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Summary:

Depending upon which research firm you believe, preliminary estimates for Mac sales are either down or flat for the second quarter compared to last year. Either way, the netbook, or lack thereof, appears to be the problem for Apple. From the Associated Press, IDC analyst Bob […]

Depending upon which research firm you believe, preliminary estimates for Mac sales are either down or flat for the second quarter compared to last year. Either way, the netbook, or lack thereof, appears to be the problem for Apple.

From the Associated Press, IDC analyst Bob O’Donnel notes that “people are focused on $600, $700 notebooks. Guess what Apple doesn’t have: any notebook below $999.” Looking at the numbers for the U.S., which accounts for roughly half of Mac sales, would seem to confirm the theory that netbook is surging.

Source: IDC via Yahoo! Finance

Source: IDC

Via Yahoo! Finance, IDC reports Apple’s market share for the second quarter at 7.6 percent, down from 8.5 percent last year. Still, that’s better than Dell, which is undergoing restructuring that looks a lot like demolition. In stark contrast, both Acer and Toshiba showed double-digit gains in market share due almost exclusively to netbook sales. Looking at the estimates from Gartner, the numbers are a little better for Apple.

Source: Gartner via AppleInsider

Source: Gartner

Via AppleInsider, Gartner estimates Apple market share at 8.7 percent, a slight uptick from 8.5 percent last year. Again, Dell is in free fall compared to the relative weightlessness of Apple, and HP. Acer rockets on, while Toshiba will almost certainly blast past Apple next quarter, unless Apple introduces a MacBook mini.

Don’t count on it.

At last quarter’s conference call, Tim Cook reiterated Apple’s position on the netbook.

When I’m looking at what’s sold in the Netbook market, I see cramped keyboards, junky hardware, very small screens, bad software. Not a consumer experience that we would put the Mac brand on. As it exists today, we’re not interested in it nor would it be something customers would be interested in the long term. We are looking at the space. For those who want a small computer that does browsing/email, they might want an iPhone or iPod touch. If we find a way to deliver an innovative product that really makes a contribution, we’ll do that.

What Cook didn’t say, but what also bears repeating, is that netbooks have cramped profits, too. Both Dell and HP have reported margins impacted by cheap portables cannibalizing higher-priced models. Apple’s margins are in the range of 30 percent, so there will be no MacBook mini, alas.

However, that “space” Cook refers to is almost certainly the perpetually rumored tablet, currently predicted for an October launch. While rumors also suggest a price around $800, it seems much more likely Apple would be looking to fill the gap in its lineup between the multitouch devices at $200-$400 and the Macbook at $1,000. This would put it at the price point O’Donnel mentions, $600-$700. If this turns out to be so, Apple’s market share in PCs will continue to stagnate or decline, at least as long as IDC and Gartner define what a PC is. With the advent of multitouch devices and the App Store, clearly Apple has other ideas on what the personal computer will be.

  1. What the hell is up with Dell? I know there having some trouble, but being down 18% is ridiculous.

    Now I’m not too surprised about Apple stagnation/decline in growth. Apple makes premium products, and during a recession, it should be expected that they will be hit hard by people trying to save money by going with cheaper alternatives. As for the whole net book thing, I honestly see that as a fad. I’m not saying that netbooks will disappear, but right now there is a lot of novelty with these cute, little computers, and eventually that will get old and growth will level off; because, as Apple says, netbooks have a lot of limitations, and eventually people will see that. I do think if Apple positions their tablet in that $600-$800 category, you will see a lot of sales. It’s funny, I remember seeing an interview with Bill Gates and Steve Jobs, where Gates said he believed tablet PCs would eventually catch on, and he hoped that Microsoft would be the ones to succeed in that space, but then he looked over the Jobs, almost like an acknowledgment that it would probably take Apple to make tablet PCs “cool”; that’s probably whats going to happen.

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  2. This is not surprising to me. In spite of the performance hits netbooks offer over more expensive fare they are often available now for $250 – $350. That puts them almost in the realm of “impulse buy” and folks who otherwise wouldn’t consider them end up buying one.

    It’s a different market than Apple’s for sure, but the $300 laptop is not going away any time soon and will continue to be a factor. It will affect notebook sales across the board, not just Apple’s.

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    1. The difficulty in getting hold of the new 15″ MacBook Pro makes me think that demand has increased for the higher priced models, despite the price. I feel people are considering buying the more expensive option with a look towards keeping it for a longer period. That was certainly going through my mind when looking at my recent purchase.

      I’m surely not the only person who has family still running my hand-down 5 year old ibook and 2 year old macbook with no problems.

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  3. “Guess what Apple doesn’t have: any notebook below $999.”

    It’s called the iPhone, more functional than any netbook. I also don’t see how one can make the direct correlation between units shipped and market share. A significant number of netbook users are buying them as a more portable supplement to an existing machine rather than a primary workstation outright. But statistics can be molded to say whatever you want them to say, I suppose.

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    1. In that same vein, let me add that Apple real netbook is the iPodTouch which does everything the iPhone does except making phone call. I need to take this back because since Skype can now run on the iPod/Touch, you can also make phone calls on one of the newer models which come with speakers.

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  4. If I wanted a netbook I’d buy a used MacBook. I can use my iPhone for over 95% of the tasks I would use a netbook for. Apple is focused on enabling users to create the best graphic content the easiest way possible. I think Apple will release a cocoa touch tablet if/when it’s perfect for creating graphic driven content in a whole new way.

    Also, netbooks are “cheap” and don’t do a thing to increase a brands strength. Apple is a premier brand and will remain so.

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  5. I do not mind Apple’s market share to stay stagnant. Rather that and healthy margins for Apple than growing at any price.

    Just look at Acer who is currently buying market share aggressively. They certainly loose money on the $800 notebooks they are pushing into the market. While that is a smart strategy given the current economy, it is not sustainable. Nor is it predictable how customers react once Acer must raise prices.

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    1. Totally agreed with you. Market share at any cost may eventually have a negative impact on the business if it impacts the bottom line to such a point that it cannot continue to innovate adequately. Looking at Dell’s aggressive price cutting policies during the 90s in order to achieve the level of market share it enjoyed for so long is one case in point. Now it is facing the like of Acer which is pressuring its PCs offering with the very low priced netbooks. Apple is smart to refuse to play in this kind of game. All it has to do is put out quality products that people will be willing to pay for and make money in the process. Basic business rule of thumb. It is doing a great job at it by controlling the entire product cycle from the software to the hardware ends producing a well integrated product that no one else can offer offer. Works in good as well as in lean times.

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  6. [...] and slick photos (OStatic) Watch a real-time reenactment of the Apollo 11 space mission (NewTeeVee) Mac market share suffers from netbook envy (TheAppleBlog) Sync iTunes with smartphones (Pre included) for free (jkOnTheRun) Wal-Mart’s [...]

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  7. [...] The Apple Blog analyzed recent market share numbers from Gartner and IDC and both show that the netbook market is sustaining, and even growing, the presence of many hardware makers. Just not Apple. Acer shows the biggest gains in year over year market share at 51 percent from IDC. Gartner pegs Acer’s growth at 74.2 percent in the same time period. Granted, Acer sells regular notebooks in addition to netbooks, but they’re also the number one seller of netbooks in the world these days, according to DisplaySearch. [...]

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  8. I would like to see Apple turn the Air into a netbook. Stay with me, now. I know it is a crazy prospect, but hear me out.

    I read an article yesterday talking about the possible demise of the Air after one more update. But why? I love my Air. I think it is a great machine and a treat to carry around. But with all the talk over netbooks, and Apple saying they can’t make one that’s junk, then why not turn the Air which competes with Macbooks, into a netbook and break into that niche without any internal competition? Its already far superior to other netbooks, no optical drive, and optional SSD. A nice update would be a smaller screen, equivalent to those found in netbooks, a buttonless trackpad like those in the macbooks, and bam, you got a netbook killer! Smaller screen, lighter weight, better battery life… Obviously they wont have the low price point of other netbooks, but dollar for dollar Apple products are far superior in every aspect anyways. And lets face it, nobody is using bloated memory or processor intensive programs on an air, except for quick on-the-go ideas. But anyone needing the power is either not using an air, or has a more powerful backup in one of Apples other fine products. I would definitely spend the extra green to get my hands on an Apple netbook, especially if it is some derivative of the Air design.

    Ok, bash away.

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  9. Steve Jobs had said that it is important to skate to where the puck will be and not where it is. I think Apple will put out a Kindle competitor. This is a new niche and market. The netbook market is as other have commented uninteresting due to its low margin and its overlap to some degree with the smart phone market.

    It is my belief that as smart phones get better and the mobile broadband gets faster, more and more people will stop replacing their PCs and just keep their smart phones. As an example, my dad and sister have no need for PCs. They have everything they need on smart phones.

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  10. imagine if the chart included all the ipod touch’s and iphone sold in the same period. Now with the iphone 3GS, it has gone beyond the capabilities of subnotebooks. It the ipod touch comes out with a camera it too will surpass all those subnotebooks. Imagine if the touch pad materializes, Apple owns the subnotebooks market and the chart will have to be changed. Oh they do it with a profit.

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