“In The Apple Market Share Myth, I demonstrated how overall market share numbers can be used to suggest ideas that have no basis in reality. Here, I’ll look at the slippery aspect of numbers, prove that a quality share of the market can be better than a larger market share, and then compare how the definition of a market is critically important in determining how useful market share numbers are. In particular, I’ll look at the iPod’s market share,” Daniel Eran writes for RoughlyDrafted.
The very interesting full article contains a number of points about Mac and iPod market share myths and realities here.
[Thanks to MacDailyNews Reader “James” and “LinuxGuy” for the heads up.]
Related article:
16-percent of computer users are unaffected by viruses, malware because they use Apple Macs – June 15, 2005
Share of Sales or Market Share?
They are not the same!
From http://www.answers.com/market+share&r=67
“market share – n. The proportion of industry sales of a good or service that is controlled by a company.”
Yes, they are the same.
The AMA (American Marketing Association) defines market share as:
– 1. (geography definition) A proportion of total sales in a market obtained by a given facility or chain. 2. (strategic marketing definition) The proportion of the total quantity or dollar sales in a market that is held by each of the competitors. The market can be defined as broadly as the industry, or all substitutes, or as narrowly as a specific market segment. The choice of market depends on which level gives the best insight into competitive position.
Please note: “The proportion of the total quantity…in a market that is held by each of the competitors.”
The point is: What is the share of Macs in operation? I’m willing to bet that Macs actual share is much larger than Share of Sales.
MDN: Please turn off the ContentLink advertizing. It makes the text much, much harder to read.
All well and good, but just check Macintouch’s “Mac Marginalization” page if you need reasons to increase plain market share.
Nautical: click on the small “i” in the content link.Then page down on the resulting page to see the “click here” to turn off the”feature”
The definition of market share depends on the definition of market.
You have a k to 12 education market.
You have a cash register market.
You have a consumer or home market.
You have a scientific market.
You have a creative market.
The list goes on and on.
What is the market? Once you know that then you can set about finding Apple’s or Dell’s or even Microsoft’s share of that market. Apple does dominate some markets.
macaholic: Thank you very, very much!
Lies, damned lies, and statistics. That article made me nauseous. Seriously. What a mess.
There’s probably a dozen definitions for “market share” but let’s keep it simple. WikiPedia’s–
http://en.wikipedia.org/wiki/Marketshare
“Market share, in strategic management and marketing, is the percentage or proportion of the total available market or market segment that is being serviced by a company.”
“It can be expressed as a company’s sales revenue (from that market) divided by the total sales revenue available in that market. It can also be expressed as a company’s unit sales volume (in a market) divided by the total volume of units sold in that market.”
So, “market share” can be total sales or total units sold in a given market or segment. That’s how business views it.
All the rest of that mixing and matching is just plain silly.
For example, I read an article yesterday that says the iPod’s share of the MP3 player market really is about 11-percent, not the 75-percent claimed by Apple and others. Why so low?
Because the writer broadened the “market” to include cell phones which play music (MP3 or whatever). Well, guess what? That’s silly. Why? Because the writer failed to include the 500-million PCs that are capable of playing music (they’re MP3 players, right?), so the iPod’s “market share” in that market is less than 1-percent. See? That’s silly.
Worse, what’s with all this mixing and matching of markets– hardware and software. At least compare Apples to apples. Microsoft doesn’t sell PC hardware (yet) but still shows up with about 90-percent operating system “market share” in the known PC world. Yes, Apple’s Mac OS X is increasing, so is Linux, and there are others. But Microsoft owns that space– PC operating systems.
In hardware, it’s a different story. Apple’s “market share” in PC hardware sales dwarfs that of Microsoft. See? Again, it’s a silly argument.
Apple’s US units sold give it about a 4-percent to 5-percent “market share” when counting boxes. Forget the “shipped vs sold” argument. Boxes don’t get sent back to the factory once they’re ‘shipped.’ Apple’s “unit” market share on a world wide basis is lower, most estimates have it at less than 3-percent.
The “market share” for sales is probably different than for units sold as Apple’s prices on per unit basis are probably higher. So what? So is Apple’s gross margins. They’re highly profitable as a PC box producer than most others–per unit sold.
The “installed base” market share is merely a different number and a different view. Apple’s is probably higher than the sales or unit number because Mac users and schools tend to keep their Macs longer than PC users. See? That’s not hard. I’ve also read that Mac users, on average per machine sold, buy more software than PC users. I do. Most Mac users I know do the same. But PC users buy more anti-virus and anti-spyware software than Mac users.
Keep the premise simple, with well defined terms, and understanding the numbers will be much easier.
Tera Patricks
Tera Talks
Daniel Eran, who wrote this article, is a total idiot. The guy is confused beyond confused at what market share is, what markets are, what sales of MP3 players are – he has written pure garbage.
He´s got a chart showing Microsoft competing with Dell, HP, Apple and others for computer market share.
It is so confused and stupid that it made perfect logic to MDN – they obviously just read the headline of the article.
The authors total creditials:
“I write about technology, Apple, motorcycles and the place I call home: San Francisco.”
The only place he has been published is on his own blog.
Thank you, Tera, for writing a rebuttal I didn’t want to. The author’s assertions are so full of crap as to be detected with a failing nose from across the continent.
Including Microsoft in any hardware marketshare arguments borders, no IS, ludricous.
MICROSOFT DOESN’T MANUFACTURE COMPUTERS.
wow… the most disorganized article I’ve read in years.
Tera,
Hope you’re feeling better.
Giving Microsoft 90% OS market share is still ludicrous. Yes, Linux, OS 2, Be OS, UNIX and others combined may have 10%. However, even Microsoft says that 15% to 20% of Windows users are using pirated copies of Windows.
Can this 15% to 20% of Windows users really be counted as Microsoft ‘market’ share when there was no sale of that software or those licenses by Microsoft?
I would put Microsoft’s true OS ‘market’ share at around 80%.
And if it weren’t for the “Osborne Effect”, Apple would have done even better last quarter!
Just thought I would throw that one out since all the shit heads that were promoting that stupid idea aren’t mentioning it anymore. Crow eating time you lapdogs.
Big Al: “I would put Microsoft’s true OS ‘market’ share at around 80%.”
But they are still using Microsoft, not something else.
If you delete the piraters from the total equation (not counted or included anywhere), Microsoft still has over 90%.
Should anything older than OSX be counted as an Apple user?
Should Windows 95 people be counted?
These market share numbers are about total legit computers bought and OS sold extra.
Gregg Thurman – You predicted Apple at $81 a share by July 21.
MacMania good call. yeah all the supposed experts are too busy eating crow with both hands to type a retracttion article.
And FWIW PC processor upgrade cards count as a full computer in market share numbers.
I think the real question here is what is quarterly market share vs installed base. I’m quite confident that installed base is much higher than 5%.
macromancer: “I think the real question here is what is quarterly market share vs installed base. I’m quite confident that installed base is much higher than 5%.”
I´ve got 6 macs: 5 in the closet one I use. So I would be 6 users right….
Just stick with the standards set up by the industry and quit trying to fudge the numbers to make yourself feel better.
I am guessing most of the recent sales of Macbooks has come from a long pent up demand by Mac owners moving up to something new. That will only last so long. Apple has to move lots more computers to make any progress.
And is the recent leap in Apple market share just because there were fewer PCs sold last quarter or whenever they count? There are lots of PC owners waiting until Vista comes out before they buy their next Windows computer.
macromancer: “I think the real question here is what is quarterly market share vs installed base. I’m quite confident that installed base is much higher than 5%.”
I´ve got 6 macs: 5 in the closet one I use. So I would be 6 users right….
Just stick with the standards set up by the industry and quit trying to fudge the numbers to make yourself feel better.
I am guessing most of the recent sales of Macbooks has come from a long pent up demand by Mac owners moving up to something new. That will only last so long. Apple has to move lots more computers to make any progress.
And is the recent leap in Apple market share just because there were fewer PCs sold last quarter or whenever they count? There are lots of PC owners waiting until Vista comes out before they buy their next Windows computer.
Nobody,
Computers are sold all over the world but mostly in Asia, Africa and South America with a pirated copy of Windows loaded prior to sale. That computer cannot be added to Microsoft’s market share if Microsoft did not profit from it’s sale.
Use common sense.
Neat & Tidy said: “I am guessing most of the recent sales of Macbooks has come from a long pent up demand by Mac owners moving up to something new.
Maybe change your name to “I should pay attention”.
AAPL CFO said on the call 50% of Macintosh buyers were “new to Mac”. That kinda makes your statement shit, doesn’t it?
Do you “feel better now”?
Big Al, should Linux count “market share” if nobody pays for the Linux version being used? Paid for or not, “market share” is still market share, though it could be segmented even further; ‘Paid vs. Non-Paid.’
So your suffering from market share envy eh? Well everyone knows that virtually no one on the face of the earth uses Macintosh computers for anything. Everything useful and popular are always done on Windows because of the superior development tools and install base. No software developer in their right mind would ever start out working on a product for the Macintosh because they would go out of business. With only a tiny fraction of users running this bloated, slow and overpriced computer system. Since only the rich can afford these computers no real applications are ever written for it.
Eventually Apple will go out of business as MP3 players are developed. Then we can all sit back and run the only real operating system for home and business – Microsoft Windows.
macaholic, Nautical: That only works once per day.
We MacHeads are part of a small—but growing—and HIGHLY profitable market share. Many computer companies would give their firstborn to be in this position. That said, Apple’s position would be so much better and safer if they could reach double digit market share in month to month sales.
Right now Apple still can’t afford many major mistakes whereas Microsoft could stumble along for years and still be a viable company because they have so much cash and so many cash cows. Apple has to pick its fights very wisely, whereas MS can pick any fight it wants—for now.
Market share translates into dollars and developers and more people would take the Mac seriously for personal use and business. With, say 12% market share, Macs would make some serious inroads into business.
If Apple had that kind of market share they could also be even more creative and adventurous in their products.