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'Analysts should focus on profits, not marketshare'

updated 05:15 am EST, Mon January 26, 2004

Apple goes beyond Macs

Apple's in the fourth quarter of 2003 and may even fall more according to some analysts: "Salomon Smith Barney analyst Rich Gardner expects Apple to post PC unit growth of 6% in 2004 this year, vs. 11% for the entire PC industry. One reason is price. Gardner says the average price of a Mac is $900, although half of PC buyers now spend less than $600...[However] Steve Jobs says analysts should stop worrying about market share and focus on profits."

Meanwhile, a BusinessWeek interview, Steve Jobs talks about its rapid rise to the top of the digital music biz, Pixar, and what tunes he's listening to today, while BusinessWeek's cover story titled "Show Time!" says that "just as the Mac revolutionized computing, Apple is changing the world of online music. If Steve Jobs plays his cards right this time, Apple could end up with a big chunk of the digital-entertainment market."

by MacNN Staff

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01/26, 12:41am | report spam | close Reply |
RIPE.

this computer company is just RIPE to have a 10-15% market share leap.

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01/26, 03:34am | report spam | close Reply |
Profits.

Profits won't convince Adobe to continue development of software for the platform. Adobe's % revenues from Mac software has been decreasing linearly for quite a while now. When will they break?

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01/26, 03:36am | report spam | close Reply |
Sad but true

Nothing else to say.

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01/26, 04:05am | report spam | close Reply |
develop

This is indeed the difference between the always quoted BMW/Mercedes marketshare and the computer market. Computer (OS) manufacturers depend far more on software developers.

Apple can do two things: increase or at least hold marketshare, or develop (strategic important) apps themselves. I think they're doing that now.

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01/26, 05:09am | report spam | close Reply |
bullshit

this is not possible. i have seen more macs the past year than i have in ten. everywhere- ibooks, imacs, g5s and powerbooks. i find this hard to believe. the "study" must consider kiosks and cash registers to be "ibm compatibles" or some bullshit term like that from the mid-80s.

mac home use, educational use and scientific use has to be definitely increasing at a faster rate than wintels. but i guess i don't have a study to back it up. oh well.

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01/26, 05:53am | report spam | close Reply |
10 to 15% world user base

1.8% marketshare per fourth quarter does not mean that 1.8% of the computer users of the world use Macs.
It means that for the fourth quarter, the computer buyers worldwide had bought 1.8% of new Macs compared to the rest of the world buying new disposable PC's that are a little more affordable than a Mac mainly because PC's become obsolete or, breakdown more often than a Mac.

The realistic picture is that there is most likely 10 to 15% worldwide Macintosh users that really have not upgraded or had to buy a new Mac so, I think the whole 1.8% is often misunderstood to the general public and that there are only 1.8% of the worldwide computer users using Macs now.

And the problem with Macs are that they hang around a little longer than PC's and eventually are compared to the most recent PC's and they don't compare in performance. You just can't compare a Performa or, a 233Mhz iMac to a 2Ghz PC.
Yeah, go ahead and compare a similar equipped (and priced) Dual Processor G5 to a top of the line PC and the differences become petty but, I guarantee the Mac will be useful for many years after that PC has been replaced. Or maybe replaced twice.

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01/26, 06:24am | report spam | close Reply |
add Radeon 9800 256 MB

Add in a new 256 MB video card BTO option to the G5s and I'm ready to order.

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01/26, 08:52am | report spam | close Reply |
What?!

"Gardner says the average price of a Mac is $900, although half of PC buyers now spend less than $600...[However] Steve Jobs says analysts should stop worrying about market share and focus on profits."

F___ you, Steve. Profits mean nothing if I get stuck buying a PC because YOU're too wrapped up in playing Music Boy to expand the Macintosh's presence in the market.

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01/26, 09:04am | report spam | close Reply |
Re: Profits

"Profits won't convince Adobe to continue development of software for the platform. Adobe's % revenues from Mac software has been decreasing linearly for quite a while now. When will they break?"

WRONG WRONG WRONG

In a word... FUD.

Adobe makes around 50% of their sales from Mac software! Has this been going down... yes, but it could be for a number of reasons (like they are making more applications geared for the PC world) I'm sure they are going to be dropping the Mac line of applications soon! Microsoft also makes a ton off of Office sales. The key is, they use the same code base for both the Windows versions and the Mac versions. If they had to rewrite everything from the ground up for OS X, Apple would have died YEARS ago.

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01/26, 09:05am | report spam | close Reply |
Re:10 to 15% world user..

Ummm.. no.

There was only a span of ~2 years in the Macs entire history where they were even (a little) above 10%, and that was around '92. Since '98 or so they've been under 3% and dropping nearly every quarter since.

Nearly all software is purchased by consumers who's systems are two years or less old and that's the group developers are most interested in. OS X is causing another fracture in that ~2% User Base as new software is targeting OS X, but according to Jobs at the keynote, not yet 40% of Mac Owners have switched to OS X yet...

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01/26, 09:24am | report spam | close Reply |
Birthday (Law)suit

Hey gang, don't forget to sign up for that G3/OSX lawsuit. Today's also the day the settlement comes due, and I want my free Apple Store credit.

http://appleosx.rosenthalco.com/

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01/26, 10:07am | report spam | close Reply |
Re: (Law)suit

Go chase an ambulance.

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01/26, 10:21am | report spam | close Reply |
plenty o users,developers

Hey,
there are 10 million OS X users out there right now, 10,000 native apps for os x, more being ported and written every day, and take it from this developer, Cocoa makes it easy for us to write and deploy those apps. Carbon helps the cross platform developers, too.
Macs may have a small market share, but very high visibility and more apps are being written and considered for macs now more than ever. Things are only getting better!

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01/26, 10:27am | report spam | close Reply |
meanwhile...

Britain is to recognise Bill Gates' contribution to UK enterprise and the fight against poverty worldwide with the sort of honour money just can't buy - a knighthood.

Bill, who is reported to be "absolutely delighted"

Steve Jobs could only WISH this!

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01/26, 10:29am | report spam | close Reply |
get out

and just sell music online, after all they were a music company to begin with RIGHT? Why did they ever begin to make computers, when music was making them scads of money, I'll never know.

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01/26, 10:35am | report spam | close Reply |
love this, this is apple!

The Mac-user interface was a 10-year monopoly," says Jobs. "Who ended up running the company? Sales guys. At the critical juncture in the late '80s, when they should have gone for market share, they went for profits. They made obscene profits for several years. And their products became mediocre. And then their monopoly ended with Windows 95.

The very sould of apple just wants to suck you dry for all the CASH it can get.

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01/26, 11:40am | report spam | close Reply |
Re; 10% to 15% world user

"but according to Jobs at the keynote, not yet 40% of Mac Owners have switched to OS X yet... "

Um actually, I think Steve's point was that having 40% of Mac users using OS X indicates a rapid transition for a user base to a new OS. Much faster than Windows 95 to 98- or 98 to XP for that matter. I think if you look at the Wintel world, about 80% are still using 98 and 95. XP never really took off. In enterprise, IT people have avoided XP and 2000 for as long as possible because of the difficulty in setting up Active Directory.

The point is that the Mac has dedicated users who wanted off of OS 9 fast. The ones still on it- schools, publishing houses on Quark 4 and more schools aren't EVER going to upgrade to X with those computers. They'll remain with the OS they have on them until they don't turn on anymore- which I might add is YEARS longer than any Wintel machine....

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01/26, 12:47pm | report spam | close Reply |
Outright lie

" i have seen more macs the past year than i have in ten"

B.S. Apple's marketshare back in 1994 is 10% (see the latest issue of BusinessWeek). Maybe you are seeing more Macs because all you do is hanging out at the Apple store or up Steve's butt but there is no way that you are seeing more Macs than you would have seen back in 1994.

"The realistic picture is that there is most likely 10 to 15% worldwide Macintosh users that really have not upgraded or had to buy a new Mac so, I think the whole 1.8% is often misunderstood to the general public and that there are only 1.8% of the worldwide computer users using Macs now."

Rationalize and B.S. This is completely untrue and not backed up anywhere, even by Steve. I remember ten years ago, there were Macs everywhere (huge installations in college labs, present in Kinko, every other person had one). There is not one now. Stop rationalizing and accept the 1.8% which needs to be bigger.

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01/26, 01:44pm | report spam | close Reply |
Re; Outright Lie

Hey I don't hang out in Steve's butt- or at the Apple Store. I work at Va. Tech. We have more Macs here than we did ten years ago! Not including the Big Mac mind you...

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01/26, 01:46pm | report spam | close Reply |
Maybe not an outright lie

"i have seen more macs the past year than i have in ten"

This might not be far from the truth. The thing that people forget is that Mac users continue to make up 3% OF AN ENLARGING WORLDWIDE COMPUTER MARKET.

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01/26, 01:46pm | report spam | close Reply |
Maybe not an outright lie

"i have seen more macs the past year than i have in ten"

This might not be far from the truth. The thing that people forget is that Mac users continue to make up 3% OF AN ENLARGING WORLDWIDE COMPUTER MARKET.

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01/26, 01:49pm | report spam | close Reply |
oops...there's more

"i have seen more macs the past year than i have in ten"

This might not be far from the truth. The thing that people forget is that Mac users continue to make up 3% OF AN ENLARGING WORLDWIDE COMPUTER MARKET. By way of example: 3% of 100 = 3, but 3% of 1,000 = 30, so in other words, you probably are seeing more Macs around -- in fact, your seeing more computers of every kind around, since the worldwide install base continues to grow.

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01/26, 01:50pm | report spam | close Reply |
Marketshare

I don't understand how 'growth' is measured. Someone explain it to me. If it's just based on sales, then how do they know? If, for example, PCs were turned over and junked more frequently (becuase of price, malfunction, etc.), wouldn't it always look like Apple's marketshare was declining? Of coure I'm not claiming that's the case, just that I don't see how it works.

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01/26, 01:59pm | report spam | close Reply |
get real

"Gardner says the average price of a Mac is $900, although half of PC buyers now spend less than $600..."

The average price of a Mac is $900????

Half of PCs sold cost less than $600???

These numbers are bogus.

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01/26, 02:01pm | report spam | close Reply |
Users vs. Sales

I totally agree with the 10-15% user base estimate. For the average PC user, there's probably a sale a year -- a machine they use at work and the machine they use at home (each every other year, averaging 1 per year).

For the average Mac user, the purchase rate is probably 1 PC every couple years (for work, or a Mac if they're lucky), and one Mac every 3 or 4 years, since Macs last longer.

This means, amongst 1000 users, 10% mac, the sales rates are 950 PCs and 33 Macs, or about 3%.

When you figure that the purchase rate for PCs may be even higher when you take into account servers and other support machines, second machines like laptops, et cetera ... the numbers become too complex to simplify easily, but you can see that a 2% sales share in any given quarter can easily equal a 10-15% user base.

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01/26, 02:05pm | report spam | close Reply |
Re:10-15% world user base

"There was only a span of ~2 years in the Macs entire history where they were even (a little) above 10%, and that was around '92. Since '98 or so they've been under 3% and dropping nearly every quarter since."

You are talking marketshare based upon systems sold.
The original post was talking about systems in use.

There is a big difference.

There are a high percentage of people using Macs that are over 5 years old. That is why there is still such a large percentage of Mac users still using Mac OS 8 and Mac OS 9; their systems were not designed to run OS X.

The Mac user install base is indeed 10% to 15% of the worldwide usage of computers.

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01/26, 02:08pm | report spam | close Reply |
Re: get out

"and just sell music online, after all they were a music company to begin with RIGHT? Why did they ever begin to make computers, when music was making them scads of money, I'll never know."

How people so ignorant can survive from day to day, I'll never know.

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01/26, 02:15pm | report spam | close Reply |
Re: Marketshare

" I don't understand how 'growth' is measured. Someone explain it to me. If it's just based on sales, then how do they know? If, for example, PCs were turned over and junked more frequently (becuase of price, malfunction, etc.), wouldn't it always look like Apple's marketshare was declining?"

Yes, that is why Apple's "marketshare" keeps declining. They base it only on retail sales.

Another factor that further separates "marketshare" numbers from install base numbers is the resale of used equipment. Two year old PCs get thrown into trash dumpsters when company's replace them with newer models. Meanwhile when 4 year old Macs get replaced, they are resold or taken home by employees for their own use.

Marketshare tells you what people are buying; it does not tell you what people are using.

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01/26, 02:18pm | report spam | close Reply |
For example

I work for a company of fewer than 500 people that has more than 13000 servers deployed around the world, all Intel-based. My desk machine is a Dell, but I have a Powerbook (just replaced a 3-year old iBook) and a 6-year-old G3 tower at home I am about to replace.

Around the office, though, many of the Linux lovers are buying Macs for its Unix cred and style. You're more likely to see a Powerbook than any other non-company-issued laptop (cheap Dells that fall apart immediately). Running a DISTANT second are those gorgeous Sony VAIOs.

On a pure per-capita basis, the PCs are winning. But the Macs have heavy mindshare.

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01/26, 02:27pm | report spam | close Reply |
Installed base

We often hear "25 Million" thrrown around as the number of Mac users. And now, they're saying there are 10 Million OS X users.

Most of the OS X users I know weren't Mac users before. And I hear lots of anecdotal evidence that some Mac users jumped ship rather than move to OS X from 8 or 9. I can't imagine the deserters outnumber the new recruits, though.

I'd like to see a scientific sampling done where people are asked:
1) What kind of computer(s) do you use at work?
2) What kind of computer(s) do you use at home?
3) What kind of computer do you most prefer?

... and have the people be as specific as possible. Such as 'Pentium 2 Dell with Windows 98' or 'Mac IIfx with System 7.6.1' ...

There has to be someone out there who could sponsor this poll. Any grad students? :)

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01/26, 03:52pm | report spam | close Reply |
BS

"The original post was talking about systems in use."

Guess what, no one cares about that or otherwise you would see it reported. You think Steve likes to see you still using that Apple IIC or frigging exclaiming on the board how cool you are because you are still using a 6 year old G3??

EVERYONE cares about how many units the makers are shipping. NO ONE cares about how many units are used because that is the only stats used by people who are losing the battle.

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01/26, 05:19pm | report spam | close Reply |
In other news...

Half of computer buyers are morons who don't realize that you get what you pay for.

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01/26, 06:08pm | report spam | close Reply |
Morons

"Meanwhile when 4 year old Macs get replaced, they are resold or taken home by employees for their own use."

Hey, you are saying this as if it is a good thing. Well, let me break it to you, it is not.

First, if Apple makes it cheap and easy for you (throwing aside what is good for Apple the company since that is another debate) to upgrade your machine every two years. Would you not do it? Everyone should have a G5 on their desktops like how people have 2+ Ghz PCs. But no, they are still using the S***** G3's like you.

Second, does it benefit Apple for you to be using those old machines. It does not. They would rather you buy their new machines every two years. Analysts would rather you buy the new machines. Shareholders would rather you but the new machines. Heck, I would like all Mac users to be using the latest and greatest. Therefore, the important question people are asking, and rightly so, is how many computers is Apple and the other computer-makers are shipping? Who cares whether you are still using your IIfx?

Lastly, the questions you want to ask yourself is, why are you and the others still using old machines? It still works is not a good answer because if it works on your old G3, it will work even better on a dualie G5. Most likely, you will get an answer: "I can't afford it."

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01/26, 06:22pm | report spam | close Reply |
My old Blue & White

I'm still using my old Blue & White G3 (upgraded to a 450 G4) because it was enough power for what I do with it. I'm upgrading because it's acting like it has an ATA bus problem or something.

The question about who is using what is a good indicator of what they're going to buy. Someone who is still using an old 604-based Mac will likely upgrade to something new soon, and it'll probably be a Mac.

As long as Apple is profitable, the next thing to worry about is mindshare, not marketshare. The Mac mindshare is definitely not represented with the 1.8% marketshare.

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01/26, 07:27pm | report spam | close Reply |
No s***

Sherlock. Of course mindshare is not represented by the measly 1.8% but mindshare won't put food on your table. In addition, no one is saying that Apple does not have a bigger mindshare. Lastly, no one is saying that Apple should not be profitable.

Apple should be profitable and ship more units because that is what counts, not how long you have owned your Mac. Seriously, why b**** about how often when PC users upgrade their machines when you would be glad to do the upgrade if you could too??

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01/26, 07:49pm | report spam | close Reply |
re:bullsh-- & installbase

You said it; I go to Home Depot, and all the registers are Dells, with monochrome screens for simple old sku # lookups . . . are these really "computers" being used for something meaningful?

MEANINGFUL computing is the word. I'd say that the marketshare totals skew, totally. Don't quote sales; I think at the next census, there should also be a poll on what kind of computer you use at home!

Glad to be part of the 25 million out there. Enjoyable. Thanks, Apple . . .

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01/26, 09:33pm | report spam | close Reply |
Dumbass

"are these really "computers" being used for something meaningful?"

Apparently you are just a high school kid. Why are those Dell register machines not meaningful? They are a profit center for Dell. If Apple can make money in the register-computer business (do those in Apple stores come to mind? Duh.) and ship more units, why shouldn't Apple?

And idiot, your capitalizing of MEANINGFUL is so stupid I don't know where to begin. What is meaningful? Who decides it? I think those Home Depot Dells do more meaningful computer than your sh1tty post. Should I take your Mac off the mindshare/market share count?

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01/26, 09:39pm | report spam | close Reply |
Moron

"Half of computer buyers are morons who don't realize that you get what you pay for."

Some of those morons also post meaningless statements too. Sure, Apple products deserve a premium but some are just simply overpriced. Of course, if one does to criticize that then one is labelled a PC user. How mature.

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01/27, 01:06am | report spam | close Reply |
Profit & Mindshare

It's more profitable to, over the course of five years, sell dozens of cheap lightbulbs that are built to burn out in months, than it is to sell one that lasts five years and never gives you trouble. Which would you rather own?

I'd rather Apple make the machines that last, and that keep us happy as consumers, rather than machines that "burn out" and need to be replaced too often.

That's why, as long as they're profitable, mindshare is more important than market share.

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01/27, 04:38pm | report spam | close Reply |
Apple does it delibrately

Apple never wanted marketshare. Any mac user will tell you, it will be a cold day in h*** when apple sells a $500 computer. It doesn't matter that people would likely buy it like crazy- apple won't do it. And it's all because of the marketing. Apple is "elite". Apple is "stylish". Apple is "different". Apple is everything but gaining marketshare because they are too f**king stubborn to sell a computer people can afford.

Sometimes I think apple survives solely based on their marketing. Even when a piece of software is c*** (ehem, iCal), people will use it just because it's apple.

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'Analysts should focus on profits, not marketshare'

updated 05:15 am EST, Mon January 26, 2004

Apple goes beyond Macs

Related Articles

Recent Articles

RIPE.

Profits.

Sad but true

develop

bullshit

10 to 15% world user base

add Radeon 9800 256 MB

What?!

Re: Profits

Re:10 to 15% world user..

Birthday (Law)suit

Re: (Law)suit

plenty o users,developers

meanwhile...

get out

love this, this is apple!

Re; 10% to 15% world user

Outright lie

Re; Outright Lie

Maybe not an outright lie

Maybe not an outright lie

oops...there's more

Marketshare

get real

Users vs. Sales

Re:10-15% world user base

Re: get out

Re: Marketshare

For example

Installed base

BS

In other news...

Morons

My old Blue & White

No s***

re:bullsh-- & installbase

Dumbass

Moron

Profit & Mindshare

Apple does it delibrately

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