Name: Why Apple Doesn't Care About Marketshare
Uploaded: 2020-02-25T08:13:05.000Z
Duration: 10 min 41 s
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Adverbs of manner

If you've been an Apple fan for the past fifteen to twenty years, then you probably

know that the company has never tried to sell the most of a product.

They didn't try to sell the most computers with the Mac, the didn't try to sell the

most music players with the iPod, and they didn't try to sell the most phones with

In fact, Steve Jobs set out to capture just 1% of the mobile phone market with the original

iPhone, since that would still generate tens of millions of dollars in revenue for the

And that business approach has always drawn criticism from tech analysts, financial experts,

and at times people from within the Apple community itself.

After all, why wouldn't a company do everything they can to dominate the market they're

Well, that's exactly what we're going to find out.

This is Greg with Apple Explained, and I want to thank NordVPN for sponsoring this video.

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Now the first thing I want to do is explain the title of this video.

Because it does sound a bit counter intuitive.

After all, if Tim Cook was offered the choice between a 90% or 10% share of the smartphone

market, obviously he'd prefer Apple to have a 90% share.

The question is, where does marketshare fall on Apple's list of priorities?

And if you're thinking, well Greg, I remember Steve Jobs talking about marketshare all the

time at the beginning of his keynote presentations.

And while that is true, that's doesn't necessarily disprove my point.

Because although Apple may celebrate a climb in marketshare if it happens, they aren't

forming their business strategy around that objective.

And this approach becomes clear when considering how Apple positions their products in each

When the original Macintosh was introduced in 1984, the average personal computer sold

for about $1,500, or roughly $3,700 today.

But the Macintosh's retail price was $2,500, or about $6,100 today.

That's a 66% premium in a product category that was expensive to begin with.

In 2001, the original iPod cost $400, when existing MP3 players retailed at around two

It was perhaps one of the most outrageously expensive Apple products at launch, starting

at $500 in 2007, which would be a little over $600 today.

Now you may be thinking, well $600 for an iPhone is actually pretty inexpensive compared

to the thousand-dollar models we've become accustom to.

But comparing existing smartphone prices to those from over a decade ago is not a fair

And it's because of something called carrier subsidies.

You see, in those days, a carrier like AT&T would subsidize an iPhone purchase by paying

a percentage of the phone's cost to Apple.

Which saved the customer quite a bit of money upfront.

But AT&T would recoup that cost by adding a monthly fee to the customers phone bill

in addition to locking them into a two-year contract.

That's part of the reason why phone bills 10 years ago were more expensive on average

That also means the $500 starting price of the original iPhone wasn't the whole story,

because it wasn't the full cost of the phone, but rather the carrier subsidized price.

That's why Steve Ballmer said this about the original iPhone: “$500 fully subsidized

I said that is the most expensive phone in the world.”

And that may have been the case, considering the true unsubsidized cost of the original

And although that number may not be shocking today, it absolutely was in 2007, when the

average premium smartphone was selling for two or three hundred dollars.

And that's part of the reason why iPhone sales didn't really explode until the two

hundred dollar, 3G model was introduced a year later.

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But even though the iPhone has become incredibly popular, it doesn't dominate the smartphone

Globally, the iPhone has achieved just 12% marketshare, trailing Huawei's 18% and Samsung's

And we see similar trends with other Apple products.

The Mac is hovering around 7% worldwide marketshare, far behind Dell's 17%, HP's 23%, and Lenovo's

But it's not all bad news for Apple, since they do have products that are dominating

The iPad is leading the industry with almost 27% marketshare, which is double Amazon, who's

But no Apple product can compare to the Apple Watch, which has been absolutely dominating

smartwatch market with almost 48% marketshare.

That means almost half of all smart watch users in the world have an Apple Watch.

Leaving second place Samsung in the dust with their 13% share.

So it's fair to say that Apple is all over the place when it comes to their products

marketshare, with some dominating their respective industries much more than others.

And this is perfect evidence that Apple isn't aiming for market dominance.

If by chance it happens as a side effect of their primary business strategy, Apple isn't

going to complain, and they may even brag about it.

But they would never make product decisions based on this metric.

So that begs the question, what are their product decisions based on?

Apple is one of the most valuable companies on earth, with a market valuation of almost