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Summary:

Joe Wilcox at Betanews does some math with NPD’s June numbers and finds that Mac market share for computers costing $1,000 or more is a commanding 91 percent, up from about 66 percent a year ago. While Apple sells only two models of Macs below $1,000, […]

Joe Wilcox at Betanews does some math with NPD’s June numbers and finds that Mac market share for computers costing $1,000 or more is a commanding 91 percent, up from about 66 percent a year ago.

While Apple sells only two models of Macs below $1,000, the MacBook and the Mac mini, according to NPD the average selling price for a personal computer was $701 in June; $515 for a Windows PC, $1,400 for a Mac. If you believe the aphorism that a business is an entity whose sole purpose is to increase shareholder equity, that’s great, but consumers, especially in difficult economic times, might like a little more for less. That truism also played out over the last few months with Apple.

Mac year-over-year retails sales declined from last November through this April, even as revenue increased. In January and February, PC unit sales were up 16.7 and 22 percent YOY, respectively, while Mac unit sales were down 5.4 and 16.7 percent. The fall in unit sales was likely the rationale for the price drop of the MacBook in late 2008, from $1,099 to $999, as well as this June’s price reduction at WWDC for the MacBook Air, 13″ MacBook Pro, and 15″ MacBook Pro.

What this means for Apple could be argued as one of two diametrically opposed outcomes. On one side, you have the rational assertion that Apple will have a lock on up to about a tenth of the overall market, and that the “race to the bottom” in pricing by companies like Dell was actually off a cliff. Certainly, that seems to be the feeling of the company as expressed by Apple Chief Operating Officer Tim Cook at the latest quarterly conference call.

I would say it differently, really, and maybe I haven’t expressed it well. Our goal is not to build the most computers, it’s to build the best. And we will — whatever price point that we can build the best at, we will play there.

However, the counter to the above argument is that the commoditization of PC and Mac hardware, along with ever-falling PC prices will, ultimately make Microsoft’s latest “bargain hunter” ads a grim reality for the Mac. This theory is also known as: Apple is doomed!

Either way, both scenarios will take years to play out, but in the near term the takeaway is more concrete: don’t buy an iMac unless you have to. According to Apple’s Q3 FY09 report, Mac desktop sales were down 10 percent YOY. This will almost certainly spur a price drop and spec bump for the flagship desktop in the near future, as early as August, no later than October. Who knows, we may even see the Mac mini return to its original price of $499.

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  1. I think the desktop, if not the workstation, is doomed. A respectable price drop on the 24″ ACD (and DVI input… $899, are you kidding me?) would go a long way toward killing it for me, and maybe the whole iMac line if a 20 incher were added.

  2. Jason Harris Friday, July 24, 2009

    I read an opinion article on this which pretty much sums it up:

    Apple is happy with their high margin premium laptops.

    There’s a lot of Apple faithful who want to evangelize a Mac in every home. There are also plenty of people who like being in their own exclusive little club, if you don’t believe me look at any “Should Apple make a netbook thread?”

    Apple is trying to position themselves as a luxury marque in the PC world. You have your glowing white Apple on your laptop at the local coffee shop, and people go “oooo!” and you can sip your latte with pride. Apple goes downmarket, suddenly everyone has them and your $1500 laptop looks basically like the $500 laptop that the guy over there has? Well there goes the appeal of the $1500 laptop.

    The reality is, most people don’t give a damn about OSX vs. Windows, they just want a computer that works. And if Apple dilutes the brand image and compares just based on hardware and cost, they’ll lose every time like the Windows commercials are pointing out.

    Apple is going to stay a premium brand, imo. The closest thing to a downmarket move we’ll see is some sort of super-iPhone. They want to be the Mercedes of PCs, and have made lots of money doing it so far. I see no need for them to change. The only reason people keep buying a C class over a Camry is because the brand image…lose the image, lose your selling power. Same applies to Apple….once the brand stops carrying a premium aura, there isn’t really much of a compelling reason to buy.

  3. Jason Burns Friday, July 24, 2009

    For an interesting perspective on these numbers NPD published, take a look at some research I did on Best Buy and how that figure measures into the overall sales of computers….

    http://www.philoking.com/2009/07/23/a-look-at-stupid-statistics-npds-flawed-view-that-91-percent-of-over-1000-computers-are-apples-means-success/

    Jason

  4. If you can’t afford a Mac, get a better job.

    Even if you dispute the relevance or truth of the domination of the high end PC market by Macs, what can’t be disputed is that Apple makes a TON of money and profit from the Mac. And sales of Macs have gone up.

    Apple is more profitable than Microsoft. For a company which has only 5 percent of the PC Market, Apple makes half of Microsoft’s revenue and profits.

    This means Apple’s strategy of only building the best machines works extremely well.

    In this recession, Microsoft has lost income, but Apple has GAINED income.

    Bottom line: Building the Best Computers and making huge profits on them is Apple’s marching orders.

    What is interesting is that Apple may sell the most expensive gear, but they still sell a lot – even to the poor, who will save and save until they can get an Apple product rather than having to settle for a Windows Box.

    1. lol, if you can’t afford a Mac, get a better job? Sounds like a new slogan if I ever heard one.

      Good to see that “the poor” are even welcome in your exclusive little club if they save up enough.

  5. “…Our goal is not to build the most computers, it’s to build the best.”As I was reading this quote, I was utterly shocked. “To build the best.” To build the best and to charge a lot of money for a high-end notebook computer, Apple is in the dark. Apple uses shared video memory for its notebook lines (yes, no real graphics memory!), never reveals the Intel processor class, and other stuff. For a similar configured PC notebook, Apple is so much more expensive (who buy Apple notebook thinking it is the best are suckers because they are making a nice fat profit for Apple). And you are tied up with Apple propriety softwares etc. Let alone you will have to buy separate adapters to attach other devices to your Apple notebook. Also the battery is inside that notebook. What a cool idea. Let the motherboard heat up and melt components inside. Battery should be attached outside so the heat can escape easier.Oh by the way, Apple is behind in the notebook lines. No HD notebooks. No HDMI connector. And Apple notebook does snot support 720p. But if you think Apple is still cool and it is the best, buy it. And buy the extra adapters too.

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