Linked by Thom Holwerda on Sat 10th Dec 2005 17:37 UTC, submitted by Dark_Knight
Apple The company expressed concern that to the extent its minority market share has caused software developers to question Apple's prospects in the PC space, developers could be less inclined to develop software for Apple products, and instead feel more inclined to devote their resources to developing software for the larger Windows market or growing Linux market. Here is the 10-K form in question.
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Apple's choice
by thebluesgnr on Sun 11th Dec 2005 00:17 UTC
thebluesgnr
Member since:
2005-11-14

Apple's marketshare is small because they want to. There's nothing wrong with that; they choose to sell less computers but be more profitable than say, Dell.

Unless they expected Microsoft to rule the other 95% of the market forever (and I'm starting to think that's exactly what they want) they had to know this was coming.

Reply Score: -2

RE: Apple's choice
by alcibiades on Sun 11th Dec 2005 08:32 in reply to "Apple's choice"
alcibiades Member since:
2005-10-12

Apple's marketshare is small because they want to. There's nothing wrong with that; they choose to sell less computers but be more profitable than say, Dell.

Unless they expected Microsoft to rule the other 95% of the market forever (and I'm starting to think that's exactly what they want) they had to know this was coming.


Don't know why this is marked down to -2. If you read Michael Porter, you see that profitability as a function of market share is U shaped. You have high profitability at very low share, and high profitability at very high share. It happens for different reasons. In the low share segment, you have high pricing power and a niche customer base. At the high end, you are down the experience curve and have economies of scale. It is when you are in the middle that you suffer. As he says, not differentiated but different.

So as a matter of business strategy, it is perfectly rational to choose a niche and stay with it, and it may well be that this gives a better risk adjusted return on shareholder funds than trying to go up the market share curve.

Because the risk is, you won't get all the way there.

The difficulty in the present context is that the Apple people applaud the results of the strategy - niche volumes, high profits, while not being willing to admit explicitly what it actually is. So they get into all kinds of intellectual contortions about what is a threat to what, Apple on the corporate desktop and so on.

Lets be clear: this strategy means that OSX cannot be a threat to Windows, and probably cannot have much or any effect on Linux takeup.

Reply Parent Score: 1