OS Market-share vs. Installed-Base

in General Discussion edited January 2014
You can't visit a popular technology-oriented discussion board these days without hearing the oft-misconceived phrase, "Apple has 5% of the market and Windows has 95%.

There are two things wrong with this statement, the first being that if Apple has five, Windows must have 95. We as users of alternative operating systems know this not to be the case. Of course, a considerable number of desktop PCs do not bear the Windows logo.

The second problem is the implication that "market-share" can be used interchangeably with "installed-base." When most people use the word "market-share", what they really mean is "installed-base."

For example, while Apple's Macintosh market-share may be 3 percent, its installed-base is approximately 10 to 12 percent of the computing industry, a figure that's roughly similar to that of Linux based PCs.

When these figures are coupled with the remaining alternative operating systems on the market, Windows installed-base works out to be somewhere in the way of 80 percent -- a far cry from the 95 figure that is often touted.

So how does market-share play into the picture you ask?

Market-share is determined by quarterly or annual sales figures. The problem with market-share statistics is that it implies that all computers retain the same level of usability over time. It assumes that once a computer is sold, it will retain its productivity status for as long as its parts continue to function.

Unfortunately, usability statistics and replacement purchasing habits of consumers vary significantly between platforms thus causing the market-share figure to look skewed.

Linux users (for example) are known to keep aging computer hardware useful long after it was left for dead by its former Windows using owner. The open source community consistently manages to squeeze every last ounce of processing power from even the most aged hardware available.

Similarly, Mac users are known to keep their computers as primary productivity tools until the gears fall off. This is really a testament to the quality that Apple incorporated into its hardware and software over the years.

Unfortunately, the incorporation of quality into these platform's coding efforts will only fuel the notion that they are far less popular as what they are as long as market-share is the most commonly used gauge to determine platform popularity.

Because the Linux operating system's distribution model isn't tied directly to sales, it will never get a truly accurate gauge as long as market-share is touted over installed-base.

Apple on the other hand, may be in a better situation for the foreseeable future.

As we all know, the troubled economy has caused desktop PC purchases to fall to an all time low. This fact may actually work to Apple's advantage.

Everything Apple has been working toward pivots on the release of OS X running on next generation hardware.

Apple is scheduled to release next generation professional hardware in the coming weeks. The release of this hardware, when coupled with Apple's Panther operating system starts the completion of Steve Jobs' rebuilding of Apple.

It's this combination, which the computer using populace has been waiting for, many of which have said that they've been holding back their computer purchases for an Apple to the time table right.

This windfall will occur in parallel with the same time that PC sales remain low, which means that as long as the semi-misleading market-share statistic continues to be touted; Apple's percentage is likely to jump from its current 3 percent status to a double-digit figure, (probably somewhere in the 12 percent range) in only a few months.

Remember, marketshare for any given company is calculated in relation to the sales of its competators. This will cause Apple's market share to make an evern larger spike considering the fact that each individual PC manufacturer's sales wont be there to counter Apple's.

Of course, if the technology spinmeisters try to turn the table and tout installed-base (as they should have all along), Apple's current 12 percent status is covered there too.

All of this kind of makes you wonder how the spinmeisters will try to distort things next.
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