Apple's Future Growth..?
The Failure of Steve Jobs
Is a Four Percent Market Share Really A Success
ryanhornbeck [Ryan Hornbeck Web Design] | POSTED: 01.18.06 @16:34
Let?s face it: Apple is one sexy company. Their products are the modern definitions of ?cool?. No self-respecting teenager or technophile would be caught dead with a Sony Walkman these days. Most creative types refuse to work on Intel-based workstations, citing their ability to work smarter and faster using Mac OS X.
So, why hasn?t Apple captured the hearts and minds of the typical ?low-end? computer user? Current statistics suggest the company is the number six computer maker with a 3.48 percent U.S. market share (http://www.macworld.com/news/2002/07/03/marketshare/). ?In comparison, computer maker Dell is in first place in U.S. market share with 26 percent and worldwide with 14.3 percent,? reports Macworld.com.
With a product line so in tune with popular culture, why hasn?t Steve Jobs and Apple seized more market share?
To understand their inability to grow, we have to review their current market share. The makers of Mac have the most loyal consumers in the ?content creation? market, where the majority of users swear by Apple?s technologies. Unfortunately, analysts believe their major growth potential now lies in ?horizontal marketing? such as their iTunes and iPhoto offerings, due to market saturation in the creativity sector.
Garnering almost total market domination of the creative set, expansion and growth of sales in this category is nearly impossible.
The new Intel-based MacBook Pro (http://www.apple.com/macbookpro/) creates an opportunity to change this dilemma for Jobs. First, it introduces the Mac operating system to a segment of the manufacturing process that is considerably less expensive to produce. Secondly, and more importantly, it gives Apple the serious possibility of marketing the operating system directly to current users of Intel workstations.
Apple has fought off hardware migration by common (see: Intel) users with their implementation of their ?Trusted Platform Module ?, or TPM (http://www.infineon.com/). This device guarantees Mac software will run only on authorized systems, namely ones manufactured by Apple. (Note: Privacy activists are greatly concerned over concerns regarding both Apple?s and Microsoft?s potential for using TPM for digital rights management technologies.)
It seems counterintuitive Apple would prevent their OS from migrating to other hardware platforms. Granted, the makers of Mac would be offering themselves to the same problems Microsoft now faces: hackers continually assaulting security measures and pirated versions of software proliferating. Still, the risks do not outweigh the potential gains.
I once heard a wizened technician say, ?The most important part of the network is the last 12 inches,? referring to the distance between the users and their monitors. Apple?s OS X is infinitely more appealing both technically and graphically than Windows XP. Their software suites are second to none in terms of sheer functionality. It can only be considered a failure of senior-level management that Apple has not gained more of a foothold in today?s systems.
Many fledgling startup companies are sporting impressive, paradigm-bending technologies. Would shareholders or investors treat these companies? CEOs with ?kid gloves? if they so blatantly wasted an opportunity such as the one sitting before Apple?
Is a Four Percent Market Share Really A Success
ryanhornbeck [Ryan Hornbeck Web Design] | POSTED: 01.18.06 @16:34
Let?s face it: Apple is one sexy company. Their products are the modern definitions of ?cool?. No self-respecting teenager or technophile would be caught dead with a Sony Walkman these days. Most creative types refuse to work on Intel-based workstations, citing their ability to work smarter and faster using Mac OS X.
So, why hasn?t Apple captured the hearts and minds of the typical ?low-end? computer user? Current statistics suggest the company is the number six computer maker with a 3.48 percent U.S. market share (http://www.macworld.com/news/2002/07/03/marketshare/). ?In comparison, computer maker Dell is in first place in U.S. market share with 26 percent and worldwide with 14.3 percent,? reports Macworld.com.
With a product line so in tune with popular culture, why hasn?t Steve Jobs and Apple seized more market share?
To understand their inability to grow, we have to review their current market share. The makers of Mac have the most loyal consumers in the ?content creation? market, where the majority of users swear by Apple?s technologies. Unfortunately, analysts believe their major growth potential now lies in ?horizontal marketing? such as their iTunes and iPhoto offerings, due to market saturation in the creativity sector.
Garnering almost total market domination of the creative set, expansion and growth of sales in this category is nearly impossible.
The new Intel-based MacBook Pro (http://www.apple.com/macbookpro/) creates an opportunity to change this dilemma for Jobs. First, it introduces the Mac operating system to a segment of the manufacturing process that is considerably less expensive to produce. Secondly, and more importantly, it gives Apple the serious possibility of marketing the operating system directly to current users of Intel workstations.
Apple has fought off hardware migration by common (see: Intel) users with their implementation of their ?Trusted Platform Module ?, or TPM (http://www.infineon.com/). This device guarantees Mac software will run only on authorized systems, namely ones manufactured by Apple. (Note: Privacy activists are greatly concerned over concerns regarding both Apple?s and Microsoft?s potential for using TPM for digital rights management technologies.)
It seems counterintuitive Apple would prevent their OS from migrating to other hardware platforms. Granted, the makers of Mac would be offering themselves to the same problems Microsoft now faces: hackers continually assaulting security measures and pirated versions of software proliferating. Still, the risks do not outweigh the potential gains.
I once heard a wizened technician say, ?The most important part of the network is the last 12 inches,? referring to the distance between the users and their monitors. Apple?s OS X is infinitely more appealing both technically and graphically than Windows XP. Their software suites are second to none in terms of sheer functionality. It can only be considered a failure of senior-level management that Apple has not gained more of a foothold in today?s systems.
Many fledgling startup companies are sporting impressive, paradigm-bending technologies. Would shareholders or investors treat these companies? CEOs with ?kid gloves? if they so blatantly wasted an opportunity such as the one sitting before Apple?
Comments
Originally posted by Zenga
Current statistics suggest the company is the number six computer maker with a 3.48 percent U.S. market share (http://www.macworld.com/news/2002/07/03/marketshare/).
How exactly is an article from 2002 "current statistics"?
They have tripled their marketshare in 2 or 3 years. Since the FOUR YEAR OLD ARTICLE that you referenced, their market share has gone down to 1.8%, and then back up again to an estimated 5% (actual number not out yet).
Market share growth at apple is huge - while market share growth at DELL is not.
Furthermore, Apple is a Fortune 500 (#263 in 2005, #301 in 2003) company.
Apple is a profitable (gross profit of $4B over the past 12 months), Fortune 500 (almost top 250 and likely to be top 150 for 2006) company with $12-16B in annual sales, a market value of nearly $60 billion, and almost $9B in cash sitting in the bank.
I'll take that.