Thursday, October 19, 2006

Apple and Dell: Profit vs. Share

Daring Fireball, an outspoken Mac blogger, makes a startling comparison:
Daring Fireball: Jackasses of the Week: Gartner Analysts Mark Stahlman and Charles Smulders

.... I’ve said it before and will say it again: the interesting “share” number for Apple’s computer business isn’t their share of the total units sold; it’s their share of the total profits in the PC hardware industry. For example, Apple trails Gateway by three-tenths of a percent in U.S. market share, but Gateway reported a loss of nearly $8 million in net income for its most recent quarter. Apple just reported a quarterly net profit of $546 million. Now, sure, a few hundred million of that comes from iPod sales, but whatever Apple’s profit from Mac sales, it’s a lot better than an $8 million loss.

Or look at Gartner’s beloved Dell. Their PC market share is at least five times higher than Apple’s. And their most recent net income? $502 million. Five times the market share, but less profit. And counting Apple’s iPod profits seems fair to me in this comparison, because Dell’s number includes all that money they’re making from those DJs...
The DJ comment is tongue in cheek of course, but it's a remarkable comparison. Apple's media coverage is not as disproportionate as we might think ...

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