard-disk-and-color Macs while the Apple III floundered and while the
first cute-but-inept Mac reached the end of its early adopter and small
printshop market.

Alain Vaillancourt

__________________________________________________________
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magasinage.yahoo.ca

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