There is good and bad news for Apple Computer’s market share numbers in the calendar fourth quarter. The Cupertino, Calif.-based computer company’s desktop market share is on the rise, while the portable market is showing a decline. While numbers are not available to show the impact of Mac mini, research analysts expect to see continued good news for the company’s desktop market share in 2005 as Mac mini sales increase.
Apple’s market share numbers
According to market research firm IDC, Apple’s desktop market share in the United States for the fourth quarter of 2004 was 2.88 percent, up from 2.20 percent in the third quarter of 2004 and up year over from the 2.06 percent registered in the fourth quarter of 2003.
United States Desktop Market Share
| Vendor | Q4 2003 | Q3 2004 | Q4 2004 |
|---|---|---|---|
| Dell | 31.58% | 34.50% | 34.68% |
| HP (Merged) | 22.01% | 21.44% | 20.86% |
| Gateway (Merged) | 7.97% | 6.45% | 7.70% |
| IBM | 3.47% | 3.33% | 3.04% |
| Apple | 2.06% | 2.20% | 2.88% |
| Sony | 1.86% | 0.90% | 0.94% |
| Acer | 1.01% | 0.56% | 0.48% |
| MPC(MicronPC) | 0.61% | 0.46% | 0.45% |
| Systemax | 0.51% | 0.42% | 0.28% |
| Micro Electronics | 0.17% | 0.16% | 0.15% |
| Total(Top10) | 71.26% | 70.43% | 71.45% |
| Total(Others) | 28.74% | 29.57% | 28.55% |
| Total | 100.00% | 100.00% | 100.00% |
While slightly smaller in number, Apple’s worldwide desktop market share shows a similar upward trend. For the fourth quarter of 2004, Apple’s worldwide desktop market share was 1.75 percent, up from 1.51 percent in the third quarter of 2004 and up year over year from the 1.32 percent in the fourth quarter of 2003.
Worldwide Desktop Market Share
| Vendor | Q4 2003 | Q3 2004 | Q4 2004 |
|---|---|---|---|
| Dell | 16.20% | 18.14% | 17.30% |
| HP (Merged) | 15.95% | 15.79% | 15.28% |
| IBM | 4.34% | 4.38% | 4.18% |
| Fujitsu/Fujitsu Siemens | 3.38% | 3.36% | 3.12% |
| Gateway (Merged) | 3.04% | 3.02% | 3.00% |
| Lenovo | 2.96% | 2.47% | 2.74% |
| NEC | 2.36% | 2.21% | 2.19% |
| Acer | 2.16% | 2.04% | 2.17% |
| Apple | 1.32% | 1.51% | 1.75% |
| Sony | 1.24% | 1.24% | 1.40% |
| Total(Top10) | 52.94% | 54.15% | 53.15% |
| Total(Others) | 47.06% | 45.85% | 46.85% |
| Total | 100.00% | 100.00% | 100.00% |
While Apple’s portable market share showed growth in 2004 from 2003 in the United States, its share was down in the fourth quarter of 2004. For the fourth quarter of 2004 Apple had 4.99 percent portable market share, down from the 6.15 percent in the third quarter of 2004 and down year over year from the 5.09 percent in the fourth quarter of 2003.
United States Portable Market Share
| Vendor | Q4 2003 | Q3 2004 | Q4 2004 |
|---|---|---|---|
| Dell | 26.55% | 29.39% | 28.92% |
| HP (Merged) | 20.03% | 17.30% | 19.02% |
| Toshiba | 12.28% | 11.89% | 12.48% |
| IBM | 9.00% | 8.23% | 7.90% |
| Apple | 5.09% | 6.15% | 4.99% |
| Sony | 4.81% | 4.34% | 4.12% |
| Gateway (Merged) | 4.51% | 3.26% | 4.00% |
| Fujitsu/Fujitsu Siemens | 1.08% | 1.79% | 1.77% |
| Acer | 0.89% | 1.38% | 1.57% |
| Panasonic | 0.79% | 0.91% | 0.94% |
| Total(Top10) | 85.02% | 84.66% | 85.70% |
| Total(Others) | 14.98% | 15.34% | 14.30% |
| Total | 100.00% | 100.00% | 100.00% |
It’s the same story for Apple’s worldwide portable market share as the company had 2.93 percent market share for the fourth quarter of 2004, down from the 3.59 percent registered in the third quarter of 2004 and down year over year from the 3.44 percent in the fourth quarter of 2003.
Worldwide Portable Market Share
| Vendor | Q4 2003 | Q3 2004 | Q4 2004 |
|---|---|---|---|
| Dell | 16.70% | 16.89% | 15.60% |
| HP (Merged) | 14.55% | 14.91% | 15.18% |
| Toshiba | 11.44% | 12.49% | 11.69% |
| IBM | 8.98% | 8.89% | 9.80% |
| Acer | 8.11% | 7.74% | 8.18% |
| Fujitsu/Fujitsu Siemens | 6.01% | 5.94% | 6.36% |
| NEC | 4.61% | 4.05% | 4.01% |
| Sony | 4.56% | 3.95% | 3.99% |
| Apple | 3.44% | 3.59% | 2.93% |
| ASUS | 1.61% | 1.56% | 2.29% |
| Total(Top10) | 80.01% | 80.01% | 80.03% |
| Total(Others) | 19.99% | 19.99% | 19.97% |
| Total | 100.00% | 100.00% | 100.00% |
The Mac mini — will it help?
While the desktop numbers are positive for Apple, they don’t take into account what could be considered one of the most significant moves Apple has made with its desktop computers in recent years — the release of the $500 Mac mini. Will the Mac mini help Apple’s future market share growth? Analysts say yes.
“It’s a little early to detect, but I think the answer is yes,” IDC analyst Roger Kay told MacCentral.
“The luster that the brand currently has because of sales of the iPod combined with what is perceived as a very affordable product and carrying the prestige of the Apple brand is definitely going to help them,” said Jupiter Research analyst Michael Gartenberg.
Apple has been known for selling computers that break traditional barriers in the industry like including USB ports, excising the floppy drive and including wireless technology. Apple is also known for having a strong, identifiable brand that people are willing to pay more money to own.
Does the prestige of owning an Apple system wear off when you are only paying $500 for the computer instead of $1,000 or more? Jupiter’s Gartenberg doesn’t think so.
“No more so than BMW has a 3, 5 and 7 series car,” said Gartenberg. “The fact that Apple is priced within reach of the rest of the market is psychologically very important. And of course, it’s a beautiful design — people look at that computer and they break out into a smile. They are not saying that about Michael Dell’s machines.”
While analysts believe the Mac mini will help Apple’s market share, they see the Mac mini being purchased as a second computer for the most part. However, it may be the hidden marketing message that could bring Windows users to the Macintosh.
“Part of what they are trying to do here is to convince people to buy a second computer to manage their media a bit better and take advantage of the iLife suite,” said NPD analyst Ross Rubin.
“Clearly the message from Apple is ‘give us a chance at being the second computer,’ said Gartenberg. “The unspoken message is unplug your PC and plug everything into the [Mac] mini.”
Does market share really matter?
As much as any company would like to boost the highest market share in the industry, does market share really matter? After all, Apple reported its highest quarterly revenue and net income in the company’s history just two months ago as it posted a US$295 million profit for its first fiscal quarter.
“Market share matters in terms of the overall platform, over time,” said Gartenberg. “One of the really important things that Apple has done is take their software future in their own hands. Critical applications like Web browsers and media players are done — the fact is, you can buy a Macintosh and get a really good out of the box software experience.”
NPD’s Ross Rubin agrees. “Market share is kind of a moot point in the evolution of the Mac.”
Gartenberg took it a step further and said that relevance in different market segments, not market share is what will matter for Apple in the coming years.
“We are past the discussion point of ‘will Apple be in business next year, will the Mac be around next year,'” said Gartenberg. “Only the foolish among us are still debating that question.”
iPod — the star in Apple’s arsenal
There is no question that the iPod has been the product to lift Apple’s profile from one of a niche computer company to a market leading powerhouse in the music industry. Apple has leveraged the popularity of the iPod to market other products in its line-up including the Macintosh.
“There is no doubt that the brand — which has always been strong — has clearly been reinvigorated in new segments of the market because of the iPod,” said Gartenberg.
Many have been waiting for the competition to drop the hammer on Apple and wrench away music store and MP3 player market share. With names like Sony, Napster, Microsoft and Creative all targeting Apple, the hammer has not dropped — in fact, the iPod’s success has only increased.
“What’s interesting is that people have been saying from day one that the iPod is great, but just wait until the competitors come up with equivalent models and Apple can’t compete. Well it’s been three and a half years and it hasn’t happened yet,” said Gartenberg.
In fact, there are other Flash MP3 players on the market that boast more features than Apple’s recently introduced iPod Shuffle, but anecdotal evidence suggests they are not as popular as the Shuffle.
“The simple proof of that is that I can walk into a store and find any number of Flash MP3 players with more features than the iPod Shuffle and Apple has a waiting list of four to six weeks,” said Gartenberg.
Apple is defining the game
With the popularity of the iPod and the iTunes Music Store, Apple has a very large target on its back. To continue its popularity Apple must continue to define the game and force the competition to follow in its footsteps. This according to analysts is what will keep Apple on top.
“The rest of the market has not shown any ability to define what the nature of the game is,” said Gartenberg. “Apple is defining the rules; Apple is defining the market — everyone else is in a reactive and responsive mode. As long as that’s the case Apple will continue to be successful.”