Apple’s Sales Figures: Whom Do You Trust?

January 14th, 2010

As you know, different market research firms have different number-crunching methodologies, so you can expect that the results will vary, and sometimes be contradictory. A case in point might be the first reports of U.S. PC sales for the last quarter. Depending on which firm’s figures you quote, Apple either gained market share or lost it, with sales that increased 31% or 23.3% over the previous year.

Clearly there’s a hefty disparity there, and how you interpret the numbers can vary, depending on whether you believe IDC, which favored Apple, and Gartner, which didn’t.

Either way, the biggest winners were HP and Toshiba, very much because of the growth in the netbook segment. Indeed, it’s fair to say that those shrunken portable PCs pretty much saved the industry from disastrous results in 2009, but does that really put these companies ahead of Apple?

The problem with the PC makers is that most companies are engaged in a mad rush to the bottom of the market, an endless search to sell as many boxes as possible regardless of the profits earned from each particular sale. This approach stands in bold contrast to the way Apple has traditionally approached its product positioning, particularly after Steve Jobs regained control of the company. Instead of maximizing sales, Apple’s marketing people have looked to a sensible tradeoff, so that each product and service sold will earn a decent margin. If there is no potential to earn enough profits, Apple stays away.

This is why, for example, the Mac mini remains at $599, even though you can buy complete desktop systems from any of a number of PC box makers for less, with display and input devices included. Of course, those products are all pieces of junk. They might work all right for a while, but build quality, the fit and finish and longevity, are sacrificed. At the end of the day, you might feel its better to just toss them out after a year or two — one hopes to the recycling depot — and buy new ones. In contrast, you expect a Mac to last for years and years, even after app and operating system upgrades are no longer possible.

I have a friend, for example, who has one of the first-generation Mac minis. He knows full well that he’ll never be able to run Snow Leopard on that machine, yet it works just fine for his purposes, which are limited to simple word processing, email and Internet surfing. At a time where a similar PC will be consigned to the trash heap or perhaps the closet or garage, Macs manage to remain relevant for years and years. That’s why it does often make sense to buy the premium product, even if you do end up with more computer than you might have wanted.

As you probably know, Apple has the lion’s share of sales for personal computers costing over $1,000. At the same time, this doesn’t mean Macs are overpriced, despite claims of that sort by members of the financial and tech media. They continue to look at price over value, and short-term gains over long-term stability. That is probably why the PC companies continue to fight for every sale, even if those sales don’t make a whole lot of sense from the standpoint of overall profitability. Market share is king, and that’s just not Apple’s game plan.

You can see that in the fact that Macs have been on a steady, not stellar, growth curve for several years, slowly advancing in market share and resulting in great profits for Apple. Maybe other PC makers will achieve greater gains this quarter or the next, but what is going to happen if people begin to desert the netbook and start to consider products that really meet the needs of the customer, rather than having a bottom line price? If they opt to pay more, they are apt to buy gear less frequently too.

This year, if you can believe what happened at the Consumer Electronics Show, lots of PC makers are dragging tablet computers off the shelves, wiping off the dust, and hoping desperately to trump Apple’s still unannounced contender. At the end of the day, tablets have never worked in the mass market, mostly because there’s very little innovation behind most of those devices. Just slap on a touchscreen display, perhaps with the ability to rotate, add a stylus for input, and make it otherwise identical to most other Windows computers on the market. No wonder the tablet revolution has remained stillborn.

That doesn’t mean success will necessarily come easy for Apple. The rumors may indeed be right about screen size and some of the basic features, but the overall interface may not be entirely that of a grown up iPhone. That would seem too simple, nor would it justify the years allegedly spent on the development of that device. At the end of the day, a fancy case, leveraging the basic look of the iPhone and the fundamentals of its operating system and features would seem a lame solution. It really doesn’t make sense.

But right now, most of the attention will likely be focused on Apple’s quarterly numbers, which will be revealed later this month. They will be the unvarnished numbers rather than surveys by third-party marketing firms that may not, in the end, give you a clear picture of what’s really going on.

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5 Responses to “Apple’s Sales Figures: Whom Do You Trust?”

  1. DaveD says:

    Those number of sales tabulating bother me. I see the usual blather from the PC fanboys on the overpricing of Macs. The low price can be a combination of improved efficiencies of manufacturing, and exploitations of other countries’ lax labor and environmental regulations. I rather pay more for products that last longer so to not add more to the landfills. I remained skeptical as to how much get recycled.

    I do want Apple to grow and continue to make lots of money. It was good to see that Apple not participate in the netbook arena. I look forward to more innovations and easy-to-use software/hardware products. It is about the “Wow!” factor.

  2. dfs says:

    Well, I don’t know who to trust, and I hope Wall Street has more sense than to pay any attention to stuff like this (but it probably doesn’t). But what I do know is how well Apple is doing in Europe. I’ve seen some very impressive stats for market share in countries like Switzerland. We have to remember that the US is only one part of a much larger picture.

  3. Kaleberg says:

    That’s an interesting analysis. Since computers of a given capability get cheaper over the years, buying a more expensive computer with more capability often means that you can use that computer longer. Maybe you didn’t need a CD-ROM or a wireless networking card or two CPUs or whatever when you bought the machine, but there was a good chance you would need it in a few years. You could buy a cheaper computer than a Mac by compromising on features, but you would probably need to upgrade sooner.

    One corollary is that Apple computers can only be upgraded so much. If you are buying two to four years ahead in time, Apple seems to feel that you are covered technologically. After five or seven years, they figure that there will be other reasons to upgrade beyond lack of features or resources.

    Interestingly, when Microsoft got stuck at XP, this dynamic worked in their favor and made things harder for Apple. After all, you could get all of XP to run on really cheap hardware. Now that Microsoft is upgrading its system again, more people are going to notice an rising need for power and features. Since Apple will continue to update OS X, I expect more people to find Apple computers a better deal since they are unlikely to be caught two to three years out.

  4. Robert Lloyd says:

    Whom: I hope to someday fully understand this language foible.

  5. Robert Lloyd says:

    PS: No “netbook” for me. I run a Mac Pro with Dual Xeon 2-core processors at 3ghz, 10 GB of RAM with 4 hard drives for a total of 2.5 terabytes internal storage, and several external hard drives for another 3+ TB. Barely enough system to get through my day. Waiting for that 50 ghz processor they predicted a few years ago….
    I learned DOS in the late 80s and went Mac in the early 90s. That move is sure lookin’ good today.

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