Apple Got Aced Out in 4Q

In this corner we have Apple, which spent about $300 million on measured media for the first 10 months of 2008 and is every marketer’s favorite—often held up as the epitome of branding. In that corner, Acer, which spent about $12 million on media for the same period, per Nielsen Monitor-Plus, and is no one’s idea of the hallmark of brand creation.

Guess which one got more market share in 2008? According to a Garner report, Acer controlled 15.2 percent of the U.S. PC market, compared to 8 percent for Apple in the fourth quarter of 2008. For Acer, that represents a 55.4 percent jump over the same period in 2007. Apple’s share rose 8.3 percent for the same period. The report noted that sales were dismal for the quarter and rose only 1.1 percent, the lowest rate of growth since 2002.

Though the figures represent units, rather than dollar share, analysts say Acer and others benefited from having notebooks in the hot sub-$500 range—a category in which Apple does not compete. Acer’s notebooks sell for as low as $355, while Apple’s entry-level MacBook starts at $999. Mikako Kitagawa, principal analyst for Gartner’s Client Computing Markets group, said Acer has more penetration in the small to medium size business market than Apple, which also helps. (Neither Acer nor Apple could be reached for comment.)

Rob Enderle, president and principal analyst of the Enderle Group, said there is a widespread belief that Acer overstuffed the channel and the numbers represent units that the company sold to retailers rather than ones that retailers sold to consumers. “Apple was hurt by not having products in the hot $500 Netbook range,” said Enderle, who added that a boon in the segment mostly buoyed Acer, Hewlett-Packerd, Dell, Lenovo and Asus. “On the other hand,” Enderle continued, “Apple customers tend to be very loyal and it is doubtful many switched from Apple to get a Netbook, however it is also likely fewer switched to Apple, which clearly did have an adverse impact in their fourth quarter numbers.”

Enderle speculated that Apple would at some point have to introduce notebooks at or near that price points.

Tim Bajarin, president of Creative Strategies, however, said Apple is not in a numbers war with any of the other other PC vendors. “This is a case of lower prices trumping a lot of the competitors, not just Apple,” said Bajarin. “Acer clearly is on a track to advance their market share by being very aggressive in pricing and Apple does not play the pricing game at all . . . They believe that they will continue to grow their market by creating what Steve Jobs calls ‘insanely great’ products.”