Soaring Mac market share means more headaches for Microsoft
It’s almost as if Apple had a long-range secret plan to lull Microsoft into a false sense of security while it quietly rebuilt its ability to compete for OS turf.
This week research firm NPD Group announced that Apple dominated the U.S. retail market for high-end computers in the first quarter of 2008, selling two out of every three PCs priced over $1,000.
Echoing trends seen in other market data, NPD said Mac laptop sales saw year-over-year growth over 50 percent, while desktop sales grew 45 percent. During the same period the Windows PC market struggled with zero growth in laptop sales and a 25 percent decline in desktop sales.
NPD estimates the Mac’s overall U.S. market share at 13.8 percent, up from 9.5 percent a year ago.
Before I continue, some caveats: the NPD data dos not include online sales, which is how Dell sells most of its PCs. Nor does it include enterprise sales, where Apple has a negligible presence. And it must be noted that Apple has but one Mac offering in the sub-$1,000 category: the Mac Mini, a small computer that sells without a monitor, keyboard or mouse.
Nevertheless, the NPD data makes it clear that U.S. consumers willing to spend a little more for a computer are choosing the Mac over Windows PCs in rapidly climbing numbers.
Now add this news to last week’s announcement from Microsoft that Office 2008 for the Mac is “selling faster than any previous version of Office for Mac in 19 years.” Since its January launch, the product has sold at three times the rate of the previous Mac release, Office 2004.
The tremendous uptick in sales for the latest Mac version of Office closely mirrors the increase in Mac unit sales since 2004 – Apple sells three times as many Macs now as it did then, with the numbers mounting steadily every quarter.
Until recently, the rise in the Mac’s market share was portrayed merely as stabilization of the Mac OS platform. But the accelerating rate of the Mac’s share and especially the more affluent consumers it continues to lure from Windows is bound to take a toll on Microsoft eventually.
As more consumers buy Macs over PCs, Microsoft sells fewer copies of Windows. True enough, some Mac owners (particularly switchers) do buy retail copies of Windows to run alongside Mac OS X, but not all – probably not even a majority.
Also true: Microsoft makes a boatload of money from Office for the Mac. Still, a significant shift in the Mac/Windows dynamic would have an impact beyond the dollars spent on software.
Think about it. The Mac’s gains so far already have destroyed the psychology that developed in the 1990s that Windows is the only reasonable choice for the average PC buyer.
Thanks to the success of the iPod in establishing Apple as the brand of cool tech, as well as the company’s ever-growing retail presence in upscale shopping malls, PC shoppers are far more likely to consider buying a Mac today than they were three years ago.
Once Apple got the Mac back on the public’s radar screen, its ability to deliver on consumer expectations fed the momentum. The Mac has established itself as not just an alternative to Windows, but now for many a preferable alternative.
What intrigues me are the consequences of the Mac as a legitimate competitor to Windows in the marketplace for the first time in over 15 years (one could argue the first time ever).
I don’t envision a day when Apple vanquishes Microsoft from the OS battlefield, but that won’t be necessary.
If Apple succeeds in winning 20 to 25 percent of the market, Microsoft would lose one of its key assets – the leverage that comes from holding a near-monopoly on PC operating systems. For years Microsoft used that power to bully rivals and promote its own technologies over that of would-be competitors (think Internet Explorer).
Even if Apple’s market share levels off in the low 20’s, it would seriously hamper Microsoft’s ability to impose its will on the computer users both in the home and the workplace.
And what about the workplace? As the Mac becomes the computer of choice in more homes and on more college campuses, more young people entering the work force will question the primacy of Windows in the business world.
Although Apple has so far declined to target business customers, the popularity of the iPhone among executives along with changing expectations of the iPod generation could result in the Mac taking inadvertent bites out of the enterprise market.
Such a turn of events would start eating into Microsoft’s profits. With Apple nibbling at the Windows hegemony and Google jeopardizing the dominance of Office with Google Apps, Microsoft could face threats to both of its cash cows. (Office and Windows comprise about 70 percent of Microsoft revenues).
Not that Microsoft will disappear any time soon, but it would be nice to see them get the wake-up call that mediocrity will not carry the day forever. True competition in the areas Microsoft has dominated for over 20 years would reward consumers with better products from all parties.
Innovation – something about which Apple knows a thing or two -- might matter again.
in Mac market share, Taunting Microsoft
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Comments
Quality, even-handed article. Thanks.
Posted by: Chris | May 21, 2008 6:21 PM
Are you old enough to remember coke vs pepsi?
This is a rerun of a bad movie. I am just about totally agnostic about this stuff. I was a developer with shrinkwrap product on the Apple II and got recruited by Guy Kawasaki to port our Amiga stuff to the Mac so they would have some showware when the Mac went color.
Here is the reality behind that statistic: there are simply no PC's priced over $1000 that are sold retail - that is to say PC's that are neither "enterprise" nor "mailorder".
None. That market is dominated by Mac's and "Whitebox" Engineering Workstations and a few hopelessly high-end laptops sold by VARs, and that's it.
That is because just about nobody else except box stores sells machines retail (and look at the statistics for WHAT else Apple sells in those Apple retail stores besides laptops) and cuz comparable performance in a PC laptop from a box store costs I wish it were not true. I like their hardware. I even like their interface. I just gag on their pricetags. And I gag on this textbook example lifted w/o credit from "How to lie with statistics".
Posted by: joe breskin | May 21, 2008 7:48 PM
The fact that Apple is doing well is great news for consumers. My personal experience with WINTEL has been disappointing to say the least. Zero support from MSFT....marginal support from Dell. Time for a new rig....and I don't care about price....I care about up time.....which is something that MSFT lost when they moved from DOS to Windows.
Posted by: Jim | May 21, 2008 8:53 PM
I see Microsoft as being like IBM in the near future. They'll be a company making business software and other such things, but they're not going to be the company of choice when it comes to operating systems. People are realizing what's best and they choose to buy a more stable OS like OS X, and Apple computers, where the hardware and software get along with out issues, and the hardware works at full potential for optimal results. Many are becoming more tech savvy, or willing to try new things, and they rather use one of the multiple versions of Linux. Apple has great potential in the future, Microsoft on the other hand, needs to clean up their image if they want to be successful.
Posted by: Carlos | May 21, 2008 10:32 PM
Good article.
@Chris who said he 'just gags on their (Mac) pricetags'. Well then Chris, it is time you did more research. Because you will find that Macs are comparable and even cheaper than similarly spec'ed PC's.
It's just that Apple does not make ill-equipped, 12 month lifespan, junkyard products.
Posted by: Jon T | May 22, 2008 6:11 AM
What's not to love about Apple, very stable UNIX based OS, cool factor, tight integration with iPod and iPhone.....
Our network/server guys love UNIX for the servers...but still want XP on the desktops....Why? I think the answer is "because that's the way we've always done it around here" and they have infrastructure in place to push out updates, etc to the Winblows PCs. It is this inertia and risk aversion (better the devil you know) that Apple has to overcome if they expect to replace my laptop at work.
Posted by: John | May 22, 2008 8:32 AM
Wintel is a big sucking time pit filled with the sludge of mediocrity. I used to say, "Time is money"; now I say, "Time is better than money."
Posted by: Partners in Grime | May 22, 2008 10:44 AM
I just purchased my MacBook last month. I was very skeptical of Mac for a long time - the idiot's box, made-for-morons and all that closed minded thinking I had built-up. There was also the issue of cross-compatibility with Office products. After wrestling with my office desktop PC one day and having it hang, crash/BSOD, slow down for no particular reason, rebooting a dozen times I lost it. I picked up the phone and ordered my Mac. After some learning pains, which lasted only a few hours, I have to say that I wish I had done this earlier. This is an extremely well engineered product and works as it should. I love the unix core as we use linux for scientific computing here and the interface is now much more natural (rather than using reflectionX in windows). All in all, I couldn't be happier. It isn't perfect, but it's orders of magnitude closer than that horrible mess of an OS that microsoft cranks out.
Posted by: Kevin | May 30, 2008 2:28 PM
I've been using Macs for 20 years. Despite that, I have no loyalty to Apple. I used to be a Commodore guy and I'm seriously looking at Linux. Aside from stability and ease of use, the main reason I like my MacBook is that when I use it in a coffee shop, girls think I'm cool and want to talk to me. To quote a lovely barista, "You look so cute sitting over there with your laptop." In reality, I'm not cute. I'm alright, but definitely not cute. The reality distortion field doesn't just apply to Steve Jobs.
Posted by: Ivor | June 20, 2008 6:06 AM
Agreed with first poster.
Also, XP is a much more stable OS in my opinion. As a gamer, it means I don't have to run Windows in an emulator or Wine or Crossover or any of those things which just slow down my computer and are prone to lower FPS as well as graphical glitches. Plus, every time I use OS X, despite everyone telling me it's not possible, I crash it.
Every time.
Guess how many times my PC has crashed in the past year. I'll tell you.
0 times. Not once has my PC crashed in the past year.
Also, those statistics seem like BS, and there's just no way that's a realistic approximation of how many Macs VS. PCs there are. Talk to me when it includes computers under 1000$.
Posted by: Pinko | July 11, 2008 11:08 PM
I love Windows Vista! It rocks! I've tried many linux distro, also Mac they both sucks, yes they do! Long live windows vista, long live microsoft. Cheers! Peace to all of you :)
Posted by: domon | July 12, 2008 6:25 AM
Guys, this thing is just sad, you claim that there are no pcs that are priced RETAIL above 1000$, but come to think of it, to make a dell with the same specs, it costs as much as a mac!!! I've done the math and I configured the computer on the website. And frankly, you don't need to emulate Windows on Macs, you can just dual boot them. As if you were running a pc, boot from windows xp or vista. PC World ran a study last year that mac laptops ran vista the fastest in the laptop industry.
Posted by: Gabriel | October 2, 2008 6:55 AM
After nearly 20 years with windows, I have now taken the plunge. To be honest i think mac users are metrosexual man-bag toting tossers - so hoping that I didn't become like one I bought a new imac and prepared myself to hate it.
The Mac OS is just fantastic (except for the lack of real alt+tab functionality and lack of a singular hash key). I do run windows xp on VMWare and this lets me fly between osx and windows. I won't go back to Windows machines now, but i may occasionally go back to windows xp. I do all kinds of progamming without a problem.
I think Macs are on the rise, their own software blows xp and vista away, the usability on the whole is far superior, they are an equivalent price for an equivalent spec, they just don't make cheap ones. I can see them grabbing 20% share in the next five years easily.
I am really tired of windows machines, I defended them to the death (i.e. first release of vista!). But I'm tired of a mass of wires, additional accessories, additional software you have to buy. The awful usability of any media application and the blatant lack of vision in this arena. I can now use whichever operating system I like! and that's the killer blow.
The next Mac ad should just have the Mac guy saying "Hi, I can be a PC" and the PC guy saying "Oh s**t!"
Posted by: Shaggy | November 16, 2008 12:24 PM
same here - 15 years of programming (Windows and Linux). Just got my first Mac. Wow, wow, wow. Vista? Fedora? Ubuntu? No way - I just love Mac, VMWare just made my 2 other computers obsolete. Still miss my Alt-Tab though :)
Posted by: alex | November 20, 2008 5:37 PM
I never owned a computer until 1994 when I got a Macintosh Performa 636CD. I've always owned Macs since then, but I'm not a very loyal Apple customer. Linux is fun, but it's not useful for real-life situations. The stability of Windows is extremely mediocre and I can't get anything useful done with it without hours of troubleshooting. The stability of System 7 and Mac OS 9 wasn't very good either but when I used that as my primary OS, most people I knew still used MS-DOS and Windows 95/98. Mac OS X has given me zero compatibility issues and is the fastest most stable OS I've used. And to the smug Linux users, I've used almost every distro with a GUI. Linux is fun to experiment with, but when I need a job done, I don't have time to look through scattered, fragmented, file directories and partitions.
Posted by: likeamojay | January 2, 2009 12:24 AM
I am a system admin who supports Windows, Linux, and Mac. Yes Windows has its problems, but so does Linux and Mac. I am so tired of hearing people say "Mac just works", or every time something goes wrong with a PC somebody yells "buy a Mac". The truth is right now I have a Mac lab with 30 Intel iMacs with Leopard that has been nothing but trouble since we purchased them. At least twice a year for the last two years I have to reformat and reinstall all the computers. They freeze or just completely crash all the time. Right now I have five of them that won't boot, and the class has switched to using the PC lab which works most of the time. Apple promised us full support, and now the engineer we are working with won't returns calls. I don't hate Apple, and their computers work good when they work. However, the reality is they do have problems, and as their share grows so will their problems.
Posted by: Ryan Fischer | February 7, 2009 1:42 PM