Desktops

Apple Leads High-End Retail Sales

Apple's Macs accounted for 66% of all personal computers priced at US$1,000 or more sold at retail in the U.S. during the first three months of this year, a market research firm said last week.

The Mac's continued gains came despite tougher economic conditions in the U.S. and illustrated Apple's lock on the premium PC market, said Stephen Baker, an analyst with NPD Group, a market research firm that specializes in tracking retail sales. "Apple's customers are looking for their second or third or fourth computer [for the family]," said Baker. "They're more affluent than the average computer buyer and they're not as impacted by the economy."

In the first quarter of 2008, Apple held 13.8% of the overall U.S. retail computer market, up from 9.5% during the same period a year before, an increase of 45%. "We've seen a noticeable increase in Mac sales since the launch of Leopard," Baker noted, referring to Mac OS X 10.5, which Apple released in October 2007. The longer-term march of Mac gains, Baker added, began when Apple switched to Intel processors, a process that started in January 2006 with the introduction of the Intel-based MacBook Pro and iMac.

Of note, said Baker, is the fact that Apple posted bigger increases over last year for desktops, which industry-wide have taken a beating at the hands of laptops. During the first three months of this year, Macs accounted for 14.4% of all desktops sold at retail in the U.S., up from just 8.1% the year before. Portable Macs, meanwhile, owned 13.6% of the market in early 2008, compared to 10.4% in the same period of 2007.

"For pretty much everyone else, desktops are a declining area of focus," said Baker. "But for Apple, the iMac is doing very well, in part because it's an all-in-one. Buyers don't quite think of it as a desktop."

And Apple essentially owns the $1,000-and-up market, according to NPD's data. Overall, Macs accounted for 66% of all personal computers sold at retail during 2008's first quarter; desktop Macs had 70% of that share, while Mac notebooks held a 64% share.

But the numbers, although impressive, come with a caveat, said Baker. "Yes, they dominate in the $1,000-plus market, but they also tend to be the only company that has a considerable focus in that price range.

Every Mac -- desktop or notebook -- that Apple sells, with the exception of the Mac mini, is priced above $1,000.

Key to Apple's success in retail, of course, is the company's own stores. Calling Apple's 210 outlets -- the vast majority of which are in the U.S. -- "one of the few computer-only places left," Baker pointed out that the chain's buyers have little choice but to drop more than $1,000. "People walking into an Apple store are mostly pre-sold on buying a Mac. Once they're there, there's not a lot of chances to trade down to, say, $599 or $799, like there is at a Best Buy.

"At a Best Buy, there are certainly Windows PCs that cost more than a thousand, but there are lots of choices in that $599 to $799 range."

Apple, which now sells Macs through Best Buy, "clearly faces more of a challenge" there, said Baker, where it's competing against lower-priced machines. "But they're doing okay."

Apple has a much less impressive U.S. market share when all channels are considered, Baker acknowledged, but that's by the company's decision. "Apple has zero share in a huge share of the market because they choose not to sell to enterprises," Baker said.

According to estimates by Gartner, Apple accounted for approximately 6.6% of all U.S. sales in the first quarter, putting it in fourth place behind Dell Inc., Hewlett-Packard Co. and Acer Inc.

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