While it has brilliantly marketed its iPod and pioneered online music with iTunes, the firm has yet to make an impact with its core business, writes Karlin Lillington
Today's teen and twenty-something iPodsters with their stylish holsters carrying the iconic music player probably do not even remember a point at which Apple wasn't considered a cool and successful brand.
"Successful" is the key word, of course. While Apple-branded products have always led with cutting edge, highly influential design, a pre-iPod decade ago the company's demise was regularly predicted. Desktop market share was dwindling and the company lacked focus.
Then, goes the story, co-founder Steve Jobs made a surprise return move to the helm and all's been happy ever after.
Well, not quite. While Apple has brilliantly marketed its iPod and pioneered online music with its iTunes music store, people are still wondering, "What about the computers?"
The multi-colour see-through Mac was extremely popular but that didn't stop a market share slide that, according to a new report from analyst Gartner, sees Apple foundering at around 2 per cent worldwide for the most recent quarter.
Shipments actually rose 13.1 per cent over the same quarter last year, but an overall increase in PC sales means Apple's market percentage has slumped though sales have increased.
Observers have been waiting to see if a so-called "halo effect" - knock on sales from the popularity of the iPod - will boost Apple's computer market but, to date, the boost has been modest with both world and US sales remaining relatively stable.
That may be about to change, if figures this week from Taiwan publication DigiTimes are correct. According to notebook manufacturing sources in Taiwan - where Apple's notebooks are made by Asustek - shipments this quarter are 39 per cent up on the previous quarter.
The figures cannot be confirmed, as second quarter shipment figures for PC manufacturers won't be out from analyst firms for several weeks yet. Apple is in a quiet period leading up to the presentation of its results in late July and declined to comment.
If the figures are correct, the sales would reflect the first sign that Apple's new Intel chip-based Macs are gaining a foothold denied previous Mac incarnations.
Apple started shipping Macs incorporating Intel's Core Duo chip early this year, with a promise to convert the entire computer line in 2006 to Intel - at one time, an unimaginable move.
And within weeks of shipping the first Intel Macs, Apple did the truly unthinkable - it offered a free program called BootCamp that allows Intel Mac users to install Windows on to their Macs, now a technical possibility because Windows is designed to talk directly to Intel chips.
Apple has been running an advertising campaign known as "Switch!" for some time, in an attempt to lure Windows users to the Mac.
Now, "Merge!" may be a more appropriate take. But will the prospect of seeing the XP start up screen on a Mac really get buyers to opt for a Mac?
"I think it's too early to say what effect Intel chips will have for Apple," says senior research analyst at IDC Michael Larner. "Initially, there's a wait-and-see factor with consumers."
Businesses are unlikely to consider switching to Apple at the moment, he says, because this year is not falling within the regular cycle for refreshing corporate hardware. "That's next year," he says, adding that he feels Apple is still primarily a consumer proposition.
In addition, he notes that Macs remain a more costly choice than many PCs for computer users, which will continue to put off many buyers - especially in Ireland, where we apparently are more concerned about price than in the UK.
Apple has a particularly low market slice of only 1.6 per cent in Ireland despite having a manufacturing presence in Cork. By contrast, Dell, which also makes PCs here, has a 10 per cent larger market share in Ireland than in the UK. Charlie Wolf, an analyst at Needham & Co, has said that he believes it will be 2007 before Apple really sees a boost in sales due to the Intel chip effect, primarily because Apple's next big upgrade to its operating system is due out then and should incorporate features to make Windows run more smoothly on Macs.
He told personal finance publication Kiplingers last week that he expects to see Apple shares almost double in value - up to $90 (€70) a share - at that time, when he predicts a large defection of PC users to Apple Intel hardware.
Many analysts see Microsoft's pushed-back launches of its new version of Windows, Vista, as a potential plus for Apple sales. With Vista's launch date moved into the new year, PC manufacturers already fear that buyers will postpone PC purchases past the crucial holiday selling period. But they may also opt for a Mac instead, given that users can buy the boxed version of Vista to install on their Mac when it comes out.
"The Vista delay does present an opportunity to Apple," says Larner.
The preinstalled suite of software on the Mac , particularly the "lifestyle" software package iLife, makes the Mac an attractive home entertainment purchase, especially coming up to Christmas, he says, and Vista can then be installed in the new year.
"For Apple, the Intel Macs are about keeping the traditional, very loyal Mac base happy, but offering attractions to the Windows user," he says.
