Market Share Matters

I've been lying to you. In my defense, it was the "good" kind of lie, where I was trying to prevent hurting your feelings. But I'm tired of it. And now I'm just going to tell you what I should have told you all along. And that's this: When it comes to PCs, tablets, smart phones, whatever; market share matters. In fact, it matters more than any other metric you care to name.

And believe me, if you're a company that doesn't have good market share--or, more to the point, some kind of tech partisan goon--you'll do anything you can to prove otherwise. You'll contort the truth, you'll distract with seemingly related metrics that look like (but are not) market share, and you'll try to change the conversation. But if you're being honest, you get it. Market share is virtually the only thing that matters.

For several years now, first at my Internet Nexus blog and more recently here on the SuperSite Blog, I've reported on the actual market share figures for the PC industry just about every quarter. (I've recently started covering smart phone market share in the same fashion for what I assume are obvious reasons.) And these figures always show the same thing: That despite massive quarterly sales growth gains compared to the wider PC industry, the Mac has yet to crack the 5 percent barrier for the worldwide market.

This drives Apple fanatics nuts. And by fanatics, I obviously don't mean "Apple users" or "typical Apple fans." I mean the goons. The guys who get up in the morning and look for people who don't blindly promote Apple at every opportunity, and seek to bully them into submission. They're bad people. And they have way too much time on their hands.

(Apple fanatics aren't alone. But in my line of work, these are the most misguided people I run into. Linux fanatics used to be just about as bad.)

I'll give you a very recent example of this goonism, since it's representative and topical. In a recent email response to my editorial, By Exiting, Slow-Moving HP Will Help Reshape The PC Market, a serial complainer quoted the line "industry darling Apple sold 3.95 million Macs in the same time period, and it doesn't even crack the top five PC makers" and wondered why I didn't provide readers with the "complete picture". "Industry darling Apple is outgrowing those businesses in front of it on a quarter by quarter basis, and it's also the most profitable PC maker on a PC by PC basis," he noted, using a typical "change the discussion" tactic. "In other words, its not just a media darling. Why use such a dismissive term?"

Why indeed. (And why is this "dismissive" of anything other than the tech press?) I'd ask why this guy didn't read the whole editorial, since I later went on to describe the consumer lust for Apple products, that Apple earns "dramatically better margins than does HP," and that if you added Apple's Mac and iPad businesses together, "Apple suddenly vaults into second place in the worldwide PC market, behind HP but ahead of Dell." See, this guy isn't really interested in debating the facts, he literally just doesn't like that I described Apple as "industry darling." Despite the fact that it is, and that I was in fact very positive about Apple's businesses and successes in this very article. An article that, by the way, was about HP, not Apple.

Apple is a hugely successful company and its Mac business, even though it trails the wider PC market by a wide margin, is a great business, a very, very successful and desirable business. For Apple. Why anyone would care about that, other than employees of Apple, is unclear to me. (I'd be happy to see Apple grab 10, 15, 20 percent--whatever--of the PC market: The Mac is great. It just never has.)

I noted up front that market share matters. That market share is, in fact, the metric that matters most. More than growth. More than margins. More than anything. And it's true. Assuming, again, that you're not someone trying to make a particular platform look better somehow.

So where does the lying come into this story? In the past, as I've published my quarterly market share numbers--in which I average the PC unit sales figures of IDC and Gartner, a practice I see others now emulating--I've received complaints like the one above. Complaints from Apple fanatics that seek to undercut the importance of market share--because, again, they don't like what it says about their favorite company and/or platform--and change the discussion. These people have complained that market share isn't all that matters. And, heck, it is most certainly not the most important metric one should use when measuring the success of a product compared to the other products with which it competes. In this case, the Mac vs. the entire PC industry.

And so I've lied. I agreed with this argument somewhat. Sure, I argued, market share is only one way to measure success. It's one of many ways. And yes, some other measurements may in fact be more meaningful. But, I added, the reason I always measure market share is because it's math. It's a simple comparison of numbers: These companies sell X number of units and we can put them in a chart, measure the entire size of the PC industry, and compare them against each other. It's sort of pure in that way. But yes, it's not the only measure.

I said this to soften the blow and, more important, to get the complainers off my back. But I've been thinking lately that I've been too timid about this topic. And I'm here today to correct that. Market share matters. Period. And if your concerns are non-partisan and true, as I believe mine are, you'll agree that it's the thing that matters most.

I don't personally care how Apple, Microsoft, HP, or any other company performs financially or otherwise, beyond the fact that I have to write about it (it is news) and how such performance may or may not impact the general PC industry going forward. I care that these things are reported accurately, of course. But here's the thing. I care about technology generally, and good technology more so than "bad" (or at least misguided) technology. But even more than that I care about the people who use technology, hopefully to make their lives more efficient if not more enjoyable. That's really what this is all about. That's where I'm coming from. Not to prop up a company. But to support the people who use their products.

When I entered the PC market in the early 1990s, I was coming off a bad relationship: My beloved Amiga was ignored by the public and seemingly by the company that made it, and when Commodore went sailing off into history, bringing the Amiga with it, I had a choice to make. And back then, the choices weren't great. There was the Mac, which was beautiful but expensive and, at the time, unsophisticated. There was Windows, which I hated, and offshoots like Windows for Workgroups (interesting, but still the same sad Windows UI) and NT (same UI, much more interesting, much more expensive and requiring a high-end system). And there was OS/2, which was technically very interesting but obviously doomed.

A lot of Amiga guys went for OS/2, which was the tech equivalent of a rebound fling and a huge mistake. I tried to warn them against this, and I went with the PC. And when I got involved with the Windows 4.0 Beta (later renamed to Windows 95), I realized I had made the right choice: Here, finally, was a great-looking UI on the mainstream computing platform. Win, win.

The reason market share matters is that market share measures where the bodies are. It's boots on the ground, actual unit sales. It represents what real people are really buying. And for the past 15 years or so, in the PC market, roughly 95 percent of all PCs sold have been running Windows. So I've been able to serve a big market that I actually care about. Again: Win, win.

Of course, the world is changing. We're moving to a post-PC/PC-plus era that will be more heterogeneous than the PC market of the past 15 years. Apple is going to be a big part of that market, folks. Which is fine: I've never sought to see Apple "lose" anything, nor to see Microsoft "win." I will always follow the sweet spot of platforms I care about that people actually use regardless. That means Windows PCs and, for now, it also means Apple devices. As things evolve, so will I. This isn't new or different.

But with regards to market share, this is always the measure that matters. Again, it's not Apple or any other company that matters, it's the products--the technologies and platforms that people use--that matter.

And let's be clear about what market share is ... and is not.

Market share is units sold: The number of PCs, devices, whatever, that were sold in a given time period.

Market share is measured quarterly and annually. Not monthly. Not weekly. (I recently saw an article that claimed that Apple made "market share gains so far in August". Are you kidding me?)

Market share cannot be measured by seeing how many PCs or devices "hit" a selection of web sites. That's a nice rough approximation of usage (and, perhaps, "usage share"). But it's not market share.

Market share is not the same as usage share. Usage share is the number (or percentage) of active users of the device/PC in question at any given time. You can say, for example, that "in mid 2011, this product add approximately X percent usage share." But that figure, by definition, is much harder to calculate than market share. It will be an educated guess at best.

Market share has to be clearly and easily measurable. Companies (and fanatics) point to hard-to-quantify sub-groups to make their favorite platforms look better. For example, Apple does not provide figures for its Mac (or device) sales for just the US; instead, it lumps all of North and South America into a single "Americas" category. So estimates of Apple's US sales--and thus its US market share--are just that, estimates. An educated guess. It doesn't mean they're inaccurate. But it does mean that this guess is not as accurate as Apple's worldwide market share numbers. You see this stuff all the time: Apple products are huge with education, for example. So we're told.

Market share matters.

It matters for PCs. It matters for media tablets (a term I hate and will try not to use going forward). It matters for some combination of PCs and media tablets since these devices are, by nature, general purpose computing devices. It matters for smart phones.

It matters for other products too, of course. But I write about mainstream technologies, and I write for the people who use those products. Not for the wishful thinkers. And not for the misguided souls that seek to prop up a gigantic corporation that does not give a crap about them at all.

I can't believe anyone would ever think differently about this. But I'll never mince words on this topic again.

Market share matters.