Despite the perception that Apple once dominated the personal computer industry, Apple has never been as dominant a player as it is today. While the Apple II once accounted for nearly one-sixth of the market, the Mac has never had more than a 12% market share.
This and other statistics can be culled from Jeremy Reimer's Personal Computer Market Share: 1975-2005, a very impressive piece of information gathering. The numbers tell some very interesting stories.
The personal computing market grew out of the hobbyist computing market, which began in 1974 with the first kit computers - the Intel 8008-based SCELBI (March 1974), the 8080-based MITS Altair 8800 (May 1975), the MOS Technology 6502-based KIM-1 (1975), and the 6502-based Apple I (April 1976) among them.
Apple was not the first to announce a ready-to-use personal computer. Commodore bought MOS Technology in 1976, re-released the KIM-1 as a Commodore product, and introduced the Commodore PET in January 1977. It began shipping in June. The original PET had a built-in cassette tape drive for saving and loading programs, a 9" blue-and-white display, and a calculator style keyboad. Commodore was only able to sell 500 in the PET's first year.
Apple
introduced the Apple
II at the West Coast Computer Faire in April 1977 and went on
sale in June. Apple and Commodore beat Radio Shack to market by
several months; its Tandy
TRS-80 was released in August 1977, and it had the big advantage
of distribution through 3,000 Radio Shack stores across the US and
around the world.
The Apple II did stand apart from Commodore and Tandy Radio Shack offerings as the first personal computer with color support, which made it a superior graphics and gaming machine.
Commodore, Apple, and Atari, which entered the PC market in 1979, based their computers on the same CPU, the low cost MOS Technology 6502. The TRS-80 and CP/M machines were built around the Intel 8080 (introduced 1974), Zilog Z80 (1976, designed to be backward compatible with the 8080 while enhancing the instruction set and a lower price), and Intel 8085 (1977, Intel's lower cost version of the 8080). A few other "home computers", such as the Radio Shack Color Computer, used the Motorola 6809, a close relative of the 6502.
The odd man out of the home computing era was Texas Instruments. The 1981 TI 99/4A (and the relatively rare 1979 TI 99/4) ran a 3 MHz TMS9900 CPU on an 8-bit data bus. It's claims to fame include being the first 16-bit personal computer and very sophisticated voice synthesis technology. By February 1983, TI began selling machines at a loss in hopes of building a larger market, and its market share may have been as high as 35%. The handwriting was on the wall, and TI discontinued the 99/4A in October 1983. In all, 2.8 million units were sold.
Although Apple's claims to have "ignited the personal computer revolution in the 1970s with the Apple II", the numbers tell a different story. Of 150,000 personal computers sold in 1977, only 600 were Apples. In 1978, Apple sold 7,600 computers in a market of 258,000. Apple didn't take 10% of the PC market until 1980 - and it fell below that mark again in 1982.
Who had all the sales? With 3,000 stores, Radio Shack did with its TRS-80. Reimer's research finds that the company sold 100,000 "Trash 80s" in 1977 (two-thirds of the market), 150,000 in 1978 (almost 60% of the market), 200,000 in 1979, and peaked at 300,000 units in 1982. The primary reason the Z80-based TRS-80 went into decline was Radio Shack's introduction of the Tandy 1000 in late 1984, which marked the Shack's entry into the IBM compatible market. The TRS-80 line was discontinued in 1985.
Commodore's VIC-20 was the first PC with color support to retail for under $300; released in 1981, it sold 800,000 units in 1982, reaching the 1 million unit mark in early 1983 (the first PC to reach the million unit mark). A big part of Commodore's success was mass market retailing - you could pick up a VIC-20 at Toys R Us; you didn't have to go to a computer store. Another factor may have been the VICmodem, the first modem to retail for $100.
Commodore built on the VIC-20's success by introducing the Commodore 64 in August 1992 - the first 64 KB personal computer to sell for under $1,000 - way under, at $595. Commodore sold 2 million units in 1983 (40% of the market!), pricing eventually dropped as low as $100 through high volume retailers, and the C-64 went on to become the best selling single computer model in personal computing history, although the exact number is unknown (estimated at between 17 and 20 million).
The Apple II line overtook the TRS-80 in 1983, the year Radio Shack sales dropped by one-third. Apple IIs peaked at 1 million units in 1984 (15.8% market share), then slowly gave way to the Macintosh.
Apple never dominated the PC market. The Commodore 64 sold 2.5 million that year. Even when combined with Mac sales, Apple had just 21.7% of the market in 1984, and that dropped by one-third in 1985. Commodore was at the 40% mark in 1983 and 1984.
The Apple II series reached its pinnacle in 1986 with the Apple IIGS, which used a 65C816 CPU running at 2.8 MHz. This 16-bit chip was 100% backward compatible with the 6502, supported up to 8 MB of RAM, and ran far faster than earlier Apple II models (all of which ran at 1 MHz). It is widely believed that the CPU was deliberately underclocked to prevent the IIGS from competing with the 8 MHz Macintosh while still offering a lot more power than the 1 MHz 6502. (The 68C816 was eventually available in speeds as high as to 20 MHz. It was also used in the Nintendo Super NES, which ran it at 3.58 MHz.)
The IIGS included higher resolution color graphics than other Apple II models and had a 4,096 color palette. It also used a 32-voice Ensoniq sound chip for incredible sound, and it was the only Apple II series computer with a graphical user interface, one clearly based on the Mac OS.
The Apple IIC+, introduced in 1988, was the last model in the Apple II series. With a 4 MHz 6502 CPU, it could run 8-bit software almost 50% faster than the IIGS. It was the only Apple II model with a built-in 3.5" floppy drive.
The 8-bit era ended in 1993, the last year Apple II and Commodore models were on the market, but by that point the 8-bit market was a shadow of its former self and accounted for less than 1% of the personal computing market.
IBM changed the industry when it released the IBM PC in 1981. It was the first popular 16-bit computer, based on commodity parts such as the Intel 8088 CPU (introduced in 1979). Even with "Big Blue" behind it, IBM's PC only accounted for 5% of personal computer sales in 1981.
IBM was going after the business market, while the Apple II, Commodore 64, and 8-bit Ataris fought over the much larger home market. But IBM was a force to be reckoned with - and other realized it. Although a few other computers were based on the Intel 8086 and 8088, the market would belong to those who could make hardware compatible with the IBM PC, both its software and it's add-on cards.
Columbia was the first to clone the IBM PC with its June 1982 PC. This was quickly followed by Eagle, and Compaq was the first with a portable IBM compatible. The Compaq Portable was an all-in-one machine that ran IBM software. It weighed 28 lb. (12.5 kg) and had a handle, making it heavy but portable. You could use it wherever there was a sturdy work surface and an AC outlet. Compaq sold 53,000 units in 1983.
IBM and the ever-growing number of clones grew to second place in 1983 with one-quarter of the PC market. The combined weight of the PC compatible market took the #1 spot from Commodore in 1985, and in 1986 they accounted for over 50% of the personal computer market. In 1995, that passed 90% of the market, and x86 PCs broke the 98% mark in 2004.
With Apple's adoption of Intel CPUs in 2006, practically every personal computer sold today is based on x86 architecture.
Reimer's data shows that the Macintosh held 6% of the PC market when it was introduced in 1984, placing it behind the C-64, PC compatibles, and the Apple II series. Sales in 1985 were terrible with no new Macintosh models.
The Mac Plus helped put
some polish back on the Apple, and 1986 unit sales almost matched
1984
sales - but the Mac market share was only 4.2% and well behind the
C-64, DOS PCs, and Apple II line. It wasn't until 1991 that the
Macintosh took a serious share of the personal computer market,
jumping from the 5% to 6% level to 11.2% that year.
DOS PC sales faltered in 1990 and 1991, dropping from 17.5 million to 16.8 million and then to 14.4 million units. This coincided with the era of Windows 3.0, the last version of Windows to really pale in comparison with the Mac OS. (There are still people out there using Windows 3.1, just as there are Mac users still devoted to System 6. Hardly anyone uses earlier versions of Windows or the Mac OS.)
Still, Windows 3.0 and a slump in the PC compatible market doesn't explain how Apple boosted sales from 1.3 million to 2.1 million units in a single year. Several Apple developments do:
What kind of PC developments did we see in 1991? Increasing speeds in the 486 processor - and that's about it.
With lower cost computers for the home and education market, a Mac designed for schools using Apple II software, 68040 power for graphics professionals, and innovative laptops (which became the model for future notebooks), Apple had one heck of a year.
While 8-bit computers were winding down and the bulk of the industry was designing IBM compatibles built around Intel's x86 architecture for the business market, two other companies were designing hardware that would excel in graphics, video, and gaming.
The Amiga 1000 was introduced in 1985, when Apple only had two Macs - the original 128 KB model and the "Fat Mac", which was the same machine with 512 KB of RAM. Although the Apple II had been the first personal computer with color, the early Macs only had a black-and-white display. It wasn't until early 1987 that Apple introduced the first Mac with color, the pro-oriented Macintosh II.
Compare the all-in-one black-and-white Macs with the Amiga 1000, and there's an obvious winner. The Amiga cost less, supported color and higher resolutions, allowed memory expansion to 8 MB (early Macs were not designed for RAM expansion), and did amazing things with video and sprites. It also output standard NTSC video, making it easy to output to a TV screen or VCR (there was also a PAL version for the European market). The Amiga also has a 4,096 color mode, which trumped anything else available at the time. It also had a multitasking operating system years before the competition.
The last Amiga, the 4000, was introduced in 1992 and discontinued in 1994, when Commodore filed for bankruptcy.
Also in 1985, Atari introduced its next generation of hardware. Like the Macintosh and Amiga, it also used the Motorola 68000 CPU. The Atari 520 ST was designed similarly to the popular Commodore 64 - everything was in the keyboard, and it had an extended keyboard layout with cursor keys and a numeric keypad, like IBM offered.
The 520 ST had 512 MB of memory and supported up to 4 MB, something Apple wouldn't match until 1986. It also had a full color graphical user interface using Digital Research GEM as its operating system. However, its color support fell far short of what the Amiga offered, with a choice of 4 or 16 colors from a 512 color palette - not much, but a lot more than the Mac had. The Atari 520 ST was less expensive than the Mac 512K or the Amiga 1000, and it had quite a following in Europe.
That Atari ST line was discontinued in 1993, when Atari left the personal computer market to focus on its next generation gaming console.
A third company entered the market with a Motorola 680x0-based machine in 1988. That company was NeXT Computer, which Steve Jobs founded after being ousted from Apple. NeXT computers were meant to be high-end graphics workstations, and in terms of hardware, they gave the Mac some real competition. Although the original NeXT Cube only supported a grayscale display, later models had color support.
NeXT took a different route for its operating system. Rather than starting from ground zero, as Apple had done, it build a graphical user interface on a Unix foundation. Although NeXT got out of the hardware business in 1990, it continued to develop its graphical user interface for use with Solaris and Windows NT.
In one of the greatest ironies in the history of personal computing, Apple acquired NeXT in 1996/97, Steve Jobs ended up regaining control of Apple, and NeXTstep/OpenStep and Unix formed the foundation of Apple's next generation operating system, known as Mac OS X.
The Commodore 64 and Atari STs dropped from the market in 1993, the same year NeXT got out of the hardware business. The Amiga went off the market in 1994, leaving just two platforms: x86 PCs (running DOS, OS/2, or Windows) and Macs.
From 1992 through 1995, both PC and Mac sales grew. Apple peaked at 12% of the personal computer market in 1992 and slowly declined to 9% in 1995, according to Reimer's numbers. Apple sold 4.5 million Macs in 1995 (a level it would not attain again until 2005).
Apple seemed to be on a roll and decided to allow other companies to license the Mac OS and build Macintosh clones.
Mac sales dropped more than 10% in 1996, and 30% more in 1997, finally hitting a low point of 2.7 million units in 1998. If anyone doubts that the clones cut into Apple's hardware business, Reimer's numbers tell the story. Apple sales in 1998 were down 40% from what they had been in 1995.
Sales of Windows PCs, on the other hand, more than doubled in the same period. With declining unit sales and a growing computer market, Apple dropped from 9% to 2.7% in just a few years. The word most associated with Apple in 1997-98 was beleaguered.
The clone experiment had to be terminated if Apple was to survive.
Apple bought NeXT, brought Steve Jobs back, and introduced the first Power Macs and PowerBooks with G3 processors in 1997. It aggressively marketed the "up to twice as fast" performance - including the famous Pentium II snail ad.
In 1998, Jobs unveiled the first iMac, which became the best selling computer on the market when it shipped in August. However, Apple's overall hardware sales were still in the dumper.
Recovery took hold in 1999, when Apple sold 3.8 million computers, which allowed it to hold on to its 3.2% market share. Apple sold virtually the same number of Mac in 2000. The glory days were back, although that only represented 2.8% of the market, according to Reimer's data.
In 2001 and 2002, Apple unit sales dropped to 3.0 million units each year. Windows PC sales, which really grew in anticipation of Y2K, also declined in 2001 and made only a small recovery in 2002. If Reimer's numbers are correct, Macs are now 2.3% of worldwide PC sales.
Still, Apple could go on indefinitely selling 3 million computers a year. The Mac may always be a minority platform, but it is a stable one.
Or Apple could go on convincing Windows, Linux, Unix, and classic Mac OS users to switch to Apple hardware running Mac OS X. The Apple retail stores, the gorgeous computers, the great ads, the brand recognition, the good exposure in the mainstream press, and the prodding of Mac loyalists can help Apple grow its share of the market - and help unleash things when the economy recovers and people are ready to spend a bit more freely on new computers.
Apple has always been a high margin computer. When I first got into computing, you could easily spend $2,500 for an Apple II+, two floppy drives, a floppy controller, and an Apple green screen monitor. With a color screen, you were close to the $3,000 mark.
Commodore, Atari, and Radio Shack ate apples for breakfast, lunch, and dinner. Radio Shack's TRS-80 outsold the Apple II through 1983. The Atari computers outsold the Apple II until 1984. And the low-cost Commodore 64 outsold the Apple II from the day it was introduced in 1982 until it died of old age in 1993.
Throughout their history, Apple has produced some of the most expensive personal computers on the market. And in the age of $200 Lindows PCs, they still do.
That's not necessarily a bad thing. Lexus and Hummer aren't known for low price, yet people continue to buy their products. Apple can survive as a 3 million unit per year computer maker for a long, long time.
At Low End Mac, we want Apple to do more than that. We want Apple to grow its market by selling more computers - and to do that, they have to offer more affordable computers.
Megahertz marketing, myths, and wars aside, today's entry level computers offer plenty of power for anyone but the most avid gamer or video editor. Consumers are less interested in megahertz (that's a geek thing) than in value - witness the amazing success of Walmart selling Lindows computers.
Macs are a good value. If that weren't the case, nobody would buy them. But for most consumers, they are not seen as the best value when compared with Windows, Lindows, and Linux boxen. And that's something Apple should address if they want to become a real force in the consumer market.
Apple doesn't have to sell a $200 stripped computer or a $350 computer system. It does have to compete with name brands such as Dell, HP, and Gateway offering $699 computer systems, and a $799 retread of the 1998 iMac simply isn't going to cut it.
A $999 eMac or $1,199 G4 iMac isn't going to do it either.
When the average consumer thinks of a computer, they visualize a keyboard, a mouse, a monitor, and "that other thing" - the computer itself. Except for the $1,499 and up Power Mac G4, Apple doesn't offer this kind of computer.
The failure of Gateway, eMachines, and others to successfully sell all-in-one models should tell Apple something. All-in-ones are niche products, and if Apple continues to rely on them on the low end, they will remain a niche player.
Consumers want boxes, and Sony has learned how to deliver Vaio computers with style and competitive prices.
Apple needs to learn that lesson.
Sony doesn't make the cheapest PCs on the market. They don't offer the lowest prices, either. Instead, they are Sony products - innovative, attractive, and a bit more expensive. Those words should ring a bell for Mac users.
Apple could have been and should have been the Sony of the personal computer industry. Instead, they played the niche game and became the equivalent of an audiophile company - people will pay more for certain brands because they are connoisseurs.
Sony plays things differently. Their equipment isn't generally audiophile quality, nor is it among the dregs of consumer electronics. Sony is noted for decent quality at a slightly higher price.
Apple could do worse than copy Sony, especially if they're serious about growing market share. The iPod and iBook already show Apple can do it if they want to.
Apple may always be a niche player. What they need to do is increase the size of their niche.
A low cost modular consumer PC - even a G3 system, as long as it
supports Quartz Extreme - could be just the ticket to move Apple from
today's small niche to the kind of market share they had in the early
1990s with the low cost all-in-one Classic and modular LC for home
and school, powerhouse Quadras for graphics professionals, and
intelligently designed PowerBooks for computer users on the go. 