Over the past month investors have reconsidered the selloff in Apple stock that took place in January and February, when AAPL fell nearly $80 from a close of $198.08 on Dec. 31 to $119.15 on Feb. 26.

Helped along by a 228-point rally on Wall Street today, AAPL picked up another $6.55 to close at $161.04, its first close over $160 since Jan. 18.

Concerns earlier this year about slowing iPhone and iPod sales spooked some investors into selling AAPL, but those investors forgot about the Mac. Even back in January when the stock was getting pummeled, both Apple and several of the analysts who follow the company predicted continuing growth in Mac sales.

Sure enough, when research firms Gartner and IDC released their first-quarter reports on PC market share, the Mac’s stellar showing stole the spotlight.

Gartner says Mac shipments increased 32.5 percent, from 762,000 to 1 million units, compared to the same quarter a year ago. According to Gartner Apple snared 6.6 percent of the U.S. PC market compared to 5.2 percent in the first quarter of 2007.

Compared with Gartner’s 2006 numbers, the Mac’s growth trend is even more dramatic. Apple had 4 percent of the market in the first quarter of 2006. Mac unit shipments are up 440,000 from the same period of 2006, a 77 percent increase.

Meanwhile IDC’s data shows Apple with a 6 percent share of the U.S. market in the first quarter, compared to 4.9 percent in 1Q 2007, with unit shipments growing 25.1 percent to 950,000.

It should be noted that Apple’s relative market share changes seasonally. For instance, back in the third quarter of 2007 Gartner reported Apple with 8.1 percent of the U.S. market. But the year-over year increase in units shipped grew at a similar pace, 37.2 percent.

The one consistent element to every research report on the PC market I’ve seen in the past year is that the number of Macs shipped keeps increasing year over year, as does its market share.

When Apple reports its first quarter earnings this coming Wednesday, we’ll find out the truth about iPod and iPhone sales (I suspect the concerns of January will prove unwarranted), and we should get confirmation on the Mac’s soaring numbers.

If it turns out Apple’s core businesses with the Mac, iPhone and Pod continued to do well despite reduced consumer spending and recession worries, expect to see AAPL continue its climb upward.

Jason Schwartz predicted today in a post on the Seeking Alpha site that AAPL could hit $300 in 2009 on Mac sales alone, but gives plenty of reasons why he thinks the company’s other businesses will thrive as well.

While $300 a share might sound crazy, Apple has a long history of transforming the improbable into reality. It wouldn’t surprise me.

Posted by David Zeiler at 5:17 PM | Permalink | Comments (4)
                    

It’s not often you can get ahead by standing still, but Apple could be doing just that based on the latest survey on computer purchasing by Rockville, Md.-based ChangeWave Research.

The data on planned purchases among U.S. consumers and businesses shows Apple with steady numbers and those of its competitors, chiefly Dell and Hewlett-Packard, declining.

Rather than surveying the population at random, ChangeWave takes its samples from among its own 15,000-member “alliance.” It also conducts similar surveys at regular intervals, providing historical data for comparison.

Apple’s numbers are essentially flat from the last survey taken in January (see charts). The most encouraging news is that in the consumer segment, respondents saying they plan to buy a Mac are up more than 50 percent from the March 2007 survey.

Now compare those numbers with Dell’s numbers. Dell laptops are down 2 percent and desktops 4 percent with consumers (32 percent for desktops, 28 percent for laptops. As recently as January 2007, 44 percent of consumers were planning to get a Dell desktop and 34 percent a Dell laptop.

Planned business purchases have fallen to an all-time low (32 percent for laptops and 32 percent for desktops). At its peak in August 2005 Dell’s numbers were 45 percent for desktops and 40 percent for laptops.

HP’s numbers also showed an overall downward trend, particularly in the consumer space, where they’ve dropped from 27 percent for laptops and 28 percent for desktops last March to 19 percent for laptops and 18 percent for desktops in the just-released survey.

Assuming ChangeWave’s data is indicative of general buying patterns, Apple’s earnings should hold steady through the current challenging economic environment. And the Mac’s U.S. market share should continue to rise this year in the periodic IDC and Gartner reports.

Other findings in the ChangeWave survey:

Leopard rules, Vista drools: Of the corporate respondents using the Mac OS X Leopard operating system, 53 percents said they were “very satisfied” with it compared with 40 percent for Windows XP Pro and a sad 8 percent for Windows Vista Business. Linux beat both flavors of Windows with 44 percent.

The survey also asked corporations about their plans to adopt Vista. Only 18 percent said they were not planning to “slow adoption of Vista,” while 26 percent they were “somewhat likely” or “very likely” to slow adoption of Microsoft’s newest version of Windows. And a remarkable 43 percent said they had no plans to adopt Vista in the next 12 months.

If Apple successfully breaches the enterprise market with the iPhone, it might ponder pitching Macs to businesses. The sort of widespread rejection of Vista evident in the ChangeWave survey could encourage corporations to consider the Mac alternative just as consumers have.

Mac desktops surge: In the portion of the survey covering PCs purchased in the previous 90 days, Mac desktops showed stunning strength among consumers, with 21 percent saying they had bought a desktop Mac. Not only did Mac desktops gain 5 percentage points from January, the number tripled – yes, tripled – from March 2007. (The Mac laptop percentage among consumers dropped 1 point to 16 percent.)

And a bit of bad news: While most of the data in the ChangeWave survey is positive for Apple, I found one troubling anomaly. Alone among PC manufacturers, Apple’s numbers in the segment in which respondents report which brand of PC they purchased in the previous 90 days tend to be about half what they are in the planned purchases segment.

For example in the November survey, 29 percent of consumers said they’d buy a Mac laptop in the next 90 days but in the current survey only 16 percent did so. The desktop numbers are closer (29 percent planned, 21 percent bought), but it’s still a significant gap.

Such discrepancies don’t appear in the data on other PC manufacturers. Back in November 31 percent of consumers said they’d buy a Dell desktop in the next 90 days; in the current survey 28 percent said they did in fact buy a Dell desktop.

The laptop numbers are almost spot on: 28 percent said they planned to purchase a Dell laptop in November; in the current survey 27 percent said they did.

Apparently, potential Mac buyers are more likely to change their minds than potential buyers of other brands. But why?

Did they see ads for bottom-of-the-barrel PCs and conclude Macs cost too much? Are they Windows users fearful of making the switch? Or is it something else?

Whatever the cause, it would behoove Apple to invest some effort in figuring it out. Those lost customers translate to lost market share, lost revenue and lost profits.

Posted by David Zeiler at 5:22 AM | Permalink | Comments (3)
                    

Not only are Apple’s three primary businesses each doing extremely well, but each retains significant potential for growth, Tim Cook, the Cupertino company’s chief operating officer said yesterday.

In a wide-ranging question-and-answer session at the Goldman Sachs Investment Symposium in Las Vegas, Cook fielded queries about “missing” iPhones, the possibility that the iPod market has become “saturated,” why the Mac’s market share has seen explosive growth and what Apple hopes to achieve with the Apple TV.

Much of what Cook had to say wasn’t new, although it was far more engaging than the sleepy, redundant comments he and CFO Peter Oppenheimer serve up to analysts during those quarterly earnings conference calls. Frequently he sounded very much like the Apple cheerleader he is paid to be, but at times Cook offered clues about Apple’s broader strategies.

Let’s look at what Cook said by category (he switched among topics frequently during the session, which you can hear for yourself here):

The iPhone: Cook said the iPhone has received the highest customer satisfaction ratings of any product Apple has ever shipped, a notable achievement for a company that routinely scores very highly in customer satisfaction.

When asked a question that has been buzzing on the Web for weeks – what’s become of the million or so iPhones Apple said it has sold but have never been activated – Cook acknowledged most of them have found their way to countries in which the iPhone is not yet available.

Without addressing the shared revenue Apple loses from its partner carriers when an iPhone is unlocked for use on another network, Cook said the company “smiles” at the problem. “It means there’s great demand for the iPhone,” he said.

The company will apply the lessons it has learned from selling the iPhone in the U.S. and three European countries as it proceeds with plans to expand availability of the product elsewhere in Europe and in Asia this year, Cook said.

Most intriguingly, he said Apple is not “married to any business model,” suggesting Apple could deviate from having one exclusive carrier per country. Cook explained that different market conditions could require a “different business model,” and in some places “being exclusive might not be in our best interests.”

This may be the first public indication that Apple is considering different approaches to the iPhone-carrier model, at least in some nations. However, Cook only had nice things to say about Apple’s relationship with AT&T, a disappointment to those hoping for a re-evaluation of the exclusivity deal in the U.S.

Cook indicated Apple expects the issue of unlocked iPhones to diminish as the device becomes available in more countries, and ominously hinted at a “series of actions” aimed at thwarting iPhone hackers (presumably those unlocking it, not those installing software on it).

Better news for iPhone owners was Cook’s frequent references to the week-overdue announcement and release next Wednesday (March 6) of the iPhone SDK, which will permit developers to write software legitimately for the iPhone and iPod Touch.

The iPod: Cook reiterated Apple’s position that the iPod Touch is a fresh platform for the company and that developing that platform is a priority. He artfully answered a question about flat iPod sales in the holiday quarter by pointing out that while unit sales increased by only 5 percent, revenues increased by 17 percent, primarily due to the higher margins on the iPod Touch, introduced only last fall.

Meanwhile sales of the low-end, lower margin Shuffle slipped 17 percent worldwide. Cook said Apple cut the price on the Shuffle to $49 Feb. 19 because “we believe there’s elasticity in the market,” whatever that means. He added that the price drop should boost sales a bit in “emerging markets” (such as China and India) as well as in the U.S.

The Mac: “The ceiling for the Mac is nowhere in sight,” Cook said in discussing the Mac’s market share. He noted that Apple sold 7 million Macs in a PC market of 260 million, leaving a lot of room for further growth.

In responding to a question asking why the Mac has become more popular with customers – he said the platform grew 44 percent in the last quarter alone – Cook described the Mac’s gains as “almost a movement.” He continued: “I think it’s gone, in many people’s minds, to asking not why buy a Mac, but why not?”

He cited two statistics showing the Mac’s resurgence in the education market. One was Student Monitor’s annual survey of college students conducted each summer asking which type of computer they planned to buy; this past summer those who said they were buying a Mac rose to 44 percent, 20 points higher than the previous year. Cook gave no source for the second statistic but said the company learned Monday that “Apple has surpassed Dell as the number one supplier of portables to higher education for 2007.”

Apple TV: Cook waffled a bit on the Apple TV, last year described by CEO Steve Jobs as a hobby and the low sales of which led to some Apple critics deriding it as a failure. “We say no to a lot of things,” he said in explaining why Apple expended resources on developing Apple TV. “We do products where we can make a difference and where we control the primary technology.”

Later Cook acknowledged Apple TV is a “niche product,” but said the company thinks that “something cool cold come out of this product.” He essentially admitted the company had erred in treating video like music, expecting customers to buy video as they buy music at the iTunes Store.

Somehow Apple missed that most people watch movies just once and would rather rent than buy them (wasn’t Blockbuster a big enough hint?) The availability of movie rentals combined with the recent changes to Apple TV – essentially releasing it from the bonds of the PC so it can download movies directly from the Internet –sets up the video realm as “an area that could be big for us,” Cook said.

Posted by David Zeiler at 4:58 AM | Permalink | Comments (8)
                    

The Mac’s resurgence will continue over the next several years, according to Gartner research, resulting in the platform’s doubling its market share in the U.S. and Western Europe by 2011.

That prognostication led off Gartner’s list of 10 key predictions for the tech industry the firm released yesterday. While crediting Apple’s business model for much of the Mac’s success, Gartner notes that “failures” of Apple’s competitors also are playing a part. Here’s what the company had to say:

“By 2011, Apple will double its U.S. and Western Europe unit market share in computers. Apple's gains in computer market share reflect as much on the failures of the rest of the industry as on Apple's success. Apple is challenging its competitors with software integration that provides ease of use and flexibility; continuous and more frequent innovation in hardware and software; and an ecosystem that focuses on interoperability across multiple devices (such as iPod and iMac cross-selling).”

Gartner has figured out what veteran Mac users have known for years. The Mac’s ease of use holds great appeal to people who just want a computer that does what it’s supposed to do. That demographic includes most home users, which is where the Mac has made most of its gains.

Gartner doesn’t name names after citing the “failures of the rest of the industry,” but it’s obvious the primary guilty party is Microsoft. Dashing expectations after years of anticipation, the latest version of Windows – Vista -- has met resistance in its first year of release. Many PC vendors, including Dell, had to start offering XP as an option on new PCs.

But the Gartner statement hints at more than the PC industry’s missteps; if you read between the lines, it’s also an indictment of the PC business model. That would be the chaotic system in which one company makes the operating system (Microsoft) while many others build the hardware (Dell, HP, Lenovo, Acer, Toshiba, Sony). And that doesn’t include all the third-party peripherals that may or may not work with your Windows PC.

Apple has long endured criticism for its vertical integration philosophy. “If only Apple would open up its hardware and software, it could compete and gain market share,” they would opine.

Of course, Apple did allow clone making briefly in the mid-1990s, but instead of growing the Mac’s market share the clone-makers gobbled up Apple’s best customers. Steve Jobs killed that bad idea shortly after his return in 1997.

Now Gartner is lauding Apple’s “software integration” and its “ecosystem that focuses on interoperability across multiple devices.” Apple’s ability to integrate its hardware, software and peripherals is what makes it all work so well. Somebody finally gets it.

One other prediction on Gartner’s list also bodes exceptionally well for Apple. By 2012, the company predicts half of traveling workers “will leave their notebooks home in favour of other devices.”

Gartner explains that workers will tire of notebooks’ size and weight: “Vendors are developing solutions to address these concerns: new classes of Internet-centric pocketable devices at the sub-$400 level; and server and Web-based applications that can be accessed from anywhere.”

Again, Gartner does not mention any names. Can you think of any devices that fit the criteria? Name begins with an “i”? Yep, the iPhone fits the bill perfectly, right down to its $399 price tag. But the $299 iPod Touch, particularly with its newfound software capabilities (mail, maps, weather, notes and stocks), may fit the bill even better.

Apple knows it and is already poised to exploit it. CFO Peter Oppenheimer referred to the iPod Touch as “an entirely new type of iPod” in his comments during Apple’s earnings conference call last week. “This new iPod has the potential to grow the iPod from being just a music and video player into being the first mainstream WiFi mobile platform running all kinds of mobile applications.”

While other companies surely will be competing in this space, Apple is the best equipped to make it work as people will expect it to work; its expertise in hardware-software integration will prove an immense advantage here. In a few years, the iPod Touch, along with the iPhone, could completely dominate this sector.

Just FYI, AAPL closed at $133.75 today.

Posted by David Zeiler at 6:29 PM | Permalink | Comments (3)
                    

The latest report from Rockville, Md.-based ChangeWave Research reflects customer satisfaction running in opposite directions for Vista and Leopard, the newest version of the Mac operating system.

An amazing 81 percent of customers of those who purchased a Mac in the previous 90 days said they were “very satisfied” with it. This compares to 27 percent of PC buyers who got Vista Home Premium on their new PC and a pathetic 15 percent of those who bought PCs with Vista Home Basic pre-installed.

According to the ChangeWave report, “Leopard’s high customer satisfaction not only dwarfs its competitors, but it’s having a direct impact on customer intentions to purchase an Apple computer. More than one-in-four respondents (26 percent) say the Leopard OS makes them more likely to buy an Apple computer in the future.”

Seemingly contradicting the IDC and Gartner reports released earlier in the week that showed the Mac’s market share slipping a bit from the third quarter to the fourth, the ChangeWave data showed an increase in Mac buyers. Of those who bought a computer in the past 90 days, 17 percent (up from 14 percent) said they bought a Mac laptop and 16 percent (up from 10 percent) said they bought a Mac desktop.

Looking ahead, of those respondents who said they planned a PC purchase in the next 90 days, 33 percent said they’d buy a Mac laptop and 29 percent a Mac desktop. The laptop number is up from 29 percent in November and from 20 percent a year ago. And that survey was taken before the MacBook Air was announced.

The Mac’s desktop number of planned purchases stayed the same (it was also 29 percent in the November survey), but has risen from 18 percent in the January 2006 survey.

But why does the Mac do so much better in the ChangeWave surveys than in the more conventional measures of market share conducted by IDC and Gartner? The data from those surveys put the Mac’s fourth quarter market share at about 6 percent.

The Mac excels in the ChangeWave data because in this particular survey, the focus is on consumer purchases rather than overall PC purchases. Removing corporate buying from the equation shows just how much progress the Mac has made with the average PC consumer.

Meanwhile, dissatisfaction with Windows Vista has grown so severe that tech Web site InfoWorld has launched a petition to Microsoft to keep selling its predecessor, Windows XP, past the planned June 30, 2008 deadline.

“Millions of us have grown comfortable with XP and don't see a need to change to Vista,” InfoWorld Executive Editor Galen Gruman writes. “It's like having a comfortable apartment that you've enjoyed coming home to for years, only to get an eviction notice.”

Well, as a Mac user I can’t explain the love for Windows XP, but apparently lot of Windows users share Gruman’s sentiments – 30,000 had signed the online petition as of 5 p.m. Jan. 17.

Posted by David Zeiler at 12:57 PM | Permalink | Comments (10)
                    

Research firms IDC and Gartner have released their quarterly market share data and the news for Apple, for the first time in a while, is mixed.

Looking at U.S. market share (Apple doesn’t show up in either company’s worldwide data), the Mac gained year-over-year, but slipped from the third quarter to the fourth.

According to Gartner, Apple shipped 1.035 million Mac units in the U.S. in the fourth quarter of 2007 for an increase of 227,000 over the fourth quarter of 2006. Market share increased a full percentage point, from 5.1 percent to 6.1 percent.

But in October Gartner reported 3Q Mac sales of 1.338 million, which means Apple shipped 303,000 fewer Macs this past quarter. Market share quarter-over-quarter fell 2 full percentage points, from 8.1 percent to 6.1 percent. That’s not good.

The data from IDC looks about the same. It shows Apple shipping 1.058 Macs in the U.S. in the fourth quarter, an increase of 250,000 over 2006. IDC’s numbers put the Mac’s market share at 5.7 percent, up from 4.7 percent in the 4Q 2006 -- like Gartner’s up a full percentage point year-over-year.

And like Gartner’s data, IDC shows a drop from quarter to quarter. In October IDC gave Apple a 6.3 percent market share, about half a percent higher than the 5.7 percent it reports the Mac had in the fourth quarter.

Does this mean the Mac’s comeback has hit a brick wall? Or is it a statistical hiccup?

At this point, it’s probably too soon to tell. I will hazard a guess that strong back-to-school laptop sales in the third quarter gave Apple an exceptional boost and holiday Mac sales simply couldn’t match it.

We’ll find out more when Apple reports its quarterly earnings next Tuesday (Jan. 22).

Posted by David Zeiler at 1:10 PM | Permalink | Comments (3)
                    

The monthly data from Net Applications was released today – yes, New Year’s Day – and it shows that the Mac has eked out another incremental gain in share.

California-based Net Applications doesn’t measure market share by units sold, as do other research companies, but by sampling traffic data from its client Web sites.

For December the Mac’s share of Internet traffic was 7.31 percent, up from 6.8 percent in November. An incremental gain, but if you look at where the Mac’s share was in December 2006 – 5.67 percent – you can see the results of a steady upward trend throughout 2007. If you go back to January 2006 (the earliest data available on Net Application’s Web site), the Mac had only a 4.21 percent share.

That’s a major leap for the Mac platform, and jibes with traditional market share data from research firms Gartner, which put the Mac’s U.S. share at 8.1 percent in October and IDC, which put it at 6.3 percent. As with the Net Applications data, both numbers were increases from previous reports.

(The iPhone, by the way, shows up in the Net Applications report with a share of 0.12 percent, up from 0.09 percent in November and 0.07 percent in October. Watch for iPhone share of Web traffic to shoot upward in 2008 and beyond.)

Almost every measure of market share in 2007 has shown the Mac gaining. If 2008 proves as good to the Mac as was 2007, we could see reports by the end of the year that show Mac market share in double digits.

Posted by David Zeiler at 1:51 PM | Permalink | Comments (1)
                    

Apple has done a great job of marketing the Intel-based Macs ability to run Windows, but has confused some ordinary users into thinking all new Macs come with a built-in ability to run Windows software and use third-party devices designed only for Windows-based PCs.

Twice this week I have had co-workers seek my counsel with this type of query. Both had bought peripheral devices for a Mac user before discovering the device was not Mac compatible.

Both said they had heard new Macs could run Windows and expressed hope the destination Macs still would be able to use the devices. I had to tell them that while the newer Intel-based Macs can indeed run Windows, the user must buy and install a retail copy of Windows to enable that capability.

Though disappointed, they understood.

I’m not sure what Apple should do to clarify this point for its growing legions of non-technical users, but it might behoove Cupertino to give it some thought. People who hear “Macs can now run Windows” not unreasonably may expect it to do so out of the box.

Apple does not need thousands of annoyed customers calling its tech support personnel to ask why this or that Windows thingy won’t work with their new Mac, only to be told the feature requires a bit more money and effort on their part.

Of course, the real culprit in this scenario is neither Apple nor the innocent user, but those companies that continue to manufacture third-party peripherals incompatible with Macs.

In this blog I have noted often the Mac’s steadily increasing market share, particularly in the United States. Those market share increases are coming mostly from consumers switching from Windows – consumers who buy lots of peripherals.

When the Mac’s market share was mired in the sub-5 percent zone, it was easy for tech companies to dismiss it. The numbers for the Mac this year have consistently shown growth; in October Gartner reported overall Mac share at 8 percent (which translates to much higher consumer market share, given the Mac’s low profile in the business world). Last week ChangeWave Research released data from November revealing that 29 percent of those who intend to buy a computer in the next 90 days would choose a Mac.

At some point the Mac user base will become too large to ignore with impunity. Companies that refuse to make their peripherals Mac compatible will start to lose business to the ones that do. Such market forces eventually should make the absence of Mac compatibility among peripheral devices a rarity.

Perhaps someday we’ll even see “Not Windows Compatible” devices. Heh heh.

Posted by David Zeiler at 12:34 PM | Permalink | Comments (6)
                    

Reinforcing other recent reports of the Mac’s continued strength in the market, a survey taken in early November by Rockville, Md.-based ChangeWave Research indicates that more potential buyers than ever plan to buy a Mac in the near future.

Of the respondents who said they planned to buy a computer in the next 90 days, 29 percent said they’d get a Mac laptop and another 29 percent said they’d get a Mac desktop.

Apple’s laptop number is actually the highest in the survey – Dell came in second at 28 percent, followed by Hewlett-Packard at 21 percent. Amazing.

On the desktop side, Dell was first with 31 percent with Apple’s 29 percent good for second. Hewlett Packard was third with 24 percent.

The numbers are even more impressive when compared to the historical data in the survey. In September 2006, only 17 percent were planning on buying Apple laptops and 18 percent Apple desktops. If you go back to October 2005, the numbers fall to 16 percent for laptops and 11 percent for desktops.

Questions on customer satisfaction offered at least one clue as to why Macs have grown more popular – Apple leads in this category by a huge margin.

A chart showing the percentage of respondents who were “very satisfied” shows Apple with 80 percent, far ahead of all the PC vendors, which range from Dell at 61 percent to Lenovo at 49 percent. Another 18 percent were “somewhat satisfied.” Only 2 percent were “very unsatisfied” with zero reporting in the “somewhat unsatisfied” category.

The combined “unsatisfied” scores for Apple’s rivals ranged from 6 percent for Dell to 14 percent for Lenovo.

Still more positive news for the Mac turns up in the operating system segment of the survey.

Asked if Leopard, the latest version of the Mac OS X, would make them “more likely” or “less likely” to buy an Apple computer in the future, 24 percent said “more likely” while 66 percent said it would have no effect. None said it would make them less likely to buy a Mac.

Another question asks. “Which operating system would you like to have preinstalled on the computers(s) you plan to buy in the next 90 days?”

Leopard was the choice of 28 percent – the highest individual number, though the Windows percentages were split by the assorted flavors of Vista and XP. Vista’s totals add up to 42 percent, with Vista Home Premium the choice of 20 percent.

Microsoft might be concerned that more than a year after the launch of Vista 40 percent of potential PC buyers would prefer Windows XP on their new computer.

As pleased as any Mac loyalist would be with these survey results, one must wonder a little at how Apple’s numbers could be so high, particularly the percentages of people planning to buy Macs. Even the most optimistic U.S. market share surveys have pegged the Mac at only about 8 percent overall, with about 12 percent of the laptop market.

How could 29 percent of a survey sample be planning to buy Macs? It just doesn’t seem possible.

It turns out it depends on who you survey. ChangeWave does not randomly select its samples, but queries a group of 13,000 “senior technology and business executives in leading companies” it calls the “ChangeWave Alliance.”

This explains why Apple does so well in its surveys – what else would you expect from such a group of highly educated and tech-savvy people?

It also bodes well for Apple much further into the future than the 90 day period asked about in the survey. The members of the ChangeWave Alliance are the type of people others look to for leadership and guidance. If nearly one in three of them are going Mac, it could signal a substantial increase in Mac market share over the next year or two, perhaps to the mid-teens or beyond.

It’s almost scary, isn’t it?

Posted by David Zeiler at 9:07 AM | Permalink | Comments (4)
                    

The other day I received a message from a coworker with this in the subject field: “OK, I’m going Mac.”

Another colleague fed up with Windows-based PCs is seeking my aid on switching to the Mac.

Having written about Apple and the Mac for the Baltimore Sun on and off for the past decade, I have become a handy resource for my colleagues at the newspaper whenever they have questions about Apple products.

Over the years nearly all of those questions have come from fellow Mac users with a particularly vexing problem with their Mac at home, although I’ve done more than my share of Mac troubleshooting in the newsroom (shhhh, don’t tell our IT department).

But over the past six months or so I’ve helped half a dozen coworkers who wanted to ditch their Windows PCs at home for a Mac. I realize this is anecdotal, completely unscientific evidence, but since such queries were rare before this year I’m counting it as further evidence that the Mac is making significant headway in the consumer market.

The reasons these folks have given me for switching from Windows -- which in most cases they have always used -- reflect points Apple has emphasized in its advertising campaign. They’re tired of PCs that get so gummed up with spyware, viruses and adware they become unusable. They’re tired of peripherals that are supposed to work but don’t. They’re tired of struggling with Windows, and are reluctant to buy a new PC because it means learning the new foibles of Vista, Microsoft’s most recent version of the OS.

At the same time, Apple’s powerful brand made enough of an impact to get them to consider the Mac as an alternative. They’ve witnessed the hype around the iPhone and noticed the dominance of the iPod in the portable music player market. Several visited an Apple Store before they made up their mind. In short, Apple’s strategy is succeeding.

Best of all, everyone who has switched has been glad they did. They’re mostly surprised that a home computer can be as hassle-free as the Mac generally is. They’re converts who will likely tell their friends about their positive experiences.

The Mac’s steadily growing U.S. market share numbers indicate this sort of thing must be happening more and more, and could be ready to snowball as we head into 2008.

Microsoft, watch your back.

Posted by David Zeiler at 2:01 PM | Permalink | Comments (22)
                    

Today Apple announced it sold more than 2 million copies of Mac OS X 10.5 Leopard in its first weekend. “Early indications are that Leopard will be a huge hit with customers,” said CEO Steve Jobs in the press release, though he might be just a teensy bit biased.

I’m guessing Apple is seizing this opportunity to gloat because demand for Leopard – like the iPhone -- will never be so high as on its first weekend.

But whether 2 million is a big number depends on how you look at it. For example, Leopard’s achievement compares very well to its predecessor, Mac OS X 10.4 Tiger, which took 5 weeks to sell 2 million copies.

Comparing Leopard to Vista, the latest incarnation of Microsoft’s Windows, shows the value of holding more than 90 percent of the operating system market. Though widely criticized, Vista sold 20 million copies in its first two months – nearly the same number as every Leopard-capable Mac in existence. (Apple Chief Operating Officer Timothy Cook estimated during the company’s recent earnings conference call that currently about 21 million Macs are Leopard capable – an impressive number considering the large number of older Macs that do not meet Leopard’s minimum specs.) Windows XP sold 17 million copies in its first two months back in 2001.

During Microsoft’s recent earnings conference call, the company reported that 85 million licenses for Vista had been sold this year. True, most of those were pre-installed on Windows PCs sold by the likes of Dell and Hewlett-Packard, but still. It’s a daunting number from the Mac perspective (not to mention the even smaller number of fans of the Linux OS).

Then again, Leopard already has been hacked to run on ordinary Windows PCs. Apple surely won’t be happy about it, but what if it catches on? We might well hear Apple report at their January earnings conference call that hundreds of thousands of copies of Leopard were “purchased with the intent of being run on non-Apple hardware.” How crazy would that be?

Posted by David Zeiler at 3:49 PM | Permalink | Comments (2)
                    

Macs continue to gain ground in U.S. market share, but how much exactly?

Research companies IDC and Gartner both have released their third quarter reports on PC market share. They agree the Mac has picked up U.S. market share from Windows-based PCs, but disagree on how much.

Gartner reports a 37.2 percent increase year-over-year in total Mac units sold (including notebooks and desktops) in the U.S., from 975,000 in 2006 to 1,338,000 in 2007. The increase raises the Mac’s market share from 6.2 percent to 8.1 percent, the largest overall U.S. market share number I’ve seen for the Mac in a very long time. It puts Apple in third place behind Dell with 29.1 percent and Hewlett-Packard at 25.7 percent. Trailing Apple are Toshiba (5.7 percent ) and Gateway (5.2 percent).

IDC puts Apple’s U.S. sales at 1,127,000 Macs in the third quarter of 2007 compared to 973,000 in 2006. That makes Apple’s market share 6.3 percent -- an improvement over the 5.7 percent it had in the third quarter of 2007 but significantly lower than Gartner’s number.

Why is Gartner’s Mac market share so much higher? And who’s right?

Somehow IDC arrived at lower sales for Apple than Gartner did while figuring higher sales for both Dell (5,010,000 units versus 4,833,000) and H-P (4,346,000 versus 4,260,000). Apparently the methodologies IDC and Gartner use differ significantly, though the companies’ press releases contained no clues as to how they calculated their numbers. And both companies advise that these figures are preliminary estimates that precede the actual data the PC companies will release in their earnings reports over the next few weeks.

The real data from the PC companies will give us a more accurate picture of what’s going on, but we never seem to get definitive agreement from the research companies and survey organizations.

Discrepancies aside, one trend appears indisputable: the Mac’s market share has been rising for the past two years. If Apple can keep the momentum going it could crack double digits in U.S. market share for the first time since the early 1990s.

Posted by David Zeiler at 3:35 PM | Permalink | Comments (0)
                    

I have long suspected that Macs had made more headway in capturing market share than the periodic research reports have indicated. Finally, we have a report that explains why.

A Bernstein Research report by Toni Sacconaghi, Jr., which I discovered via Philip Elmer-DeWitt’s Apple 2.0 blog at Fortune, provides some fresh numbers on the Mac, particularly its laptops.

The Bernstein report differs from other market share reports I’ve seen in that it breaks the data into five price “quintiles.” Mac laptops have a whopping 29.4 percent of the top quintile (machines over $1,300) and 9.3 percent of the second. When you drop the two quintiles in which Apple does not compete (the bottom two fall under $1,100), Mac laptops still net a 13.8 percent market share in the U.S. While still a long way off from parity with the Windows competition, these numbers jibe better with real-world observations than the 5 to 6 percent numbers that reflect sales of mountains of cheap PCs to businesses.

One of the charts included in the Bernstein report includes a line that breaks out Apple’s U.S. market share in the highest price category in the education and consumer markets, excluding the corporate market that the company historically has ignored. Mac laptops comprise 45.8 percent of that market. Wow.

While anecdotal proof for the Mac’s increasing popularity has been building for several years, the market share numbers have not reflected what seemed obvious. True, the Mac’s overall market share has doubled since 2004 (from 3.2 percent in the U.S. to 6.7 percent and from 1.8 percent worldwide to 2.9 percent, according to Gartner data), but all those glowing Apple logos on laptops on college campuses, at technical conferences and in public Wi-Fi areas argued for higher numbers.

Apple’s laptop share worldwide has shown a similar pattern. Mac laptops do best in the highest price quintile with 11.2 percent, and have 8.1 percent of the second most expensive one. Mac desktops have 8.1 percent of the top quintile of the global market (but almost nothing in the other four). While these figures are far from dominating, compared to Apple’s scrawny worldwide share overall, they’re startling.

Another surprise in the Bernstein report is that Apple’s surge in the high-priced categories is a relatively recent phenomenon. In 2000, Mac laptops held 3.6 percent of the top quintile in the U.S. and 4 percent of the second. The highest percentage, 6.1 percent, was in the lowest-priced quintile. By 2004, the Mac laptops had risen to 7.6 percent of the top quintile and 7.2 percent of the second. That year Apple had the highest share in the third quintile at 9.7 percent.

Despite what appears to be great news for Apple laptop sales – rapidly increasing market share in the highest-priced, most profitable quintiles -- Sacconaghi’s report points to dark consequences. It views Apple’s rapidly increasing share of the pricey end of the laptop market as a limiting factor to growth in the years ahead, particularly in light of the Mac’s increasing average price versus that of a typical PC laptop.

I had almost forgotten this, but the iBook a few years ago started at $999. The increase in price of the entry-level MacBook to $1,099 combined with the perpetual fall of Windows-based laptops has had the net effect of making Macs more and more expensive relative to their PC counterparts. Sacconaghi theorizes this will narrow the potential market for Mac laptops and pressure Apple to drop the entry-level price back to $999 or lower to perpetuate the rate of growth it has enjoyed over the past two years. Combined with Apple’s determination not to go after the corporate market, further limiting its overall market share growth, I have to concede that Mac laptop sales could hit a wall at some point.

Sacconaghi does not note in his report that Mac laptops, while costlier on average when compared to the entire Windows PC market, are priced about the same as PCs of comparable abilities (Charles Gaba’s System Shootouts site has many examples of this). Apple refuses to make cheap Macs because it wants to maintain its image as a maker of quality computers and because it disdains low-margin hardware. But in doing so, Apple has written off a significant chunk of the PC market.

This could present a problem as Apple’s market share grows, but one of the notable aspects of the company’s recent increases in market share is that they have come despite the higher average selling prices of Macs. Consumers are voting for the Mac with their pocketbooks, and there are no signs yet the trend is slowing.

Even if Sacconaghi’s scenario materializes (he projects sales into 2011), Apple’s generous margins always give it the option of prudent price cuts to goose market share. Case in point: the controversial $200 iPhone price cut resulted in a sustained 56 percent increase in sales, according to Piper Jaffray’s Gene Munster.

But for the near future, I see Apple standing pat. Wall Street should be more than satisfied with the boatload of good news Apple will deliver in its fourth quarter earnings report Oct. 22.

Posted by David Zeiler at 2:18 PM | Permalink | Comments (4)
                    

Few topics in the Mac universe engender more confusion than market share numbers. The almost infinite ways to measure market share – who’s buying, where they’re buying (Internet vs. brick and mortar), laptops vs. desktops, aggregate metrics from Web sites, raw sales data from all the PC manufacturers – make any accurate assessment almost impossible.

So I was amused yesterday when many Mac Web sites celebrated the latest numbers from California-based Net Applications, which each month measures market share of Web browsers and operating systems. The company’s September data shows Mac OS Web traffic at 6.61 percent (a combination of 3.38 percent for PowerPC-based Macs and 3.23 for Intel-based Macs). Everyone seemed pleased that the Mac OS share had risen almost a half a percentage point from 6.15 percent in August and more than a point from 5.21 percent last October.

But if you look at the data for each month over the past year, the achievement looks less impressive. The Mac OS had a combined share of 6.22 per percent as early as January. It has hovered between 5.97 percent (July) and 6.46 percent (May) all through 2007. Perhaps the best thing that can be said for the September number is that it is the highest so far this year, but by a statistically insignificant amount.

The numbers for Safari, Apple’s Web browser, are similar. Safari’s share edged up to 5.07 percent from 4.68 percent in August. Last October Safari had just a 3.93 percent share of Web surfers. But Safari had 4.85 percent in February and 4.82 percent in May so September’s jump, while the highest of 2007, does not represent a significant gain in market share for Safari.

Earlier today an outfit called W3Counter released comparable statistics showing the Mac OS representing a mere 3.77 percent of Web traffic. That’s unchanged from W3Counter’s August number, and a slight drop from the 3.91 percent the Mac OS recorded in May. In the browser category, Safari had a lowly1.77 percent share.

Why the discrepancy? Apparently the two companies are measuring traffic on different Web sites, though nether gives a lot of details on which sites they measure. Since both are in the business of supplying traffic data to customers, one assumes the statistics come from each company’s respective roster of clients. If true, that’s not a scientifically reliable way to sample market share of operating systems and browsers.

For its part, W3Counter provides evidence that their data is skewed toward the unreliable. The nation category shows tiny Latvia as the country generating the fourth-most Web traffic, ahead of Canada, the Philippines, France and Australia.

Taken individually, no data on Mac market share can offer definitive evidence of the platform’s progress against Windows. Nevertheless, most surveys and reports released over the past year or so have shown the Mac making headway, albeit slowly.

We’re unlikely to see any sudden, dramatic surges in Mac market share over the next year or two – Apple’s disinterest in pursuing the enterprise (business) market precludes any large gains -- but expect to see gradual growth as more and more consumers look to the Mac as a viable alternative to Windows.

What would be really interesting is a survey showing how the Mac’s market share has increased among consumers, omitting all those Dells in the workplace. Any takers?

Posted by David Zeiler at 3:27 PM | Permalink | Comments (3)
                    

Mac laptop sales are taking off, and it’s only going to get better.

That’s what data released earlier this week by ChangeWave Research seems to be saying. ChangeWave, a Rockville, Md.-based company that conducts surveys of business executives and professionals in more than 20 industries, just released the results of its Aug. 1-8 survey on computer sales.

According to the ChangeWave data, Apple laptop sales over the previous 90 days rose from 12 percent in the June survey to 17 percent while desktop sales dropped slightly from 8 to 7 percent. I would guess that the anticipation of new iMacs (unveiled August 7) stunted sales slightly in the most recent survey. ChangeWave also asks about planned computer purchases. Here Apple laptops remained steady at 28 percent, with desktops actually rising one point from 22 to 23 percent.

Far more compelling than the changes since June is the steady growth in the Mac numbers since January 2006. Back then Apple’s laptops and desktops both comprised just 4 percent of sales over the previous 90 days. The laptop numbers have quadrupled in just over 18 months, while the desktop numbers have doubled.

In the planned purchases survey, laptops stood at 13 percent and desktops at 11 percent back in January 2006. Both of these numbers also have more than doubled.

Long-time Mac users who recall Michael Dell’s infamous 1997 insult should relish Dell’s numbers from the survey of purchases over the previous 90 days. Dell’s laptops have sunk from 44 percent in January 2006 to 30 percent in the most recent survey. But hold your jeers and taunts until you read this: Dell desktops have plummeted from 43 percent to 24 percent.

This is all fantastic news for Mac fans, but can we trust these numbers? The ChangeWave data is not based on a conventional survey of randomly chosen respondents, but rather a periodic survey of a select group of people. ChangeWave describes them as “10,000 strategically positioned experts.” I’m not an expert on polling, so I can’t say if that makes this data more or less relevant. But when you look at this survey in the context of previous computer sales data that also points to ever-growing Mac sales, especially of the laptops, you see a trend confirmed.

My instinct is that a survey of business executives and professionals about computer buying should at least indicate which way the sales winds are blowing. If there’s any weight at all to this ChangeWave survey -- and I believe there is -- those winds are plainly at Apple’s back.

Posted by David Zeiler at 2:33 PM | Permalink | Comments (2)
                    

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?

Posted by David Zeiler at 3:49 PM | Permalink