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May 19, 2008

business

Apple rules retail in over $1,000 range

Posted May. 19, ’08, 8:09 AM PT by Dan Moren
Category | Business

Mac Q1 '08It’s long been argued that Macs are the luxury cars of the PC market: they might cost a little more, but you’re paying that premium for something that’s better put together and has higher performance than the bargain bin options. And while we all know that the Mac has been achieving huge growth in the past few years, Apple’s overall market share tends to remain on the low side.

Unsurprisingly, their retail share (read: brick-and-mortar stores) is a little higher, at 14% for the first quarter of 2008. But what if we slice out those bargain bin computers favored by so many (including most businesses)? eWeek did just that with numbers from NPD Group and found something rather interesting.

Turns out that if you only compare Macs to other computers sold in brick-and-mortar stores priced over $1,000, Apple’s market share does run into the double digits. The high double digits. Macs hold 66% of the market for retail machines over $1,000; in desktops, that lead is even higher at 70%, while laptops lag slightly lower at 64%. And Apple is beating the crap out of Windows when it comes to growth: those Q1 2008 numbers show 50%-60% growth for notebooks over the prior year, while Windows notebooks stayed flat.

What this says to me is that these days if low price isn’t your only metric when you walk into a store to buy a computer, you’ll probably buy a Mac. The other takeaway here is that Apple has succeeded tremendously on the retail front.

NPD’s vice president of industry analysis, Stephen Baker, suggested to eWeek that part of the success in this formula is the fact that Apple sells only one computer priced under $1,000, the Mac mini, saying “If you don’t give people a choice, people will spend more.” I’d skew that slightly differently myself, arguing that if your sole concern is not the bottom line, people will pay more for something that gets them more. And that’s where Apple succeeds.

[via Fortune]


4 Comments

Eric said:

I think all these numbers prove is that people already have an idea in their head if they want to buy a Mac or a PC. If you're going to buy a PC, then price is an important metric and there isn't much point in buying over $1000.

If you've already decided to buy a Mac, then you're probably already expecting to buy a machine over $1000.

This really isn't flattering news... it leads back to the "Macs are more expensive" argument. Which is, apparently (or at least, effectively), true.

May 19, 2008 9:22 AM
Donn Author Profile Page said:

What these numbers prove is that for the product areas Apple chooses to compete in, it absolutely owns.

Eric, take your second paragraph, flip it around, and it's also true (and more relevant): if you've already decided to buy a machine over $1000 (because that's the level of power/quality you desire), you're probably expecting to buy a Mac, according to these market share numbers.

The "Macs are more expensive" argument continues to be silly. At the level of the Mac (upper middle to high end PCs), at the same configuration, Macs are competitively priced.

Finally, if you are going to dominate one segment of a market, it is a decent strategy to focus on the high end where the higher margins are (and ability to produce a high quality product you can believe in).

May 19, 2008 10:38 AM
larsonst Author Profile Page said:

The funny thing about this "more expensive" argument is that the difference for using a Mac generally works out to less than a can of soda a day during the usable life of the computer (3+ years)

For those of us who use Macs that is a pittance to avoid the time-wasting hassle and uggh experience of dealing with anything wintel.

BTW I drive a pc all day at work but would no more choose to save money having one for my personal use than I would intentionally select uncomfortable shoes to save money.

For pennies a day I have a desktop BMW instead of a lemon.

May 19, 2008 11:15 AM
Anonymous said:

I can tell you that Macs are not more expensive when looking at the Macbooks. I work at Best Buy and most pc laptops with an intel are running at a 1.8 until you get to the $1300 and up range (and that just gets you a 2.1). Not to mention the mac is going to run faster on the same hardware so that gives it another edge.

And one can always go into the fact that you don't have to purchase anti-virus, anti-spyware software on a yearly basis. These are the things I point out to customers on a daily basis and I would say 8 times out of 10 I get them into a mac.

May 29, 2008 6:17 AM

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