Apple Has 66 Percent of U.S. Market for $1,000 Computers

[magesh.p]

Apple, Inc. has 66 percent of the U.S. retail market for computers priced about $1,000, according to the NPD Group. The study also found that Apple notebooks had 50 to 60 percent yearly growth, and Apple has 14 percent of the overall computer market. Problems with Microsoft's Windows Vista appear to have contributed to that growth.

Apple rules the high end. That's the conclusion of a recent report by the NPD Group that found the Cupertino, Calif.-based company has 66 percent of the U.S. retail market for all computers priced about $1,000.

For desktop computers over $1,000, Apple's retail share was 70 percent. For notebooks in that price range, it was 64 percent. The figures reflect sales in the first three months of this year, and they only account for store sales, not online.

14 Percent Overall

According to news reports, the NPD study also found that Apple's overall U.S. retail market share is 14 percent, with Apple notebooks having 50 to 60 percent growth year-over-year, and Windows notebooks having zero percent. The 14 percent retail share applied to all computers, as well as to just desktops or notebooks.

All of Apple's computer product line is priced at more than $1,000, except for the Mac Mini. Some observers have suggested that features and lower pricing may not be the highest priorities to some computer shoppers, because they are willing to pay more for a premium experience.

Stephen Baker, NPD vice president of industry analysis, has told news media that Apple also appeals to such segments as multiple-computer households. He added that, for those customers buying an additional computer, ease of use may be their priority.

There are also several key market advantages that Apple continues to enjoy. One is the hesitant reception that Microsoft Relevant Products/Services Vista has received, an edge that Apple has begun to push overtly in its most recent "I'm a Mac/I'm a PC" commercials.

Another advantage is the highly successful chain of Apple retail stores, as well as distribution through selected non-Apple retailers such as Best Buy. When a potential customer goes into an Apple store, there are no competing computers, so that popular channel is highly effective.

Store Expansion

Because of this success, the computer maker is planning to expand its chain of stores. Earlier this month, for instance, it opened a glass-faced, 20,000-square-foot store in Boston on historic Boylston Street. The new store is its second-largest worldwide, after the one on Regent Street in London. This summer, an Apple store is scheduled to open in Beijing, China.

The international side of the American computer maker is increasingly important to Apple's success. Senior Vice President Ron Johnston recently told Reuters that Apple has about half its revenue in the U.S. and half abroad. As of the end of March, Apple reported operating 208 stores, compared to 177 the previous year.

A third advantage is the success of the iPod and iPhone, which has introduced the company's products to millions of new customers.

Apple's market share increases are being reflected in its earnings. Late last month, Apple reported an earnings increase of 88 percent, or $770 million, for its fiscal second quarter, compared with a year ago. International sales were reported as accounting for 43 percent of the total, and sales were driven by Macs and iPods.