Gartner puts Apple at 8.8%, IDC at 9.4%. This bodes well for next week's earnings report

Source: MacRumors.com

Apple (AAPL) computers sold surprisingly well in a shaky economy last quarter, according to a pair of preliminary reports issued Wednesday by Gartner and IDC.

The big winner this summer was Acer, which became the world's undisputed No. 2 computer maker, after Hewlett-Packard (HPQ), on the strength of netbooks that sell for under $400.

But Mac sales also grew, despite an average selling price of just over $1,200 and profit margins that are the envy of the industry.

Reporting only domestic sales, Gartner estimates that Apple shipped 1.572 million Macs in the United States last quarter, up 6.8% year to year, for an 8.8% market share.

IDC's numbers were slightly higher: 1.64 million Macs, up 11.8%, 9.4% market share.

These seem to be record numbers. Twelve months ago, Gartner put Apple's U.S. market share at 9.5% and IDC had it at 9.1%, but those were preliminary reports. Both firms revised their 2008 Q3 Mac numbers sharply downward and now say Apple's share of the U.S. market last year was actually 8.6%.

Neither Gartner nor IDC reports Apple's worldwide Mac sales. For that we'll have to wait until Monday, Oct. 19, when Apple issues its quarterly earnings report. Analysts we surveyed put total Mac sales anywhere between 2.6 million and 2.9 million, with a consensus of 2.76 million.

UPDATE: Reader SMR in Nashua, N.H., points out that if you go back far enough, you can find years in which Apple enjoyed a larger share of the U.S. PC market. In 1994, for example, it was No. 2 (after Packard Bell) with a 14.7% share. In 1981, it had 17%, which put it in the No. 2 spot after Radio Shack (20%). Source: Ken Paulson's Chronology of Apple Computer Personal Computers.

Below the fold: Gartner and IDC's current U.S. and worldwide PC numbers:

Gartner:

IDC:

Over the past decade, Mac shipments have grown with nearly every new Microsoft release

As if Steve Ballmer didn't have enough to worry about after last week's Sidekick/Microsoft (MSFT) Danger debacle, here's a bar graph that may add to his miseries.

The graphic (shown full-size below the fold) comes out of a report to clients issued Monday by Broadpoint AmTech analyst Brian Marshall. Anticipating the release of Windows 7 next week (Oct. 22), Marshall reviewed Mac sales figures over the past 10 years to analyze the impact of the four previous Windows launches:

• Windows 98 (launched on June 25, 1998)
• Windows 2000 (launched on February 17, 2000)
• Windows XP (launched on October 25, 2001)
• Windows Vista (launched on January 30, 2007)

His findings:

"We have concluded that no negative correlation exists on Apple's (AAPL) hardware sales when Microsoft launches a new OS. Ironically, we believe new OS launches from MSFT may have even acted as a 'delayed accelerant' to AAPL's computing sales."

The chart suggests that Vista's well-publicized problems were the real accelerant, providing fodder for more than two years of Get A Mac ads.

[Click to enlarge]

Correlation is not causation, of course, and Marshall is quick to add that "AAPL's success (or failure) in the computing market is largely idiosyncratic (or company-specific) in nature and not dependent on others in the industry."

Still, he thinks that despite Windows 7 — if not because of it — Apple could double its global PC market share from about 4% today to 8% over the next five years.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Source: Net Applications

The so-called market share reports issued every month by Net Applications have long been controversial — mostly because they didn't actually measure market share (which business people typically express as the number of widgets they sell in a given period divided by the total number of widgets sold).

What Net Applications did instead was sample data from browsers visiting their clients' websites and report what percentage came from machines running Windows, Mac, Linux, etc.

But despite their flaws, we tracked the net metrics firm's reports because their sample size was relatively large — some 160 million visits per month — and because they offered regular snapshots of broad market trends. They revealed, for example, the rise of Firefox, the decline of Internet Explorer, the failure of Windows Vista to catch on. Their reports were consistent, dependable, and free.

Until now.

Net Applications' reports are still free, at least some of them (mobile market share data now costs an arm and a leg). But their dependability — and perhaps their credibility — just took a huge hit.

Starting in June the company changed the way it weights its data, giving more weight to page views from countries with large Internet populations that aren't well represented by their clients (such as China) and less weight to hits from countries like the U.S. that are over-represented in their data.

Wrenching changes

The effect was to cause wrenching changes in the results — so wrenching that Net Applications skipped its June report entirely. And on Saturday, when it finally issued its July report, the new country-by-country fudge factors were applied retroactively to all past reports.

The new market shares for the major operating systems are represented in the pie chart above. To see how different they are from the old, we have to go back to May, the last month for which we have comparable data. The results are summarized in the table below. The major effect of the new weighting system:

• Microsoft (MSFT) Windows' share grew more than 6%
• Apple (AAPL) Mac OS X fell more than 51%
• The iPhone OS lost nearly 60%
• The iPod touch — whose rapid growth was the subject of a Net Applications featured report — fell off the chart
• Java ME — Sun Microsystem's (JAVA) plaform for mobile devices, barely a blip in previous reports — grew 212%

Net Applications has retroactively revised previously published data before (see here), but never to this extent.

In defending the changes, the company argues that they provide a much more accurate view of worldwide usage share statistics. But it also acknowledges that the new method produces "some significant changes in usage share" — usage shares it published with great confidence only a few months ago. The changes it highlights:

• Baidu – Baidu goes to 9% of global search engine usage.  Baidu is on a major growth curve, which is affecting the relative share of all other search engines.
• Google – Because of Baidu's growth, Google's global share is actually going down.  This is almost completely due to Baidu and does not reflect the rest of the world.
• Apple – Since Mac share in the U.S. in significantly higher than the rest of the world, Mac and Safari share drop in the global reports.
• Opera – Opera goes up to 2% in global reports.  This reflects the significant share they have in Eastern Europe and Asia.

[What the company doesn't mention -- but several readers have pointed out -- is that their operating system numbers are now much more in line with StatCounter's global stats.]

You can see Net Applications July market share reports here, and read about the new methodology here. See Ars Technica's primer for a good review of the different ways to measure market share.

See also:

• Mac Internet share hits record 8.87%; Windows drops below 90%
• Apple starts 2009 with strong Net gains
• Apple's Net share slipped in February
• iPod touch Net share grew 36% in April

On Wednesday, Gartner Research reported that Apple's (AAPL) share of the U.S. computer market, which topped 9% in calendar Q3 last year, dropped to 7.4% in Q1 2009 — putting it in fourth place behind HP (HPQ), Dell (DELL) and Acer.

The next day, Apple's share price rose nearly 2% to finish Thursday at $121.45, its highest close in six months.

Why the disconnect? Chalk it up to the ASPs.

As Gartner's Mikako Kitagawa notes, sales for Apple's competitors are being driven by the explosion of interest in low-cost netbooks — not just among penny-pinching consumers, but in the professional and education markets as well.

As result, Gartner estimates that average selling prices (ASPs) for computers sold in the first quarter may have fallen as much as 20% across the board — cutting sharply into PC makers' revenues.

Except at Apple. Despite rumors that its engineers may be working on some kind of device with a 10-inch screen, the company has so far shown zero interest in duking it out with the likes of Acer and Asus in the bargain basement mini-notebook market.

So even as Apple's market share shrinks, its margins and gross revenue are likely to have held up better than any of its competitors.

Moreover, while Gartner's Ms. Kitagawa is seeing signs of channel inventory restocking at other companies — evidence that the global PC market has not yet hit bottom — she singles out Apple's "deft control of inventories [which] limited its shipment decline."

All this — and a flood of deferred iPhone earnings — may help explain why analysts are scrambling to raise their Apple price targets (and talking up the stock) in advance of the company's fiscal Q2 earnings report next Wednesday, April 22.

Below the fold: Gartner's preliminary estimates of domestic PC shipments for Q1 2009.

CEO Steve Jobs may be struggling with health problems, but sales of Apple's computers seem to be holding up.

In a holiday quarter in which the PC industry recorded dismal growth — its worst since 2002, according to Gartner Research — Apple (AAPL) sold more than 1.25 million Macintosh systems in the United States, up 8.3% from the same quarter last year.

Domestic shipments of Dell (DELL) computers, by contrast, were down 16.4% and HP's (HPQ) off by 3.4%, according to preliminary fourth quarter sales figures released Thursday by Gartner. (Click here for press release.)

The news was mixed for Apple, however. Although sales were up year-to-year, they were down 23% from the previous quarter — often the Mac's strongest because it includes back-to-school promotions. (Mac sales declined 0.24% between September and December 2006, according to company, but grew 7.16% between the same two quarters in 2007.)

Apple moved from third to fourth place in Gartner's survey as the Mac's domestic market share slipped to 8% from 9.5% in October. (See Macintosh share of the U.S. market tops 9%.)

The big winners last quarter were Acer (sales up 55.4% in the United States) and Toshiba (up 12%) — largely on the strength of their mini-notebooks (a.k.a. netbooks), which sold in large numbers, and at steep discounts, in the last days before Christmas.

Apple, by contrast, kept its prices — and presumably its margins — high over the holidays. We'll find out how profitable those sales were when the company releases its quarterly earnings next Wednesday.

Overall, worldwide PC shipments totaled 78.1 million units in calendar Q4 according to Gartner, a paltry 1.1% increase over the same quarter last year.

Below the fold, Gartner's raw data for domestic and worldwide PC sales. Note that in Gartner's global results (Table 1), Apple's worldwide sales are consigned to the "others" column.

The rise of the iPhone, like the course of true love, never did run smooth.

Quarterly sales last year varied widely, from a low of 720,000 in June to a high of 6,890,000 in September following the release of the iPhone 3G.

But that's nothing compared with the weird patterns that emerge from data collected by Net Applications, a Web metrics firm that tracks hits to its clients' websites on a daily basis — a total of 160 million visitors per month.

The chart above (full size below the fold), created by Hank Vaccaro of Standard Analytics and posted last week on The Mac Observer's Apple Finance Board, displays Net Applications' iPhone data for the device's first 18 months on the market. The first part of the chart is drawn from weekly data; the last part includes daily variations.

With the caveat that this graph represents how frequently iPhone owners are using the Web, not iPhone sales or market share, it still tells us quite a bit about the iPhone's growth over the past year and a half.

First, by tracking the seven-day moving average (the red line in Vaccaro's graph), we can see four clear spikes:

1. The initial release in June-July 2007
2. Holiday sales in Dec. 2007
3. The release of the iPhone 3G in July 2008
4. Holiday sales in Dec. 2008

We won't know how strong sales were in December until Apple (AAPL) releases its quarterly earnings next week (Jan. 21 at 5 p.m. EST), but based on the magnitude of that last bump, they shouldn't be too shabby. (Citibank's Richard Gardner on Tuesday cut his 12-month price target for Apple shares from $153 to $132 based in part on what he called "soft 4CQ08 iPhone shipments," but didn't say where he got his data.)

And what about the strange saw-tooth pattern in the last part of the chart? That's created by the daily variations in Web hits. On weekdays, the Internet tends to be dominated by office computers — mostly PCs running Windows. But on weekends, home users take over, and that includes a higher percentage of Macs, iPhones and other non-Windows devices. The variation is striking — as much as 40% in a single day.

But it all smooths out in the long run, as represented in Vaccaro's chart by a thick black line, and the trend — so far — is an exponential rise.

See also:

• iPod touch use "exploded" Christmas day
• Apple's Internet share registered strong gains in December
• iPhone Web share hits record 0.48%, up 58% in one month

Below the fold: Vaccaro's chart, full size:

Apple's (AAPL) presence on the Web expanded to record levels in December, according to preliminary data released early New Year's day by Net Applications.

Mac OS X's percentage of Web hits reached a record 9.63%, up more than 9% since November and nearly 32% from Dec. 2007.

Gains for the iPhone were even more impressive. Its share of the Web traffic grew nearly 19% to hit a record 0.44%. That's more than three and a half times the 0.12% share it recorded one year ago.

The iPod's Web share, meanwhile, grew 60% last month, from 0.05% to .08% — another sign of the strong holiday sales of the iPod touch reflected last week by a sharp rise in downloads from the App Store (see here).

All told, the entire Mac OS X Web experience now stands at 10.15%.

Microsoft (MSFT) Windows, meanwhile, continues its downward drift, having lost more than 1.1% of its Internet share in the space of a month. Windows PCs still dominate the Web, however, with 88.68% of page hits as measured by Net Applications.

Net Applications’ monthly surveys are conducted by sampling browser data from some 160 million visits to Web sites operated by the firm’s clients. Although it describes the results as “market shares,” the Web metrics company does not actually measure share of market in the traditional sense of sales revenue or unit sales. It does, however, provide a consistent methodology by which to gauge browser and operating system trends.

To see its Jan. 1 report, click here. The results are summarized in the table below.

Hidden in these monthly figures are the sharp spikes recorded by Apple's mobile devices around the holidays. You can see them in the day-to-day chart of Net Applications data posted early Thursday on The Mac Observer's Apple Finance Board by member Alexis Cabot. In the graph below, the dark blue line represents Web hits from iPhones and the green line hits from iPod touches.

It remains to be seen if the end-of-year trends hold up in 2009. A note on Net Application's website warns:

"The December holiday season strongly favored residential over business usage. This in turn increases the relative usage share of Mac, Firefox, Safari and other products that have relatively high residential usage." (link)

Money gets tight. Buyers get picky. Price-sensitive consumers — the kind Steve Jobs  and Apple famously "choose not to serve" — start shopping for bargain basement PCs and Taiwanese netbooks. Mac sales plummet.

That's the conventional wisdom. Or at least that's the line Morgan Stanley's Kathryn Huberty pitched in September — when she lowered Apple's (AAPL) rating twice in two weeks — and reiterated last week, when she earned the distinction of being the first and only mainstream Apple analyst to set a 2009 price target below $100 a share. (see here)

“PC unit growth is decelerating," she wrote in September, "and the remaining source of growth is increasingly in the sub-$1000 market where Apple does not play.”

The only trouble with this argument, as Turley Muller of Financial Alchemist points out, is that it flies in the face of Macintosh unit sales for the first 12 months of the recession.

"Huberty claims Apple is at risk because it’s highly exposed to the premium-end, where demand has been falling," Muller writes in an analysis posted Friday. "However, Mac unit sales grew nearly 40% for 2008, and its share in the premium segment almost doubled. Mac sales have been growing roughly 3x the market."

Huberty, whose Mac and iPhone estimates are among the worst in the industry, has become a favorite target for Apple enthusiasts. (See Why Apple shares took a nosedive.)

But Muller may be the first to put his finger on precisely what she's doing wrong.

"I understand why consumers aren’t paying-up for Windows PCs," he writes. "How are HP, Dell, Acer, Toshiba, etc different from each other if they all use Intel chips, run Windows, and have many other of the same components?"

And because the PC industry is so dominated by Windows PCs, the dynamics that drive demand for Microsoft (MSFT) Windows machines are going to determine what demand for the entire industry looks like.

But, as Muller points out,

"Macs and Windows PCs are not similar product offerings. Some analysts, notably Huberty, appear to conflate the two. Macs are Windows machines, for one can install Windows OS on Mac hardware and use it just as if it were a Dell or HP. But, PCs such as Dell and HP can’t run Mac OS."

"Therefore," he writes, "it’s Windows PC demand that is shifting to the lower-end" (emphasis his).

Muller's analysis suggests that Apple was right not to offer sharp Black Friday discounts and to stay out of the business of making $500 computers — the kind of "junk" Steve Jobs says Apple's DNA won't allow it to ship.

Even Muller concedes, however, that no company is immune to the effects of an economic downturn of this magnitude. He argues — as others have before — that once you've tasted the benefits of the Mac OS, it's hard to switch back. But with money tight, buyers may be less likely to explore the high-price offerings in the Apple Store.

"The recession won’t cause cheap Windows PCs to take sales away from Macs," he concludes. "Instead it will slow the rate that Macs take share from PCs."

Click here to read the rest of Muller's piece.

We've known since October, when Apple released its latest earnings report, that the iPhone had a bang-out summer – shipping nearly 7 million units in the quarter, up from just over 1.1 million the year before.

But it wasn't until Thursday, when Gartner Research issued its smartphone sales report for the third quarter of 2008, that we learned just how well the iPhone did vis-a-vis its competitors.

Apple's (AAPL) share of the worldwide smartphone market leaped 327.5% in Gartner's survey, catapulting past Microsoft's (MSFT) Windows Mobile to grab the No. 3 position and putting it within striking distance of Research in Motion's (RIMM) BlackBerry for the No. 2 spot.

Smartphones running on Nokia's (NOK) Symbian operating system are still No. 1, with nearly 50% market share, but they lost ground as Symbian sales shrank for the first time, down 12% for the quarter.

Apple's results would have been even more impressive – and would have knocked RIM off the No. 2 perch, as Steve Jobs claims -  if Gartner's researchers hadn't reduced the iPhone's quarterly sales numbers by the more than 2 million units that Apple shipped before the end of the quarter but were still sitting in inventory.

Gartner's preliminary sales figures – listed both by vendor and by operating system – are available in its press release here.  But they are easier to visualize in the bar graphs, pasted below the fold, that Ars Technica's David Chartier has helpfully produced. See here.

A snapshot of the global smartphone market issued Thursday by Canalys shows just how big a dent Apple's iPhone made in the cellphone universe last quarter.

With a surge of nearly 6.9 million shipments in calendar Q3, the iPhone leapfrogged past RIM (RIMM) and Motorola (MOT) to grab 17.3% of the smartphone market.

That put Apple (AAPL) in second place after Nokia, and helped cut the market-leader's share from 51.4% to 38.9%.

It also helped expand the entire smartphone category, which grew 28% from the same quarter last year to reach 40 million phones. The much larger cellphone market, by contrast, grew 3%.

Canalys also reports that Apple grabbed the No. 2 spot in smartphone operating systems, as the next table shows. Nokia's Symbian still dominates with 46.6% market share, but that's down sharply from 68.1% last year. RIM, Microsoft (MSFT) and Linux also registered gains, but nothing that compares with Apple's.

The Canalys report came the same day as a survey of business users that showed the iPhone leading all other smartphones in terms of customer satisfaction. See J.D. Power: iPhone beats BlackBerry.

However the iPhone's reign as No. 2 could be short-lived, according to Canalys. The U.K.-based research firm expects RIM to overtake Apple in the December quarter. RIM is selling three new products this holiday season — the Bold, Storm and Pearl 8220. If Steve Jobs has any more iPhones up his sleeve, we won't see them before Macworld in January.