Monday, November 21, 2005

One Million Windows users switch to Macs!!! - Part II

I had been traveling over the past few days and missed this article in The Red Herring.

Entitled “Apple’s Halo in Doubt”, the article goes a long way in proving my post “One Million Windows Users Switch to Macs!!!” right, and debunking the Mac ‘Halo effect’ myth.

From the article:

Recent analyst reports touting the “halo effect” of Apple’s popular iPod causing a small rise in Apple’s personal computer market share are misguided at best, according to a report from Endpoint Technologies Associates.

The report, issued late Wednesday, contends that Apple’s recent rise from 1.8 percent market share worldwide to 2.5 percent in the second quarter had more to do with how far Apple had fallen rather that any belated halo cast by the iPod.


“No Sherman’s march to the sea here,” said Roger Kay, president of Endpoint. “The argument against the halo effect says that while Apple’s shipments have been up for the past four quarters, it is because they are coming off historic lows. And we are now in an upgrade cycle in which the Apple faithful buy new systems.”


According to the report, Apple’s personal computer market share has fallen steadily from a high of 16 percent in the U.S. market and 13 percent worldwide back in 1986. By the 1990s, Apple had lost some of its shine but it was still a contender as the second-largest player behind IBM with a 10 percent market share.

“In 1993, a surging Compaq took the top spot from IBM, and Apple was bumped to number three. It was pretty much downhill after that,” said Mr. Kay. “Since 2000, Apple’s worldwide share has hovered around 2 percent.”


But Mr. Kay does not believe in Apple’s halo, so he attributes the Mac’s steady decline to “a lack of openness, and a price umbrella, which let the whole PC market squeeze through underneath.”


That lack of openness caused MIT Media Lab to reject Apple’s offer to donate OS X to the consortium developing a $100 PC for buyers in developing countries


According to Mr. Kay, Apple’s market share has shown tiny but steady increases since last year’s third quarter, but these increases were in the fractions of a percentage point.

“Apple’s high is generally in 2Q, based on the weighting of its business portfolio toward education, but overall, it has gained a bit more than half a point since the nadir,” said Mr. Kay.

The timing of Apple’s rise in the personal computer market does not align very well with the launch and growth in popularity of the iPod. The biggest bump in the Mac’s market share happened two years after the initial release of the iPod.

“Not exactly a direct temporal relationship,” said Mr. Kay. “In fact, Apple’s share in PCs actually sank for two years after the iPod launch.”

While the report sees Apple’s halo effect as a bit illusory, it points out that Apple’s recent success is real. Its profits are up, its shareholders are happy, and millions of Mac and iPod enthusiasts love the company and its products. ….

The entire text of the article can be found here.