The huge and unusual (at least, for Apple) share of sales enjoyed by Apple in the smartphone market has been commented on here before. Also previously discussed is Apple's relatively higher share of profit than its rivals in the PC market.
Today, we have an opportunity to revisit Apple's share of the PC market with an eye not toward unit volume (which is a metric that, due to differing profitability and the potential for loss-leaders and the like, is not particularly useful to assessing power in the marketplace or profitability) but toward revenue. Apple's share of the laptop market is in the range of 8% by unit volume but has approached 20% in some quarters. Apple's share of the desktop market is lower, though Apple reportedly holds over 90% of the market for PCs costing over $1,000. Understanding Apple's overall share and its competitiveness with other manufacturers is undermined in some as much by dividing the market into numerous slices to find the niches in which Apple successfully sells hardware as by pronouncing that with nearly 10% of the US market by unit volume, Apple lacks significant market power.
The revisitation is a look at the sales volume by dollars. This is meaningful in the PC hardware arena -- in ways it is not in the market for server operating system or server application software -- because there is no significant source in the market for zero-cost computer hardware. Apple's share of the new sales revenue for laptop computers -- a market segment in which Apple is believed to be a volume leader in the high-cost market segment -- has been over 30% for some time and recently stood at 34%. The desktop market, a segment in which Apple anecdotally didn't make many sales outside its iMac business, has grown beyond Apple's one-third-share a year ago to over 40% earlier in 2009, and now threatens to take half of all sales by dollar volume by posting a 48% share in October.
(In the server operating system market, proprietary vendors dominate by revenue because open-source competitors are available with a licensing cost of $0, or free. Measuring that market by dollars is thus doomed to confuse onlookers. Combined hardware/software pricing makes it hard to tell whether a "sale" is a single proprietary system with high-end licensing options, or is a whole rack of systems with open-source software. Due to the different capabilities of various server hardware, one might prefer to view the server market in terms of queries run or pages served or megabytes served rather than installed units or software revenue; yet, there is a strong desire to look at the future rather than the past by asking about current-quarter sales instead of the performance of previously-sold hardware. The sales models of competing businesses in this space are strikingly different, with some making revenue on services and others relying principally on software licensing fees. While it's tempting to argue that market success should be measured by existing deployments instead of new sales, wishing folks would use different metrics doesn't change habits.)
In other news, Apple's mobile platform holds 50% of worldwide mobile device data traffic. Apple's share of the mobile phone market is a mere single digit: 2.5%. However, Apple only makes smartphones, and its share of smartphone sales is about 17% by unit volume. Yet, despite having less than a quarter of the smartphone unit share (and less than 3% of the unit share for cell phones), Apple's users account for half the planet's mobile data traffic: Apple's customers either like using their phones more, or for some reason must use them more, than customers of competing products. Why does this matter? These products, which people either are drawn to use more or are preferred by those with high use needs, command such a market premium that despite Apple's mere 2.5% cell phone share, Apple's cell phone profits ($1.6B) exceed those earned by Nokia ($1.1B) on its 35% global unit sales share. Selling high-margin, high-end machines is good business: Apple and RIM together held about 3% of the world's mobile phone unit sales share in 2008 (neither company being a handset unit volume leader), but received about 35% of the profits earned from building cell phones around the world (Apple itself claiming 20% of the global handset profit). As between Apple and RIM, it seems Apple has an edge in future growth. With that growth occurring squarely in the highest-margin part of the phone market, it's clear Apple's profit stands to benefit.
Meanwhile, Microsoft stands secure with over 90% of the PC operating system market share and -- with no PC hardware overhead -- enjoys pure gravy on every license sold. Not that this is any aid to OEMs saddled with MSFT's licensing fees, or improves the cost-competitiveness of products based on MSFT's products ....
No comments:
Post a Comment