The year of the iPad for the second year in a row

The iPad and Mac businesses both grew well in the last quarter. Tim Cook said they are observing some cannibalization of Mac from the iPad but much more switching to iPad is coming from the Windows PC market.

The evidence is still hard to pin down directly but the fact that PC sales (excluding the Mac) are down gives credence to the claim. Mac growth, in contrast, is largely unaffected. The following chart shows the the iPad volumes vis-a-vis Mac volumes and the Mac growth through recent history.

The iPad has out-sold the Mac since inception and is now about three times the volume. However, the growth rate in the Mac has not changed much.

The impact on the PC market has been discussed recently and the data in the following chart is an update given more precision on the units from Apple: Continue reading “The year of the iPad for the second year in a row”

Price competition

Apple’s products are often seen as being priced “at a premium”. This is mostly a matter of perception, but in certain categories Apple’s products are priced above the industry average (though probably still affordable to sufficiently large populations). As a result, when competitors launch lower-priced products there is a tendency to expect Apple to react and reduce its prices to compete.

This expectation was evident when AT&T had an exclusive on the iPhone. The assumption among many (expressed in comments here as well as elsewhere) was that a switch to multi-carrier distribution would result in a price reduction and consequently a reduction in margins.

It was evident in the iPod and the Mac businesses over the years as prices for competing products collapsed.

It is also evident with respect to the iPad where expectations are that the Kindle will cause a reduction in the iPad price (and presumably in the margin).

However, the data we have from Apple on their pricing shows no concessions to competitive price pressure. The following chart shows the historic prices that Apple was able to obtain for its main product lines:

Continue reading “Price competition”

Apple added $38 billion in cash last year

Last year I suggested that Apple could reach $100 billion for 2011. That was based on the addition of about $20 billion during 2010. Apple added $38 billion to reach $97.6 billion at the end of 2011.

The following chart shows the composition and scale of Apple’s cash holdings.

At the closing price, Apple’s market value is equivalent to 4.3 times the value of their cash.

The story of Fernforest and Petro Dale

Once upon a time there were some innovative farmers that developed a new hybrid crop that could satisfy the hunger of a growing population. This crop grew best in large farms which had to be situated far from where people lived. The food was so tasty and production could scale so quickly that it became necessary and possible to build a novel way to deliver this food to the population. The farmers built their own transportation network, which they called a “railway”.

This network of rail was itself very efficient and soon overtook the ability of restaurants and small shops to absorb the produce. In order to keep the pipeline of food filled, the farmers (now with their own railways) bought most restaurants and grocery stores. They transformed them into more efficient food retailers and the result was even more consumption and demand for the food.

To keep the population happy, the farmers constantly devised new food hybrids and new recipes for the restaurants. The food design process became a profession, even an art form. The farmers employed the best and most creative minds  when it came to food. They created unique recipes that became instant hits and were widely consumed. They invented “star foods” and “blockbuster dishes”. The process of churning out these hits was so highly honed that farms became factories of ideas.

Continue reading “The story of Fernforest and Petro Dale”

Introducing Asymconf

Asymconf is the Asymco experience. Live.

Attendees will be treated to an engaging, participatory experience. Using the case method, you will be guided through four probing questions pertinent in modern market analysis.

  1. What is disruption and how can it be harnessed? The case of mobile computing.
  2. What are the jobs that the entertainment industry is hired to do? The case of Hollywood.
  3. Is Wall Street more than good enough? The case of financial over-service.
  4. What are the limits of education? The case of learning and the theater.

If you would like to take part, please register your interest here.

—Horace Dediu & Indrek Vainu

 

The conditions for survival and prosperity

Yesterday’s post described the history of personal computing platforms over the past 37 years. It showed a distinct shifting of “eras” between traditional personal computing and the emergent mobile computing represented by device-based platforms.

Underlying these lives (and deaths) of platforms were the growth (and decline) of fortunes of companies and people. I hoped that by observing these patterns insight could be gained into the conditions for success or failure.

The following graph shows the companies which were predominant (in the top five ranking by shipments[1]) during each year of the industry’s history and the volumes they were able to obtain during that period. I also added Nokia and RIM as examples of the challengers coming from mobile devices.

It’s a difficult graph to interpret. Continue reading “The conditions for survival and prosperity”

[Updated] The rise and fall of personal computing

Thanks to Jeremy Reimer I was able to create the following view into the history of computer platforms.

I  added data from the smartphone industry, Apple and updated the PC industry figures with those from Gartner. Note the log scale.

The same information is available as an animation in the following video (Music by Nora Tagle):

httpv://www.youtube.com/watch?v=8h-C6u4yLj4

Continue reading “[Updated] The rise and fall of personal computing”

Apple as top personal computer vendor

“Yes. I think it’s possible if you integrate tablets”

– Meg Whitman, HP CEO in response to the question of whether Apple could overtake HP in computer sales in 2012.

via HP CEO Meg Whitman Admits Apple Could Surpass HP in 2012 | MacTrast.

However, according to Gartner, HP shipped 14.7 million PCs in the last quarter. While we don’t have the total global figure for Apple, my estimates are 5.2 million Macs and 14.7 million iPads, for a total of 19.9 million computers in the same period.

There might be an error in both Gartner’s and my numbers, but the gap of over five million in Apple’s favor is unlikely to disappear.

The history of shipments from these vendors  is shown below.

The market shares are also shown here:

I included the market shares thee years ago, and the rankings with the iPad excluded.[1] Apple went from 3.42% share at the end of 2008 to 5.6% share today excluding the iPad or 17.6% including the iPad. HP went from 19.3% in 2008 to 16% today or 13% if iPad is included.

Apple is ahead of schedule on their taking[2] the top spot in terms of units.

Notes:

  1. Although vendors other than Apple also sell tablets, their totals are unpublished and I am not aware of any estimates so. If anyone has seen estimates I would be happy to amend the data.
  2. Throughout the history of the industry, Apple never held the top spot.   The Apple II peaked at 15.8% in 1984 and the Mac at 12% in 1992.

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