Apple owns 66% of $1,000-plus retail market, NPD Group says

Computerworld - Apple Inc.'s Macs accounted for 66% of first-quarter U.S. retail sales of personal computers priced at $1,000 or more, a market research firm said today.

The Mac's continued gains came despite tougher economic conditions in the U.S. and illustrated Apple's lock on the premium PC market, said Stephen Baker, an analyst at NPD Group Inc., a market research firm that specializes in tracking retail sales. "Apple's customers are looking for their second or third or fourth computer [for the family]," said Baker. "They're more affluent than the average computer buyer and they're not as impacted by the economy."

In the first quarter of 2008, Apple held 13.8% of the overall U.S. retail computer market, up from 9.5% during the same period a year before. "We've seen a noticeable increase in Mac sales since the launch of Leopard," Baker noted, referring to Mac OS X 10.5, which Apple released in October 2007. The longer-term march of Mac gains, Baker added, began when Apple switched to Intel Corp. processors, beginning in January 2006 with the introduction of the Intel-based MacBook Pro and iMac.

Of note, said Baker, is the fact that Apple posted bigger increases over last year in sales of desktops, which industrywide have taken a beating at the hands of laptops. During the first three months of this year, Macs accounted for 14.4% of all desktops sold at retail in the U.S., up from just 8.1% the year before. Portable Macs, meanwhile, owned 13.6% of the market in early 2008, compared to 10.4% in the same period of 2007.

"For pretty much everyone else, desktops are a declining area of focus," said Baker. "But for Apple, the iMac is doing very well, in part because it's an all-in-one. Buyers don't quite think of it as a desktop."

And Apple essentially owns the $1,000-and-up market, according to NPD's data. Overall, Macs accounted for 66% of all personal computers in that price category sold at retail during 2008's first quarter, taking 70% of desktop sales and a 64% share of notebook sales.

But the numbers, although impressive, come with a caveat, said Baker. "Yes, they dominate in the $1,000-plus market, but they also tend to be the only company that has a considerable focus in that price range.

Every Mac -- desktop or notebook -- that Apple sells, with the exception of the Mac mini, is priced above $1,000.

Key to Apple's success in retail, of course, are the company's own stores. Calling Apple's 210 outlets -- the vast majority of which are in the U.S. -- "one of the few computer-only places left," Baker pointed out that the people who shop at the chain have little choice but to drop more than $1,000 on a computer. "People walking into an Apple store are mostly presold on buying a Mac. Once they're there, there's not a lot of chances to trade down to, say, $599 or $799, like there is at a Best Buy.