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The revenge of the Mac

For the past several years, the tech world’s obsession with the iPod and now the iPhone has obscured a much more remarkable aspect of Apple’s ongoing success: the revival of its Macintosh business. After losing market share to PCs running Microsoft’s Windows operating system for most of the 1990s, the introduction of the first iMac in 1998 stopped the bleeding, and the past year has shown a powerful Mac resurgence. In Apple’s third quarter earnings report released yesterday, sales of Macs reached 1.76 million units, an all-time high that broke the previous record by 150,000 units. That’s a nifty 33 percent year-over-year increase. Apple CFO Peter Oppenheimer cited IDC data during yesterday’s conference call that indicated Mac sales are growing four times faster than Windows PC sales in the United States, and two times faster than PC sales globally. That means the Mac is slowly but surely gaining market share.

Looking at Mac sales from just a few years ago you can see how far the Mac has come. In the third quarter of 2002, Apple sold 808,000 Macs, and that was a 2 percent drop year over year. In 2003, Mac sales fell 5 percent year over year to 771,000, less than half the number of Macs sold in the most recent quarter. But the tide turned in 2004: Apple sold 876,000 in the third quarter that year, a 14 percent gain, and 1.18 million in 2005, a 35 percent increase.

The 33 percent increase in year-over-year units sold in Q3 is consistent with the gains of the previous three quarters: a 36 percent increase in Q2 of 2007, a 28 percent increase in Q1 and a 30 percent increase in Q4 of 2006. Note these robust numbers coincide roughly with the Mac’s transition to Intel processors, which began in June 2006.

The switch to Intel is among several factors that have boosted the Mac’s sales numbers. Another is the so-called iPod “halo effect,” the notion that some Windows users who bought iPods liked them so much they replaced their PC with a Mac. Another is the overwhelmingly positive image Apple has cultivated as a hip, innovative company, and its increased visibility in recent years thanks to the iPod, its ever-growing chain of retail stores and its clever TV ads. Lastly, and perhaps most importantly, is the cumulative effect of PC users struggling for years with such Windows plagues as viruses and spyware. Many such people, fed up with their troublesome PCs, have begun looking to replace them with Macs.

According to Oppenheimer, half of those who bought Macs from the Apple retail stores in the June quarter were “new to the Mac,” a stat Apple trots out almost every quarter. There must be something to it; all these new Mac users are starting to show up in the Mac’s market share numbers. A month ago data from research firm NPD indicated that Apple’s share of computer sales in brick-and-mortar stores rose to 13 percent in May from 11.6 percent in April. Apple’s laptop sales have been particularly strong: while the overall market for laptops grew by 40 percent in May, NPD’s data showed Apple portables with growth of 65 percent.

Apple’s market share in the United States, which in 2004 was as low as 3.2 percent, rebounded to 5.6 percent according to data released by research firm IDC last week, putting Apple into a statistical tie for third place with Gateway. All the data I’ve seen points to continued growth for the Mac. For the first time in a very long time, the Mac Nation can think about a future where their platform once again has double-digit market share.

Part of the genius of Apple’s overall strategy is that each of its businesses helps nurture the others. The iTunes Store promotes the sale of iPods. The sale of iPods enhances the sale of Macs, as will the sale of iPhones. The retail stores provide an environment for people to check out all of Apple’s offerings without distraction from competitors’ products. Because the company’s products are designed to work seamlessly together, the more Apple stuff you have, the better the user experience. It’s all so devilishly clever. Meanwhile, Apple is dreaming up still more must-have gizmos to populate its digital ecosphere and jack up its bottom line.

It’s a great time to be a Mac user, isn’t it?

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About the blogger
David ZeilerDavid Zeiler follows all developments related to Apple, Inc. Having spent his early computing years on the Apple II platform, he moved to the Mac in 1993. At The Baltimore Sun he designs pages, compelled against his will to work on a Windows-based PC.
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