RealTime IT News

Apple Rules the Priciest of Roosts

Apple claims just under 9 percent of the total desktop/notebook computing market, but it almost totally owns the "premium" space for computers.

According to market research firm NPD, Apple (NASDAQ: AAPL) held 91 percent of the market in June for computers carrying price tags more than $1,000 -- and that's up from 88 percent in May.

The other side of the coin is that's no longer a major market. Stephen Baker, vice president of research for NPD, told InternetNews.com that the split between the sub-$1,000 and over-$1,000 markets is about nine to one.

The average laptop price, according to NPD, is $701, but the split between platforms is significant. For Windows notebooks, the average selling price was $515. For Macs, it was $1,400.

"As Windows notebook prices have gone down, the value proposition for expensive notebooks continues to decline and Apple continues to gain share in what is more and more a stagnant area, mostly because the only vendor that plays in that area is Apple," he said.

Even after recent price cuts, Apple has just three computers under $1,000: the $999 13-inch MacBook and the two Mac Mini desktops at $599 and $799. At the high end, its computers can run well over $2,000.

But that's exactly how Apple wants it, Baker noted.

"Apple is not looking to be a volume leader," he said. "They feel like there's a distinct value proposal in this product and want to be paid for it. It's the same reason you don't see a lot of $15,000 E-class Mercedes Benzes. They don't feel like that's their market."

He added that Apple "hasn't exactly knocked the cover off the ball in terms of notebook volume" this year. For four of the six months this year, Apple's sales were down over the same period in 2008.

If that long-rumored Apple tablet PC comes along, Baker figures on it being more like a larger iPod Touch than a MacBook.

"They have to preserve the purity of the MacBook as a computing device," he said. "This would avoid any cannibalizing of the laptop business."

Apple is also about to lose its best salesman -- with Windows 7 coming to market and the maligned Windows Vista being shunted aside. Apple got a lot of mileage out of Vista's failures with its advertising, but Baker doesn't think we've seen the last of the campaign's smarmy "Mac" and long-suffering "PC" characters.

"It's always nice to have a boogeyman across the aisle, but some times when one boogeyman goes away, another pops up," If Vista is not there, I'm sure they will dig up stuff they can use," Baker said.

The launch of Windows 7 won't see a return to premium laptop prices, either.

"We might see price declines mitigated, stop or even increase because of the cost of components, but no one is looking to turn the PC market back into a high-price marketplace," Baker added.