Apple's PCs make gains, but not in corporate world

Apple - they're the iPod company, right? And they also make that new iPhone thing. Yes, and they make computers too, even though it sometimes seems as though everyone has forgotten about that part of the company's business.

Overlooked or not, the Macintosh line of desktops and notebooks still accounts for more than 50 per cent of Apple's revenue (although most analysts expect combined iPod and iPhone sales to eclipse Mac sales soon).

In other words, the Mac is still a big part of Apple's business. And while shipments have been growing faster than the overall PC market - meaning Apple is increasing its market share - the gains have been fairly slim.

Ever since the iPod came to dominate the portable music player market, analysts have talked about the "halo effect," a term used to describe the expected boost in Mac sales as a result of consumer interest in the iPod. If people liked Apple's music player, the theory went, then eventually some of them would want the same kind of experience on their PC - the ease of use, the well-designed interface, etc. - and switch to using a Mac.

The move to Intel processors, which replaced the Motorola chips Apple previously used, was also seen by some as boosting the company's appeal, since it would allow developers to produce Apple software more easily.

The past year or two has shown some evidence of a potential halo effect: Mac shipments rose by 17 per cent in 2006, substantially higher than the overall industry growth rate of about 9 per cent. And in the second quarter of this year, Mac shipments climbed by more than 36 per cent.

The result is that Apple has definitely increased its market share - although how much it has grown depends on whose figures you use, and whether the survey looked at the consumer market or the corporate market, the U.S. versus the world, and/or sales versus shipments to retailers.

According to market researcher IDC, Apple's retail market share in 2006 was a little over 6 per cent. Analysts at Gartner, however, said that in the second quarter of this year, Apple accounted for only 2.5 per cent of the PCs sold (Hewlett-Packard's market share was given as 18 per cent and Dell's was 15 per cent).

In a recent New York Times article, a U.S. consulting firm called Endpoint Technologies said worldwide market share for the Mac stood at just 3 per cent as of June, 2007. In 1984, the company's market share was close to 14 per cent.

The author of the Times piece, a business professor at San Jose State University, argued Apple is missing out on an opportunity to boost sales by not taking advantage of the lacklustre reception Microsoft's new Vista operating system has been getting from consumers.

There are two main reasons why Apple's market share may not be increasing as quickly as it might like, or as quickly as the halo effect might seem to indicate. One is that - as the Times article argued - the company has only recently started to expand its retail presence, and therefore can't take full advantage of the demand for Macs that might exist.

The other factor is that the consumer market - the segment where the halo effect occurs - is only part of the overall PC business. When it comes to overall sales, the corporate market is even more important than the consumer segment, and it is a place where Apple has failed to make much headway. While ease of use has helped Apple dominate in schools and small businesses (particularly those that involve graphics in some way), larger companies and corporate IT departments have not embraced the firm's products.

In part, that's because Macintoshes tend to be more expensive than similar no-name PCs, and also because many network administrators don't want to manage a mixed bag of PCs and Apple computers. Using "virtualization" software that allows Macs to run Windows has helped this somewhat, but many companies remain unsure about whether to adopt Macs or not.

While clearly the king of mobile music, in other words, Apple still has work to do to get its PC market share out of the low single-digits.