The Joy that is Mac, Will 3% Market Share End It?

As I was sitting on an airplane yesterday returning from a long business trip to the West Coast I began contemplating the 3 per cent market share issue addressed Monday by Gene Steinberg on his MacNightowl. Gene is a well-known newsprint writer and the author of one of the first books on Mac OS X which I look forward to reading. He made some points that got me to pondering why I have chosen to use Macs, why I surreptitiously promote Macs to all acquaintances and how long will I be able to do so?

Gene's 3 percent referenced Apple's market share of annual sales as published in Fortune that show Apple's percentage declining from 5.2 in 1996, the year that Steve Jobs reclaimed Apple's helm, to 3.2, 3.2, 3.3 and 2.8 during 1997-2000. These figures are as disturbing to me as they should be to any Mac user. While Apple has not disputed the annual sales share figures, Steve Jobs has often cited an installed base share of 5 per cent--the two are not measures of the same type of market share. Fortune's figures may not be true but if they are, Apple's annual sales market share has at best stayed level under Steve Jobs even with the large number of new Mac users attracted by the iMac. I am surprised that Apple may have only kept even with the global growth in personal computing over the past four years. I had thought (hoped?) that Apple had been gaining in market share (annual sales and installed base) even if slowly.

I have always enjoyed computing. As personal computing technology developed from calculators to personal computers I settled on the Lisa followed by a continuous series of Macs because they have been a joy to use. They have allowed me to compute the most effortlessly of all alternatives, they have done things that others did not, they have almost never broken, their design has stood out and they have instilled a sense of admiration in me for the engineering genius that created their elegant simplicity. Macs are a joy. The only sorrow associated with Macs is the conundrum that so few have chosen to share this joy. If Apple's market share is headed south, how long will the Joy of Mac last? But is it headed south?

Fortunately, Apple is profitable, has a lot of cash, is continuing to produce new and innovative computers at reasonable prices, is putting its best foot forward to consumers with the new Apple Stores and has just released the best personal computing operating system ever in Mac OS X. In addition, Apple's vision is that Apple's computers will continue to develop as centerpieces of a digital world.

Steve Jobs has often stated that Apple is the only computer company that controls the entire computing experience and Apple is carefully insuring the software component of that experience, the component that is most threatened with a low market share. In addition to Mac OS X, Apple has the top crossplatform database application in Filemaker Pro, the top consumer digital video application in iMovie, arguably the top professional digital video application in Final Cut Pro, the top consumer MP3 and CD burning software in iTunes and Disc Burner, the top education adminstration software and very soon the top consumer office suite in AppleWorks. Of these, only AppleWorks has yet to reach its full potential but Apple is working on it diligently. Did anyone notice that the beta Mac OS X version added intrinsic MacLinkPlus file translation? Also in development at Apple is what I believe will be the best consumer email application, Mac OS X Mail. Notably absent is an Apple web browser but third party browsers like OmniWeb, iCab and Opera are coming along for Mac OS X and both Netscape 4.77 and Internet Explorer 5 work great in Classic.

Apple's health will still depend on the products from major software developers like Adobe and Microsoft for the forseeable future and neither is likely to abandon the profitable business they have in Mac applications any time soon. In addition, Apple continues to take all the right steps to make game development for Macs profitable.

The bottom line is that 3 per cent of current sales market share and 5 per cent of the installed base share doesn't concern me at all. Apple has kept up with the growth in personal computing, Apple is healthy, Apple is taking steps to ensure its essential software base, Apple is ensuring the most positive retail experience possible and Apple is pushing the personal computing envelope in exciting design and killer engineering.

The glass is only 5 percent full, not 95 per cent empty.

Comments are welcome.

- Bill Fox, Editor in Chief

[Note: The second paragraph was edited for clarity after posting.]