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Thursday, June 01, 2006

iPod share has not translated to increased Mac share.

Appleinsider reports on a recent IDC study that shows despite impressive iPod growth, Apple worldwide share in the computer area has actually slipped from 2.2% to 2.0% and share in the US is fairly flat at 3.6%.

While it's disappointing for the Mac fans that more people haven't gotten the religion, share is only one of evaluating success. A look at operating margins paints a different picture. Apple's margin is almost double (12.27%) that of Dell (7.45%) the current share leader. In stable, commoditized, categories, strong brands are far more effective at protecting margin than growing share.

However, you have to wonder what it is about the brand that feels like it's "not for" so many people. The technological barriers don't really exist anymore and the product is acknowledged as superior. As much as we in the industry admire what they've done with their brand, there's clearly something in it that isn't inclusive for the minstream.


Anonymous said...


Adrian said...

I don't buy price as the only issue, you can get a mac pretty cheaply now. Mini's are $500. When I've researched Apple, mainstream consumers admire the brand but many say, "it's not for me"

El Gaffney said...

Al Ries thinks differently. Check out his article from April 17th on the halo effect for the brand of touting your best product:

"The halo effect also works in marketing. What's behind the phenomenal success of Apple Computer? In a word, the iPod.In fiscal 2005, Apple Computer sales were up 68% over the previous year. Profits were up 384%. And the stock was up 177%. And Apple's net profit margin increased from 3.3% to 9.6%, an astonishing jump.

The good news from Apple Computer wasn't just the success of the iPod. As a matter of fact, in fiscal 2005, the iPod and iTunes together accounted for only 39% of Apple's sales. The other 61% of Apple (computers, software and services) also did well.

Apple's computer and related businesses were up 27% in fiscal 2005 over the previous year. And, according to industry reports, Apple increased its share of the personal computer market from 3% to 4%. That's the halo effect in marketing."

AKI SYSTEMS 2600 said...

I think the brand exudes a polarizing ideology(wasn't that the intention?)...I know many "business-grad, young republican, simple-guy types" who are vehemently against what they perceive as "creative-y types" with their design-y Macs. in fact, they view Macs and Mac-types with disdain as excessive, flambouyant, impractical, frivolous. Even pretentious (gasp).

Just like Mac-types badged their anti-pcness proudly, there is a large segment of PC adherents who are prideful of their anti-macness. For them a computer is just a tool to get the work done, not a lifestyle trophy to define themselves by (not that they don't have other lifestyle trophies, just the computer isnt theirs.

I guess if computers were cars, some people simply wouldn't want a pseudo-stylish Mini and all the "cosmopolitan, high design" lifestyle trappings it implies. Some people rather prefer their undesign-y sedan or rural truck functionality.

Perhaps Apple should think of themselves very much as a Mini - an aspirational vehicle for an elite 'type', not the commoner. It may never be for the proletariat masses at Wal-Mart. If it did that, half us adherents would feel betrayed and protective if the riff-raff was let in. we are very pretentious about the brand being "ours", not "theirs".

Mac adherents are not really warm and welcoming of "outsiders". Whereas Harley adherents, for instance, find joy in SHARING the pleasure of the brand with newcomers, Apple types don't share at all. Sure we welcome you when you decide to come over, but we don't recruit. We are separatists at heart. And others hate our pretentious "better than thou" attitude.

kea said...

Excellent post AKI SYSTEMS 2600.

Thank god it's not for everyone, that's a large part of the beauty of the brand for me...

Mnels said...

As one of those "simple guys" Aki describes, I have a few comments to add. Aki largely gets it right. But I think it's important to ascribe most, if not all of the negative or non-inclusive baggage of Macs not to the product, but to the most vocal users. That's an important distinction. Perhaps this is why iPod does not suffer from any of that baggage. I would suggest that Macs are not a credible competitor to Microsoft based machines not because of aesthetics, price, reliability or basic functionality. These are all strengths. Macs fail because they are perceived by many as offering up a smaller world. Think different, but you gotta buy our closed operating system. Think different, but be willing to sacrifice the ability to seamlessly interact with the rest of the computing world. Think different, but sorry, that software you really want won't be available. We want our PCs to feel limitless. Righly or wrongly, "think different" for many ends up being "think smaller" in the end.

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