

Apple now has 9% US market share, volume growing at 6x the industry average - echair
http://apple20.blogs.fortune.cnn.com/2008/10/16/macintosh-share-of-the-us-market-tops-9/

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raganwald
_It’s almost as if Apple were in a different business than Dell (DELL), HP
(HPQ), Acer and Toshiba._

Helloooooo! DELL, HP, Acer and Toshiba are in the ruthless business of trying
to cut their margins thinner and thinner with fewer and fewer opportunities to
differentiate their products while they acts as collectors for the Windows
Tax.

Apple is indeed in a different business, a business based on differentiation
and branding.

~~~
anamax
> Helloooooo! DELL, HP, Acer and Toshiba are in the ruthless business of
> trying to cut their margins thinner and thinner with fewer and fewer
> opportunities to differentiate their products while they acts as collectors
> for the Windows Tax.

Umm, no. They're in the biz of trying to increase their margins.
Differentiation is one way that they try to do it.

Customers are in the biz of trying to decrease said companies' prices. One way
to cut prices is for said companies to cut their margins.

Currently customers are winning.

Never confuse the outcome of an interaction with the intent of one of the
parties.

~~~
raganwald
Well, DELL has made much of using supply-chain optimization to make more money
on lower net margins. If HP, Acer, and Toshiba are working to differentiate
their products from each other, I think they need to work harder.

And I speak as someone whose last PC was a Toshiba.

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cabalamat
I wonder how high this could go? I think Microsoft are vulnerable here, since
they are widely disliked, even hated.

Apple's market share in the US is higher than in the rest of the world,
because the US market is less price sensitive. But what if Apple brought out a
cheap version of the Mac Mini, to capture that sector of the market? It ought
to cost no more than $200 and like the existing Mac Mini it would have BYODKM
("Bring your own Display Keyboard and Mouse") -- but it would also be able to
use the old PS/2 keyboards and mice, which many people have in their attics or
on an old PC. This would make it a very attractive low cost option.

Apple could have as an option on all their computers dual-boot with Linux
(maybe using a customised Ubuntu distro), and allow people to run Linux
programs in a virtual machine under Mac OS. The number of extra customers this
would bring directly is not large, maybe 1% of the total market for new PCs;
however it's an influential market sector because most Linux users have less-
technical friends who rely on them for advice.

One of the drawbacks of running Linux is that it's less likely to be
compatible with new hardware than a more mainstream OS. However if the Apple
distro and campatibility layer was well-written it would allow and hardware
that works with Mac OS to work with Apple's Linux. So many Linux users might
go for this option.

If Apple did this, I think they could get 20%+ market share in the US by
2009Q4. How could Microsoft respond? Reducing prices probably wouldn't help
them much, and Microsoft are too bloated and slow moving to actually produce a
good operating system.

~~~
jimbokun
So...you are suggesting Apple sell a computer for less than the average profit
margin on their current line of computers (or about there, I'm guessing).

And this will help them how, exactly? What's the break even point for them to
get to their current level of profit? Do you even know if it is possible to
make a profit at all selling a $200 computer capable of running OS X? What
kind of hardware are we talking about here?

A just as likely scenario from selling $200 computers is Apple going out of
business, I would think.

Apple's strategy is basically to skim off all of the best customers from their
competitors and make lots of profits by doing so. Meanwhile, the rest of the
industry need to walk a tight rope between small enough margins to sell a
larger volume than their competitors, but not so small as to be negative.

Judging by the profit growth Apple has seen in recent years compared to their
competitors, I think it's working pretty well for them.

~~~
cabalamat
There's certainly an element of truth in what you say.

I think most of the customers for the $200 computer would be new customers,
not existing Apple customers. And over time, after having used a Mac they
might buy another more expensive one later on. (Particularly if their
experiences with Mac OS were better than witrh Windows).

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reazalun
9% market share in US only. The edited title here in HN can be misleading.

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vlad
What may get lost is that Apple sold 33% the number of computers that Dell did
in the same time frame. As Dell is a big corporate supplier, it is possible
that Apple sold as many (or almost as many) personal machines as Dell, and
more than any other manufacturer. Another interesting insight is that
corporations install the same software they've already purchased and will
continue to do so during a recession, while personal users are able to buy and
install software as they see fit--especially those first-time users who are
trying to find replacements for their favorite windows software. So, buyers
choose Macs when they have a choice, but choose Dell and HP machines for their
companies to run all of their existing software.

~~~
echair
_it is possible that Apple sold as many (or almost as many) personal machines
as Dell, and more than any other manufacturer_

Indeed. This article

[http://money.cnn.com/2008/10/14/technology/moritz_apple_anno...](http://money.cnn.com/2008/10/14/technology/moritz_apple_announcement.fortune/index.htm?postversion=2008101508)

says they now have 17.6% retail market share.

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fallentimes
And their stock is close to their 52 week low with a P/E under 20.
Interesting.

~~~
MikeCapone
1) The rest of the market is also at its 52 week low, no? 2) In a recession,
upmarket stuff and luxury items tend to slow down more, so it could affect
Apple more than some other PC makers.

~~~
mdakin
It's not quite that simple. Often the richest consumers are not hit as hard by
recessions and keep spending. And even if they are hit with a glancing blow
perhaps instead of buying another house, car, boat they might seek comfort in
more modest luxury purchases.

I saw this first-hand during the post-bubble recession when I was an engineer
at a luxury consumer electronics company-- we made lots of money while much of
the industry was hemorrhaging.

Supposedly sales of Patek Philippe watches actually peak during recessions.
[1]

[1] <http://www.brandchannel.com/features_effect.asp?pf_id=104>

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MaysonL
I wonder what their US market share in computers priced over $1000?

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vermontdevil
Let's see how long this will hold up since now we are in a recession and
Apple's stubbornness in regards to high pricing of their laptops.

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alaskamiller
Apple won't grow any bigger until Steve Jobs leave.

~~~
ph0rque
> Apple won't grow any bigger until _Steve Jobs leave_.

All of them?

~~~
alaskamiller
I'm not sure what kind of stupidity you're trying to point out. Leaves?
Grammar? Oh boo hoo.

~~~
ph0rque
It's a joke, take it easy man...

~~~
alaskamiller
Sarcasm doesn't transfer :/

