If you read enough tech news, you "know" that Apple is blowing it with the Mac. For months now, the headlines have been clear: "How Apple Alienated Mac Loyalists," Bloomberg wrote back in December. And just yesterday on FORBES, Ewan Spence reported on a Laptop Mag report about Apple's dwindling customer satisfaction ranking in "Apple Losing Out As Consumers Reject New MacBook Pro." With this kind of drumbeat, it wouldn't be surprising to learn Apple is indeed losing market share. Except that it isn't. On the contrary, the two firms that track PC sales both agree Apple is gaining share in the PC market -- as it has nearly every quarter for the past several years.
Here are the figures for Q1 of 2017: Gartner says Apple sales were up 4.5% over a year ago and market share rose from 6.3% to 6.8% worldwide. That puts Apple in Gartner's top 5 ahead of flagging Acer. Apple's total is just 7% behind fourth-place Asus in shipments, suggesting the Mac maker could leapfrog it as well soon. IDC has slightly different figures, with Apple's Mac total rising 4.1% and share growing from 6.7% to 7.0%. In Gartner's math, Apple is already fourth. Both agree Apple delivered a bit over 4.2 million computers, a figure which Apple always clarifies by offering a precise number with earnings. (Those are due in a few weeks.)
Notably, Gartner thinks the PC market contracted by 2.4% over 2016 while IDC sees it growing by a mild 0.6%. Part of that difference is methodology: Gartner doesn't include Chromebooks in its numbers but does include 2-in-1s like the Surface (iPad Pros? nope). IDC includes Chromebooks, which it credited for at least part of the overall increase, but excludes all detachable tablets -- so that means Surface and iPad Pro are out.
But no matter how you slice and dice the data, it's good news for Apple, which saw 4%+ unit growth against a flat or shrinking PC landscape. While Apple remains a small slice of the market, it helps to have some perspective on how that slice has grown. Back in 2010, the PC market was a robust 351 million units for the year (per Gartner). Apple wasn't in the top 5, but searching through its earnings reports yields a total of 14.4 million Macs that year. That was good for just over 4% of the PC market.
Last year, by contrast the total for all PCs had dropped to 270 million -- down a whopping 23% this decade. But Apple had managed to not only reach 6.9% share, but also grow to more than 18.6 million units -- up nearly 30%. That's perhaps more incredible when you consider Mac sales actually had reached 20.4 million in 2015 before sliding back a bit. And this is where criticism of Apple gets fair: the Macbook Pro, iMac, Mac Mini, Macbook Air and Mac Pro had all grown long in the tooth last year giving loyalists a large incentive to delay new purchases.
Once the first major upgrade shipped, however, in the Macbook Pro, the faithful did return -- contrary to what critics expected. Apple was supply constrained on the product throughout the holiday quarter last year, unable to ship as many machines as people wanted to buy.
Still, those other products are awaiting updates and the company did an unusual (and extraordinary for Apple really) mea culpa a week ago. Apple admitted the Mac Pro was a technological dead end and said that both it and the iMac were due to get major upgrades in a chat with selected journalists, including Matthew Panzarino at TechCrunch. Those machines may not be the most critical for Mac sales -- laptops rule these days -- but they matter a lot to some of those Mac loyalists who have been up in arms.
That Apple still considers those folks critical customers no doubt led to the self-flagellation but it belies a more fundamental trend. The reality is that Apple keeps taking PC share despite having a line that consists almost solely of high-priced wares. This is perhaps counterintuitive in a declining market but it shouldn't be. When products enter their sunset, you often see two related but not precisely similar things occur.
First, the "ultimate variants" of those products emerge. They include innovations on the margin like the most dramatic sail configurations on the last Clipper ships (h/t Benedict Evans of the VC firm Andreessen Horowitz). Or in Apple's case, things like the Touch Bar, a nice-to-have but not entirely necessary secondary display and touchscreen above the keyboard. Second, pricing tends to rise and not fall as a product starts to die. Why? Because those that need them will pay most anything reasonable to protect their legacy ways of doing things. And they tend to face a smaller number of suppliers, too. In PCs, it's looking more and more like HP, Lenovo, and Dell will be the last three standing, along with Apple.
Here's Gartner: "The top three vendors — Lenovo, HP and Dell — will battle for the large-enterprise segment. The market has extremely limited opportunities for vendors below the top three, with the exception of Apple, which has a solid customer base in specific verticals." If we could see into 2020 those four might well be at 4/5 of all PC shipments, up from a little more than 3/5 today.
Apple's challenge going forward in the PC market is that it has failed at times to do what it should be best at. A few years back it missed nearly an entire Christmas season on iMac when the old ones disappeared and the new ones weren't ready. The situation in 2016 with the Macbook Pro wasn't as bad but it hurt nevertheless, likely contributing to much of the year-on-year sales decline. The other problem it's had of late is keeping the line up to date. While the Mac Pro admission was extraordinary and a clear signal the now famous cylinder design was the wrong kind of innovation, there's no good reason Macbook, Macbook Pro, Mac Mini, and iMac shouldn't always be near the state of the art.
To keep them there, Apple will have to continue to devote resources to the very devices that were once embedded in the now forgotten company name: Apple Computer. It seems as though that turnaround has begun but we'll wait and see whether the company delivers. In the meantime, the good news for Apple is that it keeps gaining a bigger slice of the shrinking PC pie and the absolute size of its slice has mostly trended straight up. The critics may legitimately want something more out of Apple but consumers overall have spoken with the biggest megaphone of all: their wallets.
