Apple's Mac OS Market Share Rises 24 Percent Year Over Year

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Sep
20

By: switchtoamac at: 10:03 PM on September 20, 2006 | Comments (26)

Several outlets this week have reported that Apple's market share is declining or has flattened out, especially when compared to December 2005 data.  At first glance it may appear so but there's more to the story and the data.  This post will clear up the confusion by analyzing Apple's market share on a month to month basis during 2005 and 2006.  We'll also extract relevant metrics from Apple's earnings reports and product launches over the past several quarters to provide further insight into the matter.

Here's the real story folks, Apple's market share is not declining.  In fact, it's on a dramtic upswing.  In fact, it's up 24.4 percent year-over-year from August 2005 to August 2006.  Data used in this report has been obtained from NetApplications via Market Share.

Key Percentages
  • Up 27 percent since January 2005
  • Up 23 percent since April 2005 (Mac OS X Tiger launched April 29, 2005)
  • Up 2.9 percent January to August 2006 - despite Intel transition
2005 Data

Let's start by looking at Apple's market share month by month for calender year 2005.  You can click on each image to get a larger view.

2005 Mac OS Market Share 

As you can see, the data fluctuates.  2005 was an year of change for Apple as the company undertook two major transitions.  The first occured in April when Apple launched Mac OS X Tiger 10.4 on April 29, 2005.  The event marked the company transitioning it's operating system from Mac OS X Panther 10.3.  Then came the shocker at the World Wide Developers Conference (WWDC) on June 6, 2005.  Apple CEO Steve Jobs announced that the company would transition the company's Macintosh computers to Intel processors.  Despite those events, Apple continued to see market share gains from July to the end of the year.  Apple released revised Macintosh computers in July and October 2005, more on those updates a bit later.

What I'd like to point out is that the November 2005 and December 2005 data appear to be anomalies.  Let's delve into the data to see why.  The data shows that Apple's operating system market share increased 6.2% between October and November and increased 5.84% November and December.  This corresponds to a 12.4% increase from October 2005 to December 2005.  The data points need to be questioned as we look at the January 2006 data.  The January market share comes in at 4.21%.  If true, that would represent a 3.22% decline from December 2005.  What?  How could Apple's market share rise 12.4% in two months and then decline by 3.2% in the month after the conclusion of the 2005 holiday buying season.  A bit strange huh?

The data doesn't appear logical because the majority of Macs purchased in December 2005 (during the 2005 holiday season) would ultimately show up in the January 2006 numbers.  As with all public companies, Apple operates on a quarterly basis.  But note that Apple's fiscal quarters do not correspond to the four quarters in a given calender year.  Apple's fiscal quarters roughly run as follows:

  • Q1 - October, November, December
  • Q2 - January, Febuary, March
  • Q3 - April, May, June
  • Q4 - July, August, September

Apple had a blow out December 2005 quarter (October, November, December).  The quarter is referred to as Apple Q1 2006.  Apple exceeded expectations set forth by numerous Wall Street analysts and investment firms.  Here are some snips from posts on this site relating to the December 2005 quarter:

Apple Sales Exceed Expectations  - Posted January 10, 2006
Apple Computer Inc. Chief Executive Steve Jobs stated at Macworld 2006 that sales for Apple's December quarter exceeded expectations on strong demand for the company's iPod music players.  Revenue for the quater came in at $5.7 billion, well above the $5.04 billion average estimate of analysts.  In addition, the company's retail stores posted revenue of more than $1 billion for the first time in their history. Shares soared to a record high following the announcement.

Apple Q1 2006 Earnings and Conference Call - Posted January 19, 2006
Apple sold 1.24 million Macintosh computers during the quarter comprising 667,000 desktops and 587,000 notebooks/laptops, figures up 20 percent from the year earlier period.  Notebook sales accounted for $812M in revenue, up 34 percent from the same quarter last year.  Desktop sales accounted for $912M in revenue, down 9 percent. Overall, Macintosh computer sales accounted for 41 percent of the company's total revenue in the quarter.

The key statement from the first post is that Apple retail stores posted their highest ever revenue during that quarter.  With respect to the second post, how can a 20 percent increase in Mac unit sales (when compared to Q1 2005) result in a net decline in market share in January 2006?  If the data is accurate, that would mean that there was either a net decline in Mac units at the end of January 2006 when compared to the end of December 2005 or, other operating systems grew market share.  It's already been shown that Mac unit sales grew by 20 percent for the December 2005 quarter.  This can be explained by Macintosh updates that were announced during the 2005 December quarter:

October 12, 2005

October 19, 2005

Although the iMac was announced on October 12, they became available the following week.  The 2.0 GHz and 2.3 GHz Power Mac G5 Dual were available on October 19 but the 2.5 GHz Power Mac G5 Quad became available in early November.  The PowerBooks were available on October 19, the day they were announced.  So, there were updates to three of Apple's Mac lines whereas the Mac mini and iBook models were last revised on July 26, 2005.  Furthermore, we know that most holiday purchases are made in December, not October or November.  Hence, it's logical to conclude that the majority of those 1.24 million Macs were likely sold starting at the end of November and thoughout the month of December.  Henceforth, a significant percentage of those systems should show up in the January 2006 numbers as many would have been opened after the holidays.  Overall, the January 2006 data doesn't stack up.

To analyze it from a different perspective, let's look at the market share of other operating systems.  Windows (XP, 2000, 98, ME, NT, 95) market share increased from 95.21 percent in December 2005 to 95.52 percent in January 2006, corresponding to a 0.32 percent increase over the period.  All other operating systems (Linux, Web TV, CE, PSP, HipTop, Sun, FreeBSD) accounted for 0.39 percent in December 2005 and 0.39 percent in January 2006, no growth!  Hence, the data that shows Mac OS decline between December 2005 and January 2006 is suspect.  In my view, the Mac OS market share data for November 2005 and December 2005 data are probably overstated.  Further insight is provided in the 2006 data.

2006 Data

The following is a look at Apple's Mac OS market share month by month for calender year 2006 up to August 2006.  What many have missed in their reporting this week is that Market Share now reports Mac operating system stats into two groups, Mac OS and MacIntel.  For example, here's the Mac OS data for the month of June 2006.  Note the two listings, the first is Mac OS then a bit lower is MacIntel. When the numbers are combined, here's what we get (click on the images for a larger view):

2006 Mac OS Market Share

Mac OS Year Over Year Growth
 

Between January 2006 and April 2006, the Mac OS market share grew for three straight months.  These increases occured during a period of growing popularity, momentum, widening acceptance of the Macintosh and most importantly, the announcement of the first Intel-based Macintosh computers, the iMac and MacBook Pro on January 10, 2006.  The iMac began shipping in January followed by February shipments of pre-orders of the MacBook Pro.  There was pentup demand followed by a buying frenzy for the Intel based Macs.  So if the first Intel based Macs began shipping in January (iMac) and there was a solid December 2005 quarter, how did the January 2006 market share decline?  This places further questions on the accuracy of the December 2005 data.

The Important Metrics

What's more important is the year-over-year increase in Mac market share between 2006 and 2005.   As you can see above, the Mac OS operating system has been experiencing at least 23.5 percent year-over-year growth each month for the past year.  It peaked in March at 28.2 percent and dipped to 23.8 percent in May.  The May comparison can be attributed to the late April 2005 release of Mac OS X Tiger.  Without a comparible operating system launch for May 2006, the comparison appears below trend.

Febuary's market share increase can be attributed to strengthening iMac sales and MacBook Pro shipments that initiated on February 14, 2006 (note that Apple began accepting orders for the MacBook Pro in January).  March's increase can be attributed to the iMac, MacBook Pro, and the Febuary 28 release of the Intel-based Mac mini.  April's increase can be attributed to additional sales of Intel-based Macs and the April 5, 2006 announcement of Boot Camp which ultimately made Intel-based Macs more appealing to Window users and potential switchers.

In my view, the decline in May's market share and year over year growth can be explained by two factors.  The first factor is the the May 16, 2006 announcement of the iBook replacement, the MacBook and the second, the April 29, 2005 launch of Mac OS Tiger.  The fact that the MacBook was announced mid month can help explain May's decline.  Ever since January 2006, many buyers held out on purchasing an iBook because they anticipated an Intel-based replacement.  iBook levels had dimished by April and rumors were rampant for several weeks that a "MacBook" replacement of the iBook was imminent.  Hence, May Mac unit sales were effected.  The May comparison can also be attributed to the late April 2005 release of Mac OS X Tiger.  Without a comparible operating system launch for May 2006, the year-to-year comparison is below the trend average.

Although June's monthly market share change was negative, the year-over-year comparison was up 25.1 percent.  July marked the return to market share growth.  The true test will be the data for the remainder of 2006 and early into 2007.  I'm eager to analyze the November 2006, December 2006, and January 2007 year-to-year comparson to determine how the data points compare to their corresponding prior year data.

The August 2006 announcements of the Mac Pro and Intel based Xserv marked the completion of the Macintosh PowerPC to Intel transition.  Since that time, buyers have been quick to purchase Mac Pro systems, a stark contrast to previous periods throughout 2006.  The relucatance to purchase iBooks, Mac minis, and PowerMacs can help to explain the fluctuations in the 2006 data.  What's more important is the data from the July 2006 period onward.

We can also gain insight into Apple's prior earning announcements this year.

  • Q2 2006 - April 20, 2006
    Shipments of 1,112,000 Macintosh computers accounted for $1.572B in revenue, a 4 percent increase in units and a 5 percent increase in revenue when compared to the year-ago quarter
  • Q3 2006 - July 19, 2006
    Shipments of 1,327,000 Macintosh computers, a 12 percent increase in units compared to the year-ago quarter (2005) and up from the 1,112,000 sold last quarter (Q2 2006)

I expect the Q4 2006 earnings to demonstrate further Macintosh unit sale growth but to an extent that will blow away market and analysts expectations.  Throughout various posts on this site, I have stated that I expect Apple to expand it's market share.  In a January 11, 2006 article titled "Apple Intel and Increased Market Share", I stated that the Apple's switch to Intel processors would ultimately result in market share gains for Apple.  I also stated:

"The new Macs will usher in a new wave of Switchers.  I predict that Apple will gain significant market share on a percentage basis in 2006 whereas Microsoft will see a slight decline."

Use the following to view the market share for all tracked browsers:

Up to the August 2006 data, the prediction has come true.  Apple has experienced a 2.9 percent market share growth during 2006, Microsoft has experienced a decline of 0.3 percent (95.38 percent in January 2006 versus 95.08 percent in August 2006).  Futhermore, I've stated that 2007 will be a year to remember for Apple.  In a post on April 7, 2006 titled "Macs - Boot Camp - Market Share - Switchers" I predicted that Apple will have an 8 percent market share in the personal computer market by the end of the OS X 10.5 Leopard lifecycle.  We'll just have to wait until the successor to Leopard is released to see if the prediction comes true.

Closing

This post demonstrated that Apple's market share is on a dramatic upswing with growth of greater than 23.5 percent each month over the past year.  Apple will continue to experience market share gains for the remainder of 2006 and beyond.  The future is bright for the Apple's Macintosh and the OS X operating system.  Apple has just embarked on a multi-year expansion that will see the company continue to grab market share.

Updates

For those who doubt the analysis presented in the article, be sure to read some supporting evidence from W3C.  According to their data Mac OS X is indeed posting huge gains in market share.  Furthermore, their August year over year data for 2005 and 2006 also show an increase of 24 percent.  Although the data varies with respect the NetApplications/Market Share, the percent increase are in agreement. This provides validation to the data and analysis presented in our article.

Accroding to the W3C data, Mac OS had a market share of 2.9 percent in August 2005 whereas in August 2006 the percentage was 3.6 percent.  The math to determine the year-over-year growth comes to 24.1 percent.  Furthermore, their September 2006 to 2005 comparison comes in with growth of 22.6 percent.

Be sure to scroll to the bottom of the page and look for the section "OS Platform Statistics"

Related Stories

Updates

September 21, 2006

  • Added supporting evidence from WC3 

26 Reader Comments

Awesome analysis. Thanks for providing the information. Apple's market share is indeed on the rise. All you have to do is look around, there are more and more Mac everywhere.

" Apple will continue to experience market share gains for the remainder of 2006 and beyond."
Please explain how you come to this conclusion. The data that you present show an increasing market share during 2005 but a stagnant market share during 2006. Shouldn't your conclusion be that Apple's market share expansion has come to a halt?!
I don't like that conclusion but that's what the data tells me.

What I really would like to see is more comparisons as Apple vs Dell vs Lenovo. Otherwise no way Apple can actually increase market share in the PC sector. Yes, Apple in the Apple sector is seeing massive growth from a few years ago. Apple is also gaining ground on Lenovo, Gateway, Acer and the like. Apple has to battle 20 computer companies so, it's a very very difficult battle.

what if the increase of Windows OS is from people who use it to run in Apple hardware...cute

RDeegan,

At the top of the article:
"Up 2.9 percent January to August 2006 - despite Intel transition"

The Mac OS market share has increased this year. It will continue to do so im my opinion. You can use the reasoning presented in this article and the links to other articles within this posting. Be sure to check out the growth trend for Safari and my analysis and commentary in the article:

Macs - Boot Camp - Market Share - Switchers

If you have the time, I urge you to navigate through the site as many articles provide insight into Apple's growth.

Thanks, I seriously doubted the stories of a decline in growth. I have many friends who have recently purchased their first Macs. Many more are asking me for buying advice. Things are definitely picking up for Apple. Your article exposes the misues of data by the ever presernt nay sayers who love to write unfounded articles suggesting yet another doomsday for Apple.

Apple ads on TV are a sign of desperation.

There isn't a compelling reason to buy Apple hardware anymore.

The processor advantage is over with the switch to common Intel processors, Vista (Mac OS X dupe) is going to make up for XP's lack of security and looks.

Apple is off pursuing the small consumer market and failing to innovate in the general computer market to make it's products once again a must have by the majority of buisnesses and consumers.

What Apple needs to do is come up with a new computer product that solves a problem or saves buisnesses considerable amount of money. Instead of trying to be a PC vendor.

I believe the source of this whole thing is here:
http://www.techweb.com/wire/software/193002416 written by a Greg Keizer, citing Net Application's data and a "statement" from them.

However the more I look into this story the more suspicious it becomes. Just look at SwitchToMac's table above: http://switchtoamac.com/images/yoy.jpg

Keizer (or Net Applications) compare the Mac's most recent figures (Aug 2006) with the ONLY MONTH from 2005 that had a higher share!

If they had picked any other SINGLE month from 2005 the story would be completely reversed.

This has been syndicated to many other tech/news sites. I smell the spread of Fud!

Not Enough: "Apple ads on TV are a sign of desperation."

What are you talking about? Advertising your product is desperation?

"There isn't a compelling reason to buy Apple hardware anymore."

Because it is great hardware and it runs Mac OS.

"Vista (Mac OS X dupe) is going to make up for XP's lack of security and looks"

If you think "security and looks" is the difference, then I doubt you have used Mac OS (or XP) much at all. For example, on OS X, the system-wide spell-checker could have informed you that it's "business," not "buisness."

"What Apple needs to do is come up with a new computer product that solves a problem or saves buisnesses considerable amount of money."

They already have such a product. It's called a Macintosh, and it has a much lower TCO (total cost of ownership) than a Windows PC.

It's an interesting article, as it compares Apples to Apples :-D.

Incredibly long winded!

As an Apple shareholder, I want to see them increase marketshare as much as anyone. However, these YOY percentage changes are really not that impressive - for example, go back and look at how much market share Acer has been able to gain YOY.

Very well stated. Thanks for breaking it down.

Too many posters have no concept of what it means to think logicially.

1. The article measures year to year growth, because that is the only valid measuring stick when you're comparing market share over time, due to the seasonal nature of sales. What's important here is that Apple marketshare is growing at a healthy rate, which dispels the whole FUD about shrinking sales.

2. For the last time, you cannot directly compare Dell and Apple. Why? Does Dell create Windows? No. However, Apple creates OS X. Do you get it yet? Apple is both a hardware and a software manufacturer, or a "systems" manufacturer. Dell is a hardware manufacturer that spends no money on developing the OS.

3. Acer has been gaining marketshare by chipping away at Gateway and others. In any case, what they do doesn't take away or stain what Apple has done.

from 3.5% to 4.3% ... this is still less than 5% and whether its an increase from the year before or not it is less than one percentage point. in the world of statistics that is pretty leveled out. you people need to quit trying to make apple more than it is. I love Mac's and I love PC's, the fact is, Microsoft has the market, and unless the government says they are a monopoly they always will. Apple is fighting a losing battle. I say, Apple become a hardware company, you won't win the OS war.

JFord

ok, first to J Ford .... Apple's market share of 4% of units is quite good. considering they make the same amount of money as Dell with 15%. Going from 3.5% to 4.3% is actually a HUGE gain. Dell would have to go from 15% to 18.% of the market to have the same growth. (Remember, the average dell sells for quite a bit less than the average Apple and then Dell doesn't get the money for the OS -- in case you were wondering how the two companies can be the same size)

Now, on to my main point. I find it interesting that this article, as long as it is, fails to mention or even speculate on the reasons for market share fluctuations throughout the year. Since macs have a higher relative presence with students, and personal computer users (say ~10%) and a very low presence in corporate offices (say ~2%), that would explain the rise in market share in December (when people are buying personal computers and laptops for the home) and the drop in June-July (when corporations are stocking up on new hardware) Does this make sense to anyone else or am I crazy????

Oh, and by the way, if you're an architect or newspaper editor who uses macs at work, good for you, but I'm sure the 400 old dells in my office outweigh that pretty quick. So please spare me the "But Macs are used in corporate settings too!" garbage, they're not.

Firstly I am an Apple fan. The statistics (or rather, the analysis) here is misleading.

YOY is an ok figure, but we have already "priced in" growth from last year - which was impressive, as was early this year - and since then market share has , quite clearly, fallen. Were the second graph to show the market increase it did in the early months then we would be at around 5.1 % now, an increase of 50+%. It didn't. There has been a drop in market share.

"The article measures year to year growth, because that is the only valid measuring stick when you're comparing market share over time, due to the seasonal nature of sales. "

Nonsense, any seasonal variation in sales affects everyone, all sectors of the market, and we are comparing like with like: the Mac's percentage of total sales in that month regardless of how small or large total computer sales were.

You've failed to take into account the increase in the global market. For accurate Mac sales figures and some graphs visit here:
http://www.systemshootouts.org/mac_sales.html

Well, Apple is sort of becoming a multimedia company. The days of OS's being locked to hardware as done by Amiga and Commadore and for a while Be are dying and for good reason. The mearly fill a niche market. Apple just happened to get lucky enought to make iTunes and the iPod. These pretty much are the reasons this company was revived. Mac has some intense competition. They have to compeate with Alienware (Dell), Voodoo and others in the high end PC market despite the fact that although Apple sells some very expensive PCs, they do not sell for as good of price per power of hardware in these markets. Levono, HP, Dell, Acer, and Gateway are in the mid and low end markets (and Mac doesn't even have a low end model). Microsoft is a competitor too, though truth is MS could have killed Mac years ago if it hadn't ported IE, WMP, and Office. MS keeps Mac around as an antitrust sheild. Of course Apple also has a new opponent in the "we are an alternative to MS" niche and that is Linux. Linux is growing faster than Mac on the desktop. This is due to the extreamly low TCO of linux and due to the vast amounts of easy to use software that has been made for linux over the past few years. If and when Apple looses it's multimedia edge with the iPod, it will have to go back to selling computers. In the past that didn't go so well because the TCO of a Mac is higher than Windows when one considers the upgrades, lack of backwards compatability, pricy hardware, and pricy software, and Linux's unbelievably low TCO could prove to be a challenge.

Apple will continue to grow based on it's increasingly superior OS, apps, and hardware. MS hasn't been able to keep up with the *rate* of Apple's progress, judging from Vista especially. Sooner or later the market simply has to buckle and succumb to this stark reality, and I believe we're seeing the beginning of that. The tech/training/maintenance cash cow that is Windows can't go on as it is forever against Apple continously fulfilling what computing promises to be for people.

It's been over a year since we posted our own Mac Numbers article:
http://www.maccompanion.com/archives/august2005/Columns/MacNumbers.htm

You've used data from a "browser identifier" system.

That's not market share, which is defined as a company's share of the total computers sold in a given period.

You're confusing it with "installed base", which is the number of computers out there. And by using browser metrics, which are notoriously imprecise (if Firefox has a 10% or 20% usage among people who browse, does that mean the market share or installed base of Windows has fallen? No) you've come up with an analysis that, well, you could have saved yourself a lot of time by not bothering.

The guy who told you “A hundred percent of nothing is nothing” didn’t tell you the whole truth, but at least he wouldn’t get you laughed out of Statistics 101. This article is full of half-truths and errors, where “Apple’s market share” is Apple’s U.S. market share, which is conveniently twice that of their share in the whole world.

That’s around two percent worldwide, or close to nothing, and 24 percent of that is still close to nothing. When you look at real numbers 2004-2005, the actual increase in Mac sales was around 1.5 million, which seems like a lot, until you learn that PC sales increased by around 20 million in the same period, which makes the Mac figures seem like nothing.

In fact, Mac sales numbers in 2005 finally beat the numbers from 1995, when 4.5 million Macs were sold. That year, 45 million PCs were sold against 192 million in 2005. I didn’t see anyone rushing to tell us in all the intervening years how Mac sales declined and PC sales quadrupled, but maybe that’s because Mac OS fails to interest anyone.

So, spin it any way you can, Apple is still failing to sell computers. Under Steve Jobs the market share has fallen in half, and without the iPod they probably would have vanished. All of these numbers are verifiable from industry standards like IDC and Gartner.

ArsVenture: I agree that the analysis isn’t quite up to par. But if your numbers from the previous year (1.5 mill vs 20 mill) are correct, Mac share increased by ca 7.5 percent in that period.
The standstill this year is easily explained by the lack of Intel Macs.

>> But if your numbers from the previous year (1.5 mill vs 20 mill) are correct, Mac share increased by ca 7.5 percent in that period.

Like I say, "laughed out of Statistics 101."

Those numbers do not relate to market share - they relate to units sold. From one period to another they can increase more, or increase less - it depends on the period you choose.

It is true that Apple's units sold has been increasing lately for the first time in close to ten years. However, the figures for market share are taken as a percentage of ALL COMPUTERS SOLD, not as an increase of "what we sold last year."

Thus if Apple sold two and a half percent of all the computers sold last year (which it did), and had a hundred percent increase in sales of units sold year over year - and, of course, if PCs didn't increase their sales by even one machine - then Apple's new market share would only be five percent.

Try this page for size:

http://www.pegasus3d.com/total_share.html

It has unit sales and market share percentages for the last thirty years.

As a developer of Mac software, I can tell you that there is an definate measurable upswing in switchers. Our app, Daylite, fulfills many important business needs so we get a lot of switchers. Just to give you some concrete data. About 1 year ago, 11% to 12% of the visitors on our site where on on Windows. Now, we are consistently seeing 19% to 20% (20.7% for this last quarter to be precise) on Windows. I would say that is a huge jump in a one year time frame.

You can learn more about our app at www.marketcircle.com/daylite/DPS.html

AJ

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