For nearly every product Apple has produced, going back as far as I can remember, and with one notable exception not likely to be repeated in the future, marketshare seems to be a non-issue with Apple. Depending upon who does the counting, the Mac’s marketshare lingers in the high single digits. The iPhone and iPad are barely double digits. Watch has a strong hold on the smartwatch category, and pulls plenty of revenue from the entire watch industry, but seems not to have caught fire with the masses. Yet. Wherever we look in competing technology industry segments, our favorite Cupertino gadget maker cares not a whim about marketshare and gets very little in return.
Does marketshare matter to Apple?
No. And yes. No, because Apple knows its place in technology life, and it’s not where marketshare is an important metric to running a successful company of Apple’s stature. Yes, because Apple would love to sell more products, but since the target always is the premium end of the product spectrum the company’s executives know that profitshare is far more important than marketshare.
Now, let me take a brief assessment of where Apple’s product line stands relative to industry norms in marketshare, and as much as possible given the restraints of accurate, publicly known data, profitshare.
Again, depending upon who does the counting, the Mac’s marketshare might touch double digits, but the PC industry is on the wane, and thanks to the mobile device revolution, all is not rosy among PC makers, including Apple. Or, is it? Most who count or estimate or guesstimate such numbers point out that Apple’s iconic Mac takes home more than half the entire PC industry’s profits. Increased marketshare might be good for the company as profits would soar, but soaring beyond 50-percent is a challenge. Lower product prices might stimulate demand, but gross profits would be reduced.
Likewise, iPhone and iPad remain the mindshare and profitshare leaders in their respective product segments despite owning barely double digit marketshare. And, again, lower prices might sell more units, but that impacts gross margins and that’s where profits live. Just ask any device maker that competes with Apple products whose financials they would prefer to have; their own? Or, Apple’s?
To Apple, marketshare does matter because there needs to be a sufficient marketshare– in raw numbers– in every product for the company’s premium products to take a larger portion of profitshare.
The same holds true for Watch, Apple TV, Apple Music, iTunes, the iOS and Mac App Stores, and everywhere else where Apple competes with other technology gadget makers or service providers. Raw sales numbers matter, but only to the extent where Apple can maintain the balance it prefers between making a great product which customers love, vs. selling in sufficient numbers that the company can make a desirable profit.
Yes, marketshare matters to Apple, but only to the extent that it drives profitshare.