Taking Back the Market

Did Apple Just Double Its Market Share?

Tim Nash - 2010.07.26

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Apple sold 3.47 million Macs and 3.27 million iPads worldwide in the June quarter, for what should be 8.0% of the PC market (compared to 3.5% in the March quarter). According to Mikako Kitagawa, Principal Analyst, Gartner, "The consumer PC market registered double-digit shipment growth, but consumer mobile shipment growth slowed. This was due in part to slower growth of mini-notebooks," and "surging popularity of Apple's iPad temporarily cannibalized mini-notebooks, as well as consumer notebook sales to some degree".

In other words, analysts - as well as many buyers - look on the iPad as replacing another mobile computer. Yet the iPad is excluded from PC sales figures, which, according to IDC, include "Desktops, Portables, Mini Notebooks and do not include handhelds and x86 Servers". IDC currently classifies the iPad as a "media tablet", not a tablet PC.

Calling the iPad with its 9.7" screen and 1.5 pounds a handheld is a bit of a stretch, which is why Apple's ads and the Steve Jobs keynote had everyone sitting comfortably or lazing while "touching". How Web consumers use the iPad differs little from how they would have used a laptop or netbook.

Pricing too - $499 to $829 - is in the Windows laptop range.

There is no good reason to exclude the iPad from PC sales reports.

If the iPad Is a PC...

If we take a generous view, this exclusion is temporary while Gartner and IDC find a way to get sufficiently accurate results to analyze and make predictions - and while PC manufacturers prepare their "iPad killers". The iPad is still available in only a few countries, and the main screen supplier, LG, doesn't expect to catch up with production until next year, so supply won't match demand until then.

However, since a substantial part of Gartner and IDC revenue comes from market analysis and selling reports, keeping tablets as a separate category helps their bottom line. Will this make these quarterly updates the kind of report that PC manufacturers don't want to pay for?

It's disruption time again. It's bad enough that Apple adds a little to its PC market share quarter by quarter by selling those highly profitable $1,000-plus computers, but seeing Apple double market share in a single quarter by selling tablets - a type of computer that Bill Gates publicised as the future so many years ago - could make shareholders question management's competence. All PC manufacturers are under pressure to respond effectively, but until they can, they can hope that this little problem doesn't get too visible.

Apple's Worldwide Market Share

When iPad sales are added in, Apple moves from the "others" category and takes fifth place worldwide from Asus and Toshiba, as they each sold around 2.5 million less PCs. Using Gartner estimates for worldwide PC sales for the June quarter with Apple's Mac plus iPad figures from last week:

Company	PCs shipped (in thousands)	Market share
HP	14,455.2	17.2%
Acer	10,796.0	12.8%
Dell	10,283.2	12.2%
Lenovo	8,310.8	9.9%
Apple	6,742.0	8.0%
Total incl. iPads	84,137.2

Apple at Home

The change to the US figures is even more marked. The US had a full quarter of iPad sales and passed the million unit mark a month before it went on sale elsewhere. On May 28, it was launched in another nine countries and sales passed 2 million. If only half of the sales after that first million were in America, Apple had US sales of 2.1 million iPads and moves up from fourth place just above Toshiba to a strong thirrd place, a million behind HP.

IDC US Sales Estimates Adjusted for iPads

Previous market share in parentheses.

Company	PCs shipped (in thousands)	Market share
HP	4,721	23.1% (25.7%)
Dell	4,408	21.5% (24.4%)
Apple	3,718	18.2% (8.6%)
Acer	2,028	9.9% (11.0%)
Toshiba	1,560	7.6% (8.5%)
Total incl. iPads	84,137.2

For the September quarter, Apple has given a revenue estimate of $18bn, and its estimates are nearly always low. This increase of at least $2.3bn will come from increased sales for the iPhone 4, iPad, and the back-to-school Mac promotion, which has always been most successful in America.

If sales go at least as well as Apple expects, it should be challenging Dell and HP for first place in the US, something that hasn't happened since the IBM's PCs outsold the Apple II.*

* Or ever. Even in the early days of personal computing, Apple was never the biggest player in the market. dk

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Tim Nash is a Director of WattWenn which has a new approach to scheduling the production of TV and movies to make the most of budgets. The views in this article are his own and are prejudiced from spending more years working for computer companies than he cares to remember.

Tim lives with his wife, her website on the area ariege.com, two daughters, a cat, and a dog in the French Pyrenees. He lapsed for a while after the Apple II, but became a Mac fan when his wife introduced him to the Macintosh IIsi. If you find his articles helpful, please consider making a donation to his tip jar.

Recent Taking Back the Market columns

Succeeding Steve Jobs at Apple: The Moneyball Approach, 2011.08.25. Repost from 2009: Steve Jobs saved Apple and has a great team in place. It may never be necessary for him to come back as CEO.
Not Even the Numbers Look Good for Android, 2011.08.19. Android makes a big deal out of 500,000 activations per day, but success makes Android a big target.
In an iPad World, Intel Could Displace ARM with a New CPU, 2011.05.31. With Windows and x86 in decline and the handheld market exploding, a whole new Intel CPU optimized for tablets and smartphones could create a bright future.
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