Tuesday, September 27, 2011

Active Internet Users Are 10% Macs (5% iOS)

Although Apple's sales share numbers are not yet in the double digits for PCs (desktops and notebooks), its share of active users appears to exceed 10%. According to Chitika's surveillance of users accessing its online advertising network, Apple's Macs gained share in the user base in September and hold 10.6%. Apple's iOS devices were slightly down in share, to 5.2%. By comparison, Linux distributions total 2.3% of users and Microsoft's operating systems stand at 77.7%.

Android was up by 0.045% to 2.3%.

Note that measuring users by examining online ads neglects the non-browsing segment of the market. Both Linux and Microsoft have substantial presence in servers, and many point-of-sale systems run Microsoft operating systems. Which numbers are worth watching depends on one's purpose. As an online advertiser, Chitika is of course interested in devices in a position to browse its ad network.

From Apple's perspective, a large share of installed base is valuable in the iPhone business because Apple shares some wireless subscription revenue and shares in App Store sales of content to users. By contrast, Apple's share of the PC installed base has historically only meant that its users haven't yet replaced their Macs. With Apple's launch of the App Store, Apple stands to benefit more from users who don't replace their machines often. The Safari browser probably doesn't generate substantial revenue for Apple, despite that Apple could stand to benefit from ad revenue sharing from searches conducted from a Safari search window. But then, some revenue is better than none.

The major benefit to Apple of controlling a meaningful segment of the devices in use on the Internet is that it makes Apple's ecosystem more valuable. A reliable population of quality (i.e., paying) customers who prefer quality products is attractive to developers inclined to create quality products to sell; quality products from developers make platforms more attractive to customers; large communities create network advantages over small groups (in case you like using video chat, which only works with people whose video chat software is designed to work together); and so on. But as Apple has learned with the App Store (and its Music Store before that), a large installed base also means a large group of customers capable of providing post-sales revenue opportunities. As Apple's installed base grows, the post-sale long tail of content revenue (software, music, books, etc.) may become a material part not only of Apple's ecosystem, but its revenue. (While Apple is in an explosive sales growth phase, the sales will likely continue to dwarf post-sales subscriptions, content, etc.; but the future of Apple platforms as cash cows in the event Apple's market share reaches a "steady state" is potentially attractive and worth thinking about, even if the hypothesis that a "steady state" can exist is a bit fanciful.)

Between Apple's market-topping satisfaction and its share growth, Apple's execution is a thing to behold. Congratulations.

No comments: