Schmarket share

According to IDC, Apple is now among the top five computer manufacturers in the world, and poised to crack into the top four – it’s right behind Acer, breathing down the neck of Dell, but still a fair way short of HP and Lenovo. It’s been a while since the Mac maker has enjoyed such rarefied company, and a few questions leap to mind.

Are Macs a bigger target for hackers now?

Does Apple need to rely on a broader channel than its own stores to serve a larger market?

Does any of it actually matter?

The answers are yes, yes, and no.

The Mac has been a bigger target for malware authors for some time now, partly as a result of growing market penetration and partly as a result of comparatively naive Mac users not realising that their computers were not magically invulnerable.

You’d be hard-pressed to find a Windows user without security software installed on their machine, but some Mac users still refuse to install anti-virus, as if this is some kind of article of faith.

That makes them an easy, if still comparatively small, target.

The big money’s in phishing these days anyway, so most attacks are platform-independent.

As for the channel, yes, it’s fairly obvious that Apple can’t maintain its end-to-end control of distribution and service to the extent that it has in recent years. It’s going to be more dependent on third parties.

In Australia, this will be interesting to watch, as service centres that have been squeezed out by Apple’s increasing grip on its own channel are gradually drawn back in. 

But the thing is, share of the ‘computer’ market – laptops and desktops – is less and less relevant these days. Tablets and mobiles are where it’s at and where it’s going, and I’ll bet Acer, Dell, HP and Lenovo are not the companies you think of in that space. It’s unlikely, I think, that Tim Cook is spending time and effort wondering how he’ll beat Dell.

Apple’s most recent quarterly earnings report showed a profit of over US$18 billion. For the quarter. No other listed company has ever done that.

By contrast, Dell’s most recent quarterly statement (Q2 2014, before it delisted and stopped issuing them) said it made US$14.5 billion in total revenue. US$272 million in profits – roughly what Cook would get if he checked his sofa cushions.

You think Tim Cook is thinking a lot about Dell?

(In reality he probably is – companies in trouble can make comebacks, as Apple has proven. But market share numbers don’t tell the story of the health of the company.)

Apple has long pursued a strategy of profit ahead of market share. While iOS lags Android in the mobile space and OS X is still well short of Windows in desktops and laptops, Apple is massively more profitable than any other company in either market.

And it’s not just profitability. As mentioned, iOS lags behind Android in terms of the number of devices using each platform, but according to research firm SendGrid, 54 percent of emails opened on a mobile device in the UK are opened on an iPhone or iPad. Only eight percent are opened on Android devices. It’s a trend that’s observable in other geographies too.

The Apple faithful have long lived by the credo that “market share doesn’t matter” – it was all they had to cling to when Apple’s market share was an asterisk. And when Apple’s profitability was written in red it was a plaintive credo indeed. Now that Apple’s share and profitability are both surging, it has an air of braggadocio about it. Market share is not a problem.

What is a problem is maintaining it. Apple has a market capitalisation over US$700 billion, and that’s uncharted territory. The market is betting heavily on growth – and Apple has to deliver. Apple’s making more money than any other company in tech. It seems unlikely it can continue to grow within the confines of tech. It’s making the kind of revenue car companies make.

Hey, there’s a thought…

Matthew JC Powell is a technology commentator, philosopher and father of two, in no particular order