Low Market Share Blues? Don’t Blame the Marketing Department

If there is a consistent theme in the world of Mac commentary it is: “Apple’s market share should be higher.” Part of this fervent wish lies in the desire to see the pundit’s personal computing choice validated by a vast sea of users. Others fear that with a less than three percent market share Apple is at least doomed to marginalization if not forced to leave the computing market completely. While still another troubled group of writers live in constant terror of complete Microsoft dominance.

Once the fact is established that the Mac’s share of the market is too low for sustainability the arguments inexorably move to the question of improving the said computing platforms consumer base. When confronted with this question the many opinion mongers of all topics Macintosh place the blame squarely at the feet of Apple advertising.  These people then exhort Apple to advertise in a manner that highlights the advantages inherent in a Cupertino designed computing device. With the problem noted and subsequently solved the author is free to reminisce about the halcyon days of Macintosh. Days of stratospheric market share when Mac themed publications littered the newsstands, an era when for every five PC owners you knew, you knew three Mac guys, a time when every office that had computers at least had one Mac wired to a LaserWriter.

As compelling as the arguments are they all suffer from the same logical fallacy: subverted support. The premise that Macs once held a massive chunk of the computing market is simply untrue, since their introduction Macs have been a niche player. The seemingly all too common perception that Macs were once wildly popular and challenging PC clones for computing dominance is in actuality a reflection on the enormous success of the Apple II instead of an accurate recollection of the Macintosh computing market. The juxtaposition of memories is understandable, before being utilized as inducements for new banking customers1 the Apple II was truly the market behemoth. For several years the Apple II had more software, the largest installed user base of any platform, and generally more computing karma than any competitor. This era of market dominance resulted in software coming out first (nearly always) for the Apple II, peripherals aimed only at Apple offerings, etcetera. When someone begins waxing poetic about the former glorified days of the Macintosh it is probable they are reflecting on the unbounded initial success of the Apple II. That’s not to say that Mac market share hasn’t been substantially higher in the past, it certainly has, in 1995 Mac market share briefly touched twelve percent2. Twelve percent is certainly a respectable slice of the computing pie but hardly the market making or breaking chunk that people seem to routinely reference.

While Apple advertising efforts have been controversial3 since the ad welcoming IBM to the ranks of computer manufacturers this article will stay targeted on post 1984 efforts. To get a true picture of the Macintosh influence and the effects of advertising an examination of years with the greatest market movement is clearly in order:

1984 is the most logical stepping off point. This year featured the introduction of the first Mac and the most famous Macintosh advertisement to date. The introduction of the first Mac combined with the Ridley Scott directed masterpiece resulted in a six percent slice of the computing pie. A fairly astounding achievement considering moving to the Mac meant abandoning all the comforts of your old platform. Macs did sport something never before seen in a consumer level computer: A graphical user interface. While derided at the time the “Big Brother” ad would come to be lauded by many as the greatest commercial of all time.

The next year the Mac’s share of the computing market drops to a mere 2.6%. A drop of 3.4% may seem horrific in today’s market but it is understandable if you realize that there weren’t yearly refreshes. The 2.6% of the market were new Mac owners, not techno lusting upgraders. In fact when Apple got around to releasing a new Mac model in 1986 share climbed back to 4.2%.  These years were not bereft of advertising, 1985’s Super Bowl featured the somewhat forgotten lemmings commercial. The Mac�s identity as a decidedly different computer was being established.

1987 saw a nice jump in the Mac�s market share: a rebound to 6%. The jump in market share was coincident with the introduction of the Mac SE and Mac II. The Mac II, one recalls, was the first modular Mac. It resembled the PC clones in the basic design and could be outfitted with a nifty Apple color monitor. Mac market share bounced around the 5 to 6% level for the next four. But with no earth shattering product introductions 1987-90 were rather quiet in terms of market share with status quo being the norm. Advertising was uneventful.

In 1991 status quo went right out the window. Market share more than doubles reaching a respectable 11.2%.  The obvious question is: What happened? After all, market share doesn’t double in one year for no particular reason. Most people opine that 1991 was the time when Apple finally had a model for everyone, which is seemingly true. The low cost Classic had been introduced late in 1990, as was the first low cost color modular Mac was introduced (the unimaginatively named LC). Also from 1990 were the Macintosh Iifx (wicked fast) and the middle of the pack Mac Iisi. The majority of 1991 sales were comprised of people buying the 1990 models. While 1991 featured plenty of print ads touting Apple’s expanded product line there were no television advertisements of note.

The next year (1992) the Mac’s market share grew yet again to an even 12%. These were the great days if Mac market share is one’s personal barometer of self-fulfillment. New models were introduced but nothing revolutionary. It is at this point the steady decline begins. Three years later (1995) Mac market share checks in at roughly 9%. This is still a reasonable share though it’s clear that Mac’s aren’t going to be running the PC clones out of business. However unsettling the decline may have been the source of the market share erosion can’t really be placed on the advertising gurus. These years featured the type of advertising people are still clamoring for: the “It Does More. It Costs Less. Its that Simple” campaign. The effort may have slowed the migration from the Mac but, obviously, it did not increase market share. 

Spectators that found the slow drop in market share disconcerting were positively stunned in 1996. Mac market share drops to a more familiar 5.1%. A nearly 4% drop in market share is as unexpected as the huge gain of 1991. The drop is probably attributable to the release of Windows 95 by Microsoft. First time buyers would be hard pressed to see a substantial difference between a Mac and a PC. Sure the Macs icons looked a little cleaner but the were both systems were fairly polished windowed interfaces. Only by delving a bit more deeply into the system could you find the significant differences. It is also at this time that Apple went on the offensive in advertising to highlight the aforementioned differences. Apple fanatics were treated to perhaps some of the hardest hitting commercials ever: A series of commercials featuring a direct comparison to the foibles of Win95. However convincing and well made the commercials were the effect on sales was less than hoped for as evidenced by the massive drop in market share.

This was the beginning of the Modern Era of Mac. Market share continues a fairly steady slide to its current level. Advertising becomes more widely ridiculed and more “image” oriented. The “Think Different” campaign was roundly panned. The “Intel’s Toast” ads were loved but failed to increase numbers of boxes moved and the memory of the “switcher” ads still linger. None of these ads had an immediate measurable impact on Mac sales.

So what does this trip through the history of Macs reveal? The first thing one concludes is that far from being a company that advertises only the ineffable qualities of the Mac Apple has advertised in nearly every conceivable manner: From head to head comparisons, ads featuring the ease of use of Macs, ads that catered specifically to the low cost of Macs and ads that proclaimed the Mac to be more powerful. The wide range and lack of yearly quantifiable impact of Apple advertising should quell the notion that Apple�s advertising is solely responsible for the Macs decline in popularity. By this point the casual reader has undoubtedly come to the conclusion that advertising does little or nothing for Mac sales. Indeed, the numbers for any particular year or associated with any particular campaign seem to justify this conclusion. Despite the ease at which one reaches the conclusion, it is untenable. Including the value of Apple�s brand name demonstrates the cumulative effect of Apple advertising throughout the years. Taking 2002 as an example (to minimize the effect of the iPod�s success) we note that the Apple brand was valued at a staggering $5.32 billion4. This is a remarkable achievement for a company with a 2.27% market share5 (inspection of the list reveals the only companies with PC exposure ahead of Apple are Microsoft and IBM). In short: Apple does have a minimal segment of the computing market but this is not due to the failure of Apple advertising, rather it is in spite of Apple advertising.

It is natural to wonder about the usefulness of brand value. One supposes it might come into play if a corporate merger of buyout was contemplated but other than that the utility seems questionable. Not so, brands represent relationships between consumers and corporations so a strong image, bolstered through the years by carefully planned advertising, can result in a very receptive marketplace if the company has something that lives up to the cultivated image. Witness the phenomenal success of the iPod. Consumers were unafraid to snap the things up as quickly as Apple could produce in part due to the image Apple had cultivated.

1ECN January February 1987
2All the figures used in this article are worldwide market share numbers as cited in Personal Computer Market Share: 1975-2002
3The “Welcome IBM, Seriously” advertisement was widely seen as conceding the computing market lead to IBM. An excellent discussion can be found at Learning from the advertising guru
4BusinessWeek Online: 2003 Global Brand Scoreboard
5It is natural to wonder about the usefulness of brand value. One supposes it might come into play if a corporate merger of buyout was contemplated but other than that the utility seems questionable. Not so, brands represent relationships between consumers and corporations so a strong image, bolstered through the years by carefully planned advertising, can result in a very receptive marketplace if the company has something that lives up to the cultivated image. Witness the phenomenal success of the iPod. Consumers were unafraid to snap the things up as quickly as Apple could produce in part due to the image Apple had cultivated.