Mini Mostly Meaningless for Mac Market Share

There is a heady feeling floating around the Mac community these days. Mac aficionados are certain the Macintosh platform will shortly undergo a market share renaissance. They will point to the recent introduction of the Mac Mini, the subsequent great press the Mini has generated and increased awareness of Apple in general thanks to the iPod and iTunes. Unfortunately for the faithful all the aforementioned factors add up to a great big pile of nothing. Sure the accolades and heightened awareness are nice but when it comes to market share only one thing matters: getting systems out of the door.

Before delving into the near irrelevancy of the Mini a few points need to be addressed. First the Mac Mini is a fairly great computer. Careful readers will hear a lot of whining about this specification or the cost of that option. Ignore these groans, they stem from professional malcontents who wouldn’t be happy if Apple sold a dual G5 3GHz model for fifty cents (it would probably be too hot or something). Truth be told the vast majority of Macs in use today are no match for the Mini Mac and a lot of people are doing just fine with their older Macs.

The second issue that needs to be examined is the notion that market share is somehow critical to the health of Apple Computer. To some extent market share is crucial, after all a market share of zero is the same as finding your goldfish swimming upside down. On the other hand even with the current anemic market share Macs don’t suffer for lack of available programs or a dearth of developers. By way of example: most shareware developers will tell you that it is much easier to make money producing shareware programs for the Mac instead of Windows. More importantly Apple Computer was making healthy profits before the Mini (and before the iPod and iTunes). Profits speak louder than worried mumbles about low market share. In short: It is not necessary for Apple to gain substantial market share to remain in business. 

So now we are left with two notions: the Mini is great and market share is not the factor many suppose it to be. Taking the latter first we note that while reality may indicate that market share isn’t everything to many Mac users it is a very important thing. Climbing market share numbers mean a validation of a personal choice. Sure it isn’t the most rational thing in the world but it is infinitely more sensible than wagering on spring training baseball games. In any event the market share obsessed will be disappointed. While the supreme grooviness of the Mini was noted earlier it is not such a superlative choice that it will return the Mac platform back to its earlier days as a market behemoth.

You remember the days when the Mac was a market giant, the glory days, back when programs came out for the Mac first and you could stop in any Mall gaming store and find a plethora of Mac choices? Boy those were the days, everyone used a….wait, those days never existed. If a store carried Mac software at all it was limited. Printers and scanners were harder to find than they are now (thanks USB). In fact, one is hard pressed to think of any real advantages the average Mac user had in the Mac’s heyday (1992ish). On second thought there were a few more Mac magazines available, two pages on Photoshop and endless ads. Not the most compelling reason to pine for the (supposed) good old days.

Let us take for granted that the Mac was never too popular (maximum market share 11.2%) and let us also assume that the Mini will be a huge seller. At this point it becomes necessary to look at few numbers. Mac Mini sales for 2005 have been estimated at anywhere from 900,000 to a cool five million. These are good numbers if you own stock in Apple, five million Minis would more than double the number of Macs sold last year when coupled with notebook sales. Unfortunately for the market share obsessed even the most optimistic prognostications won’t result in a return to the market penetration of yore.

Again the numbers tell the story: The Mac’s most popular year was 1992. In that sweet year Apple managed to capture an enviable twelve percent of the computer market. For the Mac Mini to return Apple to that kind of market presence the Mini will have to sell, roughly, 17 million computers. Seventeen million Mac Minis is probably not an achievable number, not only because there aren’t seventeen million people waiting to buy a Mini but because even if there were Apple, one would suspect, could not meet the demand (estimated ship times for the Mini as of this writing “1-2 weeks”).

At this point some of us sit in depressed disbelief at just how far the Mac has fallen but that reaction is not as tenable as the numbers would have one think. It is not so much that Apple has fallen such a dizzying distance it is more the case that the computer market has grown at an incredible pace. Looking through the numbers you’ll note that Apple tends to sell a few more Macs with each passing year. By way of contrast the PC sells more than just a few more PCs every year, they sell scads of them. To put a finer point on it: in 1992 Apple sold 2.5 million computers accounting for a healthy 11.2%. Last year Apple sold 3.5 million computers and accounted for a paltry 2%.

With that in mind let us take a look at what would happen if the Mini sold five million computers this year. Let us also sweeten the deal by allowing that sales of other Macs will remain unchanged. This is no time to be shy, a further supposition that PC sales will grow at a rate of zero will help things out. Those are pretty much best case scenario numbers, numbers akin to jumping out of a plane naked and expecting to find a fully packed parachute floating up at you. Just what would Apple’s new market share be? Roughly 4.7%. Not exactly an earth shattering change. If you want to know what it is like to have a greater than 4% market share cast your mind back to 1997. For a more realistic picture assume 10% growth in PCs and Mac coupled with 900,000 Mac Mini sold and Macs capture a truly non-astounding 2.4% of the market. Great for investors in Apple but nothing that will make a big difference on the magazine rack (think 2002).

At this point it is pretty clear what has happened. Apple has grown their computer business nicely but they haven’t kept up with the growth for computers in general. One would be tempted to opine that the have a fairly static demand curve, people are going to buy three million Macs a year no matter what. Whatever the reason the gap is too large to be narrowed by the introduction of the Mini or be narrowed by any one event in particular. This isn’t like Linux gaining a foothold, to make the change to Mac users must jettison both hardware and software. In short the Mini is a very nice computer and a great addition to Apple’s hardware line up, just don’t expect it to suddenly turn the market share numbers around.