A look at stupid statistics – NPDs flawed view that 91 percent of over $1000 computers are Apples means success

desktop-computer I won’t make this long, just provide some realistic statistics. NPD says that 91% of all computers over $1,000 are Apples. First off, the thing they obscure a bit is that is 91% of all computers sold AT RETAIL. That means all desktop computers and laptop computers for businesses across the country aren’t counted, and that’s a lot of greater than $1,000 machines.

The Best Buy Study

I think we will all agree, that when the average person thinks retail computer sales, Best Buy is the Mecca. Current Best Buy inventory shows some pretty interesting things. 269 machines show up in their current online inventory. If you break those machines down, you’ll see

  • 19 desktop computers over $1,000, 6 of those are made by Apple. (iMac and Mac Pros)
  • 58 desktop computers under $1,000, two of those are made by Apple. (Mac Minis)
  • 81 laptop computers under $1,000, one of those is made by Apple. ($999 White Macbook)
  • 38 laptop computers over $1,000, 4 of those are made by Apple. (Macbook Pros)
  • 72 netbook computers, none of these are made by Apple.

So what do we have? 211 computers under $1,000, and 57 computers over $1,000.

So now that we have an idea what percentage over $1,000 machines makes of buying options (27%) let’s take a look at what is actually selling.

When you search desktop computers, and sort by “Best Selling” you will find that the $1,499 24” iMac is the first Apple in the Best Selling computers, and it shows up 29th on the list. It’s also one of 3 computers over $1,000 in the top 30! That’s right one single Apple desktop in the top 30.

When you do the same for laptops, you will find the $1,199 Macbook Pro 22nd on the list of best selling laptops at Best Buy, and one of only two laptops in the top 30 over $1,000. Again, one Apple in the top 30.

So what does all this mean? It means that over $1,000 desktops make up 10% of the best selling desktop sales at Best Buy, laptops over $1,000 make up 6% of the best selling laptops at Best Buy, and obviously, every netbook is under $1,000 and not made by Apple.

So, of the 27% of machines for sale at Best Buy, that cost over $1,000, 5 of them have managed to make it into the top 60 selling machines, not including netbooks, and TWO of those are made by Apple. That goes against the 91% number pretty heavily, but even if we give them the benefit of the doubt, I hope that Apple is damned proud to own 91% of 8 1/3% of non-netbook computer sales at Retail (at least @ Best Buy)

Parting Shots

Keep in mind that the American heartland buys a LOT of computers at Wal-Mart, of which none are made by Apple, and that is counted as retail. I would guess that most of those computers are under $1,000, further skewing this number into looking like some sort of victory. The fact of the matter, is that sub-$1,000 computers are where the real users are, netbooks or not, that IS the market these days. HP, Dell and Gateway aren’t slashing their prices and profits because the race to the bottom is their idea. They sell what is selling.

Apple fanboys love to say “You pay more for a BMW because it’s a BMW, it costs more than a Chevrolet because it’s better.” The problem with that logic is that unless you are talking about a very expensive Bimmer and a really cheap Chevrolet, the difference isn’t all that huge, it’s pretty easy to spend $35-40,000 on a Chevy. As PC prices plummet to the $300s, the difference between a $300 laptop (you can get a $299 laptop in lots of places) and a $999 laptop, is suddenly striking and causes the biggest consumer segment pause to wonder why they are paying 333% more than they have to.

10 Comments

  1. I agree with you stats are stats, and while the sales are only retail I think the Apple Store would show Apple does ok in that range — not great, not enough to skew the people buying alienware and the like.

    Windows-based machines kill Apple in the corporation and I don’t think that’s going to change, well, ever.

    What I do think the numbers show is this:
    – in its price-range, Apple is very competitive in the consumer market.
    – Apple’s not interested in the sub-$1000 market.

    I think the $500-range computers are pieces of junk. My wife had a Dell she got cheap and the thing felt cheap. She replaced it with a $800 or so Toshiba (I think it was a $1000 computer-marked down) and it feels much more solid.

    While I can see myself spending ~300 to get a Dell-notebook, once I get north of that I’m going to get a Mac. Sure, I’m a fan-boi and Apple-based writer, but the OS and Hardware fit my flow very well and I think the $1200 MBP is a great machine. I don’t think I’d have a good computing experience with a Wal-Mart computer regardless of OS.

    • I meant Dell netbook.

  2. “The fact of the matter, is that sub-$1,000 computers are where the real users are, netbooks or not, that IS the market these days.”

    Yes, according to NPD the average selling price must be in the $600 ballpark. It means that most shoppers actually buy a sub-$1,000 computer. But the over-$1000 PC market is where the money is.

    The same is true with cellphones, why sell a buckload of entry-level devices when you can focus on the smartphone market? Sure, this market is smaller (13% of total cellphone sales). But it’s growing, though. And it’s really lucrative. According to Deutsche Bank, “[Apple and RIM] accounted for only 3% of all cellphones sold in the world last year but 35% of operating profits.”

    I’m linking to the Google redirect page to bypass the Journal’s pay wall.

    http://www.google.com/url?q=http://online.wsj.com/article/SB124805149501664033.html

  3. I have to disagree with you there Adam. It’s overwhelming in the numbers I published that 90%+ of the market is buying sub $1,000 computers. Apple may be making great margins on those computers, but the money is obviously not there if nobody is buying them. The money is in finding the perfect balance point between price, features and profit. I can guarantee that there are mountains of engineers, marketing professionals and finance people looking at that exact triangle right now.

    The reality is year over year sales on desktops is significantly down for Apple (-16%) I would think that is a trend, not an anomaly. I am sure they know it too.

  4. So truthfully, the numbers aren’t even close to 91%, is that it? Then where in the world did the NPD guys got their data? From Apple?
    I think not even 50% of the people are willing to spend a thousand dollars for a computer, especially if a cheaper alternative is available.

  5. Yes, according to NPD the average selling price must be in the $600 ballpark. It means that most shoppers actually buy a sub-$1,000 computer. But the over-$1000 PC market is where the money is.

    • @odullu: According to that logic, it’s the over $10,000 computers that have the REAL profits, and those are eclipsed by the over $100,000 computers, and don’t even get me started on the $1,000,000 machines! Of course a larger profit margin is better, but you still have to SELL machines, profit margins aren’t worth squat if you aren’t moving some volume.

  6. Hey, I just wanted to point out that Apple just had it’s best non-holiday quarter ever while Microsoft just had a very lousy fiscal year. http://www.appleinsider.com/articles/09/07/23/microsoft_suffers_worst_fiscal_year_ever_while_apple_rises.html

    A few days back I checked the market cap on both Microsoft and Apple, their market cap as around 205B and 143.42B respectively. Now I know that a difference of 60B is a lot, however it just proves your point that even though the margin is high the money is not there cos nobody buys them wrong. With such a small market share and so many fewer employees, their market cap is very impressive.

    I’m from Singapore, and here, I have to say that Apple is extremely extremely popular. In my hall in a boarding school here, there are at least 8 mac books, 2 of them being a pro out of 48 people. Now this might seem extremely little, but when I first came here (last year), there were only 3 ppl who had MacBooks.

    In my class in school (admittedly it’s a school with very rich people), 70% of the class of 30 ppl have some form of Apple product, be it the ipod nano or iphone or ipod touch or ipod classic. Some of them even have multiple items such as an ipod touch and an ipod classic. Now these are their own items and not something they “share” with their family. Some of the classmates I know say that in their family everyone has at least one ipod. I think we can all agree that Apple products are slightly more expensive than competitors, but not all of us agree that they are better products. But what I can say that these “premiums” are not a barrier at all to people buying them.

    My family has an Imac and a unibody MacBook and a second hand ipod nano I bought from my classmate who just got a Iphone. We also have 2 Windows laptop. One of them being a Toshiba tablet running XP. The Toshiba cost me SGD2800, while the Unibody MacBook cost SGD1.5k (bought during one of apple’s one day sale online). The time I bought the tablet to the time I bought the MacBook was less than a year so price drops are extremely little. The tablet had all sorts of stuff like a touchscreen and fingerprint stuff and a drop resistant enclosure and all sorts of other stuff, so naturally I was very excited to be getting it. I was extremely disappointed when I got it has it was junk. The fingerprint gimmick was useless, instead of making my authenticating process before I logged into Windows faster, it just took more time for my computer to load the FingerPrint sensor. I couldn’t even stop the FingerPrint software from opening up everytime I typed a password even though I had settled it in the settings. In the end I had to uninstall the fingerprint software. I took my computer 3 minutes to start up and quite a long time to shutdown too. Within the first 8 months I had 2 bluescreens of death from doing utterly nothing. The first time while copying Movies from an extrenal hard disk, the other while just starting up my computer. Windows also had so many other small errors that I won’t even bother describing here.

    The only experience I had of Windows Vista was running in a Parallels on my MacBook. I can say that I know Windows Vista is a resource hog because my Imac (1gb) could run Windows XP in parallels quite reasonably. On my MacBook which had a faster processor and 2 Gb of DDR3 ram, Windows Vista was unbearably slow. And those authenticating dialogs that constantly popped up for the smallest of reasons whenever I wanted to install anything drove me to hate Vista quite easily.

    Last time my family computer at home used to be a Windows computer. We changed that every year by buying a new one. However, once we got our Imac, we haven’t had the need to buy a new main desktop computer for 3 years. Yes, it is getting slow now, but I just intend to upgrade the ram from 1 gb to 2 gb and I’m sure it can last for a few more years.

    At my dad’s office, he runs Windows on some of the cheapest machines there are (except for the more senior people in the company who obviously get better computers). Not because they are good, but just because they are cheap. He has Windows XP to Windows 98 in the office. Do the computers give him headaches? Yes certainly. Even the new dell computers bought at the end of last year are extremely slow compared to our 3 year old imac, even though it has more ram, more hard disk and everything.

    The only things really stopping the office from converting is because, firstly the price, secondly because all other offices that they do business with uses Microsoft office, and their own suite is not very compatible with their windows and mac versions.

    With all that said, I think that Windows 7 is shaping up quite nicely. My roommate who uses a beta copy of it says its much faster than XP. If it is really as fast as he says, I’ll be extremely happy to run it in parallels in my macBook so I can run applications like MetaTrader for my forex trading which is Windows only, thus solving my problems of some software not supporting my Mac =)

  7. I dont think i will spend that amount for a system. There are many cheaper alternatives to it so y waste money..

  8. Hi,
    I am from Singapore too! I am a student studying at the School of Science and Technology, Singapore. All I can say is, both of my parents own iphones (non-3GS), my father owns an imac, I myself owns a MacBook (2007), and I just bought a MacBook Pro (2.4GHz, 4GBram……), and everybody in my school owns either MacBook unibody or MacBook Pro. 85% of the students in my school owns MacBook Pro. All teachers own MacBook Pro. I also agree with Mr David Koh, Apple is an extremely popular product in Singapore. In one train carriage, you can spot teenagers or adults tapping away at their screens. Even 50 over year old women buy MacBook Pros in Singapore. Of course there are more……

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  1. Does Apple Have a “91 Percent” Share of the High-End? - [...] doesn’t take much to refute the market share angle. I don’t agree with the article using just Best Buy …
  2. Does Apple Have a “91 Percent” Share of the High-End? | The IT Chronicle - [...] doesn’t take much to refute the market share angle. I don’t agree with the article using just Best Buy …
  3. Does Apple Have a “91 Percent” Share of the High-End? | Mac Bargains - [...] doesn’t take much to refute the market share angle. I don’t agree with the article using just Best Buy …
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