Does Apple really want a leading market share?

Tuesday, April 28, 2009 3:00

Everyone who knows anything about computers knows that Apple computers will always be more expensive than their PC counterparts.  According to Microsoft and as well as many individuals, the “Apple Tax” is wasted money on nothing more than some cute little fruit logo affixed somewhere on your machine.  For others it is a sign of “coolness”, youth, and individuality.  One thing is for sure, Apple who was expected to weather the economic storm is mortal just like everyone else.  So much so that even they lost market share year-over-year with quite an astounding decline.  But how how much?  And is Apple really suited for marketing products that could propel them to the majority of the world markets, or at the very least the U.S.?  Heck, do they even want to be market leaders?

The current recession/depression we’re in has touched all areas of the economy and made previous blank ink profits turn into red ink sadness and losses.  In regards to Apple, while they did lose market share, at least they stayed profitable - that’s more than many company’s worldwide could claim.  To give you a more “physical” representaion, the worldwide PC market declined by 6.5% year-over-year while at the same time last year had grown 12% YOY.  While worldwide sales were slumping, the PC market in the U.S. faired slightly better and managed to break even.  Macs on the other hand, haven’t had such a good start to ‘09 as many had hoped and anticipated.  Mac shipments fell 1% to just 7.4% of the market YOY for this current year.  Some may say 1% isn’t that bad considering the economy.  At least they didn’t get into negative percentages right?  Well 1% doesn’t look bad until you compare it to the 33% growth YOY that they enjoyed last year.  After seeing a 33% to 1 % YOY change, you can really see how much Apple’s sales have taken a hit due to penny pinching consumers.  Some other notable manufacturers such as Dell suffered the same fate seeing their growth shrink by 16% (26.2% marketshave overall), Acer managed to pull a fast one on everyone and actually increase shipments by 49% (13,6% share overall) - gotta love their cheap netbooks.

A lot of media attention has been pitting Apple against Windows based PC’s for a long time now.  But that raises the question, “Does Apple even want to be the leader?”  Now I’m sure at first everyone would answer a resounding “yes”.  Who doesn’t love more money and market share?  However, look at who Apple is as a company and their philosophy.  They build more expensive and *personal opinion - feel free to disagree* generally better designed and manufactured products.  While some of the lower end computer market will sacrifice features, size, performance, etc., Apple won’t build something that skimps, (apparently they don’t know they are the company responsible for the Macbook Air).  They spend a lot of time not only on what is inside the machine for performance sake, but also how the machine looks both inside and outside so that the whole package is complete.  Many individuals who could care less about design and simply care about function, find Apple’s extra attention to details, design, and their price tag as needless waste in what could be better spent on the spec sheet and making a true contender.

But I believe Apple isn’t in it to be the biggest leader in market share and be the mass computer maker that Microsoft is.  You can disagree if you wish, but look at their product line up.  If they really wanted to get more market share, enough to lead, they would have started pumping out more devices, more laptop models, more desktop models, more anything.  They would lease OS X to other vendors and start raking in the money.  They would allow more 3rd party solutions in hardware.  These are but a few things of the many that Apple could have done years or decades ago to improve market share.  But they have a goal, an ambition to not only produce machines that are capable, but also pleasing to the eye.  Is that a crime?

There are many people in life who are very “business minded” in the sense that when they purchase an electronic device such as a computer, they only want that device to get the job done quickly and efficiently.  They will spend many hours, days, and after a lifetime added up, months on many computer machines just like it.  If you’re going to spend so much time with a machine (and I’ll even branch into the OS’s) and operating system, wouldn’t you at least like to look at it instead of having to look at it?  Really, a little bit of extra eye candy and visual appeal can really make life all the more enjoyable.  I understand everyone is different and has different priorities, but who isn’t visually motivated by things that just look better?  Basically it comes down to Microsoft’s business model is lower quality (generally), mass produced, multiple product line up.  Apple on the other hand puts more emphasis on things such as quality, image, and building a computer that you want to spend the extra money for because it just looks more professionally put together.

In the case of operating systems, the defacto standard for pretty much all of the corporate world and still much of the consumer world uses Windows XP, an operating system now nearing a double digit age…10 years.  Comparing Leopard to XP is like comparing a Model T to a Ferrai - just because you can still purchase both doesn’t mean they are similar or should be compared.  Vista greatly upped the eye candy for Windows, however with it came many problems that the public has shown with their wallets as enough to deter them from picking up Microsoft’s latest and greatest.  The up and coming Windows 7 ups the visual appeal slightly with minor changes such as the restyled start menu and task bar among several other things.  Now comparing that to Leopard is a bit more logical.  They both look polished and modern.  Which one would you choose?

Being the biggest and most widely use has its perks (such as more income), however it also has some cons, most notably innovation.  Apple itself is quite a large company, though a minority of users and marketshare when compared to the giant that is Microsoft.  It is this “littleness” and wanting to make it to the top that keeps Apple driven and keeps the innovations coming.  If Apple ever were to gain a market share lead, and evetually a commanding lead such as Microsoft, would the innovations slow or or even stop instead “re-inventing” previously made products and just adding their own flair?  Granted, many would argue and are even correct that Apple has done this already throughout the years many times.  But devices such as the iPhone with its hardware and software combination were a true innovation to the wireless industry in 2007.

Increased market share brings with it a much larger user base to keep happy.  Gone is the loyal following of  a few with a more or less identical set of requirements to fulfill in order to keep happy.  Instead with a large market share your user base is much larger and much more divided over certain issues, issues that  you will have to bend and adjust to.  Apple has shown throughout history that they don’t bend too well and like to keep tight locks on their products.  Most recently the ongoing battle with Pystar and OS X shows that Apple doesn’t want to share when it comes to its products.  Naysayers would say that Apple is merely trying to protect their closed ecosystem as becoming more open would degrade their entire Apple enviorment by opening it up and letting outsiders ruin it.  While this holds some truth, it brings back the question “Does Apple really want to have a leading market share?”  I would at times say “No,” they don’t.  The natural human nature in all of us wants to automatically assume that the answer to this question would be yes because as mentioned before, everyone loves being #1 and having the money that goes along with that status.

Is Apple merely trying to control their minority market share in order to keep the company young, youthful, and innovative? Is Apple purposely keeping themselves as the little guy in order to use that little guy image order to boost sales (though not too high as to make them too big)? Some companies just simply don’t want to become giants.  Once you become a worldly giant you start to loose some of your drive, ambition, vision, and whatever else that helped your company make it big in the beginning and climb your way to the top.  Maybe Apple is just trying to hold on to that climb - a never ending climb.

Source: Alley Insider, *Image Source: 3D News*

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