How does Apple sustain a business ? a business that even makes a profit occasionally ? on a market share of less than 3% (so low, in fact, that it just fell off the bottom of the list of the top five suppliers)? I’ve been thinking about this for ages. Consumer brands (and Apple is a consumer brand) with market share below, say, 20%, are irrelevant, invariably destined for oblivion – and the smaller the percentage, the quicker the death – vicious circles and all that.
So how does Apple do it? Well it’s obvious when you think about it: Apple is a consumer brand all right, but it’s a luxury consumer brand. Hold on, I hear you say, even luxury brands with 3% market share are doomed, aren’t they? Yes, you’re right. Anyone with an ‘O’ level in business studies will tell you that 3% is never enough. But Apple is not doomed. And the reason is that there is no luxury computer category. if there were, Apple would own at least 90% of it and, finally, its market share would match its extraordinary mind share. Apple is the Manolo Blahnik of computers.