Apple's share of US PC market slips to 8% at hands of Acer

[AppleInsider]

Apple's share of the US computer market fell to 8 percent during the fourth calendar quarter of 2008 from 9.5 percent in the third as the Mac maker surrendered its third place ranking to surging netbook maker Acer, according to market research firm Gartner.

Preliminary data released by the firm Wednesday shows Mac growth to have slowed to 8.3 percent during the three-month period ending December, representing 1.225 million Macs shipped domestically. Apple has still gained a over a point in market share on a yearly basis, shipping 96,000 more systems than it did during the fourth quarter of 2007. However, its performance is down from quarter to quarter with 29.4 percent growth during the September quarter, when it reportedly shipped 1.645 million units to Americans.

Still, Apple is one of just three top-tier PC vendors in the US who would have seen positive growth during the quarter based on Gartner's data. Toshiba has shipped just over a million systems stateside to boost its share of US market to 6.5 percent, representing 12 percent yearly growth. Meanwhile, netbook maker Acer is expected to have had its unit shipments surge over 55 percent in the fall to propel its share to 15.2 percent from summer's 8.8 percent while reclaiming its third place ranking from Apple.

Market leaders Dell and HP retained their respective positions atop the market, though both saw a yearly decline in unit shipments. Dell shipped 4.465 million systems domestically, a decline of 16.4 percent that pushed its share of the market down to 28.6 percent from 30.8 percent. HP remained a close second, shipping 4.288 million units. Although its unit shipments fell 3.4 percent on a yearly basis, HP still managed to boost its share of the market to 27.5 percent, up from 25.7 percent during the September quarter and 25.6 percent from the year-ago quarter.

Preliminary U.S. PC Vendor Unit Shipment Estimates for 4Q08 (Thousands of Units) | Source: Gartner

And these companies weren't alone on the international stage. *The worldwide PC industry suffered its worst growth rate since 2002 during the fourth quarter as worldwide shipments totaled 78.1 million units, a mere 1.1 percent increase from the fourth quarter of 2007, according to Gartner.

"The United States experienced steeper than expected shipment declines due to the recession. The Europe, Middle East and Africa (EMEA) region was also affected by the economic slow down across key countries," said analyst Mika Kitagawa. "Asia/Pacific recorded the worst shipment growth since Gartner started its PC statistics research. Latin America met expectations, but its growth was much lower than in the past."

The lone growth driver for the 2008 holiday PC season was the mini-notebook segment, according to Kitagawa, who noted that the mini-notebook segment outpaced overall mobile PC growth as more and more vendors offered creative sales promotions. This, however, has to record declines in worldwide PC revenues as customers opt for cheaper systems.

Preliminary Worldwide PC Vendor Unit Shipment Estimates for 4Q08 (Thousands of Units) | Source: Gartner

Hewlett-Packard managed to grow above the worldwide average in the fourth quarter to maintain its first-place worldwide ranking; however, its year-on-year growth was its lowest since its merger with Compaq in 2003. For its part, runner up Dell showed strong growth in Asia/Pacific but struggled to increase shipment volume in North America and EMEA.

Meanwhile, number 3 Acer continued to show staggering growth with worldwide PC shipments growing 31.1 percent, driven by low priced mini-notebooks like its Aspire One netbook in addition to low-cost systems through much of its lineup. *Lenovo maintained the fourth position in the worldwide market but suffered a shipment decline for the first time since 2006, while Toshiba grew faster than the worldwide average by heavily targeting the consumer market.

Apple does not rank amongst the top 5 PC vendors worldwide, and hence no data was reported for the company in the global demographic.

For the year, worldwide PC shipments totaled 302.2 million units, a 10.9 percent increase from 2007.

Gartner's previous reports for PC market share over earlier parts of 2008 are available below:

Third quarter 2008 (summer)
Second quarter 2008 (spring)
First quarter 2008 (winter)

[ View this article at AppleInsider.com ]

[hmurchison]

Yeah ...let's compare Apple's profit to Acers for more clarity about the picture that matters.

[afishertx]

So much for a "nacient" market.

Sent from my Dell Mini 9 netbook running OS X 10.5.6.

[CU10]

Just the notebook market or the entire PC market?

9.5% of quarterly sales is quite good in any case.

[zunx]

Apple, license Mac OS X to any PC out there and you will get 90% worldwide market share in three years! DO NOT MAKE THE SAME MISTAKE AS WITH THE ORIGINAL MAC IN 1984!!!

[Adjei]

Apple is doooomed.

[oneaburns]

Originally Posted by Adjei

Apple is doooomed.

Normally, I'd disagree and say everyone is reading too much in to one story. But, with Jobs' failing health, high-priced computers in a weak economy, sloooow updates to hardware, and a lackluster Macworld...things are looking a little gloomy. Of course, I say all this b/c I want to buy more Mac stuff and hope they'll update their hardware and lower prices

[mark2005]

There is actually some good news in those numbers as Apple achieved its growth without much discounting. Given HP and Dell's decline in units, and Acer's units are mostly $300-400 netbooks, Apple's share of consumer revenue spent on computers has clearly gone up.

[Olternaut]

With or without Jobs announcing the product the revolutionary mactouch had better come out soon.
And I'm talking BEFORE June here.

[addabox]

Originally Posted by Olternaut

With or without Jobs announcing the product the revolutionary mactouch had better come out soon.
And I'm talking BEFORE June here.

Yes. Unless Apple ships the product you made up, in the time frame you made up, they are surely doomed.

[Olternaut]

Originally Posted by addabox

Yes. Unless Apple ships the product you made up, in the time frame you made up, they are surely doomed.

Hey Ireland and wizard69 we have a new member of the mactouch club. Welcome addabox!!

[JeffDM]

Originally Posted by zunx

Apple, license Mac OS X to any PC out there and you will get 90% worldwide market share in three years! DO NOT MAKE THE SAME MISTAKE AS WITH THE ORIGINAL MAC IN 1984!!!

Name one company that has gone against Microsoft's desktop operating systems, on the same terms, and actually lived to tell about it. DR-DOS, OS/2 and Be tried and are simply gone. Windows has also displaced or marginalized most of the server operating systems, such as Netware and various versions of UNIX. Even for free, Linux and the BSDs just aren't cutting it on the consumer end unless you count the network routers. I am not convinced that Apple can necessarily do that, and I doubt that it's worth it, Apple taking a different approach to the market is the reason they've succeeded.

[addabox]

Originally Posted by Olternaut

Hey Ireland and wizard69 we have a new member of the mactouch club. Welcome addabox!!

I swear to God, you kids better not make me come down there.....

[Ireland]

Market share slips, $ share doesn't

[Phong]

It's because the Mini was over a year and a quarter old. You could buy a 2.0 Ghz Dell Studio Hybrid with better specs for half the price of the 2.0 Ghz Mini. Still can, as a matter of fact.

Tim Cook said in October that Apple doesn't compromise on quality. Someone better point the new CEO to the machine they were supposed to be using to steal marketshare. If "revenue share" is all that's important to him, then the Mac really is doomed again.

[min_t]

What the hell is a MacTouch and were can I see a pix of it in the wild. How come the rumor sites don't mention it?

[slapppy]

The only one that always wins will be Microsoft. Even in the worse economy business and people have to buy cheap computer, automatic ch-ching for MS.

[hmurchison]

Ummmmmmmmmmmmm do some of you realize that Netbooks have a high return rate?


Linux based Netbooks stinking up the joint

I think Apple simply needs to do the Netbook/Mactouch right and make it affordable for Mac users not all users and we'll be fine.

[JeffDM]

Originally Posted by MacOldTimer

Steve said no so Apple of course followed the almighty and lost a huge share of the market.

Netbooks are a huge share of very little. They don't cost a lot, there's not a lot that can be made on them, and still require a similar level of engineering as a regular notebook even if many of the purchased parts are less expensive. I don't think Apple has actually ruled it out, the comments I've seen from the company make it look hedged, like they are keeping an eye on it, and will strike when and if they feel they need to, not because of peer pressure.

If the netbook market does hold rather than just a flash in the pan, then maybe Apple will do something, but fighting for market share on the low end is basically fighting to pick scraps off of bones.

[SpamSandwich]

Originally Posted by mark2005

There is actually some good news in those numbers as Apple achieved its growth without much discounting. Given HP and Dell's decline in units, and Acer's units are mostly $300-400 netbooks, Apple's share of consumer revenue spent on computers has clearly gone up.

Acer would have to sell a heck of a lot more "netbooks" to make margins anywhere near Apple's. This is interesting news, but a bit misleading.

[MacTel]

Originally Posted by Adjei

Apple is doooomed.

Yep, anytime now.

[ianmac47]

You can't sell a premium product in the midst of major economic depression and expect to continue gaining market share against discount competitors. Apple products are obviously superior, but at the end of the day, right now, the price is keeping a lot of people away.

[sidste]

How much of Acer's growth is due to the late 2007 acquisition of Gateway and the early 2008 purchase of Packard Bell? I don't see any talk of this in the article.
Apple's growth was organic, not buy-out driven. They could pay cash for Dell.
These numbers need to be adjusted for acquisitions!

[Olternaut]

Originally Posted by min_t

What the hell is a MacTouch and were can I see a pix of it in the wild. How come the rumor sites don't mention it?

Your kidding right? Do a search on that term from this site alone will bring you up a big listing of forum posts.
Its widely expected.....at some point....that Apple will unveil either a tablet or a netbook of some manifestation soon. Of those who think it will be a tablet of some sort many have nicknamed it the "mactouch". I personally think its not going to be a tablet or a netbook but some new category of mobile that no one has thought up yet.

[sidste]

Are these number seasonally adjusted. I suspect Apple does a pretty good third quarter from students, so relative to everyone else, does their market share spike every year for back-to-school?
Where is the analysis? What do the numbers really mean?

[JeffDM]

Originally Posted by MacOldTimer

So in short you're saying Apple will chase the puck when "they think" it becomes profitable.

Good one. But I've never liked Job's use of the "puck" metaphor. Apple trails on technology as often as they lead. They seem to do things on their own time.

There is a difference between a fad and a sustainable business.

Yes I have my iPhone but it doesn't compare to a netbook when you are trying to update a spreadsheet for a presentaton or for that matter make changes to anything.

Just to make it clear, I didn't say the iPhone compares with a netbook, and I do not presume to suggest that.

By the way. Acer ranks among the world's top five branded PC vendors (Google Acer).

I wouldn't call that picking at the bones.

What I meant by "picking at the bones" is profitability. We'll see how much money they actually make, a sale is meaningless to a business unless there is a profit in it.

[aaarrrgggh]

Acer added 1MM units. Even if they are half the price of normal laptops, the question is if the added units made up for deteriation in average selling price.

From where I sit, a Netbook is an extra computer rather than a main computer. It might extend the time between purchase of a "main" computer, but it is a net benefit to both the consumer and the manufacturer (more money gets spent/more value is felt).

The market isn't as "nascent" as it was last August, and Apple is now trailing: every other manufacturer has a netbook offering (sans Toshiba?).

I think I represent Apple's current problem pretty well: my wife and I are not in a hurry to upgrade our Macs given the current economy. I am however happy to plunk down less than $500 on a new computer. This is a major problem to Apple, because it suggests that there is limited value (even to their high-end customers) for their premium product line.

Maybe it is a good time for SJ to step down.

[JeffDM]

Originally Posted by MacOldTimer

That's a short sighted as Steve's nascent comment.

Edit:
On a second topic. Windows 7 is going to run on current Netbooks. But obviously 88% of the Market share means Microsoft isn't as forward thinking as you and Steve Jobs.

How is making a profit short-sighted? Selling a lot more units doesn't help much if you have to reduce the margins a lot to make that happen. Winning a popularity contest isn't necessarily the same as good business.

[UltimateKylie]

Originally Posted by hmurchison

Ummmmmmmmmmmmm do some of you realize that Netbooks have a high return rate?


Linux based Netbooks stinking up the joint

I think Apple simply needs to do the Netbook/Mactouch right and make it affordable for Mac users not all users and we'll be fine.

Notice any word in particular? ... LINUX. I know ASUS said high returns of Linux while low return on Windows. I don't find that shocking at all as Linux is still half baked (I know I download a copy yearly just to try out). It doesn't meet what consumers can get with OS X or Windows. I know that most of Acer's Netbook sales are Windows XP and at Walmart. And to decry them as horrible is crazy, as they are about as equal as the $2500 Sony Vaio 11" Ultraportable I bought in 2004 in terms of specs (Minus DVD Drive).

[inkswamp]

Originally Posted by Adjei

Apple is doooomed.

1996 called...

[piot]

Originally Posted by MacOldTimer

Obviously ACER is a big loser and they don't know we're in a recession and that selling $3,000 BLOAT BOOKS is the future.

Way to GO STEVE, YOU DA MAN.

You have a cute name there OldTimer.... but you really are sounding more and more troll-like.

"Bloat Books" ??
"You da man" A little tactless today, don't you think?

Your whole netbook 'argument' is not even particularly strong. Did you read the original post? Any of those figures sink in?

The whole armada of PC makers, together with their new "saviour", the low profit NetBook, managed to increase there sales by ..... a massive ONE percent. Even better in the US where the rise of the almighty NetBook has lead the charge DOWN by 10 percent.

Compare that with poor old timer Apple. Somehow, with a sick leader, no bloody NetBook strategy, no firesale prices, no mini-tower.... somehow.... probably by just being evil.... they have increased their Mac sales.... and their marketshare.

[rtdunham]

Originally Posted by hmurchison

...I think Apple simply needs to do the Netbook/Mactouch right and make it affordable for Mac users not all users and we'll be fine.

hear, hear!

fighting for market share on the low end is basically fighting to pick scraps off of bones.

didn't apple itself suggest the iPhone and iPodTouch are a version of a netbook, a powerful little computer that can browse, etc? how is that different from fighting for market share on the low end? I don't see any reason apple couldn't position a superior netbook at a price between the Touch and the Macbook. The company's given up hundreds of thousands of unit sales and billions of dollars of revenue by choosing to stay out of that not-nascent market.

[piot]

Originally Posted by MacOldTimer

The entire point of my original posting is to say that Steve Jobs called the Netbook market nascent. Nascent by meaning is to say it's in its infancy or beginning to develop.

Fine. So he was right!

That in itself says that Apple missed the boat

Can you explain exactly what they have missed? All I can see, from these Gartner figures, is that Apple have maintained their prices and GAINED market share while the PC guys have lowered prices (and profits!) and LOST market share.

Perhaps Apple intends to catch the next boat.

and will be following the rest of the market to put out a Netbook.

Why? (see above)

[Hands Sandon]

Originally Posted by Olternaut

Your kidding right? Do a search on that term from this site alone will bring you up a big listing of forum posts.
Its widely expected.....at some point....that Apple will unveil either a tablet or a netbook of some manifestation soon. Of those who think it will be a tablet of some sort many have nicknamed it the "mactouch". I personally think its not going to be a tablet or a netbook but some new category of mobile that no one has thought up yet.

How about a nine inch iPod touch kind of device but with a mini chicklet keyboard, no track-pad (use the screen instead) running both the iPhones OS and regular OSX by having two seperate snap on plates. A thin design for the mobile OS and a heavier and thicker seperate full OSX when you want iPhoto etc?

[Cadam]

You seems to know a lot, are you running one of the big five computer companies, what is your vision of the computer industry and where it is heading and what are the innovations likely in these challenging time ahead?

Talk is cheap so show us the money.

[BenRoethig]

Originally Posted by sidste

How much of Acer's growth is due to the late 2007 acquisition of Gateway and the early 2008 purchase of Packard Bell?

Packard Bell isn't sold in the United States. But that is the question, is Acer really selling more machines or is the growth because they got to count the Gateway and eMachines sales?

[ShinySteelRobot]

Originally Posted by MacOldTimer

[Apple] can't figure out how to make a Netbook for less than $1000.

Apple could buy netbooks OEM'd from Acer, writer drivers for the Acer hardware that's not out-of-the-box compatible with OS X, slap an Apple sticker over the Acer logo, and sell them for a 20% markup. Starving students and road warriors would buy them in hordes.

BTW, that's essentially what tons of people are doing with their netbook Hackintoshes (install a hacked-up OS X, slap an Apple sticker over the PC maker's logo). I think the exploding popularity of the netbook-based Hackintosh marketplace (MSI Wind, Dell Mini 9, Asus Eee PC, etc) is evidence that there is a substantial market for these things.

[mitchelljd]

Well, Apple makes a great product, but there are ways they can sell more Mac Units.

1- finally release revamped desktop models (new Mac Mini, iMac, Mac Pro)
2- include Blu-Ray integration into devices. including new monitors.
3- Release new Midsized Tower. One which is upgradable, powerful and a bargain.

Apple needs a $799 laptop as well, they have to price themselves a little better.

yes, Apple has better technology investment than their competitors, but they need to make some of their computers more affordable in this stressed economy. so... lets hope for this. if they do so they can expand their customer base.

oh well... we have tough economic times where companies need to offer more for the money, also it would be great to have a more dynamic and full product line to offer more choices for consumers on what they really need.

[ouragan]

Hopefully, the new leadership at Apple will be inspired by these numbers.

What these numbers show is that Apple could compete if only it offered a desktop computer with the brand new Core i7 quad-core desktop processor from Intel. So, a competitive desktop computer with a quad-core Core i7 processor from Intel. Is that too much to ask from Apple?

These numbers also show the effect of Apple's fat 35% profit margins vs. Dell's slim 9% profit margins. While making less money on each computer, Dell is making far more money in the end because it sells so many more computers. And, for Apple, an explosive growth would secure the future of Mac OS X as a viable software platform.

So, what is Apple going to do? Keep a fat upper management with hundreds of millions of dollars in stock option compensation, and no obligation to show up for work in the case of Steve Jobs, or cut the fat and cut the price of Macs by at least $300 to grow the Apple market share?

Apple, the choice is yours. You cut the prices and adopt the Core i7 processor in the iMac, or you go through yet another death spiral. As you see, your competition is relentless, but more importantly, Dell, HP and Acer are building computers that buyers want to buy at a price they can afford.

The Intel Core i7 quad-core desktop microprocessor was officially launched on November 17, 2008. See:

Intel unleashes Core i7, beats itself @ http://www.tgdaily.com/content/view/40213/135/

Core i7 PCs launch with prices from $1250 to $13,000 @ http://www.tgdaily.com/content/view/40227/135/


A 35% profit margin? Underperforming dual-core mobile processors in desktop iMacs? Billions in stock option compensation for a greedy management? That's a recipe for disaster, Apple.

[Bregalad]

Once you achieve a market share sufficient to get software written for your platform further market share is meaningless unless total profit increases. Otherwise you're expending more effort and getting equal or fewer returns. Having iPhones running OS X is their way of grabbing market share, albeit in a different category of devices.

How many of the people buying $1299 MacBooks would opt for a $699 MacNetBook instead? Would there be enough new MacNetBook buyers to cover those losses and pay for the R&D, supply and support costs of a new model? I'm guessing Apple has decided the answer is no.

The same question applies to the mythical mini-tower Mac, but I think the answer to that question is purely political. I'm convinced that very few Mac Pro buyers would risk their productivity with a scaled down tower. No I believe the real reasons the mini-tower Mac doesn't exist are:
- Steve believes desktops are a dead end market for everyone but pros and gamers
- They know a tower has the potential to last longer than a limited design like the iMac. That means fewer sales.
- They don't want to encourage people to invest in a separate display, even one of theirs, because they know the lifespan of a desktop display is often 10 years. They'd rather sell you a whole computer that'll be obsolete in 4 years or a notebook that'll be replaced sooner than that.
- They know many, if not most, buyers would buy another brand of display.
- They don't trust customers to modify their "perfect" Macs without screwing something up and deluging the Genius Bars with PCI card problems, etc.
- They want to keep pretending they aren't losing desktop sales to the $1000 PCs that have had quad core processors since early 2007.
- They want to keep pretending that Macs are special despite being made in the same factories as low cost netbooks.
- They want to keep pretending they're a Green company even though tossing out an entire iMac and replacing it is much harder on the environment than simply getting a new computer and hooking it up to your old display.

I saw a report that said the average lifespan of a computer in 2001 was 6 years. Today that's dropped to just 2 years. Those numbers show Apple could've tripled their sales without gaining a single new customer.