A look at Paul Thurrott’s "analysis" of PC market share.

Part of Paul’s job is apparently to give Apple little to no credit for anything, especially sales. Lately, he’s almost had to work when the quarterly IDC and Gartner data comes out because it shows Apple is rising rapidly in the US.

This time around, Paul decided to ignore the US altogether. Brilliant!

Here are highlight’s from Paul’s “analysis” of the latest figures:

“…many are pointing out that Apple has rebounded in the US and is now in the top five in that market. (Apple doesn’t factor into the charts for worldwide sales, which includes many low-price markets that Apple either doesn’t sell in or doesn’t sell well in.)”

Why does Paul explain parenthetically why Apple doesn’t factor into the charts worldwide? To minimize the fact. He needs to do it this way because he’s going to base his analysis on the very worldwide figures for which he knows exactly why Apple doesn’t rate highly.

Apple does not sell $299 PCs in third-world countries, so their share will always lag on the global scale. Period. Since the market share of such machines brings next to nothing in terms of actual profit, it’s nothing but bragging rights anyway, and Paul knows this well. Still, he’s trying to show that Apple is somehow not growing rapidly in computer sales, and if he uses US data, well, that would be impossible.

“According to IDC, Apple is the number 4 PC maker in the US, behind Dell, HP, and Gateway, with 5.6 percent of the market. (Apple-friendly publications have reported this event as “Apple poised to become number three PC maker in the US” as the company was barely outsold by Gateway in the quarter….”

Why would it have to be “Apple-friendly publications,” Paul? Why wouldn’t any rational person come to this conclusion? It’s obvious. Apple and Gateway are “tied” in percentage at 5.6% with Gateway getting the nod for a few more units shipped. Apple’s #4 and climbing. This is clear to anybody.

“…I suppose it’s inconceivable that Gateway might also experience a sales surge, but whatever.) Because Apple does not provide US-only numbers, this is unreliable and thus less interesting to me.”

A Gateway sales surge? Are you serious? Gateway is fading, or did you miss that? Dell has a better shot at a sales surge than Gateway. Meanwhile, lately Apple’s US figures have consistently increased at a higher rate than the PC industry. Gateway will need a lot more than a “sales surge” to defend the #3 slot. Interesting that you don’t seem to know this.

Further, you ignore the Gartner/IDC numbers for Apple because, even though they’re good enough for PCs, they’re “unreliable” for Apple. Right. Let me translate: “Because these numbers — as they have for the last few quarters — support the fact that Apple is selling at a much faster pace than the PC industry in the US market, where they’re actually making profits instead of selling loss-leaders, I’ll blow them off with a wave of my hand.”

The rest of the post is about worldwide share. It’s all about Lenovo, Acer, etc. Having blown off Apple’s continued great showing in the US, he can forget about them.

Personally, I hope HP, Acer, etc. think like Paul and assume a “there’s nothing to see here” attitude towards Apple’s US sales. I don’t think that’s the case, however, since they’re expected to provide results (measured in profits, not share), which must factor in those skyrocketing sales.

What’s most amazing about Apple’s US sales — and I have to point this out since Paul ignores those sales totally — is that there have been no new Macs to fuel the continued growth, and no seasonal factors (e.g., back to school, holidays) that explain it either. Sure, the Macbook and Macbook Pro lines were refreshed, but that’s not much different than what the PC boys were doing as well. Rather, this is a bona-fide growth trend from people either fed up with alternatives or pulled in by the iPod (and soon iPhone) “halo.” Bottom line is clearly more and more people are considering Apple.

If the rumored new iMacs are any good (very likely), combined with the back to school season coming up Apple could be in for a killer upcoming quarter! But don’t expect Paul to let you know about it when that happens.

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24 thoughts on “A look at Paul Thurrott’s "analysis" of PC market share.

  1. – To anonymous who left the Gartner stats:

    Thanks. I knew that Toshiba’s and Acer’s results, while impressive, were not part of an ongoing trend, whereas Apple’s results have shown a trend occurring.

    – To anonymous who asked why we’re “obsessed” with Turrott,

    We’re not, and attempting to deflect legitimate criticisms of his Internet Nexus posts in this manner won’t work here. I don’t claim there’s any obsession going on, but given the steps Thurrott’s taken since my Friday post (see my post from Sunday), if there is it’s all on his side.

    – To Bill,

    Thanks for the thoughts. The “negativity” stems from Apple’s great US results and Paul simply blowing them off, then dumping all of Apple into a global pool and dismissing it.

    Yet, as another commenter pointed out, Paul has no issue with slicing and dicing sales figures into microscopic pieces for Microsoft, such as Zune sales. Apple is growing tremendously but sometimes if you read Thurrott you could miss it. Unless you call him on it and he pens an update.

    As for testing the iPhone with XP, do you think the bulk of reviews have been with Macs? I should think not. My iPhone runs runs off my XP Pro machine and I sync with Outlook beautifully. That doesn’t mean Paul did not see issues, but it does mean that the iPhone is working fine for many Outlook users.

    Remember, Outlook syncing for Contacts and Calendar is NOT new for Apple with the iPhone. The iPod and iTunes have done that for a couple years. If there was a major and/or widespread Outlook sync issue, it would be well-known by now.

  2. I must have missed the negativity,or was it it just that he wasn’t greatly positive? I think that you all read between the lines too much. He did us a great service by testing iPhone with XP, Vista and MS Office syncing.
    Also, his review of M$ Zune was not one of excitement. He called it average and suggested people wait for the next generation. He may even own more Apple products than me, but I doubt it. I go to his blog to get the scoop on my Apple products before buying, since I trust him not to look through Apple colored glasses. I was convinced to wait on the iPhone until my Treo dies, because I need a good calendar and need to save and view Word and Excel files.

  3. Are you guys all obsessed with Thurott? Are all of you really that wound up about Apple’s marketshare/profitability?
    I see his point- and why its so much fun to just say it.

  4. Paul has a curious negative obsession with Apple. There’s something morbid about it: It’s like a form of stalking. It’s par for the course that he should quote those figures and then not talk about, for example, HP, about whom for sure there would be much of interest to be said.

    Apple as Paul studiously avoids noticing has the same percentage of the market as Gateway to a statistically significant number of decimal places. IOW, they tie for third in the US market.

    So Apple is number three in its home market (a very lucrative one) for PCs. (And you can bet it’s taking a higher percentage of the high end of that market than some of its rivals, too.) Apple also has a very successful business in DAPs and now has a highly conspicuous foot in the door of the mobile phone business (and, again, in the high end of that market). Apple is doing very nicely, and a little spinning of the figures from Mr. Thurrott doesn’t and can’t change that.

  5. Assuming that Apple will continue its trends but the others won’t is starting to sound a lot more arbitrary than your original argument.

    I mostly agree with Tom, Mac sales in the U.S. are consistently growing at 25-30 percent year-over-year, I assume the trend will likely continue. Toshiba’s growth in the U.S. is typically 20-25 percent YOY. Toshiba grew faster this quarter, with a year-over-year growth rate above 50 percent, because sales were unusually low in the year-ago quarter. The YOY growth is measured against this poor quarter (564,000 units), Toshiba can’t continue, that’s not a trend, just a one time event. Even if they ship 1 million units next quarter, the YOY growth will be measured against Q3 2006, and will be weaker (23 percent).

    Q3 2005: 664,000
    Q4 2005: 697,000
    Q1 2006: 635,000
    Q2 2006: 564,000
    Q3 2006: 813,000 22.44%
    Q4 2006: 852,000 22.24%
    Q1 2007: 805,000 26.77%
    Q2 2007: 870,000 54.26%

    http://gartner.com/it/page.jsp?id=497293
    http://gartner.com/it/page.jsp?id=500384
    http://gartner.com/it/page.jsp?id=503816
    http://gartner.com/it/page.jsp?id=509905

    Acer’s growth is staggering cause they are currently expanding their retail presence in the U.S., but it will level off. Sales were growing from a low level compared to other manufacturers (336,000 units, see Gartner).

    “Acer Inc.’s worldwide shipments jumped 54.2 percent in the quarter, thanks primarily to its rapidly growing sales in the U.S. The company’s strong notebook PC sales have helped it put up huge gains in the past two years, and its recent expansion into Best Buy Co. stores helped it more than double U.S. shipments in the second quarter.”

    http://www.statesman.com/business/content/business/stories/technology/07/19/0719pc.html

    It doesn’t mean that Apple is necessarily ‘poised’ to become the #3 PC manufacturer in the U.S. Apple is narrowing the gap with Gateway, I think they can take the third place from Gateway, but going forward Apple will have to battle with Toshiba (strong notebook sales) and Acer (“high-volume, low-profit” kind of company). All in all, as long as Mac shipments will increase by 25-30 percent YOY, thus faster than the market, I won’t be too concerned. 😉

  6. Don’t read him, don’t comment on him.
    He’s a paid Microsoft shill, treat him as such.

  7. Why would you waste your time on this guy? It’s like a dog barking, ignore it and soon it will shut up.

    At one time Paul did have the brass ones to take issue with Microsoft on how bad Vista really is compared to what it was supposed to be.

    It was only recently he had a “Collin Powell” change of heart. I guess the boys in Redmond probably rattled their sabres at him or maybe they pushed the button on his shock collar.

    If purple coolaid is what mac zealots drink then what is the drink of choice for windows zealots? Zima?

  8. Zinzius, you are here and you are biased so, yes there are biased people here.

  9. Paul says he’s “not trying to paint the Mac in a bad light.” Bull hockey! He only wants to talk about Apple when they screw up or he feels like he has to convince everyone the numbers/product/features weren’t THAT good in HIS view.

    Yet when does he call MSFT to the carpet when they aren’t doing well? Paul likes to gush about the XBox 360. Yet nary a word from him since it was reported that MSFT is going to take a $1B charge because 1 in 3 are defective. Are you kidding me? This IS news. And it is worth mentioning, yet I have heard nothing from him about this. I really question why he feels like he needs to discuss the things he blogs about. Once again, it doesn’t enlighten, entertain or inform. It’s just a skewed view of the facts with a heaping of biased opinion thrown in.

  10. This is what Paul does – he posts something “controversial” about Apple and then trolls any sites that may have contradicted what he said to kind of step back from the argument.

    Also – and I’m not 100% about this – but I don’t think these figures count what Apple sells direct to the customers via the online sales – but I could be wrong.

  11. Paul,

    That you would take the time to post here is appreciated. Seriously.

    It didn’t take me half the afternoon to post my article, did it take you half the morning for yours?

    In the comments here you say “this was a blog post, not an analysis.” What does that mean? It doesn’t really count, or shouldn’t be criticized? Doesn’t that cheapen your own post?

    I read your update on Internet Nexus. Are you standing by your post, article, analysis, whatever-you-want-to-call-it or not?

    You blew off Apple’s US numbers yet claim you didn’t “attempt to paint the Mac in a bad light.” It’s difficult to read your post and not be certain it avoided giving Apple any due. I guess we have different definitions of “bad light.”

    You wrote an article (no matter what you call it) on a popular and well-read site that I — and others — took exception to. Am I to understand now that it was all just the internet posting equivalent of a hit and run?

    Not to worry, though, you’ve got zinzius on your side.

  12. Sam,

    Fair enough.

    Further, your comment:

    “If Apple just keeps focusing on making customers love their products, the rest will fall into place”

    is absolutely correct.

  13. Paul loves to run Apple down and I love how you utterly ran his reasons (if you can call it that?) down into the ground, where they deserve to be!

    Be that as it is, I like Paul; I just don’t see his point of view most of the time.

    Very well done!

  14. So… This was a blog post, not an “analysis.” You look at the numbers and … that’s it. But, hey, I’m glad I wasted half your afternoon, I guess. Geesh

    –Paul Thurrott

  15. I actually do agree with you– I think Apple’s market share, profits, and ranking will probably all increase over the next year. I just don’t think an analysis of the US *or* international numbers is necessarily meaningful. Assuming that Apple will continue its trends but the others won’t is starting to sound a lot more arbitrary than your original argument.

    If Apple just keeps focusing on making customers love their products, the rest will fall into place.

  16. Sam,

    Thanks for the persepctive.

    You mean exactly the same growth for next _year_, since the growth rate is y-o-y, not quarter.

    No, Acer will not continue 168% growth nor will Toshiba continue 50%. However, we have every reason to believe Apple will continue ~25% because they’ve already done so.

    Still, even if your numbers hold, it doesn’t change my arguments that:

    1) Gateway will lose its third-place ranking.

    2) Apple is growing extremely well in the US, and only by ignoring that fact and looking solely “worldwide” can you attempt to write them off as Thurrott did.

    3) Apple is much more profitable on their PCs because they don’t play the bargain basement game. Share is of much less value than profits.

  17. The interesting thing is that the IDC report includes the growth numbers for each of the top 5. Of course things don’t work like I’m about to suggest, but just for s&g’s I assumed the growth rate would be exactly the same the next quarter, and started from this quarter’s numbers and multiplied the growth.

    If you do that, you get a placement of:
    1. HP 5069
    2. Dell 4335
    3. Acer 1455
    4. Toshiba 1352
    5. Apple 1212
    6. Gateway 896

    So I don’t particularly think this site OR Thurott’s is making great arguments, here.

  18. Great article!

    John Gruber over at daringfireball.net also nailed with his post on profitability, pointing out that the number that matters for Apple is profitability.

    Last quarter, Apple made ~560 Million profit; Gateway lost about 8 million.

    Dell, with five times the market share of Apple, made almost $50 milliion less in profit, around $508M

  19. It’s funny how much space Paul dedicates to thumping his chest about his being the only rationale reviewer. Mossberg liked an Apple product? Paul assures us that it’s not because the product is good; it’s because Mossberg is too cozy with Jobs.

    On this market share front, Paul regularly puts Apple’s worldwide share (which pits them against markets they don’t compete in) up front, and then claims a big sigh. No news here.

    Yet, when Zune figures come out, Paul doesn’t talk about Zune market share of the international market; he looks at how the thing is doing in the U.S. against other hard-drive based mp3 players. And according to Mr. Rationale, Microsoft’s doing pretty good.

    All of his claims about being unbiased are, as you’ve rightly pointed out, hogwash.

  20. Thanks for putting the smack-down on Paul. You said exactly what I was thinking. I read his post a few hours ago and couldn’t believe that he did it again. He always seems to put the facts in the favor of anyone but Apple. I don’t know what he is thinking when he decides to write these stupid blogs of his. They don’t entertain, enlighten or provide any insight. It’s almost as if he goes out of his way to tell all of his Windows readers that Apple is not REALLY doing all that well. I wonder what he will say when Apple is clearly #3 in sales?

    I just wish for once he would take off his MSFT-centric glasses and see the world of technology for what it really is. Because while he continues to diss Apple, their market capitalization is creeping to almost half of MSFT’s .

    I guess that’s not worth mentioning either.

  21. When you read Thurrott you can feel his bitterness towards Apple and their success and innovation. He doesn’t want Apple to succeed and can’t figure out why anyone would prefer their product. The iPhone doesn’t work. The iPod is underfeatured and overpriced (especially compared to the Zune) and the AppleTV pales in comparison to the xbox360 (or at least ones that are not defective).

    I enjoy reading him and pay particular attention to what he puts in parentheses. All the bitterness, jealousy, and pettiness is contained therein.

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