Macsimum musings: the fuss about marketshare
Posted by Dennis Sellers 
Apr 13, 2004 at 12:55am
Someone once said, “Ninety-nine percent of all statistics are made up.” With all the confusion and misinformation about Macs and market share the quote sometimes seems to be more truth than humor. As with the “MHz myth,” it’s hard to know the truth about Apple’s market share and installed base. But two things are certain: 1) the sky isn’t falling, but 2) the company needs to be selling more Macs.
Let’s back up and explain the difference between “market share” and “installed base.” According to a Duke University definition, market share can be defined “as the ratio of sales of a company’s entire product line to the total sales of all related companies.” In other words when you see a report about Apple’s market share, it’s comparing the percentage of Macs sold to the percentage of all the computers sold in the same period.
The “installed base” shows the total number of units in use. “In market research on the computer industry and information technology industry installed base is used to determine the size of an existing or future market,” according to InfoTech Trends. The Mac’s installed base is the number of people using Mac OS-based computers.
According to International Data Corp., Apple’s piece of the U.S computer pie slid from 3.5 percent in 2002 to 3.2 percent in 2003. That’s certainly not good news. However, the fact is that the number of Mac users isn’t declining. It’s rising but it’s not rising enough to gain a bigger slice of the percentage number of computer users. That’s a problem, but not as serious a problem as some reports would have you believe.
As Kelli McNeil writes in a column for OSViews: “Here’s an example to put things into perspective: Let’s say two people comprise 100 percent of all computer users on the planet. Each of these individuals bought a new computer for themselves at the same time; one a Macintosh and the other a Windows PC. Market share and installed base dynamics would indicate 50/50 percentages. But if after two years time, the Windows user decides to replace his computer, ‘market share’ dynamics will show that Windows occupies 50 percent more of the market than that of Macintosh users… even though there are still only two individuals using a computer.”
As McNeil points out, a decline in market share doesn’t indicate that Mac users are leaving for Windows systems. What it indicates is that the number of Macs sold during that time period didn’t grow as fast as Windows did. That’s a trend that Apple needs to alter, but it doesn’t mean that the Mac is on its last legs as a viable computing platform. Far from it.
In fact, Al Fasoldt, writing for the Syracuse Post-Standard estimates that 8-12 percent of the personal computers used in homes today are Macs. He even thinks that Apple’s own figures for the number of Mac users worldwide (25 million) is low; Fasoldt thinks it’s closer to 35 million once you “add in the number of new users in the last few months.”
And in a Forbes article last June, Arik Hesseldahl estimates that Apple has 10 percent of the world’s computer users, while its sales usually account for about 3-5 percent of the world global personal computer market.
What aren’t Apple’s hardware sales keeping up (percentage-wise) with the overall computer market? One reason as McNeil, Fasoldt, Hesseldahl and others point out is that Mac users get more life out of their machines than Windows users. The hardware lasts longer, and since Mac users don’t replace their computers as frequently, that translates to decreased “market share” even though the installed base may grow. And for installed base, who knows how many “dumb” terminals and render-farm machines tally in the final computer head-count?
But in the long run, all this may be somewhat moot. Perception is everything (to use another clich) and if the number of Macs are perceived to be on the decline (rightfully or not) the majority of the public may think that the platform is going the way of the dinosaur. Also, installed base doesn’t put veggies on Steve Jobs’ table for the most part. Since the bulk of Apple’s revenue comes from hardware sales, a large installed base generates money in software sales and upgrades but not in the important area of hardware sales.
Apple has hit a gold mine with the iPod. With the money it has in the bank and the public relations momentum it has going, now is the time to make a concerted effort to significantly increase the market share AND installed base of the Macintosh. We’ll be looking at some thoughts on how to do this throughout the week.
Comments or ideas of your own on how Apple should fire up Mac sales? Drop us an e-mail at (JavaScript must be enabled to view this email address)
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Contributor
Dennis Sellers
Dennis has been a newspaper editor/reporter (seven years) and teacher (seven years). He has over 4,000 magazine, newspaper and online articles to his credit. He has also covered the Mac and tech industries for over a decade for such online publications as MacCentral, MacMinute and now MacsimumNews.
