When it comes to marketshare, Apple usually follows the leaders. Samsung sells more smartphones. HP sells more PCs. Fitbit sells more exercise trackers. Technology writers are stuck on marketshare as an indicator of success.
Apple seems to think marketshare sucks. The company does not seem in a hurry to gain more marketshare in any single product category. Why not? Because Apple knows that marketshare just does not mean much. What is far more important than marketshare is revenue share which begets profit share, both of which Apple dominates.
You know about the Golden Rule, right? It’s that whole “Do unto others…” thing. Apple has a different Golden Rule. First, user experience. That means products that customers want to use, use more than competitors, and are willing to pay more for the privilege. The user experience then begets revenue with brings in gross margins which begets profits.
Let’s see where Apple’s major hardware products sit relative to competitors.
iPhone – estimates vary, but it’s like Apple’s iconic iPhone dominates the revenue share and profit share of the entire industry; as much as 85-percent of the latter. Samsung gets most of the rest, so what does that say about the entire smartphone industry? Apple rules.
iPad – again, estimates vary, but other than Samsung and Amazon, have you ever seen another tablet besides iPad? Apple sells more iPads than any other tablet vendor, and the average price is sufficient to ensure the most revenue and profits. Apple rules.
Mac – sure, you can buy cheaper Windows-based PCs, cheap Chromebooks are en vogue these days, but the Mac seems to have bucked the downward PC trend of recent years– even Microsoft’s highly acclaimed Surface line has seen sales drop for a year– by selling at record levels. Again, the revenue share and profit share means Apple’s Mac takes home about half the industry’s profits on barely double digit marketshare. Apple rules.
Watch – this one isn’t even close. Watch is a smartwatch which falls into the wearables category and that includes headphones, fitness and exercise trackers, and the also-ran smartwatches put out by Samsung, Fossil, and others who grab the market crumbs. Watch has the majority chuck of marketshare, which begets, in this case, the most revenue and profits. Apple rules.
Apple TV – hey, this must be the anomaly because everyone who guesses at such numbers say Apple TV’s marketshare is anemic relative to Roku, Google Chromecast, Amazon Fire Stick. Just note that marketshare does not represent usage share. Since Apple TV is priced higher than Roku, Chromecast, and Amazon combined, it’s safe to say Apple owns the revenue share, and probably most of the profits, too. Apple rules.
AirPods & Beats – the key here is wireless headphones, yet another segment of the wearables, and a location where Beats dominates other brands, and Apple’s new AirPods own their own segment. A tracking service says AirPods account for about 85-percent of totally wireless headphone dollar sales in the U.S. That means revenue share and market share and another segment where Apple Rules.
That’s just hardware.
Apple Services business– iTunes, App Stores, Apple Music, et al– is larger than any Apple product other than iPhone, so if you’re following the money, hardware brings in the lion’s share of revenue and profits in each segment, and that translates to the fastest growing Apple business unit– Services.
Apple is sitting on top of a few hundred billion dollars because it follows the money. That explains why I wrote, “It’s Time To Say Goodbye To Apple Car.” There’s no money there. And Apple goes where the money goes.