madison

Apple owns the market on expensive PCs

Erica Ogg CNET News | July 23, 2009 12:07 PM PDT

Summary

According to a new study from NPD, 91 percent of PCs sold for over $1,000 at retail in June was a Mac. Does this fit right into Microsoft's recent ad campaign?

Topics

More good news for Apple this week: if consumers are going to buy an expensive computer, they're choosing the Mac maker.

That's according to the June tally of the PC market from The NPD Group. According to NPD, 91 percent of all computers sold at retail for more than $1,000 were Macs. That marked a slight increase from the 88 percent in May. But Apple officially owns that market, and it appears the price cuts across its MacBook Pro lineup introduced in early June helped. On Tuesday, Apple announced that it sold 13 percent more Macs during April, May, and June of this year than the same period a year ago, despite the recession and price-conscious consumers.

Of course, all the computers Apple sells--with the exception of the $999 white plastic MacBook--are more than $1,000, so they should own that market. NPD's numbers do not include specialty gaming PCs that enthusiasts usually customize and buy online, which can be well over $1,000. But, as NPD analyst Stephen Baker points out, two-thirds of all computers are sold at retail, so the numbers paint a comfortably accurate picture of what's going on in the PC market.

Windows PCs on average sell for much cheaper now because of the increased focus on price point aided by the Netbook phenomenon. The average selling price for a Windows PC at retail in the U.S. was $515, and for Macs it was $1,400.

That would seem to justify Apple COO Tim Cook's comments on his company's earnings call earlier this week, where he pretty much said Apple would never make a Netbook because the company doesn't think it can make a quality notebook for $400 or $500. ("We're going to focus on what we've always done. The Mac has outgrown market in 18 of the last 19 quarters. I think that says that we do have the right approach.")

Or do they?

While Apple's overall business is indeed humming along, NPD's Baker thinks that based on the data, it's not sustainable for the Mac business to refuse to go lower than $999.

"Regardless of the value proposition, the trend in consumers is they want to spend less money. But Apple is gaining more and more share in a segment ($1,000-plus) that is not likely to grow," he said.

Until the cheaper MacBook Pros came out in June, retail data in the U.S. showed Apple notebook sales growth was actually declining from February through May, which helps explain the price cuts.

But Baker believes that even if Apple doesn't do a Netbook, "sooner rather than later" Apple will need to come down to $799 for its lowest-end notebook if it wants to continue to grow its market share. And, he says, there's precedent at Apple in this area.

"They know how to do this...with the iPod, they continually cannibalized themselves, strategically bringing out new (iPod models) to cover all relevant price points," he said, referring to the expansion from the early iPod Classic to the inexpensive iPod Shuffle. "They're very, very good at this."

This article was originally posted on CNET News.

Talkback Most Recent of 102 Talkback(s)

  • 91% of a market?
    91 percent of all computers sold at retail for more than $1,000 were Macs.

    Windows has less marketshare than that and they are a monopoly. I guess that means Apple now has a monopoly on PCs over $1,000! I know that when I went to buy a laptop in the $1,500 range, I had no choice but the MBP so that is what I had to buy.
    ZDNet Gravatar
    NonZealot
    23rd Jul 2009
  • Also implies one other FACT
    91% of all computers over $1,000 do not come with Windows on it, have not had a Windows tax paid on it, AND CANNOT BE PURCHASED WITH ANYTHING OTHER THAN OS X, SAFARI, AND ITUNES PRE-INSTALLED ON IT.

    Just saying.
    ZDNet Gravatar
    NonZealot
    23rd Jul 2009
  • You're such a loon you respond to yourself...
    Look in the mirror and ask yourself what's your
    problem? Maybe you need a job, or a new job, but
    a least get a life.

    http://www.nytimes.com/2009/07/24/technology/comp
    anies/24soft.html?ref=technology
    ZDNet Gravatar
    GoPower
    23rd Jul 2009
  • The actual FACT...
    ...is that you evidently haven't got a clue what you are talking about.
    Are you implying that Apple are an abusive monopoly? Are you implying
    that Apple are acting in an anti-competitive manner? the truth is the
    YOU FAIL TO GRASP WHAT A MONOPOLY ACTUALLY IS. YOU
    ALSO FAIL TO UNDERSTAND WHAT 'UNLAWFULLY LEVERAGING
    A DOMINANT MARKET POSITION' MEANS.
    Had Apple acted as
    you have insinuated, the others would have already complained. Go to
    the OECD website and look up 'Monopoly' and 'Anti-trust'.
    ZDNet Gravatar
    SimonUK2
    23rd Jul 2009
  • Yes
    How is Apple doing anything different that Microsoft was? Honestly. If you want their OS you HAVE to buy their computer brand. They install ALL their software on the machine and you have no choice not to have it on there. So basically what you are saying is Microsoft should make or contract out someone to make a Microsoft Computer Brand and then they would not be considered a monopoly and the only difference would Microsoft would allow other brands to install their OS on their computers. I mean Apple doesn't make computers anymore seeing as they use the same hardware as other computers (essentially). Intel Chip, Intel Chipset, NVidia or ATI GPU, same manufacturers of DDRx Ram. Right? Throw it all in a shiny case and put an apple logo on it doesn't make it unique in anyway.
    ZDNet Gravatar
    bobiroc
    23rd Jul 2009
  • Like the choice I have if I buy an Acer?
    For that matter, I have an extremely restricted choice if I buy from Dell
    or HP. For clarity, here's the mistake you, NZ, and the others, Apple
    don't really compete with in term of selling computers, especially
    given that Microsoft do not sell computers. Apple compete with
    Dell, Toshiba, HP, Sony et al. You are at liberty to install whatever
    you like onto the Apple hardware. When they made Macs with
    PowerPC's, The choice was limited to OS X and a few Linux flavours.
    When they switched to Intel, this option opened up somewhat. I guess
    that you are implying that Apple are an abusive monopoly because
    they only allow OS X to run on their hardware. This has always
    been the case. How is it any different now that they use Intel produced
    processors to when they used IBM/Motorola produced processors? Is
    your DVD manufacturer behaving in the same way as it is only sold
    with their firmware on it? What about Sony, Microsoft and Nintendo
    with their games consoles? Ultimately if you don't like Mac's, don't buy
    one. It's a ridiculously simple concept...
    ZDNet Gravatar
    SimonUK2
    24th Jul 2009
  • The difference
    The difference between Apple and Microsoft with respect to antitrust
    and monopoly maintenance is simple and obvious. It has nothing to
    do with the hardware and OS, it has everything to do with licensing.
    Microsoft is prepared to openly license it's OS to all comers and
    presumes to be the one OS that binds all hardware. Apple makes its
    own hardware and OS and choses not to license either openly.
    Microsoft has gotten into trouble with antitrust legislation because of
    their open licensing policy and their preparedness to abuse the power
    that the open licensing gives them to restrict or impair competition.
    These abuses have been well documented in several court cases in
    more than one continent. Apple can't run afoul of these same antitrust
    abuses and they don't obstruct or hinder any competition because
    they don't openly license! When are you people going to start getting
    this!
    ZDNet Gravatar
    Len Rooney
    24th Jul 2009
  • Wanna try that again...?
    Apple makes its own hardware and OS and choses not to license either openly.

    Apple doesn't make diddly squat - except for the OS.

    Apple buys off the shelf components just like everybody else.

    Apple uses factories in China to assemble them - just like like everybody else.
    ZDNet Gravatar
    Wolfie2K3
    25th Jul 2009
  • And you must know what you are talking about...
    .. because you PUT IT ALL IN BOLD AND CAPITAL LETTERS! Wow, didn't that really teach us all a lesson.
    ZDNet Gravatar
    cornpie
    23rd Jul 2009
  • *sigh*
    Read the NZ original post. I was mocking him.
    ZDNet Gravatar
    SimonUK2
    24th Jul 2009
  • Abusive Monopoly
    Define an abusive monopoly, using your own words and then demonstrate in your own words, in your own style how that applies to MS.

    ...and don't post a bunch of links, make a case if you have such facts and are big enough to back up your obvious assertions.
    ZDNet Gravatar
    Raid6
    23rd Jul 2009
  • Right
    A monopoly is not a matter of opinion. IT IS A MATTER OF FACT.
    The OECD (Organisation for Economic Co-operation and Development) is
    a respected international economic advisory. Their definition of a
    Monopoly and of what anti-trust means will be far more reliable than
    most other sources.
    ZDNet Gravatar
    SimonUK2
    24th Jul 2009
  • Ignoring a huge portion of said market
    And that are the do-it-yourselfers as well as boutique OEMs - all of which are high end (easily over $1000) PCs and are ENTIRELY Windows based - not even Linux here since this community cares about performance gaming and the like. SOOO these numbers mean absolutely (insert like from MIB where K tells J what his skills mean).

    A more accurate subject would have been Apple owns RETAIL OUTLET market on expensive PCs. People who spend that much money on a PC usually know what they need, why they need it - and hence know how to get it cheaper by building it themselves. In fact, how about some numbers on NewEgg sales of bare-bone systems over $1000 - that would at least give SOME indication in the right direction.

    "The views expressed here are mine and do not reflect the official opinion of my employer or the organization through which the Internet was accessed."

    ZDNet Gravatar
    gnesterenko
    23rd Jul 2009
  • We would have to see volumes
    And that are the do-it-yourselfers as well as boutique OEMs - all of which are high end (easily over $1000) PCs and are ENTIRELY Windows based - not even Linux here since this community cares about performance gaming and the like.

    We would have to see volumes for sure but I would be very surprised if this was a substantial number. It could be and I don't have numbers to prove my hunch that DIYers and boutique OEMs make up a small fraction of $1,000+ sales.
    ZDNet Gravatar
    NonZealot
    23rd Jul 2009
  • Straight from the J Goebbel's School of Propaganda
    You bought a laptop over $1500?

    When pigs fly or you are a major liar.

    BTW, BMW has a monopoly in the market of sports luxury vehicles made
    in the suburbs of Munich.

    Let's take them to court!!!
    ZDNet Gravatar
    mlindl
    24th Jul 2009

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