The Mac Market Share Myth

April 28, 2004
John Koetsier
news

The conventional market share myth in the Macintosh world is simple.

BMW only has a small fraction of the automobile marketplace, the Mac user may say, but no-one says that BMW is doomed, beleaguered, shrinking, dying, etc. etc. insert adjective of choice. Therefore Apple is safe as well, even if it is a niche product.

Well, I’m a long-term Mac user, devotee, and fan, but that’s not the Mac Market Share Myth. The real market share myth is that market share is not important.

Jobs and company have a few facts in their corner when they claim that market share is not important. One is the increasing importance of both standards and the internet. As long as the Mac supports certain standards, and works well on the net, the Mac user is an equal digital citizen.

Well, that’s partially true. But it’s not the whole story.

After all, BMWs don’t require the afficionado to drive on a separate road system to use their vehicle. They don’t have to use special gas that can only be bought from special service stations, usually hundreds of kilometres apart. They don’t have windsheilds with unique optics that make it difficult to see the road signs and posted speed limits.

In short, once you’ve bought the BMW, you head out on the road and it plays nice in the world. In fact, if you continue the analogy, any particular BMW vehicle is actually just an application for the huge distributed operating system known as The Road System.

The point is clear: operating systems, even operating systems as wonderful and excellent and beautiful as Mac OS X, are only part of the story. The rest of the story – and the bigger part of the story – is applications. And applications require developers.

A number of things will draw developers to an operating system, or platform. Technical excellence, philosophical foundations, emotional reasons, licensing and legal environment, development tools, and ease of development are just some of the reasons.

But the only reason that is absolutely guaranteed to draw developers to your platform is CUSTOMERS. And customers, it should be obvious, are a direct function of MARKET SHARE.

Market share for the Mac matters. It matters a lot. And the Mac will die, or drift off and become a pathetic hobbyist tool like the Amiga operating system, if Apple doesn’t really recognize the problem, see the solutions (there will be more than one) and act on it as quickly and decisively as possible.

There are several things Apple can do that would have immediate impact on market share. Tomorrow I’ll talk about one of them.

14 CommentsLeave a comment

  • Seems Apple’s music and video applications trump the competition, particularly the overpriced bloated ones. There’s less competition in Mac software (except from Apple) and a decent enough market size. There’s also ways of facilitating the porting of software for Macs. Methinks that rumors of Apple’s frailty are exaggerated.

  • You make an excellent point. I am hoping that the fact that it is allegedly much easier to code for the Mac (because of XCode and other tools) will make up for some of the marketshare differential. Also, OSX’s UNIX lineage makes UNIX ports to Mac easier than to Windows (and lesss like “slumming” for the applications involved 🙂 ).

  • I agree with everything in this article, up until this statement:

    “But the only reason that is absolutely guaranteed to draw developers to your platform is CUSTOMERS. And customers, it should be obvious, are a direct function of MARKET SHARE”.

    No, you’ve got it wrong. Customers are a direct function of ‘number of active users, or installed base’, not ‘market share’.

    Market share = number of people who bought a particular brand of NEW computer in a given time period. This has little or no bearing on whether a developer will develop for a computer.

    Number of active users, or installed base = the number of people who use a particular computer right now, and therefore are potential purchasers of your product. This has everything to do with whether a developer will develop for a computer.

    Mac’s ‘market share’ is dependant on the relationship between how many computers Apple sell, compared to the number of computers all the other manufacturers sell. If Apple’s sales figures stayed exactly where they are, and their competitors sales figures go up, then the Mac’s market share will look as if it is going down, when actually the number of active users either stays the same or goes up.

    Developers know the difference between ‘market share’ and ‘active user base’, the problem is, is like the mhz myth, the buying public haven’t got time for the detail, and latch onto meaningless numbers to quickly make a decision or to reinforce their choice.

    “Mac’s only run upto 2ghz, and this Dell runs at 3.2ghz, it must be faster!”

    Is the same incorrect statement as:

    “Mac’s market share is only 2.7%, and Dell’s is 35%, therefore the Mac is dying.”

    This article is discussing the possibility that developers will leave the platform if not enough users use it. To measure this use via ‘market share’ is a flawed arguement. As long as Apple can show developers the number of active users is rising (which it is, as long as they keep maintaining or beating their own sales figures, which they are), then developers will continue to develop for the Mac.

  • Hmmm … I think your point is probably valid. But I think it’s also a very fine line between market share and active user base.

    A platform that has a big user base but over time a very small market share will eventually have a smaller user base … simply through attrition.

    And even if it isn’t smaller, it’s PROPORTIONALLY smaller, meaning it will get less attention from developers.

    At least, IMHO.

    😉

  • Um, as usual with analogies, yours is bad. Does the BMW require BMW parts? Are you supposed to use standard but higher-octane gasoline? Do you need to buy tires that fit?

    The Mac uses the same networking protocols as the rest of the world, it uses much of the same data file types (html, PDF, MS Office, and much more). The Internet and data formats are much more fitting with your “road and fuel” analogy than applications.

    In other words, the Mac travels the same roads and uses standard fuel – it just requires compatible parts, just like anything else does.

    Nice try.

  • one more factor in the market share is…
    average lifespan before a user replaces a computer… this is about 5 years for the “average mac user”
    and about 2 years for the “average PC user”
    the active installed base of Mac Users world wide is about the same as the population of Canada
    now some of them are still using Mac OS 9 and earlier, but the ones upgrading their systems more often
    are the ones more likely to spend money on new software, and so are the target for Developers.

    not all the additional info that could be presented, but it at least gives something more to think about

  • I agree with some of your points, but respectfully disagree with others. There are something like 30 MILLION Mac users world wide, and that is a huge market for any developer. If you put out a good product, Mac users will respond, which is why Adobe revealed that about 25% of their sales go to people with Mac systems.

    You see, there’s an old saying “practice makes perfect.” This is untrue. It should be “perfect practice yields perfection.” Likewise, more developers mean more products is irrelevant. The Mac market does not need more developers. It needs more great developers. I would rather have 10 great new products than 100 pieces of garbage, wouldn’t you? And indeed, that is the nature of the Mac market.

    Years ago, Corel made some really second rate applications. They also tried to pawn off some horrible, low-quality licence-free photography. The Mac market avoided them like the plague, but the Windows market, always thinking that “more cheaper” means better, flocked to the products, giving Corel some success. Later, Corel tried to return to the Mac market and Mac users still avoided them. The result: Corel (or whomever owned them by this time) couldn’t blame their crap for their failure. Instead, they blamed the “small” Mac market.

    Balony. Give Mac users a quality product at a fair price and Mac users will flock to it. People who type letters or crunch numbers could use a cheap typewriter or a calculator. But people who need quality–professional musicians, filmmakers, graphics professionals, publishers, etc.–flock to the Mac.

    Thirty million users is a huge market! Let those who are prepared to offer crap, beware! You won’t find many Mac adopters of that 30 million. Those who want to produce elegance and quality, be prepared for massive sales.

    However, the computer games market it enormous for Windows and almost non-existant for the Mac. So if you want to spend $2500 to get a super Windows machine in order to play Doom, go ahead. Or spend $200 and get a PS2 with better games.

  • I agree that the most market share figures quoted in the press refer to the past quarter or year. It also depends on whether it’s the market share in the US or worldwide; desktop vs. laptop; retail vs. direct sales.

    Unfortunately, if your market share is 3-5% for many years in a row, as Apple’s has been, then your installed base share ends up being 3-5% as well. Even Apple acknowledges this. In January, Apple said it had about 10 million OS X users and that this is 40% of the installed base, which translates to a 25 million installed base. Maybe by now it’s up to 30 million, although for most developers only OS X users count.

    When you consider there are 100 million new Wintel PCs sold each year, Apple’s installed base is still small (even allowing for longer Mac lifespan, OS 8/9 users, etc).

  • No doubt Apple could gain from more market share. But see what you think of this angle…

    It’s true that Apple doesn’t offer developers as many potential customers for their apps as does the Windows world, but nor do Apple developers have to compete against as many developers as do Windows developers. So perhaps it’s good to be one of two or three developers offering software-that-does-X to 10 million OS X users rather than one of a dozen developers offering it to 300 million Windows users?

  • Corel. Buffet-in-a-pig-trough-quality software. Why won’t they make sw that Mac users might buy – like WP? There’s a Linux version.

    And of all the people that I know that own WinPCs, none of them actually pay for commercial software. That’s right, none! How do these people make more money than Mac developers?

  • I agree that if Apple’s market share carries on at 3-5%, in the longer term, that is what it will become in terms of user base, but my arguement is there’s a problem is the way in which that 3-5% figure is calculated, and developers don’t use this figure anyway.
    This figure is based on total computer sales, for all business types. If you create a page layout product, you are not selling to all business types you are selling just to designers. So the 3-5% figure is irrelevant. You need to look more closely at what platform your customers use and the specific market share for that customer. I heard that Adobe’s Mac customers market share is 51%.

    A developer won’t simply take the 3-5% and assume that’s the percentage of Mac users compared to Windows users who will buy their product. They look at their specific market and judge how many potential Mac & Windows customers their are and arrive at a real percentage.