Two interesting bits of financial/market share news today:
- Microsoft reported its first annual revenue decline ever.
- Apple has 91% market share for personal computers in the US costing more than $1000.
What do these two things have in common? In my world, netbooks. Look at it this way. There are a number of reasons Microsoft saw a revenue decline this year (and please, before you shed any tears, bear in mind that the company is still making a profit, just not as big a profit as it did last year). Some of those reasons have to do with software: Windows Vista didn’t catch on the way Microsoft hoped it would, and Windows 7 isn’t available yet.
But the recession has also led to a decline in PC sales generally, and a surge in sales of low cost netbooks which run older copies of Windows XP which Microsoft is offering at a deep, deep discount in an attempt to provide an affordable alternative to Linux powered netbooks. And that’s led to lower profit margins for Microsoft.
Apple, on the other hand, doesn’t sell a netbook. And it doesn’t (officially, anyway), make its operating system available for use on existing netbooks. So the company is pretty much ignoring the low end of the personal computer market. And while analysts have been predicting for the past year or two that the company would have to release a netbook, here’s the thing: It doesn’t. Because Apple has built a name for itself providing high quality computers. Not cheap ones.
And while that might not seem like a good strategy during a recession, it appears to be working overall. For people who are willing to spend a lot of money on computers, Apple seems to be the most popular choice, by a long shot. Sure, the vast majority of PCs that are sold cost less than $1000. But there are still a fair number of people willing to spend top dollar for premium computers. And if Apple were to start offering cheaper $300, $400, and $500 computers, it might be hard to convince consumers that the company’s other computers are worth a premium price.
While I generally prefer a cheap and good enough computer to an expensive one that offers more features than I need, I think Apple has been smart to stay out of the netbook space, even if there are a number of Apple enthusiasts clamoring for some sort of Macbook Mini,