Apple's Marketshare

It’s easy to make fun of Apple for having such a small share of the computer market -- I’ve done it myself a few times -- but when you look at revenues and profits, it becomes clear that Apple is not only wildly successful, but arguably more successful than many of its competitors, especially considering its market share:

From Can Apple Take Microsoft in the Battle for the Desktop?:

Quoting RDM:

While Apple is cited by Gartner and IDC as selling around 5% of all the computers in the US, it isn’t obvious that Apple’s 5% share is the cream of the market; it’s actually worth more than the same or larger percentage of shares held by rivals.

There were 9.8 million Macs sold in the last two years, up from 6.2 million in the previous two year period. Those numbers don’t compare with the stunning volume of PCs shipped by HP and Dell--which each sold 38 million PCs in 2006 alone--but Apple’s profits do.

In the forth quarter of last year, HP and Dell combined sold 10 times as many PCs as Apple in the US, earned 5.5 times as much revenue as Apple, but together only ended up with 2.2 times as much net income as Apple.

In other words, Apple earned nearly half as much net income with its 5% share of the market as HP and Dell together, with their combined 55% share of the US PC market: $1 billion for Apple vs $2.2 billion for HP and Dell together!

From Market Share vs Installed Base: iPod vs Zune, Mac vs PC:

Quoting RDM:

In the final quarter of 2006, Apple earned $7.1 billion in revenue, compared to Microsoft’s $12.5 billion in total revenue. Yes, that’s right, Apple brought in more than half as much money as Microsoft, despite Windows owning 98% of the PC market.

Even stripping Apple of its iPod revenues, which PC pundits love to do, the company still earned $4.4 billion on its Macintosh business, over a third as much as Microsoft brought in from its entire Windows, Office, and server operations combined. Apple’s 2% of the PC market doesn’t seem so small anymore.

Of course, Microsoft actually lost a lot of money on all of its consumer electronics products, so looking at profits, Apple earned $1 billion compared to Microsoft’s total $3.4 billion in profit.